Putting your money into a golf property in Spain is a "fantastic investment option" thanks to the country's 320 days of sunshine, its great climate and cheap flights options.
That is according to property experts at RightmoveOverseas, who add overseas golf properties are becoming increasingly popular as they can be used all year, offer good rental yield and value for money.
The Costa del Sol in Spain is the most popular golf property investment location, as it has 32 Championship courses, but RightmoveOverseas explains there are similar golf facilities available across much of the Spanish Costas.
"With almost year-round sun, Spain offers the perfect golfing conditions and some amazing courses and views. Daily low-cost flights to Spain's main airports also mean that you can visit your golf property anytime you feel the need to practice your putting," said Justin Figgins, head of RightmoveOverseas.
He added: "Investors look at golf properties as highly rentable due to the appeal to a cross section of holiday makers all year round."
However, Mr Figgins advises against acting too hastily, even if you find the perfect golf course.
"Spain does not have the same buying procedures as the UK, and it is possible to get trapped in a bunker," Mr Figgins said.
An independent Spanish lawyer should act on your behalf and protect your interests as a buyer, ensuring the right planning permissions have been granted and, where necessary, check for rights of way and any existing boundary disputes, he explained.
They will also protect your deposit and ensure the relevant costs and taxes have been paid by you.
Golf properties in Spain start from around £114,000, with two-bedroom apartments in the Cabopino golf resort on the marina in Elviria available from £271,626, and two bedroom townhouses surrounded by landscaped gardens and a private pool for £441,393 by the Monte Mayor Golf and Country Club.
As well as Spain, the overseas property website says golf properties are available all over the world, from Florida in the US, Canada, and the Caribbean, to Portugal, Germany and Cyprus
Saturday, June 2, 2007
Two-fifths of Britons have considered moving abroad or buying an overseas property, new research reveals.
Two-fifths of Britons have considered moving abroad or buying an overseas property, new research reveals.
The survey by Bank of Scotland International finds Australia is the most popular place to move to, with ten per cent of Brits saying it would be their top place to live.
The country is more popular with younger Brits, with 59 per cent of under-45s saying it is their top location. This figure drops to 16 per cent for over-65s.
In Europe France came top, however the country's popularity drops significantly among younger Brits - three per cent of under 25s saying it is where they would most like to live compared with 76 per cent of over 45s.
Brits from the north-west are keenest on living in Australia, whereas those living in the south-east put France as their top place to live overseas
The survey by Bank of Scotland International finds Australia is the most popular place to move to, with ten per cent of Brits saying it would be their top place to live.
The country is more popular with younger Brits, with 59 per cent of under-45s saying it is their top location. This figure drops to 16 per cent for over-65s.
In Europe France came top, however the country's popularity drops significantly among younger Brits - three per cent of under 25s saying it is where they would most like to live compared with 76 per cent of over 45s.
Brits from the north-west are keenest on living in Australia, whereas those living in the south-east put France as their top place to live overseas
Half of North American CEOs tapping overseas talent: Deloitte survey
Half of North American CEOs tapping overseas talent: Deloitte survey
28 May, 2007
By Liam Lahey
Citing exceptional employees as the key to their success, fast-growth CEOs admit that finding, hiring and retaining qualified employees is their biggest operational challenge.
This, according to a newly released Deloitte survey, is a key reason why CEOs are tapping overseas markets for talent, a trend that will increase over the next five years. Deloitte's "2007 CEO Survey" petitioned the fastest growing companies in North America as ranked on Deloitte's 2006 Technology Fast 500. Also noteworthy, CEOs are shying away from doing business outside of North America.
Tech companies in particular are going overseas for talent for three key reasons, explained Jeffrey Alderton, principal, Human Capital Advisory Services for Deloitte Consulting in New Jersey.
First, availability of sheer number of educated talent in locations outside the U.S. Second is cost; third is 24-hour service.
"The U.S. cost of hiring workers at this point in time can often exceed that of the cost of hiring overseas. We're seeing a very highly educated, highly interested constituency outside the U.S. that is very motivated to enter the American business market," he said. "With shared services in India or Europe, for example, companies can have a 24-hour operation, simple due to the time change (no sleep time). This is a very motivating point for off-shoring."
When asked how the driving factors for overseas hires fare juxtaposed to the fact that North American firms are shying away from doing business overseas, Alderton said it surprised him.
"But I really think they are two separate issues. Because of the whole cost structure, high educational expectations, etc., American employees have to pay huge amounts of loans, so that adds to the cost structure of how people are getting hired," he said. "It's very different from the educational structure as it is in APAC and European communities where some of the outsourcing companies are based. It's a resource and cost issue that tech companies are going to APAC (including India), EMEA (especially Prague), and Latin America."
The survey was conducted during the first quarter of 2007 by Deloitte's Technology, Media & Telecommunications (TMT) Group.
High-quality employees are the biggest contributors to company growth for 67 per cent of the CEOs surveyed, consistent with 66 per cent last year, the report read. Finding, hiring and retaining qualified employees is the biggest operational challenge for 48 per cent of the CEOs, up from 41 per cent last year. To attract employees, 69 per cent are relying on equity compensation and stock options, down from 71 per cent last year. Fifty-one per cent offer flexible hours, up slightly from 49 per cent last year. Training programs and educational opportunities are offered by 38 per cent of the companies, up from 35 per cent last year, and 31 per cent provide a career path, up from 28 per cent last year.
"When it comes to talent, supply and demand are out of balance, making employees more like consumers," he said. "And like consumers, if employees with those in-demand skills sets are not receiving the satisfaction they seek from their workplace, they will find it elsewhere -- with the competition. This will put an even greater strain on employers for available talent."
But do individuals seeking employ regard themselves as akin to consumers?
"In the technology, media and telecom industry, I'm seeing the younger talent going to technology companies for the environment," Alderton remarked. "Many of these companies are producing products that younger talent is not going not to use uniquely, and they may be a consumer but not on a grand scale.
"I think they are picking and choosing new work places to bridge their personal life with their business acumen. I'm not convinced that they are looking at jobs as a consumer. The needs of the talent market right are about seamless integration of their personal and professional lives. The virtual workplace is the customization of their career. If that's what companies offer, that's where they're going. If the company offers a product discount, that's a bonus."
CEOs say their companies are turning to overseas talent, with 45 per cent of those surveyed said that they are currently off-shoring, and 55 per cent said they plan to offshore in the next five years. In five years, 30 per cent planned to have up to 10 per cent of their workers offshore; 27 per cent planned to have up to 20 per cent offshore; 19 per cent expected to have up to 30 per cent offshore; and 15 per cent expected to have up to 40 per cent offshore. Overall, 43 per cent of the CEOs said it was critical or very important to look overseas for talent. However, even in five years, CEOs envisioned the vast majority of the workforce would remain in North America.
"We see tech companies keeping the more technical and developmental resources off-shored with client-facing interaction staying in the U.S. for companies who do business only or primarily in the U.S.," he said. "The growing executive level may, in fact, remain here in the U.S., based on with whom they need to interface."
CEOs remain confident about company growth, with 82 per cent of those surveyed very or extremely confident. Virtually all (98 per cent) said they would be hiring over the next 12 months. Thirty-seven per cent said they would grow their workforce 26 per cent to 50 per cent over the next 12 months, up from 30 per cent last year. Half the CEOs would grow their headcount up to 25 per cent, the same as last year. Another 11 per cent intended to grow their headcount more than 50 per cent, down from 17 per cent last year.
Fifty-nine per cent of the CEOs surveyed believed they would continue growing organically, up from 55 per cent last year. Fifteen percent planned to acquire other companies, down from 17 per cent last year. Just seven per cent planned on merging with another company, up from six per cent.
Meanwhile, CEOs are far more concerned about government regulation and terrorism than access to capital. With 34 per cent of the CEOs surveyed said the biggest threat to success is excessive government regulation, followed by 19 per cent who said the biggest threat was increased competition from emerging powers like China and India; and 18 per cent cited terrorism. Only nine per cent were concerned about access to capital, and 10 per cent expressed concern about rising interest rates.
Twenty percent of the CEOs surveyed said that lower interest rates were needed to spur growth, up from eight per cent last year, while 18 per cent prescribed lower personal and corporate taxes, down from 31 per cent last year.
The Deloitte survey showed CEOs have chosen a variety of methods to protect their valuable intellectual property. The most popular of those surveyed (40 per cent) is to restrict distribution of products to markets with a strong reputation for protecting IP. They also build in IP protection to minimize theft (38 per cent), hire third-party specialists to advise them on IP protection (32 per cent), and train staff on measures to reduce IP theft (32 per cent).
28 May, 2007
By Liam Lahey
Citing exceptional employees as the key to their success, fast-growth CEOs admit that finding, hiring and retaining qualified employees is their biggest operational challenge.
This, according to a newly released Deloitte survey, is a key reason why CEOs are tapping overseas markets for talent, a trend that will increase over the next five years. Deloitte's "2007 CEO Survey" petitioned the fastest growing companies in North America as ranked on Deloitte's 2006 Technology Fast 500. Also noteworthy, CEOs are shying away from doing business outside of North America.
Tech companies in particular are going overseas for talent for three key reasons, explained Jeffrey Alderton, principal, Human Capital Advisory Services for Deloitte Consulting in New Jersey.
First, availability of sheer number of educated talent in locations outside the U.S. Second is cost; third is 24-hour service.
"The U.S. cost of hiring workers at this point in time can often exceed that of the cost of hiring overseas. We're seeing a very highly educated, highly interested constituency outside the U.S. that is very motivated to enter the American business market," he said. "With shared services in India or Europe, for example, companies can have a 24-hour operation, simple due to the time change (no sleep time). This is a very motivating point for off-shoring."
When asked how the driving factors for overseas hires fare juxtaposed to the fact that North American firms are shying away from doing business overseas, Alderton said it surprised him.
"But I really think they are two separate issues. Because of the whole cost structure, high educational expectations, etc., American employees have to pay huge amounts of loans, so that adds to the cost structure of how people are getting hired," he said. "It's very different from the educational structure as it is in APAC and European communities where some of the outsourcing companies are based. It's a resource and cost issue that tech companies are going to APAC (including India), EMEA (especially Prague), and Latin America."
The survey was conducted during the first quarter of 2007 by Deloitte's Technology, Media & Telecommunications (TMT) Group.
High-quality employees are the biggest contributors to company growth for 67 per cent of the CEOs surveyed, consistent with 66 per cent last year, the report read. Finding, hiring and retaining qualified employees is the biggest operational challenge for 48 per cent of the CEOs, up from 41 per cent last year. To attract employees, 69 per cent are relying on equity compensation and stock options, down from 71 per cent last year. Fifty-one per cent offer flexible hours, up slightly from 49 per cent last year. Training programs and educational opportunities are offered by 38 per cent of the companies, up from 35 per cent last year, and 31 per cent provide a career path, up from 28 per cent last year.
"When it comes to talent, supply and demand are out of balance, making employees more like consumers," he said. "And like consumers, if employees with those in-demand skills sets are not receiving the satisfaction they seek from their workplace, they will find it elsewhere -- with the competition. This will put an even greater strain on employers for available talent."
But do individuals seeking employ regard themselves as akin to consumers?
"In the technology, media and telecom industry, I'm seeing the younger talent going to technology companies for the environment," Alderton remarked. "Many of these companies are producing products that younger talent is not going not to use uniquely, and they may be a consumer but not on a grand scale.
"I think they are picking and choosing new work places to bridge their personal life with their business acumen. I'm not convinced that they are looking at jobs as a consumer. The needs of the talent market right are about seamless integration of their personal and professional lives. The virtual workplace is the customization of their career. If that's what companies offer, that's where they're going. If the company offers a product discount, that's a bonus."
CEOs say their companies are turning to overseas talent, with 45 per cent of those surveyed said that they are currently off-shoring, and 55 per cent said they plan to offshore in the next five years. In five years, 30 per cent planned to have up to 10 per cent of their workers offshore; 27 per cent planned to have up to 20 per cent offshore; 19 per cent expected to have up to 30 per cent offshore; and 15 per cent expected to have up to 40 per cent offshore. Overall, 43 per cent of the CEOs said it was critical or very important to look overseas for talent. However, even in five years, CEOs envisioned the vast majority of the workforce would remain in North America.
"We see tech companies keeping the more technical and developmental resources off-shored with client-facing interaction staying in the U.S. for companies who do business only or primarily in the U.S.," he said. "The growing executive level may, in fact, remain here in the U.S., based on with whom they need to interface."
CEOs remain confident about company growth, with 82 per cent of those surveyed very or extremely confident. Virtually all (98 per cent) said they would be hiring over the next 12 months. Thirty-seven per cent said they would grow their workforce 26 per cent to 50 per cent over the next 12 months, up from 30 per cent last year. Half the CEOs would grow their headcount up to 25 per cent, the same as last year. Another 11 per cent intended to grow their headcount more than 50 per cent, down from 17 per cent last year.
Fifty-nine per cent of the CEOs surveyed believed they would continue growing organically, up from 55 per cent last year. Fifteen percent planned to acquire other companies, down from 17 per cent last year. Just seven per cent planned on merging with another company, up from six per cent.
Meanwhile, CEOs are far more concerned about government regulation and terrorism than access to capital. With 34 per cent of the CEOs surveyed said the biggest threat to success is excessive government regulation, followed by 19 per cent who said the biggest threat was increased competition from emerging powers like China and India; and 18 per cent cited terrorism. Only nine per cent were concerned about access to capital, and 10 per cent expressed concern about rising interest rates.
Twenty percent of the CEOs surveyed said that lower interest rates were needed to spur growth, up from eight per cent last year, while 18 per cent prescribed lower personal and corporate taxes, down from 31 per cent last year.
The Deloitte survey showed CEOs have chosen a variety of methods to protect their valuable intellectual property. The most popular of those surveyed (40 per cent) is to restrict distribution of products to markets with a strong reputation for protecting IP. They also build in IP protection to minimize theft (38 per cent), hire third-party specialists to advise them on IP protection (32 per cent), and train staff on measures to reduce IP theft (32 per cent).
The changing face of property funds
The changing face of property funds
Mark Dutton
Mark Dutton
In recent years, a frequently canvassed topic in financial services circles has been the changing nature of the listed property trust (LPT) sector.
It makes good sense to include property related securities in a well-diversified portfolio strategy, but increasingly, LPTs have been behaving more like high-flying shares than a conservative asset class.
LPTs – a paradigm shift
Returns generated from the Australian LPT sector have outpaced the broad share market index over most periods extending back for 10 years or more.
In 2006, the LPT market posted yet another spectacular gain. Boosted by a 14 per cent return in the final quarter, the return for the full year reached 34 per cent, well ahead of a very strong share market return of 25 per cent.
The past few months may have offered us a preview of what may happen in this sector should conditions become less favourable.
Despite another strong start to the year, the LPT sector finished the March quarter with a negative return of 2.3 per cent, underperforming the broad share market by more than 9 per cent.
The LPT market reacted violently to news that also triggered general equity market volatility, including a sharp sell-off in Chinese stocks on the Shanghai Stock Exchange, news of an increased risk of a slowdown in the US, and concerns about the US ‘sub-prime’ mortgage lending market.
The issues that triggered recent volatility in the listed property market are not in the textbook of things that Australian LPT investors would normally need to think much about. But they are now.
The changing nature of the market means many Australian LPTs have offshore exposures.
There are some benefits to this trend, but it does mean that developments overseas can now have a direct impact on an Australian LPT portfolio.
From a new high in late February 2007, the Australian LPT Index fell by 8.8 per cent in less than two weeks. This is not the kind of volatility that property investors might traditionally have expected.
Most of the stocks with big negative returns were among last year’s star performers, while many of the laggards from last year got through this period of volatility with positive returns.
Drilling down into the LPT sector reveals several other key developments worth noting, nine of the top 10 performers in 2006 were ‘stapled’ securities. These securities effectively staple together interests in property management, development or portfolio management activities along with real estate exposures, and now make up around 75 per cent of the market capitalisation of the sector.
These securities have been able to boost earnings growth well beyond prevailing rental growth rates with the addition of corporate earnings and leverage, much like ordinary shares.
In addition, earnings growth over recent years has been boosted by asset sales.
The very strong returns achieved by LPTs over recent years have left many stocks in the sector, particularly those structured as stapled securities, looking far from cheap by conventional valuation metrics. However, while big names like Centro and Macquarie Goodman have been trading on a price to net tangible assets ratio of around 250 per cent, many smaller stocks in the market index appear to be trading on a more modest premium to net tangible assets of around 20 per cent to 40 per cent.
So looking across the whole LPT sector, it is clear that some securities are likely to behave more ‘defensively’ than others.
Consistency is the key
While the returns and volatility experienced over recent quarters in LPTs are more share market-like, over the same periods we saw returns from the unlisted property sector accruing in a more ‘property like’ manner. Returns from unlisted property (Mercer’s Australian Unlisted Property Trust Index) ranged from 3.3 per cent to 4.8 per cent per quarter over the past year, and a further 3.7 per cent return was recorded for the March 2007 quarter.
Clearly, the unlisted nature of this market means that there is no real measure for the true volatility of valuations. But it is also clear that strong market fundamentals in Australian real estate markets have continued to support good returns and solid income growth.
Funds investing in direct property assets most commonly seek to build a diversified exposure to office, industrial and retail property, and gain a good geographical spread. Conservative funds will have little or no gearing and earn returns solely from the rental income and valuation changes of the underlying properties.
Retail opportunities scarce
Direct retail property has continued to perform very well, helped by positive trends in retail sales.
Retail spending data for January and February certainly surprised on the upside, with February spending at its highest level in nine months. After moderating in 2006, consumers appear to have shrugged off three rate rises and higher petrol prices, and the outlook for retail spending remains positive given the strength of the job market, wages growth and falling inflation.
This retail turnover is supportive for income in retail property, but the growth from the sector has pulled back after strong gains in 2003 and 2004 and there appears to be less potential for strong capital growth in this area in the short term. This is already evidenced by compressed yields in the retail property sector, although given the amount of new supply expected in 2007, we may not see yields fall much further.
Opportunities still remain, but they are harder to find and success may entail looking beyond the heavily contested major metropolitan markets.
Office space limited
The office sector is currently experiencing very strong demand. This demand, combined with limited new supply has seen vacancy rates plummet.
The market is particularly tight in Perth and Brisbane, where the resources boom has added to demand, and brought vacancy rates down to below 2 per cent.
Strong demand is having the inevitable effect on rental rates, with strong double digit growth set to continue. However, investors still face a challenge, as demand for property assets remain high, forcing yields lower in the hotly contested markets.
Strong Australian dollar lifts industrial sector
The industrial sector is generally regarded to be in an upswing phase, although it may peak prior to the office sector. The industrial sector is being strongly supported by the volume of imports into Australia and, to some extent, by the strength of the Australian dollar.
However, as DBRREEF notes in its latest quarterly report, developers are planning to build more than three million square metres of new industrial stock during 2007.
This record amount of new supply may result in some near term weakness in rental growth rates, although risks are partially mitigated by pre-commitments totalling around 57 per cent of the new stock under construction.
Are hybrids the right mix?
LPTs can no longer be regarded as a proxy for direct property. It is still a valid asset class, but should not simply be considered as a direct property portfolio with liquidity. Because the nature of the asset class has changed, its role in a diversified portfolio must also have changed. Much portfolio modelling still in use assumes LPT returns and volatility outcomes to be somewhere between bonds and shares, and for correlations of returns to be relatively low.
The new era of Australian LPTs introduces more ‘equity-like’ risk and return potential, and also faces the likelihood that returns may be more highly correlated with mainstream equity market returns.
Direct property portfolios continue to offer ‘property-like’ exposures, and, along with these, inherent limitations on liquidity and timely valuations.
Well-designed ‘hybrid’ property funds provide investors with a managed pool of assets typically comprising LPTs, direct property investments, and a small amount of cash and related securities. These funds do provide strong diversification benefits relative to shares and fixed interest, exposure to property markets, plus liquidity and daily unit pricing.
Little wonder that the sector is now attracting strong support from advisers and investors.
The research group Managed Investments Assessments recently reported that the hybrid property sector grew by 400 per cent over the past two years.
Funds now on offer include those managed by established groups such as AMP, AXA, Challenger and Perpetual, and a number of new funds have recently been launched with different degrees of risk and exposure.
As demand for hybrid property increases and money from superannuation investment pours into this sector, it is becoming more intensely researched and competition is mounting. As a result, there has been a swing away from smaller property vehicles, such as syndicates of $50-$250 million.
The consolidation of smaller funds into larger funds has lifted the calibre of many of the investments, meaning funds are more diversified across sectors in the number of properties they hold.
All segments of the property market have experienced strong demand resulting in increased valuations, and reduced yields. Two key strategies for such times are research and diversification. Intensive specialist research into each individual asset needs to sit alongside overall market analysis to help identify the best opportunities.
Diversification across both listed and unlisted assets, and a strong spread of assets across market sectors and geographical markets, is a sound approach to accessing the benefits of property exposures in a diversified portfolio.
Mark Dutton is the chief invest ment officer of AXA Asia Pacific.
Mark Dutton
Mark Dutton
In recent years, a frequently canvassed topic in financial services circles has been the changing nature of the listed property trust (LPT) sector.
It makes good sense to include property related securities in a well-diversified portfolio strategy, but increasingly, LPTs have been behaving more like high-flying shares than a conservative asset class.
LPTs – a paradigm shift
Returns generated from the Australian LPT sector have outpaced the broad share market index over most periods extending back for 10 years or more.
In 2006, the LPT market posted yet another spectacular gain. Boosted by a 14 per cent return in the final quarter, the return for the full year reached 34 per cent, well ahead of a very strong share market return of 25 per cent.
The past few months may have offered us a preview of what may happen in this sector should conditions become less favourable.
Despite another strong start to the year, the LPT sector finished the March quarter with a negative return of 2.3 per cent, underperforming the broad share market by more than 9 per cent.
The LPT market reacted violently to news that also triggered general equity market volatility, including a sharp sell-off in Chinese stocks on the Shanghai Stock Exchange, news of an increased risk of a slowdown in the US, and concerns about the US ‘sub-prime’ mortgage lending market.
The issues that triggered recent volatility in the listed property market are not in the textbook of things that Australian LPT investors would normally need to think much about. But they are now.
The changing nature of the market means many Australian LPTs have offshore exposures.
There are some benefits to this trend, but it does mean that developments overseas can now have a direct impact on an Australian LPT portfolio.
From a new high in late February 2007, the Australian LPT Index fell by 8.8 per cent in less than two weeks. This is not the kind of volatility that property investors might traditionally have expected.
Most of the stocks with big negative returns were among last year’s star performers, while many of the laggards from last year got through this period of volatility with positive returns.
Drilling down into the LPT sector reveals several other key developments worth noting, nine of the top 10 performers in 2006 were ‘stapled’ securities. These securities effectively staple together interests in property management, development or portfolio management activities along with real estate exposures, and now make up around 75 per cent of the market capitalisation of the sector.
These securities have been able to boost earnings growth well beyond prevailing rental growth rates with the addition of corporate earnings and leverage, much like ordinary shares.
In addition, earnings growth over recent years has been boosted by asset sales.
The very strong returns achieved by LPTs over recent years have left many stocks in the sector, particularly those structured as stapled securities, looking far from cheap by conventional valuation metrics. However, while big names like Centro and Macquarie Goodman have been trading on a price to net tangible assets ratio of around 250 per cent, many smaller stocks in the market index appear to be trading on a more modest premium to net tangible assets of around 20 per cent to 40 per cent.
So looking across the whole LPT sector, it is clear that some securities are likely to behave more ‘defensively’ than others.
Consistency is the key
While the returns and volatility experienced over recent quarters in LPTs are more share market-like, over the same periods we saw returns from the unlisted property sector accruing in a more ‘property like’ manner. Returns from unlisted property (Mercer’s Australian Unlisted Property Trust Index) ranged from 3.3 per cent to 4.8 per cent per quarter over the past year, and a further 3.7 per cent return was recorded for the March 2007 quarter.
Clearly, the unlisted nature of this market means that there is no real measure for the true volatility of valuations. But it is also clear that strong market fundamentals in Australian real estate markets have continued to support good returns and solid income growth.
Funds investing in direct property assets most commonly seek to build a diversified exposure to office, industrial and retail property, and gain a good geographical spread. Conservative funds will have little or no gearing and earn returns solely from the rental income and valuation changes of the underlying properties.
Retail opportunities scarce
Direct retail property has continued to perform very well, helped by positive trends in retail sales.
Retail spending data for January and February certainly surprised on the upside, with February spending at its highest level in nine months. After moderating in 2006, consumers appear to have shrugged off three rate rises and higher petrol prices, and the outlook for retail spending remains positive given the strength of the job market, wages growth and falling inflation.
This retail turnover is supportive for income in retail property, but the growth from the sector has pulled back after strong gains in 2003 and 2004 and there appears to be less potential for strong capital growth in this area in the short term. This is already evidenced by compressed yields in the retail property sector, although given the amount of new supply expected in 2007, we may not see yields fall much further.
Opportunities still remain, but they are harder to find and success may entail looking beyond the heavily contested major metropolitan markets.
Office space limited
The office sector is currently experiencing very strong demand. This demand, combined with limited new supply has seen vacancy rates plummet.
The market is particularly tight in Perth and Brisbane, where the resources boom has added to demand, and brought vacancy rates down to below 2 per cent.
Strong demand is having the inevitable effect on rental rates, with strong double digit growth set to continue. However, investors still face a challenge, as demand for property assets remain high, forcing yields lower in the hotly contested markets.
Strong Australian dollar lifts industrial sector
The industrial sector is generally regarded to be in an upswing phase, although it may peak prior to the office sector. The industrial sector is being strongly supported by the volume of imports into Australia and, to some extent, by the strength of the Australian dollar.
However, as DBRREEF notes in its latest quarterly report, developers are planning to build more than three million square metres of new industrial stock during 2007.
This record amount of new supply may result in some near term weakness in rental growth rates, although risks are partially mitigated by pre-commitments totalling around 57 per cent of the new stock under construction.
Are hybrids the right mix?
LPTs can no longer be regarded as a proxy for direct property. It is still a valid asset class, but should not simply be considered as a direct property portfolio with liquidity. Because the nature of the asset class has changed, its role in a diversified portfolio must also have changed. Much portfolio modelling still in use assumes LPT returns and volatility outcomes to be somewhere between bonds and shares, and for correlations of returns to be relatively low.
The new era of Australian LPTs introduces more ‘equity-like’ risk and return potential, and also faces the likelihood that returns may be more highly correlated with mainstream equity market returns.
Direct property portfolios continue to offer ‘property-like’ exposures, and, along with these, inherent limitations on liquidity and timely valuations.
Well-designed ‘hybrid’ property funds provide investors with a managed pool of assets typically comprising LPTs, direct property investments, and a small amount of cash and related securities. These funds do provide strong diversification benefits relative to shares and fixed interest, exposure to property markets, plus liquidity and daily unit pricing.
Little wonder that the sector is now attracting strong support from advisers and investors.
The research group Managed Investments Assessments recently reported that the hybrid property sector grew by 400 per cent over the past two years.
Funds now on offer include those managed by established groups such as AMP, AXA, Challenger and Perpetual, and a number of new funds have recently been launched with different degrees of risk and exposure.
As demand for hybrid property increases and money from superannuation investment pours into this sector, it is becoming more intensely researched and competition is mounting. As a result, there has been a swing away from smaller property vehicles, such as syndicates of $50-$250 million.
The consolidation of smaller funds into larger funds has lifted the calibre of many of the investments, meaning funds are more diversified across sectors in the number of properties they hold.
All segments of the property market have experienced strong demand resulting in increased valuations, and reduced yields. Two key strategies for such times are research and diversification. Intensive specialist research into each individual asset needs to sit alongside overall market analysis to help identify the best opportunities.
Diversification across both listed and unlisted assets, and a strong spread of assets across market sectors and geographical markets, is a sound approach to accessing the benefits of property exposures in a diversified portfolio.
Mark Dutton is the chief invest ment officer of AXA Asia Pacific.
WA truffles to hit overseas markets
WA truffles to hit overseas markets
Truffles from south-west Western Australia will be sent overseas after the region's first established truffiere announced it is about to harvest a record crop.
The Hazel Hill truffiere was set up on a property near Manjimup several years ago to see if the delicacy could be grown in the south-west and develop a new industry for the region.
Truffles can fetch prices of up to $3,000 per kilogram.
Hazel Hill is expecting to dig up more than 400 kilograms of French black truffles this year and has lined up buyers from France, the United States, Japan and China.
Hazel Hill director Dr Nick Malajczuk says he is relieved the gamble has worked.
"Suddenly the truffles from the south-west of Western Australia are really hitting the market and we're probably a month earlier than the eastern states, so we're really in the restaurants a month earlier," he said.
Truffles from south-west Western Australia will be sent overseas after the region's first established truffiere announced it is about to harvest a record crop.
The Hazel Hill truffiere was set up on a property near Manjimup several years ago to see if the delicacy could be grown in the south-west and develop a new industry for the region.
Truffles can fetch prices of up to $3,000 per kilogram.
Hazel Hill is expecting to dig up more than 400 kilograms of French black truffles this year and has lined up buyers from France, the United States, Japan and China.
Hazel Hill director Dr Nick Malajczuk says he is relieved the gamble has worked.
"Suddenly the truffles from the south-west of Western Australia are really hitting the market and we're probably a month earlier than the eastern states, so we're really in the restaurants a month earlier," he said.
Europeans Getting Steadily Wealthier Compared To Americans
Europeans Getting Steadily Wealthier Compared To Americans
Posted by Bill Bonner on May 28th, 2007
Asia may be growing like a weed, but at least America still has a lead against its closest competitors in Europe, right? The old world is a rigid, socialised, slow, expensive, dull, snobby museum, right?
But what’s this? For the first time in six years, says the OECD, Europe will grow faster than the United States. Last year, US GDP grew at a 3.3% rate. OECD economists say it will do only about 2.1% this year - thanks largely to the slow-down in housing. Europe is expected to grow by 2.7% this year.
Usually, American GDP grows faster than Europe simply because the US population is increasing more rapidly. Many countries in Europe have little - or even negative - population growth. So, a slower rate of GDP growth in Europe still could represent a higher rate of individual wealth gains.
Another thing to remember is that European growth seems to be healthier growth. Industries expand, wages go up, people make money. Automobiles from Germany, perfume from France, chocolates from Belgium, handbags from Italy - Europe has well-established brands that give it a positive balance of trade with the rest of the world.
American growth, by contrast, has largely been a consequence of consumer spending…and the money consumers have been spending has often been borrowed - from overseas. Each year, Americans go further and further into debt in order to keep their economy growing.
The real, net effect of these trends is hard to gauge. Our guess is that Europeans are steadily getting richer compared to Americans.
Meanwhile, the rich from all over the world are boarding trains, planes and automobiles to Europe. Some come as tourists. But many come to live. They buy houses in London…or villas on the Cote d’Azur. The International Herald Tribune tells us that prices where F. Scott Fitzgerald used to hang out have been going up by about 15% per year…from Menton to Saint Tropez.
One of the most desirable locations is St. Jean-Cap-Ferrat, where you should “expect to pay USD$30 million or more for a decent property,” according to a real estate agent.
If that’s too much, you can go up into the hills, where you can get a villa for as little as USD$1.3 million.
On the same page of the IHT we are given an opportunity to buy a “tropical lifestyle” on the island of Mauritius! “Elegant, plantation-style villas” are for sale for USD$800,000 to USD$2 million.
Yes, dear reader, all over the world, the rich are splashing out. Warhol’s can of Campbell’s soup sold for USD$5.5 million. Houses in the middle of nowhere sell for millions. What next?
Bill Bonner
The Daily Reckoning Australia
Posted by Bill Bonner on May 28th, 2007
Asia may be growing like a weed, but at least America still has a lead against its closest competitors in Europe, right? The old world is a rigid, socialised, slow, expensive, dull, snobby museum, right?
But what’s this? For the first time in six years, says the OECD, Europe will grow faster than the United States. Last year, US GDP grew at a 3.3% rate. OECD economists say it will do only about 2.1% this year - thanks largely to the slow-down in housing. Europe is expected to grow by 2.7% this year.
Usually, American GDP grows faster than Europe simply because the US population is increasing more rapidly. Many countries in Europe have little - or even negative - population growth. So, a slower rate of GDP growth in Europe still could represent a higher rate of individual wealth gains.
Another thing to remember is that European growth seems to be healthier growth. Industries expand, wages go up, people make money. Automobiles from Germany, perfume from France, chocolates from Belgium, handbags from Italy - Europe has well-established brands that give it a positive balance of trade with the rest of the world.
American growth, by contrast, has largely been a consequence of consumer spending…and the money consumers have been spending has often been borrowed - from overseas. Each year, Americans go further and further into debt in order to keep their economy growing.
The real, net effect of these trends is hard to gauge. Our guess is that Europeans are steadily getting richer compared to Americans.
Meanwhile, the rich from all over the world are boarding trains, planes and automobiles to Europe. Some come as tourists. But many come to live. They buy houses in London…or villas on the Cote d’Azur. The International Herald Tribune tells us that prices where F. Scott Fitzgerald used to hang out have been going up by about 15% per year…from Menton to Saint Tropez.
One of the most desirable locations is St. Jean-Cap-Ferrat, where you should “expect to pay USD$30 million or more for a decent property,” according to a real estate agent.
If that’s too much, you can go up into the hills, where you can get a villa for as little as USD$1.3 million.
On the same page of the IHT we are given an opportunity to buy a “tropical lifestyle” on the island of Mauritius! “Elegant, plantation-style villas” are for sale for USD$800,000 to USD$2 million.
Yes, dear reader, all over the world, the rich are splashing out. Warhol’s can of Campbell’s soup sold for USD$5.5 million. Houses in the middle of nowhere sell for millions. What next?
Bill Bonner
The Daily Reckoning Australia
MRCB REIT in five years
KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) hopes to establish a real estate investment trust (REIT) in the next five years or so when its property sector has “matured”, says group managing director and chief executive officer Shahril Ridza Ridzuan.
“It's part of our long-term goal and we plan to inject our KL Sentral properties into the REIT once they start earning revenue and giving yields,” he said after the company AGM and EGM yesterday.
The KL Sentral project, to be developed in phases until 2014, comprises corporate office towers and business suites, hotels, condominiums, a mall and an international entertainment and media centre.
MRCB's other operations are building services; engineering, construction and information communications technology intelligent systems; and infrastructure, concessions and environmental conservation.
Shahril said the company was on track to achieving its projected revenue of RM800mil and pre-tax profit of RM60mil for its financial year ending Dec 31, 2007.
“It (financial performance) will be driven mainly by our property and construction divisions,” he said.
On MRCB's overseas ventures, he said the company was looking to step up its operations in the Middle East.
“We are in discussions with various clients in Saudi Arabia,” he said.
Last year, MRCB was awarded two contracts totalling RM400mil to develop a six-star hotel and an office tower in Dubai, which are expected to be completed in late 2008 and late 2007, respectively.
Meanwhile, asked about MRCB negotiating a 70% stake in the concessionaire for the Penang Outer Ring Road project, Shahril said: “At this stage, we are not willing to comment.”
He said however, that MRCB viewed Penang as a “strategic area” for investment and was “always looking” for opportunities there.
“It's part of our long-term goal and we plan to inject our KL Sentral properties into the REIT once they start earning revenue and giving yields,” he said after the company AGM and EGM yesterday.
The KL Sentral project, to be developed in phases until 2014, comprises corporate office towers and business suites, hotels, condominiums, a mall and an international entertainment and media centre.
MRCB's other operations are building services; engineering, construction and information communications technology intelligent systems; and infrastructure, concessions and environmental conservation.
Shahril said the company was on track to achieving its projected revenue of RM800mil and pre-tax profit of RM60mil for its financial year ending Dec 31, 2007.
“It (financial performance) will be driven mainly by our property and construction divisions,” he said.
On MRCB's overseas ventures, he said the company was looking to step up its operations in the Middle East.
“We are in discussions with various clients in Saudi Arabia,” he said.
Last year, MRCB was awarded two contracts totalling RM400mil to develop a six-star hotel and an office tower in Dubai, which are expected to be completed in late 2008 and late 2007, respectively.
Meanwhile, asked about MRCB negotiating a 70% stake in the concessionaire for the Penang Outer Ring Road project, Shahril said: “At this stage, we are not willing to comment.”
He said however, that MRCB viewed Penang as a “strategic area” for investment and was “always looking” for opportunities there.
IGB plans hotel in Australia
IGB plans hotel in Australia
By SUSAN TAM
KUALA LUMPUR: IGB Corp Bhd plans to build a hotel in Australia within 18 to 24 months should it succeed in securing the project.
Group managing director Robert Tan said the hotel, located in the heart of Sydney, was expected to carry the St Giles international hotel brand name, similar to its hotel in London.
“We have tendered for this project. We have not got the property yet and we are looking for other investments as well,” he said after the company AGM yesterday.
Tan said IGB intended to manage the hotel, as it did with its hotels in Malaysia. It would be a three- to four-star hotel, he said, adding that the company picked Australia for the country’s good occupancy rates and stable political environment.
The property player, he said, was also eyeing emerging markets in Eastern Europe as part of its investments abroad.
Tan said IGB’s MiCasa All-Suite Hotel in Yangon, Myanmar was charting at least 80% in occupancy, as that country was experiencing strong arrivals of Chinese and Indian tourists.
“The business there is quite promising. Hopefully there will be more efforts to promote tourism there,” he added.
On the local front, Tan said Visit Malaysia Year 2007 had boosted occupancy rates, leading to a growth of 10% to 15% in the group’s bottomline.
“The hotel occupancy rates have been going up steadily since last year, mostly from local traffic,” he said.
Cititel Hotel has an occupancy rate of about 85% to 90% and the Renaissance Kuala Lumpur, 75% to 80%.
On the sale of Renaissance, Tan said there were many interested parties, mostly foreigners, but the offers received were below IGB’s target price.
“There are a few parties doing due diligence now, but there is nothing to report at this juncture,” he said but declined to disclose the target price.
On the traffic situation in Mid-Valley City, Tan said IGB had to date spent RM500mil to improve the area’s linkages and expected the link to the Abdullah Hukum Putra LRT station to be ready in a few months.
“We are ready to work on this link and are awaiting approvals from the authorities. We hope to complete it in time for the opening of The Gardens in September,” he added.
Tan said the link would consist of a pedestrian walkway and a travellator. IGB is also increasing parking space in the area to 14,000 bays by year-end from 9,000 currently.
In a filing with Bursa Malaysia, IGB announced a net profit of RM33.4mil for the first quarter ended March 31, against RM27.9mil in the previous corresponding period.
Revenue, however, fell marginally to RM141.7mil from RM147.1mil on lower contribution from the property division but this was mitigated by higher profits from its hotel business as well as an exceptional gain from the disposal of investments.
By SUSAN TAM
KUALA LUMPUR: IGB Corp Bhd plans to build a hotel in Australia within 18 to 24 months should it succeed in securing the project.
Group managing director Robert Tan said the hotel, located in the heart of Sydney, was expected to carry the St Giles international hotel brand name, similar to its hotel in London.
“We have tendered for this project. We have not got the property yet and we are looking for other investments as well,” he said after the company AGM yesterday.
Tan said IGB intended to manage the hotel, as it did with its hotels in Malaysia. It would be a three- to four-star hotel, he said, adding that the company picked Australia for the country’s good occupancy rates and stable political environment.
The property player, he said, was also eyeing emerging markets in Eastern Europe as part of its investments abroad.
Tan said IGB’s MiCasa All-Suite Hotel in Yangon, Myanmar was charting at least 80% in occupancy, as that country was experiencing strong arrivals of Chinese and Indian tourists.
“The business there is quite promising. Hopefully there will be more efforts to promote tourism there,” he added.
On the local front, Tan said Visit Malaysia Year 2007 had boosted occupancy rates, leading to a growth of 10% to 15% in the group’s bottomline.
“The hotel occupancy rates have been going up steadily since last year, mostly from local traffic,” he said.
Cititel Hotel has an occupancy rate of about 85% to 90% and the Renaissance Kuala Lumpur, 75% to 80%.
On the sale of Renaissance, Tan said there were many interested parties, mostly foreigners, but the offers received were below IGB’s target price.
“There are a few parties doing due diligence now, but there is nothing to report at this juncture,” he said but declined to disclose the target price.
On the traffic situation in Mid-Valley City, Tan said IGB had to date spent RM500mil to improve the area’s linkages and expected the link to the Abdullah Hukum Putra LRT station to be ready in a few months.
“We are ready to work on this link and are awaiting approvals from the authorities. We hope to complete it in time for the opening of The Gardens in September,” he added.
Tan said the link would consist of a pedestrian walkway and a travellator. IGB is also increasing parking space in the area to 14,000 bays by year-end from 9,000 currently.
In a filing with Bursa Malaysia, IGB announced a net profit of RM33.4mil for the first quarter ended March 31, against RM27.9mil in the previous corresponding period.
Revenue, however, fell marginally to RM141.7mil from RM147.1mil on lower contribution from the property division but this was mitigated by higher profits from its hotel business as well as an exceptional gain from the disposal of investments.
E&O Property to acquire more land
E&O Property to acquire more land
By TEE LIN SAY
THE shift is visible. E&O Property Bhd (E&OP) is steadily emerging as one of the most attractive property plays in the stock market.
Its main appeal - the company is the largest property developer in Penang with about 1,350 acres in George Town and 350 acres in Kuala Lumpur city centre.
Some analysts say that in Kuala Lumpur and Penang, E&OP has the largest prime land bank.
Presently, it already has a growth development value (GDV) of RM15bil.
Out of this, RM10bil comes from Penang, and the remainder from Kuala Lumpur.
Show unit of Idamansara in Damansara Heights.
Due to its strength in the middle to high-end development, analysts are anticipating net profit to grow by a compounded rate in excess of 30% over the next three years.
And because of its dominant presence in high end markets, it also has the highest leverage in the sector to property price increases, where every 1% increase will boost its revised net asset value by 14.2%, versus the sector average of 8.2%.
When the exemption of real property gain tax was first announced in March, it wasn't merely a knee-jerk reaction when Penang property stocks started rallying.
Penang is widely seen as one of the largest beneficiaries of the Malaysian property play given that it has the best demand-supply balance among developed states.
Property in Penang has generally done superbly thanks to the pent-up demand and the limited amount of land bank on the island. E&OP has been shrewd and has been aggressively embarking on land bank acquisitions in premium areas to capitalise on the property boom.
During an analyst briefing on Tuesday, not only did E&OP announce results that were slightly above consensus, it also announced two acquisitions that were going to be earnings accretive almost immediately.
Results wise, E&OP lived up to its premium name when for its financial year (FY) ended March 2007 – revenue was up 50.93% to RM492.2mil while net profit was up 103.32% to RM131.76mil.
Stripping out its ex-exceptional gain, E&OP’s financial year (FY) 2007 net profit rose 47% to RM95mil, underpinned by a stronger second half, which represented 57% of the year.
New sales in FY07 came to RM460mil and unbilled sales amounted to RM300mil as at March 31. E&O Property's operating margin expanded by 27.7% due to tail-end billings related to its Dua Residency and Idamansara developments.
Meanwhile, net profit and revenue for the fourth quarter fell 31% and 4% on a quarterly basis as a result of lower property billings. This was due to a lull in sales as bumiputra units (Dua Residency and Idamansara) remained unsold.
Analysts are expecting a pickup in the first half of 2008, assuming that legal authorisation for sales to nonbumiputras coincides with completion.
No dividend was proposed for the fourth quarter. A gross dividend of 23 sen gross had been distributed during the year. At present, E&OP has no dividend policy but one is likely to be established.
“E&OP's recent moves, which include its land acquisitions, stake increases at Seri Tanjung Pinang and overseas plans should further strengthen its branding and appeal,” says one analyst from a foreign brokerage.
Acquisitions
More recently, there was an acquisition to further entrench its position as a blue chip developer. Via its wholly- owned subsidiary, Kamunting Management Services Sdn Bhd, E&OP had entered into a share sale agreement with North Zest Sdn Bhd for a 24% stake in Bridgecrest Resources Sdn Bhd for RM25mil.
E&O Property presently owns 70% of Bridgecrest, which in turn is the intermediate holding company of E&O Property (Penang) Sdn Bhd (EOPP) and Tanjung Pinang Sdn Bhd (TPD).
EOPP is the master developer of about 240 acres of Seri Tanjung Pinang (Phase 1) while Tanjung Pinang is the concession company approved to reclaim and develop 740 acres off Tanjung Tokong (Seri Tanjung Pinang, Phase 2). On a per sq ft basis, E&OP puts the acquisition price at RM7.12 per sq ft.
“This is cheap on a gross basis, but we need to bear in mind that Phase 2 is a concession. There is still no land and has yet to be reclaimed. They are basically buying rights to develop that area. So there will also be cost involved to reclaim the land,” says the analyst from the foreign brokerage.
To sum it up, the proposed acquisitions will increase E&OP’s interest in EOPP from 70% to 94%, while its interest in Tanjung Pinang Sdn Bhd would increase from 65.88% to 77.98%. This acquisition is pending FIC approvals and should be completed within two months.
Deutsche Bank analyst Chia Aun- Ling, in her report dated May 29, views this acquisition positively.
“In terms of earnings, it should enhance E&OP’s FY08-09 net profit by an additional RM12mil- RM26mil net profit (due to lower minority interest) respectively.
This means that the RM25mil acquisition cost should be recovered in one-two years,” she says.
Strategy Moving Forward
During the analyst briefing, management also mentioned that it plans to enhance its position to ride the property upcycle. Other than its ongoing property launches in Kuala Lumpur and Penang projects, over the next six months, E&OP plans to go on the aggressive to build up its premium land bank, especially in Kuala Lumpur.
“It may look to acquire outright or via joint ventures. Management needs to secure at least two pieces of land in KL to sustain its earnings beyond the next five years,” says the analyst.
The analyst expects at least two such acquisitions in FY07. This, if successful, should underpin its medium-term earnings growth momentum. For the medium to longer term, E&OP is reviewing alternative locations in the prime areas of Johor and the Asian region.
Chia has raised her 12-month target price to RM5 following the proposed acquisition of an additional stake in its Penang project. We expect that the acquisition would be earnings and RNAV accretive.
Accordingly, Deutsche’s RNAV has been upgraded to RM5.13 per share, valuing the existing and imminent projects at a discounted cash flow (at a weighted average cost of capital of 7.7%) and the undeveloped land bank at market prices.
“We maintain Buy on E&OP, one of our top picks for the Malaysian property sector given its high-end luxury niche exposure. We continue to see E&OP enjoying strong pricing power given little competition in the high-end luxury space as well as growing demand from both domestic and foreigner investors,” says Deutsche.
Meanwhile, parent company Eastern & Oriental Bhd (E&O) has proposed to dispose of 90 million E&OP shares, representing 13.8% of the issued and paid up share capital of E&OP.
If completely implemented, the proposed E&OP disposal will result in E&O’s effective equity interest in E&OP being reduced from 64.04% to 50.28%.
E&O plans to utilise the proceeds to finance the expansion of its property investment division and hospitality division.
It has also proposed to dispose of up to 68.6 million Putrajaya Perdana Bhd Shares, representing 50.8% of the issued and paid-up share capital of the latter.
By TEE LIN SAY
THE shift is visible. E&O Property Bhd (E&OP) is steadily emerging as one of the most attractive property plays in the stock market.
Its main appeal - the company is the largest property developer in Penang with about 1,350 acres in George Town and 350 acres in Kuala Lumpur city centre.
Some analysts say that in Kuala Lumpur and Penang, E&OP has the largest prime land bank.
Presently, it already has a growth development value (GDV) of RM15bil.
Out of this, RM10bil comes from Penang, and the remainder from Kuala Lumpur.
Show unit of Idamansara in Damansara Heights.
Due to its strength in the middle to high-end development, analysts are anticipating net profit to grow by a compounded rate in excess of 30% over the next three years.
And because of its dominant presence in high end markets, it also has the highest leverage in the sector to property price increases, where every 1% increase will boost its revised net asset value by 14.2%, versus the sector average of 8.2%.
When the exemption of real property gain tax was first announced in March, it wasn't merely a knee-jerk reaction when Penang property stocks started rallying.
Penang is widely seen as one of the largest beneficiaries of the Malaysian property play given that it has the best demand-supply balance among developed states.
Property in Penang has generally done superbly thanks to the pent-up demand and the limited amount of land bank on the island. E&OP has been shrewd and has been aggressively embarking on land bank acquisitions in premium areas to capitalise on the property boom.
During an analyst briefing on Tuesday, not only did E&OP announce results that were slightly above consensus, it also announced two acquisitions that were going to be earnings accretive almost immediately.
Results wise, E&OP lived up to its premium name when for its financial year (FY) ended March 2007 – revenue was up 50.93% to RM492.2mil while net profit was up 103.32% to RM131.76mil.
Stripping out its ex-exceptional gain, E&OP’s financial year (FY) 2007 net profit rose 47% to RM95mil, underpinned by a stronger second half, which represented 57% of the year.
New sales in FY07 came to RM460mil and unbilled sales amounted to RM300mil as at March 31. E&O Property's operating margin expanded by 27.7% due to tail-end billings related to its Dua Residency and Idamansara developments.
Meanwhile, net profit and revenue for the fourth quarter fell 31% and 4% on a quarterly basis as a result of lower property billings. This was due to a lull in sales as bumiputra units (Dua Residency and Idamansara) remained unsold.
Analysts are expecting a pickup in the first half of 2008, assuming that legal authorisation for sales to nonbumiputras coincides with completion.
No dividend was proposed for the fourth quarter. A gross dividend of 23 sen gross had been distributed during the year. At present, E&OP has no dividend policy but one is likely to be established.
“E&OP's recent moves, which include its land acquisitions, stake increases at Seri Tanjung Pinang and overseas plans should further strengthen its branding and appeal,” says one analyst from a foreign brokerage.
Acquisitions
More recently, there was an acquisition to further entrench its position as a blue chip developer. Via its wholly- owned subsidiary, Kamunting Management Services Sdn Bhd, E&OP had entered into a share sale agreement with North Zest Sdn Bhd for a 24% stake in Bridgecrest Resources Sdn Bhd for RM25mil.
E&O Property presently owns 70% of Bridgecrest, which in turn is the intermediate holding company of E&O Property (Penang) Sdn Bhd (EOPP) and Tanjung Pinang Sdn Bhd (TPD).
EOPP is the master developer of about 240 acres of Seri Tanjung Pinang (Phase 1) while Tanjung Pinang is the concession company approved to reclaim and develop 740 acres off Tanjung Tokong (Seri Tanjung Pinang, Phase 2). On a per sq ft basis, E&OP puts the acquisition price at RM7.12 per sq ft.
“This is cheap on a gross basis, but we need to bear in mind that Phase 2 is a concession. There is still no land and has yet to be reclaimed. They are basically buying rights to develop that area. So there will also be cost involved to reclaim the land,” says the analyst from the foreign brokerage.
To sum it up, the proposed acquisitions will increase E&OP’s interest in EOPP from 70% to 94%, while its interest in Tanjung Pinang Sdn Bhd would increase from 65.88% to 77.98%. This acquisition is pending FIC approvals and should be completed within two months.
Deutsche Bank analyst Chia Aun- Ling, in her report dated May 29, views this acquisition positively.
“In terms of earnings, it should enhance E&OP’s FY08-09 net profit by an additional RM12mil- RM26mil net profit (due to lower minority interest) respectively.
This means that the RM25mil acquisition cost should be recovered in one-two years,” she says.
Strategy Moving Forward
During the analyst briefing, management also mentioned that it plans to enhance its position to ride the property upcycle. Other than its ongoing property launches in Kuala Lumpur and Penang projects, over the next six months, E&OP plans to go on the aggressive to build up its premium land bank, especially in Kuala Lumpur.
“It may look to acquire outright or via joint ventures. Management needs to secure at least two pieces of land in KL to sustain its earnings beyond the next five years,” says the analyst.
The analyst expects at least two such acquisitions in FY07. This, if successful, should underpin its medium-term earnings growth momentum. For the medium to longer term, E&OP is reviewing alternative locations in the prime areas of Johor and the Asian region.
Chia has raised her 12-month target price to RM5 following the proposed acquisition of an additional stake in its Penang project. We expect that the acquisition would be earnings and RNAV accretive.
Accordingly, Deutsche’s RNAV has been upgraded to RM5.13 per share, valuing the existing and imminent projects at a discounted cash flow (at a weighted average cost of capital of 7.7%) and the undeveloped land bank at market prices.
“We maintain Buy on E&OP, one of our top picks for the Malaysian property sector given its high-end luxury niche exposure. We continue to see E&OP enjoying strong pricing power given little competition in the high-end luxury space as well as growing demand from both domestic and foreigner investors,” says Deutsche.
Meanwhile, parent company Eastern & Oriental Bhd (E&O) has proposed to dispose of 90 million E&OP shares, representing 13.8% of the issued and paid up share capital of E&OP.
If completely implemented, the proposed E&OP disposal will result in E&O’s effective equity interest in E&OP being reduced from 64.04% to 50.28%.
E&O plans to utilise the proceeds to finance the expansion of its property investment division and hospitality division.
It has also proposed to dispose of up to 68.6 million Putrajaya Perdana Bhd Shares, representing 50.8% of the issued and paid-up share capital of the latter.
Innovation a key to success
Innovation a key to success
BRICK & MORTAR
By TEH LIP KIM
Property developers need to deliver more than just bricks and mortar
WITH consumer sentiment dampened by increases in fuel prices and interest rates last year, it is vital that developers do their utmost to build homes that will stand up to the most discerning demands. In order to compete, we need to be innovative and think out of the box.
The property sector as a whole suffered a down cycle in the last two years, with sales reportedly declining about 7.6% to RM28bil on the back of a weak domestic demand. Stock overhang units, which are completed units issued with certificates of fitness that are unsold after nine months, have also increased, although many of these are properties priced below RM150,000.
Still, while these grim figures warrant serious introspection on the part of developers, it is not all bad news. The high-end market, on the other hand, has returning strong numbers and foreign investors are starting to turn their attention to Malaysia. It is encouraging, too, that the government has recently come up with a slew of incentives and policy changes in an effort to stimulate the market.
With high net worth individuals and foreign buyers inclined to be more discriminate in their expectations of a property, developers need to take a critical look at how we can introduce inventive yet practical ideas into the homes that we build.
One such innovation in the local market is the design of courtyard homes. Courtyard houses have a long history and have been in use for almost as long as man has been building homes. Courtyards afford private open spaces that are protected by buildings or walls. Usually located right in the centre of the house, they introduce air and light to our homes and provide safe area for our children to play and tranquil sanctuaries where we can unwind after a frenetic day at work.
A narrow slice of land, perhaps ten feet wide running down the length of a house, is usually not terribly functional in terms of the different things that can be done with it. But take that same amount of space and put it into an enclosed courtyard area that is nearer in shape to a square and the possibilities just multiply.
As a child, I grew up in a home that was both functional and down-to-earth. It had no odd corners, just big open spaces that were very welcoming. It had openings along the top parts of the walls, creating a cross-ventilation that provided lots of breeze and light inside.
Sometimes, the best innovations are those that retain, rather than discard, centuries-old traditions. According to feng shui principles, sharp angles and nooks and crannies can slow down the flow of energy causing the energy to stagnate and the surroundings to become unhealthy. Innovative homes, therefore, would be free of designs that encourage the accumulation of dormant energies. They would, instead, lean towards open spaces that are rectangular in shape and generous in outlook.
Thinking back to my old house, I also remember many happy moments playing outside with the kids in my neighbourhood. It was a time when families bonded with each other and had a sense of connection with others living in the vicinity. Nowadays developers need to think creatively so that we can provide this simple, unadulterated joy to our children.
Developers should think innovatively about effective use of space for the whole development. Instead of just focusing on areas that can be sold, more emphasis should be placed on how the whole development can enrich the lives of its residents. Provision of practical green spaces for example, will encourage children and adults alike to enjoy the outdoors and interact with their neighbours. A separate jogging and bicycle track would make this area more effective and safer.
In many instances, green areas are unfriendly spaces, either tucked away in a small little plot, or without benches or a shaded area to unwind in – quite obviously an afterthought! This is something that can even be achieved in condominium developments. Perhaps thinking about inventive ways of using space is how developers can contribute to bringing back the sense of community we all enjoyed years ago.
At the same time, when we talk about innovation, we must not overlook practicality. The most innovative homes are those that meet the needs of their occupants’ at every turn. As developers, we would do well to ensure that serious thought goes into this aspect of building. For example, in Malaysia, a wet kitchen is an essential part of every home. Many people often spend extra money renovating their brand new homes for the use of a wet kitchen. How much more efficient it would be if this had already been thought of from the start.
While we already have properties in Malaysia that meet world standards of innovation, quality and appeal, these are often restricted to high-end properties in prime city centre locations. Perhaps our next challenge is to see that these high standards trickle down to the rest of the market.
The writer is the managing director of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcome, send in your email to md@sdb.com.my.
BRICK & MORTAR
By TEH LIP KIM
Property developers need to deliver more than just bricks and mortar
WITH consumer sentiment dampened by increases in fuel prices and interest rates last year, it is vital that developers do their utmost to build homes that will stand up to the most discerning demands. In order to compete, we need to be innovative and think out of the box.
The property sector as a whole suffered a down cycle in the last two years, with sales reportedly declining about 7.6% to RM28bil on the back of a weak domestic demand. Stock overhang units, which are completed units issued with certificates of fitness that are unsold after nine months, have also increased, although many of these are properties priced below RM150,000.
Still, while these grim figures warrant serious introspection on the part of developers, it is not all bad news. The high-end market, on the other hand, has returning strong numbers and foreign investors are starting to turn their attention to Malaysia. It is encouraging, too, that the government has recently come up with a slew of incentives and policy changes in an effort to stimulate the market.
With high net worth individuals and foreign buyers inclined to be more discriminate in their expectations of a property, developers need to take a critical look at how we can introduce inventive yet practical ideas into the homes that we build.
One such innovation in the local market is the design of courtyard homes. Courtyard houses have a long history and have been in use for almost as long as man has been building homes. Courtyards afford private open spaces that are protected by buildings or walls. Usually located right in the centre of the house, they introduce air and light to our homes and provide safe area for our children to play and tranquil sanctuaries where we can unwind after a frenetic day at work.
A narrow slice of land, perhaps ten feet wide running down the length of a house, is usually not terribly functional in terms of the different things that can be done with it. But take that same amount of space and put it into an enclosed courtyard area that is nearer in shape to a square and the possibilities just multiply.
As a child, I grew up in a home that was both functional and down-to-earth. It had no odd corners, just big open spaces that were very welcoming. It had openings along the top parts of the walls, creating a cross-ventilation that provided lots of breeze and light inside.
Sometimes, the best innovations are those that retain, rather than discard, centuries-old traditions. According to feng shui principles, sharp angles and nooks and crannies can slow down the flow of energy causing the energy to stagnate and the surroundings to become unhealthy. Innovative homes, therefore, would be free of designs that encourage the accumulation of dormant energies. They would, instead, lean towards open spaces that are rectangular in shape and generous in outlook.
Thinking back to my old house, I also remember many happy moments playing outside with the kids in my neighbourhood. It was a time when families bonded with each other and had a sense of connection with others living in the vicinity. Nowadays developers need to think creatively so that we can provide this simple, unadulterated joy to our children.
Developers should think innovatively about effective use of space for the whole development. Instead of just focusing on areas that can be sold, more emphasis should be placed on how the whole development can enrich the lives of its residents. Provision of practical green spaces for example, will encourage children and adults alike to enjoy the outdoors and interact with their neighbours. A separate jogging and bicycle track would make this area more effective and safer.
In many instances, green areas are unfriendly spaces, either tucked away in a small little plot, or without benches or a shaded area to unwind in – quite obviously an afterthought! This is something that can even be achieved in condominium developments. Perhaps thinking about inventive ways of using space is how developers can contribute to bringing back the sense of community we all enjoyed years ago.
At the same time, when we talk about innovation, we must not overlook practicality. The most innovative homes are those that meet the needs of their occupants’ at every turn. As developers, we would do well to ensure that serious thought goes into this aspect of building. For example, in Malaysia, a wet kitchen is an essential part of every home. Many people often spend extra money renovating their brand new homes for the use of a wet kitchen. How much more efficient it would be if this had already been thought of from the start.
While we already have properties in Malaysia that meet world standards of innovation, quality and appeal, these are often restricted to high-end properties in prime city centre locations. Perhaps our next challenge is to see that these high standards trickle down to the rest of the market.
The writer is the managing director of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcome, send in your email to md@sdb.com.my.
Tourism M'sia wins award for best deals
Tourism M'sia wins award for best deals
By FOO YEE PING
NEW YORK: Tourism Malaysia, spurred by its victory at a major travel award competition, is switching into high gear to woo more travellers from North America.
Its Los Angeles office was awarded recently the "Most Outstanding Achievement in Marketing of Travel Deals for a Destination" by Travelzoo, an Internet travel site which has 11 million subscribers.
"This is the first time we got such an award by Travelzoo. It is a significant reflection of our Malaysian brand because Travelzoo is a high-powered Internet tool on travel," said Mohamed Amin Yahya, vice-president of Tourism Malaysia (Western USA/Latin America).
Tourism Malaysia beat four contenders for the award - Bermuda Department of Tourism, City of Indian Wells, Maison de la France and the Santa Rosa Convention & Visitors Bureau.
The 2007 Travelzoo Awards were held last month in Las Vegas at the Mandalay Bay Resort & Casino.
Also known as the Tzoos, the awards are given out to companies that offer the best travel deals of the year.
Winners were picked by a committee of judges from about 600 travel company entries.
According to Travelzoo, the winners were chosen based on the competitiveness of the deals offered, reliability, consistency, appeal and quality.
"(Where quality is concerned), the travel deals must be so good that we would recommend booking an offer with these companies to our family and friends," it said in a statement.
By FOO YEE PING
NEW YORK: Tourism Malaysia, spurred by its victory at a major travel award competition, is switching into high gear to woo more travellers from North America.
Its Los Angeles office was awarded recently the "Most Outstanding Achievement in Marketing of Travel Deals for a Destination" by Travelzoo, an Internet travel site which has 11 million subscribers.
"This is the first time we got such an award by Travelzoo. It is a significant reflection of our Malaysian brand because Travelzoo is a high-powered Internet tool on travel," said Mohamed Amin Yahya, vice-president of Tourism Malaysia (Western USA/Latin America).
Tourism Malaysia beat four contenders for the award - Bermuda Department of Tourism, City of Indian Wells, Maison de la France and the Santa Rosa Convention & Visitors Bureau.
The 2007 Travelzoo Awards were held last month in Las Vegas at the Mandalay Bay Resort & Casino.
Also known as the Tzoos, the awards are given out to companies that offer the best travel deals of the year.
Winners were picked by a committee of judges from about 600 travel company entries.
According to Travelzoo, the winners were chosen based on the competitiveness of the deals offered, reliability, consistency, appeal and quality.
"(Where quality is concerned), the travel deals must be so good that we would recommend booking an offer with these companies to our family and friends," it said in a statement.
Be cautious and selective, companies advised
Be cautious and selective, companies advised
WHILE pursuing the many opportunities in the offshore property market has many advantages, developers have been cautioned to do the necessary homework and check the project's viability carefully before taking the plunge. They must be careful to balance the risks and rewards.
Sunway City Bhd (SunCity) senior managing director Datuk C.K. Wong advised Malaysian companies to remain cautious and selective because of the volatile nature of overseas property markets.
“Avoid mega residential and commercial developments initially. Residential developments should be the starting point, and only later the opportunities to develop mixed and commercial projects,” he added.
Wong said a strong equity partnership with an established and reputable local partner was advisable.
“SunCity requires a higher rate of return from its overseas property developments to manage and mitigate the additional risks.”
Mah Sing Group Bhd president and group chief executive Datuk Leong Hoy Kum concurred on the need to be cautious.
Having been approached by some foreign parties to pursue developments overseas, Mah Sing is currently conducting in-depth studies on several opportunities and evaluating the risks and returns.
“We are not in a hurry as there are still a lot of opportunities in Malaysia. Being a prudent developer, we are careful in ensuring that we face minimum risk by putting out minimum capital outlay.
“We also need to do a thorough research on the demand before embarking on any of the projects,” Leong said.
Should the company decide to venture overseas, it is likely to do it via a joint venture with an established local party so that it needs minimum capital payout.
“We need to take into account a whole range of factors and among the most important criteria we are looking for is that our joint-venture partner should be a reputable local party with extensive knowledge of the local market,” he said.
“If we can have that in place, we can concentrate on what we do best and introduce our lifestyle concepts and our branding in their market".
WHILE pursuing the many opportunities in the offshore property market has many advantages, developers have been cautioned to do the necessary homework and check the project's viability carefully before taking the plunge. They must be careful to balance the risks and rewards.
Sunway City Bhd (SunCity) senior managing director Datuk C.K. Wong advised Malaysian companies to remain cautious and selective because of the volatile nature of overseas property markets.
“Avoid mega residential and commercial developments initially. Residential developments should be the starting point, and only later the opportunities to develop mixed and commercial projects,” he added.
Wong said a strong equity partnership with an established and reputable local partner was advisable.
“SunCity requires a higher rate of return from its overseas property developments to manage and mitigate the additional risks.”
Mah Sing Group Bhd president and group chief executive Datuk Leong Hoy Kum concurred on the need to be cautious.
Having been approached by some foreign parties to pursue developments overseas, Mah Sing is currently conducting in-depth studies on several opportunities and evaluating the risks and returns.
“We are not in a hurry as there are still a lot of opportunities in Malaysia. Being a prudent developer, we are careful in ensuring that we face minimum risk by putting out minimum capital outlay.
“We also need to do a thorough research on the demand before embarking on any of the projects,” Leong said.
Should the company decide to venture overseas, it is likely to do it via a joint venture with an established local party so that it needs minimum capital payout.
“We need to take into account a whole range of factors and among the most important criteria we are looking for is that our joint-venture partner should be a reputable local party with extensive knowledge of the local market,” he said.
“If we can have that in place, we can concentrate on what we do best and introduce our lifestyle concepts and our branding in their market".
Buying properties abroad helps hedge investments
Buying properties abroad helps hedge investments
MOST Malaysian property buyers are a discerning and sophisticated lot nowadays, with the more affluent ones casting their sights on properties overseas.
S.K. Brothers Realty chief executive officer Charlie Chan sees Australia, Singapore and Britain as popular countries for Malaysians investing in properties overseas.
Elvin Fernandez
“With the growing affluence of Malaysians, investing in properties overseas is one way to hedge their investments. They want to put their eggs in different baskets,” he said.
Chan said those who had invested in properties in Britain years ago would be enjoying capital appreciation and foreign exchange gains, thus encouraging them to invest further.
Australia is also a favourite place – especially Melbourne, Sydney, Perth and Gold Coast – for Malaysians to buy property as many have children who are studying there.
“I don't see these investments affecting our local property market. People are still buying properties here to stay and invest in.
“We are also attracting foreign buyers into our market, especially after the recently introduced policies such as the abolition of the real property gains tax,” Chan said.
He believes these cross-border property investments are good for the country.
“People are looking for security and good returns on their investments,” he said.
Charlie Chan
General manager Chan Ai Cheng said investors were always on the lookout for new opportunities.
“Land investment in Britain is also something worth considering. Investors can expect a return of 300% to 700% over a five to 10-year period,” she said.
Strategic land investment involves buying land with agricultural status or brownfield land which would be converted into residential, commercial or industrial land in future.
The strategy is simple – buy an undeveloped piece of land, wait until its price goes up (with planning permission) and then sell.
When the land is sold, a capital gain is made, but since the British government only taxes people who live or work in Britain, Malaysians will not pay this tax.
“We have clinched a deal worth over RM500,000 from a single investor before,” Ai Cheng said.
Khong & Jaafar Sdn Bhd managing director Elvin Fernandez noted that one of the hottest sectors in the property market in Asean was the high-end luxurious condominium in Singapore.
“That market has been hot for the past one year. International buyers including Malaysians – high net worth individuals – are buying into the sector for capital appreciation and rental income,” he said.
Some high-end luxury condos are said to be selling at about S$3,000 per sq ft.
Elvin pointed out the need for good rental returns for a well-supported luxury high-end condo market.
“We will need a strong expatriate market to push up rental income for Malaysia so that the local luxury high-end condo can benefit from the spillover effect from Singapore,” he said.
He added that there could be more foreign workers in the country with projects from the Ninth Malaysia Plan rolling in and this would strengthen the luxury high-end condo market, as they would be looking to rent the condos.
Colliers International Property Consultants Sdn Bhd deputy managing director Lee Vun-Tsir reckoned the prices of luxury high-end condos in Singapore had doubled in the last eight months.
Lee expects a bigger expat workforce in Singapore, especially with the construction of Genting Inter- national's Sentosa integrated resort, which will have the region's first Universal Studios theme park and a casino.
He said this would help boost the property market there and make it even more attractive for foreign investors.
“Indonesia, especially Bali, is also one of the places Malaysians invest in – cash-rich individuals looking to buy resort developments, private villas and other such properties.
“Bali's resort developments are a favourite as they are relatively cheaper compared with the other resorts in the region – for example, it is one third the price of resort properties in Phuket. We also speak a similar language,” he said.
Lee said the company was not aggressively moving into the overseas property market but rather catered to a niche market with resort properties such as the Angsana Resort and Spa in Bali.
MOST Malaysian property buyers are a discerning and sophisticated lot nowadays, with the more affluent ones casting their sights on properties overseas.
S.K. Brothers Realty chief executive officer Charlie Chan sees Australia, Singapore and Britain as popular countries for Malaysians investing in properties overseas.
Elvin Fernandez
“With the growing affluence of Malaysians, investing in properties overseas is one way to hedge their investments. They want to put their eggs in different baskets,” he said.
Chan said those who had invested in properties in Britain years ago would be enjoying capital appreciation and foreign exchange gains, thus encouraging them to invest further.
Australia is also a favourite place – especially Melbourne, Sydney, Perth and Gold Coast – for Malaysians to buy property as many have children who are studying there.
“I don't see these investments affecting our local property market. People are still buying properties here to stay and invest in.
“We are also attracting foreign buyers into our market, especially after the recently introduced policies such as the abolition of the real property gains tax,” Chan said.
He believes these cross-border property investments are good for the country.
“People are looking for security and good returns on their investments,” he said.
Charlie Chan
General manager Chan Ai Cheng said investors were always on the lookout for new opportunities.
“Land investment in Britain is also something worth considering. Investors can expect a return of 300% to 700% over a five to 10-year period,” she said.
Strategic land investment involves buying land with agricultural status or brownfield land which would be converted into residential, commercial or industrial land in future.
The strategy is simple – buy an undeveloped piece of land, wait until its price goes up (with planning permission) and then sell.
When the land is sold, a capital gain is made, but since the British government only taxes people who live or work in Britain, Malaysians will not pay this tax.
“We have clinched a deal worth over RM500,000 from a single investor before,” Ai Cheng said.
Khong & Jaafar Sdn Bhd managing director Elvin Fernandez noted that one of the hottest sectors in the property market in Asean was the high-end luxurious condominium in Singapore.
“That market has been hot for the past one year. International buyers including Malaysians – high net worth individuals – are buying into the sector for capital appreciation and rental income,” he said.
Some high-end luxury condos are said to be selling at about S$3,000 per sq ft.
Elvin pointed out the need for good rental returns for a well-supported luxury high-end condo market.
“We will need a strong expatriate market to push up rental income for Malaysia so that the local luxury high-end condo can benefit from the spillover effect from Singapore,” he said.
He added that there could be more foreign workers in the country with projects from the Ninth Malaysia Plan rolling in and this would strengthen the luxury high-end condo market, as they would be looking to rent the condos.
Colliers International Property Consultants Sdn Bhd deputy managing director Lee Vun-Tsir reckoned the prices of luxury high-end condos in Singapore had doubled in the last eight months.
Lee expects a bigger expat workforce in Singapore, especially with the construction of Genting Inter- national's Sentosa integrated resort, which will have the region's first Universal Studios theme park and a casino.
He said this would help boost the property market there and make it even more attractive for foreign investors.
“Indonesia, especially Bali, is also one of the places Malaysians invest in – cash-rich individuals looking to buy resort developments, private villas and other such properties.
“Bali's resort developments are a favourite as they are relatively cheaper compared with the other resorts in the region – for example, it is one third the price of resort properties in Phuket. We also speak a similar language,” he said.
Lee said the company was not aggressively moving into the overseas property market but rather catered to a niche market with resort properties such as the Angsana Resort and Spa in Bali.
Chasing the global dream
Chasing the global dream
Stories by ANGIE NG and ELAINE ANG
MALAYSIAN developers are a creative and adventurous lot and have many signature real estate projects dotting many parts of the world today.
Malaysian-built and owned property landmarks can be found in a growing number of cities as developers continue to take their expertise beyond the local shores.
A bungalow in SunCity's Sunway Toul Kok City project in Phnom Penh, Cambodia
There is quite an impressive number of landmarks across the globe, including hotels, commercial, retail, and residential properties, and recreational facilities.
IGB has a stable of hotel properties in various cities, including St Giles Hotel in London and Heathrow, MiCasa All-Suite Hotel in Yangon, New World Hotel in Ho Chi Minh City, and St Giles Manila.
IOI Corp Bhd, in a joint venture with Andhra Pradesh State Trading Corp, has completed a gems and jewellery complex in Banjara Hills, Hyderabad.
Datuk C.K. Wong
Next on its plate will be a high-end condominium project in Sentosa Cove.
Undertaken by IOI Land Singapore Pte Ltd, a 70% subsidiary of IOI Properties Bhd, the project will be a joint venture with Ho Bee Investment Ltd.
IJM Properties has some residential developments in India, including Raintree Park in Hyderabad, Andra Pradesh.
Mulpha International Bhd's development projects in Sanctuary Cove, Queensland, and Norwest Business Park, Sydney, have made the company one of the largest Malaysia-based real estate investors and developers in Australia.
Also targeting the overseas markets are Sunway City Bhd (SunCity), Ireka Corp Bhd and Gamuda Land Sdn Bhd.
Having transformed an old tin mining land into the vibrant address that is Bandar Sunway, SunCity now wants to put its creativity and expertise to undertake more projects that are different and unique.
“There is an apparent undersupply of well-designed properties in some of the high-growth cities in the region and we want to come out with good projects that add value to the property landscape there,” SunCity senior managing director Datuk C.K. Wong said.
It is building a landmark housing development in Phnom Penh, Cambodia: the Sunway Toul Kok City project.
Lai Voon Hon
The niche project comprises 84 double-storey bungalows within an exclusive residential enclave that introduces a new lifestyle of high-end homes with a host of facilities within a gated and guarded surrounding.
At the launch recently, all the units were sold out.
The 32-acre project has an estimated gross development value of US$33mil.
The project's third phase on the remaining 15 acres will comprise 84 units of 3-storey link house and 48 double-storey villas.
In India, SunCity’s project Sunway Prajay Megapolis is in Hyderabad, an emerging IT and biotechnology hub.
The 400 units of upmarket residential high-rise development on 5 acres have a gross development value of RM300mil.
“We regard this project as our maiden entry into the booming real estate market in India and are looking forward to securing other projects in the rapidly growing market,” Wong said.
Ireka Corp Bhd is currently busy building up the property portfolio for Aseana Properties Ltd (ASPL) in Vietnam, a US$275mil property development company listed on the London Stock Exchange and which is managed by Ireka's fully owned subsidiary Ireka Development Sdn Bhd (IDM).
Datuk Leong Hoy Kum
Ireka has a 20% stake in ASPL, which focuses on property development in Malaysia and Vietnam.
Executive director Lai Voon Hon said IDM was currently working on several projects in Ho Chi Minh City and Hanoi, comprising Grade A offices, 5-star hotels and mid- to high-end condominiums.
“We hope to develop our highly successful i-Zen brand of high-end condominiums and offices for ASPL in Vietnam, and we expect to receive very positive response from both its increasingly affluent local and returning overseas Vietnamese (Viet kieu as they are called in Vietnam),” Lai said.
Ireka will also tap on its expertise in developing successful hotels such as the Westin KL to develop award-winning 5-star hotels for ASPL in Ho Chi Minh and Hanoi to meet the huge demands for rooms in both these cities.
Gamuda Land Sdn Bhd, the property development arm of Gamuda Bhd, expects to make its foray into Vietnam next year when it launches its first mixed development housing and commercial project in Hanoi.
The company, in a joint venture with a Hanoi state-owned enterprise, is finalising a plan to develop a US$1bil township.
Stories by ANGIE NG and ELAINE ANG
MALAYSIAN developers are a creative and adventurous lot and have many signature real estate projects dotting many parts of the world today.
Malaysian-built and owned property landmarks can be found in a growing number of cities as developers continue to take their expertise beyond the local shores.
A bungalow in SunCity's Sunway Toul Kok City project in Phnom Penh, Cambodia
There is quite an impressive number of landmarks across the globe, including hotels, commercial, retail, and residential properties, and recreational facilities.
IGB has a stable of hotel properties in various cities, including St Giles Hotel in London and Heathrow, MiCasa All-Suite Hotel in Yangon, New World Hotel in Ho Chi Minh City, and St Giles Manila.
IOI Corp Bhd, in a joint venture with Andhra Pradesh State Trading Corp, has completed a gems and jewellery complex in Banjara Hills, Hyderabad.
Datuk C.K. Wong
Next on its plate will be a high-end condominium project in Sentosa Cove.
Undertaken by IOI Land Singapore Pte Ltd, a 70% subsidiary of IOI Properties Bhd, the project will be a joint venture with Ho Bee Investment Ltd.
IJM Properties has some residential developments in India, including Raintree Park in Hyderabad, Andra Pradesh.
Mulpha International Bhd's development projects in Sanctuary Cove, Queensland, and Norwest Business Park, Sydney, have made the company one of the largest Malaysia-based real estate investors and developers in Australia.
Also targeting the overseas markets are Sunway City Bhd (SunCity), Ireka Corp Bhd and Gamuda Land Sdn Bhd.
Having transformed an old tin mining land into the vibrant address that is Bandar Sunway, SunCity now wants to put its creativity and expertise to undertake more projects that are different and unique.
“There is an apparent undersupply of well-designed properties in some of the high-growth cities in the region and we want to come out with good projects that add value to the property landscape there,” SunCity senior managing director Datuk C.K. Wong said.
It is building a landmark housing development in Phnom Penh, Cambodia: the Sunway Toul Kok City project.
Lai Voon Hon
The niche project comprises 84 double-storey bungalows within an exclusive residential enclave that introduces a new lifestyle of high-end homes with a host of facilities within a gated and guarded surrounding.
At the launch recently, all the units were sold out.
The 32-acre project has an estimated gross development value of US$33mil.
The project's third phase on the remaining 15 acres will comprise 84 units of 3-storey link house and 48 double-storey villas.
In India, SunCity’s project Sunway Prajay Megapolis is in Hyderabad, an emerging IT and biotechnology hub.
The 400 units of upmarket residential high-rise development on 5 acres have a gross development value of RM300mil.
“We regard this project as our maiden entry into the booming real estate market in India and are looking forward to securing other projects in the rapidly growing market,” Wong said.
Ireka Corp Bhd is currently busy building up the property portfolio for Aseana Properties Ltd (ASPL) in Vietnam, a US$275mil property development company listed on the London Stock Exchange and which is managed by Ireka's fully owned subsidiary Ireka Development Sdn Bhd (IDM).
Datuk Leong Hoy Kum
Ireka has a 20% stake in ASPL, which focuses on property development in Malaysia and Vietnam.
Executive director Lai Voon Hon said IDM was currently working on several projects in Ho Chi Minh City and Hanoi, comprising Grade A offices, 5-star hotels and mid- to high-end condominiums.
“We hope to develop our highly successful i-Zen brand of high-end condominiums and offices for ASPL in Vietnam, and we expect to receive very positive response from both its increasingly affluent local and returning overseas Vietnamese (Viet kieu as they are called in Vietnam),” Lai said.
Ireka will also tap on its expertise in developing successful hotels such as the Westin KL to develop award-winning 5-star hotels for ASPL in Ho Chi Minh and Hanoi to meet the huge demands for rooms in both these cities.
Gamuda Land Sdn Bhd, the property development arm of Gamuda Bhd, expects to make its foray into Vietnam next year when it launches its first mixed development housing and commercial project in Hanoi.
The company, in a joint venture with a Hanoi state-owned enterprise, is finalising a plan to develop a US$1bil township.
Malaysian investors keen on NZ and Australia
Malaysian investors keen on NZ and Australia
ASK any savvy Malaysian property investor and there is a high probability that he or she has property Down Under or in New Zealand.
This does not come as a surprise to Global Link Properties chief administrative officer (overseas properties) Norman Sia, who is a strong believer of the properties' investment potential.
Norman Sia does not believe Malaysians buying properties overseas will have any effect on the local market at all
“Malaysians are very interested in investing overseas, especially in developed countries which are politically stable and have transparent policies. They do it to preserve their wealth and to diversify their investments.
“Australia and New Zealand properties are more affordable compared with Singapore, Britain and Hong Kong,” Sia said.
In addition, property prices in Australia historically doubled every 10 years due to increasing costs such as land, labour and building materials, Sia pointed out.
He said Global Link Properties had introduced not less than 500 projects to Malaysian buyers comprising three types of properties – pure residential properties, student accommodation near learning institutions and condominium hotels, which are condos by usage but leased to hotels.
“Student accommodation and condo hotel cater to investors who buy for investment return so the properties sell faster.
“The least popular, in a sense, are residential properties, as prospective buyers find it hard to make a decision so it takes longer to sell the properties,” he said.
According to Sia, investments in hotel units provide the highest returns – a minimum of 6% net per annum – especially since Global Link focuses mainly on 4 to 5-star hotels.
“This is sustainable as such returns are achievable on a 30% occupancy rate. Student accommodation also offers good returns at 4.5% net annually,” he said.
About 80% of Global Link's clientele are people who run their own businesses as well as professionals who buy properties mainly for investment.
The balance are high net worth buyers who are not so concerned about returns but are looking for unique assets to add to their lists of properties.
“We had 200 to 300 investors last year and expect a 10% to 15% growth every year. We now have close to 200 investors this year. Sales have been boosted by a new project in Queenstown, New Zealand,” Sia said.
The Kawarau Falls Station project in Queenstown consists of 1,000 hotel apartments with a gross development value of NZ$1bil.
The project, launched in the beginning of the year, is 90% sold. It will start construction next month and is expected to be completed in 2011. Prices range from NZ$360,000 to NZ$1.5mil per unit.
Sia said about 60% of Global Link's sales were from Australian properties and 40% from New Zealand.
He said the company had put more emphasis on properties in New Zealand in the past two years as the products there were more unique. The Lord of the Rings movies have also made the country more attractive to property investors.
“We will be looking back at Australia in the next one year as property prices there have come down and stabilised. It will be a good time to pick up properties there,” he said.
The company will launch some new Australian and New Zealand projects here: two beachfront apartment projects in Gold Coast, Australia – one in two weeks and another in a month's time – and three projects in Melbourne – two apartment projects and students' accommodation.
He does not believe Malaysians buying properties overseas will have any effect on the local market at all.
“Those who invest overseas have their basket full of local properties already. Moreover, overseas investors are only a small group,” he said.
Sia himself has property investments overseas. About 85% of his property portfolio is in hotel units in Australia, New Zealand, Singapore, Hong Kong and Malaysia.
“It is important to look at income-producing properties. Brick and mortar is still the best investment where our wealth can grow with rental income thrown in as well,” he added.
ASK any savvy Malaysian property investor and there is a high probability that he or she has property Down Under or in New Zealand.
This does not come as a surprise to Global Link Properties chief administrative officer (overseas properties) Norman Sia, who is a strong believer of the properties' investment potential.
Norman Sia does not believe Malaysians buying properties overseas will have any effect on the local market at all
“Malaysians are very interested in investing overseas, especially in developed countries which are politically stable and have transparent policies. They do it to preserve their wealth and to diversify their investments.
“Australia and New Zealand properties are more affordable compared with Singapore, Britain and Hong Kong,” Sia said.
In addition, property prices in Australia historically doubled every 10 years due to increasing costs such as land, labour and building materials, Sia pointed out.
He said Global Link Properties had introduced not less than 500 projects to Malaysian buyers comprising three types of properties – pure residential properties, student accommodation near learning institutions and condominium hotels, which are condos by usage but leased to hotels.
“Student accommodation and condo hotel cater to investors who buy for investment return so the properties sell faster.
“The least popular, in a sense, are residential properties, as prospective buyers find it hard to make a decision so it takes longer to sell the properties,” he said.
According to Sia, investments in hotel units provide the highest returns – a minimum of 6% net per annum – especially since Global Link focuses mainly on 4 to 5-star hotels.
“This is sustainable as such returns are achievable on a 30% occupancy rate. Student accommodation also offers good returns at 4.5% net annually,” he said.
About 80% of Global Link's clientele are people who run their own businesses as well as professionals who buy properties mainly for investment.
The balance are high net worth buyers who are not so concerned about returns but are looking for unique assets to add to their lists of properties.
“We had 200 to 300 investors last year and expect a 10% to 15% growth every year. We now have close to 200 investors this year. Sales have been boosted by a new project in Queenstown, New Zealand,” Sia said.
The Kawarau Falls Station project in Queenstown consists of 1,000 hotel apartments with a gross development value of NZ$1bil.
The project, launched in the beginning of the year, is 90% sold. It will start construction next month and is expected to be completed in 2011. Prices range from NZ$360,000 to NZ$1.5mil per unit.
Sia said about 60% of Global Link's sales were from Australian properties and 40% from New Zealand.
He said the company had put more emphasis on properties in New Zealand in the past two years as the products there were more unique. The Lord of the Rings movies have also made the country more attractive to property investors.
“We will be looking back at Australia in the next one year as property prices there have come down and stabilised. It will be a good time to pick up properties there,” he said.
The company will launch some new Australian and New Zealand projects here: two beachfront apartment projects in Gold Coast, Australia – one in two weeks and another in a month's time – and three projects in Melbourne – two apartment projects and students' accommodation.
He does not believe Malaysians buying properties overseas will have any effect on the local market at all.
“Those who invest overseas have their basket full of local properties already. Moreover, overseas investors are only a small group,” he said.
Sia himself has property investments overseas. About 85% of his property portfolio is in hotel units in Australia, New Zealand, Singapore, Hong Kong and Malaysia.
“It is important to look at income-producing properties. Brick and mortar is still the best investment where our wealth can grow with rental income thrown in as well,” he added.
Swire banks on Japan love affair
Swire banks on Japan love affair
Swire Properties, the real-estate arm of conglomerate Swire Pacific (0019), is hoping the revamp of one of its anchor retail tenants and Hong Kong's love affair with all things Japanese will drum up more business at its flagship shopping mall, Cityplaza, in Tai Koo.
The company, along with representatives from Japanese department store operator UNY, last week officially opened the APiTA department store at Cityplaza One.
A spirited performance by taiko drummers for company representatives and guests kicked off a month-long series of Japanese-related promotions at the mall, which has an area of more than one million square feet.
UNY chairman Koji Sasaki said it has transformed the former UNY department store into the APiTA store, its first such store outside Japan, to match the new refurbished image of Cityplaza.
Swire has spent more than HK$700 million since 1997 to complete a major renovation of the mall. UNY declined to disclose how much it spent on the refurbishment.
Swire senior portfolio manager Elizabeth Kok Tong Wai-lee said UNY's previous lease expired at the end of last year but was extended two months.
The new lease, which started March 1, will last for an initial period of six years, extendable to nine.
The APiTa store, selling food, household goods and fashion items, is the shopping mall's largest tenant, occupying 180,000 sqft or 27 percent of the mall's area, unchanged from before.
APiTA, under the UNY group, is one of the four biggest department store operators in Japan, with 70 outlets there.
Kok confirmed other retailers had also been eyeing the space previously used by UNY department store.
When The Standard asked if the prospective tenants had offered better rents than UNY, Kok replied: "Rents are not number one."
Swire, she said, has to keep in mind the overall image of Cityplaza and what prospective tenants can bring to the mall. She declined to reveal how much rent UNY is paying under its new lease or by how much it has increased.
The change of name of the retailer, however, was not used as a basis for setting the new rent, which Kok maintained was based on open-market rents.
In any case, Hong Kong's fixation with anything Japanese, especially among the younger generation, is a potential money-spinner.
"We believe superior quality Japanese goods are still very popular with Hong Kong people," Kok said. "You see that Hong Kong people are very fond of visiting Japan."
APiTA is hoping strict authenticity will bring in customers - management and design of the store closely resembles that of the main APiTA store in Japan.
More than 70 percent of the goods on sale are imported directly from Japan, including some brands previously available only in Japan.
Swire has a long relationship with UNY, dating back to 1987 when Swire sent a delegation to Japan to bring UNY to Hong Kong at Cityplaza.
The regional director for the retail department at the property consultant, Jeanette Chan Wing- wai, said Swire takes market positioning and the tenant mix of its malls seriously. "They are very concerned about origin of the tenant, their image, presentation and market competitiveness. [Only] after assessing it would rents be discussed," Chan said.
Cityplaza rents are low compared with prime shopping areas such as Central and Tsim Sha Tsui.
If a department store in Causeway Bay with a few thousand square feet in area was paying HK$70-HK$100 per square foot, then UNY with 180,000 sqft could be at least 50 percent lower.
"Their [UNY's] area is so much bigger and Tai Koo serves both local residents and the office population. Apart from fashion, it has food.
"As they are not focusing on fashion, their rent, comparatively speaking, is much lower," Chan said.
The fact there is a ready customer base at Tai Koo is probably another factor that makes UNY an attractive tenant to Swire.
LCH (Asia-Pacific) Surveyors managing director Joseph Ho Chin-choi said there are many Japanese living in Tai Koo and Quarry Bay. "A lot of Japanese rent flats there and, as far as I know, some Japanese funds have set up [property] portfolios there and rent to Japanese," Ho said.
"To be frank, the Japanese are quite united. They have their own community."
All this means UNY is able to profit from serving this group.
However, the long relationship between UNY and Swire would not have meant more favorable rents for UNY. "They [Swire] don't have to worry about business. If you go, another one will come in," Ho said.
Ho agreed that had there been no such community, UNY may have found it difficult to survive. UNY and Jusco owed their existence in the area to the Japanese community.
"The market there [for Japanese] is really big."
Jusco is another Japanese department store operator and the Hong Kong operation is part of AEON Stores (0984).
Swire Properties, the real-estate arm of conglomerate Swire Pacific (0019), is hoping the revamp of one of its anchor retail tenants and Hong Kong's love affair with all things Japanese will drum up more business at its flagship shopping mall, Cityplaza, in Tai Koo.
The company, along with representatives from Japanese department store operator UNY, last week officially opened the APiTA department store at Cityplaza One.
A spirited performance by taiko drummers for company representatives and guests kicked off a month-long series of Japanese-related promotions at the mall, which has an area of more than one million square feet.
UNY chairman Koji Sasaki said it has transformed the former UNY department store into the APiTA store, its first such store outside Japan, to match the new refurbished image of Cityplaza.
Swire has spent more than HK$700 million since 1997 to complete a major renovation of the mall. UNY declined to disclose how much it spent on the refurbishment.
Swire senior portfolio manager Elizabeth Kok Tong Wai-lee said UNY's previous lease expired at the end of last year but was extended two months.
The new lease, which started March 1, will last for an initial period of six years, extendable to nine.
The APiTa store, selling food, household goods and fashion items, is the shopping mall's largest tenant, occupying 180,000 sqft or 27 percent of the mall's area, unchanged from before.
APiTA, under the UNY group, is one of the four biggest department store operators in Japan, with 70 outlets there.
Kok confirmed other retailers had also been eyeing the space previously used by UNY department store.
When The Standard asked if the prospective tenants had offered better rents than UNY, Kok replied: "Rents are not number one."
Swire, she said, has to keep in mind the overall image of Cityplaza and what prospective tenants can bring to the mall. She declined to reveal how much rent UNY is paying under its new lease or by how much it has increased.
The change of name of the retailer, however, was not used as a basis for setting the new rent, which Kok maintained was based on open-market rents.
In any case, Hong Kong's fixation with anything Japanese, especially among the younger generation, is a potential money-spinner.
"We believe superior quality Japanese goods are still very popular with Hong Kong people," Kok said. "You see that Hong Kong people are very fond of visiting Japan."
APiTA is hoping strict authenticity will bring in customers - management and design of the store closely resembles that of the main APiTA store in Japan.
More than 70 percent of the goods on sale are imported directly from Japan, including some brands previously available only in Japan.
Swire has a long relationship with UNY, dating back to 1987 when Swire sent a delegation to Japan to bring UNY to Hong Kong at Cityplaza.
The regional director for the retail department at the property consultant, Jeanette Chan Wing- wai, said Swire takes market positioning and the tenant mix of its malls seriously. "They are very concerned about origin of the tenant, their image, presentation and market competitiveness. [Only] after assessing it would rents be discussed," Chan said.
Cityplaza rents are low compared with prime shopping areas such as Central and Tsim Sha Tsui.
If a department store in Causeway Bay with a few thousand square feet in area was paying HK$70-HK$100 per square foot, then UNY with 180,000 sqft could be at least 50 percent lower.
"Their [UNY's] area is so much bigger and Tai Koo serves both local residents and the office population. Apart from fashion, it has food.
"As they are not focusing on fashion, their rent, comparatively speaking, is much lower," Chan said.
The fact there is a ready customer base at Tai Koo is probably another factor that makes UNY an attractive tenant to Swire.
LCH (Asia-Pacific) Surveyors managing director Joseph Ho Chin-choi said there are many Japanese living in Tai Koo and Quarry Bay. "A lot of Japanese rent flats there and, as far as I know, some Japanese funds have set up [property] portfolios there and rent to Japanese," Ho said.
"To be frank, the Japanese are quite united. They have their own community."
All this means UNY is able to profit from serving this group.
However, the long relationship between UNY and Swire would not have meant more favorable rents for UNY. "They [Swire] don't have to worry about business. If you go, another one will come in," Ho said.
Ho agreed that had there been no such community, UNY may have found it difficult to survive. UNY and Jusco owed their existence in the area to the Japanese community.
"The market there [for Japanese] is really big."
Jusco is another Japanese department store operator and the Hong Kong operation is part of AEON Stores (0984).
Heavenly haven of peace in the haveli
Heavenly haven of peace in the haveli
HenryChu
Friday, May 11, 2007
Travelers who stumble upon this desert town can be forgiven for feeling a bit like Dorothy waking up in Oz.
Eyes dulled by the browns and grays of the arid landscape blink in wonder at the Technicolor tones of fantastically illustrated courtyard homes. Vivid frescoes bathe every surface - walls, window frames, doorways, arches - in a jewel box of color, from ruby red to sapphire blue to a golden yellow worthy of any glittering brick road.
Scenes of Oz-like whimsy crowd the paintings. Hindu gods tool around in luxury cars while graceful female figures arrange themselves into the shape of an elephant. Portraits of pale-faced Englishmen, a beatific Gandhi and a cigar-puffing Jesus peer out from odd corners. There are fanciful renditions of planes and trains by long-ago artists who had heard of such amazing contraptions but could only imagine what they looked like.
Hundreds of these beautiful but fading courtyard homes, or "havelis," dot this corner of northern India, in a region called Shekhawati. Walking through the towns here is like exploring a vast open-air art gallery, the result of a century of prodigious activity by anonymous artists whose patrons spent lavish sums turning their residences into showpieces, mainly to keep up with the neighbors.
But the heyday of the havelis came to a close more than 50 years ago. Many of these historic houses have been locked up and abandoned, their owners long gone in search of modern lifestyles in India's big cities.
A remarkable architectural and artistic legacy lies in danger of slipping into oblivion as the paintings themselves surrender to age, neglect and heedless destruction. Their survival depends on whether a handful of activists can convince officials, residents and absentee owners - some of whom belong to India's wealthiest families - that the homes are treasures worth saving.
"I don't think they have realized that they have a very unique resource," said Urvashi Shrivastava, an architect who is trying to catalog some of Shekhawati's havelis before it is too late. "We need to raise awareness. Today we have the heritage with us, but if we don't take care of it, in a few years it will go away."
Hampering conservation attempts are the usual obstacles that confront many a worthy cause in India: bureaucratic lassitude and a lack of funds.
The effort is further complicated by the fact that the houses remain private property, often in the hands of multiple owners - heirs of the original builder - who cannot agree on what to do with their ancestral home or which of them ought to do it.
"Most of these havelis are 100 years old," said Ramesh Jangid, a native of Shekhawati and one of the first activists to recognize the cultural value of what lay outside his doorstep. "In these 100 years, there may be four or five generations, and the number of shareholders may be 40, 50 or 60 ... So who will take charge of this repair? Who will spend the money?"
If advocates like Jangid had their way, this entire region would be declared a protected heritage zone. Haveli owners would be compelled to maintain the properties, perhaps with government subsidies, or risk their being taken over by the state. Jangid recently met government cultural officials to discuss such ideas.
What he sees when he meanders through the dusty lanes of towns like Nawalgarh, Dundlod and Mandawa are not just splashily decorated houses but giant canvases stamped with the religion, politics and culture of a bygone era.
The frescoes offer glimpses of the twilight of the British Raj, India's struggle for independence, new inventions and common local pastimes. The sacred - scenes from Hindu mythology - mixes with the profane - erotic couplings of acrobatic skill - the extraordinary - battles on elephant-back - with the everyday - a woman admiring herself in a mirror.
"It's a history book," Jangid said of the havelis' social significance.
The word haveli is Persian in origin, meaning an enclosed space. The architecture of Shekhawati's courtyard homes, often several stories tall, is a lovely blend of form and function incorporating principles similar to fung shui, not only to impart a spiritual sense but to maximize comfort by, for example, blocking out sunlight and drawing in breezes during the searing heat of summer. Inner atriums kept women segregated from men and hidden from the prying eyes of strangers, following the strict code of modesty of the time.
The names of the artists are lost to history. But the fruit of their fertile imaginations lives on, and one of the pleasures of wandering Shekhawati is to ponder what went on in the painters' minds as they toiled with their brushes.
Was it a cosmic joke, in one late-period fresco, to show the gods Rama and Sita, their heads shimmering in haloes of light, being chauffeured in a black stretch Rolls?
In a region where transport normally came with four legs, how strange was it to be asked by the haveli owner to portray the story of some crazy attempt at flying by a faraway pair of brothers named Wright? Result: a man whose outstretched arms support five pairs of wings.
In the limpid gaze of the painted British guards with their guns, or the melancholy Englishwoman fingering an accordion, is there a suggestion they know the end is nigh for their rule over the crown jewel of the British empire?
Modern times ushered in the painted havelis' decline. By the end of the 1930s, many prosperous Marwari families had moved away. The old abodes were left to gather dust, handed over to caretakers or let out to shopkeepers. Thousands of frescoes have faded, peeled or crumbled away. Others have been destroyed by water seepage, defaced by thick layers of posters tacked onto outside walls or demolished to make way for new development.
Inside one intact, still-spectacular Nawalgarh haveli, Ram Lal Saini, 79, sweeps the stone floors during the day and falls asleep at night amid a montage of scenes of the god Shiva disporting in a river, an Englishman cradling a dog and a horsedrawn tram full of British passengers and an Indian driver and ticket-taker.
Now stooped and wizened, Saini came to the house as a servant boy, was paid four silver coins a month to feed the livestock and serve as the punka-wallah - pulling the giant hanging fan that swept back and forth from the ceiling. But his master packed up for Calcutta not long afterward, and gave him the keys.
"I've lived here longer than the owners have," Saini said. "When people say: `Go home,' I feel like this is it."
Descendants of the original owner still visit from time to time, he said, but they tend to stay in hotels boasting electricity, modern plumbing and telephones, conveniences that few of the old courtyard homes were designed to have.
The links with their ancestral towns have become so attenuated, however, that members of the younger generation often have no clue where the family haveli is.
Most appreciative of the richly decorated residences seem to be the tourists who are coming in increasing, although still relatively small, numbers. Last year, 150,000 visitors, about one- third of them foreign, traveled through the Jhunjhunu district, where most of Shekhawati's hotels and best-known painted havelis are located.
Local officials hope to capitalize on the growing interest, and haveli enthusiasts say that the extra revenue and attention could spur preservation efforts.
Nina Rao, a New Delhi professor who is studying the influence of tourism in the region, called on the government to play a more active role in saving the courtyard houses. "Nobody else is going to do it," Rao said. "This is something that should not be linked to [making] money. Today tourists are coming; tomorrow they may not ... These things are of value in and of themselves."
LOS ANGELES TIMES
HenryChu
Friday, May 11, 2007
Travelers who stumble upon this desert town can be forgiven for feeling a bit like Dorothy waking up in Oz.
Eyes dulled by the browns and grays of the arid landscape blink in wonder at the Technicolor tones of fantastically illustrated courtyard homes. Vivid frescoes bathe every surface - walls, window frames, doorways, arches - in a jewel box of color, from ruby red to sapphire blue to a golden yellow worthy of any glittering brick road.
Scenes of Oz-like whimsy crowd the paintings. Hindu gods tool around in luxury cars while graceful female figures arrange themselves into the shape of an elephant. Portraits of pale-faced Englishmen, a beatific Gandhi and a cigar-puffing Jesus peer out from odd corners. There are fanciful renditions of planes and trains by long-ago artists who had heard of such amazing contraptions but could only imagine what they looked like.
Hundreds of these beautiful but fading courtyard homes, or "havelis," dot this corner of northern India, in a region called Shekhawati. Walking through the towns here is like exploring a vast open-air art gallery, the result of a century of prodigious activity by anonymous artists whose patrons spent lavish sums turning their residences into showpieces, mainly to keep up with the neighbors.
But the heyday of the havelis came to a close more than 50 years ago. Many of these historic houses have been locked up and abandoned, their owners long gone in search of modern lifestyles in India's big cities.
A remarkable architectural and artistic legacy lies in danger of slipping into oblivion as the paintings themselves surrender to age, neglect and heedless destruction. Their survival depends on whether a handful of activists can convince officials, residents and absentee owners - some of whom belong to India's wealthiest families - that the homes are treasures worth saving.
"I don't think they have realized that they have a very unique resource," said Urvashi Shrivastava, an architect who is trying to catalog some of Shekhawati's havelis before it is too late. "We need to raise awareness. Today we have the heritage with us, but if we don't take care of it, in a few years it will go away."
Hampering conservation attempts are the usual obstacles that confront many a worthy cause in India: bureaucratic lassitude and a lack of funds.
The effort is further complicated by the fact that the houses remain private property, often in the hands of multiple owners - heirs of the original builder - who cannot agree on what to do with their ancestral home or which of them ought to do it.
"Most of these havelis are 100 years old," said Ramesh Jangid, a native of Shekhawati and one of the first activists to recognize the cultural value of what lay outside his doorstep. "In these 100 years, there may be four or five generations, and the number of shareholders may be 40, 50 or 60 ... So who will take charge of this repair? Who will spend the money?"
If advocates like Jangid had their way, this entire region would be declared a protected heritage zone. Haveli owners would be compelled to maintain the properties, perhaps with government subsidies, or risk their being taken over by the state. Jangid recently met government cultural officials to discuss such ideas.
What he sees when he meanders through the dusty lanes of towns like Nawalgarh, Dundlod and Mandawa are not just splashily decorated houses but giant canvases stamped with the religion, politics and culture of a bygone era.
The frescoes offer glimpses of the twilight of the British Raj, India's struggle for independence, new inventions and common local pastimes. The sacred - scenes from Hindu mythology - mixes with the profane - erotic couplings of acrobatic skill - the extraordinary - battles on elephant-back - with the everyday - a woman admiring herself in a mirror.
"It's a history book," Jangid said of the havelis' social significance.
The word haveli is Persian in origin, meaning an enclosed space. The architecture of Shekhawati's courtyard homes, often several stories tall, is a lovely blend of form and function incorporating principles similar to fung shui, not only to impart a spiritual sense but to maximize comfort by, for example, blocking out sunlight and drawing in breezes during the searing heat of summer. Inner atriums kept women segregated from men and hidden from the prying eyes of strangers, following the strict code of modesty of the time.
The names of the artists are lost to history. But the fruit of their fertile imaginations lives on, and one of the pleasures of wandering Shekhawati is to ponder what went on in the painters' minds as they toiled with their brushes.
Was it a cosmic joke, in one late-period fresco, to show the gods Rama and Sita, their heads shimmering in haloes of light, being chauffeured in a black stretch Rolls?
In a region where transport normally came with four legs, how strange was it to be asked by the haveli owner to portray the story of some crazy attempt at flying by a faraway pair of brothers named Wright? Result: a man whose outstretched arms support five pairs of wings.
In the limpid gaze of the painted British guards with their guns, or the melancholy Englishwoman fingering an accordion, is there a suggestion they know the end is nigh for their rule over the crown jewel of the British empire?
Modern times ushered in the painted havelis' decline. By the end of the 1930s, many prosperous Marwari families had moved away. The old abodes were left to gather dust, handed over to caretakers or let out to shopkeepers. Thousands of frescoes have faded, peeled or crumbled away. Others have been destroyed by water seepage, defaced by thick layers of posters tacked onto outside walls or demolished to make way for new development.
Inside one intact, still-spectacular Nawalgarh haveli, Ram Lal Saini, 79, sweeps the stone floors during the day and falls asleep at night amid a montage of scenes of the god Shiva disporting in a river, an Englishman cradling a dog and a horsedrawn tram full of British passengers and an Indian driver and ticket-taker.
Now stooped and wizened, Saini came to the house as a servant boy, was paid four silver coins a month to feed the livestock and serve as the punka-wallah - pulling the giant hanging fan that swept back and forth from the ceiling. But his master packed up for Calcutta not long afterward, and gave him the keys.
"I've lived here longer than the owners have," Saini said. "When people say: `Go home,' I feel like this is it."
Descendants of the original owner still visit from time to time, he said, but they tend to stay in hotels boasting electricity, modern plumbing and telephones, conveniences that few of the old courtyard homes were designed to have.
The links with their ancestral towns have become so attenuated, however, that members of the younger generation often have no clue where the family haveli is.
Most appreciative of the richly decorated residences seem to be the tourists who are coming in increasing, although still relatively small, numbers. Last year, 150,000 visitors, about one- third of them foreign, traveled through the Jhunjhunu district, where most of Shekhawati's hotels and best-known painted havelis are located.
Local officials hope to capitalize on the growing interest, and haveli enthusiasts say that the extra revenue and attention could spur preservation efforts.
Nina Rao, a New Delhi professor who is studying the influence of tourism in the region, called on the government to play a more active role in saving the courtyard houses. "Nobody else is going to do it," Rao said. "This is something that should not be linked to [making] money. Today tourists are coming; tomorrow they may not ... These things are of value in and of themselves."
LOS ANGELES TIMES
Estimates cut for HK waterfront site
Estimates cut for waterfront site
Raymond Wang and Danny Chung
Friday, May 18, 2007
Surveyors are revising their valuation for a waterfront residential site in West Kowloon downward by as much as 11 percent after the May 8 auction for a site in the area.
The auction saw a consortium comprising Sino Land (0083), Chinese Estates Holdings (0127), K Wah International (0173) and Nan Fung Development secure a residential plot at the West Kowloon reclamation area for HK$4 billion, which was at the low end of market estimates.
Surveyors expected the site, bounded by Hoi Wang Road, Yan Cheung Road and Yau Cheung Road near Yau Ma Tei, to fetch between HK$4 billion and HK$5 billion.
The low-end price prompted Vigers Appraisal and Consulting executive director Tony Chan Tung-ngok to lower his valuation for another waterfront residential site in West Kowloon scheduled for auction next month.
Chan said the site on Hoi Fai Road could go for HK$6.2 billion, or HK$6,767 per square foot - 11.4 percent lower than his previous estimate of HK$7 billion, or HK$7,638 psf.
"If companies partner up, fewer bidders will take part, which may affect bidding atmosphere and final price," he said.
Charles Chan Chiu-kwok, managing director of valuation and professional services at property consultant Savills, is considering revising his valuation for the site downward by about 5 percent to HK$6,650 psf from more than HK$7,000 psf.
Centaline Surveyors director James Cheung King-tat expects the site to go for nearly HK$6,800 psf.
Previously, market watchers said developers, who took a cautious stance at last week's auction, could be holding on to their financial resources to bid in next month's auction for the prime West Kowloon site.
"It cannot be ruled out that some developers want to reserve their resources in order to bid for the West Kowloon site," Chan of Vigers said. "The sea views from the Hoi Fai Road site in next month's auction are a little better than the one sold last week."
Midland Surveyors director Alvin Lam Tsz- pun agreed that developers may have wanted to keep the price down so as not to set too high a benchmark for the Hoi Fai site.
The Hoi Fai Road auction was triggered by Wheelock Properties (0049) with a bid of HK$4.2 billion, the biggest by a developer since 2004.
The 122,204-square-foot site adjacent to One SilverSea - which was developed by Sino Land - is likely to draw potential bids from rival developers.
Those include Cheung Kong (Holdings) (0001), Sun Hung Kai Properties (0016), Sino and K Wah, who have all indicated they will study the site.
The bid of HK$4.2 billion, or HK$4,583 psf, will also be the opening bid in the auction June 12.
Wheelock raised the price after failing to trigger the site in March.
Wheelock director Ricky Wong Kwong-yiu said the Hoi Fai Road site was suitable for the construction of between 800 and 900 apartments of more than 1,000 sqft each.
The project will generate a gross floor area of 916,522 sqft.
He estimated the total investment including land price, construction cost and other fees would be HK$7 billion to HK$8 billion.
Given the large scale of the project, Wheelock would also consider teaming up with other developers to bid for the site, he added.
Sino purchased the One SilverSea development site for HK$1.6 billion, or HK$1,944 psf, at a government land auction in 2002 when the market was in a downturn.
Midland's Lam estimated the value of the Hoi Fai Road site at HK$6 billion, as it is close to Olympic station and some apartments would have sea views.
"It is one of the few waterfront sites in the area," Lam said.
Cheung Kong executive director Justin Chiu Kwok-hung said: "At the Hoi Fai site, the [existing] flats there are newer and so they [owners] wouldn't upgrade so soon. Still, the view [from the plot up for auction] is better."
Chiu said Cheung Kong was interested in the site.
In September 2004, a residential site on Tin Kwong Road in Ho Man Tin was triggered for auction with a bid of HK$5.02 billion.
The site was sold to Cheung Kong for HK$9.42 billion a month later.
In September 2005, two adjoining sites opposite Hoi Fu Court and Park Avenue in West Kowloon fetched between HK$5,300 psf and HK$5,400 psf. It was also a consortium involving Sino Land, Nan Fung and Chinese Estates that won those sites.
Midland Realty chief analyst Buggle Lau Ka- fai said last week's land sale may not stimulate secondary prices in West Kowloon very much as the market was overoptimistic with its estimates before the auction.
"With [the final price] at the lower end of the market, some owners may not be so aggressive in hiking their prices," Lau said.
Ricacorp Properties executive director Willy Liu Wai-keung agreed the lower-than-expected price would be healthier for the market.
He said if the site had sold for a higher price, then the Hoi Fai plot set for auction could be bid even higher.
"The market may not accept such price levels," Liu said, referring to secondary market owners possibly being too aggressive in pricing.
Hong Kong Property Services (Agency) reported that some owners raised asking prices by 2 percent to 6 percent after the auction last week.
Raymond Wang and Danny Chung
Friday, May 18, 2007
Surveyors are revising their valuation for a waterfront residential site in West Kowloon downward by as much as 11 percent after the May 8 auction for a site in the area.
The auction saw a consortium comprising Sino Land (0083), Chinese Estates Holdings (0127), K Wah International (0173) and Nan Fung Development secure a residential plot at the West Kowloon reclamation area for HK$4 billion, which was at the low end of market estimates.
Surveyors expected the site, bounded by Hoi Wang Road, Yan Cheung Road and Yau Cheung Road near Yau Ma Tei, to fetch between HK$4 billion and HK$5 billion.
The low-end price prompted Vigers Appraisal and Consulting executive director Tony Chan Tung-ngok to lower his valuation for another waterfront residential site in West Kowloon scheduled for auction next month.
Chan said the site on Hoi Fai Road could go for HK$6.2 billion, or HK$6,767 per square foot - 11.4 percent lower than his previous estimate of HK$7 billion, or HK$7,638 psf.
"If companies partner up, fewer bidders will take part, which may affect bidding atmosphere and final price," he said.
Charles Chan Chiu-kwok, managing director of valuation and professional services at property consultant Savills, is considering revising his valuation for the site downward by about 5 percent to HK$6,650 psf from more than HK$7,000 psf.
Centaline Surveyors director James Cheung King-tat expects the site to go for nearly HK$6,800 psf.
Previously, market watchers said developers, who took a cautious stance at last week's auction, could be holding on to their financial resources to bid in next month's auction for the prime West Kowloon site.
"It cannot be ruled out that some developers want to reserve their resources in order to bid for the West Kowloon site," Chan of Vigers said. "The sea views from the Hoi Fai Road site in next month's auction are a little better than the one sold last week."
Midland Surveyors director Alvin Lam Tsz- pun agreed that developers may have wanted to keep the price down so as not to set too high a benchmark for the Hoi Fai site.
The Hoi Fai Road auction was triggered by Wheelock Properties (0049) with a bid of HK$4.2 billion, the biggest by a developer since 2004.
The 122,204-square-foot site adjacent to One SilverSea - which was developed by Sino Land - is likely to draw potential bids from rival developers.
Those include Cheung Kong (Holdings) (0001), Sun Hung Kai Properties (0016), Sino and K Wah, who have all indicated they will study the site.
The bid of HK$4.2 billion, or HK$4,583 psf, will also be the opening bid in the auction June 12.
Wheelock raised the price after failing to trigger the site in March.
Wheelock director Ricky Wong Kwong-yiu said the Hoi Fai Road site was suitable for the construction of between 800 and 900 apartments of more than 1,000 sqft each.
The project will generate a gross floor area of 916,522 sqft.
He estimated the total investment including land price, construction cost and other fees would be HK$7 billion to HK$8 billion.
Given the large scale of the project, Wheelock would also consider teaming up with other developers to bid for the site, he added.
Sino purchased the One SilverSea development site for HK$1.6 billion, or HK$1,944 psf, at a government land auction in 2002 when the market was in a downturn.
Midland's Lam estimated the value of the Hoi Fai Road site at HK$6 billion, as it is close to Olympic station and some apartments would have sea views.
"It is one of the few waterfront sites in the area," Lam said.
Cheung Kong executive director Justin Chiu Kwok-hung said: "At the Hoi Fai site, the [existing] flats there are newer and so they [owners] wouldn't upgrade so soon. Still, the view [from the plot up for auction] is better."
Chiu said Cheung Kong was interested in the site.
In September 2004, a residential site on Tin Kwong Road in Ho Man Tin was triggered for auction with a bid of HK$5.02 billion.
The site was sold to Cheung Kong for HK$9.42 billion a month later.
In September 2005, two adjoining sites opposite Hoi Fu Court and Park Avenue in West Kowloon fetched between HK$5,300 psf and HK$5,400 psf. It was also a consortium involving Sino Land, Nan Fung and Chinese Estates that won those sites.
Midland Realty chief analyst Buggle Lau Ka- fai said last week's land sale may not stimulate secondary prices in West Kowloon very much as the market was overoptimistic with its estimates before the auction.
"With [the final price] at the lower end of the market, some owners may not be so aggressive in hiking their prices," Lau said.
Ricacorp Properties executive director Willy Liu Wai-keung agreed the lower-than-expected price would be healthier for the market.
He said if the site had sold for a higher price, then the Hoi Fai plot set for auction could be bid even higher.
"The market may not accept such price levels," Liu said, referring to secondary market owners possibly being too aggressive in pricing.
Hong Kong Property Services (Agency) reported that some owners raised asking prices by 2 percent to 6 percent after the auction last week.
UK home prices rise in April despite rate hikes
UK home prices rise in April despite rate hikes
JohnFraher
Friday, May 18, 2007
House prices in Britain rose in April as higher interest rates failed to stem gains in London and the southeast of England, the Royal Institution of Chartered Surveyors said.
The number of real estate agents and land surveyors reporting higher home values in England and Wales outnumbered those showing declines by 28.9 percentage points in the three months through April, the London- based organization said. That's the most since December. In London, the balance was 86 percent.
The Bank of England raised borrowing costs for the fourth time since August last week after inflation accelerated to a record in March and a property boom showed few signs of slowing. House prices have jumped as bankers and wealthy foreigners pour money into real estate and a shortage of homes limits supply.
"Last week's interest rate hike may not be the last as the housing market has not slowed as quickly as expected, given the initial round of rate rises," said Ian Perry, a spokesman for RICS. "With prices buoyant and conditions still tight, another rate rise later in the summer looks likely."
The Bank of England raised its benchmark by a quarter point May 10 to 5.5 percent and futures trading suggests investors expect a further move in the third quarter.
Along with London, prices were also driven higher by Northern Ireland and Scotland, RICS said, but there were signs the market may cool in coming months. Surveyors' confidence in the price outlook fell to the lowest since September 2005 and inquiries by new buyers fell for a fifth month.
The Bank of England said May 2 mortgage approvals fell to 113,000 in March, the lowest in 11 months.
A lack of new properties and a boom in London's financial services industry are driving up home values. UK house prices rose at the second-fastest pace since 2005 last month, rising 10.9 percent, HBOS said. BLOOMBERG
JohnFraher
Friday, May 18, 2007
House prices in Britain rose in April as higher interest rates failed to stem gains in London and the southeast of England, the Royal Institution of Chartered Surveyors said.
The number of real estate agents and land surveyors reporting higher home values in England and Wales outnumbered those showing declines by 28.9 percentage points in the three months through April, the London- based organization said. That's the most since December. In London, the balance was 86 percent.
The Bank of England raised borrowing costs for the fourth time since August last week after inflation accelerated to a record in March and a property boom showed few signs of slowing. House prices have jumped as bankers and wealthy foreigners pour money into real estate and a shortage of homes limits supply.
"Last week's interest rate hike may not be the last as the housing market has not slowed as quickly as expected, given the initial round of rate rises," said Ian Perry, a spokesman for RICS. "With prices buoyant and conditions still tight, another rate rise later in the summer looks likely."
The Bank of England raised its benchmark by a quarter point May 10 to 5.5 percent and futures trading suggests investors expect a further move in the third quarter.
Along with London, prices were also driven higher by Northern Ireland and Scotland, RICS said, but there were signs the market may cool in coming months. Surveyors' confidence in the price outlook fell to the lowest since September 2005 and inquiries by new buyers fell for a fifth month.
The Bank of England said May 2 mortgage approvals fell to 113,000 in March, the lowest in 11 months.
A lack of new properties and a boom in London's financial services industry are driving up home values. UK house prices rose at the second-fastest pace since 2005 last month, rising 10.9 percent, HBOS said. BLOOMBERG
Replicating Vancouver in Dubai
Replicating Vancouver in Dubai
May 27, 2007 in Unbelievable!, Canada/Vancouver
DK mentioned over dim sum yesterday a fascinating tidbit about Dubai Marina and Vancouver’s False Creek, so I did a little investigating. Very interesting! (FYI, Yaletown/False Creek area is where I live now…)
The following article is dated 2004, and there may very well be better articles out there. And probably a few dissertations and master’s theses out there? The author, Boddy, an architecture writer for the Vancouver Sun beams with national(ist) pride that Dubai chose to replicate Vancouver.
May 27, 2007 in Unbelievable!, Canada/Vancouver
DK mentioned over dim sum yesterday a fascinating tidbit about Dubai Marina and Vancouver’s False Creek, so I did a little investigating. Very interesting! (FYI, Yaletown/False Creek area is where I live now…)
The following article is dated 2004, and there may very well be better articles out there. And probably a few dissertations and master’s theses out there? The author, Boddy, an architecture writer for the Vancouver Sun beams with national(ist) pride that Dubai chose to replicate Vancouver.
Winfoong to acquire Singapore property firm
Winfoong to acquire Singapore property firm
Danny Chung
Monday, May 28, 2007
Small developer Winfoong International (0063) is buying a Singapore property company from its controlling shareholder for S$22.24 million (HK$113.94 million).
Winfoong will pay S$4.68 million in cash and issue 900 million new shares for the remaining S$17.56 million.
The value of the new shares represents 60.3 percent of the existing share capital of the company and 37.6 percent of the enlarged issued share capital. The issue price is 10 HK cents, representing an 87.7 percent discount to the closing price of 81 HK cents Friday.
The issue of new shares will boost the stake of the major shareholder, Singapore-listed Hong Fok Corp from 40.7 percent to 63 percent.
The property company being sold, Goldease Group, is engaged in property development and holds several Singapore buildings.
These are 11 flats at Balmoral Park and four flats at Suffolk Road with an average total monthly rental income of HK$155,000 last year.
"The board considers that the acquisition provides the group with a good opportunity to expand and diversify its property investment portfolio into the overseas market," chairman Patrick Cheong Pin- chuan said in a stock exchange notice.
Apart from buying the entire issued share capital of Goldease, the deal also includes acquiring a loan of not more than S$33.2 million.
The company posted a 31 percent increase in net profit attributable to shareholders for the year to the end of December that was due mainly to a near sixfold rise in share of profits from an associate of HK$178 million.
The company focuses mainly on property leasing, development and horticultural services.
It is redeveloping an investment property at 38 Conduit Road, which is expected to be completed in 2009.
Danny Chung
Monday, May 28, 2007
Small developer Winfoong International (0063) is buying a Singapore property company from its controlling shareholder for S$22.24 million (HK$113.94 million).
Winfoong will pay S$4.68 million in cash and issue 900 million new shares for the remaining S$17.56 million.
The value of the new shares represents 60.3 percent of the existing share capital of the company and 37.6 percent of the enlarged issued share capital. The issue price is 10 HK cents, representing an 87.7 percent discount to the closing price of 81 HK cents Friday.
The issue of new shares will boost the stake of the major shareholder, Singapore-listed Hong Fok Corp from 40.7 percent to 63 percent.
The property company being sold, Goldease Group, is engaged in property development and holds several Singapore buildings.
These are 11 flats at Balmoral Park and four flats at Suffolk Road with an average total monthly rental income of HK$155,000 last year.
"The board considers that the acquisition provides the group with a good opportunity to expand and diversify its property investment portfolio into the overseas market," chairman Patrick Cheong Pin- chuan said in a stock exchange notice.
Apart from buying the entire issued share capital of Goldease, the deal also includes acquiring a loan of not more than S$33.2 million.
The company posted a 31 percent increase in net profit attributable to shareholders for the year to the end of December that was due mainly to a near sixfold rise in share of profits from an associate of HK$178 million.
The company focuses mainly on property leasing, development and horticultural services.
It is redeveloping an investment property at 38 Conduit Road, which is expected to be completed in 2009.
Home on the web - the buy-to-let debate
Home on the web - the buy-to-let debate
NEWS that the taxman is cracking down on landlords elicited huge interest on Times Online: with more than 60,000 page views the story was one of the most read and attracted the highest number of comments – more than 130. Here is a cross-section of your views:
“Buy-to-let should be banned – residential properties are to be lived in, not to make profit out of the poor and first-time buyers.” Des, London
“213,700 new homes were built last year in the UK, according to the Department for Communities and Local Government; 330,000 buy-to-let mortgages were taken in the same period, according to the Council of Mortgage Lenders – that’s 116,300 more than the number of new homes. No wonder it makes sense to ensure they are taxed fairly.” Matt, London
“My tenant pays £675 per week. Yes, per week. That’s not because she can’t afford to buy, it’s because she wants to rent. Like most landlords I have an interest-only mortgage – if I didn’t get tax relief on the interest, I’d put her rent up 40 per cent.” Philippa, London
Related Links
Buy-to-let investors are suffering - should we be worried?
Buy-to-let families face tax shock
Market View - Falling Yields
“I know at least 20 people who call themselves ‘property speculators’, but who don’t declare their income as such. Property speculation has skewed the market as it is – to avoid tax as well is a disgrace.” Charlie, Cambridge “Buy-to-let does not create a housing shortage; what has created a shortage are people living longer, divorce, immigration, people living alone, and government policies that have made it hard to build. Combine that with low interest rates and prices are bound to rise.” Charles, Bath
“The buy-to-let brigade has caused probably the biggest inequality in British society in ten years. If they haven’t paid enough tax then let’s claw it back and put the money in the public domain.” Gavin, London
“I have been a landlord for 19 years. I have always paid my taxes and expect everyone else in this business to do so as well. Rentals serve people who cannot or do not want to own their own property, such as families on benefit. Statements such as ‘ban residential buy-to-lets’ fail to consider the plight of those who would not have the availability of such housing.” John, Durham
“There would be far fewer private landlords if Mr Brown had not stolen billions of pounds from pension funds since 1997!” Gary, London
NEWS that the taxman is cracking down on landlords elicited huge interest on Times Online: with more than 60,000 page views the story was one of the most read and attracted the highest number of comments – more than 130. Here is a cross-section of your views:
“Buy-to-let should be banned – residential properties are to be lived in, not to make profit out of the poor and first-time buyers.” Des, London
“213,700 new homes were built last year in the UK, according to the Department for Communities and Local Government; 330,000 buy-to-let mortgages were taken in the same period, according to the Council of Mortgage Lenders – that’s 116,300 more than the number of new homes. No wonder it makes sense to ensure they are taxed fairly.” Matt, London
“My tenant pays £675 per week. Yes, per week. That’s not because she can’t afford to buy, it’s because she wants to rent. Like most landlords I have an interest-only mortgage – if I didn’t get tax relief on the interest, I’d put her rent up 40 per cent.” Philippa, London
Related Links
Buy-to-let investors are suffering - should we be worried?
Buy-to-let families face tax shock
Market View - Falling Yields
“I know at least 20 people who call themselves ‘property speculators’, but who don’t declare their income as such. Property speculation has skewed the market as it is – to avoid tax as well is a disgrace.” Charlie, Cambridge “Buy-to-let does not create a housing shortage; what has created a shortage are people living longer, divorce, immigration, people living alone, and government policies that have made it hard to build. Combine that with low interest rates and prices are bound to rise.” Charles, Bath
“The buy-to-let brigade has caused probably the biggest inequality in British society in ten years. If they haven’t paid enough tax then let’s claw it back and put the money in the public domain.” Gavin, London
“I have been a landlord for 19 years. I have always paid my taxes and expect everyone else in this business to do so as well. Rentals serve people who cannot or do not want to own their own property, such as families on benefit. Statements such as ‘ban residential buy-to-lets’ fail to consider the plight of those who would not have the availability of such housing.” John, Durham
“There would be far fewer private landlords if Mr Brown had not stolen billions of pounds from pension funds since 1997!” Gary, London
Foreign yields
Foreign yields
Shrewdly managed, property abroad can make you a tidy sumRosie Millard
So, you own a property overseas. Lucky you. And now you want to make it earn its keep by letting it out. Doing so successfully can be as tricky as buying the right place to start with, but don’t despair: rental success abroad can be yours, provided you follow some simple rules.
Essentially, holidaymakers and long-term corporate tenants are looking for the same thing: a simple, properly kitted-out flat or house in the right location that will fulfil their needs and is not full of dusty priceless antiques or ghastly plastic furniture. It needs to be spotless, workable and appropriately decorated.
So, leave the family snaps at home and choose framed pictures that won’t frighten anyone and, ideally, have a vague link to the location – arty black-and-white shots of local views, that sort of thing, to remind your tenant why they have chosen your property.
Even though your tenants have gone abroad, they will still want to keep in touch with home. “My top two tips for renting successfully are: a) install Sky and b) install a broadband connection,” says Mary McCallum, who runs Holidays Marbella (www. holidaysmarbella.com), which rents out properties on the Costa del Sol, in Spain. “People don’t want to go to a local internet cafe. They want to log on while they are in the holiday home so they can work and be with the family at the same time.”
Next, it is absolutely vital that you have someone on site who can manage your property for you. Renting by owner, as the Americans call it, sounds like a great idea and, in theory, will save you the 25% commission most managing agents charge. In practice, however, it will land you with a lot of problems, unless you really want to do it full-time and have air miles to burn.
Guests, whether long-term or not, need looking after – and this cannot be done by a disembodied voice at the end of a telephone. They need a reliable meeter-and-greeter and someone to orchestrate changeovers, not to mention cope with calamities.
Do you want your visitors to arrive in a dirty flat with unchanged linen? If not, you need to arrange a proper service for it. If the managing agent can find new tenants for you, so much the better. You’ll both have a vested interest in keeping the property neat and tidy.
Recently, one set of visitors to my flat in Paris left behind an entire drawer of new T-shirts. Another had her wallet pinched on the Métro. A third managed to flood the kitchen. All of the above problems were dealt with on the spot by Gail, my angelic Parisian agent. Not only does having a Gail save you the headache of panicking guests on the phone, or the colossal bore of physically having to go to Paris, Vienna or Cape Town yourself, but it impresses guests.
Indeed, an efficient and charming agent on the ground is one of the things that makes people rebook. And that, dear landlord, makes a 25% commission rate bearable. Finding one is easy: go back to your original estate agent, look in local papers, look on the net.
On the other hand, this does not necessarily mean you have to entrust them with the important task of finding tenants. If you are prepared to invest more time, you should market the property yourself.
Here, the internet is invaluable, and has virtually replaced other forms of advertising. In return for a flat fee, sites such as www. holiday-rentals.co.uk and www.holidaylettings.co.uk give access to thousands of potential tenants.
Tips for efficient adverts? According to Holiday-Rentals. co.uk, the average time spent on each page of a booking site is less than a minute – so the first paragraph should tell potential renters everything they need to know.
And make it memorable. “Paris love nest in the 9th arrondissement” is how mine starts. It seems to work. After a single explanatory paragraph, give further details on subsequent pages. Remember to put in contact numbers and important details (whether the property has a shower or a bath, for example). Tips on sightseeing would be handy, too.
If your property is not in the centre of town, come clean; make a virtue of it. Photographs are also crucial: I have a picture of a bath brimming with bubbles and surrounded by lit candles (it is a love nest).
The other key is not being too greedy. Offer your property at a decent rate, in line with comparable places. Then you can slash prices if you need to fill it up during slow months. August is the favoured time for discounts in Paris, but in Cornwall, it’s January. On the coast of Europe, the high season is essentially the summer months; in Asia, or the Caribbean, it is the other way round; and in some key cities (New York, London, Venice), there is no low season.
And please don’t do all your sums on the assumption that your holiday home will be let 90% of the time. This is unlikely – and unwise, because without any empty weeks, your property will have no time to recover.
I think 65% occupancy is perfect. In any case, because you have invested in such a great area, you’ll want to stay in your holiday home a bit. Won’t you?
Shrewdly managed, property abroad can make you a tidy sumRosie Millard
So, you own a property overseas. Lucky you. And now you want to make it earn its keep by letting it out. Doing so successfully can be as tricky as buying the right place to start with, but don’t despair: rental success abroad can be yours, provided you follow some simple rules.
Essentially, holidaymakers and long-term corporate tenants are looking for the same thing: a simple, properly kitted-out flat or house in the right location that will fulfil their needs and is not full of dusty priceless antiques or ghastly plastic furniture. It needs to be spotless, workable and appropriately decorated.
So, leave the family snaps at home and choose framed pictures that won’t frighten anyone and, ideally, have a vague link to the location – arty black-and-white shots of local views, that sort of thing, to remind your tenant why they have chosen your property.
Even though your tenants have gone abroad, they will still want to keep in touch with home. “My top two tips for renting successfully are: a) install Sky and b) install a broadband connection,” says Mary McCallum, who runs Holidays Marbella (www. holidaysmarbella.com), which rents out properties on the Costa del Sol, in Spain. “People don’t want to go to a local internet cafe. They want to log on while they are in the holiday home so they can work and be with the family at the same time.”
Next, it is absolutely vital that you have someone on site who can manage your property for you. Renting by owner, as the Americans call it, sounds like a great idea and, in theory, will save you the 25% commission most managing agents charge. In practice, however, it will land you with a lot of problems, unless you really want to do it full-time and have air miles to burn.
Guests, whether long-term or not, need looking after – and this cannot be done by a disembodied voice at the end of a telephone. They need a reliable meeter-and-greeter and someone to orchestrate changeovers, not to mention cope with calamities.
Do you want your visitors to arrive in a dirty flat with unchanged linen? If not, you need to arrange a proper service for it. If the managing agent can find new tenants for you, so much the better. You’ll both have a vested interest in keeping the property neat and tidy.
Recently, one set of visitors to my flat in Paris left behind an entire drawer of new T-shirts. Another had her wallet pinched on the Métro. A third managed to flood the kitchen. All of the above problems were dealt with on the spot by Gail, my angelic Parisian agent. Not only does having a Gail save you the headache of panicking guests on the phone, or the colossal bore of physically having to go to Paris, Vienna or Cape Town yourself, but it impresses guests.
Indeed, an efficient and charming agent on the ground is one of the things that makes people rebook. And that, dear landlord, makes a 25% commission rate bearable. Finding one is easy: go back to your original estate agent, look in local papers, look on the net.
On the other hand, this does not necessarily mean you have to entrust them with the important task of finding tenants. If you are prepared to invest more time, you should market the property yourself.
Here, the internet is invaluable, and has virtually replaced other forms of advertising. In return for a flat fee, sites such as www. holiday-rentals.co.uk and www.holidaylettings.co.uk give access to thousands of potential tenants.
Tips for efficient adverts? According to Holiday-Rentals. co.uk, the average time spent on each page of a booking site is less than a minute – so the first paragraph should tell potential renters everything they need to know.
And make it memorable. “Paris love nest in the 9th arrondissement” is how mine starts. It seems to work. After a single explanatory paragraph, give further details on subsequent pages. Remember to put in contact numbers and important details (whether the property has a shower or a bath, for example). Tips on sightseeing would be handy, too.
If your property is not in the centre of town, come clean; make a virtue of it. Photographs are also crucial: I have a picture of a bath brimming with bubbles and surrounded by lit candles (it is a love nest).
The other key is not being too greedy. Offer your property at a decent rate, in line with comparable places. Then you can slash prices if you need to fill it up during slow months. August is the favoured time for discounts in Paris, but in Cornwall, it’s January. On the coast of Europe, the high season is essentially the summer months; in Asia, or the Caribbean, it is the other way round; and in some key cities (New York, London, Venice), there is no low season.
And please don’t do all your sums on the assumption that your holiday home will be let 90% of the time. This is unlikely – and unwise, because without any empty weeks, your property will have no time to recover.
I think 65% occupancy is perfect. In any case, because you have invested in such a great area, you’ll want to stay in your holiday home a bit. Won’t you?
Grandeur Homes
PropNex has also wasted no time setting up a new luxury homes division headed by Douglas Wong, formerly associate director of Knight Frank’s Good Class Bungalow (GCB) arm Regal Homes.
On the performance so far, Mr Mohamed said: ‘The PropNex Grandeur Homes team is starting to show results, with five transactions closed in the core areas including Sentosa and downtown. Grandeur Homes is already serving more than 30 GCB clients and many high net-worth buyers looking to invest in Singapore.’
Mr Mohamed expects Grandeur to capture 20 per cent of all GCB sales within a year.
With the property market so active, PropNex has also seen record hires. In March, it took on a record 207 new agents.
Based on the 5,686 licences renewed, as reported to the Inland Revenue Authority of Singapore at end-2006, Mr Mohamed said PropNex is Singapore’s biggest real estate company. ‘More people are attracted to the lucrative prospect of being their own boss and the unlimited possibilities sales can bring,’ he said.
Source: The Business Times, 02 June 2007
On the performance so far, Mr Mohamed said: ‘The PropNex Grandeur Homes team is starting to show results, with five transactions closed in the core areas including Sentosa and downtown. Grandeur Homes is already serving more than 30 GCB clients and many high net-worth buyers looking to invest in Singapore.’
Mr Mohamed expects Grandeur to capture 20 per cent of all GCB sales within a year.
With the property market so active, PropNex has also seen record hires. In March, it took on a record 207 new agents.
Based on the 5,686 licences renewed, as reported to the Inland Revenue Authority of Singapore at end-2006, Mr Mohamed said PropNex is Singapore’s biggest real estate company. ‘More people are attracted to the lucrative prospect of being their own boss and the unlimited possibilities sales can bring,’ he said.
Source: The Business Times, 02 June 2007
HSR says it has used the tagline for its ads but PropNex claims it should be the biggest agency here
HSR says it has used the tagline for its ads but PropNex claims it should be the biggest agency here
Which is the biggest of them all?
Property agencies, that is. The honour of being able to claim the title of Singapore’s No. 1 agency has sparked a bizarre battle between two heavyweights.
In one corner is HSR International Realtors, which was named the largest real estate agency in Singapore by the Singapore Book of Records (SBOR) last month. The 27-year-old firm and its 5,136 agents, says chief executive (CEO) Patrick Liew, have since used ‘the largest real estate agency’ as a tagline for advertisements.
On Wednesday, however, a challenger emerged from the opposite corner.
PropNex, now in its seventh year of business, sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’ - a slogan it said has always been used on its website and has even been quoted in the media.
‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003,’ CEO Mohamed Ismail told The Straits Times yesterday. ‘It is not official, but nobody disputed it until last month.’
He said that ‘he knew from the beginning that HSR’s claim had no merits’ because its office and staff sizes were lower than those of PropNex. HSR hit back by saying its claim was based on PropNex’s published figure of 3,800 agents.
But PropNex said the figure referred to only ‘active agents’ - those who have closed a deal within the last year - while it has many more registered agents.
At the heart of this tussle is an issue more weighty than simply the flexing of mathematical muscle.
Mr Mohamed said the conflicting claims have affected credibility and caused confusion among clients. ‘We were giving a pitch for a project in Malaysia when the developer asked us if it was true that PropNex had the largest agency, because they had seen HSR’s ad.’
He has since taken up the issue with Mr Ong Eng Huat, the SBOR’s president, and expects a response by next week.
Mr Ong said that ‘while at the time we were quite satisfied that HSR has the largest number of agents, the figure is always changing’. The SBOR is ‘reviewing the method of measuring’, and it is not prepared to do further audits until it comes up with ‘a better form of measurement’.
Meanwhile, it is understood that HSR has been told not to attribute the claim of being the largest agency to the SBOR in its ads.
HSR’s Mr Liew told ST yesterday that size does not matter: ‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’
For him, ‘the important thing is not to be the largest, but to be the best’. ‘I lay claim to having the highest-paid agents. This month, my top agent is making at least $1.7 million. I throw my last dollar down that my top 30 agents will outdo their top 30. They cannot beat me.’
Another big gun, ERA, has refrained from jumping into the fray, even though it boasts more than 5,000 agents. ‘We are not interested in being the biggest,’ said assistant vice-president Eugene Lim. ‘(Being a) big agency doesn’t mean big market share. It’s about productivity; it’s the number of transactions you do.’
Does size matter?
In one corner is HSR International Realtors, which was named the largest real estate agency here by the Singapore Book of Records last month. In the other corner is PropNex, which sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’. ‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003.’ MR MOHAMED ISMAIL, the CEO of PropNex, who says conflicting claims have affected credibility and caused confusion among clients
‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’ MR PATRICK LIEW, the CEO of HSR International Realtors, which has been using ‘the largest real estate agency’ as a tagline for its advertisements
Source: The Straits Times, 02 June 2007
Which is the biggest of them all?
Property agencies, that is. The honour of being able to claim the title of Singapore’s No. 1 agency has sparked a bizarre battle between two heavyweights.
In one corner is HSR International Realtors, which was named the largest real estate agency in Singapore by the Singapore Book of Records (SBOR) last month. The 27-year-old firm and its 5,136 agents, says chief executive (CEO) Patrick Liew, have since used ‘the largest real estate agency’ as a tagline for advertisements.
On Wednesday, however, a challenger emerged from the opposite corner.
PropNex, now in its seventh year of business, sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’ - a slogan it said has always been used on its website and has even been quoted in the media.
‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003,’ CEO Mohamed Ismail told The Straits Times yesterday. ‘It is not official, but nobody disputed it until last month.’
He said that ‘he knew from the beginning that HSR’s claim had no merits’ because its office and staff sizes were lower than those of PropNex. HSR hit back by saying its claim was based on PropNex’s published figure of 3,800 agents.
But PropNex said the figure referred to only ‘active agents’ - those who have closed a deal within the last year - while it has many more registered agents.
At the heart of this tussle is an issue more weighty than simply the flexing of mathematical muscle.
Mr Mohamed said the conflicting claims have affected credibility and caused confusion among clients. ‘We were giving a pitch for a project in Malaysia when the developer asked us if it was true that PropNex had the largest agency, because they had seen HSR’s ad.’
He has since taken up the issue with Mr Ong Eng Huat, the SBOR’s president, and expects a response by next week.
Mr Ong said that ‘while at the time we were quite satisfied that HSR has the largest number of agents, the figure is always changing’. The SBOR is ‘reviewing the method of measuring’, and it is not prepared to do further audits until it comes up with ‘a better form of measurement’.
Meanwhile, it is understood that HSR has been told not to attribute the claim of being the largest agency to the SBOR in its ads.
HSR’s Mr Liew told ST yesterday that size does not matter: ‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’
For him, ‘the important thing is not to be the largest, but to be the best’. ‘I lay claim to having the highest-paid agents. This month, my top agent is making at least $1.7 million. I throw my last dollar down that my top 30 agents will outdo their top 30. They cannot beat me.’
Another big gun, ERA, has refrained from jumping into the fray, even though it boasts more than 5,000 agents. ‘We are not interested in being the biggest,’ said assistant vice-president Eugene Lim. ‘(Being a) big agency doesn’t mean big market share. It’s about productivity; it’s the number of transactions you do.’
Does size matter?
In one corner is HSR International Realtors, which was named the largest real estate agency here by the Singapore Book of Records last month. In the other corner is PropNex, which sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’. ‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003.’ MR MOHAMED ISMAIL, the CEO of PropNex, who says conflicting claims have affected credibility and caused confusion among clients
‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’ MR PATRICK LIEW, the CEO of HSR International Realtors, which has been using ‘the largest real estate agency’ as a tagline for its advertisements
Source: The Straits Times, 02 June 2007
Hong Leong Asia exclusive contract to supply ready-mixed concrete to the Marina Bay Sands integrated resort
Hong Leong Asia (HLA), a subsidiary of Singapore’s Hong Leong Group, has been awarded an exclusive contract to supply ready-mixed concrete to the Marina Bay Sands integrated resort (IR). The contract could be worth as much as $210 million.
Under the contract, HLA will supply about 800,000-1.2 million cubic metres of ready-mixed concrete for the construction of the IR until it is completed in 2009, the company said yesterday.
While HLA declined to provide the value of the contract, industry players said that price of a cubic metre of ready-mixed concrete ranges between $167-$175 at present. HLA’s contract could, therefore, be worth anything between $133.6-$210 million depending on the price of and amount of ready-mixed concrete it supplies.
‘This award, as the sole supplier of ready-mix concrete to the Marina Bay Sands integrated resort, will have a positive effect on the group’s building materials unit,’ said HLA CEO Teo Tong Kooi.
The contract from Marina Bay Sands follows an earlier one awarded to CSC Holdings subsidiary L&M Foundation Specialist Pte Ltd. Last month, CSC Holdings won a $240 million deal for piling and diaphragm walls for the IR.
Contracts awarded by the IR are expected to boost the construction sector here - set to grow in 2007 after years of being in the doldrums. Industry regulator Building and Construction Authority expects deals awarded here to reach $17-19 billion this year. HLA’s shares climbed 10 cents to close at $2.73 yesterday. The stock has surged 60.6 per cent since the start of the year.
Source: The Business Times, 02 June 2007
Under the contract, HLA will supply about 800,000-1.2 million cubic metres of ready-mixed concrete for the construction of the IR until it is completed in 2009, the company said yesterday.
While HLA declined to provide the value of the contract, industry players said that price of a cubic metre of ready-mixed concrete ranges between $167-$175 at present. HLA’s contract could, therefore, be worth anything between $133.6-$210 million depending on the price of and amount of ready-mixed concrete it supplies.
‘This award, as the sole supplier of ready-mix concrete to the Marina Bay Sands integrated resort, will have a positive effect on the group’s building materials unit,’ said HLA CEO Teo Tong Kooi.
The contract from Marina Bay Sands follows an earlier one awarded to CSC Holdings subsidiary L&M Foundation Specialist Pte Ltd. Last month, CSC Holdings won a $240 million deal for piling and diaphragm walls for the IR.
Contracts awarded by the IR are expected to boost the construction sector here - set to grow in 2007 after years of being in the doldrums. Industry regulator Building and Construction Authority expects deals awarded here to reach $17-19 billion this year. HLA’s shares climbed 10 cents to close at $2.73 yesterday. The stock has surged 60.6 per cent since the start of the year.
Source: The Business Times, 02 June 2007
First Reit
First Reit announced yesterday that it will add a $12.8 million nursing home to its portfolio.
The Lentor Residence - a 148-bed home with a gross floor area of almost 3,000 sq m - is the third nursing home in Singapore that the real estate investment trust (Reit) has bought since it was listed by Indonesia’s Lippo Group last December.
The deal will expand First Reit’s asset base by 14 per cent. It is also expected to reap $998,400 in annual rent from its lease of the Lentor Avenue nursing home to First Lentor Residences.
‘Not only will this acquisition further strengthen our income stream, it will also enlarge First Reit’s asset portfolio, raising it to $293.1 million,’ said Dr Ronnie Tan, chief executive officer of Bowsprit Capital Corporation, which manages First Reit.
First Reit, which is Singapore’s first health-care Reit, also owns a hospital and four properties in Indonesia.
Its new acquisition will be funded fully by a $90 million term loan from OCBC Bank issued in January this year.
‘Our gearing after the acquisition will still be relatively low, giving us financial flexibility to undertake more acquisitions that fit in with our strategy,’ said Dr Tan.
The firm aims to grow its asset base to $500 million within three years of its initial listing, but Singapore may not be the next destination.
Dr Tan said: ‘We will continue to look for quality health-care assets in different parts of Asia so as to reduce our reliance on any single country or type of tenants.’
Source: The Straits Times, 02 June 2007
The Lentor Residence - a 148-bed home with a gross floor area of almost 3,000 sq m - is the third nursing home in Singapore that the real estate investment trust (Reit) has bought since it was listed by Indonesia’s Lippo Group last December.
The deal will expand First Reit’s asset base by 14 per cent. It is also expected to reap $998,400 in annual rent from its lease of the Lentor Avenue nursing home to First Lentor Residences.
‘Not only will this acquisition further strengthen our income stream, it will also enlarge First Reit’s asset portfolio, raising it to $293.1 million,’ said Dr Ronnie Tan, chief executive officer of Bowsprit Capital Corporation, which manages First Reit.
First Reit, which is Singapore’s first health-care Reit, also owns a hospital and four properties in Indonesia.
Its new acquisition will be funded fully by a $90 million term loan from OCBC Bank issued in January this year.
‘Our gearing after the acquisition will still be relatively low, giving us financial flexibility to undertake more acquisitions that fit in with our strategy,’ said Dr Tan.
The firm aims to grow its asset base to $500 million within three years of its initial listing, but Singapore may not be the next destination.
Dr Tan said: ‘We will continue to look for quality health-care assets in different parts of Asia so as to reduce our reliance on any single country or type of tenants.’
Source: The Straits Times, 02 June 2007
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