Fall In Grade A Office Rents

A report done by CBRE Research showed tt S'pore office rents in 4Q08 (yr-yr) had the sharpest fall in Asia. Her vacancy rate had also gone up to 0.9% fr 0.2% a yr ago. However, some tenants whose leases tt were committed 3 - 4yrs ago could still face with higher rents upon renewal this yr.

4Q08 (yr-yr) Grade A Office Rental:
SGP: -14%
Tokyo: -13.4%
HK: -13.2%
Hanoi: 25.6%
KL: 19.3%
Seoul: 9.5%

* Asia1-Office *

Beware of Indemnity Clause

Case 1:
Some developers are getting the original buyers to sign a Letter of Authority with an indemnity clause that the original buyers will be liable for breaches by their sub-purchasers, including payments for pty tax and maintenance fees.

However, the Housing Controller said tt this was against rule 16 of the Housing Developers Rules, which requires a developer to enter into fresh S&P with the sub-purchasers on the same terms and obligations as the original buyers. Thus the sub-purchasers will be in a direct contractual relationship with the developer and releases the original buyers from their obligations.

Case 2:
Some developers are offering Interest Absorption Scheme (IAS) to attract buyers. Such scheme is similar to the Deferred Payment Scheme tt was scrapped by Govt last yr, except tt buyers need to secure home loans and developers will pay the interest until TOP.

But the scheme comes with an indemnity clause tt shd the developer fail to pay interest to the bank, buyers will have to make the payment and their credit standing will also be affected. Experts think tt such risks are low bcos the developer's reputation is at stake, and the amt of interest is negligible to the overall project cost.

* CNA-S&P , CNA-IAS *

More Condo Launches Coming

With 2 successful launches, Caspian @Jurong & Alexis @Alexandra, another 102-unit FH project, St Patrick's Residences @St Patrick's Rd and 118-unit project, The Beverly @Toh Tuck Rd were launched.

On ave, the price of St Pat Residences was abt $675 psf for a 1,152 sf 2BR unit and abt $900 psf for a 3,423 sf 4BR penthouse. Some 3BR cost just <$1m. Interest absorption scheme (IAS) was offered at a 3% permium.

Over at The Beverly, ave price was abt $750 psf. Unit sizes range fr 1,120 sf for 2BR to 4,187 sf for 4BR, and 2,099 - 2,757 sf for 2-storey penthouses. IAS was not offered.

More projects are expected to launch soon: Double Bay Residences @Simei, The Arte @Thomson, Domus @Irrawaddy, Ascentia Sky @Redhill and The Mercury @River Valley.

* AsiaOne-Launch *

*****

Seems tt S'poreans are either vy rich or optimistic ... ... long queues at NATAS fair, and buying big ticket item like condo; while Citibank, AIG are requesting for more $$$, and stocks plunged to many-yrs lows.

And still got pple so brave doing flipping ... ... * AsiaOne-Flippers *.