Singapore's Home Prices to Reach Record in 2010, SC Global Says

By Leslie Tan and Liza Lin

Aug. 18 (Bloomberg) -- Singapore's luxury home prices may rebound and reach a record in two years as the city state's casino resorts open and the private banking industry develops, SC Global Developments Ltd. Chief Executive Office Simon Cheong said.

About 13 million square feet of office space is expected to be built in the next two years, compared with about 50 million square feet of space now, and companies have already signed leases before the buildings are completed, he said, pointing to his optimism that it would translate into demand for homes.

``2010 is a fair time frame,'' said Cheong in an interview today. ``When the market turns around, you must have the product.''

Singapore's home prices, which rose to a record in 2007, are easing as the government predicts slower growth amid the U.S. subprime crisis. Prime Minister Lee Hsien Loong said yesterday the economic woes will ``at least'' continue into next year.

The government this month lowered its 2008 economic expansion forecast to between 4 percent and 5 percent from an earlier estimate of as much as 6 percent. The economy is expected to slow down as Asian manufacturers face declining demand from the U.S., the region's largest overseas market. Singapore's economy expanded 7.7 percent in 2007.

`Wobbliness in Prices'

SC Global's ``The Marq'' apartment project, close to the Orchard Road shopping belt, fetched a record S$5,100 ($3,613) a square foot in June last year. The company didn't disclose the size of the unit, and said at the time investors paid between S$11 million and S$31 million for homes at the project.

Prices at the project fell to S$4,719 a square foot by December, when a 6,232-square-foot apartment was sold for S$29.4 million, government data showed. SG Global defines luxury homes as those with prices exceeding S$4,000 a square foot.

``In the short term, there could be some wobbliness in prices due to global market uncertainty, but it has nothing to do with fundamentals,'' said Donald Han, Singapore-based managing director of Cushman & Wakefield Pte, a real estate consulting company. ``In the medium term, the value proposition for Singapore still remains.''

SC Global said Aug. 13 second-quarter net income more than doubled to S$11.5 million as selling prices rose, boosting pretax profit margins to 51 percent from 23 percent last year.

Singapore's two casino resorts, which will cost more than $6 billion to build, are scheduled to open in the next two years. Lee said yesterday the two resorts would need 20,000 workers, which would increase the number of expatriates to the city state.

To contact the reporters on this story: Leslie Tan in Singapore at lestan@bloomberg.net; Liza Lin in Singapore at Llin15@bloomberg.net