MARKET UPDATES

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Condo, HDB rental volumes tumble again in August; rents hold: SRX

Rents for Housing Board flats and private apartments held steady in August but leasing took another big hit, with rental volumes falling to multi-year lows and below circuit-breaker levels, going by flash data from real estate portal SRX Property on Wednesday (Sept 9). August leasings for private condominiums and apartments tumbled 20.4 per cent month on month to 2,716 units. This is 47 per cent lower than a year ago and 42 per cent less than the five-year average volume for the month of August. The rental volume for HDB flats in August also fell, by 16.7 per cent from July to 1,025 flats. This is 46.2 per cent lower than a year ago and 44.1 per cent below the five-year average volume for that month. For condo rentals, the estimated August volumes would be the lowest since February 2014, while those for HDB flats would be the lowest since December 2010, SRX told The Straits Times. The sharp fall in rental volumes, which was also seen in July, could signal the start of a "domino effect" for the rental market, which has been hampered by an economic slowdown and rising unemployment among foreigners in Singapore, said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie. Pointing to the job support schemes intended to help firms retain their Singaporean workers, Ms Sun added that it is "inevitable" that the reduction in foreign employment will adversely impact the leasing market temporarily. ERA Realty head of research and consultancy Nicholas Mak agreed, and said that dampened demand in both the HDB and private housing market may be due to weakness in the wider employment market, which has seen job losses for some expatriates. This wider decline has not been offset by the increase in rental demand for HDB flats from Malaysian workers looking for affordable accommodation near their workplaces following the implementation of border restrictions between Malaysia and Singapore due to Covid-19. SRX flash data also showed that private apartment rents remained unchanged in August from the previous month, while HDB rents saw a small uptick of 0.3 per cent within the same period. Year on year, overall rents for private apartments in August were down by 1 per cent from a year ago and 17.3 per cent off their peak in January 2013. For HDB flats, rents slipped by 0.1 per cent from August last year and were 14.6 per cent lower than their peak in August 2013. Although the SRX rental index held steady for the private residential market in August, Ms Sun noted that rents have been falling for six consecutive months for luxury homes in the prime districts or core central region. Rents have also slipped marginally in the outlying areas or outside of central region. "The trends may indicate that more expats are moving out from prime locations to suburban areas or city fringe areas, where housing tends to be more affordable in the light of the current economic slowdown, " she said. Rental vacancies may increase in the coming months, possibly exerting some downward pressure on rents for certain locations, she said. As for HDB rents, said Mr Mak, the 0.3 per cent month-on-month increase comes as a significant number of relatively new HDB flats completed the five-year minimum occupation period this year and could be available for lease. These newer flats would command higher rentals compared with the older flats in the vicinity. As more of such newer flats enter the leasing market, they could support or even increase the overall HDB rental index, he added.

Source: Straits Times
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Private home resale volume hits 2-year high in Aug: SRX

The number of private non-landed homes resold hit a two-year high last month while prices firmed slightly in what observers see as another sign of the Singapore property market's growing recovery from the effects of the Covid-19 pandemic. An estimated 1,052 resale condominiums and apartments changed hands last month - up 7 per cent from July and 36.3 per cent higher than in August last year, according to flash figures from real estate portal SRX Property yesterday. The previous highest volume was achieved in July 2018 - the month when property cooling measures were announced - when 1,100 units were sold. The strong demand from HDB upgraders showed in the transactions of mass market homes in the outside central region (OCR), which accounted for nearly 60 per cent of August's resale transactions. As in July, this group of buyers entered the private resale market in greater numbers when many flats became eligible for resale following their five-year minimum occupation period. Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said August's stellar resales of private homes seem to be in tandem with the positive sales trends observed in other market segments. Last week's SRX flash estimate for August's HDB resale volume showed a similarly strong level of demand, with more than 2,400 HDB resale flats transacted for a third consecutive month. HDB's Build-To-Order sales launches in a number of housing estates in August were also oversubscribed many times. Based on the latest URA caveat data, new home sales, excluding executive condominiums, or ECs, also hit more than 1,200 units in August during the Hungry Ghost Month. This is the highest sales achieved over the last 12 months. The strong housing demand across the different market segments indicates that Singapore's property market could be showing some "early signs of recovery", said Ms Sun. Property sales plunged during the circuit breaker period when no housing viewings were allowed and all showflats were closed. Private resales began to rebound in July with pent-up demand and HDB upgraders nearly doubled transactions to 978 units resold from 496 units in June. Said Ms Sun: "For many Singaporeans, residential properties may still be a 'safer bet', especially for investors who are looking for stable returns during times of uncertainty. The market exuberance from the primary market may have also spread to the secondary market as opportunistic buyers are currently on the look-out for under-valued resale properties in the market. "With more than 5,000 resale condos sold in the first eight months of 2020, based on SRX data, we expect total resale volume to likely reach 7,500 to 8,000 units this year - a tad lower than the 8,949 units resold in 2019, but still a very respectable number in view of the massive disruption from the pandemic, " she said. Despite the rise in demand, resale condo prices in August remained largely stable, inching up by 0.4 per cent from July, and by the same amount over the same month last year. Both the core central region (CCR) and rest of central region (RCR) saw a marginal resale price increase of 0.3 per cent month on month, while the OCR - which is supported by a larger pool of buyers - enjoyed a slightly higher 0.5 per cent rise. Mr Nicholas Mak, ERA Realty's head of research and consultancy, said the stable price index and expanding resale volume in August indicate that sellers were not cutting prices significantly to sell their properties. At the same time, some homebuyers were defying the Hungry Ghost Month, which began in the third week of August, to seal property deals. Ms Wong Siew Ying, head of research and content at PropNex Realty, said she expects private resale prices to be relatively flat in the coming months, as the gloomy economic prospects and muted sentiment weigh on sellers' ability to raise asking prices substantially. In addition, buyers are likely to be cautious and prudent in their purchases, mindful of potential downside risks ahead, including the weaker hiring market, she said.

Source: Straits Times
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Condo resale volume hits 2-year high in August: SRX

SINGAPORE - The number of private non-landed homes resold hit a two-year high last month while prices firmed slightly in what observers see as another sign of the Singapore's property market's growing recovery from the effects of the Covid-19 pandemic. An estimated 1,052 resale condominiums and apartments changed hands last month - up 7 per cent from July and 36.3 per cent higher than in August last year, according to flash figures from real estate portal SRX Property on Tuesday (Sept 8). The last highest volume was achieved in July 2018 - the month when property cooling measures were announced - when 1,100 units were resold. The strong demand from HDB upgraders was evidenced by mass market homes in the outside central region (OCR) accounting for nearly 60 per cent of August's resale transactions. As in July, this group of buyers have entered the private resale market in greater numbers, with many flats becoming eligible for resale recently by obtaining their five-year minimum occupation period. Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said August's stellar resales of private homes seem to be in tandem with the positive sales trends observed in other market segments. Last week's SRX flash estimate for August's HDB resale volume showed a similarly strong level of demand, as more than 2,400 HDB resale flats were transacted for a third consecutive month. August's HDB Build-to-Order sales launch had also been oversubscribed many times for a number of housing estates. Based on the latest Urban Redevelopment Authority caveat data, new home sales, excluding executive condominiums or ECs, also hit more than 1,200 units in August during the Hungry Ghost Month. This is the highest sales achieved over the last 12 months. The strong housing demand across the different market segments may indicate that Singapore's property market could be showing some "early signs of recovery", said Ms Sun. Property sales had plunged during the circuit breaker period when no house viewings were allowed and all show flats were closed. Private resales began to rebound in July with pent-up demand and HDB upgraders nearly doubling transactions to 978 units resold from 496 units in June. Said Ms Sun: "For many Singaporeans, residential properties may still be a 'safer bet' especially for investors who are looking for stable returns during times of uncertainty. The market exuberance from the primary market may have also spread to the secondary market as opportunistic buyers are currently on the look-out for under-valued resale properties in the market. "With more than 5,000 resale condos sold in the first eight months of 2020 based on SRX data, we expect total resale volume to likely reach 7,500 to 8,000 units this year - a tad lower than 8,949 units resold in 2019, but still a very respectable number in view of the massive disruption from the pandemic, " she said. Despite the rise in demand, resale condo prices in August remained largely stable, inching up by 0.4 per cent from July, and by the same amount over the same month last year. Both the core central region (CCR) and rest of central region (RCR) saw a marginal resale price increase of 0.3 per cent month on month, while the OCR - which is supported by a larger pool of buyers - enjoyed a slightly higher 0.5 per cent rise. Mr Nicholas Mak, ERA Realty's head of research and consultancy said the stable price index and expanding resale volume in August indicate that sellers were not cutting prices significantly to sell their properties. At the same time, some home buyers were defying the Hungry Ghost Month, which began in the third week of August, to seal property deals. Ms Wong Siew Ying, head of research and content at Propnex Realty, said she expects private resale prices to be relatively flat in the coming months, as the gloomy economic prospects and muted sentiment weigh on sellers' ability to raise asking prices substantially. In addition, buyers are likely to be cautious and prudent in their purchase, mindful of potential downside risks ahead, including the weaker hiring market, she said. A condo unit at Hilltops in Cairnhill Circle which went for $8.4 million was August's highest transacted resale price. In the city fringes or RCR, the highest price was for a $5.1 million unit at Amber Skye in Amber Road, while the OCR's highest sale came from a $3.6 million unit at Grand Duchess at St Patrick's in Marine Parade.

Source: Straits Times
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Frasers Centrepoint Trust proposes to take over AsiaRetail Fund for $1.06 billion

Frasers Centrepoint Trust (FCT) is proposing to raise up to $1.39 billion in equity to fund its acquisition of the remaining 63.1 per cent of AsiaRetail Fund for $1.06 billion. AsiaRetail Fund owns five malls in Singapore - Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1 - as well as one office property, Central Plaza. If the acquisition goes through, FCT's retail properties in its portfolio will increase from seven to 11, and its net lettable area will expand by about 64 per cent to 2.3 million sq ft. This places FCT among the largest suburban retail mall owners in Singapore. FCT's portfolio size will increase to approximately $6.65 billion, from $3.96 billion. It currently has seven suburban retail properties in Singapore, namely Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Anchorpoint, YewTee Point, Bedok Point, Changi City Point and Waterway Point (40 per cent interest). To fund the acquisition and pare down existing debt, FCT's manager is proposing to issue up to 628 million new units in the trust, representing around 56.1 per cent of the total number of issued units. Based on the illustrative issue price of $2.22 per new unit, the proposed equity fund raising is expected to raise gross proceeds of up to $1.39 billion. AsiaRetail Fund also owns Setapak Central, a mall in Kuala Lumpur, which it proposes to divest to FCT's sponsor for a sale price of $39.7 million. FCT also plans to divest Bedok Point to its sponsor for a sale price of $108 million. On a pro forma basis, these transactions are expected to provide 8.59 per cent distribution per unit accretion based on FCT's FY2019 financial statements. Suburban malls remain an attractive asset class, FCT said, noting that more than 99 per cent of the retailers in the AsiaRetail Fund's Singapore retail assets and FCT's existing portfolio have resumed business since phase 2 of Singapore's reopening on June 19. "The pace of the recovery has demonstrated the resilience of suburban retail malls through challenging times, " it added. The acquisition fee payable to the real estate investment trust manager for the proposed acquisition is approximately $19.3 million. Stamp duties, professional fees and other expenses to be incurred in connection with the acquisition and the proposed equity fund raising are estimated at $32.1 million. FCT will convene an extraordinary general meeting on Sept 28 to seek unit holders' approval for the proposed transactions.

Source: Straits Times
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Property portal 99 Group to hire 100 tech staff over the next 12 months; appoints CTO

Property portal 99 Group is hiring around 100 additional technology staff over the next 12 months to boost its tech workforce. These include positions such as front- and back-end engineers, app developers, product managers, user experience (UX) and user interface (UI) designers and data analysts, said the Singapore-based firm on Wednesday (Sept 2). Some of the job openings for positions in Singapore and Indonesia are listed on its 99.co website. In addition, the firm announced that it has appointed Mr Shivkumar Krishnan as its Chief Technology Officer. He brings with him over two decades of experience in the tech industry, said the portal. Prior to the appointment, Mr Krishnan was the director of engineering at Circles.Life and the engineering leader at Grab. He has also spent more than 10 years in the United States at tech giants including Microsoft and eBay, as well as at start-ups. The CTO appointment and hiring plans are meant to "accelerate the property portal's tech innovation for an evolving real estate industry", as property hunting increasingly shifts online, said the firm. It added that the push to expand its pool of tech professionals is "all the more important" as the Covid-19 pandemic has hastened digital transformation in the property buying and selling process.Calling the Covid-19 a "game changer", its chief executive Darius Cheung said the firm is leveraging technology to deliver a better experience for property seekers. "As an increasing portion of the entire home search and purchase process shifts online, our platform has facilitated many transactions through tools such as live video viewings, " he said.The firm said it had received five times the number of video listings on its platforms in the first half of this year. Even after Singapore eased the circuit breaker measures in June and physical home viewings were resumed, home seekers continue to show high interest in such video listings on its platforms.

Source: Straits Times
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Queen Astrid Gardens launches collective sale, $126.8m guide price for huge good class bungalow land

The owners of Queen Astrid Gardens have launched their property for collective sale - putting on the market a land parcel in the right location and size to potentially build four good class bungalows (GCBs). The site lies within the exclusive Queen Astrid Park GCB area and comes with a guide price of $126.8 million, which translates to approximately $2,037 per square foot of land area, exclusive marketing agent Knight Frank Singapore said on Wednesday (Sept 2). Mr Ian Loh, Knight Frank Singapore's head of capital markets for land and building, collective and strata sales, said the site "poses opportunities for potential buyers looking to create a family estate and leave an enduring legacy". The 999-year leasehold site spans 5,783 sq m or 62,243 sq ft. The eventual buyer can build a single mansion or subdivide it for up to four GCB parcels, subject to approval by the relevant authorities, said Knight Frank Singapore. Mr Loh noted that there are only about 2,800 GCBs in the 39 GCB Areas in Singapore and the last GCB sale of land over 60,000 sq ft in District 10, where Queen Astrid Gardens site is located, was in 2015. The property sits on elevated grounds and is possibly the highest point in the locality, said the agency, adding that it also has a generous frontage of more than 100m onto Queen Astrid Gardens road. "With a very limited supply, GCBs with favourable attributes such as regular-shaped land and elevated grounds usually command good premiums over other GCBs, " said Mr Loh. "With the option for subdivision into several GCBs, the asset is an especially attractive proposition for home seekers or investors looking for further wealth preservation potential over the long term." Built in 1989, Queen Astrid Gardens condominium is a four-storey development comprising 16 apartments ranging from 224 sq m to 239 sq m. The owners stand to pocket $7.8 million to $8.06 million each, based on the guide price for the property. The tender for Queen Astrid Gardens will close on Oct 7 at 3pm.

Source: Straits Times
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PropertyGuru raises $300 million from existing backers to expand in South-east Asia

PropertyGuru Group, the South-east Asia property technology company, has raised another $300 million from global investment giants TPG Capital and KKR, both of which are existing investors. The funding will accelerate PropertyGuru's growth across South-east Asia as it "ramps up its investment to meet the rapidly evolving needs in the property ecosystem", said the company in a media release on Wednesday (Sept 2). "The additional investments from TPG and KKR will enable us to continue building South-east Asia's property trust platform and accelerate our momentum in key markets like Malaysia and Vietnam, " said chief executive and managing director Hari V. Krishnan. "We help property seekers 'Find.Finance.Own' their home and these new investments will accelerate the growth plans we have identified as more consumers and customers move towards digital solutions for property buying and selling, " he added. The company scrapped plans for an initial public offering in Australia last year, citing market volatility. It was planning to raise as much as A$380.2 million (S$380.6 million) in the listing. PropertyGuru added that the investment comes at "an extraordinary time". It said the company has seen a 24 per cent year-on-year revenue growth and continues to lead in South-east Asia with 57 per cent market share. Launched in 2007, PropertyGuru is based in Singapore and also operates in Vietnam, Thailand, Malaysia and Indonesia. Chairman Olivier Lim said: "We have scaled rapidly across South-east Asia by anticipating and addressing consumer needs with a data-driven strategy, underpinned by a talented team of 'gurus'. "This year, amidst the changing business realities, the demonstrable strength of our platforms has solidified our relative market leadership and provides new opportunities to accelerate both organic and inorganic growth with new investments." The firm intends to expand PropertyGuru Finance, a mortgage marketplace launched this year; PropertyGuru FastKey, an end-to-end sales enablement solution for property developers; and improve its data capabilities to serve home buyers across the region. One of the newer features in PropertyGuru FastKey is what is dubbed the StoryTeller, which allows 360-degree walk-throughs of a project, its units and the surrounding cityscape. This allows property developers to start marketing their projects even before the construction of the physical sales galleries and show flats.

Source: Straits Times
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China interest in HK real estate builds up

Chinese investors are scouring Hong Kong's commercial property market for bargains after prices plunged 30 per cent, signalling a new wave of demand following anti-government protests last year that kept a lid on investment activity. Property agents expect the influx of Chinese capital, which has helped Hong Kong become one of the world's most expensive property markets, can once again prop up the sector as China recovers from the Covid-19 pandemic and stands ready to deploy liquidity. Last month alone, mainland buyers snapped up at least two office towers and one hotel building worth HK$4 billion (S$702 million) in total, according to agents and filings. "A majority of recent large-value building deals were bought by Chinese investors; their number has really grown in the third quarter, " said Mr Reeves Yan, head of capital markets at CBRE Hong Kong. "They're looking for bargains... and they're confident in Hong Kong in the long term." The pickup in demand coincides with the imposition of a national security law in Hong Kong on June 30, which the authorities in Beijing and the financial centre have said is necessary to ensure its stability and prosperity. Mr Dennis Cheng, senior sales director at Ricacorp Properties, said: "We expect to see more mainland investors coming to buy land. "If Hong Kong gets more stable in the next few months after the national security law, we expect more mainland companies to open branches here, and that will help the office sector to recover." The move by Chinese investors is in stark contrast to foreign investors, who are staying away due to growing concerns over the city's future. Critics of the new legislation say it has pushed the former British colony onto a more authoritarian path following months of sometimes violent democracy protests last year. Mr Daniel Wong, chief executive of Midland IC&I, said: "Foreign investors are still absent. I spoke to two foreign funds recently who said they won't consider Hong Kong at the moment because the political risks are relatively high now." In July, state-owned China Mobile and a consortium led by major Chinese developer Vanke bought one land parcel each for HK$5.6 billion and HK$3.7 billion, respectively. They were the first Chinese companies to win public tenders since January. Colliers says it expects mainland capital will become "the next wave of demand" in the Hong Kong leasing and investment markets, supported by cross-border financial initiatives in stock and wealth management, and the city's large capital pool for fund-raising. China called on its biggest state firms to take a more active role in Hong Kong, including stepping up investment and asserting more control of companies to help cool last year's political crisis, Reuters reported last year. It is unclear, however, whether the latest spike in investment is being driven by Beijing because while some of the buyers are government-backed, many of them are private investors. But the city recorded a plunge in deal volume amid the unrest and the pandemic, and has yet to witness a rise in mainland investments comparable to a few years ago. Colliers said in a recent note: "There are early signs of mainland Chinese demand returning." Chinese investment accounted for 39 per cent of total commercial real estate transactions in Hong Kong so far this year, up from 19 per cent for the whole of last year, Colliers said.

Source: Straits Times
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BP to sell London headquarters as work style shifts, says report

BP plans to sell its headquarters in central London as it cuts jobs and adopts flexible working, The Times reported on Sunday (Aug 30). The oil major, which employs 6,500 office staff in the UK, plans to rent back the building on St James's Square from the new owner for as long as two years before leaving for good, the newspaper said, without citing anyone. BP declined to comment on "rumour or speculation" to the paper. BP joins other employers that are changing their work styles after many employees began working at home due to the coronavirus pandemic. Chief executive officer Bernard Looney has said the company will move to a mixture of home and office working. The plan highlights the uncertainty the property market is facing as the coronavirus sent office workers to set-ups in their kitchens or living rooms, emptying towers in the City and Canary Wharf business centers and elsewhere across London. Only 13 per cent of people were back to their offices this month in London, and across the nation's 63 biggest urban centres, the number was 17 per cent, the newspaper said, citing analysis of mobile phone data. The building, which BP bought for £117 million in 2001, could be priced at more than £300 million (S$544 million) today, the newspaper said.

Source: Straits Times
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Kajima to open $100m innovation centre in Singapore

Japan's Kajima Corporation broke ground for its first overseas innovation centre at Singapore's Changi Business Park yesterday. The $100 million Kajima Global Hub will also serve as its Asia-Pacific headquarters, said a joint statement from Kajima - one of Japan's oldest and biggest construction firms - and JTC Corporation. The 3,088 sq m facility will contribute new building technologies and research and development capabilities to Singapore's construction sector, they said. Its construction will also be the first known application of a comprehensive suite of robotics solutions by Kajima outside Japan. Kajima will consolidate all 400 staff across its business functions - construction, engineering, development, research and design - under one roof at the hub. Kajima Technical Research Institute Singapore (KaTris) will research and develop and test-bed construction, sustainable and wellness technologies. The building itself will showcase robotics, digitalisation and automation by incorporating data-driven environmental control and energy-saving solutions. KaTris will increase the number of local research personnel, while Kajima Global Hub will create better jobs, attract Singaporean staff and reduce the environmental impact of new developments. Kajima president Yoshikazu Oshimi said at the ground-breaking ceremony: "By promoting open innovations with renowned institutions in the region, both public and private, we strive to build our solid foundation, not only to deliver the best services and solutions to our clients, but also to plant seeds and incubate new businesses for future generations." The Kajima initiative comes after it signed a memorandum of understanding with JTC last year to share expertise and collaborate on R&D. Minister of State for Trade and Industry Low Yen Ling said at the event: "This latest development reinforces Singapore's value and strength as a trusted and well-connected global R&D hub." She said the pandemic has given Singapore's construction sector a strong impetus to accelerate adoption of digital technology and automation, improve productivity and reduce the need for lower-skilled workers. Kajima and JTC will launch several joint initiatives. BOLSTERING INNOVATION By promoting open innovations with renowned institutions in the region, both public and private, we strive to build our solid foundation, not only to deliver the best services and solutions to our clients, but also to plant seeds and incubate new businesses for future generations. KAJIMA PRESIDENT YOSHIKAZU OSHIMI They will develop a concrete-finishing robot with Nanyang Technological University (NTU) and a local small and medium-sized enterprise, Mega Plus Technology, to automate the construction process. The robot should be able to reduce manpower and labour cost by 50 per cent, on top of improving quality and safety, by early next year. NTU start-up Transforma Robotics will deploy its painting and inspection robots that were jointly developed with JTC to work alongside Kajima's construction robots. JTC chief executive Ng Lang said; "JTC forms strategic partnerships with industry partners, such as Kajima, and academic institutes to address a broad spectrum of challenges faced by the sector." He said by combining its engineering capabilities with forward-looking industry expertise, JTC hopes to accelerate and contribute to the construction sector's digitalisation. Kajima has been working closely with the National University of Singapore on "well and green" building design concepts while partnering the Singapore University of Technology and Design on adapting advanced technologies such as drones for the construction industry. The company is also sponsoring the Lee Kuan Yew Global Business Plan Competition managed by Singapore Management University, and participated in the Open Innovation Platform of the Infocomm Media Development Authority.

Source: Straits Times
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