Home Loan Newsletter 20100305, By Home Loan Singapore Pte Ltd

Home Loan Singapore Newsletter Mar 05, 2010

Topics covers (Feel free to Recommend this page to your friend, thanks )

Home Loan Singapore Popular Products (27 Feb to 05 Mar)

Weekly SIBOR and SOR Rates (27 Feb to 05 Mar)

Property launches to go into high gear

Property tax for most will still be lower even if AV is hiked

Prices of new luxury homes surge

China home prices unlikely to crash: CBRE

313@somerset draws more people than expected

Call for review of housing policies

Co-owner loses fight to stop collective sale

Retirement housing land lease to be studied

11 bids for exec condo site in Sengkang

Turning old CBD offices into prime new homes

Ask a question or feedback to us

Home Loan Singapore Popular Products (27 Feb to 05 Mar)

Completed Pty:2yr Lock in	Building Under Construction: No Lock in
Interest(Prime Rate) 1st yr: 1.25% 2nd yr: 1.65% 3rd yr onwards:2.65%	Interest 1st yr: 0.50% + 3mth Sibor (1.20%) 2nd yr: 0.75% + 3mth Sibor (1.45%) 3rd yr onwards: 1.25% +3mth Sibor (1.95%)
Partial repayment penalty: Nil Full repayment penalty:1.5% X outstanding amount	Partial repayment penalty: Nil Full repayment penalty:Nil

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Weekly SIBOR and SOR Rates (27 Feb to 05 Mar)

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Headline:Property launches to go into high gear

Section: Money

By: JOYCE TEO

Publication: The Straits Times 04/03/2010

Page: B20

No. of words: 751

Luxury market expected to make strong rebound as economy improves

DEVELOPERS are gearing up to launch more projects – especially prime ones – into a thriving property market driven by confident buyers keen to splash out on the back of the improving economy and a low interest rate environment.

The Government's anti-speculation moves last month are having little effect on genuine home hunters, who have ever wider real estate options.

Potential buyers will certainly have no lack of choices when it comes to new launches this month with "easily half a dozen launches" coming up, said CB Richard Ellis (CBRE) executive director of residential services Joseph Tan.

Mass-market projects have been setting the pace for months but prime developments, which began inching back into the market late last year, are becoming more prevalent.

A CBRE Research report yesterday said that Singapore's luxury residential market is expected to make a strong rebound.

It noted that new luxury projects recorded launch prices of between $2,500 and $3,400 per sq ft (psf) in the fourth quarter of last year.

This beats the $2,100 psf to $2,700 psf range achieved at the end of 2008, demonstrating a strong turnaround, it said.

In January and February, 88 units of CapitaLand's prime Urban Suites were sold at $2,500 psf on average while about 35 units of The Laurels in Cairnhill Road went at $2,500 psf to $2,900 psf, it said.

The launches coming up on the weekend include the Hiap Hoe Group prime estate Waterscape At Cavenagh, and Hong Leong Holdings' Aalto.

The Waterscape At Cavenagh will house 200 one- to four-bedroom units and penthouses ranging from 581 sq ft to 2,992 sq ft. Prices at this weekend's launch will be about $1,880 per sq ft.

Hiap Hoe gave a preview of the project in late November and sold just three units at a median price of $1,909 psf. Another five units were sold in December.

But this year it has sold 88 units, with the bulk transacted over the weekend after Chinese New Year, from $1,715 psf to $2,020 psf or $1.03 million to $3.15 million.

This weekend will also see Hong Leong Holdings release 60 high-floor units at the freehold 196-unit Aalto in Meyer Road. Prices will start from $2,000 psf.

A handful of lower-floor units are also available, from $1,500 psf. Absolute pricing ranges from $3.1 million for a 1,442 sq ft three-bedder to $5.3 million for a 1,959 sq ft four-bedroom unit.

The Aalto was first released in 2007 with units selling for around $1,950 psf. It was then launched in January 2008.

One unit was sold in January this year at $2,011 psf, leaving 78 unsold units in the condo, which will receive its temporary occupation permit in September.

A Hong Leong Holdings spokesman said: "We have maintained the original selling price of the Aalto in light of premium value and location."

Next weekend, buyers can look forward to Cheung Kong Holdings' The Vision in West Coast Crescent, The Laurels and Tiong Aik's Coralis in Joo Chiat Road.

The Vision, a 99-year leasehold condo, is said to be priced about $1,100 psf.

Coralis is a freehold condo featuring one-bedders as small as 495 sq ft and penthouses of up to 3,089 sq ft. Indicative pricing is from $1,350 to $1,550 psf.

The pace will quicken over the next two to three months with possible launches including 76 Shenton Way, Seascape and Residences at W in Sentosa Cove, The Waterline on the former Toho Gardens site in Yio Chu Kang, UOL Group's Dakota Crescent project, and Starlight Suites in River Valley Close.

CBRE Research said the luxury projects Ardmore 3 and those on the sites of the old Grangeford, Hillcourt and Parisian estates are likely to be marketed in the first half of the year. Prices and rents of luxury properties are expected to rise by 10 per cent to 15 per cent and 5 per cent to 10 per cent respectively this year.

Overall, prices will continue to rise but at a much less frenetic pace, said Mr Tan. "If you look at the recent land tenders, there's a certain replacement cost that developers need to look at.

Some developers may want to put a forward price on their projects now as they don't want to run out of their landbank too quickly."

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Headline:Property tax for most will still be lower even if AV is hiked

Section: Editorial & Opinion

Publication: The Business Times 04/03/2010

Page: 23

No. of words: 236

LETTER TO THE EDITOR

MR DENIS Distant said that the benefits of the new progressive property tax may not last long if IRAS starts revaluing the Annual Value (AV) of properties (BT, Feb 26, "Property tax boon may be short-lived").

Property tax is a tax levied on the ownership of property, based on the AV of the property. AV reflects the prevailing market rentals of properties. The tax payable will thus increase with an increase in market rentals and vice versa.

IRAS will only adjust the AVs of properties if the market rental data support such revisions. Currently, owner-occupied residential properties are taxed at a flat 4 per cent.

With the progressive property tax schedule, properties with an AV of less than $77,000 will pay less property tax compared to the current flat 4 per cent rate.

This is because the first $6,000 of AV is exempt from property tax. Even with future increases in AV, most owner-occupied properties will still pay lower tax under the new regime so long as their AV does not exceed $77,000.

(As a reference, all HDB flats have AVs of not more than $11,000 currently.)

Only about 3 per cent of private owner-occupied residences now have AVs in excess of $77,000. Even then, our property tax rates will remain lower than in most international cities, even for the high-end properties.

Deanna Choo Director (corporate communications) IRAS

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Headline:Prices of new luxury homes surge

Section: Property

Publication: The Business Times 04/03/2010

Page: 30

No. of words: 703

LAUNCH prices of new luxury residential projects in Singapore rose about 20-25 per cent last year and could appreciate a further 10-15 per cent this year, says CB Richard Ellis.

Rentals of completed luxury homes, which slid 10.5 per cent in 2009, could increase 5-10 per cent this year, according to the property consulting group.

Already, in the first two months of this year, prices have been climbing steadily, CBRE said, citing sales of 88 units at Urban Suites at $2,500 psf on average and about 35 units at The Laurels at $2,500-2,900 psf, although the latter features smaller units. Both projects are in the Cairnhill area.

Other luxury projects that will be marketed in the first half of 2010 include Ardmore 3, Nassim 8 and those on the sites of Grangeford and Parisian, CBRE said.

The Singapore residential property launch meanwhile continues to teem with activity in various market segments.

At Meyer Road, Hong Leong Holdings is releasing this week close to 60 upper-floor units at Aalto, a 27-storey freehold condo with a total of 196 units.

Prices will start from $2,000 psf.

"Absolute pricing ranges from $3.1 million for a 1,442 sq ft three-bedder on the 18th floor to $5.3 million for a 24th level four-bedroom apartment of 1,959 sq ft," the company said in a statement yesterday. A handful of lower-floor units are also available, from $1,500 psf.

The project was first launched in early 2008 and as at end-January this year, 118 units had been sold. Aalto comprises three and four bedroom apartments and penthouses.

It is expected to receive Temporary Occupation Permit in September this year.

Hiap Hoe is also doing an official launch of its 200-unit Waterscape At Cavenagh this week. So far, it has sold 96 units. The average selling price is about $1,880 psf.

The seven-storey freehold condo comprises one-to-four-bedroom apartments, and penthouses.

Later this month, Hong Leong Group could release a 202-unit project on the former Ong Building site at 76 Shenton Way. TID Pte Ltd – a joint venture between Hong Leong and Mitsui Fudosan – is also expected to preview in a few weeks Nathan Suites, a 24-storey project at Nathan Road, opposite the Malaysian High Commission.

The project's 65 units comprise two, three and four-bedroom apartments as well as penthouses.

CBRE, in its release on the luxury residential market, said that recent sales activities point to the start of a revival in this market segment. "It is likely that this interest in luxury homes is sustainable given the low interest rates and improving economic environment," the firm's executive director, Li Hiaw Ho, said.

However, he predicts that "we are unlikely to see runaway prices the way we did in 2007 as homebuyers will be less impulsive and more discerning following the latest government measures" to cool the market.

Back then, average launch prices of new luxe projects jumped from $1,800-2,600 psf in 2006 to $2,000-4,000 psf in 2007.

Overseas buyers returned at upmarket property launches in Singapore in Q4, as seen at Marina Bay Suites, Urban Suites, and Kasara the Lake, a plush villa development at Sentosa Cove.

This bodes well for the market segment.

Elsewhere in Asia, prices of luxury homes in the secondary market edged up in Beijing, Shanghai, Guangzhou and Hong Kong by 6-10 per cent in Q4 2009 over the preceding quarter while remaining largely stable in other markets.

Singapore saw a 2.7 per cent quarter-on-quarter gain in average prime residential price in the secondary market to $2,260 psf in the fourth quarter. Despite strong sales, leasing demand for luxury homes remained rather fragile in some cities, with Beijing, Guangzhou, KL and Ho Chi Minh City posting a modest rental drop in Q4.

Leasing markets in Hong Kong, Shanghai and Bangkok began to gradually recover, with rents for luxury homes rising by increments ranging from one per cent in Bangkok to 6 per cent in Hong Kong.

Looking ahead, CBRE forecasts that end-users and investors may adopt a more cautious approach in the next couple of months following the introduction of measures that tighten lending for property in certain markets.

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Headline:China home prices unlikely to crash: CBRE

Section: Property

By: EMILYN YAP

Publication: The Business Times 04/03/2010

Page: 31

No. of words: 436

Residential prices could plateau in H2 2010 but major correction unlikely

RENOWNED short-seller Jim Chanos sees a property bubble on the verge of bursting in China. But other well-known investors disagree – and on their side of the fence is CB Richard Ellis president and CEO for Asia Chris Brooke.

Residential prices in China could plateau in the second half of this year but a major correction is unlikely, he said in an interview with BT.

He also believes that large parts of the Singapore and Hong Kong property markets are not in risky territory.

For China, 2010 could be "a year of consolidation and stabilisation and getting back to a more sustainable market", he said.

"Residential prices could probably increase a little bit in the first half and stabilise in the second half."

Price growth in China has slowed in the past few months, Mr Brooke said. There is a seasonal effect – buying tends to ebb during the festive period.

Government measures to cool the property market have had an impact, he said. For instance, the China Banking Regulatory Commission told banks last month to raise downpayments and interest rates for third mortgages.

Such initiatives have dampened sentiment. "Buyers take a step back and say 'maybe I'll wait and see what happens before I make that decision'," Mr Brooke said.

The government could implement more measures to calm the market, he said. "Policy risk is always there in China.

The government has probably more involvement in the market there than anywhere else.

"But because the real estate sector as a whole is an important part of broader economic growth, I think the government will look to strike a delicate balance."

Naysayers are worried not just about fervour in China's residential sector but a potential supply glut in its commercial sector.

Reports of buildings left vacant while massive new ones take shape have fuelled more talk of a bubble.

But Mr Brooke is sanguine. It may take several years for supply to be absorbed, but there will be demand from multinational corporations and domestic companies, he said.

For instance, there has been strong demand recently for offices in Beijing, where rent for Grade A space may have bottomed.

As for Hong Kong and Singapore, he sees limited speculation but little policy risk. Recent anti-speculative measures introduced in both markets have signalled that the authorities are keeping a close eye, he said.

In Hong Kong, home prices shot up in the luxury segment but rose at a more measured pace in the mass to mid-market.

As such, prices have more room to grow this year in the mid-market than in the luxury segment, Mr Brooke reckons.

'Policy risk is always there in China. The government has probably more involvement in the market there than anywhere else.'

– CB Richard Ellis president and CEO Chris Brooke

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Headline:313@somerset draws more people than expected

Section: Property

By: UMA SHANKARI

Publication: The Business Times 04/03/2010

Page: 29

No. of words: 350

ORCHARD Road newcomer 313@somerset has received a higher than expected nine million visitors since it opened three months ago, the mall's owner, Lend Lease Group, said yesterday.

"When we first did the research three years ago, we were expecting something like 60,000-70,000 (visitors) a day. But now, the average is about 100,000 a day," said Ooi Eng Peng, executive officer for retail and investment management in Asia for Australia-based Lend Lease.

The 301,000 square foot mall is fully leased at "market rents". Lend Lease won the retail site above Somerset MRT station in a government tender in 2006 with its top bid of $617.2 million. The mall had its official opening yesterday and now Lend Lease is on the lookout for more sites.

"We are very committed to Singapore and we hope we can get more land to build retail malls here," said Mr Ooi.

"But the market landscape is quite competitive, everybody is trying (to get more land)."

Lend Lease, in particular, hopes to grow its presence in the suburban retail space, said Mr Ooi: "If you look at our model around the world, we are very much focused on suburban malls."

In Singapore, Lend Lease also has Parkway Parade Shopping Mall in its retail portfolio.

But the company is not placing all its bets on the retail scene here – it also has plans to grow into other regional markets.

"For the next three years . . . we are very focused on three countries – China, Malaysia and Singapore," said Mr Ooi.

"Singapore retail is very competitive because retail malls here are very tightly held.

And China is a very big market for us. We are not rushing there but with our skills in retail, hopefully we can get some advantage in China."

Lend Lease hopes to have a retail presence in China by the end of this year. And in Malaysia, Lend Lease has teamed up with property group SP Setia to build a RM750 million (S$311 million) retail mall in Setia City, in the Setia Alam township in Shah Alam.

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Headline:Call for review of housing policies

Section: Home - Budget Debate

By: JESSICA CHEAM

Publication: The Straits Times 03/03/2010

Page: B10

No. of words: 510

ALTHOUGH it was not directly addressed in Budget 2010, worries about the cost of housing in Singapore were reflected in several MPs' speeches yesterday.

There were calls to review housing policies, including current rules that allow private property owners to buy HDB flats and to sublet them.

It was also suggested that the $8,000 household income ceiling be raised to allow more Singaporeans to buy new subsidised flats (that are not executive condominiums) from the Housing Board.

The growing number of new immigrants in recent years has caused not just a squeeze on jobs, but also on transport and housing, said MPs.

Mr Inderjit Singh (Ang Mo Kio GRC) said: "By bringing in too many people too quickly...the cost of living has gone up rapidly.

The clearest manifestation of this is the cost of HDB flats."

He said though permanent residents (PRs) cannot buy new flats, they still indirectly inflate prices.

This is because demand by PRs in the resale market can push up prices, and the price of new HDB flats is pegged to the resale market.

There are also many PRs who rent HDB flats and this contributes to the upward pressure on flat prices, he added.

HDB resale prices have risen about 40 per cent in the past three years, far outstripping Singapore's economic growth.

The Ministry of National Development has maintained that PRs, who make up only one in five resale flat buyers, have minimal impact on resale prices.

Yesterday's debate also saw Dr Ahmad Magad (Pasir Ris-Punggol GRC) raise concerns on the effectiveness of recent measures to curb property speculation.

Three days before the Budget statement on Feb 22, the Government announced new rules: A property buyer has to pay extra stamp duty if he sells the property within a year; and the amount buyers can borrow from lending institutions was reduced from 90 per cent to 80 per cent of the property's value.

Despite these measures, people are still thronging showrooms and snapping up properties, said Dr Ahmad.

He was particularly concerned about the policy that allows private property owners to own HDB flats as well.

While the policy says they must live in the flats, anecdotal evidence shows many do not, and are renting them out.

"If no stern action is taken, it will encourage more dual property owners to do the same," he said.

Mr Sin Boon Ann (Tampines GRC) wants the Government to review the income ceiling for a group of young Singaporeans – graduates who have worked a few years before deciding to settle down – struggling to buy a new HDB flat.

He argued that not all couples whose incomes exceed the current limit can afford private housing, or have enough cash to meet the down payment for a pricier resale HDB flat from the secondary market.

National Development Minister Mah Bow Tan said recently the Government was looking into measures for the HDB market and that announcements would be made in Parliament some time this week or the next.

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Headline:Co-owner loses fight to stop collective sale

Section: Home

By: SELINA LUM

Publication: The Straits Times 03/03/2010

Page: B7

No. of words: 455

A MAN did not want to sell his apartment in a proposed collective sale, but his wife wanted to – and had signed on the dotted line to say yes.

The sale of the Joo Chiat property thus hung in limbo for three years while the lone dissenter, Mr Goh Teh Lee, 52, took his fight all the way to the highest court in the land.

En route, the couple divorced.

Yesterday, he lost the battle. The Court of Appeal threw out his case, paving the way for the sale.

The court, comprising Judges of Appeal Chao Hick Tin, Andrew Phang and V. K. Rajah, were unanimous in deciding that Mr Goh, as a co-owner, did not have the right – known in legal parlance as locus standi – to be heard in court, since he and his now ex-wife had to act as one in the en bloc sale.

Despite being told this, Mr Goh, who represented himself in court, insisted he had a strong case for objecting to the sale on the basis of procedural irregularities and unfairness.

But Justice Chao remarked: "We are extremely doubtful that your case is strong. Most, if not all, of the points you raised are without merit."

Justice Rajah piped in: "And we are being polite."

The property in question comprised 24 apartments in a four-storey block known as Koon Seng House and nine pre-war terrace houses on one plot of land. The collective sale was mooted at a residents' meeting in November 2006, when the Gohs were going through their divorce.

The sales proceeds, $21.12 million, were to be divided equally among the 33 units. The terrace houses were owned by a single owner, and the apartments, by different individuals.

Mr Goh asserted that there were discrepancies in the collective sale agreement, such as dodgy signatures.

He contended that the deal was not transparent as the minutes of the first meeting were not circulated to all owners and that the sale committee had acted too hastily by appointing the property agent and lawyer for the deal on the same night the panel was formed.

He also alleged that the majority owners made false declarations to the Strata Titles Board (STB).

The STB disagreed and ordered the sale in December 2008. Mr Goh appealed to the High Court to reverse the decision.

When the High Court also ruled against him, he went to the Court of Appeal.

While he was not ordered to pay legal costs, Mr Goh will have to pay $3,000 for the sales committee's expenses for the appeal.

The appeals court also ruled that if he does not sign the sales papers, the Registrar of Supreme Court will sign them on his behalf.

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Headline:Retirement housing land lease to be studied

Section: Home - Budget Debate

By: CAI HAOXIANG

Publication: The Straits Times 05/03/2010

Page: B10

No. of words: 279

DEVELOPERS here already have the option to build retirement housing villages on any site that is zoned for residential use.

But the Government will study a suggestion by Nominated MP Laurence Wee that those interested in developing such villages be given the option of 60-year land leases – or 30-year leases that can be extended for a further 30-year period.

Senior Minister of State for National Development Grace Fu informed Mr Wee that the Urban Redevelopment Authority had, in fact, already made a Jalan Jurong Kechil site available for sale on a short tenure of 30 years.

"The developer has the flexibility to develop the site for retirement housing or conventional housing development. The shorter tenure of 30 years allowed for the site was intended to reduce the land costs, which could facilitate retirement housing development," she said.

Ms Fu made the point that not only was the option of residential zones already available, but the developers could also build developments targeted at niche markets like the elderly. She said the Housing Board also built studio apartments that are custom-built for elderly living.

Mr Wee had envisaged a development of low-rise condominiums which offers elderly folk a means to live with peers, while staying socially involved to combat loneliness and depression.

Property developer and former Real Estate Developers' Association of Singapore chief Daniel Teo, 67, said the Government was "moving in the right direction".

He too is keen on developing a retirement village and agreed that longer leases would be more attractive.

He explained that higher building costs and the benefits of economies of scale might mean that having a longer lease would serve a developer better.

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Headline:11 bids for exec condo site in Sengkang

Section: Home

By: JOYCE TEO

Publication: The Straits Times 05/03/2010

Page: B1

No. of words: 674

Top bid higher than expected; final selling prices likely to be over $650 psf

AN EXECUTIVE condominium (EC) site in Sengkang has drawn a whopping 11 bids, with the winning offer trumping analysts' expectations by a fair margin.

The 19,000 sq m site, which can be developed into 520 apartments and is near Buangkok MRT station, was topped by joint bidders Frasers Centrepoint's Opal Star and Lum Chang Building Contractors.

Their valuation of the asset came to $193.28 million, or $315 per sq ft (psf) of gross floor area.

They nudged MCC Land (Singapore) and its bid of $190.7 million, or nearly $311 psf of gross floor area, into second place. The third bid of $181.19 million, or $295.3 psf of gross floor area, came from Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development.

Analysts had expected lower bids of between $190 and $300 psf of gross floor area, which would translate into a final selling price of $550 to $600 psf.

By the close of the tender yesterday, developers large and small had put in pitches, from Far East Organization to Sim Lian Land and Chinese firm Qingjian Realty.

City Developments' unit submitted the second-to-last bid of $140.38 million, or $228.8 psf of gross floor area, while Boon Keng Development was last in with an offer of $121.8 million, or $198.5 psf of gross floor area.

CBRE Research said the large number of bids showed that developers continued to have an upbeat outlook for the suburban residential market, and signalled that they were keen to build up their land banks for suburban development.

"Six of the 11 bidders expect the new development...to be launched above $600 psf, which would be a reasonable average selling price for a new EC project at this location in today's market," said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

"This indicates that about half of the developers in today's tender expect the price of entry-level homes to increase in the next year or so."

The winner of the site will have to set aside 95 per cent of the units during the first month of sale for first-time home buyers, as stipulated by the Housing Board.

Frasers Centrepoint is looking to build 500-plus units on the plot, said a spokesman.

"This site is well located, and in view of the tight supply and great demand, we are confident that it will be an attractive development especially to home buyers who have been recently priced out of the market," he said.

The units are not expected to be cheap, given that the top bid is the highest received for an EC site since land was made available for sale from this source in 1997, property experts said.

The previous record, set in May 1997, was at $220 psf of gross floor area, according to CBRE Research.

Based on the top bid's value, analysts estimate the break-even level to be about $600 to $640 psf, which indicates that final selling prices could range from $650 to $700 psf.

PropNex chief executive Mohamed Ismail said that such a price "will seem reasonable" come the second half of the year, when developers who bought land recently at some $500 psf or more "will be marketing their private mass market condos at more than $900 psf".

At nearby The Rivervale EC, Florida EC and Park Green EC, units were sold at $520 to $600 psf between last October and last month, said CBRE Research.

The Government last put up an EC site for sale in Punggol in September 2008 but failed to attract any bids.

The last EC launched was La Casa in Woodlands in May 2005 – for around $550 psf – which was completed in early 2008.

HDB announced yesterday that it will put up for tender a land parcel along Yishun Avenue 11 within the next two months.

The site is earmarked for housing development under the Design, Build and Sell Scheme (DBSS) and will have a potential yield of 700 flats, it said.

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Headline:Turning old CBD offices into prime new homes

Section: Front Page

By: UMA SHANKARI

Publication: The Business Times 01/03/2010

Page: 1

No. of words: 892

As Marina Bay financial district takes shape, developers are making exciting plans

[SINGAPORE] Some one million square feet of office space in the Central Business District (CBD) is likely to be converted into at least 1,000 private homes over the next three years.

Property analysts say that with the Marina Bay financial district now taking distinct shape, developers are looking to recycle older office buildings in the current CBD in anticipation of business activity moving to the new hotspot.

Redevelopment plans are also motivated by climbing luxury home prices which contrast sharply with falling office rents.

City Developments said at its results briefing last Thursday that it was looking to see if it could convert any of its office buildings in the "old" CBD to residential use.

"It is a question of demand," said CityDev chairman Kwek Leng Beng at the briefing.

CityDev's parent company Hong Leong Holdings is already redeveloping 76 Shenton Way, which has a net lettable area (NLA) of about 92,700 square feet of office space.

The 202-unit residential project due to come up on the site is likely to be launched within the next few weeks.

Other similar conversions in the pipeline include UIC Building on Shenton Way and Starhub Centre on Cuppage Road.

"With the theme of working, living and playing in 21st century Singapore fast becoming a lifestyle reality, we see great potential in quality residential developments in the core central region," said a Hong Leong spokesman.

The trend is not new. Developers were looking to convert selected office space into residential use as far back as 2007. City- Dev, for example, launched its One Shenton residential project in January 2007, converting an office block into residential space.

Since then, 316 apartments in the 341-unit project have been sold, with many going for more than $2,000 per sq ft (psf).

But other such plans were put on hold when in May 2007, fearing a shortage of office space, the Urban Redevelopment Authority (URA) called a halt to all conversion of offices in the central area to curb further depletion of existing stock.

The ban was lifted in late 2008 as fears of an office space oversupply emerged.

Knight Frank chairman Tan Tiong Cheng said that with the Marina Bay Sands integrated resort (IR) now ready to open its doors and the entire Marina Bay area taking shape, developers are now taking another look at their buildings located in the current CBD.

"It is the government's intention to have a new CBD in Marina South. So there is concern that some of the older office buildings may not be relevant to future needs," said Mr Tan.

"Office rents have also dipped, so it is a good time to look at redeveloping some of these buildings now that the ban has been lifted."

Elsewhere on Shenton Way, UIC has received permission to redevelop UIC Building into a mostly residential project. UIC's board says it is still assessing all alternatives to ensure the best use for the building. But sources told BT that the conversion could start some time this year. The property has close to 400,000 sq ft of office space.

Office real estate investment trust (Reit) CapitaCommercial Trust also said in January that it is looking at redeveloping Starhub Centre on Cuppage Road into a residential and commercial project with up to 80 per cent of the gross floor area devoted to residential use. The property currently has an NLA of about 280,000 sq ft and analysts estimate that 200-300 upmarket homes could be built on the site.

Other office properties that could be converted (either fully or partly) into private homes include KOP Capital's The Spazio on Cecil Street, and three buildings owned by Fission Group and Yi Kai Group – VTB Building on Robinson Road, and Aviva Building and Cecil House on Cecil Street.

In all, around one million square feet of office space could be removed from the market and transformed into upmarket homes.

City living has, in recent years, become more popular and luxury home prices are expected to climb this year.

UBS Investment Research, for example, expects luxury home prices to rise 40 per cent in 2010 to reach $4,000 psf and maintains that prime home prices (in districts 9, 10, 11) could reach 2007 levels this year.

Falling office rents and an upcoming glut of office supply also means that office rents are widely expected to continue falling.

Property firm Savills expects a 20-25 per cent fall in Grade A office rents in Singapore this year.

But Knight Frank's Mr Tan says that not all office buildings in the present CBD can be converted into homes.

"City living is only attractive if you have a view of the sea or you have some kind of a city vista," he said.

The conversion of some office space into residential units will lend support to rents, analysts said.

UBS Investment Research said in late January that it now expects over one million sq ft of office space to be removed in 2010 and 2011, instead of the 550,000 sq ft expected earlier.

"As a result, we upgrade our prime office rents in 2010-2013 by 5 per cent," said UBS analyst Regina Lim.

"We now expect prime office rent of $8.70 psf per month by end-2010 and $9.70 psf per month by end-2011."

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