Friday, July 27, 2007

CapitaLand tie-up to develop China malls

CapitaLand tie-up to develop China malls July 17, 2007
Posted by propertyforesight in Developer Moves, China. add a comment

CapitaLand has signed a cooperative agreement with China Vanke, China’s largest residential developer, in a move that will increase the Singapore property giant’s potential pipeline of retail mall assets in the country.

Under the agreement, CapitaLand and Vanke will jointly develop identified retail assets - for ongoing projects and upcoming ones - in Vanke’s residential townships. These retail assets will then be acquired by CapitaLand ‘at the appropriate time’, the company said.

CapitaLand and Vanke will also employ the same partnership arrangement for potential greenfield residential township projects, which Vanke intends to continue building in China.

The retail assets could eventually be injected into CapitaLand’s CapitaRetail China Trust (CRCT), which is made up of some of CapitaLand’s retail assets in China. ‘There is a possibility of them (the new retail assets developed jointly with Vanke) being ultimately injected into CRCT, but this will only be in the medium to long term,’ said a CapitaLand spokesperson.

CapitaLand now has over 70 malls in its China portfolio, and this agreement is expected to add to the number.

‘The partnership with Vanke is not only mutually beneficial but also a strong endorsement from China’s largest developer of our retail property development and management skill sets, and on-ground delivery capabilities in China,’ said Liew Mun Leong, chief executive of CapitaLand.

‘In addition, by having our retail property presence in these townships, residents in Vanke’s properties will enjoy even higher quality of living and there will be greater appeal for such developments among the local population.’

The joint venture is expected to raise the standards of residential township projects in China to be on a par with international township developments - where residential and retail components are well laid-out to allow residents to enjoy F&B and retail facilities within easy reach, said CapitaLand.

CapitaLand’s shares closed 20 cents down at $7.80 yesterday.

Source: The Business Times

Yanlord buys Suzhou site for 2.2b yuan

Yanlord buys Suzhou site for 2.2b yuan June 30, 2007
Posted by propertyforesight in China. add a comment

Chinese real estate developer Yanlord Land has acquired a site in Suzhou for about 2.16 billion yuan (S$435.9 million), it said yesterday.

The ‘prime site’ is located in Shuanghu Plate Area, Suzhou, Jiangsu Province, and is located between the Dushu and Jinji lakes. It has a total gross floor area of nearly 337,000 square metres, and was acquired at about 6,400 yuan per square metre of GFA, Yanlord said.

The group intends to develop the property into ‘a deluxe residential zone comprising townhouses, fully fitted apartments, ancilliary commercial facilities and serviced apartments’. The acquisition demonstrates ‘our continued confidence in the potential of the rapidly expanding Suzhou property sector and its ability to play a key role in Yanlord’s geographical expansion strategy’, said Zhong Sheng Jian, chairman and CEO of Yanlord.

Suzhou has seen per capita disposable income nearly double from 10,515 yuan in 2001 to 18,532 yuan in 2006, one of the highest among the Yangtze River Delta cities, he added.

The foreign investment - such as from over 80 of the Fortune 500 companies - have also attracted expatriates from overseas and other parts of China.

Source: The Business Times

Chinese developer Longhu plans US$1b HK IPO

China’s Longhu Real Estate hopes to raise US$1 billion in a Hong Kong initial public offering, probably next year, a bank source said, at a time when loans are drying up for land-hungry developers as the government tries to cool the building sector.

The source told Reuters that the Chongqing-based firm would probably sell around a 25 per cent stake, and was now looking to hire investment banks to handle the initial public offering.

‘It’s still early days,’ the source said, adding that the IPO would probably be launched in 2008. A report in the South China Morning Post newspaper yesterday said that UBS, JPMorgan, Morgan Stanley and Merrill Lynch were vying for the deal.

With the Chinese government trying to cool the booming construction sector, and banks no longer giving loans for land purchases, property firms have been keen to sell shares and issue convertible bonds in recent months.

And deals are getting bigger.

Guangzhou-based Country Garden Holdings Co raised US$1.66 billion last month in the biggest ever IPO in Hong Kong by a Chinese property firm. The stock jumped 35 per cent on its debut and is now 26 per cent above its IPO price. That IPO has sparked speculation that a raft of Chinese property developers will follow suit as they gather funds to buy land in a rush to break out of regional strong-holds and become national players.

Chinese industrial conglomerate VcanLand Group, for example, told Reuters this month it was planning a Hong Kong IPO of at least US$1.3 billion.

Longhu was founded in 1995, according to the firm’s website, and has built a villa, apartment and shopping centre projects in the western Chinese city of Chongqing.It also plans to build a 1 million sq m residential project with high-rise apartments and villas.

Source: The Business Times

Shui On, partners to invest 3b yuan in China venture

Shui On Land Ltd, a Shanghai-based real estate developer, and its partners in a venture will spend more than 3 billion yuan (S$599 million) on a software park in the north-eastern Chinese city of Dalian.

The venture will pay Yida Group, a local developer, 936 million yuan for a 78 per cent stake in the project, Shui On Land said in a statement to the Hong Kong Stock Exchange yesterday. The venture, which includes Yida and Shui On Construction & Materials Ltd, will also pay Yida 2.14 billion yuan for the land and other related costs in the project.

Shui On Land, which first sold shares to the public in a Hong Kong share sale in October, has been expanding. The company and Shui On Construction, both controlled by billionaire Vincent Lo, in November bought developer Sheng Jin Real Estate Co, which owns an office and commercial building site in Shanghai.

After the transaction, Shui On Land will own 61.5 per cent of the venture, Dalian Software Park Phase 2. Yida will own 10.3 per cent while Shui On Construction will own the rest. The project has an area of about 4 million square metres.

The software park’s first phase opened in 1998, has a gross floor area of 1.6 million sq m and has attracted more than 340 software companies, Shui On said in March.

Source: The Business Times

Close watch on property boom, too

THERE is no ’single trigger point’ that will set off alarm bells, but the Monetary Authority of Singapore (MAS) is closely watching developments in the property boom.

‘We watch these developments carefully, in particular the risk of property prices taking a momentum of their own,’ MAS managing director Heng Swee Keat told the media yesterday.

From a central bank and regulator’s perspective, MAS’ policy concerns are in two broad areas - the impact of rising prices on costs and on the stability of the financial system, he said. Already, the recent rapid rise in rentals has led to a rise in business costs, which would eventually be passed on to consumers.

The banking sector’s exposure to the property and construction sectors is ’significant’, and housing and related business loans have grown over the last few quarters, Mr Heng added. ‘So for both these reasons we will be watching developments in the market very carefully.’

Source: The Business Times, 26 July 2007

Condos-on-columns the in thing in S’pore July 27, 2007

Soleil@Sinaran is latest in new trend for high-rises that enhances privacyTHE upcoming Frasers Centrepoint Homes condo Soleil@Sinaran is the latest to reflect the trend for soaring buildings raised high on columns.

Architects 61, which also designed The Cosmopolitan in the River Valley area, said that by elevating the 417-unit Soleil@Sinaran, ‘the privacy of the units is enhanced to greater heights’.

Considerations in the design of Soleil@Sinaran included a high plot ratio of 3.5, a height restriction of about 40 storeys and high-density living.

The architects also felt that adjacent mid-rise private flats and Novena Square commercial development had large footprints and, therefore, views were minimised.

Architects 61 said: ‘Privacy of the lowest level of units is further enhanced by locating it as high from the ground as possible.’

Like The Cosmopolitan - and many other new condominiums - Soleil@Sinaran will rise from above street level.

But will columns be the only thing visible from street level?

Asked about the impact on the streetscape from buildings raised on columns, the Urban Redevelopment Authority said: ‘Generally, in certain areas within the city centre, urban design guidelines are put in place where the context requires buildings to relate to the street and their surrounding developments.

‘In the case of The Cosmopolitan, it is located in a residential area where the relation of the building to the street is not as critical. Hence the guidelines do not specifically require the building to do so.’

For Soleil@Sinaran, raising the building has allowed Architects 61 to free more space for landscaping that will include lagoons, pool lounges, entertainment pavilions with spa alcoves and spa pavilions to create a ‘green podium’.

‘The landscaping extends into the depth of the tower footprint,’ the architects said. ‘Trees grown within the covered first-

storey terrace provide a human scale to the tower rising above, ‘dissolving’ the boundary between the inside and the outside. It is this landscaped podium that provides the human scale at street level.’

Soleil@Sinaran is expected to be launched mid-August. Prices have not be fixed yet.

Part-time property agents on the boom

THIS year, Ms K.C. Koh upgraded her family to a five-room flat, splurged $50,000 on renovations and even pampered her parents and two sisters with a 32-inch LCD television each.

She did all these with the $80,000 she made since January in in the property market.

What’s amazing is that she is only a part-time agent.

In the first quarter of this year (2007), 4,565 private residential units were sold - more than double the number the same time last year.

Many others like her have entered the market in the hope of making some extra money.

Institute of Estate Agents figures show there are 18,500 property agents. It could not say how many of these were parttime agents.

But property agencies say the number of agents they have have doubled of late to cope with the hot property market.

Up to two-thirds of these newcomers are estimated to be part-timers.

They hold jobs ranging from engineers and lawyers to life insurance agents and housewives.

East Coast en bloc sale fetches 25% price premium July 27, 2007

St Patrick’s View sold to TG Development for $79 million

ST PATRICK’S View, off Telok Kurau Road, has been sold en bloc to TG Development Pte Ltd (TGD) for $79 million, 25 per cent higher than the indicated price when the collective sale was launched three months ago.

On its bullish bid, TGD managing director Ong Boon Chuan said: ‘The prices for Districts 9, 10 and 11 are quite high but there is room for more upside in the outskirts.’

Giving a contrarian view, Mr Ong also said that while higher asking prices for en bloc sites may lead to resistance from developers, it also means there will be ‘less supply in the market’.

Marketed by Colliers International, executive director (Investment Sales) Ho Eng Joo added: ‘The benchmark price of St Patrick’s View reflects developers’ continued confidence and optimism in the East Coast area, as demand for new residential projects still remains strong.’

At $79 million, the price works out to $682 per sq ft per plot ratio (psf ppr), including an estimated development charge of $302,318 for the 83,013 sq ft site.

Mr Ong said that TGD plans to build a five-storey development of about 100 units with unit sizes of between 1,000 sq ft and 1,400 sq ft. The launch is targeted for mid-2008.

The breakeven cost is estimated at around $1,000 psf, which means new units have to be sold in excess of this.

Over in Kembangan, Savills Singapore is marketing the launch of the 32-unit D’Oasia by Monfort Land at about $910 psf.

To date, more than 50 per cent of the apartments have been sold during a recent private preview. The development is expected to be completed by Dec 30, 2010.

Savills is also marketing the collective sale of Trendale Tower on Cairnhill Road.

The indicative price of $180 million is 12.5 per cent higher than it was three months ago when it was put up for sale through an expression-of-interest exercise.

The latest price works out to about $2,477 psf ppr with the breakeven estimated at between $3,100 and $3,200 psf. Savills director of investment sales Steven Ming said: ‘It is reasonable to project a selling price of a new project on this site at between $3,500 and $3,600 psf.’

The 21,709 sq ft site has a plot ratio of 2.8 and can yield about 36 units of 2,000 sq ft condominium apartments.

In the Clementi area, GRE Realty is marketing the sale of Park West Condominium through the expression-of-interest mode. So far, 75 per cent of owners have agreed to the sale.

The indicative price for the 633,638 sq ft site is $620 million to $660 million, inclusive of development charge of about $115 million. GRE Realty estimated that the breakeven price would be around $750-$780 psf.

Source: The Business Times, 26 July 2007

Bids for Beach Road site may have topped $2b

The development cost for the future 99-year leasehold project could hit $3b

(SINGAPORE) A state tender for the former NCO Club/Beach Road camp grounds yesterday drew seven bids with market watchers estimating bids could have topped the $2 billion mark or $1,250 psf of potential gross floor area.

The all-in development cost for the 99-year leasehold project is expected to be in the $3 billion region, analysts estimate.

Urban Redevelopment Authority revealed the bidders, but not their bid prices, under yesterday’s two-envelope system tender, where bidders had to submit concept proposals and tender prices separately. The tender attracted big names familiar with the local market such as CapitaLand, City Developments, Pontiac Land, Overseas Union Enterprise (OUE), Keppel Land and Cheung Kong Holdings.

And some of them have teamed up with heavyweight overseas partners like Dubai’s Istithmar (part of Dubai World group) and a unit of US-based Elad Properties (these two teamed up with CityDev). Morgan Stanley is believed to have partnered Pontiac. OUE, controlled by Indonesia’s Lippo Group and Malaysian tycoon Ananda Krishnan, is expected to rope in partners like Austria’s Raiffeisen Zentralbank (RZB).

Billion Rise Ltd (believed to be linked to Li Ka-shing’s Cheung Kong Holdings) partnered Keppel Land to put in two bids. OUE is also believed to have placed two bids, one through Beach Development and the other through Nicoll Development.

Such a strategy, of placing two bids, presumably gives the bidders an opportunity to present alternative concepts, whether at the same or different prices, and hopefully boost their chances of success.

Under the two-envelope system, the concept proposals will first be evaluated against a set of prestated criteria (including overall design concept, quality of architectural design, adaptive reuse of conservation buildings, and composition and placement of uses). Only proposals that substantially satisfy the evaluation criteria will be shortlisted.

At the second stage, the tender price envelopes of these shortlisted bidders will be opened and the site awarded to the highest of these bidders, provided this top bid meets the government’s reserve price.

Market watchers reckon the majority of bids at yesterday’s tender would be in the $1,000 to $1,200 psf per plot ratio range which works out to around $1.6 billion to $1.9 billion for the 99-year site which can have a maximum gross floor area of nearly 1.6 million sq ft.

Construction costs, fees and interest could amount to a further $900 million to $1 billion, bringing the likely all-in investment to about $2.5 billion to $3 billion.

The site can be developed into a project with nearly 1.6 million sq ft gross floor area, of which a minimum 40 per cent is for office use, and at least 30 per cent for hotel rooms. The rest can be for complementary retail and residential use.

The development will entail the conservation and restoration of the former NCO Club building and three blocks of the former Beach Road camp. The new towers in the building can be up to 45 storeys high.

Market watchers reckon that some of the schemes could possibly entail a high-rise tower with hotel rooms on the lower floors and apartments on the upper floors, seen in places like New York but novel in Singapore.

The release of the Beach Road site is part of the government’s strategy to alleviate the shortage of office space.

JP Morgan real estate analyst Chris Gee said: ‘The office rental market is the most volatile of all the investment property segments in Singapore.’

He noted that even before the close of yesterday’s tender, the URA had made known its plans to offer four other sites in the CBD which can be substantially developed into offices - two at Anson Road and two near the One Shenton condo project. The tender for the first of the Anson Road plots closed on Monday and was yesterday awarded to highest bidder Mapletree Investments at $1,021 psf per plot ratio.

The tender for the second Anson Road plot closes next month. The tender for a plot directly behind One Shenton closes in September, while that for the next-door site will be launched by the end of this month.

Source: The Business Times, 26 July 2007

Close watch on property boom, too

THERE is no ’single trigger point’ that will set off alarm bells, but the Monetary Authority of Singapore (MAS) is closely watching developments in the property boom.

‘We watch these developments carefully, in particular the risk of property prices taking a momentum of their own,’ MAS managing director Heng Swee Keat told the media yesterday.

From a central bank and regulator’s perspective, MAS’ policy concerns are in two broad areas - the impact of rising prices on costs and on the stability of the financial system, he said. Already, the recent rapid rise in rentals has led to a rise in business costs, which would eventually be passed on to consumers.

The banking sector’s exposure to the property and construction sectors is ’significant’, and housing and related business loans have grown over the last few quarters, Mr Heng added. ‘So for both these reasons we will be watching developments in the market very carefully.’

Source: The Business Times, 26 July 2007

Beach Road site draws 7 bids from big-name developers

Some even put in two bids to boost chances of winning historic 3.5ha plot

PROPERTY heavyweights have come out in force to vie for a plum commercial site in Beach Road - seen by some as the last iconic site in town.

Competition is so keen in the current red-hot market that some developers submitted two bids in the hope of increasing their chances. The historic 3.5ha site is just up the road from Raffles Hotel and could fetch $1.5 billion.

The Urban Redevelopment Authority (URA) yesterday released the names of the seven tender submissions it had received by the time the tender closed. It will award the tender after evaluating design concepts and then considering the prices submitted by those bids with acceptable designs.

‘This is a high-quantum site. The fact that it attracted seven submissions shows Singapore is still a very attractive investment destination,’ said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

Among the big names, Indonesia’s Lippo Group - which already has extensive interests in Singapore - and Keppel Land (KepLand) put in two proposals each.

Lippo submitted its proposals under Beach Development and Nicoll Development.

KepLand tied up with a partner, Billion Rise - believed to be a vehicle for Hong Kong giant Cheung Kong Holdings, another foreign group with interests in Singapore - for both of its bids. It tendered under Ocean & Capital Properties and Mansfield Developments.

CapitaLand submitted its proposal under various parties, all featuring the name ‘Brilliant’.

The sixth proposal was from Colonnade Properties and Beacon Strategic Investments. This is led by Pontiac Land’s Pontiac Investments.

The seventh bid came from City Developments’ Scottsdale Properties, Dubai World’s Istithmar Beach Road FZE and Elad Group Singapore.

The site can be built up to a gross floor area of 146,827 sq m and allows for a high-quality mixed-use development featuring mostly prime office space and hotel rooms.

Property experts say it is a large site affording the opportunity for an eye-catching development. Some believe it is the last iconic site in town - so some of the bids could be high, at $1.5 billion or more, they said.

When the tender was launched in March, consultants had said the site could fetch $1 billion to $1.4 billion. URA had said the hotel and office space will add to the critical mass of such space in the area.

Singapore faces a shortage of prime Grade A office space. Yesterday, Savills put out a report saying vacancy rates for prime Grade A office buildings have fallen to 1 per cent in the second quarter - the lowest level in a decade - from 2.8 per cent in the first quarter.

Indeed, at least until 2010, the vacancy rate for Grade A office space is expected to remain below 3 per cent, it said.

‘The shortage is in Grade A space. There’s still some space in Grade B buildings and outside the prime areas,’ said Savills director of corporate real estate Simon Hill.

Landlords will continue to dominate the market, pushing rents up by another 20 to 30 per cent by year-end.

Source: The Straits Times, 26 July 2007

Runaway lawyer David Rasif fingered in property cashback case

THERE was an added element of interest in a property cashback court case - runaway lawyer David Rasif was fingered as a ‘prime mover’ in the scam.

In the dock was property agent Goh Chong Liang, 37, who admitted to his role in a cashback scam to cheat banks into giving out housing loans.

But all in the gallery listened attentively when both defence lawyer Peter Fernando and Deputy Public Prosecutor Jason Chan pointed to Rasif’s stake in the scam.

District Judge Liew Thiam Leng was told of how Goh conspired with Rasif to dupe the banks into granting loans in the scam.

DPP Chan gave the court an idea of how such a scam worked - a property agent will work with a buyer and seller to inflate the price of the seller’s flat.

This will secure a higher housing loan for the buyer. The difference between the loan amount and the actual price of the resale flat is then split between those involved in the scam.

The court heard that Goh had roped in Rasif, through his law firm at the time, to act for flat sellers in the scam.

In order to inflate the price of a flat, Goh included the renovation costs for the flat by a shell company he helped set up.

The company, however, never carried out any such work at all.

Source: The Straits Times, 26 July 2007

Rising rents spur increase in expat moves

MOVING companies which specialise in the relocation of high- and mid-level expatriates are reporting a surge in number of expat families they are helping to move within Singapore.

The majority of these moves are reported to be from upscale districts such as Holland Road, Bukit Timah and Tanglin to cheaper, outlying neighbourhoods.

This downgrading phenomenon started in recent months, they say, as spiralling rents put prime-district living out of reach of some expats.

Rents for apartments in Districts 9, 10 and 11 have skyrocketed by 33 per cent from a year ago on average, according to real estate consultancy Savills.

These three districts refer to areas such as Orchard/Cairnhill, Tanglin/Holland Road and Newton/Bukit Timah respectively.

Since March, moving companies that service the corporate accounts of multinational corporations here have been inundated with expats’ requests for local moves.

At least one firm reported volumes doubling from a year ago.

The expats’ musical chairs, movers say, occur mostly at the end of the month, which is when residential leases usually end.

Singapore’s ‘en bloc frenzy’ has cut the supply of rental apartments in choice districts and caused the rents of still-available apartments to increase.

‘Low vacancy levels coupled with strong demand from overseas staff as well as from tenants and owners displaced from collective sales is expected to translate into rising rents over the short to meidum term,’ said Simon Hill, regional director of residential leasing at Savills.

Source: The Straits Times, 26 July 2007

City Towers’ asking price doubles in 3 mths

CITY Towers on Bukit Timah Road is for sale by tender with an indicative price of $458.7 million, almost double the price indicated just three months ago.

An expression-of-interest exercise was held in April by marketing agents Knight Frank. Senior manager (investment sales) Steven Tan said it drew about five bids.

At the time, only 75 per cent of the owners had agreed to proceed with a collective sale.

‘The owners believe the new indicative price is reflective of market prices,’ said Mr Tan. The minimum 80 per cent approval from owners to sell has now been obtained.

The development is on 104,535 sq ft of freehold land, which is zoned for residential use at a plot ratio of 2.1, with a height restriction of 24 storeys.

Mr Tan says the successful developer can build an estimated 183 units of average 1,200 sq ft each.

Together with an estimated development charge of about $2.2 million, the indicative price reflects a land value of $2,100 per square foot per plot ratio.

As the current development is close to the maximum gross floor area, the development charge is only slightly more than the estimated $1.7 million it would have been three months ago before the rates were revised.

The break-even price is estimated at $2,870 psf, and Mr Tan expects the new units to sell for at least $3,000 psf.

On East Coast Road, Savills Singapore is marketing 48 strata-titled commercial units at EastGate, a 52-unit freehold development, for sale en bloc by expression of interest.

‘All 48 units are currently near full occupancy and are generating good cash flows from its rental collections,’ said Steven Ming, director (investment sales) of Savills Singapore. The freehold property has an indicative price of $80.3 million or $1,350 psf, based on current net lettable area.

‘Investors and buyers have begun to look at opportunities beyond the traditional CBD locations for good commercial buildings that could still present good upside potential in terms of both rental rates and capital value appreciation,’ said Mr Ming.

Potential average rentals are expected to be $5 psf.

Source: The Business Times, 25 July 2007

SC Global makes top bid for Sentosa site

It offered $268.3m for a 99-year leasehold condo plot near Tanjong Beach

LUXURY residential developer SC Global Developments has finally made a catch at Sentosa Cove.

It yesterday placed the top bid of $268.3 million - $1,799.78 psf of potential gross floor area - for a 99-year leasehold condo plot next to Tanjong Beach, according to provisional tender results.

This is around 32 per cent higher than the previous record for condo land in the area, of $1,361 psf per plot ratio, set in March this year, by a Ho Bee-IOI joint venture. That was for The Seaview Collection plot, which can be built up to eight storeys high.

The Ho Bee-IOI tie-up is believed to have emerged as the second-highest bidder at yesterday’s tender for the The Beachfront Collection. Its bid was around 3 per cent below SC Global’s.

SC Global had bid for earlier sites on Sentosa Cove but not aggressively, says it chairman and CEO Simon Cheong.

‘We’ve been waiting for this site. This is a rare site on Sentosa Cove - the only site where you can come out of your condo and walk directly to Tanjong Beach. We’ll be able to create on this plot a product which is synonymous with the SC Global branding.

‘This is also the only condo plot on Sentosa Cove flanked by the sea and the golf course.’

Mr Cheong could not say just how many apartments he is planning to develop on the site, but the maximum allowed by Sentosa Cove Pte Ltd - the master planner for the upmarket waterfront district - for the plot is 88 units. The 113,797 sq ft plot has a 1.31 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey height limit.

Analysts reckon SC Global’s break-even cost for a new condo on the site could be around $2,300 to $2,400 psf.

The project should be launch-ready in Q3 next year. Based on SC Global’s track record of commanding premium prices for its projects, it would not be surprising if it is hoping for an average selling price of $3,000 psf or higher, market watchers reckon. Currently, subsale prices at condos on Sentosa Cove are said to have surpassed the $2,300 psf mark.

Yesterday’s tender drew a total of five bids. Besides the bids from SC Global and the Ho Bee-IOI tie-up, the other contenders are said to include Frasers Centrepoint and Hong Leong.

Source: The Business Times, 25 July 2007

Will property market see a repeat of 1996?

Will property market see a repeat of 1996?
Posted by propertyforesight in Market Watch. add a comment

Industry watchers expect govt to take more calibrated approach this time round

THERE’S a sense of deja vu in the air for those of us who witnessed the last residential property boom in the 1990s. Record prices being reported by developers, an en bloc sale being attempted in just about every private estate, foreign buying at record levels, and subsales again in favour.

Even the government’s approach to dealing with the situation seems reminiscent of 1996, according to some market watchers.

The Ministry of National Development and Urban Redevelopment Authority have been giving assurances lately that there will be sufficient supply of homes and that they will make more sites available, if necessary. And just like over a decade ago, MND and URA have recently been making public more information on the property market to provide greater transparency.

Flashback to the mid-90s. As far back as 1994, the government raised booking and forfeiture fees to curb speculative activity. But speculation picked up again and in January 1996, URA announced that the government had set aside enough land for 100,000 private homes for the five-year period from 1997 to 2001 - more than thrice the amount necessary to meet its target of releasing land for 6,000 private homes a year.

The following month, URA revealed the sales status (as defined by options granted by developers) of individual private residential projects, and said it would do this each quarter. This was to correct any wrong impression of high take-up rates.

Fast forward to 2007. Last month MND announced the biggest Government Land Sales (GLS) Programme with enough land for about 8,000 private homes.

Earlier this month, URA said that there were about 32,700 yet-to-be-sold private homes in uncompleted projects as of Q1 2007 - possibly enough to meet demand for the next three years.

On the transparency front, URA last week released for the first time information on the number of units sold for each uncompleted private residential project by price bracket, in the month of June. Such information will henceforth be released monthly.

But what if, like in 1996, such measures fail to calm the market?

The thing with the property market is that it is primarily sentiment driven. In a bull run, people may not heed reason and logic and are driven by fear and greed instead.

When the strategy of giving assurances of adequate supply and releasing more market information failed to stem speculation in 1996, the authorities were forced to announce a slew of measures on May 14 that year. These included taxing as income the gains made from selling properties within three years of purchase and introducing a sellers’ stamp duty for those who sold residential properties within three years of purchase.

Financing was also clamped down. Banks could not make housing loans for more than 80 per cent of the purchase price or value of a property, whichever was lower. Permanent residents were limited to one Singapore dollar housing loan each while foreigners were denied such loans altogether.

All of the May 1996 anti-speculation measures were subsequently removed during the property doldrum.

To many market industry participants now, the writing is on the wall. They figure that the government may come up with measures to cool the market if the property bull run threatens Singapore’s competitiveness.

However, the stakes are higher now. Many credit the current property boom to the government’s efforts to promote Singapore, which have put Singapore on the radar screens of overseas property investors again, and its embrace of foreign talent and high net-worth individuals.

In short, many of the foreign investors in the local property market today were wooed by Singapore. Slapping a set of harsh measures might send out a negative message about Singapore as an investment destination as a whole.

Also, speculation is yet to reach the heady levels seen in 1996.

Some in the industry think a ‘whisper campaign’ by the government to tighten financing targeted at banks and developers may be less harsh and avoid a panic crash.

For example, banks could be asked to be more careful in screening housing loan applications. ‘Maybe, instead of giving loans up to the maximum 90 per cent of the value of homes, they could limit this to 80 per cent. This will make people think twice before they pay record prices for homes,’ reckons a seasoned industry observer.

Deferred payment schemes extended by developers could also be moderated or suspended, some industry players said. The ability to buy a property by making an initial payment of just 10 or 20 per cent of its value, with the next payment postponed to after the project is completed, makes things a whole lot easier for those thinking of flipping properties for a quick gain. Removing deferred payments should help take the froth from the market.

But there is a school of thought which believes that getting rid of the deferred payment, which often entails buyers paying 3 to 5 per cent more for the price of a home than under a progressive payment scheme, could crash the market.

Some suggest that taxing gains from selling properties within a short period of time may be a fairer way to contain the current exuberance. Those who make quick gains from flipping their properties should be prepared to part with a portion of their gain by paying income tax on it.

It remains to be seen if history will repeat itself.

Source: The Business Times, 25 July 2007

Strong home sales boost KepLand profit by 42%

Strong home sales boost KepLand profit by 42%
Posted by propertyforesight in Facts & Figures. add a comment

STRONG residential sales and a thriving market for office space have helped boost Keppel Land’s (KepLand’s) second-quarter net profit by 42.3 per cent to $63 million.

For the quarter ended June 30, sales rose 55.1 per cent to $359.2 million, which the property developer attributed to the ’strong performance’ of its projects in Singapore and overseas.

Such examples include The Belvedere and Urbana in Singapore, Villa Riviera in China and Elita Promenade in India.

KepLand’s earnings from overseas represented 48 per cent of profits during the quarter, well down from 75 per cent a year earlier on the back of stronger sales in Singapore.

For the half-year, group turnover was $654.6 million, way higher than the $350.5 million in the year-ago period.

This was the result of revenue coming from existing projects and new projects launched this year, such as Sixth Avenue Residences in Singapore.

Rental income from the group’s office buildings was lower than that for the second quarter of last year, as KepLand had sold four of its office buildings - Bugis Junction Towers, Prudential Tower, Keppel Towers and GE Tower - in April last year.

However, revenues from KepLand’s hotels and resorts, fund management and property services were higher than in the year-ago period.

Earnings per share for the half-year rose to 17.4 cents, up from 11.2 cents, while net asset value per share rose to $2.24 as at June 30 from $2.21 as at Dec 31 last year.

Looking ahead, KepLand managing director Kevin Wong said Singapore’s property market is expected to remain strong.

Meanwhile, the group will continue to pursue residential and township developments in countries such as China and Vietnam.

Mr Wong said: ‘We are very bullish on the Vietnam market and we will continue trying to secure new projects.’

In Singapore, residential developments have also performed well, he said, due to strong demand from local and foreign homebuyers.

For example, sales of Reflections at Keppel Bay have reached about 97 per cent of the 493 units launched and Park Infinia at Wee Nam has hit the 89 per cent sales level. The Suites at Central, Urbana, The Linc, Freesia Woods and Elysia have all been fully sold.

Source: The Straits Times, 25 July 2007

Tuesday, July 24, 2007

Saudi Arabia’s Knowledge Economic City wants investors

Saudi Arabia’s Knowledge Economic City wants investors



By CHAN CHING THUT

THE developer of Saudi Arabia's Knowledge Economic City (KEC) Al Madinah hopes to attract not only foreign direct investments, but also experience and expertise from prospective investors.

The 4.8 million sq m KEC will have a gross investment value of US$7bil when fully developed.

Project manager Seera City Real Estate Development Co business development vice-president Hisham Zahid said the company was open to discussions with any parties to participate in KEC.

“There are a lot of investment opportunities in infrastructure, hospitality, retail, real estate, information technology, education and so forth.

“However, we do not want investors to just put in money, but smart money.

“We require investors who have a good track record and are able to provide the know-how and experience to successfully develop KEC,” he said.

Hisham told StarBiz Malaysia had a very good and impressive knowledge-based industry and could play a role in assisting in the development of KEC.

“We can learn from what has happened here and adapt it to KEC. We also want to learn from Malaysian companies and hope to establish more partnerships,” he said.

So far, the company has signed memoranda of understanding and contracts with several local companies (in Saudi Arabia) and with government and private sector organisations from Malaysia and the US.

Marketing and public relations director Mohammed Khoja said the company has organised roadshows to the Gulf region, Thailand and Malaysia and have been approached by companies from France, Singapore and Australia.

KEC, the latest of the six economic cities planned by the Saudi Arabian General Investment Authority, will boost the economic development in knowledge-based industries such as intellectual property, medical, hospitality, tourism and multimedia.

The other economic cities already announced include King Abdullah Economic City, Prince Abdulaziz bin Mousaed Economic City and Jazan Economic City.

Mohammed said Saudi Arabia was headed for another boom with the easing of rules and regulations to attract investments.

“Foreign direct investments have been increasing 20% year-on-year,” he added.

Construction of KEC – divided into three phases – will begin in the middle of next year and go on for 12 years.

Hisham said the first phase would begin with the infrastructure, which would continue for four years.

An initial public offering by the consortium (comprising four participating companies) which is developing KEC is also scheduled latest by the third quarter next year.

Resort-style apartments

Resort-style apartments



By CHAN CHING THUT

IF a lifestyle is what you seek, then Desa Idaman in Taman Puchong Prima may prove to be your dream home as befitting its name.

The latest residential project by Primaharta Development Sdn Bhd, a subsidiary of Mitrajaya Holdings Bhd, offers buyers the ambience of an exclusive resort style living – vibrant and idyllic.

Possibly the first of its kind in Puchong, the gated and guarded five-storey low rise apartments is located in a tropical resort living setting with lush landscaping and emphasis on a water theme park right at the resident’s door step.

Sales and development director Kok Siew Leng said Desa Idaman was scheduled for launch in August or soonest by month end.

“Desa Idaman is set on freehold, 10.4-acre land and comprises 540 units spread over 11 blocks.

“This is one of the last piece of land earmarked for residential development in the 250-acre Taman Puchong Prima,” she told StarBiz.

Kok said the company was still deciding on the selling price, as it wanted to emphasise on the finishing and interior of each unit.

“With build up of between 955 sq ft and 1,100 sq ft, the price will start from nothing less than RM150,000.

“We are not merely selling apartments but a lifestyle. There is no such concept in Puchong and the nearest is probably in Bandar Sunway,” she added.

The gross development value of Desa Idaman is estimated to be just under RM100mil.

Central to the entire development is a clubhouse and water theme park, which will cost RM3mil.

The maintenance fee has not been fixed but buyers can expect nothing less than 18 sen per sq ft.

The clubhouse will provide facilities such as a gymnasium, childcare centre, cafeteria, lobby/function area and surau. Recreational facilities at the water theme park will include an adult swimming pool, jacuzzis, water reflexology path, waterfall, play pool and double water slides.

Each unit will be allocated a parking bay. When pointed out that it was common for most condominium or apartment units to be allocated two parking bays, Kok said buyers would understand, as the developer would emphasise on other aspects to enhance the apartments.

Although a concept that offers tropical resort living is nothing new, the mindset of buyers has changed.

Kok said although more apartments were built in Puchong, buyers were getting smarter, more discerning and wanted something different.

“People want more, so as a developer, we want to allow them to feel that apartment living is different. We are selling a lifestyle,” she said.

Tagged at a price that is likely to be “affordable”, Desa Idaman is targeted at young professionals and young families with small children. It is also ideal for elderly couples searching for a weekend getaway, without having to travel too far to enjoy such a lifestyle.

Piling work for Desa Idaman has started and the units will be ready for hand over in three years or sooner.

Mitrajaya started developing Taman Puchong Prima in mid-1999. Since then, a township comprising double storey houses, low- and medium-cost apartments and business centres have taken shape.

Its last project, Desa Impiana, which comprises duplexes and condominiums, was launched three years ago. The last phase of Desa Impiana is scheduled for completion by year-end.

Feng Shui and Architecture

Feng Shui and Architecture



In conjunction with the recently concluded Asia Pacific Geomancy Conference 2007 in KL, we are publishing a series of articles from the book The Power of Geomancy by David Koh. This is the second in the series.

A few decades ago, one would not have linked Feng Shui with architecture, let alone any profession. The passage of time has wrought many changes; one of the more notable of which is the awareness of an inter-relationship between Feng Shui and the science of geomancy with that of architecture.


David Koh
In the past, when one mentions the need to consult the experts in the building industry, what immediately come to mind would be the architects, contractors, engineers, electricians, and interior designers and so on with the architect heading the list. Why is this so? The fact is the initial concept or idea will come from him. The architect must understand the client's needs and translate this into an aesthetically pleasing design, which is functional and meets the client's needs.

Similarly, Feng Shui is a very complex subject and in the past, this knowledge was only available to a selected few; members of the Imperial family or Court, ministers, generals, doctors, astronomers, mathematicians, or master builders.

To apply feng shui correctly, one must understand the individual, his inherent strengths, his limitations and his needs and try to answer these needs within the limited parameters.

To see the relationship, one must have a basic understanding of the fundamental principles of I-CHING, which is the foundation of Feng Shui. A rough translation of the words Feng Shui means wind and water. Hence, Feng Shui includes the study of nature and the movement of life forms.

All life forms and matter contain energy in one form or another. In the I-CHING context, energy is categorised firstly into Cosmic Energy; secondly, Earth's Living Energy and thirdly, Energy formed from the fusion of the first two forms, which is known as Energy in Humans and Space.

1. COSMIC ENERGY

Cosmic energy comes from celestial bodies such as the sun, the moon, the major planets and the constellations. These energies are complex and can be in the form of radio waves, light energy ranging from quasar to supernova, solar energy in the form of light and heat and so on. A scientist views the universe as matter comprising the visible atomic matter to the invisible.

The energy from these sources affects us in many ways, some of which we are aware of and others we have yet to discover.

For example, we know that the sun brings life-sustaining heat and light to us, and earth's tilt on its axis, together with its movements around the sun, determines the season. The moon's gravitational pull affects the oceans, and it varies with its position relative to the Earth, and this in turn affects the tides.

2 EARTH'S LIVING ENERGY

Earth's living energy includes Earth's magnetic fields, gravitational pull, seismic waves and geological forces. This may result in the formation of mountains and valleys and other such natural structures.

3 ENERGY IN HUMANS AND SPACE

The fusion of the first two forms of energy is believed to be responsible for the creation of mankind, giving rise to the third form of energy - that of humans and the space around them.

Humans themselves are energy forms. A psychic or a telepath merely has a more highly developed mental energy enabling him to do what you and I cannot. Chemicals react differently with the atmosphere resulting in combustion, which is another form of energy caused by man. Our air-conditioners and heaters also result in changes in temperature and even to a small extent cause climatic changes through the greenhouse effect.

There are endless sources of energies. The interaction between all these energies forms the very complex environment in which we live today. A minor disturbance in the balance could well lead to a catastrophic change in the environment.

For the purpose of this subject, we shall dwell on the third form of energy, which is the energy found in humans and space.

4. HUMANS AND SPACE

In architecture, one would design structures with minimal negative environmental impact or maximum energy efficiency. Sir Henry Wotten, author of the Vitruvius theory of Architecture, propounds that a building has to be structurally sound at the particular space and time, serve its purpose and satisfy both viewer and user.

In the organisation of space, an architect would consider ventilation, proportions, lighting - both natural and artificial, soundproofing, its functionality and the inhabitants who occupy it.

Similarly, Feng Shui also considers the above factors but approaches it differently. It is important for us to know that most of the ancient Chinese culture revolves around the I-CHING, which governs all aspects of the Chinese way of life, from as far back as 6,000 years ago.

Like all cultures and civilisations, the architecture of that era is found on the tombs for the Dead, very much like the Pyramids and Sphinx in ancient Egypt, places of worship for their Gods as well as dwellings for the Living. The application of Feng Shui principles can be seen from the early Pan Po village situated at Xi-An to the comparatively more recent Forbidden City in Beijing.

Of course, in the early days when men were still wanderers and gatherers, there was no formal system of Feng Shui.

However, the essence of Feng Shui was so strongly ingrained in them, that their way of life was governed by these principles, as it was second nature to them. Like all sciences, Feng Shui is applicable whether one is aware of it or not.

For example, a child may not understand gravity but it still exists and apples still drop from trees to the ground. Feng Shui is a scientific technique for reconciling human nature with the limitations imposed on it by settlement.

Having recognised that the dwelling or form is a reflection of the underlying energy pattern, it is possible for the individual to select the best sites to locate his house. The ancient people were very sensitive and performed this simple act of selection instinctively.

Naturally, the emperors and leaders of that time held the power to acquire the choice locations or best sites. Others would have to accept less ideal locations and this led to the need for Feng Shui practitioners whose skills included an in-depth understanding of the flow of energy forces.

VIEWED FROM THE FENG SHUI PERSPECTIVE

GEOLOGICAL FORCES

Energy from the Feng Shui perspective includes geological forces such as the earth's movements. Plate Tectonics Theory divides the Earth's lithosphere into a number of large moveable plates and several smaller ones. Over centuries of evolution, the face of Earth as viewed from space may be very different from what it is now.

For example, the Indian continent is moving northwards and is contributing to the fact that Mount Everest, the world's highest mountain, is growing by 25mm per year and is moving in a north-easterly direction at a rate of 25cm every year.

This major shift in the earth mass is both physically visible and measurable. From the example, it is obvious that there is a tremendous geological force that is being exerted at all times.

In every upward surge there is a resultant downward push according to Newton. The Law of Gravity, as we know it, will cause a mass like a mountain to exert its weight downwards and sideways in a movement called seismic wave.

a) By way of these seismic waves and other geological forces, natural landscapes are formed. In geological terms, these are caused by Elastic waves, namely the P wave, S wave, Love wave and Rayleigh wave.

b) These formations are further influenced by other forces such as the wind and waves and result in other new formations. As a result of gravitational and levitation principles, these masses exert their weight downwards and sideways. The energy or force exerted on the surrounding areas will spread out until it exhausts itself or it loses its rigidity. Any non-rigid medium, sea, lake, river or vacuum in its path will result in the immediate cessation in the transfer of the energy or force.

It is very much like a builder using soundproof material to block the transfer of sound from one area to another by introducing a different medium in the path of the sound.

It is obvious that certain mediums are better at stopping energy waves or diluting them. The energy will go around the medium of non-rigid matter and therefore in the case of the coastal areas, result in the formation of uneven beach fronts or even sand dunes.

It is not difficult to conclude that the smaller and shallower river is only able to stop the lesser energy from passing through.

It is also noted that the taller the mass, the stronger the forces therein. The forces that transfer and travel will create undulating earth formation. This is similar to cracking a whip or flipping a long rope at one end. You will notice that the force applied will result in a wave-like pattern which tapers off as it gets further from the origin. The further away from the source of the energy or force, the gentler the energy becomes as it dissipates.

Conversely, if the non-rigid barrier is introduced closer to the source, the force will be stopped when it is still highly charged with energy.

At this point, the energy is so strong that it forms the nutrients and life force for plants, which will be lush and green. But in the case of buildings and houses, these energies may be tapped through the piling, pillars, floors and walls of the building since the medium through which the energy is transferred is similarly rigid.

The detailed study of these forces is very complex and it suffices to say that this force is usually what is referred to in Feng Shui terms as "dragon".

Anything that is between 100 and 1,000 feet is classified as force, for example, the force of the lie of the mountain. From 0 to 100 feet, it is called the "form" or "shape" and anything at sea level or 0 ft is referred to as the "location".

Similar to water, energy flows from higher to lower levels and continue until it is stopped by a barrier. However, in the case of energy, the barrier takes the guise of a non-rigid form. The energy will then be conserved and can be tapped. Since the ancients believed that the earth itself exerts a subtle energy system or life force or "chi", it explains the existence of certain ancient structures like the Stonehenge in Wiltshire, which is reputed to wield strange powers till this date.

From the Feng Shui perspective, the interruption of the dragon by the force will result in the formation of forms or shapes. These forms or shapes can be identified by their similarity to certain animals.

The four (4) main forms or shapes are: A Turtle B Phoenix C Dragon D Tiger

From their studies, Feng Shui practitioners can plot the energy point and are able to locate structures such as houses, temples, place of business in auspicious places, which are those with positive or "Living Chi".

Similarly, in architecture, the architect designs the building to blend well with the natural surrounding landscape. Where such natural features do not exist, they are created artificially, to enhance the structure or building.

A geomancer, by applying his knowledge, would identify the invisible meridian of energy, which may be manifested into forms mentioned earlier, and design the structure to tap into such energy. These designs are intended to harmonise and blend with the natural environment and form part of nature.

Anything that interferes or does not blend with the forms and shapes so created by the forces and their subtle energy are considered destructive and bad for the individual housed in the structure.

This is very important, especially when we are selecting a site for a township, housing scheme, factory and office block.

BASIC STEPS IN FENG SHUI TOWARDS GREATER HARMONY There are four basic steps in Feng Shui and they are the process of Identification, Selection, Matching and Ignition

From the Feng Shui perspective, it is very important to identify the subject in order to best place the subject. Just like in architecture, you must know your client in order to determine his needs and preference. In Feng Shui, every one in a macro sense, like an atom, is a different energy force.

Every energy force has its own characteristics, strength and weakness. They are classified by Trigrams into eight categories and these are expressed in terms of five elements. They are then further subdivided into another 12 classifications, each represented by an animal symbol. This is very contusing and at this point, it suffices to know that there is a scientific way of identifying each individual.

Similarly, in Feng Shui, any given space like a house is divided into eight entrances. Each entrance will have a different energy force.

Why do we say this? Let us go back to the very basic science lesson that we had long ago. We know the earth has two magnetic poles and the pull of the earth's magnetic forces is strongest at the poles. We also know that like poles repel and unlike poles attract. Hence a house with a north entrance or a south entrance will face or induce different energy.

A living entity, be it in the form of a human or an animal, is the conduit through which the energy enters or exits the premises. Hence it is often said that an abandoned property is decaying or lifeless and this has given rise to all sorts of speculation of malevolent forces.

Similarly, we also know that the sun rises in the morning and sets in the evening. The morning sun has germicidal properties conducive for growth and the afternoon sun radiates strong light and heat that is destructive to some life forms.

Since Earth spins from west to east, we can conclude that the door at the east will bring in a different energy compared to that of the west. In Feng Shui, it is believed that every degree variation in orientation will have slightly different energy.

The detailed reading during identification process will allow us to know the subject's requirements and consequently assist in the selection of the best orientation or location of a door. We can even predict what will be encountered at a different door if he continues to stay in a building with an entrance unsuited to him.

Similarly, we also know that after the first two steps, we need to ensure that the construction, orientation and arrangement of internal components must be designed and placed in a manner that will create harmony. This step is called matching. The design is to match the subject and his family who occupy the house.

Lastly, we have the process of ignition, which is a form of test to determine the accuracy of our calibration. If done correctly, predicted events will subsequently take place after the ignition process. The Feng Shui master prior to the ignition process will foretell the events.

From the above, you can see that Feng Shui encompasses a wide array of subject matter. There are both general and specific principles and rules to follow. At this stage of our understanding of Feng Shui, we are only at the tip of the iceberg. It will take time to have an in-depth understanding of Geomancy and the science of Feng Shui calibration as it encompasses many inter-related sciences, such as the study of cosmic forces, earth forces, physics, chemistry, biology and human behaviour.

There are also some common beliefs in Feng Shui which are meshed with those of certain religious practices which are non-Feng Shui. The common ones to avoid are listed below.

• Building a house which faces a mountain • Building a house near a mountain with the front door facing the East • Building a house on the acute convex side of a river or a road • Building a house with the front and back door in direct alignment • Building near high-tension cables • Building a house which faces a road junction • Building at a dead-end road • Building with main door facing a lamp-post or a tall obstruction • Building with main door facing the outlet of a monsoon drain • Overhead beam • Low ceilings and nautilus point

Of course, there are also some nonsensical practices in Feng Shui such as the hanging of Pakua and mirrors at the door, having a door angled in a certain position or hanging of wind chimes and paintings or flutes.

To conclude, practices in Feng Shui are very similar to that of architecture. They are both logical and precise. It requires an understanding of nature's forces and harnessing of these positive living forces to enrich the individual's life.

Teak for the tropics

Teak for the tropics



By Annie Ooi


Overall view of the showroom
Photographs by Ong Soon Hin

Teak wood does not go out of style and the warm brown patina of a piece of teak furniture gives this comforting and cosy look to the room it is in.

It has this solidity which gives a certain assurance to the product and a sense that you are getting some value for your money.

Bayu Timor Galeri (Eastern Breeze) in Taman Megah has a stock of tropical furniture which ranges from the traditional to contemporary looks for both indoor and outdoor.


Tan surveys her teak furniture
Dee Tan, one of the owners, has been in love with this wood since 1999 when she opened the shop.

“Teak is evergreen as it is a durable tropical hardwood free from termites.

"The way the grain flows is also very attractive,” says Tan, who sources her furniture mainly from Indonesia.

“We buy a lot of our teak furniture from Indonesia as teak is plentiful there.


Still a firm favourite, the kopitiam table is priced at RM1,300 and the chairs at RM170 each
"The soil there is suitable for growing it, and they have a programme whereby they replant teak, called plantation teak.

"They are harvested after eight years, but if you want the diameter of the trunk to be bigger, you have to wait up to 30 years.

“Some customers also look for ‘old teak’, which is recycled from pieces of vintage teak furniture, an abandoned house or railway sleepers.

"These pieces are more expensive as they are harder to get.”

Recently, Tan decided to renovate the upper floor of her shop at a cost of about RM20,000 to exhibit minimalist tropical furniture as “ the trend is towards no-fuss contemporary furniture with clean lines ”.


This particular example of a daybed is priced just below RM3,000. There are three drawers below for added storage space
Explains Tan: “I find that the ornate Javanese look is fading away.

“However, good things never go out of style.

"I started off with the traditional kopitiam table, and I will still concentrate on it as I find that it is still in demand”.

Upstairs, the full-length windows let in the sunlight, and the teak pieces are placed at their best angle to catch the light.

Tan points out a few hot buys.

One popular item is the daybed in solid teak wood.

“The daybed is usually placed in the sitting room, where the owner can lounge on it.


"Relaxing" chair, RM1,900 each.
"Or, it could be positioned in the patio, if the area is big enough.

“Another current favourite is the French-designed ‘relaxing’ chair.

"It is popular in Europe, where they use the chair in the conservatory.

"Made in Indonesia, I call it the ‘Cobra’ as it is sinuous in look.

"It is made from the fibre of the banana trunk, which has been dried and made into rope.

"A final touch of cane adds to the arty look.


The smallish dining set with the rustic look is ideal for the kitchen
"Metal gives the support, and when you sit on it, you can feel the slight spring.”

Moving on, she points out a square dining table.

“This dining table in a rustic design can be placed in the entrance, foyer or the kitchen as a breakfast table.

"It is specially designed with an intricate ethnic motif in the centre.

"A table with four stools cost RM2,300; each stool is priced at RM280.”

As many of her customers find themselves paring down their livestyle habits, the furniture they buy gets simpler.

She points out a contemporary tropical set.

“It has clean geometric lines, with a glass-topped coffee table.”


Contemporary living room set - many of her customers are going for modern clean lines
The whole set, consisting of a two-seater, two single seats and the table, is priced at RM2,900.

Bar stools or chairs are useful items to have around, as they are easily moved around and called into service when additional guests suddenly pop up.

“These are American-sized, and are tagged at RM450 each.”

In the showroom, these chairs are placed beside decorative items, which are an ingenious piece of work.

Natural products make useful items, and the bract of the banana flower is turned into firstly, a decorative piece and secondly, a lamp.


A really comfortable bar chair; the decorative items in the background are made from natural products
The bulb of the lamp is shaded by treated buffalo skin which does not break easily, unlike glass.

Also, the skin does not get hot, making it safe and comfortable to be around it.

The lamp is a combination of unlikely items; a banana tree flower bract, buffalo skin and a metal stand.

They come as up- or down-lights.

Wicker and wood is still a great evergreen combination and it has found renewed popularity.

Modern art pieces by Indonesian artists are also up on the walls for those who like a touch of modernity while doing their duty to the traditional.

These pieces can be purchased for about a few hundred Ringgit each, unlike the local works, which are more pricey at four figures.

Construction set to power market

Construction set to power market



By LOONG TSE MIN

PETALING JAYA: Apart from the highly buoyant oil and gas sector, the construction sector is expected to power the stock market in the second half, said analysts.

In the short term, the construction sector is also expected to receive a boost from the anticipated announcements on the Northern Corridor Economic Region “in the next two to three weeks,” TA Securities research head Kaladher Govindan told StarBiz.

Moreover, there was still further implementation of projects in the eastern corridor encompassing Kelantan, northern Terengganu and western Pahang, he said.

Kaladher said construction counters could also expect a boost from announcements in the upcoming annual budget in September.

OSK Investment Bank head of research Kenny Yee also picks construction as one of the promising sectors in the second half. He favours Gamuda Bhd and IJM Corp Bhd as well as KL Sentral developer and construction player Malaysian Resources Corp Bhd (MRCB).

In a report released on July 5, OSK said it was not surprised that MRCB was not named as one of the shareholders of the Penang Outer Ring Road project and maintained its “trading buy” call on the counter.

“We like MRCB's KL Sentral assets and the Eastern Dispersal Link gives the company a steady cashflow,” the report said.

Meanwhile Kaladher is promoting Ahmad Zaki Resources Bhd, Ranhill Bhd and Bina Puri Holdings Bhd.

In a July 19 report, TA said it was positive on Ahmad Zaki's acquisition of Eastern Pacific Industrial Corp Bhd (EPIC).

“Based on a simple interest rate calculation of 6%, we expect the EPIC acquisition to improve group earnings by 1.6% - 3%, depending on EPIC’s effective tax rate of 30% - 40%,” it said.

Furthermore, Ahmad Zaki's local operations remain bright, given its strong niche in the east coast of the peninsula.

As budgeted under the Ninth Malaysia Plan, eastern Peninsular Malaysia was getting a bigger pie compared with the previous plan, said TA's report.

“In the meantime, the group’s earnings would be sustainable with its RM1.2bil orderbook, which should sustain the group for the next 24-30 months,” the research house said.

TA said in a report last week that Ranhill's most exciting division would be its newly created energy division, “and we will be proven right if the news about the company striking oil in Citarum Block turns out to be true”.

The research house said although the gestation period was long, the reward of the new business segment, if successful, would be huge.

On Bina Puri, TA said the company's outstanding orderbook exceeding RM1.2bil was “significantly large” considering its smallish size, with a market cap of less than RM300mil.

Surprisingly more than 50% of the company's orderbook is made up of overseas projects focused on Thailand.

More overseas contracts are in the pipeline for the company, said TA.

“Based on our discussion, the group is finalising RM700mil worth of contracts in Libya to build 3,000 houses,” it added.

TA believes this is the first of a total of three phases that could be awarded to Bina Puri.

Kenanga Investment Research head Yeonzon Yeow concurred that construction was one of the sectors that could run during the rest of the year, favouring stocks like Muhibbah Engineering (M) Bhd and LCL Corp Bhd.

Muhibbah had on July 6 announced that it had successfully secured a RM1.1bil contract to build the South Klang Valley Expressway.

Yeow expects the new contract to impact on earnings for the financial year ending Dec 31, 2008.

Firms gain from buoyant industry, property projects

Firms gain from buoyant industry, property projects



By SUSAN TAM

PETALING JAYA: The buoyant oil and gas industry and significant property developments in east Malaysia have benefited stocks like Muhibbah Engineering Bhd and Suria Capital Holdings Bhd.

In a recent report, Standard & Poor’s (S&P) said Muhibbah was reaping the benefits from the spillover effects from a buoyant oil and gas sector, the global shortage of vessels and the increasing need to replace old vessels.

The company’s order book has risen to RM3.3bil to-date, with RM322mil from its shipbuilding division. S&P said the company’s total order book of RM3.3bil was 134% higher than orders of RM1.4bil recorded at the end of last year.

“We assume that Muhibbah will clinch an additional RM2bil worth of contracts over the next two years,” it said.

S&P is revising upward its net profit forecast for Muhibbah by 17% and 18% for 2007 and 2008 respectively due to the positive sentiment in the shipping sector.

Port operator Suria Capital Holdings Bhd is attracting investor interest as it is benefiting from significant property developments and recently approved special tax incentives.

The property developments included the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) and the Jesselton Waterfront project, Aseambankers said a recent report.

Aseambankers said Suria Capital, through Sabah Ports, operates eight ports in Sabah and would benefit from the commissioning of the new Sapangar Bay Container Port last month.

“This allows Sabah Port to capture a sizeable amount of transshipment trade from the BIMP-EAGA,” it added.

The investment bank also said the Jesselton Waterfront project, with a gross development value of RM1.5bil, could contribute some RM225mil to Suria Capital’s net profit.

Aseambankers said Suria Capital’s net profit this year was estimated to increase by 57% due to a recently approved special tax incentive for its ports operation. It is also to receive a tax refund of RM32mil while its port earnings will be exempted from tax for the next 10 to 15 years.

An industry observer said that steady growth was also seen for other ports.

“The sentiment on local ports is bullish. With consistent growth, the Third Industrial Master Plan’s target of 36 million 20ft equivalent units (TEUs) should be achieved in the next decade or so,” he said.

Last year, Malaysia's ports handled container throughput totalling 13.6 million TEUs.

Recent reports stated that Westport and Northport in Port Klang were expected to achieve the targeted seven million TEUs this year.

Westport is expected to contribute 4.2 million TEUS, with the remainder from Northport, based on estimates given by Port Klang Authority chairman Datuk Chor Chee Heung

LCL tenders for RM300m Kazakh jobs

LCL tenders for RM300m Kazakh jobs



Group MD upbeat on prospects there

KUALA LUMPUR: Interior fit-out specialist LCL Corp Bhd has tendered for more than RM300mil worth of projects in Kazakhstan, which it hopes to clinch by year's end.

The company, which has a current order book of RM30mil–RM40mil in Kazakhstan, had already spent RM1.5mil on a showroom there, which it would formally launch in September, group managing director Low Chin Meng said.

Low is upbeat about the prospects in Kazakhstan because of the “massive developments to be put in place by the Kazakhstan government, high foreign direct investments in that country and the spill-over benefits from oil income as Kazakhstan has the world's fourth largest oil reserves”.

LCL's key growth driver is mainly overseas projects, especially in the United Arab Emirates (UAE). For the first quarter ended May 31, UAE jobs contributed 51% to the company's revenue, Kazakhstan (4%) and Malaysia (45%).

Low said he hoped that by year's end, LCL's overseas projects would contribute 70% of revenue and local projects, 30%.


LCL executive chairman Datuk Syed Ariff Fadzillah Syed Awalluddin and Low Chin Meng
“Our order book is worth approximately RM600mil, of which RM400mil is from the UAE.

“The majority of our ongoing projects are in Dubai, such as the Burj Dubai Mall Hotel, Dubai Marina Mall & Hotel and Atlantis Hotel at the Palm, which were awarded to us by well-known international property developers,” he said.

To support demand from overseas, the company invested almost RM9mil to set up a factory in Chennai, India, which is expected to be operational by the third quarter.

Low said the factory would provide cost savings and speed up delivery of materials to projects in the Middle East, Kazakhstan and India.

On new growth areas, he said the company would be looking at opportunities in North Africa and Russia by next year, but added that it would probably take two to three years to develop or secure big projects.

The company currently has four factories in Kajang and one in Sungai Buloh.

LCL's listing was transferred to Bursa Malaysia main board yesterday. Its shares finished 25 sen down at RM5.80.

For the first quarter ended May 31, the company posted an after-tax profit of RM4.1mil on revenue of RM50.1mil, up from RM2mil and RM38.4mil respectively in the year earlier quarter.

Hotel occupancy, room rates at all time high: STB

Hotel occupancy, room rates at all time high: STB


Revenue per available room hit $165.90 and gazetted hotels here generated total room revenue of $854.4 million, said the Singapore Tourism Board (STB) in a statement.

SINGAPORE'S hotel sector posted outstanding performance this year, with hotel occupancy and room rates at an all time high, said the tourism board on Tuesday.
For the first six months of this year, the average room rate grew by 19.5 per cent to $192, while the average occupancy rate reached 86 per cent.

Revenue per available room hit $165.90 and gazetted hotels here generated total room revenue of $854.4 million, said the Singapore Tourism Board (STB) in a statement.

For the month of June, the average room rate crossed the $200 mark for the first time to reach $210.

Gazetted hotels churned out $164.3 million in room revenue and $181.60 in revenue for each available room.

STB said these are not only historical highs for any single month but also significant double-digit growth in excess of 20 per cent, compared to June last year.

Singapore also received more visitors than ever before in the first half of the year, it noted.

'This is the highest visitor arrivals recorded over the January to June period for the Singapore tourism sector,' said STB.

It added it's confident of meeting its full-year target of 10.2 million visitors with an expected boost during the peak months of July, August and December.

Estimated tourism receipts for the six months reached $6.4 billion, a nine per cent increase, which has a full-year target of $13.6 billion.

'We have also seen record high visitor arrivals for each month this year compared to the same month in previous years,' said Lim Neo Chian, STB'S chief executive and deputy chairman.

Indonesians were the largest group of visitors, with 911,000 arriving between January and June.

China was second with 529,000, followed by India with 386,000, said STB.

Lacking natural attractions, Singapore has embarked on a major campaign to spruce up its tourist appeal.

It has plans for new attractions including two casino resorts, expected to open by 2010.

It is also trying to become an arts and entertainment centre, and will host its first Formula One Grand Prix event later next year. -- AFP

More data on rents for HDB flats to be released soon

More data on rents for HDB flats to be released soon
MORE data on rents for Housing Board (HDB) flats will be released soon to add transparency to a market faced with rising prices.
The move comes after recent reports that monthly rents of HDB flats are exceeding $2,000 in some locations.

The information will give a clearer picture of recent price movements in the rental market, and will be similar in nature to figures on average resale prices released last week.

Minister of State for National Development Grace Fu said on Tuesday that this 'objective data' will 'give potential tenants better understanding of the market'.

'The government will continue to make such information more widely available so people can make more informed decisions,' she added.

The HDB is looking into the possibility of breaking down the data by the 26 HDB towns instead of by regions.

Some market players had concerns about the way average resale prices were collated on the HDB's website.

They said the regional grouping made it difficult for buyers or sellers to get a clear picture of how flats similar to their own are faring.

Ms Fu said the government is considering the feedback but will remain 'careful' as it has to assess 'if there's sufficient data to give meaningful comparisons'.