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www.fareast-plaza.com
No.14
Scotts Road
#05-134(B) Far East Plaza Singapore
228213
Tel:
67326266 HP:
96736477
Fax:
67325132
Email:enquiry@fareastplaza.com
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Charles
Yue (Charlie) H/p: 9673 6477
26th Anniversary
in Real Estate
1983
To 2010
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Ginza
Real Estate Top Awards
Charles Yue (Charlie)
Top Lister (Most Exclusive
Listings)
(2002/3/4/5/6/7/8)
Top Producer (Commercial Property)
(2002/3/4/5/6/7/8)
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Newsletter on
Far East
Plaza
By Charles Yue (Charlie)
Jul
– Aug 2010 Series I
50
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(A)
MACRO FACTORS - HOW TO AVOID ANOTHER EURO ZONE
PROBLEM AND WHAT DID HISTORY TEACH US.
In
Mid-April 2010, the Straits Times Index (S.T.I)
briefly hit over 3000 points and then the Dow Jones
Index went below 10,000 points on May 5th, triggered
by unfolding problems in the European Union or Euro
Zone (consisting of 27 countries) and the slow
recovery in the U.S. This debt burden started with
Greece and has since uncovered a pattern spreading
to Portugal, Ireland and Spain. ( These countries
have now the dubious honour to earn the acronym of '
PIGS '! - Portugal, Ireland, Greece and
Spain).
Market sentiment has been greatly affected as most
bad debts will be infesting the European Union with
the Domino effect. With the weak recovery in
American and Japan, and Europe not buying, some are
predicting another round of financial crisis, now
played out from Europe, will creep into the Asian's
stock and property market.
All
these end-result and consequential pains have its
source on the human fundamental misbehaviours of
wanton waste, bad work ethics, overspending and
indulgence, uncompetitiveness, undeserved welfarism,
draconian affirmative policy and protectionism.
As
an individual, we need to study hard, upgrade
skills, innovate, postpone immediate gratification,
save for a rainy day for emergency and invest for
the future.
As
a nation, the people and the government should be
competitive, open and transparent, they should cut
down on waste and red-tape, reward risk-taking,
practice meritocracy and set aside foreign reserves
for saving/ defence / calamity.
It
seems like a deja vu drama played out first in the
1997 Asian Financial Flu, the 2008 U.S. Sub-prime
crisis and now the Euro Zone. The people of the
affected European countries will queue up to
experience deflation, collapse of real estate
prices, negative equity, wage and job loss,
foreclosure, business and bank failures.
Perhaps,
everyone should be taught of the 'Basic Finance
Lesson 101' on the Finanacial Ratios:
1.
Basic Liquidity Ratio : 6 to 8 months of Emergency
Saving.
2.
Saving Ratio : At least 10%.
3.
Debt to Asset Ratio : 50% or less.
4.
Debt Service Ratio : 35% or less.
It
is an irony that in the 16th to 19th century, the
European countries similar with the 'PIGS' after the
Renaissance, went for economic exploration to
colonize the New World and control and explolt the
people and government, created slave trading, sold
opium to the weak Manchu Qing's China and subjugated
other less developed regions.
Yet,
despite their advanced knowledge of weapon
technology and business management of creating
credits and debt financing, they have turned soft
and decadent, succumbing to the basic human weakness
of splurging on unearned future money through credit
cards ( 'a western disease' together with the small
pox and chicken pox ) and descended into The Dark
Age of bubonic plague which killed one third (1/3)
of Europe's population before the Crusade.
Now
bring forward to 2010. The Euro currency was valued
at S$2.20 in November 2009 to 1 Euro but now it is
at S$1.70. Some experts are even predicting that it
will match S$1.40 to 1 Euro as the European Union
countries fall like dominoes and eventually break
up!
Even
with the summer heat now on in Europe, Asian
tourists, many from China, are queuing up outside
the branded goods stores like Louis Vuitton, Prada,
Hermes, Cartiers and Bvlgari to snatch up all
varieties of branded products which are 40% cheaper
now, ( Euro currency is now 30% cheaper and 10% for
'Value Added Tax', VAT, foreign tourists tax refund
).
Yes,
tourists in Europe's shops are crying out: cheap!
cheap! cheap! .
(B)
WHY SMART SELLERS MAY CONSIDER SELLING NOW.
Since
January 2010, when retail trade volume has started
to slow down owing to the new supply of shopping
malls space, and now in July 2010, we have many more
clear signals that the rent for tenancy renewal is
coming down. Some are for 5% while others are as
much as 30%. With consistent market feedback, we
would definitely conclude that the rent will be
dropping throughout this year.
There
are more incidents of tenants defaulting in terms of
late or non payment or pleading for lower rent
discount. We are handling more cases of rental
cheques being bounced and the assignment of tenancy
whereby the existing tenants want to stop retail
operation and need to find a replacement through us.
Ironically,
many bank valuations have remained generously high
and therefore buyers can still take high loan
amounts based on the bank's panel of valuers.
Singapore's
property bubble may be forming as the rental income
and yield cannot match the asking or sale price.
Sellers have often quoted how much the bank has
valued their properties and can give high amount of
loan but the property's existing or prospective
yield would not be able to give a decent rental
return.
Thus,
while the going is still good, some smart sellers
may consider to reap the capital gain by 'eating up
the cherries' or roasted duck drumsticks (2
drumsticks are equal to 30% of the whole duck's
price ) and pass the buck to some contrarian and
adventureous buyers. When by then if most people
think that the market is bad, both price and demand
will suffer.
To
know how much your property is worth for sale or
rent, please call us at HP 96736477 for a
confidential discussion.
(C)
HOW CAN LANDLORDS AND OWNERS TAP OUR EXPERTISE IN
MARKETING?
1.
Call us to find out how much your shop is worth for
rent and sale.
2.
Sms your handphone number and email address. We
provide a monthly report on the state of the market
condition.
3.
Provide a Tenancy Renewal Package with various
option services including negotiation with existing
tenant, finding new tenant, collection of rent and
after-sale caretaker supervision.
4.
Tenant's Default Re-Engineering - solve, eliminate,
redress and maintenance of good tenant practice.
5.
Forward Sale Re-Packaging - to present the best
property image and profile so as to seek the highest
potential sale price in a future date.
Charles
Yue (Charlie) H/p: 9673 6477
Fax: 67325132
www.fareast-plaza.com
Email:enquiry@fareast-plaza.com
14 Scotts Road #05-134 (B) Far East Plaza Singapore
228213 |