6 property markets worth a closer look

Signs of renewed confidence for global investors are very apparent today, after the global recession last year. Here are six markets that we would recommend to investors seeking to grow their property portfolio.
Vietnam
Vietnam’s export economy and growing aspirational population makes it a strong market for growth potential. Also, demand for residential accommodation is outgrowing supply at a rapid rate. There are about 60,000 units scheduled for completion through to 2012 versus the 110,000 homes required in the same period.
Vietnam has a dynamic and cyclical property market that is heavily influenced by its stock market, so this is often a barometer for tracking the performance of the property sector. Over the past few months, the property market looks to be levelling out and there has been a significant rise in supply as developer confidence returns. The fourth quarter of 2009 saw twice as many launches of new schemes as the previous period.
For international investors who don’t know the market, choosing the right property can be a daunting task. Buyers would be wise to look for projects by reputable international developers.
Malaysia
For investors who want lower risk with solid yields and capital growth at affordable prices, I always recommend including a property in Kuala Lumpur in their portfolio. Malaysia is an export-based economy with strong fundamentals and will grow steadily as the global economy continues to recover.
The government encourages little speculation and recently introduced a real property gains tax of 5 per cent on any property sold within five years of purchase. The best time to buy is when interest rates are low and banks are lending freely. Currently, loan to values of 70-80 per cent are easily achievable. The property market is transparent with laws based largely on the UK legal system which makes investing in property very simple. For a private investor, there are thousands of websites to visit that have all the relevant information to compare and contrast the various opportunities available.
KL is Malaysia’s most developed and liquid property market with international appeal and considerable domestic demand. When buying, consider the location of the property carefully. Traffic can be tiresome and it is best to buy close to a public transport node. While property ownership for foreigners can be freehold title, it is also important to note that there are restrictions for foreigners buying property in Malaysia. For example, purchases of under RM500,000 are not permitted.
Hong Kong
The best time to buy in Hong Kong is when land supply is short and interest rates are low. The past 12 months have seen a massive 33 per cent rise in the property market, making it the highest growth rate in the developed world.
The property market responds rapidly to stock market performance, and as the China economy continues to grow, so too will Hong Kong’s. A direct result of this growth is that there are a number of mainland Chinese residents buying property in Hong Kong who are happy to pay higher prices. Sustained buying interest from cash-rich individuals and the tight supply in the luxury sector will push up property prices by 10 per cent over the next 12 months.
With strong liquidity in the banking system and a further drop in funding costs, average prices in the traditional luxury districts grew 9.6 per cent quarter on quarter at end-November 2009, showing there is still growth in the market.
Like Malaysia, Hong Kong’s property market is relatively transparent and sourcing a good deal is simple if you have the time to do your research. Keep away from off-plan developments in Hong Kong, as you will get a better yield from the secondary market. Look for areas that are built up and continuing to show growth such as Sheung Wan. Do be aware of the buildings going up in the vicinity of any development. If you are buying your apartment for the view, make sure that nothing can be built in front of it.
Singapore
The Singapore government is very nimble when it comes to changing regulations on buying property, which can both be a disadvantage and an advantage to investors.
Singapore had a robust residential market in the midst of the economic recession, and 2009 saw about 14,500 new homes sold, second only to 2007. This compares starkly against the 4,382 units sold by developers in 2008. In Q4 of last year, the government added a number of regulations to prevent a property bubble forming, and earlier this year added a 3 per cent stamp duty for investors who sell their residential property within 12 months of purchase. I believe that 2010 holds a lot of promise for the luxury sector, as demand from more confident buyers is being answered by developers.
Singapore has a very transparent property market and for those buyers lucky enough to live locally, sourcing property is simple. However, for those based outside Singapore, deals are snapped up very quickly by the local market. So it’s best to fly there and spend some time looking yourself. Look out for a reputable developer with a proven track record and projects in the most sought-after areas – districts 9, 10 or 11.
London
London is one of the most internationally traded property sectors in the world and is seen as a barometer for the global economy. The best time to buy London property for international investors is now.
London presents opportunities when supply is low, mortgage finance is difficult for local investors limiting their buying power and when the pound is weakening. All of these factors conspire to allow savvy international investors to pick up deals that normally wouldn’t be available to buyers overseas.
This means that there are a large number of opportunities for investors in Asia. However, quantity often does not equal quality. Deals that reach the Asian market are often lower quality, mass market developments. For international investors, it is best to seek advice from property investment groups who can source quality deals by conducting thorough research and underwriting a tranch of units. Investors should be wary of off-plan property in areas with a lot of supply. Look for projects in a quality central location with good transport links to the city.
Australia
Due to its population growth and geography, Australia is experiencing an undersupply of housing. In 2008, Australia’s population grew by 2.6 per cent – which is the equivalent of the entire population of Canberra – in one year. Occupancy rates are always very dependable, with figures such as 98 per cent in cities like Melbourne becoming the norm. These trends are creating great opportunities for foreign investors right now.
Another factor currently contributing to the success of the economy is Australia’s extremely successful export relationship with China. Last year, Australia exported more coal to China than any other country in the world and 2010 is set to exceed last year’s numbers. While the resources sector accounts for only 2 per cent of Australia’s economy, it has a very positive trickle-down effect on sectors such as the property market.
There are a number of factors to consider when purchasing property in this market. Perhaps the most important is to make sure you buy where local Australians want to live. As an international buyer, you are restricted to only buying new property. Also, note that Australia has strict and tight deadlines for the purchase process and local agencies are much less likely to understand the logistical issues for international investors.
There is likely to be a significant increase in funds invested in property markets globally this year. Right now, Asian markets, Australia and the UK are showing the most appeal and we would strongly recommend conducting further research in these areas.

Tim Murphy is managing director and founder of IP Global, a property investment company specialising in acquiring property in emerging, distressed and recovering markets

Parkway Novena sells all 100 medical suites

Healthcare services provider Parkway Holdings could see a $60 million boost to its top line this year, fuelled by the sale of medical suites at its new Parkway Novena Hospital.
All 100 suites launched over the past two weeks have been taken up, the group said yesterday. The units ranged from 452-1,431 sq ft. Going by the price – $3,588-$3,828 per sq ft excluding GST – this could add up to sales of more than $200 million.
However, revenue from the sales will be recognised progressively. Typically, a buyer pays a 5 per cent booking fee for an option to purchase. The buyer then has to put down a further 15 per cent on signing a sale-and-purchase agreement. An additional 10 per cent is collected on completion of piling work.
All in all, about 30 per cent of the money from the sale of suites so far will be booked this financial year. Subsequent payments will flow over the next two years as construction progresses.
Parkway CEO-designate Tan See Leng said demand for phase one of the medical suites came largely from cardiac science, orthopaedics, neuroscience and supporting disciplines. There is a mix of doctors from public and private sectors, but Dr Tan was unable to say what the split is.
Many of the doctors who have booked the units practise outside of Parkway’s system, at locations such as Lucky Plaza, Paragon or Camden Medical Centre.
‘These doctors do not necessarily admit patients to our hospitals at this point in time,’ said Dr Tan. ‘So what we did was that we target this group of doctors. They come into Novena. It becomes a very good, very seamless type of referral structure where they actually operate within a hospital complex.’
Expected to open in the second quarter of 2012, Parkway Novena Hospital will house a specialist centre with 259 medical suites. The group will launch phase two of the sale of suites in the next few days.
It is yet to decide on pricing or the number of units to be made available. But it intends to hold on to some suites to retain flexibility for collaboration with foreign or public institutions down the track.
At a media briefing yesterday to give an update on the Novena project, Dr Tan introduced Lee Hong Huei, 39, as CEO-designate of Parkway Novena Hospital. Dr Lee joined Parkway in 2000 and was most recently CEO of Mt Elizabeth Hospital. He is stepping up hiring to form a team that will help plan operational details at the new hospital.
‘At the moment, it’s mainly the planning operations team,’ said Dr Lee. ‘Moving along, there will be some clinical positions. We are already looking at nursing staff, ancillary support staff.’
He projects a headcount of about 700-800 clinical and non-clinical staff at the hospital when it opens in 2012. By then, about 100-150 doctors are expected to practise at the specialist centre. When it is fully operational, Parkway Novena Hospital will be about the size of Mt Elizabeth today, with about 1,000-1,200 staff.
Parkway posted a net profit of $118.9 million on revenue of $979.2 million last year. It will award the tender for construction of the new hospital by the end of April. Construction is estimated to cost about $400 million.

Source : Business Times – 27 Mar 2010

Redas chief had questioned need for govt intervention

Mr Simon Cheong, president of the Real Estate Developers’ Association of Singapore (Redas), raised government hackles this week when he questioned the need for government intervention to halt the rise of private home prices.
He had asked if the state should be so concerned with the prices of private home prices, when the segment serves only 16.5 per cent of the population.
The Government recently introduced cooling measures in the private and public property markets after observing signs of speculative activity.
Mr Cheong, who is also chairman and chief executive of developer SC Global, said the Government should shoulder some of the responsibility for short land supply and escalating property prices.
He cited two recent government land tenders to illustrate his point. A single bid for a Tampines site was rejected in June 2008 for being too low, but was awarded in March at a price that was about 3.6 times higher. A Ten Mile Junction mixed-use site also had a failed bid in April 2008, but went for 2.7 times higher last month.
‘Had the two sites been awarded back then at ‘market prices’, the current demand-supply mismatch scenario in the residential market may have been smoothed and price increases for such mass market projects more muted overall,’ he said.
The Ministry of National Development (MND) rebutted Mr Cheong’s claims the next day, pointing out the Government’s objective was to maintain a healthy property market. ‘A property market bubble, if allowed to form, may not only impact housing affordability, but also severely impact the economy when it bursts,’ it said.
MND said it was arguable if awarding the two sites at the low bid prices in 2008 would have moderated property prices, or simply allowed the bidders to achieve a fatter profit margin.
The sites could yield about 800 homes. Against a total supply pipeline of 60,476 uncompleted units of private housing at the end of last year, of which 34,234 units are still unsold, it was ‘questionable if the added supply from these sites in 2008 would have affected prices today in any way’, MND said.

Source : Straits Times – 27 Mar 2010

‘Govt has role in property market’

National Development Minister Mah Bow Tan yesterday emphasised that the Government has a role to play in the property market, but any intervention is ‘done sparingly’.
‘We try not to intervene but when we do, we do it only because we want the market to work better,’ he told The Straits Times in an interview. The Government wants to see a stable, healthy market, where prices are generally moving in tandem with the fundamentals of the economy, he added.
He was responding to recent comments by the president of the Real Estate Developers’ Association of Singapore, Mr Simon Cheong, who questioned the need for government intervention to halt the rise of private home prices.
Mr Cheong also commented on Wednesday that the Government should shoulder some of the responsibility for short land supply and escalating property prices. (See: Redas chief had questioned need for govt intervention)
The Ministry of National Development issued a statement on Thursday to rebut his claims, noting that the Government’s role in ensuring a stable market ‘matters to the well-being of Singaporeans and the economy’.
Mr Mah said yesterday that Mr Cheong’s argument that the Government should not interfere in the market, or that it may be intervening too much, was ’strange’.
‘It’s not the intention for us to replace the market… it’s like the HDB (resale) market, we don’t set prices. We let the market set the prices, but we intervene to make sure the price is in line with fundamentals and there is no excessive demand from excessive speculation,’ he said.
The Government wants to ensure, for example, that demand is driven by people who want to live in the property, or invest for the long term, he added.
‘That’s the position we take. We don’t intervene unless we have to (and) only when we think the market is not working well.’
Mr Mah also said that a property bubble is not good for the market and the public should be sceptical of developers who say otherwise.
Mr Justin Chiu, executive director of Hong Kong’s Cheung Kong (Holdings), said this week that contrary to what some believe, bubbles can be good as they fuel sales volumes and price rises.
But Mr Mah said yesterday: ‘When developers start talking and say bubbles are good for the market, I just wonder, why are they saying that?
‘It may be good for developers, but it’s certainly not good for people who want to buy, because of affordability, nor for investors… because when the bubble bursts, everybody gets hurt.’
The irony, he added, was that ‘if developers talk up the market, and people believe them, and prices go up and spiral out of control, then the more we will be forced to act. So I hope people realise that’.
Reacting to Mr Cheong’s comment that the reserve price system is unable to respond quickly enough during periods of high volatility, Mr Mah said the system is not new and has worked well.
‘So many sites have been sold by that system, and we’ve sold sites where people have bid below the reserve price,’ he said.
But in the case of two tenders cited by Mr Cheong which were not awarded at the time, Mr Mah noted the bid prices ‘were so ridiculous’.
‘It was a few bidders who were trying their luck because no one else was interested,’ he said. Even if developers obtained land at a low price, he thought it unlikely that they would sell cheaper homes to buyers.
When the market is high, developers will not sell for less than the market price, he added.
‘So it’s a really strange argument. But we’ve made our reply, let’s leave it at that.’

Source : Straits Times – 27 Mar 2010

Pender Court up for sale again with $100m price tag

PenderCourt, off West Coast Highway, has been relaunched for collective sale at an asking price of about $100 million.
That is about 20 per cent above the price the condominium fetched in an ultimately abortive sale in the 2007 property boom. Buyer Bravo Building Construction called off the deal in early 2008.
The firm had, by then, also pulled out of two other collective sale deals – Tulip Garden near Holland Road and Makeway View in Newton.
Now, the sellers of the freehold 48-unit development are expecting offers in the region of $100 million to $108 million, said marketing agent Credo Real Estate’s executive director of marketing Yong Choon Fah.
On this basis, the asking price range translates to a land price of about $992 per sq ft (psf) to $1,071 psf on the potential gross floor area, she said.
At this level, a developer may expect to break even at about $1,480 psf to $1,570 psf, Ms Yong added.
This price is for a total gross floor area of about 100,840 sq ft, including an additional 10 per cent space set aside for balconies.
Pender Court was sold at the peak of the last boom in July 2007.
Bravo agreed to pay $80 million or about $872 psf of potential gross floor area. No development charge was payable then.
It decided in April 2008 to cut its losses on the deal, rather than pump in more money and make a bigger loss by pursuing the development.
The property market had slowed considerably by then, from the boom days of the previous year.
Pender Court owners got to keep the $12 million deposit, which worked out to an average of $250,000 per unit.
Meanwhile in the east, Teakhwa Real Estate launched Changi Complex at the junction of Bedok Road and Upper Changi Road for collective sale on Thursday.
Owners are expecting prices of about $45 million to $48 million. This works out to $563 psf to $598 psf of potential gross floor area, including the estimated development charge of $3.6 million.
The tenders for Changi Complex and Pender Court close on April 20 and April 27 respectively.

Source : Straits Times – 27 Mar 2010

16 houses at Fort Road close to being sold

Sixteen freehold terrace houses at Fort Road in the Tanjong Rhu area are said to be close to being sold for about $86 million.
Construction and property group Chip Eng Seng is believed to have been granted an option to buy the houses. However, this is still subject to one of the sellers – a company which owns a few of the houses – securing approval from its shareholders for the sale, BT understands.
The 16 houses have a land area of nearly 37,000 square feet and the party that’s buying could potentially purchase from the state a cul-de-sac or dead-end road, which has a land area of about 11,000 sq ft. This would increase the total site area to about 47,900 sq ft – large enough to be redeveloped into a new condominium project with about 90 units averaging 1,100 sq ft.
The terrace houses, which make up a development named Fort Terrace, are owned by several parties who have come together for the proposed sale. The site is zoned for residential use with a 2.1 plot ratio (ratio of maximum potential gross floor area to land area) under Master Plan 2008.
Back-of-the-envelope calculations show that the price of $86 million could work out to about $1,100 per square foot of potential gross floor area, inclusive of development charge (DC), for intensifying the site and estimated payment for the state land.
Going by this unit land price, analysts estimate the breakeven cost for a new condo development on the site would be about $1,450-1,550 psf.
While that hardly leaves any profit for the developer based on current selling prices in the area, Chip Eng Seng’s strategy would probably be to build a high proportion of smallish units to achieve higher per square foot selling prices, said a property consultant.
Fort Terrace was put on the market back in February 2008 with an indicative price of $95 million or $1,238 psf per plot ratio inclusive of DC prevailing at the time and the estimated cost for purchasing the state land.
But it was not sold back then. 2008 was a weak year for the property market, which was reeling from the effects of the US sub-prime crisis that began in 2007 and escalated to a global financial crisis in 2008, culminating in the collapse of Lehman Brothers in September that year.

Source : Business Times – 27 Mar 2010

Collective sales market stays cool

The property market may be hot for new launches, but the fervour has not spilled over to collective sales.
BT understands that two residential sites put up for sale in December last year are unlikely to find new owners soon. The tender for Mayfair Gardens at Rifle Range Road closed in January, but no winner emerged and the collective sale agreement (CSA) has lapsed. Nearby, Green Lodge at Toh Tuck Road has also failed to find a buyer and the CSA is close to expiring.
The CSA is a crucial document in the collective sale process. From the time that the minimum 80 per cent consent level is secured for a CSA, agents have up to 12 months to find a buyer and submit an application to the Strata Titles Board for an order for the sale. If the CSA expires before an application, home owners have to convene extraordinary general meetings again to restart the sale process.
An industry source told BT that there were several bidders for Mayfair Gardens but their offers were below the asking price. The owners had hoped for at least $210 million. On top of this, a developer would have to pay $40 million to restore the lease to 99 years, from the current 72. This means that the cost would have come up to $857 per square foot per plot ratio (psf ppr).
The CSA for Mayfair Gardens was signed in March last year and has expired, the source said. The deal did not go through because of the ‘price gap’.
The story is similar for freehold Green Lodge. BT understands that several bids were received during the tender but they failed to meet the reserve price. The owners were looking for $135 million. Add a state charge of about $9.5 million and the price would be $683 psf ppr.
A majority of the owners agreed to sell the property in April last year. Another market insider said that the CSA is close to expiring, and agents are unlikely to have enough time to find a buyer and submit an application to the authorities.
Apart from Mayfair Gardens and Green Lodge, Laguna Park at Marine Parade failed to find a buyer last year. Laguna Park’s sales committee called off the collective sale in November after lower-than-expected bids came in.
These cases reflect the challenges in selling en bloc in today’s market, where there is a gap in price expectations between buyers and sellers.
According to HSR investment sales assistant executive director Jeffrey Goh, many home owners are not keen to reduce asking prices and are in no hurry to sell. They have seen how well new property launches have done and this has ‘given them a lot of excitement’, he said.
But Credo Real Estate managing director Karamjit Singh believes that Mayfair Gardens and Green Lodge are ‘not necessarily representative of the fate of en blocs to come’.
For properties where sufficient consent from owners was obtained some time back, asking prices may not be in line with market conditions, he said.
‘But we are about to see a new wave of en bloc launches by tender in the months ahead, and these will be projects that would have got started end of last year or early this year.’

Source : Business Times – 27 Mar 2010

30% hike in rent at 5 wet markets

Stallholders at the five wet markets taken over by Sheng Siong last year will have to pay 30 per cent more in rent from next month.
The stallholders at the five markets – in Serangoon, Bukit Batok, Fajar Road and two in Choa Chu Kang – were informed of the increase by the supermarket chain earlier this month.
Stallholders The Straits Time spoke to said they were handed one-year contracts to sign. Currently, they pay about $1,500 to $3,000 in rent and are on a two-year contract.
Sheng Siong’s managing director Lim Hock Chee said the chain had no choice but to increase rental rates, as it had to pay bank interest fees, property tax and maintenance fees after buying the five wet markets for about $25 million.
Many stallholders feel that the increase is too high, with some even saying that they will give up their businesses. Mr Quek Tian Poh, who sells religious goods at the wet market in Serangoon, said he is loath to pass the increased costs down to his customers as they may stay away.
A group of tenants were anxious enough to approach their MP, Mr Seah Kian Peng, for help on Monday. Their request: That the chain stagger the rent increase and increase the contract duration to two years.
The news comes after Sheng Siong’s controversial purchase of the wet markets in December. The chain had wanted to convert the wet markets into air-conditioned markets, triggering public concern about the shrinking number of wet markets in Singapore.
Government leaders stepped in to say that the premises could not be turned into supermarkets, and under that condition approved the sale.

Source : Straits Times – 24 Mar 2010

Wee Hur awarded CMT project worth $103.6m

Wee Hur Holdings has won a $103.6 million project from Singapore real estate investment giant CapitaMall Trust to rebuild Jurong Entertainment Centre.
The project involves constructing a five-storey entertainment and shopping complex with a three-level basement.
The crown jewel of the complex will be an Olympic-size ice-skating rink in the centre of the building. It will be Singapore’s first Olympic-size rink, replacing a smaller one located at the previous Jurong Entertainment Centre.
That rink, operated by Fuji Ice Palace, was one of only two in Singapore. It was the venue for ice-hockey tournaments and the Singapore National Figure Skating Championships.
The previous Jurong Entertainment Centre was closed for redevelopment in February 2008.
Besides the Olympic ice rink, the new complex will house a supermarket, restaurants, retail shops and a multi-screen cinema.
The gross floor area of the building will be 29,433 sq m.
This is Wee Hur’s first project for CapitaMall Trust.
It was secured through subsidiary Wee Hur Construction from HSBC Institutional Trust Services (Singapore), as trustee of CapitaMall Trust.
Wee Hur executive chairman Goh Yeow Lian said: ‘Our ability to be selected by leading property developers demonstrates our established reputation in the industry.’
Construction work starts on March 31 and is expected to be completed by November next year.

Source : Business Times – 24 Mar 2010

Govt releases 4 home sites in one go

Four more residential sites – on which more than 1,200 private homes can be built in total – were released for sale by the government yesterday.
The Urban Redevelopment Authority (URA) yesterday also reiterated that the potential supply of land from the government’s land sales programme and the supply from projects in the pipeline will be ‘more than sufficient to meet the demand for private housing’.
‘The government will continue to monitor the property market closely,’ URA said. ‘If necessary, more supply can be injected via the second half 2010 government land sales programme to ensure that property prices are in line with economic fundamentals.’
Private home prices rose 7.4 per cent in Q4 2009 after climbing 15.8 per cent in Q3. For the whole of 2009, prices of private residential properties rose by 1.8 per cent.
Analysts have said that that the URA price index is likely to show an increase in Q1 2010 as more higher-value projects have been sold in the current quarter. The index will be released in April.
Yesterday, URA said it is releasing three residential land parcels – one each at Boon Lay Way, Simei Street 3 and Stirling Road – for sale. The agency last released three sites for sale at one go in January 2000.
And in addition to that supply, the Housing & Development Board (HDB) also plans to launch a residential site at Tampines Road for tender in about two weeks’ time. HDB is releasing the site as it has been triggered by a bid from an unnamed developer.
Analysts said that the government’s ‘very rare’ move of releasing four sites on the same day was designed to emphasise its often-repeated point that the supply of land and homes is more than enough to meet demand.
The upcoming supply from the four sites could also moderate the climb in private home prices.
Colin Tan, Chesterton Suntec International’s research and consultancy director, said that it was ‘positive’ that URA & HDB are co-ordinating their efforts and pushing out development sites quickly.
‘This should stem the overly aggressive bids we have seen in recent weeks and also stem future price escalations from the supply side. Because if developers pay too much for their sites, their initial selling prices may be higher to recover the land cost,’ Mr Tan said.
URA’s three sites can potentially yield about 1,180 private homes. The sites are ‘well-distributed across the island, namely in the west, east and central regions, to provide developers and home-buyers with more choice’, the agency said.
Two of the three land parcels released by URA yesterday – the sites at Boon Lay and Simei – are being offered under the confirmed list. The third site at Stirling Road was placed on the reserve list – which means that it has to be triggered for sale before the government will launch it.
Chua Chor Hoon, head of DTZ’s South-east Asia research team said that both sites on the confirmed list were attractive. She estimates that the site on Boon Lay Way could go for $330-$390 per square foot (psf) of potential gross floor area, with homes there eventually selling for $720-$780 psf.
A comparable property in the vicinity will be Frasers Centrepoint’s Caspian, where units are currently selling for $647-$732 psf.
Ms Chua also predicted that the site at Simei could go for a slightly pricier $360-$410 psf of potential gross floor area.
Homes on the site could eventually sell for $750-$800 psf. Nearby, units at Double Bay Residences are going for $680-$746 psf, she said.
Interest is also expected to be strong for HDB’s Tampines site. The site, which has been on the reserve list for the past few years, will be put up for tender after a developer committed to bid at least $6.5 million for it.
It could prove to be popular as smaller developers – who could not compete in recent government land tenders as the prices were too high – could be attracted to it, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
He added that although the land parcel could be developed into apartments or landed homes, it is more likely that the developer will build an apartment block of 35 to 45 units on this site.
In an update, URA said that the government has sold four residential sites since January 2010. The four land parcels can potentially yield a total of 1,710 housing units.
Another two private residential sites, one at Sembawang Road and another at Upper Serangoon Road, will be released for sale via the confirmed list next month.

Source : Business Times – 24 Mar 2010

Three residential sites up for sale by tender

The flow of residential land onto the market continues with three government sites up for grabs by tender, and a fourth ready for release if developers show interest.
The three sites confirmed for tender are 99-year leasehold plots. Two are near MRT stations.
A plot at Boon Lay Way near Lakeside MRT station can yield 525 units, while a site across the road from Simei MRT station can yield about 250 flats.
The third site – at Tampines Road – is on the reserve list but was triggered for sale when a developer lodged an acceptable offer of $6.5 million. It is suitable for landed homes or apartments and will be launched for tender in about two weeks.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak told The Straits Times: ‘We already know these development sites will be pushed out for sale, but it is very rare that the Government would release three sites for tender and put one more available for application on the same day.’
‘It appears it wants to strongly put the point across that there is enough supply of land and residential properties for sale, to both the public and developers.’
Savills Singapore’s director of investment sales and prestige homes, Mr Steven Ming, added: ‘Developers are selling out their projects and they need to have their landbanks replenished.
‘If they are unable to do so, they will simply choose to raise the prices of their existing inventory and sell slower instead.’
Mr Mak estimates that the top bids for the Boon Lay site will range from $360 psf per plot ratio to $420. Mr Ming expects a lower price of $260 to $300 psf ppr.
DTZ’s head of South-east Asia research, Ms Chua Chor Hoon, tips bids of $330 to $390 psf ppr, considering Caspian nearby is selling for $647 to $732 psf.
The likely selling price of units on the Boon Lay Way site could be $720 to $780 psf, she said.
Experts tip the Simei site to attract bids of $320 to $410 psf ppr, translating to likely prices for flats of $750 to $850 psf.
Mr Mak reckons the Tampines site could attract bids of $335 to $390 psf ppr.
A fourth site that might hit the market is at Stirling Road. It could yield 405 units but is for sale under the reserve list system, so developers who are keen must indicate their interest by committing to a minimum bid that the Government deems acceptable.
‘If it is released for sale, the top bids could range between $500 and $550 psf ppr or $240 million to $264 million,’ said Mr Mak.
‘It will be popular with developers and home buyers because it is near the Queenstown MRT station and Anchorpoint shopping centre.’
Mr Ming is looking at possible bids of $510 to $600 psf ppr, with a final selling price of $1,100 to $1,300 psf.
The Government has sold four residential sites under the confirmed list since the start of the year. These sites were scheduled for tender without developers having to first indicate interest.
A further two private residential sites – at Sembawang Road and Upper Serangoon Road – will be up for sale via the confirmed list next month, said the Urban Redevelopment Authority (URA).
A site on the reserve list at Sengkang West Avenue was sold last month while another two sites – at Upper Changi Road North and Tampines Road – have been triggered for sale after acceptable bids were offered.
The tenders for the Boon Lay Way and Simei sites will close on May 4 and 11 respectively.

Source : Straits Times – 24 Mar 2010

Cheung Kong on lookout for land sites

Hong Kong developer Cheung Kong Holdings is on the lookout for more residential and commercial sites to buy in Singapore, says executive director Justin Chiu.
‘We are looking at a few pieces of land,’ said Mr Chiu. ‘The whole market (in Singapore) is moving. I am optimistic about the future.’
Although land prices are high, Cheung Kong will ‘keep looking for new land’ as it is an ‘investment in (Singapore’s) future’, he said. He expects private home prices here to continue climbing over the next few years.
The group, which is controlled by Hong Kong tycoon Li Ka-shing, launched its 99-year-leasehold The Vision condo in the West Coast area earlier this month. It has since sold 210 of the 295 homes at the project at benchmark prices for the area.
Cheung Kong now has one yet to be launched residential project, at Upper Thomson Road, in its portfolio.
It also has a one-third stake in the upmarket Marina Bay Suites, which is part of the Marina Bay Financial Centre complex. During phase one, 90 units released for sale at the 221-unit condominium were snapped up at $2,200 to $2,500 per square feet (psf). Phase two is slated to be launched this year.
The official public launch of The Vision takes place this Friday, after most of the units were through private previews. Discounts of 2-3 per cent were given during these previews, said Mr Chiu. From Friday, the discount will no longer be available.
Two- to four-bedroom units, which make up the bulk of the project, are selling for $1,000-1,200 psf, while most of the 14 strata terrace units have been sold for $3-3.2 million apiece.
Up next is the 99-year leasehold condo plot in Upper Thomson Road. Cheung Kong won the plum site in November 2009 with a top bid of about $251 million, which works out to $533 psf of potential gross floor area – above most expectations. Mr Chiu said then that the breakeven cost for the project would be about $850 to $900 psf.
Yesterday, he said that Cheung Kong will make the best use of the site’s location opposite Singapore Island Country Club’s Island Golf Course. Planning permission is yet to be received, but Mr Chiu said that the units will definitely be large.

Source : Business Times – 24 Mar 2010

Bubbles can be ‘good for property market’

Contrary to what some believe, bubbles can be good for the property market, said the executive director of Hong Kong’s Cheung Kong (Holdings).
Mr Justin Chiu told reporters yesterday at the showflat of his company’s latest project here that he likes property bubbles because they fuel sales volumes and price rises.
Mr Chiu – who was moved to dress up as James Bond at launch parties in 2004 to stimulate interest – believes that what he calls optimum sentiment can buoy prices by up to 30 to 40 per cent. Without it, prices can fall by 50 per cent.
‘I like bubbles. It’s my religion. In a property market or any market, if there is some bubble, people will be more enticed to go into the market.’
‘If it’s a flat market like in 2003 (when Sars hit), even though I give you a discount and I dress up like James Bond…I sell fewer than 10 units.’
Mr Chiu, who stressed that property investment was a long-term game subject to short-term fluctuations, said people would not invest in property unless there was confidence. ‘If no one is buying, prices will fall…That’s why I said I like bubbles. Bubbles mean everyone is coming in.’
At Cheung Kong’s latest project, The Vision, sales are reported to be brisk despite relatively high prices. Buyers have bought 210 units of the 99-year leasehold condo in West Coast Crescent, attracted by early-bird incentives discounting quoted prices by 2 per cent to 3 per cent.
The official launch is to be held on Friday, but per square foot (psf) prices for the apartments have already set a net high benchmark for the West Coast area.
The 281 apartments were mostly priced around $1,000 psf to $1,200 psf. All except one of the 14 strata terrace houses – costing $3 million to $3.2 million apiece – have been snapped up.
Mr Chiu, who is nearly 60, says the prices are reasonable given the project’s location and quality finishings. ‘If the price is not reasonable, we would not be selling over 200 units in two weeks.’
Cheung Kong’s next project will be a site in Upper Thomson Road, which it won the tender for last November with a price of about $533 psf per plot ratio. Mr Chiu said it is likely to attract mainly locals and Chinese nationals.
He said Cheung Kong was looking at a few pieces of residential land. And together with Hongkong Land and Keppel Land – its partners for the Marina Bay Financial Centre (MBFC) project – Cheung Kong is also looking at buying offices.
More details will be revealed at the topping-out ceremony of Tower Two of MBFC next month.
Mr Chiu noted that the Singapore property market is now enjoying boom conditions, and government measures will not alter that, though there may be other risk factors such as wars. He said the key lies in the message given out with the measures, instead of the effectiveness of the measures.
‘To me, government measures are not important at all unless they are very drastic…Government is only a small factor of the free market forces. Unless it takes very strong measures…I don’t think it can alter the trend, (but) it can slow down (the market). I don’t think any Asian government is prepared to wreck the market.’

Source : Straits Times – 24 Mar 2010

Property still top draw for wealthy

Property investments still take pride of place in high-net-worth (HNW) individuals’ portfolios, accounting for a third of investments, a survey by Knight Frank and Citi Private Bank has found.
But only 13 per cent of wealthy respondents said they were planning to buy a new primary residence this year. While 37 per cent said they would consider a second home, almost half the respondents said they would not use debt to fund the purchase.
While survey respondents – who are Citi clients – are cautious, about 70 per cent believe this year will be a good year to invest in property, followed by 68 per cent in favour of equities. The least favoured asset class was bonds. The survey was conducted in January.
No details are available, however, on how many respondents took part.
Says Aamir Rahim, Citi Private Bank Asia Pacific chief executive: ‘Although equity and property markets have bounced back sharply, the survey responses suggest wealthy investors remain concerned about the state of the global economy . . .
‘When making property investment decisions, capital growth prospects are the main driver, followed by asset stability and then yields.’
He adds: ‘Although relatively few respondents were planning to purchase a new primary residence this year, a significant proportion do see buying opportunities in the current market . . . It’s clear that the wealthy still see property as a vital part of their investment portfolios and feel comfortable with it.’
Capital appreciation
Property has a weighting of roughly 33 per cent among the survey respondents, followed by equities’ share of 24 per cent. Some 35 per cent of respondents expect equities to be the best-performing asset class in 2010, followed by hedge funds and property.
Among the types of property exposures, residential property is expected to fare the best, followed by commercial property and agricultural property.
The big question is the capital appreciation potential of some of the real estate markets which rose significantly last year.
Based on Knight Frank’s Prime International Residential Index, Shanghai real estate registered the steepest upward trajectory with a 52 per cent rise last year. This was followed by Beijing’s 47 per cent and Hong Kong’s 40.5 per cent. Singapore ranked fifth in terms of the pace of price change, with a rise of 17 per cent, on par with Johannesburg.
Among other markets, the biggest plunge was in Dubai where prices fell 45 per cent. This was followed by Western Algarve in Portugal with 30 per cent.
Liam Bailey, Knight Frank’s head of residential research, said prime residential properties saw a polarisation last year. Asian cities – especially in China – recovered strongly, but most other locations continued to fall.
‘I do believe that we will see this gap narrow again in 2010. It seems unlikely that property prices in cities such as Shanghai can continue to grow at these kinds of rates. In many (other) locations, there was positive growth in the latter half of 2009.’ New York real estate, for example, rose 2 per cent in the second half, but fell 12 per cent in the whole year.
Mr Bailey said fiscal intervention by administrations in Beijing and Washington means those cities are increasingly viewed as financial as well as administrative hubs – that is, having an impact on the cities’ prime property markets as banks gravitate towards them.
‘Although there are still questions over the state of the global economy,’ he said, ‘property remains a core part of the wealthy’s investment portfolios . . . Current price falls will be viewed by many as a buying opportunity, but as the data from our Prime International Residential Index shows, these windows of opportunity do not always remain open for long.’
Boost from IRs
On Singapore property, in particular, Knight Frank’s residential division head Peter Ow expects prime prices to climb another 10-20 per cent this year and outperform the overall market. Buying interest is expected from China, India and Indonesia.
‘The opening of the IRs (integrated resorts) will present more leasing opportunities for high-end residential properties and will help create new residential enclaves, strengthening the overall living experience of these new clusters,’ he said in the report.
Mr Bailey points out that low interest costs have protected potentially distressed owners and reduced the supply of property for sale. At the same time, low savings rates have spurred the wealthy to move out of cash and into property in search of yields. This has driven demand for property higher and against the backdrop of tight supply, has pushed values upwards in some locations.
‘Ironically, the unintended consequence of government economic stimulus packages has been to support demand and pricing in top-end residential markets – probably not something governments would readily admit to.’
The obvious question is whether current pricing is sustainable. ‘Our view is that most prime markets are suffering from an undersupply of stock and this will help maintain prices in the short term. Looking further ahead, however, it is those locations that offer a genuine lifestyle attraction to the world’s wealthy, rather than just an investment opportunity, that will prove most sustainable,’ he wrote.

Source : Business Times – 24 Mar 2010

Singapore offers best living environment for Asian expats: survey

Singapore continues to offer the best living environment for Asian expatriates. This is according to the latest Location Ratings for expatriate living conditions published by ECA International.
This is the 11th year in a row that Singapore has held pole position.
ECA International’s Location Ratings system is used to assist international HR departments to establish expatriate allowances which compensate staff for the difficulties of adapting to living in their assignment location.
The ratings are based on an analysis of living standards for more than 400 locations globally. Factors such as climate, health services, housing and utilities, and infrastructure are taken into account.
Regional director (Asia) of ECA International, Lee Quane, said: “Singapore’s high quality infrastructure and health facilities, combined with low health risks, air pollution, crime rates and a cosmopolitan population help make the city an easy place for Asian expats to live in.”
The Japanese cities of Kobe, Yokohama and Tokyo, along with Hong Kong, are the other Asian locations that are ranked top 15.

Source : Channel NewsAsia – 24 Mar 2010

S’pore office property market bottoming out: Jones Lang LaSalle

The Singapore office property market appears to be bottoming out and the trend of falling rents is stabilising, according to data from consultants Jones Lang Lasalle.
This is even though its preliminary estimate of average Prime Grade A gross effective rent in the central business district declined marginally by 0.6 per cent on quarter to S$7.75 per square foot per month in the first quarter.
Office rents have been on a declining trend since the third quarter of 2008.
Jones Lang LaSalle said the return of market activity from the fourth quarter last year continued to be instrumental in bringing rentals closer to their bottom.
Most landlords in the market were able to maintain their rentals.
In terms of demand, Jones Lang LaSalle said vacancy has dropped in the first quarter of this year in several key market segments.
These include Prime Grade A offices where the vacancy rate dropped from about four per cent in the fourth quarter last year, to about three per cent in the first quarter of 2010.
These mostly resulted from the success of prominent Prime Grade A office buildings such as Republic Plaza, UOB Plaza 1, Capital Square and One George Street in terms of securing tenants and reducing vacancies.
Going forward, the consultant said with the potential oversupply of office space and increased competition amongst landlords, the high end segment of the office market will be able to command premium over existing older buildings as demand finally returns to the market.

Source : Channel NewsAsia – 24 Mar 2010

New private home price index launched in Singapore

There is a new price index to provide information on the state of the residential market in Singapore.
The index was developed by the National University of Singapore’s Institute of Real Estate Studies and is the first such index by an academic institution here.
The Singapore Residential Price Index, or SRPI, which tracks month-on-month price movements, will provide a resource for the development of property derivatives.
That will then help to expand the suite of financial products offered in Singapore.
Organisations like real estate firms and financial institutions can use the index to help them better manage their direct real estate exposure and to hedge their portfolio risks.
The index looks at factors like the unique location of each property and volume of transactions to consider the price movement of the market.
One unique feature of this new index is that it uses a fixed basket of properties to determine the data.
The basket comprises 364 private residential projects located across 26 postal districts in Singapore.
The composition of the basket will be adjusted bi-annually to reflect the changes in the completed stock of private non-landed residential properties.
The basket will be next revised in December 2011.
The NUS hopes its new index would complement the existing one by the Urban Redevelopment Authority that is released quarterly.

Source : Channel NewsAsia – 24 Mar 2010

Where heritage meets hospitality

From Vietnam to Chiang Mai, from Yogyakarta to Guangzhou, architect Hijjas Kasturi was extraordinarily busy criss-crossing the region last year.
His mission: to buy furniture, household fittings, wood carvings, doors, tiles, antiques. You name it, it is on his list.
‘It was fascinating. We discovered many types of old material still being made by hand,’ he said, showing off a tile from Vietnam that was made using a technique similar to batik block printing.
His purchases are for a new project in Penang. He has bought 15 old shophouses in the heritage zone of Penang’s capital city George Town, and is refurbishing them into a small luxury hotel.
The Hotel Penaga, to be open by Christmas, has stirred excitement because Singapore-born Mr Hijjas, 75, is one of Malaysia’s leading architects, whose elegant skyscrapers have won admiration for their beauty.
His company has built lofty buildings like the Maybank Tower, the Securities Commission building, and Putrajaya International Convention Centre.
The Penang project, however, is different from Mr Hijjas’ previous undertakings. First, it will be owned by the Hijjas family, and secondly, it will be built on a much smaller scale compared with the architect’s earlier works.
It is a boost to George Town, which has fallen into decline over the past decade, losing its lustre as the Pearl of the Orient. Rent control measures imposed in 1948 meant redevelopment was unprofitable, and many of the 12,000 rent-controlled buildings fell into disrepair.
But abolishing the measures did not reverse the city’s fortunes either. After rent control was lifted in 1997, many residents were forced out by soaring rents. The iconic shophouses were abandoned and George Town took on an air of neglect.
In 2008, it received a new lease on life when, along with Malacca, it was listed as a Unesco World Heritage Site. There is now a sense of rejuvenation as old shophouses are being bought up and turned into cafes, shops, and guesthouses.
Dr Andrew Aeria, a Penang activist and university lecturer, attributes this revival to the sense of certainty brought about by the Unesco listing.
‘Previously, people didn’t know which way the development was going. The heritage way, or more high-rises? Now that there’s certainty, people are willing to invest,’ he said.
At the end of last year, an Australian hotelier opened The Straits Collection – a heritage hotel housed in a series of pre-war shophouses. Just before that, an Edwardian Anglo-Malay bungalow, Clove Hall, was opened as a luxury hotel after refurbishment.
Mr Hijjas said with George Town’s revival, his family believed it was a good place for a long-term investment. As he put it: ‘Penang is such a magical place.’
It all started when he and his wife wanted to expand their artist-in-residence programme to Penang. For the past 15 years, they have sponsored one Malaysian and one Australian artist each year for a year’s stay at their sprawling estate, Rimbun Dahan, in rural Selangor.
They were hunting for one shophouse, and ended up buying 15 in a triangular block bordered by Hutton Lane, Clarke Street and Jalan Transfer. The 1950s-era lots used to house small businesses like coffee shops and mechanics’ workshops.
They decided that a hotel would provide the best returns for their impulse buy. The project will have 32 rooms, and maintain every bit of the old-world charm while keeping to strict environmental standards.
Mr Hijjas’s son Suyani Hijjas, who is overseeing the project, said the 15 shops were bought for RM4.8 million (S$2 million), and refurbishment will cost another RM10 million.
The first block of five houses is almost ready and looks wonderful. The houses will be rented out as double-storey suites with a living room, kitchen, a garden jacuzzi and two huge bedrooms with balconies.
The other two blocks will house guest rooms, a restaurant, and a spa. The backlanes that once separated the three blocks will become a lush garden with a pool.
‘We want to keep the charm that’s inherited with the buildings. Where we have to redesign the old for comfort, we are mindful not to destroy its essence,’ said Mr Hijjas.
To comply with the green building index, as much as 70 per cent of the wood is recycled, as well as the roof tiles. A rainwater harvesting system and solar panels to power LED lights will be installed.
Mr Hijjas hopes the hotel will provide the income for their cultural programmes as the arts are a long-time passion of his – almost as long as his love for buildings: ‘I had always wanted to be an architect. It comes from the fascination with buildings, and our family built our own house in the Malay farm near Geylang.’
The architect grew up poor in Singapore, but won a Colombo Plan scholarship to study architecture in Australia. He worked at the Housing Board before leaving for Malaysia in the 1960s to start an architecture school.
‘Culture is important. We can live to survive but there must be more to life than that. It must have richness,’ he said.
The Hotel Penaga will embody this philosophy through its artworks and an artists programme: ‘After all, that’s how it started.’

Source : Straits Times – 22 Mar 2010

New lease on life for hospital after 99 years

Far from their homes in Guangdong province 100 years ago, three clan leaders thought they would scrape together money to buy medical care for their clansmen.
They raised so much – $150,000 – that they built a hospital instead to give free care to anyone.
They also struck a sweetheart deal in their 99-year lease with the British colonial leaders to pay $1 every year in rent for Kwong Wai Shiu Hospital.
That lease expired on Feb 22, and the 6ha land in Serangoon Road was handed over to the Singapore Government. The hospital’s new annual rental bill: $1.4 million.
‘My heart was full of pain,’ said Ms Ling Bee Sian, the hospital’s director of operations, who signed the takeover papers last month with officials from the Singapore Land Authority (SLA).
‘It’s hard to imagine that this land doesn’t belong to us anymore.’
But far from gaining a new burden, the hospital is getting a big boost in its next phase of life.
The Ministry of Health (MOH) eyes it as an important component in its plan for Singaporeans to get integrated health care. So in September last year, it agreed to increase its subsidy to Kwong Wai Shiu, from $170,000 to what may amount to millions of dollars every year (see box).
It will pay a portion of the hospital’s patient expenses, as well as cover its rent for buildings within its compound that are used for patient care.
Until now, Kwong Wai Shiu, which is run by a voluntary welfare organisation, met its yearly operating costs of about $12 million mainly through public donations and patient fees.
Other plans are afoot for the 50-bed community hospital and 350-bed nursing home, whose patient base is largely the elderly and low-income.
It is in talks with another hospital to provide step-down nursing care to the hospital’s patients, said its vice-chairman Patrick Lee. This is in line with MOH’s plan for acute hospitals and step-down community hospitals to partner and provide seamless care for patients.
Also, with extensions, its new lease would be up by 2015, and the hospital may need to find another home then, depending on ‘the outcome of discussions and consultations with the Ministry of Health and other government agencies’, said an SLA spokesman.
The hospital hopes those talks will coalesce with its ambitions to double the number of its beds to 800 and hire more doctors and nurses. It now runs at 70 per cent occupancy because of the manpower shortage.
In 2007, Kwong Wai Shiu was recognised by MOH as a fully fledged community hospital. It also runs a rehabilitation centre and Traditional Chinese Medicine clinic.
Patients come via walk-ins, referrals and assignments by MOH’s Agency of Integrated Care, which coordinates their placement into appropriate facilities.
More than 90 per cent of its nursing home patients are above 65 years old, with the average age being 83.
Currently, a 30-day stay at the hospital costs between $1,350 and $1,800; and between $450 and $1,200 at the nursing home.
The hospital is in the midst of extracting financial and patient records for MOH to determine the size of the subsidy.
As as result of the agreement, the hospital also began means testing patients, to decide the level of subsidy that each should get.
However that goes, things will not change much for Mr Oh Boon Whay, a nursing home resident who suffered a stroke about 20 years ago.
The public assistance recipient, 80, is perhaps the kind of patient that the original founders wanted to ensure was not left destitute.
He has lived peacefully here alone since 1987. The former caterer and motorcycle enthusiast said: ‘It’s a good life here. Every morning I get up, go for a walk, read my newspapers. Time flies.’

Source : Straits Times – 22 Mar 2010

Most town councils not raising fees

Residents outside of Aljunied and Jurong can breathe easy for now, as most town councils say they will not be raising their conservancy fees just yet.
Aljunied and Jurong town councils announced two weeks ago that they will be increasing their service and conservancy (S&C) fees from next month, due to higher operating and maintenance costs.
However, 13 of the 14 remaining town councils say they will not be raising their fees just yet. The last town council – Hougang – did not respond to queries.
But some did say rising costs have made it increasingly difficult for them to maintain the status quo.
Aljunied and Jurong town councils had made known to their residents that they will raise monthly conservancy charges by between 50 cents and $4.50 for Singapore home owners, depending on the type of flat.
The increase for permanent residents and foreigners will be between $2.80 and $7.50.
Some of the 13 town councils The Straits Times spoke to said they were able to balance their budgets and thus will not raise S&C fees.
Just how do they do it?
Tanjong Pagar Town Council chairman Koo Tsai Kee said his council had set aside ’sufficient accumulated surpluses’ in both its operating and sinking funds.
Most town councils keep a sinking fund for future maintenance works and projects like the Lift Upgrading Programme.
Another chairman, Tampines Town Council’s Masagos Zulkifli, puts it down to ‘prudent cash flow management’ and also residents who have been punctual with their payments.
The town councils say they try to stretch their dollar, for example, by using energy-saving lights and increasing the productivity of their employees with the help of technology.
Said a spokesman for Marine Parade Town Council: ‘The town council is also mindful of the long-term maintenance costs needed when we consider installing additional facilities in the estates.’
But Ang Mo Kio-Yio Chu Kang Town Council chairman Inderjit Singh said it has become tougher to manage the budget.
‘Costs have gone up everywhere, significant of which is manpower cost. The costs of materials and contracts have also been steadily increasing. Utility charges also form a significant part of our costs, especially electricity,’ he said.
Hong Kah Town Council said 40 per cent of its operating expenses for its last financial year (2008/2009) went towards its utility bills.
Its spokesman said the tariff hike also cost the town council an additional $2.9 million.
Switching to energy-saving lights has helped to trim 10 per cent off its electricity bill.
Mr Singh said: ‘So far, we have managed to do everything at the highest quality without increasing any charges to the residents.’
But his town council will not rule out future hikes. ‘If we don’t (raise charges), we will run at a deficit, which is not tenable and will affect our quality of work if we cannot get the right resources because of the deficit,’ he said.
Mr Singh added that his town council had planned to raise charges a few years ago, but held back due to a goods and services tax increase.
It also held back last year due to the recession, and focused on controlling costs.
‘I hope residents will realise that we cannot not increase (our charges) in the coming years,’ he added.
West Coast Town Council chairman Arthur Fong said that while the newer flats in the town council district might require less repairs now, they will cost more down the road when repainting works are done.
Though he does not see a need to increase the S&C fees immediately, Mr Masagos said the Lift Upgrading Programme and town development programmes do ’cause a drain’ to the sinking fund.
It may not be entirely fair to compare town councils, Mr Singh and Mr Fong pointed out, as each one is different and operates independently of others.
The ages of the estates are different, and they have been maintained and improved at different rates as well.
‘The cost to maintain different types of properties of different ages means that comparing councils is not meaningful,’ said Mr Fong.
Even within a town council district, property types in the different divisions are different.
Precincts within the same division may also differ, resulting in different costs, schedules, and attention from the town council.
‘We have been very careful in that we try to do things in a no-frills way, but again, to manage the expectations of residents who are comparing with others is a constant challenge,’ Mr Fong said.

Source : Straits Times – 22 Mar 2010

12,000 old flats to be upgraded annually

Around 12,000 – that is the upper ceiling of the quota for homes to be upgraded annually under the government’s Home Improvement Programme (HIP) from this year onwards.
The annual target was announced by National Development Minister Mah Bow Tan yesterday during a community event in Yishun.
According to Mr Mah, HIP will cover some 14 precincts or around 10,000 to 12,000 homes every year. This nationwide upgrading initiative, first announced by Prime Minister Lee Hsien Loong at the 2007 National Day Rally, covers flats that were built in 1986 or earlier.
Close to 300,000 households in Singapore qualify for the programme, which covers compulsory improvements including repairs for ceiling leaks, as well as spalling or flaking concrete.
Homeowners can also opt for optional upgrades such as new toilets and metal gates.
The compulsory items are fully subsidised by the government while the other works are offered on a co-payment basis.
In 2009, the government sped up the pace of upgrading by committing $1 billion to HIP over a three-year period. Back then, authorities said they were hoping to take advantage of lower construction costs during the recession to refurbish some 33,000 units of older public housing.
More than 13,000 homes were spruced up from 2007 to 2008 and around 8,000 flats were upgraded under HIP last year.

Source : Business Times – 22 Mar 2010

Ellipsiz to sell stake in building at Joo Koon Crescent

Engineering and advanced packaging solutions provider Ellipsiz has agreed to sell its interest in a building at 12 Joo Koon Crescent for S$4.4 million.
The firm is expected to book a net gain of S$1.7 million from the sale.
Ellipsiz said the proposed sale will enhance its financial position and increase its working capital.
The property is a factory-cum-office building, whose lease is due to expire in January 2027, with an option to renew for another 29 years.
The building was damaged in a fire in March last year and reinstatement works are still on-going.
The building is valued at around S$4 million.
The sale is estimated to be completed by August this year.

Source : Channel NewsAsia – 22 Mar 2010

New S$15m fund to aid sustainable construction

The Building and Construction Authority is setting up a S$15 million fund to promote sustainable construction.
The fund will focus on developing capabilities in recycling waste from the demolition of buildings and in using recycled materials for construction.
The construction industry has welcomed the latest initiative, but is hoping for more government support for their usage.
The opening of the Samwoh eco-green park demonstrates a growing focus in Singapore’s construction industry on sustainable development methods.
This is the first building in the country to be built using recycled concrete aggregate.
And Samwoh wants to raise its production of recycled materials for the construction industry.
However, it notes that this will be a long-term investment due to the low margins and the current slow take-up rate.
The government hopes that more companies can use recycled concrete and building materials to reduce Singapore’s reliance on imported raw materials.
Elvin Koh, managing director, Samwoh Corporation, said: “…we have invested about S$10 million (in this eco-park). If you are talking about returns, it might be a bit slow because it is new in the market.
“But we view this as a long term-business. It all depends on the government agencies and how fast they can accept this new concept .”
The eco-concept is also making other inroads.
The Land Transport Authority has rolled out changes to its road construction specifications to allow recycled materials to be used in building roads.
While supportive of these moves, industry players said it is too early to tell whether costs will be impacted.
However, they stressed that more government funding is needed for sustainable construction to take off in a big way.
Andrew Khng, president, Singapore Contractors Association, said: “I am hoping that the government will take the lead forward to push the industries by implementing in their contracts (that) a certain percentage of their contracts component should look at the green products; for the contractors, we need some kind of incentive to push us to go green on our own.”
Companies said a public-sector led push to adopt more eco-friendly practices could have a positive impact on their earnings.
Samwoh, for instance, gets 3 to 4 per cent of its revenues from the sale of recycled materials.

Source : Channel NewsAsia – 22 Mar 2010

Retail rentals firm in Q1

Singapore retail rents have held firm in the first quarter of this year.
According to estimates by DTZ Research, rental values of retail space in the prime retail belt of Orchard and Scotts Road, other city areas and even suburban areas remained unchanged.
DTZ said gross retail rents at the Orchard and Scotts Road area stayed firm as the market absorbed the new supply that came onstream in 2009 and in the first quarter of this year.
Gross rents of prime first-storey and upper-storey retail space in Orchard Road remained at about S$40 per square foot per month.
Along Scotts Road, the gross rents averaged about S$20 per square foot per month.
DTZ said after five consecutive quarters of decline, gross rents in other city areas also remained at about S$25 per square foot per month for prime first storey space, and S$14 per month for upper storey retail space.
As for suburban areas, prime first storey retail space held firm at about S$33 per square foot per month while upper-storey space came in at about S$23 per month.
According to DTZ Research, the bulk of the pipeline supply will come on stream this year.
However, the estimated 2.3 million square feet of new retail space is 15 per cent lower than the 2.7 million square feet of new supply in 2009.

Source : Channel NewsAsia – 22 Mar 2010

A roof over my bloated head

I dread this time of the year. It’s nearing April, the month when the lease on my current rental apartment will expire.
Since the option of a year-long extension in my existing contract has been exhausted, the nerve-racking and tedious ritual of hunting for a decent new roof over my head has begun.
And I have slipped into anxiety mode.
The fear of not finding a suitable replacement in time has forced me into action at least two months in advance. Besides, my long list of demands in a rental home makes my search even more difficult.
For the last 21/2 years that I have been in Singapore, I have shared living space with a flatmate in two separate, as near-perfect HDB flats as any expat could wish for. I have also been fortunate enough to find a quiet, friendly and safe neighbourhood and two accommodating and understanding landladies.
Now I insist that the next apartment be as good as the last two, if not better. But the actual process of finding something suitable gives me the jitters.
The search is a long, rough one which involves daily scans of the classifieds, incessant and sometimes untimely phone calls by poacher agents offering their services, sweaty walks to prospective locations and sleepless nights worrying about an uncertain tomorrow.
It drives me to the edge, like a student who is taking the O-level exams after not having studied at all for the whole year.
The initial worry is finding a good agent, someone whose accent I can decipher and who, in turn, can decipher mine. Then comes the most difficult part of explaining to him my exact requirements.
After two years of living in apartments enviably close to an MRT station and just a 20-minute ride away from the office, I am averse to spending an additional second travelling to work.
Besides a good location, I want the flat to be on a high floor with plenty of sunshine, and have good ventilation and big bathrooms with clean toilets (seats not squats). Budget, of course, is a big consideration and so is the cleanliness and safety barometer of the neighbourhood. Proximity to foodcourts, supermarkets, golf clubs and so on are an added advantage. (What can I say, I am high-maintenance.)
The length of my list makes most agents slump with exasperation, while the tolerant few try to talk me into striking out at least one demand. I end up striking out, you guessed it, the agent.
In my defence, my work hours compel me to seek such comforts. But, some of the roadblocks are not of my making. For instance, if the flat meets my expectations, chances are the owners insist on letting it out only to families or to non-Indians.
At other times, they have a list of demands, like no cooking (a hobby of mine), no parties (they don’t know that I’d rather go to Clarke Quay) and no boyfriends (I am single leh! Don’t they read my columns?).
Last year’s recession has added to my woes, as I try to tighten my belt without trying to compromise on my needs. The process is upsetting, making an eternally optimistic and adventure-loving person like me want to run home to Mummy in Mumbai.
But, then I comfort myself with positive thoughts.
Singapore’s Housing Board has an excellent record of building affordable apartments for nearly 85 per cent of its people. So I tell myself that even though I may run out of energy, it is highly unlikely that I will run out of choices.
Besides, despite all the hurdles in finding a flat, some of them of my own creation, I am confident that for every failed viewing, I will have 100 more choices every day. For every exasperated agent, I will have 10 other tolerant types who will be ready to assist me.
Having jumped into the fray early, I still have the luxury of time to choose according to my whims.
And I am sure that the keys to the new rental flat will be handed to me before it is time to move out of the old one.
The writer is an assistant to the foreign editor in The Straits Times and has lived in Singapore for 21/2 years.

Source : Sunday Times – 21 Mar 2010

Big projects, hot prices

Hainan: An announcement that the tropical island would be transformed into a top international tourist hotspot prompted investors from across the country – and beyond – to rush in and snap up properties.
Shanghai: Land and property prices in the Pudong New Zone area, especially plots near where the new Disney theme park would be sited, shot up to record highs.
Beijing: The 2008 Olympic Games benefited residents and property developers alike as a massive building spree gripped the city in the two years leading up to the Games. Prices slumped after the Games and dipped further when the global economic crisis bit. But the government’s massive stimulus measures, announced last year, boosted them again to new heights.
Guangdong: Property prices in key cities such as Shenzhen and Guangzhou shot up, thanks to stimulus-funded projects, such as schemes to rejuvenate the Pearl River Delta region, the high-speed railway linking Hong Kong, Macau and Shenzhen, and the ultra-speedy Wuhan-Guangzhou rail connection.

Source : Sunday Times – 21 Mar 2010

Real estate: China’s god of fortune

On Jan 6, a day after the government announced a grand plan to transform Hainan province into a world-class tourism paradise, retiree Zhou Yafen woke up to see crowds ‘rushing madly to buy apartments’ on the island.
‘Property prices shot up like an arrow,’ said the 59-year-old, who owns a 125 sq m flat in provincial capital Haikou that she bought in 2005. Its value today has gone up by more than eight times.
‘Just one word from the government, and miracles happen! If only I had money to buy another property, I’d be so rich now,’ she told The Sunday Times in a phone interview.
Thanks to a buying frenzy like the one in Hainan, one of the hottest topics around dinner tables and on Internet forums these days is how to bao fa (get rich overnight) by betting your money on China’s modern-day God of Fortune – the government.
All it takes is an announcement from Beijing of a new mega project somewhere and both stock and real estate prices in that area will skyrocket.
In Hainan, for example, property prices soared by 20 per cent in January alone while share prices of companies like Lawton Development, which owns hotels in Hainan, Hainan Expressway and Haikou Agriculture, almost doubled in value within five days of the announcement.
Or just look at Pudong New Area in Shanghai, which is blessed with not one but two mega projects: the World Expo which opens in May and the planned Disney park.
On Nov 4 last year, less than two hours after the long-awaited Disneyland in Shanghai was finally confirmed, a land parcel near the theme park’s future site was auctioned off for an eye-popping 1.19 billion yuan (S$240 million). This price was more than 3.5 times the minimum asking price.
The property fever in anticipation of Disney has gripped Shanghai residents – and scores of rich investors from across China – for several years. In 2006, new apartments in areas such as Chuansha were already sporting billboards covered with dollar signs and Mickey Mouse ears to push sales.
But it was only after Beijing finally gave the long-awaited green light to Disney that the speculative frenzy sent average prices jumping by as much as 25 per cent within one month.
Yet other fortunate places in recent times include Guangdong – one of the focal points of Beijing’s mega high-speed rail project unveiled last year – and Tianjin. Beijing is promoting the northern port city as the gateway to the next frontier of economic growth.
With the advent of Tianjin’s Binhai Industrial New Zone – which has attracted major investments such as the Sino-Singapore Eco-City, home prices in some parts of the once-sleepy city have risen by as much as 80 per cent in the past two years.
These two cities, together with first-tier cities like Beijing and Shanghai, led the 24 per cent hike in average property prices across the country last year even as fears of a bubble grew.
Smaller cities also have a share of the fortune. Chengdu, for example, benefited from Beijing’s massive reconstruction effort after the 2008 Sichuan earthquake. Xiamen was last year identified as a new centre for cross-strait commerce with Taiwan.
Beijing’s ‘magic words’ alone did not spur the double-digit price jumps, said analysts. Economic growth, speculation, a growing number of affluent urbanites and demand for marriage homes financed by couples’ parents were also factors.
Still, ‘hyped-up expectations that state-driven projects are bound to take off in a big way do help to push up sales significantly’, noted Shanghai-based property consultant Sherry Li, who helps Chinese investors scout for such investments.
But such hype sometimes falls flat. ‘Take Dalian. It attracted a lot of attention a few years ago when there were big plans to make it a tourism and oil refining centre. Prices jumped 20 to 30 per cent and then flopped after that,’ said Ms Li.
‘I don’t think the Hainan craziness will last that long either.’

Source : Sunday Times – 21 Mar 2010

Waterfront living? This is it

Some return to home and hearth. Mr Robert Crivelli returns to his home and berth.
His family of four lives on the Melivia, a 21m-long houseboat berthed at ONE?15 Marina Club.
Mr Crivelli, 44, senior director at a private bank, was inspired by friends who lived on boats in Hong Kong’s Discovery Bay.
The Swiss was hooked after going to a boat show at ONE?15 Marina Club in 2007.
The family was then living in a $7,500-a-month rented house in Bukit Timah.
His wife, Rakia, 44, and two children Bruno, 15, and Dounia, 11, like their new lifestyle too.
The houseboat has four bedrooms, four bathrooms, a living room, a dining room, a terrace, a kitchen and a laundry room. It has about 2,500 sq ft of living space.
Melivia cost less than $1.5 million and took six months to build in Zhuhai, China, before being delivered to Singapore in early 2008. The family moved in soon after.
‘Some friends could not imagine life on a boat. But after visiting us, they agree it doesn’t move and you don’t really feel like you are on water,’ Mr Crivelli said.
A Sunday Times check with marinas and clubs found that at least a dozen expatriates – mostly from the United States, Germany, Britain and Australia – live on boats here. Some do so with family members.
Software architect Kris Beevers, 29, came to Singapore in September 2008. The New Yorker decided he would move onto a boat after six months of living on land.
His housing agent laughed and told him ‘it was impossible and too expensive’, he said.
Mr Beevers had always wanted to live on a boat but the cold weather in New York was a problem.
Last month, the bachelor finally found a second-hand 12m sloop in Phuket, Thailand which he bought for US$60,000 (S$84,000).
‘There aren’t many affordable boats for sale in Singapore. It’s a bit laborious to fly out to see boats but the difficulties are surmountable.’
His boat, Oia, will arrive here at the end of the month. It will berth at the Republic of Singapore Yacht Club.
Mr Beevers’ decision to live on a boat took into account the property prices in Singapore.
‘At $700,000, a two-bedroom apartment here is the cost of a mansion in many other places,’ he said, adding that living on a boat is generally cheaper, with owners paying about $2,000 a month for berthing and utilities.
‘Buying a boat and living on it is cheaper than paying rent for the same period. And after that, it just gets cheaper and cheaper,’ he said.
There is a bonus too.
‘When I need a break, I can sail my home off to a secluded island and relax for a few days,’ he said.

Source : Sunday Times – 21 Mar 2010

‘City of Waterways’ is taking shape

It looks like Singapore the Garden City is on target to become a City of Waterways too.
With World Water Day falling tomorrow, PUB, the national water agency, is confident that its masterplan targets will be met.
The banks of the country’s 32 rivers and 7,000km of canals and drains are being transformed, as are its 15 reservoirs which will teem with water activities.
A key element of PUB’s Active, Beautiful, Clean Waters (ABC Waters) programme is the people factor: projects will involve residents so that they have ownership too.
The masterplan identified more than 100 locations where projects will be implemented in phases till 2030.
The PUB first identifies a waterway or reservoir for transformation by looking at such factors as demographics, surrounding facilities and upcoming developments.
It then sees how the ABC Waters project can complement the surroundings and add value to the area.
Grassroots groups, schools and residents are involved: Feedback, ideas and views are gathered from them. After all, they will participate in and organise activities around the completed projects.
Mr Yew Kai Lih, 54, senior constituency manager in the Kolam Ayer constituency office, says: ‘Our waterway is now our trademark.’
Residents along the Kallang River/Kolam Ayer area now enjoy landscaped river banks and a floating deck.
Upgrading work to the waterways of Kolam Ayer, MacRitchie and Bedok have so far cost $23 million.
Mr Yew believes that the property prices in his constituency have gone up as the waterway now provides waterfront living amenities.
He feels that there is now a sense of ownership of the waterway. The constituency club organises activities such as gardening and performances on the floating deck.
Among the projects that are expected to be completed this year are: Sungei Punggol, Lower Seletar Reservoir, Pandan Reservoir and Jurong Lake. So too will Sungei Whampoa (St George’s Lane), Sungei Kallang/Whampoa RC31, Kranji Reservoir, Pang Sua Diversion Canal and Alexandra Canal.
Kallang River-Bishan Park and the Serangoon Reservoir – Lorong Halus waterway will be completed next year.
A problem that currently plagues canals here is pollution, but ‘pollution of the waterways has decreased over the years’, said Mr Tan Nguan Sen, director, Catchment and Waterways, PUB.
Last year, an average of 14 tonnes of flotsam was collected daily from the waterways. This is a reduction from the daily average of 15 tonnes collected in 2008, despite a steady increase in Singapore’s population.
Mr Eugene Heng, 60, chairman of the Waterways Watch Society, sees these changes to the waterways as a positive thing.
The society is a volunteer group that monitors, restores and protects the aesthetics of the waterways.
Mr Heng feels that ‘allowing more water activities in select areas is something that the society believes will help the public enjoy and, at the same time, appreciate, understand and value our waters’.

Source : Sunday Times – 21 Mar 2010

Heartland condos at $1k psf or more?

A 99-year leasehold condominium The Vision, in the quiet suburbs of West Coast Crescent, was launched recently at an eye-popping price of around $1,000 to $1,200 per sq ft (psf).
Nevertheless, at least 160 buyers put down money for the mass market homes that come with branded goods and quality finishes, said the developer Cheung Kong (Holdings).
That set the benchmark price for the area. And this will not be the last of such pricey projects, industry players said.
PropNex chief executive Mohamed Ismail said the trend of a sizeable number of properties sold above $1,000 psf will likely continue over the next few months.
Still, this price level is not yet likely to become the norm for the entire mass market category, given that affordability will be a serious issue, said those in the industry.
This price level first came up in the mass market segment after Far East Organization launched its 329-unit Centro Residences in Ang Mo Kio at more than $1,100 psf last year.
At that time, property experts were caught by surprise, pointing out that the price would be a new suburban record.
Until then, the leasehold record was believed to be held by Bishan 8, which Far East launched at $1,100 psf in 1997.
Still, there were buyers at Centro, with five February deals registered at a median level of $1,220 psf.
At some of last year’s popular mass market launches, some units did cross this $1,000 psf price level, though the average launch price was below that mark.
These included Trevista in Toa Payoh, Meadows@Peirce in Upper Thomson and Elliot at the East Coast.
Looking ahead, the $1,000 psf price may not be surprising, based on some of the aggressive bids achieved at recent government land tenders, industry players said.
‘For the next half year, you will likely see new mass market launches hitting the price level,’ said Knight Frank managing director (residential services) Peter Ow.
‘The psf price is one thing, the quantum is another. As long as the total quantum is at $1 million or less, buyers can still afford to buy.’
Units will thus become smaller to keep the quantum affordable, he added.
‘If the developers bought land above $500 psf ppr, they would try to sell it for more than $900 psf ppr,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. (The term ppr refers to per plot ratio.)
However, the aggressive bidding situation will not last.
‘Demand is still strong. But as more supply comes onstream, developers’ landbanking needs will gradually be satisfied,’ said Mr Mak.
Their bids will come down gradually, he said.
Developers are also wary about overpricing their projects as they would then have difficulty selling them, he said.
Said DTZ’s South-east Asia research head, Ms Chua Chor Hoon: ‘Not all mass market projects can be sold at above $1,000 psf. They would need to have very attractive attributes in order to attract home owners or investors.’
This would include proximity to town and MRT stations, and proximity to employment hubs or sought-after educational institutions to provide a ready pool of good tenants, Ms Chua added.
‘Developers will try to maintain the ($1,000 psf and above) price level as the norm for very well-located mass market condos,’ said Mr Mak.
But it will not be the norm for mass market condos in general, he stressed.
‘We are not seeing a strong growth in household income, so how can we support those kind of prices?’

Source : Sunday Times – 21 Mar 2010

Bond issue seen improving CCT portfolio

Capitacommercial Trust’s (CCT) second major fund-raising exercise in less than a year could pave the way for the office landlord to improve its portfolio, analysts said.
The trust on Wednesday said that it will issue $225 million worth of convertible bonds and use 75-90 per cent of the proceeds to enhance its assets and refinance debt.
‘Although bite-sized, we think the proceeds from convertible bonds provides financial flexibility and paves the way for long awaited acquisition(s) and/or asset enhancement initiatives to enhance its office portfolio,’ said Goldman Sachs analyst Paul Lian, who has a ‘buy’ call on CCT.
He added that the news allays market concerns that CCT, which is partly owned by Singapore’s largest property group CapitaLand, is losing its foothold in the office market with the sale of Robinson Point and the potential redevelopment of StarHub Centre to residential use. Both deals were announced early this year.
In an update yesterday, CCT said that the convertible bonds issue has been fully placed out to institutional and accredited investors. The bonds, which are due in April 2015, are unsecured and convertible into new CCT units at a conversion price of $1.356 per new unit. They come with an interest rate of 2.7 per cent per year.
Credit Suisse, the lead manager for the issue, could exercise an option within the next 28 days to increase the size of the issue by up to $25 million to $250 million, CCT added.
The bond issue marks the second big fund-raising action for CCT in less than a year. The trust in mid-2009 raised $804 million in a rights issue and paid off some of its debt to cut down its gearing.
With this latest convertible bond issue, CCT will have more cash on hand. But gearing is expected to climb.
Goldman Sachs estimates that 2010 gearing could rise to 36 per cent from 32 per cent. But CCT has no major refinancing pressure until its $355 million convertible bond put option is due in May 2011 and $520 million worth of commercial mortgage-backed securities is due in Sept 2011.
CCT chief executive Lynette Leong pointed out that the bonds are unsecured, which preserves CCT’s existing pool of unsecured properties and ‘will give CCT the financial flexibility to respond quickly to any growth opportunities in the future’.
Eight properties with a total asset value of $2.8 billion (out of CCT’s eleven properties) are unsecured against any borrowings.
In a statement, Moody’s Investors Service said that it sees no impact on CCT’s ‘Baa2′ corporate family rating or ‘Baa3′ senior unsecured debt rating from the latest convertible bond issue.
‘Leverage will increase modestly, but the long-dated convertible bond issue will improve CCT’s liquidity and funding stability,’ said Moody’s vice-president and senior credit officer Peter Choy. ‘It will also provide funding for CCT’s portfolio reconstitution, designed to enhance asset quality.’
But others were bearish on the stock as office rents in Singapore are expected to continue sliding.
‘We think office rents could continue to trend downwards over the next 1-2 quarters and possibly bottoming out by end-2010,’ said DMG & Partners Securities, which issued a fresh ’sell’ call. ‘Judging from the huge supply of office space, it could take at least 1-2 years for excess capacity to be absorbed before rents start their upward climb.’
CCT shares lost four cents, or 3.5 per cent, to close at $1.09 yesterday.

Source : Business Times – 19 Mar 2010

China Overseas Land H2 profit jumps 62%

China Overseas Land, the country’s largest property firm by market value, posted strong half-year profit growth and said it would increase spending by almost a third this year.
China Overseas Land & Investment Ltd earmarked HK$54.5 billion (S$9.8 billion) for 2010 capital expenditure on land purchases and property development, up from HK$41.7 billion last year, chairman Kong Qingping said yesterday.
But China Overseas sees little growth in sales volume, with analysts saying government measures to keep prices from rising too sharply may dampen the financial performance of property developers.
China Overseas, a unit of construction firm China Construction Engineering Corp, sees no growth in volume sales this year from last year’s 4.8 million square metres.
The company, and its rivals Vanke and Soho China, benefited from a property boom last year that was fuelled by nearly 10 trillion yuan (S$2 trillion) in new lending and massive economic stimulus spending. A strong rebound in the property market prompted consolidation of prices at a high level.
‘Some recent policies and measures have already affected the property market in the short term,’ the company said in a statement, though it remains upbeat about the long-term development of China’s property market.
Executives from the Hong Kong-listed company did not rule out a China listing, but declined to elaborate at yesterday’s news conference.
July-December profit rose 62 per cent to HK$4.43 billion from HK$2.74 billion a year earlier, according to Reuters calculations, beating consensus forecasts for HK$3.44 billion by Thomson Reuters I/B/E/S.
Full year net profit was HK$7.47 billion, versus a year-earlier HK$5 billion, on revenue nearly doubled at HK$37.3 billion.
China Overseas shares fell 1.6 per cent after the results, closing at HK$16.90, while the main market slipped 0.25 per cent.
Shares in China Overseas have gained 3 per cent this year, beating a broader market that has dipped 2.5 per cent.

Source : Business Times – 19 Mar 2010

Moody’s still negative on outlook for Reits

Prospects for real estate investment trusts (Reits) in Singapore remain challenging as there will be a greater supply of office, industrial and retail space coming onstream, said Moody’s Investors Service yesterday.
The rating agency kept its outlook for the sector over the next 12 months negative. This places it at the bearish end of the scale compared with two other research houses – DMG & Partners has a ‘neutral’ rating on Reits and OCBC Investment Research recently upped its call to ‘overweight’.
Moody’s was particularly concerned about the influx of office, industrial and downtown retail space at a time of unexceptional economic growth. Its sovereign unit estimates that Singapore’s GDP will expand by around 5 per cent this year.
‘This is below the average GDP growth of 8 per cent from 2004 to 2007 and will not be adequate to absorb the strong increase in supply of commercial properties that was planned before 2008, based upon the then much higher economic growth rate,’ it said in a report.
According to Moody’s, around 6.6 million square foot of new office space will enter the market between this year and 2012. While landlords have managed to secure tenants for more than 30 per cent of the new supply, there will still be pressure on occupancy and rents over the medium term, it said.
When it came to the retail sector, Moody’s was more worried about rents at Orchard Road. This is because about 3.7 million sq ft of new space will be ready in the next two years, some of it at the two integrated resorts.
Moody’s acknowledged that most Reits have been rather resilient and have turned in stable results. But ‘pressure on earnings may increase in 2011 when new supply comes on stream across all property segments if demand is not increased’, it said.
Not all market watchers shared Moody’s view completely. DMG analyst Jonathan Ng agreed that office Reits would face a tougher time as rents continue to slip, but he was neutral about prospects for retail and industrial Reits, and positive on hospitality Reits’ performance.
Mr Ng was not particularly concerned about new retail space coming onstream as pre-commitment rates have been strong.
In a March 4 report, OCBC Investment Research upgraded its call on the Reits sector. Of the eight Reits it covers, five most recently turned in results meeting the house’s forecasts while three did better than expected.

Source : Business Times – 19 Mar 2010