Vietnam, a little dragon on the rise: Thailand’s daily
16:15' 26/04/2007 (GMT+7)
Entitled “Letter from Ho Chi Minh city: Vietnam, a Little Dragon on the Rise”, Thailand ’s English-language daily, the Nation, on April 25 commented that Vietnam is a good country to invest in and its people are great.
"Vietnam attracts foreign investors because people in the government are determined to do so,” said Vikrom Kromadit, CEO of Amata Group, who is currently the largest Thai investor in Vietnam .
The newspaper said that the Vietnamese government is trying to do everything to attract foreign investors.
It wrote that the government hopes more overseas Vietnamese to return to the country in the future. If they choose to stay longer and participate in nation-building, the country would benefit most from their investment and management skills with a visa-free entry scheme for those planning to stay in Vietnam for more than six months.
The Nation said that Vietnam would be able to catch up with Thailand very soon in every way.
"Vietnam has offered better conditions and incentives for foreign investors than Thailand," the paper said.
To obtain a competitive edge and confront future challenges, Vietnamese leaders know well that there must be major changes in the country's education policies, especially in the fields of technology and English-language training, the paper added.
(Source: VNA)
Saturday, April 28, 2007
Foreign investors buying licenced real estate projects
Foreign investors buying licenced real estate projects
16:40' 27/04/2007 (GMT+7)
VietNamNet Bridge – It is a growing trend that foreign investors are buying real estate which has been licenced instead of injecting money in completely new projects.
Within one month, Singapore’s Keppel Land signed two contracts on setting up joint ventures with local partners to develop accommodation projects in HCM City.
In mid April, Harrisonburg, a member of Keppel Land, set up a joint venture with An Phu Corporation to run a high-grade apartment bloc project, covering an area of 1.74 ha in district 2, HCM City. The legal capital of the joint venture is $14.4mil, of which Harrisonburg will contribute 60%. Eighty million dollars will be injected to build 500 high-grade apartments for sale early next year.
Two weeks before that, Keppel Land signed a contract on setting up a joint venture with Tien Phuoc to invest $106mil in a project on building 1,500 apartments for sale in district 2, HCM City.
Real estate projects located in advantageous positions are being hunted by many foreign investors, who want to take shortcuts in investment by buying licenced projects instead of starting up completely new projects.
In fact, foreign investors face a lot of difficulties in seeking places for projects and site clearance; therefore, they make wise deals by buying licenced projects. Regularly, foreign investors join forces with domestic investors to set up joint ventures, in which foreign investors hold the controlling stakes.
Two years ago, Hai An Corporation, a domestic owned company, announced the implementation of a high-grade apartment project, called Orchard Garden in district 2. However, as the market was gloomy at that time, the project sank into oblivion. However, the project did not disappear as people thought it might: it was renamed River Garden after Indochina Land Holding bought 90% of the total shares of the 206-apartment project.
Foreign investors, especially investment funds, are hunting for licenced projects involving apartments, offices, shopping centres and golf courses to buy.
Investment funds are being put under hard pressure to disburse as much as possible. In general, when raising funds, fund management companies always have to promise to disburse capital in one year. As there are not many operational projects to buy, foreign investors have to join forces with local partners to develop licenced projects.
Cooperating with foreign investors to develop projects proves to be a good choice for many domestic investors, who often lack capital. However, not every domestic investor chooses this way. In fact, it is not difficult to call for capital into projects at this moment, as idle capital from the public is profuse, and people are seeking suitable investment channels.
The Thuy Duong Company Ltd, the investor of the twin tower apartment and shopping centre TD Plaza in Hai Phong City, last week changed into a joint company, which will help it easily raise funds in the stock market. The strategic shareholders of the joint stock company are Prudential life insurance, Vina financial investment fund, and Phu Thai Group, a retailer.
(Source: Dau tu)
16:40' 27/04/2007 (GMT+7)
VietNamNet Bridge – It is a growing trend that foreign investors are buying real estate which has been licenced instead of injecting money in completely new projects.
Within one month, Singapore’s Keppel Land signed two contracts on setting up joint ventures with local partners to develop accommodation projects in HCM City.
In mid April, Harrisonburg, a member of Keppel Land, set up a joint venture with An Phu Corporation to run a high-grade apartment bloc project, covering an area of 1.74 ha in district 2, HCM City. The legal capital of the joint venture is $14.4mil, of which Harrisonburg will contribute 60%. Eighty million dollars will be injected to build 500 high-grade apartments for sale early next year.
Two weeks before that, Keppel Land signed a contract on setting up a joint venture with Tien Phuoc to invest $106mil in a project on building 1,500 apartments for sale in district 2, HCM City.
Real estate projects located in advantageous positions are being hunted by many foreign investors, who want to take shortcuts in investment by buying licenced projects instead of starting up completely new projects.
In fact, foreign investors face a lot of difficulties in seeking places for projects and site clearance; therefore, they make wise deals by buying licenced projects. Regularly, foreign investors join forces with domestic investors to set up joint ventures, in which foreign investors hold the controlling stakes.
Two years ago, Hai An Corporation, a domestic owned company, announced the implementation of a high-grade apartment project, called Orchard Garden in district 2. However, as the market was gloomy at that time, the project sank into oblivion. However, the project did not disappear as people thought it might: it was renamed River Garden after Indochina Land Holding bought 90% of the total shares of the 206-apartment project.
Foreign investors, especially investment funds, are hunting for licenced projects involving apartments, offices, shopping centres and golf courses to buy.
Investment funds are being put under hard pressure to disburse as much as possible. In general, when raising funds, fund management companies always have to promise to disburse capital in one year. As there are not many operational projects to buy, foreign investors have to join forces with local partners to develop licenced projects.
Cooperating with foreign investors to develop projects proves to be a good choice for many domestic investors, who often lack capital. However, not every domestic investor chooses this way. In fact, it is not difficult to call for capital into projects at this moment, as idle capital from the public is profuse, and people are seeking suitable investment channels.
The Thuy Duong Company Ltd, the investor of the twin tower apartment and shopping centre TD Plaza in Hai Phong City, last week changed into a joint company, which will help it easily raise funds in the stock market. The strategic shareholders of the joint stock company are Prudential life insurance, Vina financial investment fund, and Phu Thai Group, a retailer.
(Source: Dau tu)
Aberdeen launches property fund for France and Southern Europe
Aberdeen launches property fund for France and Southern Europe
Fri, 27 Apr 2007
In line with its strategy to become a leading fund and asset manager in the French market, Aberdeen Property Investors has launched a new fund, Aberdeen Property Fund France and Southern Europe. The fund's first investment is the acquisition of CB 16, a landmark office building in la Défense in Paris, from GE Real Estate France for an amount in excess of EUR 200 million.
The building is fully let to Alcan and Unilog on a 9-year lease agreement. The total area of the building is some 28,000m2, containing also three company restaurants and 151 parking spaces. L'Etoile Properties acted as advisor to Aberdeen in this acquisition.
Jacques-Yves Nicol, International Director and Head of Aberdeen Property Investors Southern Europe, said: 'We are very pleased to have this quality building as our first acquisition for the new fund. This is a landmark property in a prime business district, which is enjoying good rental growth and a low vacancy rate of 5%.'
'This acquisition reflects the success of our strategic partnership with L'Etoile Properties in the French market, which not only allows us to offer active local management of the fund's assets but also provides valuable support in the sourcing of products.'
Aberdeen Property Fund France and Southern Europe is a closed-ended, diversified fund with a Core to Value added profile. It will be diversified both in terms of sectors and geography, covering France, Spain, Portugal and Italy, with France being the priority market initially. The target equity is EUR 500 million, which given its target level of leverage of 50-60% loan to value, will give an investment capacity of EUR 1-1.3 billion.
Ubbe Strihagen, International Director at Aberdeen Property Investors, added: 'Through the new Aberdeen France and Southern European Fund, we offer a new product to complement our existing product range for institutional investors. We now have 11 funds open for investments in Europe and Asia, ranging from national and regional funds to fund of fund products. This is however our first product that focuses purely on Southern Europe.'
Aberdeen Property Investors is the specialist division of Aberdeen Asset Management plc, a global investment management group listed on the London Stock Exchange and managing over EUR 100 billion of assets.
Aberdeen Property Investors manages some EUR 10 billion in property investments through property funds and management mandates on behalf of its institutional client base. The division has some 500 employees at offices in ten European countries.
Fri, 27 Apr 2007
In line with its strategy to become a leading fund and asset manager in the French market, Aberdeen Property Investors has launched a new fund, Aberdeen Property Fund France and Southern Europe. The fund's first investment is the acquisition of CB 16, a landmark office building in la Défense in Paris, from GE Real Estate France for an amount in excess of EUR 200 million.
The building is fully let to Alcan and Unilog on a 9-year lease agreement. The total area of the building is some 28,000m2, containing also three company restaurants and 151 parking spaces. L'Etoile Properties acted as advisor to Aberdeen in this acquisition.
Jacques-Yves Nicol, International Director and Head of Aberdeen Property Investors Southern Europe, said: 'We are very pleased to have this quality building as our first acquisition for the new fund. This is a landmark property in a prime business district, which is enjoying good rental growth and a low vacancy rate of 5%.'
'This acquisition reflects the success of our strategic partnership with L'Etoile Properties in the French market, which not only allows us to offer active local management of the fund's assets but also provides valuable support in the sourcing of products.'
Aberdeen Property Fund France and Southern Europe is a closed-ended, diversified fund with a Core to Value added profile. It will be diversified both in terms of sectors and geography, covering France, Spain, Portugal and Italy, with France being the priority market initially. The target equity is EUR 500 million, which given its target level of leverage of 50-60% loan to value, will give an investment capacity of EUR 1-1.3 billion.
Ubbe Strihagen, International Director at Aberdeen Property Investors, added: 'Through the new Aberdeen France and Southern European Fund, we offer a new product to complement our existing product range for institutional investors. We now have 11 funds open for investments in Europe and Asia, ranging from national and regional funds to fund of fund products. This is however our first product that focuses purely on Southern Europe.'
Aberdeen Property Investors is the specialist division of Aberdeen Asset Management plc, a global investment management group listed on the London Stock Exchange and managing over EUR 100 billion of assets.
Aberdeen Property Investors manages some EUR 10 billion in property investments through property funds and management mandates on behalf of its institutional client base. The division has some 500 employees at offices in ten European countries.
UOB, Keppel lead Singapore's rise
UOB, Keppel lead Singapore's rise
By Ovais Subhani
Email us your feedback at fd@bizedge.com
Southeast Asian stocks rose on April 26 aided by a rally in the United States, with Singapore's index climbing on the back of gains in United Overseas Bank and Keppel Corp.
The Straits Times Index ended up 1.31%, recovering from losses in the past two sessions.
Indonesian stocks gained 1.48%, the Philippine index added 1.24%, and by 0910 GMT, Thai stocks were up 0.47%.
The Malaysian market was closed for a local holiday, and will reopen on April 27.
US stocks rose to an all-time high above 13,000 points on April 25 buoyed by strong earnings reports and reassuring news on the economy.
Dealers in Singapore said those US gains helped further boost investor sentiment in the city-state where the quarterly reporting season has seen a steady flow of healthy earnings.
UOB, Singapore's second-largest lender, rose 2.8% after staying flat in the last two sessions.
Keppel Corp, the world's top offshore oil rig builder, rose 3.8% after JP Morgan raised its share price target to S$23.24 (RM52.48) from S$20.56, citing the firm's favourable position to profit from demand for rigs. The stock closed at S$21.70.
"Keppel is still in a sweet spot, and is now leveraging operational efficiencies and scale," JP Morgan analysts Winnifred Heap and Kelvin Sam said in a note to investors.
"It is well positioned to ride the next wave of demand for ultra-deepwater drilling and production units through its suite of proprietary designs along with a proven track record in converting floating systems for the world's leading FPSO contractors such as SBM and Prosafe," the note said.
CapitaLand, Southeast Asia's biggest developer, rose 1.8% after its majority-owned subsidiary Ascott Group, up 0.6%, announced the launch of a private equity real estate fund for investment in China.
Ascott earlier announced a 77% drop in first-quarter net profit, but analysts such as Winston Liew of OCBC Investment Research said the revenue and distributable income was higher than the firm's own forecast.
"The performance was boosted by the inclusion of recent acquisitions in the Philippines and Vietnam," Liew said.
In Jakarta, Telkom Indonesia rose 2.9% and conglomerate Astra International rose 3.1%. Both are expected to release first-quarter results in the next few days.
Italian Thai, Thailand's biggest builder, rose 2% and rival Sino Thai Engineering was up 1.4% after the government said bidding for Bangkok mass transit lines would start in August.
Thai builder Ch Karnchang rose 2.1% after a subsidiary said it signed an agreement with the government of Laos to build a hydroelectric power plant there.
Gains in the Philippines were led by SM Investments, up 3.6%, after local media reported the conglomerate as saying it would spend about US$2 billion (RM6.84 billion) over the next five years to expand its shopping mall, retail and banking operations, as well as on an eco-tourism project south of Manila. -- Reuters
By Ovais Subhani
Email us your feedback at fd@bizedge.com
Southeast Asian stocks rose on April 26 aided by a rally in the United States, with Singapore's index climbing on the back of gains in United Overseas Bank and Keppel Corp.
The Straits Times Index ended up 1.31%, recovering from losses in the past two sessions.
Indonesian stocks gained 1.48%, the Philippine index added 1.24%, and by 0910 GMT, Thai stocks were up 0.47%.
The Malaysian market was closed for a local holiday, and will reopen on April 27.
US stocks rose to an all-time high above 13,000 points on April 25 buoyed by strong earnings reports and reassuring news on the economy.
Dealers in Singapore said those US gains helped further boost investor sentiment in the city-state where the quarterly reporting season has seen a steady flow of healthy earnings.
UOB, Singapore's second-largest lender, rose 2.8% after staying flat in the last two sessions.
Keppel Corp, the world's top offshore oil rig builder, rose 3.8% after JP Morgan raised its share price target to S$23.24 (RM52.48) from S$20.56, citing the firm's favourable position to profit from demand for rigs. The stock closed at S$21.70.
"Keppel is still in a sweet spot, and is now leveraging operational efficiencies and scale," JP Morgan analysts Winnifred Heap and Kelvin Sam said in a note to investors.
"It is well positioned to ride the next wave of demand for ultra-deepwater drilling and production units through its suite of proprietary designs along with a proven track record in converting floating systems for the world's leading FPSO contractors such as SBM and Prosafe," the note said.
CapitaLand, Southeast Asia's biggest developer, rose 1.8% after its majority-owned subsidiary Ascott Group, up 0.6%, announced the launch of a private equity real estate fund for investment in China.
Ascott earlier announced a 77% drop in first-quarter net profit, but analysts such as Winston Liew of OCBC Investment Research said the revenue and distributable income was higher than the firm's own forecast.
"The performance was boosted by the inclusion of recent acquisitions in the Philippines and Vietnam," Liew said.
In Jakarta, Telkom Indonesia rose 2.9% and conglomerate Astra International rose 3.1%. Both are expected to release first-quarter results in the next few days.
Italian Thai, Thailand's biggest builder, rose 2% and rival Sino Thai Engineering was up 1.4% after the government said bidding for Bangkok mass transit lines would start in August.
Thai builder Ch Karnchang rose 2.1% after a subsidiary said it signed an agreement with the government of Laos to build a hydroelectric power plant there.
Gains in the Philippines were led by SM Investments, up 3.6%, after local media reported the conglomerate as saying it would spend about US$2 billion (RM6.84 billion) over the next five years to expand its shopping mall, retail and banking operations, as well as on an eco-tourism project south of Manila. -- Reuters
Dubai’s ruler turns tide on development
Dubai’s ruler turns tide on development
By Simeon Kerr in Dubai
Published: April 23 2007 19:16 | Last updated: April 23 2007 19:16
Every weekend Umm Suqeim beach, one of the last remaining public beaches in Dubai, swarms with human life. Arab women, shrouded head to toe, tend to their children alongside Russians in their skimpiest briefs, and local elders chat among themselves while low-paid construction workers meander along the beachfront, collectively enjoying one of the few free pleasures in Dubai, where economic and social divides often prevail.
The cosmopolitan and egalitarian symbolism of this 750m strip of sand, nestled in the shadow of Dubai’s Burj Al Arab hotel, a self-styled seven-star icon to opulence, stirred strong emotions among the emirate’s population when it was announced last month that the beach would make way for yet another offshore real-estate development.
ADVERTISEMENT
The complaints from Dubai’s expatriate population, usually confined to blogs and the letters pages of newspapers, gained traction through an online petition.
With the signatures growing by a thousand every day, Sheikh Mohamed bin Rashid Al Maktoum, Dubai’s ruler, ordered an end to work on the beach – a rare U-turn – to rapturous approval from beachgoers and residents.
“The decision had looked arrogant and greedy – let’s grab the last land while we can,” says the author of Dubai’s best-known expatriate blog, Secret Dubai Diary.
The incident provided a snapshot of decision-making in the emirate, which is balancing rollercoaster development with the demands of expatriates, about 95 per cent of all residents in the UAE’s business hub. Half of Dubai’s 1.4m-strong population is from south Asia, mainly low-paid workers, while Arab and western expatriates, including more than 100,000 Britons, are seeking the tax-free lifestyle in increasing numbers.
Many are now putting down firmer roots, thanks to a freehold law that opened the real estate market to non-Gulf Arabs in 2002.
For decades, Dubai’s rulers have governed in consultation through the majlis – a place where rulers would sit with trusted advisers, large merchant families and commoners – to discuss issues of the day. The public outrage triggered by news of the closure of the best beach in Dubai seems to have created a similar situation, with the ruler apparently changing his mind after listening to public opinion.
“I like to think that this petition reached the powers that be, helping to persuade them to keep this beach open, as a place for the people,” says one of the organisers behind the online petition, who did not want to be named for fear of being branded a trouble-maker.
Despite the victory over the beach, decisions still come from the top down. International human rights organisations continue to highlight the ill-treatment of construction workers and press for the UAE government to introduce the right to collective bargaining.
Nor is the UAE on the road to western-style democracy. The federation last year held its first elections, with an electoral college of Emirati candidates picked by the seven rulers of each emirate voting among themselves to choose representatives to a federal consultative council. It was the slowest move towards more political openness among its Gulf Arab state peers, but UAE government officials are unapologetic, saying the country will move at its own pace.
Keeping Dubai an attractive destination for wealthy expatriates, however, is clearly on the minds of the powers-that-be. Perhaps a victim of its own success, last year Dubai’s population grew by as much as 300,000, clogging roads and jacking up rents. Sheikh Mohamed has implemented an annual 7 per cent rent cap to blunt soaring rent inflation.
Dubai’s dog shelter, threatened with closure and putting down hundreds of stray dogs after being turfed out by its landlord, received land from the government after an extended media campaign with wide-eyed puppies tugging on the heartstrings of the mainly foreign dog-lovers.
Increasing home ownership in the expatriate community has also led to a different type of popular pressure through residents’ associations, some elected, which negotiate with government-controlled developer Emaar Properties over issues such as service fees.
But longstanding expatriates take a more cynical view of their ability to influence events. They mainly believe the input of local residents – not foreigners – reversed the decision on the beach. One local family living near the beach organised objections from other long-time residents to the development, say locals.
Zabeel Investments, the company behind the beach development, is owned by Sheikh Mohamed’s second son, Hamdan, who appears to be being groomed to succeed his father.
While the beach – one of Dubai’s most valuable pieces of real estate – may have been saved from the developers, at least temporarily, others maintain that Dubai’s supercharged 15 per cent annual economic growth rate, matched by ambitious projects in tourism, logistics and finance, will continue to force the closure of other “expatriate institutions”: private beach clubs, sailing clubs and cricket pitches are all making way as Dubai’s mega projects march on.
For the organisers of the petition, however, the popular response to their effort to carve out a public space amid the private development of Dubai, is a signal of a more organised community of expatriates, who want some say in their new-found home. ”People are making their lives here. It used to be a matter of staying here for two years, getting a tan while making money before leaving, but now there is a community,” said the organiser of the petition.
By Simeon Kerr in Dubai
Published: April 23 2007 19:16 | Last updated: April 23 2007 19:16
Every weekend Umm Suqeim beach, one of the last remaining public beaches in Dubai, swarms with human life. Arab women, shrouded head to toe, tend to their children alongside Russians in their skimpiest briefs, and local elders chat among themselves while low-paid construction workers meander along the beachfront, collectively enjoying one of the few free pleasures in Dubai, where economic and social divides often prevail.
The cosmopolitan and egalitarian symbolism of this 750m strip of sand, nestled in the shadow of Dubai’s Burj Al Arab hotel, a self-styled seven-star icon to opulence, stirred strong emotions among the emirate’s population when it was announced last month that the beach would make way for yet another offshore real-estate development.
ADVERTISEMENT
The complaints from Dubai’s expatriate population, usually confined to blogs and the letters pages of newspapers, gained traction through an online petition.
With the signatures growing by a thousand every day, Sheikh Mohamed bin Rashid Al Maktoum, Dubai’s ruler, ordered an end to work on the beach – a rare U-turn – to rapturous approval from beachgoers and residents.
“The decision had looked arrogant and greedy – let’s grab the last land while we can,” says the author of Dubai’s best-known expatriate blog, Secret Dubai Diary.
The incident provided a snapshot of decision-making in the emirate, which is balancing rollercoaster development with the demands of expatriates, about 95 per cent of all residents in the UAE’s business hub. Half of Dubai’s 1.4m-strong population is from south Asia, mainly low-paid workers, while Arab and western expatriates, including more than 100,000 Britons, are seeking the tax-free lifestyle in increasing numbers.
Many are now putting down firmer roots, thanks to a freehold law that opened the real estate market to non-Gulf Arabs in 2002.
For decades, Dubai’s rulers have governed in consultation through the majlis – a place where rulers would sit with trusted advisers, large merchant families and commoners – to discuss issues of the day. The public outrage triggered by news of the closure of the best beach in Dubai seems to have created a similar situation, with the ruler apparently changing his mind after listening to public opinion.
“I like to think that this petition reached the powers that be, helping to persuade them to keep this beach open, as a place for the people,” says one of the organisers behind the online petition, who did not want to be named for fear of being branded a trouble-maker.
Despite the victory over the beach, decisions still come from the top down. International human rights organisations continue to highlight the ill-treatment of construction workers and press for the UAE government to introduce the right to collective bargaining.
Nor is the UAE on the road to western-style democracy. The federation last year held its first elections, with an electoral college of Emirati candidates picked by the seven rulers of each emirate voting among themselves to choose representatives to a federal consultative council. It was the slowest move towards more political openness among its Gulf Arab state peers, but UAE government officials are unapologetic, saying the country will move at its own pace.
Keeping Dubai an attractive destination for wealthy expatriates, however, is clearly on the minds of the powers-that-be. Perhaps a victim of its own success, last year Dubai’s population grew by as much as 300,000, clogging roads and jacking up rents. Sheikh Mohamed has implemented an annual 7 per cent rent cap to blunt soaring rent inflation.
Dubai’s dog shelter, threatened with closure and putting down hundreds of stray dogs after being turfed out by its landlord, received land from the government after an extended media campaign with wide-eyed puppies tugging on the heartstrings of the mainly foreign dog-lovers.
Increasing home ownership in the expatriate community has also led to a different type of popular pressure through residents’ associations, some elected, which negotiate with government-controlled developer Emaar Properties over issues such as service fees.
But longstanding expatriates take a more cynical view of their ability to influence events. They mainly believe the input of local residents – not foreigners – reversed the decision on the beach. One local family living near the beach organised objections from other long-time residents to the development, say locals.
Zabeel Investments, the company behind the beach development, is owned by Sheikh Mohamed’s second son, Hamdan, who appears to be being groomed to succeed his father.
While the beach – one of Dubai’s most valuable pieces of real estate – may have been saved from the developers, at least temporarily, others maintain that Dubai’s supercharged 15 per cent annual economic growth rate, matched by ambitious projects in tourism, logistics and finance, will continue to force the closure of other “expatriate institutions”: private beach clubs, sailing clubs and cricket pitches are all making way as Dubai’s mega projects march on.
For the organisers of the petition, however, the popular response to their effort to carve out a public space amid the private development of Dubai, is a signal of a more organised community of expatriates, who want some say in their new-found home. ”People are making their lives here. It used to be a matter of staying here for two years, getting a tan while making money before leaving, but now there is a community,” said the organiser of the petition.
UAE property giant to build ‘new Bali’
UAE property giant to build ‘new Bali’
By Simeon Kerr and Roula Khalaf in Dubai
Published: April 23 2007 19:31 | Last updated: April 23 2007 19:31
Emaar Properties, the Dubai real estate giant, is set to launch a multi-billion dollar development in Indonesia to build a “new Bali”.
Mohamed Alabbar chairman of Emaar, said the resort and homes development on Lombok would be the last new international market tapped by the Dubai-backed developer.
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Mr Alabbar, a key adviser to Sheikh Mohamed bin Rashid Al Maktoum, the ruler of Dubai, said Emaar would expand in markets that it had already entered, with the US a key target.
The company will use John Laing Homes, the California company acquired last year, to expand its reach into Arizona, Florida and Washington DC, with a view to quadrupling profits to $1bn from the current $250m (€190m, £125m), he said.
“The time is right for acquisitions in the US,” he said. “With the [real estate] market slowing we might find some value there.”
After driving Dubai’s real estate industry, an aggressive expansion into new markets over the past three years has seen Emaar commit to projects with a development value of more than $60bn across 15 countries, including Saudi Arabia, India, Algeria and Egypt.
“The last country I want to do is Indonesia,” said Mr Alabbar. “We need to consolidate, to concentrate on our current portfolio.”
The Lombok development, expected to be signed next month in Jakarta, is a joint venture with the Indonesian government for a development over 1,500 acres on the island east of Bali.
Mr Alabbar is expected to unveil more domestic projects as Emaar receives new land from March’s land-for-shares swap deal with the government-owned Dubai Holding, another conglomerate in the emirate.
Emaar will transfer 2.4bn new shares, worth about $7.6bn, to the government through a convertible bond over five years starting in 2008, eventually placing 51 per cent of the company in government ownership, up from 32 per cent.
Mr Alabbar said the deal, an idea crafted by Emaar, would enable the company to pay back Dubai Holding in shares as it started to generate returns from the land.
But he played down concerns of frantic expansion in the Dubai real estate market, which analysts say could lead to an alarming oversupply of housing units.
Dubai should continue its rapid building programme, he said, especially in the low-cost housing sector, to damp prices.
Real estate agents estimate average property prices have risen by up to 35 per cent over the past year, continuing to drive up the cost of living.
Mr Alabbar said Dubai banks were not stretched on development and housing loans. “I’m not worried about a bubble. We have a global city under construction,” he said, noting that more international companies were moving in, including Halliburton.
By Simeon Kerr and Roula Khalaf in Dubai
Published: April 23 2007 19:31 | Last updated: April 23 2007 19:31
Emaar Properties, the Dubai real estate giant, is set to launch a multi-billion dollar development in Indonesia to build a “new Bali”.
Mohamed Alabbar chairman of Emaar, said the resort and homes development on Lombok would be the last new international market tapped by the Dubai-backed developer.
ADVERTISEMENT
Mr Alabbar, a key adviser to Sheikh Mohamed bin Rashid Al Maktoum, the ruler of Dubai, said Emaar would expand in markets that it had already entered, with the US a key target.
The company will use John Laing Homes, the California company acquired last year, to expand its reach into Arizona, Florida and Washington DC, with a view to quadrupling profits to $1bn from the current $250m (€190m, £125m), he said.
“The time is right for acquisitions in the US,” he said. “With the [real estate] market slowing we might find some value there.”
After driving Dubai’s real estate industry, an aggressive expansion into new markets over the past three years has seen Emaar commit to projects with a development value of more than $60bn across 15 countries, including Saudi Arabia, India, Algeria and Egypt.
“The last country I want to do is Indonesia,” said Mr Alabbar. “We need to consolidate, to concentrate on our current portfolio.”
The Lombok development, expected to be signed next month in Jakarta, is a joint venture with the Indonesian government for a development over 1,500 acres on the island east of Bali.
Mr Alabbar is expected to unveil more domestic projects as Emaar receives new land from March’s land-for-shares swap deal with the government-owned Dubai Holding, another conglomerate in the emirate.
Emaar will transfer 2.4bn new shares, worth about $7.6bn, to the government through a convertible bond over five years starting in 2008, eventually placing 51 per cent of the company in government ownership, up from 32 per cent.
Mr Alabbar said the deal, an idea crafted by Emaar, would enable the company to pay back Dubai Holding in shares as it started to generate returns from the land.
But he played down concerns of frantic expansion in the Dubai real estate market, which analysts say could lead to an alarming oversupply of housing units.
Dubai should continue its rapid building programme, he said, especially in the low-cost housing sector, to damp prices.
Real estate agents estimate average property prices have risen by up to 35 per cent over the past year, continuing to drive up the cost of living.
Mr Alabbar said Dubai banks were not stretched on development and housing loans. “I’m not worried about a bubble. We have a global city under construction,” he said, noting that more international companies were moving in, including Halliburton.
Qatar arrives late but still makes its mark
Qatar arrives late but still makes its mark
By Simeon Kerr in Dubai and Jim Pickard in London
Published: April 26 2007 03:00 | Last updated: April 26 2007 03:00
Last night Three Delta stayed silent about its raid on J Sainsbury but there were few doubts that the Qatari-backed investment group was the mystery buyer of 14 per cent of the supermarket chain.
It is the second big Arab investment in a UK blue-chip company in a week - following the purchase of 3 per cent of HSBC by Maan Abdulwahed al-Sanea, the Saudi businessman.
Qatar is a late entrant into the global investment scene compared with its Gulf peers. But it is making up for lost time, backed by the income from its huge gas reserves.
Only two years ago the state set up the Qatar Investment Authority, a $40bn (£20bn) state-run investment agency that aims to turnpetrodollars into overseas assets, in a bid to help reduce the tiny peninsula state's reliance on energy revenues.
The QIA will come onto bankers' radars more and more frequently, say analysts.
"Qatar is a relative newcomer - it invested heavily in the gas industry in the 1990s and is now yielding the results of that strategy," says Simon Williams, an economist with HSBC in Dubai. "But they are increasingly ambitious and innovative in how to deploy their surpluses."
As such, it is seeking to replicate the success of similar state-backed investment bodies in Singapore, Abu Dhabi and elsewhere. Singapore's GIC is one of the world's biggest real estate investors.
Investments by the QIA have included a $205m stake in the Industrial & Commercial Bank of China. The group is said to be interested in further pre-initial public offering investments in China, a key market for Qatar's gas exports.
At the forefront of the drive is Sheikh Hamad bin Jaber al Thani, foreign minister and head of the QIA.
Last summer the sheikh set up UK-based Three Delta, an investment group, mostly with QIA cash but also some of his own money.
The business rapidly made several purchases including the £1.4bn acquisition of nursing home operator Four Seasons and the £150m acquisition of Senad, the special needs schools group. The QIA, meanwhile, took an unsuccessful £8bn tilt at Thames Water.
This February the same group bought a 1 per cent stake in J Sainsbury through a separate vehicle, Delta Two.
Sheikh Hamad, one of the key power brokers in the royal family in Qatar, is a softly-spoken man who during his 15 years at the foreign ministry has overseen closer diplomatic and military co-operation with the US, while at the same time having to deal with thediplomatic fall-out from Qatar-funded Arab satellite channel Al Jazeera, whose methods have irritated American and Arab sensibilities alike.
But his economic clout is perhaps even more far-reaching.
Sheikh Hamad's cousin, the ruler, is said to joke: "I may run the country, but he owns it."
In Britain, the sheikh is the financial backer of London's most expensive block of flats at One Hyde Park in Knightsbridge, which is being overseen by development managers Candy & Candy. Separately, a consortium of Candy & Candy and Qatari Diar - which is chaired by the sheikh - won the auction for Chelsea Barracks ata price which is rumouredto be close to £1bn.
He is also reputed to be one of the largest players on the small Doha Securities Market, and is said to own the swankiest new hotel in Doha, the Four Seasons.
As chairman of fast-growing Qatar Airways, Sheikh Hamad is described bysome that know him asa good boss who rewardshis employees well.
The scale of Qatar's international investment agency pales in comparison with Abu Dhabi Investment Authority, with estimated assets of about $500bn plus, or Kuwait Investment Authority's $250bn.
But Qatar's booming gas-driven economy is the QIA's ultimate calling card. The tiny peninsula has built up government surpluses of about $20bn over the past four years, according to HSBC estimates, while current account surpluses of about $40bn over the same period provide a pool of savings for vehicles such as the QIA to tap to fund international acquisitions.
Per capita gross domestic product has trebled over the past six years to $60,000, three times the average across the Gulf Arab states of $19,000 a head in 2006. As the economy grows, Qatar is likely to buy into other economies as a means to support the government's aim of reducing dependence on hydrocarbons from about 70 per cent to about 50 per cent.
Background
The Qatari investors who bought 14 per cent ofJ Sainsbury this week might simply regard the supermarket chain as an undervalued stock.
However, there was speculation yesterday that their Three Delta and Delta Two funds might support Robert Tchenguiz, holder of a 5 per cent stake in Sainsbury. Coincidentally, Mr Tchenguiz used to employ Paul Taylor, who runs Three Delta. He has been urging the Sainsbury board to sell some of its £7.5bn of freehold property, perhaps by spinning off a real estate investment trust.
Or the investors could be planning a buy-out of the supermarket group with Qatari state backing. Old colleagues of Mr Taylor's say he once wanted to attempt
a Sainsbury's buy-out.
"It would not surprise me if this is the start of something bigger," said one acquaintance yesterday.
By Simeon Kerr in Dubai and Jim Pickard in London
Published: April 26 2007 03:00 | Last updated: April 26 2007 03:00
Last night Three Delta stayed silent about its raid on J Sainsbury but there were few doubts that the Qatari-backed investment group was the mystery buyer of 14 per cent of the supermarket chain.
It is the second big Arab investment in a UK blue-chip company in a week - following the purchase of 3 per cent of HSBC by Maan Abdulwahed al-Sanea, the Saudi businessman.
Qatar is a late entrant into the global investment scene compared with its Gulf peers. But it is making up for lost time, backed by the income from its huge gas reserves.
Only two years ago the state set up the Qatar Investment Authority, a $40bn (£20bn) state-run investment agency that aims to turnpetrodollars into overseas assets, in a bid to help reduce the tiny peninsula state's reliance on energy revenues.
The QIA will come onto bankers' radars more and more frequently, say analysts.
"Qatar is a relative newcomer - it invested heavily in the gas industry in the 1990s and is now yielding the results of that strategy," says Simon Williams, an economist with HSBC in Dubai. "But they are increasingly ambitious and innovative in how to deploy their surpluses."
As such, it is seeking to replicate the success of similar state-backed investment bodies in Singapore, Abu Dhabi and elsewhere. Singapore's GIC is one of the world's biggest real estate investors.
Investments by the QIA have included a $205m stake in the Industrial & Commercial Bank of China. The group is said to be interested in further pre-initial public offering investments in China, a key market for Qatar's gas exports.
At the forefront of the drive is Sheikh Hamad bin Jaber al Thani, foreign minister and head of the QIA.
Last summer the sheikh set up UK-based Three Delta, an investment group, mostly with QIA cash but also some of his own money.
The business rapidly made several purchases including the £1.4bn acquisition of nursing home operator Four Seasons and the £150m acquisition of Senad, the special needs schools group. The QIA, meanwhile, took an unsuccessful £8bn tilt at Thames Water.
This February the same group bought a 1 per cent stake in J Sainsbury through a separate vehicle, Delta Two.
Sheikh Hamad, one of the key power brokers in the royal family in Qatar, is a softly-spoken man who during his 15 years at the foreign ministry has overseen closer diplomatic and military co-operation with the US, while at the same time having to deal with thediplomatic fall-out from Qatar-funded Arab satellite channel Al Jazeera, whose methods have irritated American and Arab sensibilities alike.
But his economic clout is perhaps even more far-reaching.
Sheikh Hamad's cousin, the ruler, is said to joke: "I may run the country, but he owns it."
In Britain, the sheikh is the financial backer of London's most expensive block of flats at One Hyde Park in Knightsbridge, which is being overseen by development managers Candy & Candy. Separately, a consortium of Candy & Candy and Qatari Diar - which is chaired by the sheikh - won the auction for Chelsea Barracks ata price which is rumouredto be close to £1bn.
He is also reputed to be one of the largest players on the small Doha Securities Market, and is said to own the swankiest new hotel in Doha, the Four Seasons.
As chairman of fast-growing Qatar Airways, Sheikh Hamad is described bysome that know him asa good boss who rewardshis employees well.
The scale of Qatar's international investment agency pales in comparison with Abu Dhabi Investment Authority, with estimated assets of about $500bn plus, or Kuwait Investment Authority's $250bn.
But Qatar's booming gas-driven economy is the QIA's ultimate calling card. The tiny peninsula has built up government surpluses of about $20bn over the past four years, according to HSBC estimates, while current account surpluses of about $40bn over the same period provide a pool of savings for vehicles such as the QIA to tap to fund international acquisitions.
Per capita gross domestic product has trebled over the past six years to $60,000, three times the average across the Gulf Arab states of $19,000 a head in 2006. As the economy grows, Qatar is likely to buy into other economies as a means to support the government's aim of reducing dependence on hydrocarbons from about 70 per cent to about 50 per cent.
Background
The Qatari investors who bought 14 per cent ofJ Sainsbury this week might simply regard the supermarket chain as an undervalued stock.
However, there was speculation yesterday that their Three Delta and Delta Two funds might support Robert Tchenguiz, holder of a 5 per cent stake in Sainsbury. Coincidentally, Mr Tchenguiz used to employ Paul Taylor, who runs Three Delta. He has been urging the Sainsbury board to sell some of its £7.5bn of freehold property, perhaps by spinning off a real estate investment trust.
Or the investors could be planning a buy-out of the supermarket group with Qatari state backing. Old colleagues of Mr Taylor's say he once wanted to attempt
a Sainsbury's buy-out.
"It would not surprise me if this is the start of something bigger," said one acquaintance yesterday.
Singapore’s home prices chalked up their biggest gains in over seven years, rising 4.8 per cent in the January to March period from the previous quarter led by the luxury segment, officials figures showed on Friday.
The Urban Redevelopment Authority (URA), said its price index for private homes rose to 136.5 points in the first quarter from 130.2 points in the Oct-Dec period last year. This is a 16.5 per cent increase from the first quarter a year ago.
Prices for private apartments in the republic’s prime central district rose at a faster pace during the first quarter, climbing 5.5 per cent compared to the more modest 2 per cent gain chalked up by flats in the rest of the island republic.
Private home rents also grew at a faster pace between January and March, growing 7.6 per cent compared to 5.3 per cent in the last three months of 2006. Singapore’s property market recovery gained momentum after the government introduced measures in July 2005 to ease real-estate financing rules and foreign investment.
Last month, CapitaLand and its Hong Kong partner Sun Hung Kai Properties said they had set a new pricing benchmark for Singapore residential property by selling some units in their downtown development for more than $4,000 (US$2,644) per square foot.
The URA said office space rents grew 10.4 per cent in January-March, moderating slightly from 11.6 per cent in the last quarter of 2006.
The Urban Redevelopment Authority (URA), said its price index for private homes rose to 136.5 points in the first quarter from 130.2 points in the Oct-Dec period last year. This is a 16.5 per cent increase from the first quarter a year ago.
Prices for private apartments in the republic’s prime central district rose at a faster pace during the first quarter, climbing 5.5 per cent compared to the more modest 2 per cent gain chalked up by flats in the rest of the island republic.
Private home rents also grew at a faster pace between January and March, growing 7.6 per cent compared to 5.3 per cent in the last three months of 2006. Singapore’s property market recovery gained momentum after the government introduced measures in July 2005 to ease real-estate financing rules and foreign investment.
Last month, CapitaLand and its Hong Kong partner Sun Hung Kai Properties said they had set a new pricing benchmark for Singapore residential property by selling some units in their downtown development for more than $4,000 (US$2,644) per square foot.
The URA said office space rents grew 10.4 per cent in January-March, moderating slightly from 11.6 per cent in the last quarter of 2006.
The Urban Redevelopment Authority grant more office land
The Urban Redevelopment Authority granted provisional permission in the first quarter of this year for six projects that can generate a combined 121,360 square metres (1.3 million square feet) gross floor area of offices.
The biggest project, involving nearly 500,000 sq ft of offices, is at Alexandra Distripark, owned by Mapletree Investments.
Approval has also been given to OUB Centre Ltd to add nearly 52,000 sq ft of offices and about 55,300 sq ft of shop space to OUB Centre at Raffles Place under an additions and alterations scheme proposed by the owner.
Provisional permission has also been given for 123,570 sq ft of ‘reconstruction to existing’ building in the case of Dapenso Building at Cecil Street/Stanley Street.
A stone’s throw away, a Kajima-Lehman joint venture received the green light for 275,900 sq ft of offices at Robinson Road (on the Crosby House site).
Straits Trading also obtained provisional permission for a nearly 200,000 sq ft office redevelopment of its Straits Trading Building at Battery Road.
Over in North Bridge Rd/High Street area, approval has been given to add 160,000 sq ft of offices and almost 200,000 sq ft of retail area to be housed in a nine-storey commercial building and additions/alterations to the Funan Digitalife Mall.
URA’s office price index appreciated 4.3 per cent in Q1 this year over the preceding quarter, slower than a 7.7 per cent gain registered in Q4 last year.
The office rental index gained 10.4 per cent in Q1, following an 11.6 per cent rise in Q4. With tightening office space, the vacancy rate fell from 10.3 per cent as at Dec 31, 2006, to 9.1 per cent as at March 31, 2007. CB Richard Ellis says: ‘Looking ahead, we expect demand drivers to remain strong albeit demand levels in 2007 may stay below the exceptional 2.4 million sq ft in 2006, principally due to the constraints imposed by the lack of new supply as well as low vacancy rate. It is likely that some demand may divert to business parks as well as high-tech industrial space.’
Source: The Business Times, 28 April 2007
The biggest project, involving nearly 500,000 sq ft of offices, is at Alexandra Distripark, owned by Mapletree Investments.
Approval has also been given to OUB Centre Ltd to add nearly 52,000 sq ft of offices and about 55,300 sq ft of shop space to OUB Centre at Raffles Place under an additions and alterations scheme proposed by the owner.
Provisional permission has also been given for 123,570 sq ft of ‘reconstruction to existing’ building in the case of Dapenso Building at Cecil Street/Stanley Street.
A stone’s throw away, a Kajima-Lehman joint venture received the green light for 275,900 sq ft of offices at Robinson Road (on the Crosby House site).
Straits Trading also obtained provisional permission for a nearly 200,000 sq ft office redevelopment of its Straits Trading Building at Battery Road.
Over in North Bridge Rd/High Street area, approval has been given to add 160,000 sq ft of offices and almost 200,000 sq ft of retail area to be housed in a nine-storey commercial building and additions/alterations to the Funan Digitalife Mall.
URA’s office price index appreciated 4.3 per cent in Q1 this year over the preceding quarter, slower than a 7.7 per cent gain registered in Q4 last year.
The office rental index gained 10.4 per cent in Q1, following an 11.6 per cent rise in Q4. With tightening office space, the vacancy rate fell from 10.3 per cent as at Dec 31, 2006, to 9.1 per cent as at March 31, 2007. CB Richard Ellis says: ‘Looking ahead, we expect demand drivers to remain strong albeit demand levels in 2007 may stay below the exceptional 2.4 million sq ft in 2006, principally due to the constraints imposed by the lack of new supply as well as low vacancy rate. It is likely that some demand may divert to business parks as well as high-tech industrial space.’
Source: The Business Times, 28 April 2007
How not to be the first to sell and last to buy
Human beings are funny creatures. If there’s a new type of funky shoes in the market and nobody wears them, you probably won’t either. But if enough people wear them so that they attain ‘cool’ status, then their popularity will explode. This phenomenon follows the theory set out by Malcolm Gladwell in his book The Tipping Point.
Similarly for a book, if it makes it to the bestsellers list, more people will be enticed into reading it and that in turn will boost sales. So apparently one trick employed by publishers is to buy the books they want to promote from the retail outlets themselves. They have a rough idea of how many books they need to buy in order for the book to make it to the list of the week’s top 10. Once on the list, sales will have their own momentum.
The same mechanics work for stocks and shares, as well as the property market. Some people know that certain stocks are trading below their intrinsic value. But they are unwilling to put money there, until and unless they see that the share price is stirring.
The thinking, of course, is they want their money to get to work almost immediately. This is the trader mentality.
And once a stock starts moving, many more buyers will jump in. And if there is more demand than there is supply, the price will be pushed up even further.
It’s the same story in the property market. Up till two years ago, many people had reservations about committing to a property investment. Now that prices have moved up sharply, and at an accelerating pace, more people are coming into the market to buy.
Now let’s examine the effect of price changes on people’s decisions.
Price changes will attract more supply or demand. On the supply side, it is easily understandable. When a producer sees that he can get more money by selling more products, the logical decision might be to produce more. But that decision cannot be carried to its logical conclusion, which is to keep increasing production capacity. At some point, demand will taper off, and if the producer is not careful, he will be stuck with a lot of excess capacity.
Different tactic
But some suppliers might employ a different tactic. When they see prices moving up fast, and if they cannot increase their supply, they may well hoard their products. In other words, they will hold back their supply to the market, in the hope of subsequently getting a much higher price.
On the demand side, the effect of price change is more intriguing. According to economics theory, for elastic demand, the higher the price, the lower the demand. This would apply to discretionary spending and goods with close substitutes.
So if prices get too high, and assuming income does not increase as fast, people will have to cut down on consumption or shift to cheaper goods with similar functions.
A change in price has less of an impact on the demand for necessities. For example, if someone is sick and needs a doctor and medicine, that person will have to pay whatever is asked.
Then there’s another type of product, where the higher the price, the bigger the demand. Perhaps two types of products would exhibit this kind of characteristics. The first are luxury goods, or goods that signal to the world one’s elevated wealth or taste status. Another would be products whose value is difficult to ascertain. This would include stocks and shares. In this group of products, the element of fear and greed will come into play.
One of the oldest tricks in the con-man’s bag is this: Approach a stranger and offer to sell something totally worthless, like a bag of stones or obsolete semiconductor chips. Quote a price, say, $100, and the stranger will say: ‘You are mad.’
Then the con-man’s accomplice will act as a passer-by who has overheard the conversation. The accomplice will say: ‘Wow, you mean there are still these products around? I thought there is a shortage now. I know this person who’s willing to buy this at $150 per bag. OK, I will pay you $100 for this bag.’
After the first con-man has left, the accomplice will say to the victim: ‘Oh, I just remembered that I have to bring my mum to see the doctor. I’m supposed to meet this buyer in half hour. Do you want to make some quick money? I’ll sell these two bags to you for $120 and you sell to him at $150.’
Some people actually fall for the trick. In this instance, the promise of being able to sell at a higher price is the motivation for the purchase. Of course, there is no guarantee that the promise will be fulfilled.
Jack Treynor, author of the article ‘What does it take to win the trading game?’ identified three key trading motives: value, news/information, and cash flow.
Value buyers act when they see things they consider cheap, and are willing to wait for the market to recognise the value. They can take their time to accumulate a stock, and hence reduce the cost of trading.
Information traders, meanwhile, act on new information and changing expectations of the market. So if one has new information not widely known in the market, one can reap the benefits.
Therefore information traders are always under pressure to complete trades before the information spreads across the market. They are time-sensitive: their goal is to get the trades done quickly, even if this means paying up for liquidity.
As for traders with cash flow motivations, buying or selling is dependent on their desire to increase or decrease equity exposure, independent or even ignorant of the prospects for the stocks. Those getting into the market believing they can make a quick profit belong to this group.
Ultimately, a successful investor and trader is someone who can adapt quickly to a changing market.
A value investor may have identified a stock early and have held on for two to three years before the market starts to recognise it. And when the market starts to bid up the share price, the value investor may be tempted to sell once his target price is met. However, if he noticed continued strong buying interest - as every completed trade provides feedback to the trader - then he may want to hold out a bit longer.
Objective
In the final analysis, the objective of any investor or trader is: To avoid being the first to sell and the last to buy.
Everyone wants to be the last person to trade with a big contraparty - not the first.
This is evident in the numerous property en-bloc sales taking place now. When the wave was just taking off, many owners who missed their last opportunity to sell their properties in the last bull run grabbed the first offer that came along. And the offer was generally not great, on hindsight. But after the developer has accumulated a big enough plot of land, the last project to hold out - generally the smallest piece of land - will be paid the most.
But of course holding out for more entails the risk of missing the last buy order.
But what’s true is: being savvy in reading the market, and timing and implementing one’s sales and purchases, is as important as picking a good investment in maximising one’s overall returns.
Source: The Business Times, 28 April 2007
Similarly for a book, if it makes it to the bestsellers list, more people will be enticed into reading it and that in turn will boost sales. So apparently one trick employed by publishers is to buy the books they want to promote from the retail outlets themselves. They have a rough idea of how many books they need to buy in order for the book to make it to the list of the week’s top 10. Once on the list, sales will have their own momentum.
The same mechanics work for stocks and shares, as well as the property market. Some people know that certain stocks are trading below their intrinsic value. But they are unwilling to put money there, until and unless they see that the share price is stirring.
The thinking, of course, is they want their money to get to work almost immediately. This is the trader mentality.
And once a stock starts moving, many more buyers will jump in. And if there is more demand than there is supply, the price will be pushed up even further.
It’s the same story in the property market. Up till two years ago, many people had reservations about committing to a property investment. Now that prices have moved up sharply, and at an accelerating pace, more people are coming into the market to buy.
Now let’s examine the effect of price changes on people’s decisions.
Price changes will attract more supply or demand. On the supply side, it is easily understandable. When a producer sees that he can get more money by selling more products, the logical decision might be to produce more. But that decision cannot be carried to its logical conclusion, which is to keep increasing production capacity. At some point, demand will taper off, and if the producer is not careful, he will be stuck with a lot of excess capacity.
Different tactic
But some suppliers might employ a different tactic. When they see prices moving up fast, and if they cannot increase their supply, they may well hoard their products. In other words, they will hold back their supply to the market, in the hope of subsequently getting a much higher price.
On the demand side, the effect of price change is more intriguing. According to economics theory, for elastic demand, the higher the price, the lower the demand. This would apply to discretionary spending and goods with close substitutes.
So if prices get too high, and assuming income does not increase as fast, people will have to cut down on consumption or shift to cheaper goods with similar functions.
A change in price has less of an impact on the demand for necessities. For example, if someone is sick and needs a doctor and medicine, that person will have to pay whatever is asked.
Then there’s another type of product, where the higher the price, the bigger the demand. Perhaps two types of products would exhibit this kind of characteristics. The first are luxury goods, or goods that signal to the world one’s elevated wealth or taste status. Another would be products whose value is difficult to ascertain. This would include stocks and shares. In this group of products, the element of fear and greed will come into play.
One of the oldest tricks in the con-man’s bag is this: Approach a stranger and offer to sell something totally worthless, like a bag of stones or obsolete semiconductor chips. Quote a price, say, $100, and the stranger will say: ‘You are mad.’
Then the con-man’s accomplice will act as a passer-by who has overheard the conversation. The accomplice will say: ‘Wow, you mean there are still these products around? I thought there is a shortage now. I know this person who’s willing to buy this at $150 per bag. OK, I will pay you $100 for this bag.’
After the first con-man has left, the accomplice will say to the victim: ‘Oh, I just remembered that I have to bring my mum to see the doctor. I’m supposed to meet this buyer in half hour. Do you want to make some quick money? I’ll sell these two bags to you for $120 and you sell to him at $150.’
Some people actually fall for the trick. In this instance, the promise of being able to sell at a higher price is the motivation for the purchase. Of course, there is no guarantee that the promise will be fulfilled.
Jack Treynor, author of the article ‘What does it take to win the trading game?’ identified three key trading motives: value, news/information, and cash flow.
Value buyers act when they see things they consider cheap, and are willing to wait for the market to recognise the value. They can take their time to accumulate a stock, and hence reduce the cost of trading.
Information traders, meanwhile, act on new information and changing expectations of the market. So if one has new information not widely known in the market, one can reap the benefits.
Therefore information traders are always under pressure to complete trades before the information spreads across the market. They are time-sensitive: their goal is to get the trades done quickly, even if this means paying up for liquidity.
As for traders with cash flow motivations, buying or selling is dependent on their desire to increase or decrease equity exposure, independent or even ignorant of the prospects for the stocks. Those getting into the market believing they can make a quick profit belong to this group.
Ultimately, a successful investor and trader is someone who can adapt quickly to a changing market.
A value investor may have identified a stock early and have held on for two to three years before the market starts to recognise it. And when the market starts to bid up the share price, the value investor may be tempted to sell once his target price is met. However, if he noticed continued strong buying interest - as every completed trade provides feedback to the trader - then he may want to hold out a bit longer.
Objective
In the final analysis, the objective of any investor or trader is: To avoid being the first to sell and the last to buy.
Everyone wants to be the last person to trade with a big contraparty - not the first.
This is evident in the numerous property en-bloc sales taking place now. When the wave was just taking off, many owners who missed their last opportunity to sell their properties in the last bull run grabbed the first offer that came along. And the offer was generally not great, on hindsight. But after the developer has accumulated a big enough plot of land, the last project to hold out - generally the smallest piece of land - will be paid the most.
But of course holding out for more entails the risk of missing the last buy order.
But what’s true is: being savvy in reading the market, and timing and implementing one’s sales and purchases, is as important as picking a good investment in maximising one’s overall returns.
Source: The Business Times, 28 April 2007
Property subsale activity higher than estimated
oThe subsale market of the private residential sector - often seen as reflecting speculative activity - has been more active than previously thought, the latest official data show.
Subsales accounted for 6.4 per cent of total private housing deals on the island in the final three months of last year, one percentage point higher than estimated figures released by the Urban Redevelopment Authority in January.
In the sizzling high-end sector as reflected in URA’s core central region - which includes districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - the Q4 2006 subsale share of total private housing transactions was 12.1 per cent, instead of the 9.7 per cent in the earlier figures.
The private housing market in the core central region is still buoyant, with developers chalking up a big increase in sales in this location in the first three months of this year. The region continued to record the biggest price gains.
The Q1 price index for all non-landed homes in this region was up 5.5 per cent from the final three months of last year. The highest increases - of 7.3 per cent - were for uncompleted homes, compared with 3.1 per cent for completed ones.
Prices of all non-landed homes (covering both completed and uncompleted projects) in the rest of the central region - which includes places like Bukit Merah, Geylang and Toa Payoh - rose 3.7 per cent in the first quarter.
Outside the central region, which covers typical suburban mass market locations such as Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, the increase was 2 per cent.
URA’s overall private home price index posted a 4.8 per cent rise in the first three months of this year.
The leasing market also sparkled, with the rental index for non-landed homes increasing 8.1 per cent in Q1 this year over the previous quarter, higher than the 5.8 per cent gain in Q4 2006. Rents are expected to continue rising as supply shrinks because of collective-sale sites being redeveloped, says CB Richard Ellis executive director Li Hiaw Ho.
Yesterday’s figures show that developers launched 2,259 uncompleted homes in the core central region in Q1, which was 59 per cent more than in the preceding quarter and more than eight times the 265 units released in Q1 last year.
But there appears to be no glut, as developers also managed to sell 2,055 homes in this region, almost as many as they launched in the period, although some of the sales could have involved projects launched earlier.
The figure of 2,055 for uncompleted homes in the core central region sold by developers between January and March is 17 per cent up on the previous quarter and over five times the 385 homes they sold in this area in Q1 2006.
For the whole of Singapore, developers sold 4,565 uncompleted homes in Q1 2007, nearly 10 per cent up on the previous quarter - and a new quarterly record.
URA’s latest numbers show that there were 581 subsale deals in Q4 last year and 1,156 for the whole of last year, an increase from the 426 and 989 respectively in the estimated figures.
For Q1 this year, there were also 581 subsale deals according to yesterday’s data, but market watchers expect URA to revise upwards this figure next quarter as more caveats are lodged.
The URA has said that statistics on secondary market transactions (comprising subsales and resales) will be updated each quarter as more caveats are lodged.
Subsales involve projects that have yet to receive a Certificate of Statutory Completion, while resales cover completed developments.
The URA captures primary market or developers’ sales from returns of a comprehensive quarterly survey of licensed developers. These showed that four units at the 428-unit Marina Bay Residences were unsold as at March 31, and at The Orchard Residences, just eight of the 98 units released in the 175-unit condo were unsold by that date. Over at the 341-unit One Shenton project, 91 units were unsold as at March 31. But that was almost a month ago, and City Developments, the developer of One Shenton, said yesterday that it has ‘about 50 units (excluding the 11 penthouses) available for sale to-date’.
Colliers International predicts that the overall private home price index could grow 17 to 20 per cent for the whole of this year, with the biggest gain of 20-25 per cent coming from the core central region, followed by the rest of the central region (15 to 18 per cent) and outside central region (12 to 15 per cent).
Source: The Business Times, 28 April 2007
Subsales accounted for 6.4 per cent of total private housing deals on the island in the final three months of last year, one percentage point higher than estimated figures released by the Urban Redevelopment Authority in January.
In the sizzling high-end sector as reflected in URA’s core central region - which includes districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - the Q4 2006 subsale share of total private housing transactions was 12.1 per cent, instead of the 9.7 per cent in the earlier figures.
The private housing market in the core central region is still buoyant, with developers chalking up a big increase in sales in this location in the first three months of this year. The region continued to record the biggest price gains.
The Q1 price index for all non-landed homes in this region was up 5.5 per cent from the final three months of last year. The highest increases - of 7.3 per cent - were for uncompleted homes, compared with 3.1 per cent for completed ones.
Prices of all non-landed homes (covering both completed and uncompleted projects) in the rest of the central region - which includes places like Bukit Merah, Geylang and Toa Payoh - rose 3.7 per cent in the first quarter.
Outside the central region, which covers typical suburban mass market locations such as Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, the increase was 2 per cent.
URA’s overall private home price index posted a 4.8 per cent rise in the first three months of this year.
The leasing market also sparkled, with the rental index for non-landed homes increasing 8.1 per cent in Q1 this year over the previous quarter, higher than the 5.8 per cent gain in Q4 2006. Rents are expected to continue rising as supply shrinks because of collective-sale sites being redeveloped, says CB Richard Ellis executive director Li Hiaw Ho.
Yesterday’s figures show that developers launched 2,259 uncompleted homes in the core central region in Q1, which was 59 per cent more than in the preceding quarter and more than eight times the 265 units released in Q1 last year.
But there appears to be no glut, as developers also managed to sell 2,055 homes in this region, almost as many as they launched in the period, although some of the sales could have involved projects launched earlier.
The figure of 2,055 for uncompleted homes in the core central region sold by developers between January and March is 17 per cent up on the previous quarter and over five times the 385 homes they sold in this area in Q1 2006.
For the whole of Singapore, developers sold 4,565 uncompleted homes in Q1 2007, nearly 10 per cent up on the previous quarter - and a new quarterly record.
URA’s latest numbers show that there were 581 subsale deals in Q4 last year and 1,156 for the whole of last year, an increase from the 426 and 989 respectively in the estimated figures.
For Q1 this year, there were also 581 subsale deals according to yesterday’s data, but market watchers expect URA to revise upwards this figure next quarter as more caveats are lodged.
The URA has said that statistics on secondary market transactions (comprising subsales and resales) will be updated each quarter as more caveats are lodged.
Subsales involve projects that have yet to receive a Certificate of Statutory Completion, while resales cover completed developments.
The URA captures primary market or developers’ sales from returns of a comprehensive quarterly survey of licensed developers. These showed that four units at the 428-unit Marina Bay Residences were unsold as at March 31, and at The Orchard Residences, just eight of the 98 units released in the 175-unit condo were unsold by that date. Over at the 341-unit One Shenton project, 91 units were unsold as at March 31. But that was almost a month ago, and City Developments, the developer of One Shenton, said yesterday that it has ‘about 50 units (excluding the 11 penthouses) available for sale to-date’.
Colliers International predicts that the overall private home price index could grow 17 to 20 per cent for the whole of this year, with the biggest gain of 20-25 per cent coming from the core central region, followed by the rest of the central region (15 to 18 per cent) and outside central region (12 to 15 per cent).
Source: The Business Times, 28 April 2007
GuocoLand bought Leedon Heights for $835 million
GuocoLand yesterday said it has bought Leedon Heights for $835 million in what is thought to be the largest ever lump sum paid for a collective sale site here.
The price works out to about $1,062 per square foot per plot ratio (psf ppr), including a development charge of about $40.2 million. Leedon Heights, in District 10, is located off Holland Road and Farrer Road.
The purchase will be the fourth major land acquisition in the last 12 months for GuocoLand, a Singapore-based developer controlled by Malaysian billionaire Quek Leng Chan. Leedon Heights will add about 825,000 sq ft to the group’s existing land bank of one million sq ft of gross floor area.
The developer said in a filing to the Singapore Exchange that the purchase, which will close in mid-2008, will be funded by debt and internal resources.
Tang Wei Leng, director of investment advisory services at property firm DTZ which brokered the deal, said that the site drew strong interest. There were five bids and one expression of interest in all - including from major Singaporean developers such as CapitaLand, City Developments, SC Global and Ho Bee Investment, she said.
The price paid by GuocoLand is slightly higher than that previously indicated by DTZ when it was first put up for sale. In March, when the site was first launched, DTZ estimated that could fetch its owners $780 million.
Including an estimated development charge (DC) of $40.2 million, the suggested price works out to $981 psf ppr.
The site has a land area of about 522,000 sq ft and a 1.6 plot ratio. When launching the tender, DTZ said that provisional permission has been granted for a 12-storey condominium with 384 residential units.
Said GuocoLand yesterday: ‘Given the locale - it is well-established with Singaporeans and foreigners alike - GuocoLand is confident of drawing strong interest from premium buyers from Singapore, the region and internationally.’
Data from the Urban Redevelopment Authority released yesterday showed that home prices grew a robust 4.8 per cent in the first quarter of the year, higher than the 3.8 per cent increase seen in the previous quarter. The hike was led by uncompleted projects in the Core Central Region (which includes Districts 10), where prices rose 7.3 per cent.
Right now, Leedon Heights consists of four blocks with a total of 314 units. Owners will walk away from the collective sale with upwards of $2.4 million each, Ms Tang said.
GuocoLand’s shares climbed 20 cents to close at a one-year high of $5.40 yesterday. The stock has climbed 108.5 per cent since the start of the year, compared with a 13.8 per cent rise in the benchmark Straits Times Index.
Source: The Business Times, 28 April 2007
The price works out to about $1,062 per square foot per plot ratio (psf ppr), including a development charge of about $40.2 million. Leedon Heights, in District 10, is located off Holland Road and Farrer Road.
The purchase will be the fourth major land acquisition in the last 12 months for GuocoLand, a Singapore-based developer controlled by Malaysian billionaire Quek Leng Chan. Leedon Heights will add about 825,000 sq ft to the group’s existing land bank of one million sq ft of gross floor area.
The developer said in a filing to the Singapore Exchange that the purchase, which will close in mid-2008, will be funded by debt and internal resources.
Tang Wei Leng, director of investment advisory services at property firm DTZ which brokered the deal, said that the site drew strong interest. There were five bids and one expression of interest in all - including from major Singaporean developers such as CapitaLand, City Developments, SC Global and Ho Bee Investment, she said.
The price paid by GuocoLand is slightly higher than that previously indicated by DTZ when it was first put up for sale. In March, when the site was first launched, DTZ estimated that could fetch its owners $780 million.
Including an estimated development charge (DC) of $40.2 million, the suggested price works out to $981 psf ppr.
The site has a land area of about 522,000 sq ft and a 1.6 plot ratio. When launching the tender, DTZ said that provisional permission has been granted for a 12-storey condominium with 384 residential units.
Said GuocoLand yesterday: ‘Given the locale - it is well-established with Singaporeans and foreigners alike - GuocoLand is confident of drawing strong interest from premium buyers from Singapore, the region and internationally.’
Data from the Urban Redevelopment Authority released yesterday showed that home prices grew a robust 4.8 per cent in the first quarter of the year, higher than the 3.8 per cent increase seen in the previous quarter. The hike was led by uncompleted projects in the Core Central Region (which includes Districts 10), where prices rose 7.3 per cent.
Right now, Leedon Heights consists of four blocks with a total of 314 units. Owners will walk away from the collective sale with upwards of $2.4 million each, Ms Tang said.
GuocoLand’s shares climbed 20 cents to close at a one-year high of $5.40 yesterday. The stock has climbed 108.5 per cent since the start of the year, compared with a 13.8 per cent rise in the benchmark Straits Times Index.
Source: The Business Times, 28 April 2007
Contract shower
The Government plans to award an estimated $3.2 billion worth of projects over the next 12 months, the Ministry of Finance said on Friday.
The figure, which is the lowest in three years, is less than half of last year’s $7.5 billion and about a-third less than the $4.7 billion projected in 2005.
Today understands that the latest estimate is culled from the various public-sector agencies’ projections and may change during the course of the fiscal year ending Mar 31, 2008.
Of the present 933 procurement contracts, 258 of them worth some $1.8 billion are for building works. One of the major projects is a $65-million deal for the track work of Downtown Line 1.
The Ministry of Education will call for tenders for five school rebuilding and upgrading contracts worth $30 million each.
Information technology companies can look forward to more than 300 contracts worth a total of $730 million, which the Government had announced earlier in the week.
In the area of goods and services, tenders will amount to $635 million. Some of the big-ticket items include a tender for PUB’s $70-million sludge disposal for water recycling plants, and two National Environment Agency tenders for street cleaning worth another $70 million.
Separately, the Government will soon award a $1.5-billion contract to homogenise its computer infrastructure across most agencies. If this project for a Standard ICT Operating Environment is given out this year, the dollar figure will be added to the year’s actual contracts awarded, said a spokesperson from the Finance Ministry.
This pre-procurement plan was started in 2003 with the aim of giving suppliers and contractors early information on what the public sector planned to buy in the year.
More information can be found at www. gebiz.com.sg.
Source: Weekend Today, 28 April 2007
The figure, which is the lowest in three years, is less than half of last year’s $7.5 billion and about a-third less than the $4.7 billion projected in 2005.
Today understands that the latest estimate is culled from the various public-sector agencies’ projections and may change during the course of the fiscal year ending Mar 31, 2008.
Of the present 933 procurement contracts, 258 of them worth some $1.8 billion are for building works. One of the major projects is a $65-million deal for the track work of Downtown Line 1.
The Ministry of Education will call for tenders for five school rebuilding and upgrading contracts worth $30 million each.
Information technology companies can look forward to more than 300 contracts worth a total of $730 million, which the Government had announced earlier in the week.
In the area of goods and services, tenders will amount to $635 million. Some of the big-ticket items include a tender for PUB’s $70-million sludge disposal for water recycling plants, and two National Environment Agency tenders for street cleaning worth another $70 million.
Separately, the Government will soon award a $1.5-billion contract to homogenise its computer infrastructure across most agencies. If this project for a Standard ICT Operating Environment is given out this year, the dollar figure will be added to the year’s actual contracts awarded, said a spokesperson from the Finance Ministry.
This pre-procurement plan was started in 2003 with the aim of giving suppliers and contractors early information on what the public sector planned to buy in the year.
More information can be found at www. gebiz.com.sg.
Source: Weekend Today, 28 April 2007
Eyeing a view of Orchard Road
The Leonie Hill area looks set for major changes. Two properties in the area are looking to go en bloc.
On Monday, CB Richard Ellis launched an Expression of Interest (EOI) to find a developer for Grangeford Apartments along Grange Road.
A day later, Knight Frank put up the nearby Rivershire for sale, also by EOI.
Under the Master Plan 2003, any project in the Leonie Hill area is subject to a 36-storey limit.
For Grangeford Apartments, the existing built-up gross floor area is an estimated 34,882 sq m, reflecting a plot ratio of 2.87. The guide price of $660 million works out to around $2,016 per sq ft per plot ratio, that is inclusive of an estimated Differential Premium of $97.8 million to top up the lease to 99 years. The current 99-year lease dates back to 1974.
There will be no development charge payable to add the extra 10 per cent of gross floor area allowed for the balconies as the development charge baseline is at 50,904 sq m, equivalent to a plot ratio of approximately 4.18.
The 26-year-old Grangeford Apartments consists of 96 two-bedroom apartments, 96 three-bedroom apartments and a shop unit.
Using the above-mentioned guide price, owners of the 1,173 sq ft two-bedroom units will receive $3 million, while those in the 1,755 sq ft three-bedroom units will receive $3.8 million. The shop unit will receive $3.1 million.
In February, a three-bedroom unit in the development fetched $1.8 million. This equates to a collective sale premium of 111 per cent.
“A full-scale condominium would sit perfectly on the site given its excellent layout and prime location,” said Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis.
A new development comprising around 188 units averaging 2,000 sq ft can be built on the site. The estimated break-even costs for a new development is around $2,600 to $2,650 per sq ft.
As for Rivershire, the single block of 74 apartments sits on approximately 56,396 sq ft of freehold land along Leonie Hill Road.
Knight Frank expects the site to command around $237 million, and with no development charge, it works out to $1,500 per sq ft per plot ratio.
A new development with around 125 units averaging 1,200 sq ft could be built on the site.
Both Knight Frank and CB Richard Ellis believe that their respective sites would attract interest from developers given the strong showing in take-up rates for luxury condominium developments.
“As observed from the recent success of residential projects launched in the vicinity, the buying sentiment is still strong. An iconic residential development with unobstructed views towards Orchard Road will certainly appeal to foreign and local buyers,” said Mr Lake.
The EOI exercises for Grangeford Apartments and Rivershire end at 3pm on May 25 and May 29 respectively.
Source: Weekend Today, 28 April 2007
On Monday, CB Richard Ellis launched an Expression of Interest (EOI) to find a developer for Grangeford Apartments along Grange Road.
A day later, Knight Frank put up the nearby Rivershire for sale, also by EOI.
Under the Master Plan 2003, any project in the Leonie Hill area is subject to a 36-storey limit.
For Grangeford Apartments, the existing built-up gross floor area is an estimated 34,882 sq m, reflecting a plot ratio of 2.87. The guide price of $660 million works out to around $2,016 per sq ft per plot ratio, that is inclusive of an estimated Differential Premium of $97.8 million to top up the lease to 99 years. The current 99-year lease dates back to 1974.
There will be no development charge payable to add the extra 10 per cent of gross floor area allowed for the balconies as the development charge baseline is at 50,904 sq m, equivalent to a plot ratio of approximately 4.18.
The 26-year-old Grangeford Apartments consists of 96 two-bedroom apartments, 96 three-bedroom apartments and a shop unit.
Using the above-mentioned guide price, owners of the 1,173 sq ft two-bedroom units will receive $3 million, while those in the 1,755 sq ft three-bedroom units will receive $3.8 million. The shop unit will receive $3.1 million.
In February, a three-bedroom unit in the development fetched $1.8 million. This equates to a collective sale premium of 111 per cent.
“A full-scale condominium would sit perfectly on the site given its excellent layout and prime location,” said Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis.
A new development comprising around 188 units averaging 2,000 sq ft can be built on the site. The estimated break-even costs for a new development is around $2,600 to $2,650 per sq ft.
As for Rivershire, the single block of 74 apartments sits on approximately 56,396 sq ft of freehold land along Leonie Hill Road.
Knight Frank expects the site to command around $237 million, and with no development charge, it works out to $1,500 per sq ft per plot ratio.
A new development with around 125 units averaging 1,200 sq ft could be built on the site.
Both Knight Frank and CB Richard Ellis believe that their respective sites would attract interest from developers given the strong showing in take-up rates for luxury condominium developments.
“As observed from the recent success of residential projects launched in the vicinity, the buying sentiment is still strong. An iconic residential development with unobstructed views towards Orchard Road will certainly appeal to foreign and local buyers,” said Mr Lake.
The EOI exercises for Grangeford Apartments and Rivershire end at 3pm on May 25 and May 29 respectively.
Source: Weekend Today, 28 April 2007
Official figures confirmed yesterday what many tenants and buyers have known for months - rents and real estate prices are going through the roof.
Soaring demand for residential and commercial space and a boom in high-end home sales have given the property sector its best quarter for years.
Landlords, in particular, are now calling the shots after several tough years.
Residential rents across the board rose 7.6 per cent in the first quarter after having jumped 5.3 per cent in the last three months of 2006.
Flats led the way, with rents rising 8.1 per cent, up from the 5.8 per cent in the previous quarter, said an Urban Redevelopment Authority (URA) quarterly report.
It is all down to a classic supply-demand squeeze. The rash of collective sales is taking thousands of rental flats off the market, yet the number of tenants - local and foreign - chasing quality property has increased with the robust economy.
While rents are about 29 per cent below the 1996 peak, overall rental growth in the first quarter has exceeded price growth.
And landlords will have the whip hand for a while yet, with some experts projecting that residential rents will rise as much as 25 per cent this year.
CB Richard Ellis sees ongoing collective sales keeping supply tight. CBRE Research executive director Li Hiaw Ho agreed, saying the en bloc frenzy has swung the rental market in favour of landlords.
The en bloc activity is having another flow-on effect - displaced owners of estates sold collectively are chasing new homes in outer areas and helping push up prices.
‘The collective sales in the central region are raising the number of homeowners looking for replacement units,’ said Colliers International’s Ms Tay Huey Ying.
Many are forced by the runaway prices in the central areas to look elsewhere, which partly explains the robust price rises in the URA figures, including those in once lacklustre areas, she said.
Led by prime, high-end launches, private residential property prices surged 4.8 per cent across the board, following a 3.8 per cent rise in the previous quarter, and are now near their 2000 peak.
Favourable gains were seen even in non-central areas, but overall, prices across the board remain about 25 per cent below the 1996 peak.
HDB resale prices rose 1.25 per cent, but sales volume was down to 6,258 units, the lowest since early 2004.
ERA Singapore said the dip is temporary, and resale prices should rise about 2 to 4 per cent this year.
Private residential prices in the first quarter were led by new apartment launches in the core central region, including hotspots such as Orchard Road, where records were smashed by eager buyers.
Prices in this region - districts 9, 10 and 11, the downtown core and Sentosa - rose 7.3 per cent, exceeding the 7 per cent rise in the whole of 2005. Prices rose 25.4 per cent in 2006.
In the quarter, 2,259 units of uncompleted private homes in the central region were launched - an ‘unprecedented’ number, said Chesterton International’s head of research and consultancy, Mr Colin Tan.
Demand was equally strong, with 2,055 units snapped up in the quarter.
‘Whether it is misplaced or not, the demand reflects buyers’ tremendous confidence in the market,’ said Mr Tan.
Yesterday’s figures also confirmed the boom in commercial space, with office rents rocketing 10.4 per cent.
Source: The Straits Times, 28 April 2007
Soaring demand for residential and commercial space and a boom in high-end home sales have given the property sector its best quarter for years.
Landlords, in particular, are now calling the shots after several tough years.
Residential rents across the board rose 7.6 per cent in the first quarter after having jumped 5.3 per cent in the last three months of 2006.
Flats led the way, with rents rising 8.1 per cent, up from the 5.8 per cent in the previous quarter, said an Urban Redevelopment Authority (URA) quarterly report.
It is all down to a classic supply-demand squeeze. The rash of collective sales is taking thousands of rental flats off the market, yet the number of tenants - local and foreign - chasing quality property has increased with the robust economy.
While rents are about 29 per cent below the 1996 peak, overall rental growth in the first quarter has exceeded price growth.
And landlords will have the whip hand for a while yet, with some experts projecting that residential rents will rise as much as 25 per cent this year.
CB Richard Ellis sees ongoing collective sales keeping supply tight. CBRE Research executive director Li Hiaw Ho agreed, saying the en bloc frenzy has swung the rental market in favour of landlords.
The en bloc activity is having another flow-on effect - displaced owners of estates sold collectively are chasing new homes in outer areas and helping push up prices.
‘The collective sales in the central region are raising the number of homeowners looking for replacement units,’ said Colliers International’s Ms Tay Huey Ying.
Many are forced by the runaway prices in the central areas to look elsewhere, which partly explains the robust price rises in the URA figures, including those in once lacklustre areas, she said.
Led by prime, high-end launches, private residential property prices surged 4.8 per cent across the board, following a 3.8 per cent rise in the previous quarter, and are now near their 2000 peak.
Favourable gains were seen even in non-central areas, but overall, prices across the board remain about 25 per cent below the 1996 peak.
HDB resale prices rose 1.25 per cent, but sales volume was down to 6,258 units, the lowest since early 2004.
ERA Singapore said the dip is temporary, and resale prices should rise about 2 to 4 per cent this year.
Private residential prices in the first quarter were led by new apartment launches in the core central region, including hotspots such as Orchard Road, where records were smashed by eager buyers.
Prices in this region - districts 9, 10 and 11, the downtown core and Sentosa - rose 7.3 per cent, exceeding the 7 per cent rise in the whole of 2005. Prices rose 25.4 per cent in 2006.
In the quarter, 2,259 units of uncompleted private homes in the central region were launched - an ‘unprecedented’ number, said Chesterton International’s head of research and consultancy, Mr Colin Tan.
Demand was equally strong, with 2,055 units snapped up in the quarter.
‘Whether it is misplaced or not, the demand reflects buyers’ tremendous confidence in the market,’ said Mr Tan.
Yesterday’s figures also confirmed the boom in commercial space, with office rents rocketing 10.4 per cent.
Source: The Straits Times, 28 April 2007
Friday, April 27, 2007
China Properties Developments, Inc. Reports Results for 2006
XI'AN, China--(BUSINESS WIRE)--China Properties Developments, Inc. (OTCBB:CPDV) through its majority owned subsidiaries, is primarily engaged in the acquisition and development of land holdings, and the development, sale, rental, and management of mixed-use residential, commercial and office properties in the City of Xi’an, the capital of Shaanxi Province in the People’s Republic of China, recently announced results for the fiscal year ended December 31, 2006.
For the year ended December 31, 2006, revenue was $4,733,773 compared to $4,510,328 for the year ended December 31, 2005. Gross profit for the year ended December 31, 2006 was $1,439,912 compared to $1,127,582 in the comparable period in 2005. Net loss for the 2006 year period was $124,487 or $0.01 per share, compared to net income of $420,129 or $0.02 per share, in the comparable period of 2005. Comprehensive loss for the 2006 year period was $209,790 or $0.01 per share, compared to comprehensive income of $347,962 or $0.02 per share, in the comparable period of 2005.
Ping'an Wu, Chairman, President and CEO of China Properties Developments, Inc. said, "We are pleased to announce our financial results for 2006. 2006 was another milestone year in the development of China Properties as during the year we completed development of the Yangming International Tower, announced the acquisition of Shaanxi Xinyuan Real Estate Co. Ltd and their Yan-Ta Shopping Mall property, and engaged Sandler O'Neill Mortgage Finance L.P., LLC as Introducing Broker. We are very excited about plans for the rest of 2007.”
Steven Lou, Director, Executive VP and CFO of China Properties Developments, Inc., stated, "We are proud of our corporate results for 2006 and to date. The Company is continuing to work hard to leverage our position as a publicly traded company. China Properties remains committed to working towards increasing long term shareholder value.”
About The Company
China Properties Developments, Inc. through its majority owned subsidiaries, is primarily engaged in the acquisition and development of land holdings, and the development, sale, rental, and management of mixed-use residential, commercial and office properties in the City of Xi’an, the capital of Shaanxi Province in the People’s Republic of China, One of China's most ancient cities, Xi'an is a thriving cultural, historical and intellectual center, whose population of more than 6 million. The Company has completed development of the Jiahui Office Building, Oufengyuan Office Building, Jixiang Garden Residential Project, and Yangming International Tower. Currently there are three specific projects that are in various stages of negotiations and planning, they are: Garden Villa, Bali Village and the Great Tang Hibiscus Garden. The total assets of the Company are over US$28 million. The Company recently entered into an agreement to acquire Shaanxi Xinyuan Real Estate Co., developer of the Yan-Ta Shopping Mall. For more information go to www.chinapropertiesdevelopments.com.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the companies, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the companies disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
XI'AN, China--(BUSINESS WIRE)--China Properties Developments, Inc. (OTCBB:CPDV) through its majority owned subsidiaries, is primarily engaged in the acquisition and development of land holdings, and the development, sale, rental, and management of mixed-use residential, commercial and office properties in the City of Xi’an, the capital of Shaanxi Province in the People’s Republic of China, recently announced results for the fiscal year ended December 31, 2006.
For the year ended December 31, 2006, revenue was $4,733,773 compared to $4,510,328 for the year ended December 31, 2005. Gross profit for the year ended December 31, 2006 was $1,439,912 compared to $1,127,582 in the comparable period in 2005. Net loss for the 2006 year period was $124,487 or $0.01 per share, compared to net income of $420,129 or $0.02 per share, in the comparable period of 2005. Comprehensive loss for the 2006 year period was $209,790 or $0.01 per share, compared to comprehensive income of $347,962 or $0.02 per share, in the comparable period of 2005.
Ping'an Wu, Chairman, President and CEO of China Properties Developments, Inc. said, "We are pleased to announce our financial results for 2006. 2006 was another milestone year in the development of China Properties as during the year we completed development of the Yangming International Tower, announced the acquisition of Shaanxi Xinyuan Real Estate Co. Ltd and their Yan-Ta Shopping Mall property, and engaged Sandler O'Neill Mortgage Finance L.P., LLC as Introducing Broker. We are very excited about plans for the rest of 2007.”
Steven Lou, Director, Executive VP and CFO of China Properties Developments, Inc., stated, "We are proud of our corporate results for 2006 and to date. The Company is continuing to work hard to leverage our position as a publicly traded company. China Properties remains committed to working towards increasing long term shareholder value.”
About The Company
China Properties Developments, Inc. through its majority owned subsidiaries, is primarily engaged in the acquisition and development of land holdings, and the development, sale, rental, and management of mixed-use residential, commercial and office properties in the City of Xi’an, the capital of Shaanxi Province in the People’s Republic of China, One of China's most ancient cities, Xi'an is a thriving cultural, historical and intellectual center, whose population of more than 6 million. The Company has completed development of the Jiahui Office Building, Oufengyuan Office Building, Jixiang Garden Residential Project, and Yangming International Tower. Currently there are three specific projects that are in various stages of negotiations and planning, they are: Garden Villa, Bali Village and the Great Tang Hibiscus Garden. The total assets of the Company are over US$28 million. The Company recently entered into an agreement to acquire Shaanxi Xinyuan Real Estate Co., developer of the Yan-Ta Shopping Mall. For more information go to www.chinapropertiesdevelopments.com.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the companies, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the companies disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Central Vietnam Coast Set For More Five-Star Resorts
Central Vietnam coast set for more five-star resorts
Deals have been done for building several five-star resorts along the coast in central Vietnam’s Quang Nam province amid a burgeoning demand for quality tourism services.
A stretch of 40 km between Son Tra island and Hoi An will see a series of luxury resorts come up.
The UK-listed fund VinaCapital plans to build a $130 million tourism-golf complex in Dien Ban district.
Last week a joint venture between VinaCapital and Sai Thanh Investment and International Tourism (STI) got a license to build a $16 million complex of 100 villas and entertainment facilities.
Work on it will begin in the second quarter.
Don Lam, general director of VinaCapital, said the number of foreign travelers to Vietnam increased by over 20 percent annually and most of them wanted high-quality services.
Nguyen Quang Ninh, general director of The Nam Hai Resort belonging to the Indochina Resorts Group, said the group planned two projects worth over $100 million in Danang town.
The site of this Evason Hideaway on dramatic Ninh Van Bay is quite unique
The $55 million The Nam Hai Resort opened last month and occupancy was high, he said.
However, he warned, coastal landscapes should be protected to ensure sustainable tourism development.
The authorities should impose strict regulations on zoning and construction of resorts.
For instance, only resorts with four-star rating or more should be licensed and their density should not exceed 30 percent of any area.
Vo Anh Tai, head of giant operator Saigontourist, said the central region should focus on improving its weak transport system.
Only Danang had an international airport while flights from Ho Chi Minh City and Hanoi to the region were inadequate in the peak October-April period.
Traveling by rail or road was inconvenient and time-consuming.
Ports receiving cruise ships had originally been designed to handle cargo and not people.
Source: Tuoi Tre
HCM City Real Estate Market Draws Foreign Capital
HCM City is in serious shortage of luxury hotels, tourist sites and entertainment centres so I want to invest in a casino here,” said Walter Kim, Chairman and Chief Executive Officer of the US’ Sky Group in a meeting with HCM City officials on April 24.
Mr Kim seemed to be very impatient when he ‘forced’ Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung to arrange an appointment this Friday.
“I want to build a four- or five-star hotel in Saigon immediately,” the Korean American owner of the Sky Group repeated.
He affirmed Sky Group’s investment potential. “Sky Group plans to invest around US$50 million in projects in Vietnam.”
HCM City Vice Chairman Nguyen Trung acknowledged the fact that the city lacked five-star hotels. It has only 1,500 high-class hotel rooms at present. The Taiwan Industrial and Commercial Association wants to bring a group of 120 companies to HCM City to seek investment opportunities but it has to reduce the number of members to 70 because of a shortage of hotel rooms.
HCM City plans to build over 10,000 additional hotel rooms before 2010 to serve meetings, seminars and foreign tourists.
“HCM City will focus on attracting foreign investment into trade centre and hotel projects to increase the source of supply in the coming time,” Mr Tin said.
Projects calling for foreign investment in HCM City:
- Thu Thiem new residential area is calling for investment in television tower and stadium projects.
- 600ha Tay Bac new residential area: 20 local and foreign investors want to participate in this project, which is now in the design and planning stage.
- 400ha Binh Quoi - Thanh Da ecological tourism zone.
- Can Gio sea tourism zone.
- 6km Binh Khanh bridge, with four lanes and total investment of US$150 million.
Deputy Minister of Planning and Investment Nguyen Bich Dat also affirmed that HCM City would focus on calling for foreign investment into real estate and infrastructure areas. However, he suggested that foreign investors think of real estate in a broader sense – not only hotels but also new residential areas, industrial zones and entertainment centres.
At a talk on investment held in HCM City on April 24 between HCM City leaders, representatives of the Ministry of Planning and Investment, and 250 foreign CEOs, ½ of whom were from Asian groups, many foreign businessmen proposed projects for the HCM City leaders to consider.
A Thai businessman asked: “I saw many motorbikes in Vietnam so I want to build an automobile and motorbike component part plant in HCM City. What conditions do I have to meet?
Many Malaysian companies are very interested in investment in power, oil and gas industry in HCM City.
HCM City’s foreign investment falls in early 2007
As an economic and trade centre of Vietnam, HCM City is an attractive destination for foreign investment. However, the city drew only US$440 million of foreign investment in the first three months of 2007, a reduction of over $1.2 million compared to the same period of 2006.
The Deputy Director of the city’s Department of Planning and Investment, Nguyen Van Hung, admitted this fact, and said that the city didn’t have any big project like the $300mil project of Intel early last year. However, businessmen have said that as land costs and land leasing prices in the city are too high while competition from neighbouring provinces in attracting foreign investment is fierce, it is not surprising that the city’s attraction of foreign capital has declined.
Former Deputy Director of the HCM City Department of Planning and Investment, Director of DNL Investment Consulting Company Luong Van Ly said that to attract more foreign capital, HCM City needed to further reform administrative formalities and increase the land fund.
The current Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung said that there were many optimistic signals for HCM City in FDI attraction. “Many big projects are waiting for licences, including a software project in Thu Thiem with $1 billion of investment in the first phase,” he said.
Last year the city lured $2.2 billion of foreign investment.
VNE
HCM City is in serious shortage of luxury hotels, tourist sites and entertainment centres so I want to invest in a casino here,” said Walter Kim, Chairman and Chief Executive Officer of the US’ Sky Group in a meeting with HCM City officials on April 24.
Mr Kim seemed to be very impatient when he ‘forced’ Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung to arrange an appointment this Friday.
“I want to build a four- or five-star hotel in Saigon immediately,” the Korean American owner of the Sky Group repeated.
He affirmed Sky Group’s investment potential. “Sky Group plans to invest around US$50 million in projects in Vietnam.”
HCM City Vice Chairman Nguyen Trung acknowledged the fact that the city lacked five-star hotels. It has only 1,500 high-class hotel rooms at present. The Taiwan Industrial and Commercial Association wants to bring a group of 120 companies to HCM City to seek investment opportunities but it has to reduce the number of members to 70 because of a shortage of hotel rooms.
HCM City plans to build over 10,000 additional hotel rooms before 2010 to serve meetings, seminars and foreign tourists.
“HCM City will focus on attracting foreign investment into trade centre and hotel projects to increase the source of supply in the coming time,” Mr Tin said.
Projects calling for foreign investment in HCM City:
- Thu Thiem new residential area is calling for investment in television tower and stadium projects.
- 600ha Tay Bac new residential area: 20 local and foreign investors want to participate in this project, which is now in the design and planning stage.
- 400ha Binh Quoi - Thanh Da ecological tourism zone.
- Can Gio sea tourism zone.
- 6km Binh Khanh bridge, with four lanes and total investment of US$150 million.
Deputy Minister of Planning and Investment Nguyen Bich Dat also affirmed that HCM City would focus on calling for foreign investment into real estate and infrastructure areas. However, he suggested that foreign investors think of real estate in a broader sense – not only hotels but also new residential areas, industrial zones and entertainment centres.
At a talk on investment held in HCM City on April 24 between HCM City leaders, representatives of the Ministry of Planning and Investment, and 250 foreign CEOs, ½ of whom were from Asian groups, many foreign businessmen proposed projects for the HCM City leaders to consider.
A Thai businessman asked: “I saw many motorbikes in Vietnam so I want to build an automobile and motorbike component part plant in HCM City. What conditions do I have to meet?
Many Malaysian companies are very interested in investment in power, oil and gas industry in HCM City.
HCM City’s foreign investment falls in early 2007
As an economic and trade centre of Vietnam, HCM City is an attractive destination for foreign investment. However, the city drew only US$440 million of foreign investment in the first three months of 2007, a reduction of over $1.2 million compared to the same period of 2006.
The Deputy Director of the city’s Department of Planning and Investment, Nguyen Van Hung, admitted this fact, and said that the city didn’t have any big project like the $300mil project of Intel early last year. However, businessmen have said that as land costs and land leasing prices in the city are too high while competition from neighbouring provinces in attracting foreign investment is fierce, it is not surprising that the city’s attraction of foreign capital has declined.
Former Deputy Director of the HCM City Department of Planning and Investment, Director of DNL Investment Consulting Company Luong Van Ly said that to attract more foreign capital, HCM City needed to further reform administrative formalities and increase the land fund.
The current Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung said that there were many optimistic signals for HCM City in FDI attraction. “Many big projects are waiting for licences, including a software project in Thu Thiem with $1 billion of investment in the first phase,” he said.
Last year the city lured $2.2 billion of foreign investment.
VNE
$35bil Worth Of Big Projects To Be Initiated In Vietnam
The Ministry of Planning and Investment has revealed a list of 40 big projects which are going to be developed in Vietnam, capitalised at $35bil in total.
This proves to be a vast sum of capital, and if just one-third of the figure comes true, the targeted $12bil worth of foreign direct investment set earlier this year would be easily fulfilled.
These include a $5bil project on building high-tech zones specialising in making electronic products to be invested in by Taiwanese Foxconn. Bac Ninh and Bac Giang provinces in the north have been chosen as the investment places. Foxconn has set up a representative office in Bac Ninh to speed up the project’s implementation.
Power plant projects come second in terms of scale. The 2,640 MW Van Phong – Khanh Hoa coal-run thermo power plant is slated to be invested in by Japan’s Sumitomo group, and is estimated to have the total investment capital of $3.5bil. The project has been submitted to the Prime Minister.
There could be two other power plants: the Mong Duong 2 thermo power plant in Quang Ninh province (1,200 MW). The $1,463bil project would be developed by a joint venture of the US-based AES and the Vietnam Coal and Mineral Industries. It is expected that the project would be implemented under the mode of BOT (build – operation – transfer). The Government has approved the investment mode and has assigned the Ministry of Industry to conduct negotiations with the partner.
The other power plant is a coal-run thermo power plant to be located in the southern province of Binh Thuan, which has the investment capital of $1.4bil. The investor of the project would be China’s CSG.
Oil refinery projects are also listed among the upcoming projects. These include the $1.53bil oil refinery complex No 3 in Ba Ria – Vung Tau to be invested in by Thai Chemicals Group and PetroVietnam; and a 1mil tonne/year oil refinery worth $1.2bil to be invested in by Singapore’s SP Chemicals Company.
Industries and high technologies are the fields that foreign investors are focusing on. A steel project has been drawn up which comprises a 4.5mil tonne/year steel mill and a factory exploiting Thach Khe ore mine, capitalised at $3.75bil. The project has been drawing special attention from foreign investors. Korea’s Posco, Taiwan’s Sunsteel, India’s TaTa Steel and ESSAR, China’s Bao Steel and Wuhan all have expressed their interest in the steel project.
The US-based Alcoa Group is planning to join forces with the Vietnam Coal and Mineral Industries to run a project on bauxite exploration, worth $1.5bil.
Other noteworthy projects include projects on 1. Producing notebooks by Compaq in Vinh Phuc, capitalised at $500mil; 2. Building ships in Van Phong, Khanh Hoa province by Korea’s STX group, worth $500mil; 3. Steel joint ventures of India’s ESSAR, Vietnam Steel Corporation and Vietnam Rubber Corporation, $570mil.
Construction, real estate and tourism also prove to be attractive investment fields. The southern province of Kien Giang has attracted two big tourism projects: the Asian Pearl project on Phu Quoc Island proposed by Swiss Trustee Suisse and Vinaconex, estimated to cost $2bil, and a 1,800 ha luxurious entertainment complex. The latter project was suggested by the US-based Limited Investment Zone, estimated to be capitalised at $2bil. A smaller tourism project, worth $1bil, has also been registered by Britain’s Rockingham Asset Management.
Meanwhile, Hanoi has been successfully luring real estate projects in apartment and office leasing. Malaysia’s Gamuda Group has got permission to build and develop the Yen So area, worth $1bil. Britain’s Pacific Land Limited has decided to inject money in two projects worth $1bil each, to build a bio-industrial park in Nam Thang Long zone and Sai Dong A high-tech zone.
The list by the Ministry of Planning and Investment also shows the names of projects capitalised from $100mil to less than $1bil. Most of the foreign direct invested projects are located in big cities and localities like Hanoi, HCM City, Khanh Hoa, Dong Nai, Ba Ria – Vung Tau in the south, and Vinh Phuc, Bac Ninh, Quang Ninh in the north
The Ministry of Planning and Investment has revealed a list of 40 big projects which are going to be developed in Vietnam, capitalised at $35bil in total.
This proves to be a vast sum of capital, and if just one-third of the figure comes true, the targeted $12bil worth of foreign direct investment set earlier this year would be easily fulfilled.
These include a $5bil project on building high-tech zones specialising in making electronic products to be invested in by Taiwanese Foxconn. Bac Ninh and Bac Giang provinces in the north have been chosen as the investment places. Foxconn has set up a representative office in Bac Ninh to speed up the project’s implementation.
Power plant projects come second in terms of scale. The 2,640 MW Van Phong – Khanh Hoa coal-run thermo power plant is slated to be invested in by Japan’s Sumitomo group, and is estimated to have the total investment capital of $3.5bil. The project has been submitted to the Prime Minister.
There could be two other power plants: the Mong Duong 2 thermo power plant in Quang Ninh province (1,200 MW). The $1,463bil project would be developed by a joint venture of the US-based AES and the Vietnam Coal and Mineral Industries. It is expected that the project would be implemented under the mode of BOT (build – operation – transfer). The Government has approved the investment mode and has assigned the Ministry of Industry to conduct negotiations with the partner.
The other power plant is a coal-run thermo power plant to be located in the southern province of Binh Thuan, which has the investment capital of $1.4bil. The investor of the project would be China’s CSG.
Oil refinery projects are also listed among the upcoming projects. These include the $1.53bil oil refinery complex No 3 in Ba Ria – Vung Tau to be invested in by Thai Chemicals Group and PetroVietnam; and a 1mil tonne/year oil refinery worth $1.2bil to be invested in by Singapore’s SP Chemicals Company.
Industries and high technologies are the fields that foreign investors are focusing on. A steel project has been drawn up which comprises a 4.5mil tonne/year steel mill and a factory exploiting Thach Khe ore mine, capitalised at $3.75bil. The project has been drawing special attention from foreign investors. Korea’s Posco, Taiwan’s Sunsteel, India’s TaTa Steel and ESSAR, China’s Bao Steel and Wuhan all have expressed their interest in the steel project.
The US-based Alcoa Group is planning to join forces with the Vietnam Coal and Mineral Industries to run a project on bauxite exploration, worth $1.5bil.
Other noteworthy projects include projects on 1. Producing notebooks by Compaq in Vinh Phuc, capitalised at $500mil; 2. Building ships in Van Phong, Khanh Hoa province by Korea’s STX group, worth $500mil; 3. Steel joint ventures of India’s ESSAR, Vietnam Steel Corporation and Vietnam Rubber Corporation, $570mil.
Construction, real estate and tourism also prove to be attractive investment fields. The southern province of Kien Giang has attracted two big tourism projects: the Asian Pearl project on Phu Quoc Island proposed by Swiss Trustee Suisse and Vinaconex, estimated to cost $2bil, and a 1,800 ha luxurious entertainment complex. The latter project was suggested by the US-based Limited Investment Zone, estimated to be capitalised at $2bil. A smaller tourism project, worth $1bil, has also been registered by Britain’s Rockingham Asset Management.
Meanwhile, Hanoi has been successfully luring real estate projects in apartment and office leasing. Malaysia’s Gamuda Group has got permission to build and develop the Yen So area, worth $1bil. Britain’s Pacific Land Limited has decided to inject money in two projects worth $1bil each, to build a bio-industrial park in Nam Thang Long zone and Sai Dong A high-tech zone.
The list by the Ministry of Planning and Investment also shows the names of projects capitalised from $100mil to less than $1bil. Most of the foreign direct invested projects are located in big cities and localities like Hanoi, HCM City, Khanh Hoa, Dong Nai, Ba Ria – Vung Tau in the south, and Vinh Phuc, Bac Ninh, Quang Ninh in the north
Singapore Makes a Pitch to Draw the Wealthy
SINGAPORE, April 25 — This affluent city-state of 4.5 million people is aiming to be a sanctuary for the world’s wealthy and their money, Asia’s answer to Geneva and Zurich.
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Asia’s Rich
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Jonathan Drake for The New York Times
Foreign workers building a seafront home in Sentosa Cove. A container loading dock and the city skyline are in the background.
Singapore, with its reputation for authoritarian order and safety, has long relied on luring multinational corporations for manufacturing jobs and economic growth. But with China’s rise as an industrial powerhouse, it started chasing a succession of economic fads — from technology to pharmaceuticals to stem-cell research — in search of a fresh elixir.
Now Singapore, a tiny enclave at the tip of the Malay peninsula, is trying to carve out a new niche for itself in the global economy by bolstering banking secrecy laws and offering generous tax incentives.
“I can’t think of any other place where private banking is growing so much as in Singapore,” said Henrik T. Mikkelsen, a private banker at Commerzbank in Singapore. “We want to be the Switzerland of Asia.”
It may lack the stunning Alpine scenery, but officials here hope that luring the wealthy and their bankers will not only diversify the economy but also help offset a declining birth rate and increase Singapore’s stagnant population with what is known here as “foreign talent.”
“It creates jobs, it builds a service industry, it generates income and, on the immigration issue, it also supplements our shortfall in fertility,” said Vivian Balakrishnan, Singapore’s minister for community development, youth and sports.
Almost 40 private banks now have regional operations in Singapore, including Swiss stalwarts like Bank Julius Baer. Citigroup’s headquarters for all private banking outside the United States is now in Singapore, as is the global banking headquarters of Standard Chartered Bank of Britain.
The estimated $150 billion in private wealth they manage here is still just a sliver of the $1.7 trillion managed by Swiss bankers. But by all accounts it is growing quickly, fed by wealth pouring in from Asia’s fast-growing economies, Middle Eastern oil money, and Japanese and Europeans fleeing new efforts to tax their offshore earnings.
The bankers cater to people like Robert V. Chandran, who emigrated to the United States from India and made fortunes in California real estate and the fuel oil business. In 2005, contemplating retirement, he moved his company and family here, bought a condominium downtown and space in a waterfront resort with parking for yachts. He traded in his American passport for one from Singapore.
Mr. Chandran said that he was lured by Singapore’s blend of Western conveniences with Asian values and by the government’s zeal for keeping Singapore competitive. “They don’t have global taxation,” he said, which means that his capital gains and interest income are not taxed here. (Singapore only imposes an income tax of 20 percent on income earned in Singapore.)
Singapore’s vision for the high life can be found at Sentosa Cove, a secluded development on the edge of a small island theme park off Singapore’s coast. Mr. Chandran is building his home there, among sites that sold for as much as $9.9 million each. Sentosa Cove has a 400-berth marina with 10 spots for megayachts, two golf courses and a casino resort on the way.
“The government wants to create Sentosa as a playground for the rich and famous,” said Joseph Tan, director of residential property at CB Richard Ellis. “They’re trying to build it as our Monte Carlo.”
Providing services for Asia’s superrich is undoubtedly a growth market. The booming region is churning out at least 200,000 new millionaires a year, according to a recent report from Merrill Lynch and CapGemini, prompting comparisons with America’s Gilded Age.
“The wealth of the wealthy in emerging markets is no different than the wealth of the wealthy in the Rockefeller days,” said Roman Scott, who left a job analyzing the industry for management consultant BCG last year to start his own investment advisory firm, the Calamander Group. “It’s the robber baron thing.”
In a region known for its poverty, corruption and political turmoil, this port enclave has long served as a refuge for wealthy ethnic Chinese from Malaysia and Indonesia, who rely on Singapore’s top-notch health care and schools. For many, Singapore’s gleaming infrastructure, efficient bureaucracy and stable government more than compensate for its lack of press freedom, political debate and artistic ferment.
While the latest influx of wealthy foreigners is pushing costs up, property prices are still low compared with London or New York. Tax rates are low as well. Singapore does not tax capital gains or interest income. Its top income tax rate is 20 percent, and it does not tax income earned outside Singapore.
Much of the decision to promote private banking here was the result of an official reassessment conducted in 2002 in the midst of the global recession and China’s investment boom. Singapore convened an Economic Review Committee from the private sector and government to chart a new course.
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Jonathan Drake for The New York Times
Cricket anyone? A construction worker on a break at Sentosa Cove. Almost 40 private banks now have regional operations in Singapore.
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Asia’s Rich “They were facing China with no real game plan,” said Robert Stein, a former head of Deutsche Bank’s Asian operations who headed the committee’s financial services working group.
The panel recommended that Singapore focus on luring hedge funds, private equity firms, insurers and private banks. Afterward, Singapore exempted foreign-earned income from taxation and modified its trust laws, guaranteeing the right of trust holders to determine who inherits their estate.
Bankers in Singapore say this is especially attractive to clients from Europe, where courts often overrule wills to give relatives a fair share, and from the Middle East, where Islamic courts sometimes pass over wives and children to hand over entire estates to a deceased’s father and brother.
Singapore had already strengthened its banking secrecy laws in 2001. While many banks are moving their back offices to India, bankers here say Singapore’s secrecy rules are so tight that they are moving the data centers handling their private banking transactions from India to Singapore.
Concerns have emerged, however, that Singapore may also be attracting wealthy individuals who have something to hide.
Before his arrest in 2005 on charges of corruption and fraud, Gianpiero Fiorani, the former chief executive of Italy’s Banca Popolare Italiana, stashed some of his assets in Singapore. The Japanese fund manager and shareholder activist Yoshiaki Murakami moved his fund, MAC Asset Management, to Singapore before his arrest last year on charges of insider trading. And in December, the police in Shanghai arrested an unidentified Singaporean for running an underground bank that shuttled money between China and Singapore.
Bankers here say they are under pressure to know the nature of their clients’ wealth — Singapore’s secrecy rules do not extend to anyone involved in terrorism or smuggling. And the authorities here say they are not trying to attract tax evaders.
“The Singaporeans have done an excellent job of balancing a pro-business stance with a regulatory environment that creates a well-disciplined environment for private banking,” said Mr. Stein, now a director in London at the German bank WestLB.
Still, many governments are unhappy about the prospect of losing tax revenue to another country. A “stop tax haven abuse” bill, introduced in February by three United States senators — two Democrats, Carl Levin of Michigan and Barack Obama of Illinois, and a Republican, Norm Coleman of Minnesota — includes Singapore (along with Hong Kong and Switzerland) in its list of “probable locations for U.S. tax evasion.”
Meanwhile, the European Union has been trying to persuade Singapore to follow the lead of Switzerland and other European tax havens, which have agreed to share information on accounts or collect a withholding tax.
Germano Mirabile, a policy officer at the European Union’s Taxation and Customs Union Directorate-General, said Singapore had not yet responded to Brussels’ overtures.
Because tax rates in Asia are generally low, Singapore’s lure to Asians is less about escaping taxes and more about protecting assets from political vagaries. Many Chinese, for example, keep some of their earnings in Hong Kong. But for those who fear Hong Kong is still within reach of Chinese authorities, Singapore has become increasingly popular.
“A lot of Chinese would like to come to Singapore because Hong Kong is still China,” said Kong Eng Huat, managing director of Merrill’s private banking operations in Singapore.
Some put more than their money in Singapore. Many wealthy Chinese executives have bought homes in Singapore and moved their families here. “They want their kids to have a safe environment, clean water, better air,” said Shi Xu, vice president of Singapore’s Hua Yuan Association, a club for mainland immigrants.
Singapore’s proximity to South Asia is also luring ethnic Indians, both those from India and those like Mr. Chandran from the Indian diaspora. Indian nationals recently emerged as the biggest group of foreign buyers of prime real estate in Singapore, after citizens of neighboring Indonesia and Malaysia.
Roughly 60 percent of the buyers at Sentosa Cove are foreigners, according to the development’s staff. Sentosa’s residents get a choice of two views; they can survey one of the world’s busiest container ports or one of the world’s busiest sea lanes.
That may suit shipping magnates like Mr. Chandran more than most, but as an added inducement, foreigners buying property in Sentosa Cove are put on a fast track by immigration authorities for permanent residency.
“They think of everything,” said Jackson Tai, the American chief executive of Singapore’s largest bank, DBS. Recalling B. F. Skinner’s utopian novel, “Walden Two,” he said, “Singapore is Walden Three.”
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Asia’s Rich
Enlarge This Image
Jonathan Drake for The New York Times
Foreign workers building a seafront home in Sentosa Cove. A container loading dock and the city skyline are in the background.
Singapore, with its reputation for authoritarian order and safety, has long relied on luring multinational corporations for manufacturing jobs and economic growth. But with China’s rise as an industrial powerhouse, it started chasing a succession of economic fads — from technology to pharmaceuticals to stem-cell research — in search of a fresh elixir.
Now Singapore, a tiny enclave at the tip of the Malay peninsula, is trying to carve out a new niche for itself in the global economy by bolstering banking secrecy laws and offering generous tax incentives.
“I can’t think of any other place where private banking is growing so much as in Singapore,” said Henrik T. Mikkelsen, a private banker at Commerzbank in Singapore. “We want to be the Switzerland of Asia.”
It may lack the stunning Alpine scenery, but officials here hope that luring the wealthy and their bankers will not only diversify the economy but also help offset a declining birth rate and increase Singapore’s stagnant population with what is known here as “foreign talent.”
“It creates jobs, it builds a service industry, it generates income and, on the immigration issue, it also supplements our shortfall in fertility,” said Vivian Balakrishnan, Singapore’s minister for community development, youth and sports.
Almost 40 private banks now have regional operations in Singapore, including Swiss stalwarts like Bank Julius Baer. Citigroup’s headquarters for all private banking outside the United States is now in Singapore, as is the global banking headquarters of Standard Chartered Bank of Britain.
The estimated $150 billion in private wealth they manage here is still just a sliver of the $1.7 trillion managed by Swiss bankers. But by all accounts it is growing quickly, fed by wealth pouring in from Asia’s fast-growing economies, Middle Eastern oil money, and Japanese and Europeans fleeing new efforts to tax their offshore earnings.
The bankers cater to people like Robert V. Chandran, who emigrated to the United States from India and made fortunes in California real estate and the fuel oil business. In 2005, contemplating retirement, he moved his company and family here, bought a condominium downtown and space in a waterfront resort with parking for yachts. He traded in his American passport for one from Singapore.
Mr. Chandran said that he was lured by Singapore’s blend of Western conveniences with Asian values and by the government’s zeal for keeping Singapore competitive. “They don’t have global taxation,” he said, which means that his capital gains and interest income are not taxed here. (Singapore only imposes an income tax of 20 percent on income earned in Singapore.)
Singapore’s vision for the high life can be found at Sentosa Cove, a secluded development on the edge of a small island theme park off Singapore’s coast. Mr. Chandran is building his home there, among sites that sold for as much as $9.9 million each. Sentosa Cove has a 400-berth marina with 10 spots for megayachts, two golf courses and a casino resort on the way.
“The government wants to create Sentosa as a playground for the rich and famous,” said Joseph Tan, director of residential property at CB Richard Ellis. “They’re trying to build it as our Monte Carlo.”
Providing services for Asia’s superrich is undoubtedly a growth market. The booming region is churning out at least 200,000 new millionaires a year, according to a recent report from Merrill Lynch and CapGemini, prompting comparisons with America’s Gilded Age.
“The wealth of the wealthy in emerging markets is no different than the wealth of the wealthy in the Rockefeller days,” said Roman Scott, who left a job analyzing the industry for management consultant BCG last year to start his own investment advisory firm, the Calamander Group. “It’s the robber baron thing.”
In a region known for its poverty, corruption and political turmoil, this port enclave has long served as a refuge for wealthy ethnic Chinese from Malaysia and Indonesia, who rely on Singapore’s top-notch health care and schools. For many, Singapore’s gleaming infrastructure, efficient bureaucracy and stable government more than compensate for its lack of press freedom, political debate and artistic ferment.
While the latest influx of wealthy foreigners is pushing costs up, property prices are still low compared with London or New York. Tax rates are low as well. Singapore does not tax capital gains or interest income. Its top income tax rate is 20 percent, and it does not tax income earned outside Singapore.
Much of the decision to promote private banking here was the result of an official reassessment conducted in 2002 in the midst of the global recession and China’s investment boom. Singapore convened an Economic Review Committee from the private sector and government to chart a new course.
Skip to next paragraph
Enlarge This Image
Jonathan Drake for The New York Times
Cricket anyone? A construction worker on a break at Sentosa Cove. Almost 40 private banks now have regional operations in Singapore.
Multimedia
Graphic
Asia’s Rich “They were facing China with no real game plan,” said Robert Stein, a former head of Deutsche Bank’s Asian operations who headed the committee’s financial services working group.
The panel recommended that Singapore focus on luring hedge funds, private equity firms, insurers and private banks. Afterward, Singapore exempted foreign-earned income from taxation and modified its trust laws, guaranteeing the right of trust holders to determine who inherits their estate.
Bankers in Singapore say this is especially attractive to clients from Europe, where courts often overrule wills to give relatives a fair share, and from the Middle East, where Islamic courts sometimes pass over wives and children to hand over entire estates to a deceased’s father and brother.
Singapore had already strengthened its banking secrecy laws in 2001. While many banks are moving their back offices to India, bankers here say Singapore’s secrecy rules are so tight that they are moving the data centers handling their private banking transactions from India to Singapore.
Concerns have emerged, however, that Singapore may also be attracting wealthy individuals who have something to hide.
Before his arrest in 2005 on charges of corruption and fraud, Gianpiero Fiorani, the former chief executive of Italy’s Banca Popolare Italiana, stashed some of his assets in Singapore. The Japanese fund manager and shareholder activist Yoshiaki Murakami moved his fund, MAC Asset Management, to Singapore before his arrest last year on charges of insider trading. And in December, the police in Shanghai arrested an unidentified Singaporean for running an underground bank that shuttled money between China and Singapore.
Bankers here say they are under pressure to know the nature of their clients’ wealth — Singapore’s secrecy rules do not extend to anyone involved in terrorism or smuggling. And the authorities here say they are not trying to attract tax evaders.
“The Singaporeans have done an excellent job of balancing a pro-business stance with a regulatory environment that creates a well-disciplined environment for private banking,” said Mr. Stein, now a director in London at the German bank WestLB.
Still, many governments are unhappy about the prospect of losing tax revenue to another country. A “stop tax haven abuse” bill, introduced in February by three United States senators — two Democrats, Carl Levin of Michigan and Barack Obama of Illinois, and a Republican, Norm Coleman of Minnesota — includes Singapore (along with Hong Kong and Switzerland) in its list of “probable locations for U.S. tax evasion.”
Meanwhile, the European Union has been trying to persuade Singapore to follow the lead of Switzerland and other European tax havens, which have agreed to share information on accounts or collect a withholding tax.
Germano Mirabile, a policy officer at the European Union’s Taxation and Customs Union Directorate-General, said Singapore had not yet responded to Brussels’ overtures.
Because tax rates in Asia are generally low, Singapore’s lure to Asians is less about escaping taxes and more about protecting assets from political vagaries. Many Chinese, for example, keep some of their earnings in Hong Kong. But for those who fear Hong Kong is still within reach of Chinese authorities, Singapore has become increasingly popular.
“A lot of Chinese would like to come to Singapore because Hong Kong is still China,” said Kong Eng Huat, managing director of Merrill’s private banking operations in Singapore.
Some put more than their money in Singapore. Many wealthy Chinese executives have bought homes in Singapore and moved their families here. “They want their kids to have a safe environment, clean water, better air,” said Shi Xu, vice president of Singapore’s Hua Yuan Association, a club for mainland immigrants.
Singapore’s proximity to South Asia is also luring ethnic Indians, both those from India and those like Mr. Chandran from the Indian diaspora. Indian nationals recently emerged as the biggest group of foreign buyers of prime real estate in Singapore, after citizens of neighboring Indonesia and Malaysia.
Roughly 60 percent of the buyers at Sentosa Cove are foreigners, according to the development’s staff. Sentosa’s residents get a choice of two views; they can survey one of the world’s busiest container ports or one of the world’s busiest sea lanes.
That may suit shipping magnates like Mr. Chandran more than most, but as an added inducement, foreigners buying property in Sentosa Cove are put on a fast track by immigration authorities for permanent residency.
“They think of everything,” said Jackson Tai, the American chief executive of Singapore’s largest bank, DBS. Recalling B. F. Skinner’s utopian novel, “Walden Two,” he said, “Singapore is Walden Three.”
RCM says European stocks should avoid U.S. slowdown
mercoledì, 25 aprile 2007 10.47
Versione per stampa (Page 1 di 2)
By Sophie Hares
LONDON (Reuters) - European equity markets look robust and should remain relatively immune from any economic slowdown in the United States, RCM's European chief investment officer said on Tuesday.
Valuations are reasonable as European markets hover around six-year highs and there are few signs, despite the recent run of hefty mergers and acquisitions, that companies are paying over the odds to get deals through.
"We actually feel valuations, corporate restructuring, share buybacks, dividend growth is continuing to surprise on the upside," said Neil Dwane, who directly manages 5 billion euros (3.4 billion pounds) in pan-European equities at RCM, which is part of German insurer Allianz (ALVG.DE: Quotazione, Profilo).
"In terms of Europe being a microcosm, we think European equities look pretty good value. We still feel quite happy with equity markets up here," he told Reuters.
The FTSEurofirst 300 <.FTEU3> rose around 16 percent last year, boosted by M&A activity, and is still up around 5 percent so far this year, despite a global equity selloff in late February and early March.
Europe and Asia should remain relatively safe from any major U.S. economic fallout, although exporting industries would be among those to take a short-term knock, said Dwane.
"We think Asia and Europe could continue to go on in a fairly constructive fashion, even if the U.S. does slow down quite substantially," said Dwane, noting the strength of the domestic European economy.
"We're still very healthy on the market and think there's still opportunities to make money."
While concerns about the outlook for U.S. housing and consumption continue to linger, the threat of higher inflation remains a real concern, particularly as crude oil edges towards $68 a barrel.
On a sectoral basis, Dwane said he remains upbeat about European oil, mining, industrial and healthcare stocks.
However, he is swerving away from consumer discretionary, auto, insurance and financial stocks, despite Barclays (BARC.L: Quotazione, Profilo) agreeing to buy ABN AMRO (AAH.AS: Quotazione, Profilo) this week for 67 billion euros, the world's biggest banking takeover.
mercoledì, 25 aprile 2007 10.47
Versione per stampa (Page 1 di 2)
By Sophie Hares
LONDON (Reuters) - European equity markets look robust and should remain relatively immune from any economic slowdown in the United States, RCM's European chief investment officer said on Tuesday.
Valuations are reasonable as European markets hover around six-year highs and there are few signs, despite the recent run of hefty mergers and acquisitions, that companies are paying over the odds to get deals through.
"We actually feel valuations, corporate restructuring, share buybacks, dividend growth is continuing to surprise on the upside," said Neil Dwane, who directly manages 5 billion euros (3.4 billion pounds) in pan-European equities at RCM, which is part of German insurer Allianz (ALVG.DE: Quotazione, Profilo).
"In terms of Europe being a microcosm, we think European equities look pretty good value. We still feel quite happy with equity markets up here," he told Reuters.
The FTSEurofirst 300 <.FTEU3> rose around 16 percent last year, boosted by M&A activity, and is still up around 5 percent so far this year, despite a global equity selloff in late February and early March.
Europe and Asia should remain relatively safe from any major U.S. economic fallout, although exporting industries would be among those to take a short-term knock, said Dwane.
"We think Asia and Europe could continue to go on in a fairly constructive fashion, even if the U.S. does slow down quite substantially," said Dwane, noting the strength of the domestic European economy.
"We're still very healthy on the market and think there's still opportunities to make money."
While concerns about the outlook for U.S. housing and consumption continue to linger, the threat of higher inflation remains a real concern, particularly as crude oil edges towards $68 a barrel.
On a sectoral basis, Dwane said he remains upbeat about European oil, mining, industrial and healthcare stocks.
However, he is swerving away from consumer discretionary, auto, insurance and financial stocks, despite Barclays (BARC.L: Quotazione, Profilo) agreeing to buy ABN AMRO (AAH.AS: Quotazione, Profilo) this week for 67 billion euros, the world's biggest banking takeover.
Barclays fund arm to boost ETF line-up in Japan
giovedì, 26 aprile 2007 11.10
Versione per stampa
By Jonathan Soble and Yuka Obayashi
TOKYO (Reuters) - Barclays Global Investors said it would more than double the number of foreign-registered exchange traded funds it sells in Japan.
In a statement planned for release later on Thursday and obtained by Reuters, Barclays said it had filed notice with regulators for 14 additional iShares ETFs, bringing the total number available in Japan to 26.
ETFs are index funds that are bought and sold on exchanges like individual stocks.
The newly available ETFs include funds linked to Chinese, South Korean, Brazilian and South African stock indexes; developed-market stocks and bonds; and the alternative-asset Macquarie Global Infrastructure 100 fund.
"The additional products are part of our ongoing product development effort," Nick Good, head of iShares Asia Pacific, said in the statement.
Barclays Global, which has about $287 billion (143 billion pounds) of ETF assets under management globally in about 190 funds, is in the midst of a re-organisation in Japan.
The company agreed last week to sell its Japanese asset custody business to Sumitomo Trust & Banking Co., the country's fifth-biggest bank, for 4.9 billion yen.
Barclays will continue to manage the business' 11.26 trillion yen of client assets, while Sumitomo Trust will assume administration and custody duties.
giovedì, 26 aprile 2007 11.10
Versione per stampa
By Jonathan Soble and Yuka Obayashi
TOKYO (Reuters) - Barclays Global Investors said it would more than double the number of foreign-registered exchange traded funds it sells in Japan.
In a statement planned for release later on Thursday and obtained by Reuters, Barclays said it had filed notice with regulators for 14 additional iShares ETFs, bringing the total number available in Japan to 26.
ETFs are index funds that are bought and sold on exchanges like individual stocks.
The newly available ETFs include funds linked to Chinese, South Korean, Brazilian and South African stock indexes; developed-market stocks and bonds; and the alternative-asset Macquarie Global Infrastructure 100 fund.
"The additional products are part of our ongoing product development effort," Nick Good, head of iShares Asia Pacific, said in the statement.
Barclays Global, which has about $287 billion (143 billion pounds) of ETF assets under management globally in about 190 funds, is in the midst of a re-organisation in Japan.
The company agreed last week to sell its Japanese asset custody business to Sumitomo Trust & Banking Co., the country's fifth-biggest bank, for 4.9 billion yen.
Barclays will continue to manage the business' 11.26 trillion yen of client assets, while Sumitomo Trust will assume administration and custody duties.
Parting the curtains at Lazard
giovedì, 26 aprile 2007 3.02
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By Joseph A. Giannone
NEW YORK (Reuters) - For more than a century, investment bank Lazard Freres cultivated an air of intrigue and mystery, of "great men" providing sage advice to the highest realms of power and wealth around the world.
But in his new book, "The Last Tycoons" (Doubleday, $29.95), former Lazard banker William Cohan pulls back the curtain to reveal a den of infighting, back-stabbing and greed no different from the rest of Wall Street. Lazard's great talent, he argues, was its ability to manage the press and polish its own legend.
"The reality was never the myth," Cohan, a former reporter who worked as a Lazard banker for six years, said in an interview. "It wasn't that much different from other firms."
By most measures a small firm with little capital, the company now known as Lazard has cast an outsize shadow since its founding as a New Orleans dry goods merchant in 1848.
It always attracted colorful figures: Andre Meyer and Felix Rohatyn, Frenchmen who pioneered mergers and acquisitions after World War II; Michel David-Weill, so powerful he was known as the "Sun King."
David-Weill ran Lazard for more than 25 years with big Cuban cigars, an obsession with secrecy, and absolute control over bonuses and promotions.
Its partners in Paris, London and New York were also infamous for turf battles so fierce they almost brought the firm to its knees, paving the way for Bruce Wasserstein, the legendary dealmaker, to take control of Lazard and drag it into the modern era.
Cohan, who worked as an associate and vice president over six years, combed through internal and public documents and conducted interviews with more than 100 partners past and present. The book, with its tales of betrayal, sex and other vices, has been the talk of Wall Street since it was published April 3.
Lazard dismissed the book as "a substantially inaccurate account written by a junior banker who left Lazard more than 10 years ago. It was not fact-checked with the firm and has nothing to do with the present state of Lazard or its business."
Lazard executives reached by Reuters declined to comment. A former top partner said the book "focused on the gossipy, rumor side of things," though he conceded Cohan "knows more about Lazard than anybody dead or alive."
"At Lazard they used to say it's not enough for you to succeed: others have to fail," Cohan said of a Darwinian culture in which bankers battled for power and fees.
giovedì, 26 aprile 2007 3.02
Versione per stampa (Page 1 di 2)
By Joseph A. Giannone
NEW YORK (Reuters) - For more than a century, investment bank Lazard Freres cultivated an air of intrigue and mystery, of "great men" providing sage advice to the highest realms of power and wealth around the world.
But in his new book, "The Last Tycoons" (Doubleday, $29.95), former Lazard banker William Cohan pulls back the curtain to reveal a den of infighting, back-stabbing and greed no different from the rest of Wall Street. Lazard's great talent, he argues, was its ability to manage the press and polish its own legend.
"The reality was never the myth," Cohan, a former reporter who worked as a Lazard banker for six years, said in an interview. "It wasn't that much different from other firms."
By most measures a small firm with little capital, the company now known as Lazard has cast an outsize shadow since its founding as a New Orleans dry goods merchant in 1848.
It always attracted colorful figures: Andre Meyer and Felix Rohatyn, Frenchmen who pioneered mergers and acquisitions after World War II; Michel David-Weill, so powerful he was known as the "Sun King."
David-Weill ran Lazard for more than 25 years with big Cuban cigars, an obsession with secrecy, and absolute control over bonuses and promotions.
Its partners in Paris, London and New York were also infamous for turf battles so fierce they almost brought the firm to its knees, paving the way for Bruce Wasserstein, the legendary dealmaker, to take control of Lazard and drag it into the modern era.
Cohan, who worked as an associate and vice president over six years, combed through internal and public documents and conducted interviews with more than 100 partners past and present. The book, with its tales of betrayal, sex and other vices, has been the talk of Wall Street since it was published April 3.
Lazard dismissed the book as "a substantially inaccurate account written by a junior banker who left Lazard more than 10 years ago. It was not fact-checked with the firm and has nothing to do with the present state of Lazard or its business."
Lazard executives reached by Reuters declined to comment. A former top partner said the book "focused on the gossipy, rumor side of things," though he conceded Cohan "knows more about Lazard than anybody dead or alive."
"At Lazard they used to say it's not enough for you to succeed: others have to fail," Cohan said of a Darwinian culture in which bankers battled for power and fees.
Death knell sounding for India property boom?
mercoledì, 25 aprile 2007 10.06
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By Dominic Whiting, Asia property correspondent
MUMBAI (Reuters) - "The grave dancer", U.S. tycoon Samuel Zell, was in a mood to spoil a two-year-long party when he told a gathering of Indian property executives this week they were "on the brink of excess" and their boom would end in tears.
The developers and fund managers could only agree.
The man who earned his nickname, and a $4.5 billion (2.2 billion pound) fortune, picking up cheap offices in the 1990s U.S. downturn and packaging them into a property trust sold last year for $39 billion, said it was "mental masturbation" to believe there were endless riches for investors in India's 1 billion person market.
Only a top sliver of the population can afford to buy the homes being built.
"India's greatest asset today is everyone's imagination," Zell said.
Many in the audience nodded in assent.
The only difference of opinion among some of India's leading property professionals at the conference in Mumbai was how far property prices would drop, probably at some point in the next year -- 10 percent or 40 percent?
The last time a property bubble burst in India prices slumped by as much as 70 percent between 1995 and 2001. But this time around, a raft of international funds raised by the likes of Citigroup (C.N: Quotazione, Profilo), Morgan Stanley (MS.N: Quotazione, Profilo) and Credit Suisse (CSGN.VX: Quotazione, Profilo) are likely to step in looking for bargains and cushion the fall.
"Our expectation is that sometime in the course of this year you'll see a 30 to 40 percent drop in prices," said Ajit Dayal, chief executive of fund manager Quantum Advisors.
An estimated $10 billion was raised internationally for Indian property funds last year.
But rising mortgage rates and a doubling of property prices in major cities in the past two years will lift home prices beyond the reach of even the 40 million richest Indians that developers are targetting, Dayal said
mercoledì, 25 aprile 2007 10.06
Versione per stampa (Page 1 di 3)
By Dominic Whiting, Asia property correspondent
MUMBAI (Reuters) - "The grave dancer", U.S. tycoon Samuel Zell, was in a mood to spoil a two-year-long party when he told a gathering of Indian property executives this week they were "on the brink of excess" and their boom would end in tears.
The developers and fund managers could only agree.
The man who earned his nickname, and a $4.5 billion (2.2 billion pound) fortune, picking up cheap offices in the 1990s U.S. downturn and packaging them into a property trust sold last year for $39 billion, said it was "mental masturbation" to believe there were endless riches for investors in India's 1 billion person market.
Only a top sliver of the population can afford to buy the homes being built.
"India's greatest asset today is everyone's imagination," Zell said.
Many in the audience nodded in assent.
The only difference of opinion among some of India's leading property professionals at the conference in Mumbai was how far property prices would drop, probably at some point in the next year -- 10 percent or 40 percent?
The last time a property bubble burst in India prices slumped by as much as 70 percent between 1995 and 2001. But this time around, a raft of international funds raised by the likes of Citigroup (C.N: Quotazione, Profilo), Morgan Stanley (MS.N: Quotazione, Profilo) and Credit Suisse (CSGN.VX: Quotazione, Profilo) are likely to step in looking for bargains and cushion the fall.
"Our expectation is that sometime in the course of this year you'll see a 30 to 40 percent drop in prices," said Ajit Dayal, chief executive of fund manager Quantum Advisors.
An estimated $10 billion was raised internationally for Indian property funds last year.
But rising mortgage rates and a doubling of property prices in major cities in the past two years will lift home prices beyond the reach of even the 40 million richest Indians that developers are targetting, Dayal said
F&C assets fall after net outflow
venerdì, 27 aprile 2007 9.36
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By Laurence Fletcher
LONDON (Reuters) - F&C Asset Management said on Friday its assets under management fell to 102.7 billion pounds at the end of March from 104.1 billion pounds at the end of December.
In the first quarter, the firm (FCAM.L: Quotazione, Profilo) had a net outflow of 2.8 billion pounds, it said.
This included a 1.6 billion-pound net outflow from insurance funds and a 1.1 billion-pound net outflow from institutional funds.
Fixed interest assets fell to 52.7 billion pounds from 54 billion pounds at the end of December, while money market assets dropped to 4.4 billion pounds from 5.4 billion pounds.
However, equity assets rose to 38.8 billion pounds from 38.2 billion pounds, while alternative investments also rose slightly.
In March F&C reported a big fall in annual underlying earnings and said it had set an earnings per share growth target of 50 percent from 2007 to 2009, part of a three-year turnaround plan to boost investment in higher-margin products.
While many UK-based fund firms have benefited from rising stock markets in recent years, some groups have seen their assets shrink as traditional clients like pension funds have switched to using a range of asset managers instead of only one to run their investments.
F&C, which is 51 percent owned by insurer Friends Provident, was created in 2004 from F&C Asset Management's reverse takeover of ISIS Asset Management.
venerdì, 27 aprile 2007 9.36
Versione per stampa
By Laurence Fletcher
LONDON (Reuters) - F&C Asset Management said on Friday its assets under management fell to 102.7 billion pounds at the end of March from 104.1 billion pounds at the end of December.
In the first quarter, the firm (FCAM.L: Quotazione, Profilo) had a net outflow of 2.8 billion pounds, it said.
This included a 1.6 billion-pound net outflow from insurance funds and a 1.1 billion-pound net outflow from institutional funds.
Fixed interest assets fell to 52.7 billion pounds from 54 billion pounds at the end of December, while money market assets dropped to 4.4 billion pounds from 5.4 billion pounds.
However, equity assets rose to 38.8 billion pounds from 38.2 billion pounds, while alternative investments also rose slightly.
In March F&C reported a big fall in annual underlying earnings and said it had set an earnings per share growth target of 50 percent from 2007 to 2009, part of a three-year turnaround plan to boost investment in higher-margin products.
While many UK-based fund firms have benefited from rising stock markets in recent years, some groups have seen their assets shrink as traditional clients like pension funds have switched to using a range of asset managers instead of only one to run their investments.
F&C, which is 51 percent owned by insurer Friends Provident, was created in 2004 from F&C Asset Management's reverse takeover of ISIS Asset Management.
Investment flees China equity funds after hot 2006
giovedì, 26 aprile 2007 11.07
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By Herbert Lash
NEW YORK (Reuters) - Weeks before the Shanghai stock market plunge in February sparked a global sell-off, investors began pulling what now amounts to about $2.6 billion (1.3 billion pounds) from China-related equity funds, a research firm said.
Most markets have since recovered, but investment continues to flee China and related regions, which in 2006 captured half the $24 billion invested in emerging market equity funds, said Brad Durham, co-founder Emerging Portfolio Fund Research.
"The flows have definitely fallen off from the China funds in recent weeks and recent months, precipitated by the sell-off in February and March," Durham said in an interview this week.
The week ending February 7 marked the first weekly period in a long time that money flowed out of China funds and funds called Greater China, which includes money invested in Hong Kong, Taiwan and mainland China, Durham said.
From February 7 through April 18, the latest week data is available, about $1.63 billion left China funds and $934 million left Greater China funds, he said.
The shift in sentiment is remarkable because China was a hot story in 2006, with China region funds returning almost 27 percent, better than any other asset class or investment objective, according to Lipper, a unit of Reuters Group Plc.
China region funds are up 6.89 percent this year as of April 19, Lipper said. But many other investment objectives have done better, led by utilities, which are up 11.49 percent and followed by Latin American funds, up 11.37 percent.
The BRIC markets of Brazil, Russia, India and China -- another popular investment theme last year -- all have seen outflows from equity funds dedicated to those countries in recent weeks and months, Durham said.
Where the money has gone is unclear, but Malaysia and Singapore have seen large inflows in recent months, he said. Almost $2.4 billion has flowed into Malaysian funds in the past five months, and $1.53 billion into Singapore funds during the past six months, he said.
"Those are two markets where we've seen a very sharp inflow pattern in recent months," he said.
giovedì, 26 aprile 2007 11.07
Versione per stampa
By Herbert Lash
NEW YORK (Reuters) - Weeks before the Shanghai stock market plunge in February sparked a global sell-off, investors began pulling what now amounts to about $2.6 billion (1.3 billion pounds) from China-related equity funds, a research firm said.
Most markets have since recovered, but investment continues to flee China and related regions, which in 2006 captured half the $24 billion invested in emerging market equity funds, said Brad Durham, co-founder Emerging Portfolio Fund Research.
"The flows have definitely fallen off from the China funds in recent weeks and recent months, precipitated by the sell-off in February and March," Durham said in an interview this week.
The week ending February 7 marked the first weekly period in a long time that money flowed out of China funds and funds called Greater China, which includes money invested in Hong Kong, Taiwan and mainland China, Durham said.
From February 7 through April 18, the latest week data is available, about $1.63 billion left China funds and $934 million left Greater China funds, he said.
The shift in sentiment is remarkable because China was a hot story in 2006, with China region funds returning almost 27 percent, better than any other asset class or investment objective, according to Lipper, a unit of Reuters Group Plc.
China region funds are up 6.89 percent this year as of April 19, Lipper said. But many other investment objectives have done better, led by utilities, which are up 11.49 percent and followed by Latin American funds, up 11.37 percent.
The BRIC markets of Brazil, Russia, India and China -- another popular investment theme last year -- all have seen outflows from equity funds dedicated to those countries in recent weeks and months, Durham said.
Where the money has gone is unclear, but Malaysia and Singapore have seen large inflows in recent months, he said. Almost $2.4 billion has flowed into Malaysian funds in the past five months, and $1.53 billion into Singapore funds during the past six months, he said.
"Those are two markets where we've seen a very sharp inflow pattern in recent months," he said.
Morley has $2 billion to spend on Asian property
giovedì, 26 aprile 2007 10.54
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By Alison Tudor and Yuka Obayashi
TOKYO (Reuters) - Morley Fund Management, one of Europe's largest property fund management firms, said on Wednesday it will expand its property business into Asia and aims to have $10 billion (5 billion pounds) to invest within four years.
With an initial $2 billion for deals from its parent company insurance group Aviva, Morley plans to work with local partners in Japan, China, South Korea and India.
Morley said one of these joint ventures would be with Japan's Mitsubishi UFJ Trust and Banking Corp, with others to be announced soon.
Morley has allocated 50 percent of its $2 billion to invest in Japanese property with the remaining 50 percent spread across the region. It has allocated $500 million to the MUTB joint venture.
"We have strong ambitions for property investment in the region similar to those we had in continental Europe three years ago," said Ian Womack, Managing Director Property at Morley.
HOT PROPERTY
Japanese land prices rose for the first time in 16 years in 2006, offering further evidence that the nation is emerging from deflation with support from a steady economic recovery, a government survey showed in March.
Morley expects to invest in different types of property, but the bulk will be office buildings. The firm also expects to seek deals outside of the Tokyo metropolis where land prices have risen most strongly and competition is becoming intense.
"Japan has attractive returns relative to other real estate markets," Nick Mansley, property strategy and indirect investment director at Morley, told Reuters in an interview.
Morley set up a regional office in Singapore three weeks ago, where Asian fund manager Andrew Peacock and Asian property analyst Guy Cawthra will be based.
Morley has 18 percent of its $325 billion of funds under management in property. In the United Kingdom and Europe, Morley has over 30 billion pounds invested in property assets, up from 8 billion pounds in 2000.
giovedì, 26 aprile 2007 10.54
Versione per stampa
By Alison Tudor and Yuka Obayashi
TOKYO (Reuters) - Morley Fund Management, one of Europe's largest property fund management firms, said on Wednesday it will expand its property business into Asia and aims to have $10 billion (5 billion pounds) to invest within four years.
With an initial $2 billion for deals from its parent company insurance group Aviva, Morley plans to work with local partners in Japan, China, South Korea and India.
Morley said one of these joint ventures would be with Japan's Mitsubishi UFJ Trust and Banking Corp, with others to be announced soon.
Morley has allocated 50 percent of its $2 billion to invest in Japanese property with the remaining 50 percent spread across the region. It has allocated $500 million to the MUTB joint venture.
"We have strong ambitions for property investment in the region similar to those we had in continental Europe three years ago," said Ian Womack, Managing Director Property at Morley.
HOT PROPERTY
Japanese land prices rose for the first time in 16 years in 2006, offering further evidence that the nation is emerging from deflation with support from a steady economic recovery, a government survey showed in March.
Morley expects to invest in different types of property, but the bulk will be office buildings. The firm also expects to seek deals outside of the Tokyo metropolis where land prices have risen most strongly and competition is becoming intense.
"Japan has attractive returns relative to other real estate markets," Nick Mansley, property strategy and indirect investment director at Morley, told Reuters in an interview.
Morley set up a regional office in Singapore three weeks ago, where Asian fund manager Andrew Peacock and Asian property analyst Guy Cawthra will be based.
Morley has 18 percent of its $325 billion of funds under management in property. In the United Kingdom and Europe, Morley has over 30 billion pounds invested in property assets, up from 8 billion pounds in 2000.
The popularity of overseas property TV programmes in the UK could be behind growing investment interest in the Australian market, a website has said.
South Australia in particular is proving popular with investors because of its fine wines, festivals and hot weather, according to Landlord Expert.
Even though Australia is far very away from the UK, investors are finding the price, quality and promise of strong rental yields down under extremely attractive.
Ben Howard, director of Monopoly Realty Holdings, said: "The official rental property vacancy rates in South Australia are now hovering between 0.5 per cent and one per cent.
"Team this with the British pound providing excellent exchange values and many UK investors like the prospects of an Aussie residential investment."
Mr Howard added that many experts are predicting rents to increase by 20 per cent over the next three months.
According to Amberlamb, rental prices in all major Australian cities make any buy-to-let investment "immediately profitable".
South Australia in particular is proving popular with investors because of its fine wines, festivals and hot weather, according to Landlord Expert.
Even though Australia is far very away from the UK, investors are finding the price, quality and promise of strong rental yields down under extremely attractive.
Ben Howard, director of Monopoly Realty Holdings, said: "The official rental property vacancy rates in South Australia are now hovering between 0.5 per cent and one per cent.
"Team this with the British pound providing excellent exchange values and many UK investors like the prospects of an Aussie residential investment."
Mr Howard added that many experts are predicting rents to increase by 20 per cent over the next three months.
According to Amberlamb, rental prices in all major Australian cities make any buy-to-let investment "immediately profitable".
Britons who have bought an overseas property and are leaving the UK to live there are being urged to take steps to protect their finances.
In response to statistics from the Office for National Statistics that show over 500 Brits are leaving the country every day, currency specialists HiFX is warning that currency fluctuations could erode a buyer's assets.
According to HiFX, investors should consider securing their currency by locking the rate in a forward contract, which is particularly useful if the property purchase takes two or three months to complete.
Mark Bodega, marketing director for HiFX, said: "The majority of people emigrating from the UK are not millionaires jetting off to a luxury island, but everyday people who are likely to be most affected by banks charging over the odds for currency exchange and losses through currency fluctuation."
He also said that for investors looking to buy a property and move abroad, Australia offers is a world leader when it comes to value for money.
According to latest International Property Rights Index, Australia is in the top ten nations that have the best property protection rules, scoring 8.1 out of ten, just 0.2 behind Norway, which was in first place.
In response to statistics from the Office for National Statistics that show over 500 Brits are leaving the country every day, currency specialists HiFX is warning that currency fluctuations could erode a buyer's assets.
According to HiFX, investors should consider securing their currency by locking the rate in a forward contract, which is particularly useful if the property purchase takes two or three months to complete.
Mark Bodega, marketing director for HiFX, said: "The majority of people emigrating from the UK are not millionaires jetting off to a luxury island, but everyday people who are likely to be most affected by banks charging over the odds for currency exchange and losses through currency fluctuation."
He also said that for investors looking to buy a property and move abroad, Australia offers is a world leader when it comes to value for money.
According to latest International Property Rights Index, Australia is in the top ten nations that have the best property protection rules, scoring 8.1 out of ten, just 0.2 behind Norway, which was in first place.
Australia is one the most popular countries when it comes to British investors looking to invest in overseas property, according to website BuyAssociation.
Spokesman Paul Collins said that most people who choose Australia as an investment destination do so because they want to move there permanently or intend to manage their property from afar ? without ever seeing it.
He also pointed out that foreign buyers will have to put their investment bid before Australia's foreign investment review board to approve the purchase, which can prolong the application process and add to the amount of paperwork.
The board will examine the proposal before recommending it to the Australian government on whether it is suitable for approval under official policy.
However, it is very rare for the board to reject an application from an overseas buyer, he added.
On the issue of the most popular locations, Mr Collins said that Sydney and Melbourne still appeal to investors, although a growing number of buyers are looking at places like Perth and the Gold Coast as well.
Investors "are looking a bit further afield and getting a bit more adventurous", he remarked.
Spokesman Paul Collins said that most people who choose Australia as an investment destination do so because they want to move there permanently or intend to manage their property from afar ? without ever seeing it.
He also pointed out that foreign buyers will have to put their investment bid before Australia's foreign investment review board to approve the purchase, which can prolong the application process and add to the amount of paperwork.
The board will examine the proposal before recommending it to the Australian government on whether it is suitable for approval under official policy.
However, it is very rare for the board to reject an application from an overseas buyer, he added.
On the issue of the most popular locations, Mr Collins said that Sydney and Melbourne still appeal to investors, although a growing number of buyers are looking at places like Perth and the Gold Coast as well.
Investors "are looking a bit further afield and getting a bit more adventurous", he remarked.
Australia is proving to be a popular destination with those Brits who are hoping to buy an overseas property, a new survey has revealed.
According to the latest HiFX Global Property Hotspot study, the percentage of enquiries regarding an Australian purchase has doubled since the beginning of the year.
In January, the percentage of enquiries for Australia was three per cent, rising to six per cent in March, the survey shows.
The report also reveals increasing enquires from Brits looking to permanently emigrate, but investors are being urged to consider the currency fluctuations that can take place between a successful visa application and the eventual move.
Spokesman Mark Bodega explained: "Making the decision to move to a new country is a big undertaking, both emotionally and financially.
"Last year we saw the Australian dollar fluctuate by almost ten per cent (9.7 per cent) so when moving £250,000 'down under' in 2006, currency fluctuation meant you risked losing as much as £24,250."
According to property website BuyAssoication, Sydney and Melbourne still appeal to investors, although a growing number of buyers are looking at places like Perth and the Gold Coast.
According to the latest HiFX Global Property Hotspot study, the percentage of enquiries regarding an Australian purchase has doubled since the beginning of the year.
In January, the percentage of enquiries for Australia was three per cent, rising to six per cent in March, the survey shows.
The report also reveals increasing enquires from Brits looking to permanently emigrate, but investors are being urged to consider the currency fluctuations that can take place between a successful visa application and the eventual move.
Spokesman Mark Bodega explained: "Making the decision to move to a new country is a big undertaking, both emotionally and financially.
"Last year we saw the Australian dollar fluctuate by almost ten per cent (9.7 per cent) so when moving £250,000 'down under' in 2006, currency fluctuation meant you risked losing as much as £24,250."
According to property website BuyAssoication, Sydney and Melbourne still appeal to investors, although a growing number of buyers are looking at places like Perth and the Gold Coast.
Forget the Crash - Learn from Australia’s Property Market
Published on 26 April 2007 at 01:51 pm
Filed in Real Estate in Australia
Will there or won’t there be a global property market crash? If you live in the United State you’ll probably say it’s happening already, if you’re banking on property in Spain you’ll be praying it’s not impending and if you’re resident in the UK you’ll be counting down the days until it hits…but actually, forget the crash – learn from Australia’s property market.
Property prices in Australia were at an attractively affordable level back in 1995, the cost of living was also very low and the nation was gaining ground in terms of renewed appeal from British, European and North American would-be migrants who had been discouraged before when Australia seemed to want more Asian migrants. In came demand for property, up went prices and bang should have gone the property market…but it didn’t.
Between 1996 and 2003 the price of a piece of real estate in Australia doubled – the property market in Australia was seemingly out of control as more and more investors flooded in, immigration numbers rose and fuelled housing demand and greater numbers of local first time buyers were forced to mortgage themselves to the hilt to get on the housing ladder.
By 2003 it seemed so inevitable that the market was booming and that because what goes up must come down a bust was looming, but here we are in 2007 and prices have started rising again – up 8.3% on average in 2006 from just over 2% in 2005.
So what happened to real estate in Australia between 2003 and 2007?
Australia managed to successfully manage its property based economy, it slowed activity down, it reduced inflation with interest rate rises, it caused stagnation in the most seemingly overblown markets and instead of crash landing in a ball of flames, Australia’s property market touched down, regrouped and is now off again – albeit at a much more sedate and healthier pace.
So, instead of worrying about a global property market crash you should be hoping and praying that your government can learn from the example set by Australia which seems to have a stable and attractive real estate market with strong levels of sustainable demand and just enough affordability to maintain buoyancy.
Page 1 of 1
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Published on 26 April 2007 at 01:51 pm
Filed in Real Estate in Australia
Will there or won’t there be a global property market crash? If you live in the United State you’ll probably say it’s happening already, if you’re banking on property in Spain you’ll be praying it’s not impending and if you’re resident in the UK you’ll be counting down the days until it hits…but actually, forget the crash – learn from Australia’s property market.
Property prices in Australia were at an attractively affordable level back in 1995, the cost of living was also very low and the nation was gaining ground in terms of renewed appeal from British, European and North American would-be migrants who had been discouraged before when Australia seemed to want more Asian migrants. In came demand for property, up went prices and bang should have gone the property market…but it didn’t.
Between 1996 and 2003 the price of a piece of real estate in Australia doubled – the property market in Australia was seemingly out of control as more and more investors flooded in, immigration numbers rose and fuelled housing demand and greater numbers of local first time buyers were forced to mortgage themselves to the hilt to get on the housing ladder.
By 2003 it seemed so inevitable that the market was booming and that because what goes up must come down a bust was looming, but here we are in 2007 and prices have started rising again – up 8.3% on average in 2006 from just over 2% in 2005.
So what happened to real estate in Australia between 2003 and 2007?
Australia managed to successfully manage its property based economy, it slowed activity down, it reduced inflation with interest rate rises, it caused stagnation in the most seemingly overblown markets and instead of crash landing in a ball of flames, Australia’s property market touched down, regrouped and is now off again – albeit at a much more sedate and healthier pace.
So, instead of worrying about a global property market crash you should be hoping and praying that your government can learn from the example set by Australia which seems to have a stable and attractive real estate market with strong levels of sustainable demand and just enough affordability to maintain buoyancy.
Page 1 of 1
Related Articles
How Can I Afford to Buy Property in Australia?
Focus on Property in Australia
Property Investment Opportunities in Australia
Investment Property in Australia
Best Property to Buy in Australia
Investment Properties Victoria Australia
Property in Perth Australia
Properties for Sale in Queensland Australia
Buying Property in Australia
Australian Property Market Outlook
Investment Property in Australasia
Economic Forecast for the Australian Property Market
Real Estate and Property in Australia
Archive
Property Abroad Archive
RSS Syndicate
Property Abroad RSS
Home | About | Contact
Offshore Resources | Offshore Services | Property Abroad | Living Abroad | Books | Expat Blog
Home » Property Abroad » Real Estate in Australia » Forget the Crash - Learn from Australia’s Property Market
Copyright (c) 2004 2007 ShelterOffshore.com. All rights reserved.
Privacy Policy | Contact Us
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