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					MICA (P) 164/04/2009




update
                                                                                                                    ISSUE 47 • SEPTEMBER 2009




                                                                                                         research &
                                                                                                         d e v e l o p me nt r e p ort


    Market Summary
    The second quarter of 2009 showed an improvement
    in market sentiment, with expectations that the economy
    had bottomed out in 1Q2009. Supported by strong
    gains in the manufacturing and financial services
    sectors, Singapore’s overall GDP expanded by 20.7% in
    2Q2009 compared with the previous quarter. In year-
    on-year (y-o-y) terms, GDP shrank by 3.5% in 2Q2009,
    compared with 9.5% contraction in 1Q2009. With better
    than expected economic indicators for 2Q2009, the
    Ministry of Trade and Industry has revised Singapore’s
    GDP growth for 2009 to -6% to -4% from the previous
    forecast of -9% to -6%.

    The Singapore residential market has rebounded
    significantly with a total of 7,250 new private residential
    units sold as of the first half of 2009, 70% higher than
    the 4,264 units sold for the whole year of 2008. The
    rate of price declines has also moderated, with the URA
    private residential price index and office price index
    having registered quarterly declines of -4.7% and -3.9%
    respectively for 2Q2009, compared with -14% and
    -12% declines in that order for the previous quarter. The
    economic recovery, low interest rates, pent-up demand
    from HDB upgraders and the return of foreign investors
    have renewed strong buying interest for private property.
    To curtail speculative activity, the government has banned
    the interest absorption scheme and interest-only housing
    loans for private residential property from 14 September
    this year. Despite the improving sentiment, the economic
    outlook for the second half of 2009 remains uncertain       ASCENTIA SKY, SINGAPORE
    with the lack of fundamentals to sustain a strong recovery. Rider Levett Bucknall LLP are the Quantity Surveyors for this condominium development.
    The fragility of the global financial system, coupled with
    unemployment, cautious consumer spending and rising government debt may limit global economic recovery. It is widely
    expected that economic growth will only pick up momentum from 2010 onwards. To meet the possible increase in demand
    for private housing, the government will reinstate land sales under the Confirmed List and increase supply on the Reserve
    List for the first half of 2010.

    The Singapore construction industry continued to expand with double-digit growth of 18.6% y-o-y in 2Q2009 compared
    with 24.4% in 1Q2009. Based on the Building and Construction Authority’s (BCA) report, the total volume of contracts
    awarded in 2Q2009 is 13% higher than 1Q2009, attributed to the stronger construction demand for residential and
    public sector civil engineering work. Contracts awarded by the private sector amount to S$1.2 billion, with the public sector
    having awarded close to S$4 billion worth of contracts in 2Q2009 (as illustrated in Figure 1).

    Building tender prices continued their downward trend for the first six months of 2009, as the reduced volume of available
    building tenders in contrast with the 2008 peak had resulted in greater competition among contractors. Rider Levett
    Bucknall’s quarterly Tender Price Index (TPI) showed an average -7% decline for 2Q2009 compared with 1Q2009. The
    BCA All Buildings TPI registered -8% decline for the same period. In view of the recent surge in private residential property
    sales and the release of more public infrastructure and institutional work, tendering activity is projected to increase over the
    next two quarters. Tender prices are anticipated to level off with an estimated -3% movement in 3Q2009. Full year tender
    price movement for 2009 is anticipated to be on average between -18% and -20%.


    ISSUE 47 • SEPTEMBER 2009
Market Feature
Singapore Construction Market Trends
Construction Demand
Amidst the global economic slowdown, availability of new construction projects has declined noticeably for 2009, particularly
for the private sector. Total construction demand reached S$9.8 billion for the first half of 2009, with S$7.7 billion consisting
of public sector work and S$2.1 billion from the private sector. Private sector construction demand for commercial and
industrial properties has declined substantially, with a combined S$964 million worth of contracts awarded for the first half
of 2009 compared with S$4.4 billion awarded in the second half of 2008. Public sector projects provide the main support
for construction demand through new infrastructure work and institutional developments. In contrast with the all-time high of
S$34.6 billion in 2008, the BCA recently estimated that total construction demand in 2009 could fall to the range of S$18
billion and S$24 billion, against the previous projection of between S$22 billion and S$28 billion.


                                                     Figure 1 – Total Contracts Awarded in Singapore (Quarterly)

                        10,000

                        9,000

                        8,000

                        7,000
       In SGD Million




                        6,000

                        5,000

                        4,000

                        3,000

                        2,000

                        1,000

                            -
                                 1Q 2006 2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009

                                                                          Public Sector      Private Sector

Data Source: BCA (as at 27 August 2009)




Material Prices
At the beginning of 2009, basic material and commodity prices fell due to a slump in global demand and declining
economic activity worldwide. However, there has been an upturn in the prices of key commodities. The table below shows
the average price changes of commodities and basic construction materials since the start of the year.

 Material                                                                          Unit                  Jan 09           Aug 09            Price Change
 Crude Oil (WTI)                                                                  barrel                      US$42          US$71                 69%

 Copper                                                                            tonne                US$3,220          US$6,164                 91%

 Aluminium                                                                         tonne                 US$1,412         US$1,933                 37%

 Steel Reinforcement (T20)                                                         tonne                 S$861.50            S$850                 -1%

 Concrete (Grade 35)                                                           cubic metre                S$121.10            S$88                 -27%

 Cement                                                                            tonne                 S$117.50            S$100                 -15%

 Concreting Sand                                                                   tonne                 S$34.30           S$29.80                 -13%

 Granite (20mm aggregate)                                                          tonne                 S$23.40           S$18.20                 -22%

Data Source: FT, BCA, RLB (as at 9 September 2009)




ISSUE 47 • SEPTEMBER 2009 | UPdATE RESEARCh & dEvEloPMEnT REPoRT
Graph 1: Metal Price Movements

                                                 Average Monthly Prices for Copper, Aluminium and Steel Reinforcement (In US$/Tonne)


               8,200
                                                                                                                                                                       Copper

               7,200


               6,200


               5,200
   US$/Tonne




               4,200
                                                                                                                                      Aluminium

               3,200


               2,200

                                                                          Steel Reinforcement (T20)
               1,200


                200
                             Dec   Jan   Feb   Mar   Apr   May   Jun   July   Aug   Sep   Oct    Nov   Dec    Jan   Feb   Mar   Apr   May   Jun    Jul   Aug   Sep    Oct   Nov Dec   Jan   Feb   Mar Apr     May   Jun   Jul   Aug
                             06    07    07    07    07    07    07    07     07    07    07     07    07     08    08    08    08    08    08     08    08    08     08    08  08    09    09    09   09     09    09    09    09

               Copper                                                                                                          2                  6             3                  2   4
                             6671 5668 5674 6449 7764 7680 7473 7971 7509 7646 8006 6965 6585 7059 7886 8437 8683 8380 8259 841 7633 6988 4924 371 3071 3220 331 3748 4405 4568 501 521 6164
               Aluminium 281 2807 2831 2760 281 2794 2676 2732 251 2390 2441 2506 2381 2445 2776 3304 2958 2902 2957 3070 2764 2525 21
                            3                  4                  4                                                                   20 1852 1490 1 2 1
                                                                                                                                                    41 329 1335 1420 1460 1573 1667 1933
               Steel Reinf   485   490   502     8
                                               51 537      588   601 607      612   624   641 647      779   838    975 1095 1 20 1 59 1 9 1
                                                                                                                              1    1    21  251 1     01
                                                                                                                                                 243 1 7 871 705 635                  563   536   503   508     6
                                                                                                                                                                                                              51 505      516   590



Data Source: London Metal Exchange, BCA and RLB




Graph 2: Building Tender Price Index                                                                                              (Year 2005 = 100)

               160

               150

               140

               130

               120

               110

               100

                 90

                 80
                             1994        1995        1996        1997          1998        1999          2000         2001        2002            2003         2004         2005      2006        2007        2008        2009*

                RLB          104         110          120         123           105             96       100              91          91          95           97           100       103         130          151         127
                BCA          101         105          108         107           100             89           88           88          90          96           99           100       103         123          137         119



Data Source: BCA and RLB


Notes:
•	Variances	between	the	RLB	and	the	BCA	Tender	Price	index	arise	from	differences	in	the	index	derivation	methodology,	the	basket	of	items	and	weightages	used	for	each	index	and		
	 the	variety	of	building	projects	utilised.	The	index	basket	here	excludes	piling	works	and	Mechanical	&	Electrical	services.								

•	Starting	from	the	publication	of	2009	indices,	the	BCA	and	RLB	Tender	Price	Index	are	adjusted	with	a	new	base	year	of	2005	(i.e.	2005	index	=	100).

*	Average	indices	as	at	1st half of 2009.
Singapore Construction Prices
                                                 Cost per CFA                     Cost per GFA                                                                                                Cost per CFA
    Commercial                                                                                                             Landed Residential
                                                    S$/m2                            S$/m2                                                                                                       S$/m2
   Office within CBD                                                                                                       Detached House                                                       3,050 – 5,050

   < 10 Storeys                                   1,900 – 2,350                    2,650 – 3,000                           Semi-detached House                                                  2,250 – 2,950

   11 – 25 Storeys                                2,200 – 2,650                    2,750 – 3,450                          Terrace House                                                         2,050 – 2,450
    26 – 40 Storeys                               2,350 – 3,000                    3,100 – 4,000
                                                                                                                           Institutional
   41 – 55 Storeys                                2,800 – 3,500                    3,750 – 4,700
                                                                                                                           Primary School                                                      1,000 – 1,300
   > 55 Storeys                                   3,250 – 3,750                    4,250 – 4,900
                                                                                                                           Secondary School                                                    1,100 – 1,650
   Office Outside CBD
                                                                                                                          Junior College                                                       1,350 – 2,100
   < 10 Storeys                                   1,800 – 2,250                    2,250 – 2,800

   11 – 25 Storeys                                1,950 – 2,450                    2,550 – 3,250                           Institutions of Higher Learning                                     1,900 – 2,700

    26 – 40 Storeys                               2,350 – 2,800                    2,850 – 3,650                           Industrial
    Hotel (including FF&E)                                                                                                 Light Industrial Building                                           1,050 – 1,450

    Five Star                                     3,850 – 5,100                    4,900 – 6,550                           Heavy Industrial Building                                           1,200 – 1,700
    Four Star                                     3,200 – 3,950                    4,100 – 5,150                           Hi Tech Factory                                                     1,300 – 2,000
   Three Star                                     3,000 – 3,400                    3,750 – 4,300
                                                                                                                           Single Storey Warehouse                                                 900 – 1,250
    Retail
                                                                                                                          Car park
    Medium Quality                                2,000 – 2,500                    2,700 – 3,200
                                                                                                                          Above Grade Car Park                                                     600 – 1,150
    Good Quality                                  2,550 – 3,000                    3,250 – 3,900
                                                                                                                           Basement Car Park                                                   1,250 – 2,000
    Condominium
                                                                                                                      CFA – Construction floor area is the area of all building enclosed covered
    Medium Quality                                                                                                    spaces measured to the outside face of the external walls including covered
                                                  1,750 – 2,300                    2,300 – 2,900
    Condominium                                                                                                       basement and above ground car park areas.
    Good Quality
                                                  2,150 – 2,850                    2,950 – 3,800                      GFA – Gross floor area is the area of building enclosed covered spaces
    Condominium
                                                                                                                      excluding car park and driveway areas calculated for purposes of planning
    Luxury Quality                                                                                                    submission.
                                                  2,750 – 3,750                    3,700 – 5,150
    Condominium
                                                                                                                      The construction price ranges above are indicative and due consideration
All prices stated herein are as at 2nd Quarter 2009, and include a general                                            should be given to the different specification, size, location and nature of
allowance for foundation and external works.                                                                          each project when utilising this information. The prices here may not fully
                                                                                                                      reflect the extent of current market and tendering conditions.

Exclusions
• Land cost • Legal and professional fees • Development charges • Authority fees • Finance costs • Loose furniture,
fittings and works of art • Tenancy work • Site infrastructure work • Diversion of existing services • Resident site staff
cost • Models and prototypes • Future cost escalation • Goods and Services Tax
While	Rider	Levett	Bucknall	LLP	(“RLB”)	has	endeavoured	to	ensure	the	accuracy	of	the	information	and	materials	herein	(the	“Materials”),	it	does	not	warrant	its	accuracy,	
adequacy, completeness or reasonableness and expressly disclaims liability for any errors in, or omissions therefrom. RLB shall not be liable for any damage, loss or expense
whatsoever	arising	out	of	or	in	connection	with	the	use	or	reliance	on	the	Materials.	The	Materials	are	provided	for	general	information	only.	Professional	advice	should	be	
obtained	for	your	particular	factual	situation	before	making	any	decision.	The	Materials	may	not,	in	any	medium,	be	reproduced,	published,	adapted,	altered	or	otherwise	used	
in	whole	or	in	part	in	any	manner	without	the	prior	written	consent	of	RLB.

Published & printed by



Rider Levett Bucknall LLP
150 Beach Road #09-01 Gateway West Singapore 189720
Tel: +65 63391500 Fax: +65 63391521
Web: www.rlb.com E-mail: rlb@sg.rlb.com

Rider	 Levett	 Bucknall	 LLP	 (Reg.	 No.	 T09LL0492J)	 is	 a	 limited	 liability	 partnership	 registered	 in	 Singapore	 under	 the	 Limited	 Liability	 Partnerships	 Act,	 Cap.	 163A	 and	 it	 was	 converted	 from	 the	 firm	 of	
Rider	Levett	Bucknall	(Reg.	No.	08787000B)	on	1	April	2009.




ISSUE 47 • SEPTEMBER 2009

				
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