Saturday, November 10, 2007

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road

DEVELOPERS continue to trigger the release of sites from the Government Land Sales programme’s reserve list.

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.

The developer who made the application - who was not identified - has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.

The site will be launched for tender in about two weeks.

The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.

‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.

‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’

A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.

Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.

He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.

‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.

‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.

CBRE’s Mr Tan predicts at least five or six bids.

‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.

Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.

So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.

Separately, URA yesterday awarded a residential site at Enggor Street behind Icon to Far East Organization unit Bishan Properties.

The company was the higher of two bidders the 99-year leasehold plot attracted at a tender that closed on Nov 1.

Its bid of $233.8 million or $851.66 psf ppr was 55 per cent higher than the only other offer of $150.98 million or about $550 psf per plot ratio by Guoco-Land.

A tender for the residential site next door closes on Nov 15.

Source : Business Times - 10 Nov 2007

Comments made by Hotel Properties (HPL) group executive director Christopher Lim, and have accused him of being in contempt of court.

Lawyers for both the majority and minority owners of Horizon Towers have objected to recent comments made by Hotel Properties (HPL) group executive director Christopher Lim, and have accused him of being in contempt of court.

On Thursday, BT reported Mr Lim as saying that he was ‘concerned about’ the Strata Title Board’s (STB) view that it had no duty to make a ruling on the collective sale of Horizon Towers before the Dec 11 sale completion deadline. He said that such a stance could ‘potentially scuttle’ the deal.

The STB tribunal had taken this view on Wednesday, after both sets of owners agreed that the board did not have a legal obligation to make a decision by Dec 11.

This prompted Mr Lim to announce that the buyers, HPL and its partners, were ‘reviewing our position’. While he did not elaborate, BT understands that this could mean that the buyers will proceed with the $1 billion lawsuit they had earlier filed against the majority owners for breach of the sale and purchase agreement.

Lawyers for both sets of owners yesterday spoke out against the comment. KS Rajah of Harry Elias Partnership, which represents one group of minority owners, said that it was inappropriate for Mr Lim to comment on ongoing legal proceedings. He said that it was contempt that should be referred to the Attorney-General’s chambers.

‘Anybody who seeks to muddy the waters must be told to lay off or you will face the consequences,’ Mr Rajah said. The STB tribunal’s chairman Philip Chan said that the board would deliberate on the matter.

News of the potential lawsuit also distressed a number of the majority owners of Horizon Towers. Sales committee chairman Lim Seng Hoo however sought to reassure the owners that they were not in breach of the sale and purchase agreement as the committee was continuing ‘to prosecute the present STB hearings expeditiously’.

He also said that their submission to the tribunal on whether it had a legal obligation to rule on or before Dec 11 merely explained that ‘timelines agreed to between the parties to a sale and purchase agreement do not impose legal obligations upon the board’.

The drama continued in the hearing before the STB, as a new witness - former sales committee member Henry Lim - took the stand.

Philip Fong of Harry Elias fired off a series of questions to Mr Lim, asking him if the sales committee recognised that allowing its sales agent, Alvin Er, to take his commission from the buyer posed a conflict of interest for Mr Er, as that may have stopped him from trying harder to find a better price for Horizon Towers after getting an offer from HPL that met the sellers’ minimum reserve price. Mr Lim did not answer the question, only saying that he had ‘no comment’.

Senior Counsel Michael Hwang, who represents another minority owner, asked Mr Lim why the sales committee did not consider other expressions of interest - there were at least four other parties which had indicated that they were prepared to pay a higher price than HPL.

Mr Hwang cited the example of an unnamed Hong Kong developer who had offered $510 million - above HPL’s offer of $500 million - for Horizon Towers. Mr Lim said that he had attempted to contact the developer but had failed to get in touch.

And it was during a tough session with a third counsel for the minorities, Kannan Ramesh of Tan Kok Quan Partnership, that Mr Lim revealed that he had been frustrated with the short amount of time the sales committee had unwittingly imposed on itself to consider HPL’s offer. He said that he felt that they could have succeeded in getting better offers if they had more time to do so.

After intense questioning, Mr Lim admitted that three of the nine former sales committee members, including himself, were not satisfied with HPL’s offer and had expressed their reservations about it.

Mr Lim also testified that the sales committee had rushed into the deal - and had failed to consult the majority owners before accepting HPL’s offer. He said that the sales committee feared that it would be sued by the majority owners if it had taken too long to revert to HPL and had lost the offer as a result. But he also admitted that the ‘prudent safe option’ for the sales committee would have been to consult the owners - except that their lawyers, Drew & Napier, had advised them otherwise.

Mr Lim was clearly uncomfortable with the unrelenting scrutiny, choosing to answer most of the questions posed to him with either ‘no comment’ or ‘I can’t recall’.

Source : Business Times - 10 Nov 2007

$40 million makeover of Orchard Road, the part of Orchard Road that stretches from Wheelock Place to Tanglin Mall

New outlets offering niche, top-end products liven up the ‘quieter’ part of Singapore’s premier shopping area, reports CHEAH UI-HOON

WHILE the talk in town a week ago was about the government’s $40 million makeover of Orchard Road, the part of Orchard Road that stretches from Wheelock Place to Tanglin Mall has been going through some positive changes of its own.

Most people know it as the ‘quieter’ part of Orchard Road, but since the middle of this year, a number of shops offering niche, top-end products have sprung up, not to mention Jackie Chan’s first cafe in the world. And then, of course, there’s the imminent opening of St Regis, slated to usher in guests through its five-star hotel doors on Dec 22. It will be the first international luxury hotel brand to open in Singapore in more than a decade.

The newest retailers on that block are optimistic about the prospects of that side of Orchard Road, and actually they don’t mind that it has less shopping traffic as long as they’re the ‘right’ shoppers. Not only that, they have booked their spots in Orchard Road in anticipation of the boom when events like Formula One zoom into town, and when the integrated resorts (IRs) open.

‘We wanted a prestigious address,’ says Mikael Andersson, owner of the Hastens store, a top Swedish bed and mattress marque, at One Nassim Road. ‘But we didn’t necessarily want to pay for one with high shopper traffic.’

The location also worked because it allowed Hastens to have large store-front windows, and rent is lower than if it had set up shop in the central part of Orchard Road.

‘We don’t depend on walk-in customers but those who are familiar with the brand because it’s a well-known European brand,’ he says, adding that that part of Orchard Road has a high concentration of top-end condominiums as well.

Fine furnishings store Atmosphere, next to Hastens, was set up with the same philosophy. ‘This end of Orchard Road is quieter and more suitable for a luxury brand,’ says its director Bharat Ram, of Himatsingka Singapore Pte Ltd.

‘The upper end of Orchard Road has become more premium in the last two to three years. With the development of St Regis, many high-end brands have moved here,’ he says. ‘With rentals moving up significantly in the middle Orchard Road area, it makes eminent sense to open stores in the upper end of Orchard Road which is on the same stretch of the road, premium yet more affordable.’

He believes that there’ll be a significant movement of premium brands to this location in the coming months.

Already, there are brands like Franck Muller, which opened its new 1,900-sq-ft boutique at Delfi recently. And its distinctive store-frontage has added ‘a sense of excitement’ to that part of Orchard Road, believes Carina Lee, the luxury watch brand’s marketing communications manager.

Even though well-heeled, brand-conscious shoppers are aware that this is the part of Orchard Road that has the most exclusive fashion labels, it doesn’t help reminding them so. Which is the aim behind The Shopping Gallery at Hilton Hotel’s advertisements booked in several glossy fashion magazines from September to December.

‘This is the first time that The Shopping Gallery Hilton Singapore has embarked on an advertising campaign to market the place as a luxury shopping destination,’ says Cedric Tan, creative director for Balrog Inc which produced the campaign.

‘The ‘Fashion High, Fashion Life’ campaign is meant to gear up the gallery’s visibility. This is the place, after all, where high fashion grew up in Singapore. We have all the first-tier luxury brands like Missoni, Armani, Donna Karan and Dolce & Gabbana so we think it’s important to highlight that,’ he says.

He says that the six-figure advertising campaign is to pave the way for more events held at The Shopping Gallery next year, especially with the impending F1 race. About the profile of its typical shoppers, Mr Tan notes that they aren’t browsers. ‘They pick up what they want and go. We may not draw a lot of traffic, but we get the right traffic,’ he adds.

This part of Orchard Road could do with something like a Rodeo Drive, the three-block ‘branded’ shopping destination in Beverly Hills, California, says Yngvar Stray, general manager of the soon-to-open St Regis Hotel.

‘Orchard Road has been a centre of attraction for Singapore, but this side has never been able to be the draw. We need to make sure that Orchard Road doesn’t stop at Shaw House or Wheelock,’ says Mr Stray. ‘But if this part was positioned to be more like Rodeo Drive, that will be phenomenal,’ he adds. ‘The Hilton Hotel has one of the best shopping arcades I can think of and that inspiration should follow through along the street - being more exclusive, more niche.’

When St Regis opens next month, Mr Stray expects the 299-room hotel to generate a buzz with its restaurants, bars and spa. But then again, it intends to keep corporate activity nominal - even corporate room bookings - as the hotel is targeted at the individual traveller, in line with the greater concentration of luxury residences in the area.

Growing market

‘Orchard Road needs multiple attractions - and this part has more branded products. You come here because you understand its value,’ says Mr Stray.

Singapore has focused on mid-market growth for a long time now, but the high-end market is now growing, he feels. Along with it, more personalised attention and ‘bespoke’ service. Some shops have already picked up on this tone which St Regis Hotel itself is setting. Franck Muller’s interior, for instance, is fashioned like a lush, private residence, complete with a long dining table-like show space.

And then there’s Glitterati Fashion Boutique, a new cocktail and evening wear boutique which set up shop recently at Tudor Court. Owner Latika Alok made sure the shop has been designed with separate sitting rooms and cosy corners to provide personalised customer service. Although she had been running the business from her home since the early 1990s, she decided to get a shop space now ‘to position Glitterati for the IR market’, she notes, when there’ll be more events happening in town for which people have to dress up.

What about the fact that there are commercial buildings in that part of the town that don’t come up to scratch in terms of their services or appearances? Mr Stray doesn’t think that those will be an obstacle.

Nicholas Mak, research director of Knight Frank property consultancy, says that the upper end of Orchard Road needs more high-end shops, and possibly needs a few buildings to get a facelift, although he reckons that would happen only if building managers have a reason to increase rental or face some competition.

‘But the tenant mix is partly art and partly science. It’s a matter of coming up with the right formula,’ he says. The upper end of Orchard Road will continue to be seen more as a ‘destination’ area, he thinks.

Atmosphere’s Mr Ram figures that better connectivity between the middle area of Orchard and the upper end will make the flow of customer traffic easier. But he also expects that Ion Orchard, with its retail and luxury residential space, along with St Regis, ‘will completely re-position upper Orchard to the more important and premium part of Orchard Road’.

Time will be the test of Orchard Road’s makeover - and whether the upper end will really shape up to be upper crust.

Source : Business Times - 9 Nov 2007

China’s economic planning agency has issued restrictions on foreign investment in real estate and other industries

China’s economic planning agency has issued restrictions on foreign investment in real estate and other industries, part of a range of measures aimed at righting imbalances in the economy.

A lengthy list of revised rules that take effect on Dec 1 imposes bans on foreign investment in businesses such as golf courses, gambling, genetically modified crops, traditional teas, film production and weapons manufacturing, according to a document seen yesterday on the website of the National Development and Reform Commission.

China’s leaders have touted a shift in planning away from hyper-fast industrial expansion toward a more sustainable form of development.The change hasn’t yet been reflected in data showing the economy growing at an annual rate of nearly 12 per cent.

The revised guidelines welcome foreign investment in environmentally friendly areas such as recycling, ‘clean’ industries and environmental protection.

They ban foreign investment in mining of strategically important minerals and restrict investment in energy intensive, highly polluting projects.

Some restrictions are for illegal businesses, such as the processing of ivory and tiger bones. Others, such as a ban on foreign investment in Internet services and news websites, had been announced earlier.

Many match a list issued by the NDRC in 2004. The reissue of the rules suggests that some, like limits on foreign investment in real estate, were not adequately enforced.

State media reports played up the limits on property investment, although apart from the ban on investment in golf courses and in real estate agencies, the list matches current regulations.

The NDRC’s list also discourages investment in export-oriented industries, reflecting China’s efforts to curb its ever-soaring trade surplus, which is expected to top US$200 billion this year.

Foreign direct investment in China rose almost 11 per cent in January-September from a year ago to US$47.2 billion, according to the state media reports. Of that total, foreign investment in property development accounted for 42.3 billion yuan (US$5.7 billion).

Foreign direct investment in 2006 totalled US$63 billion. — AP

Source : Business Times - 9 Nov 2007

The introduction of ‘landlord insurance’ in Singapore, which is something that is being offered in Australia.

With the growing property rental market in Singapore, it may be time to look at more ways to protect the interests of both landlords and tenants.

This was the opinion of some viewers who wrote in after a landlord was interviewed on Get Rea!, a Channel NewsAsia’s current affairs programme.

In the Get Rea! episode, “Just Follow The Law”, it was a case of a Singaporean landlord living in Australia who had problems with a difficult tenant in Singapore.

Among other things, the tenant refused to let the landlord’s property agent arrange for a joint inspection of the premises towards the end of the lease.

So the inspection was carried out at midnight on the last day itself.

The property was left in such a mess that the two months security deposit was forfeited.

The landlord, Sharon de Souza, suggested the introduction of ‘landlord insurance’ in Singapore, which is something that is being offered in Australia.

She said: “Landlord insurance essentially gives you coverage. They will cover up to A$5,000 of your legal fees if you have to engage a lawyer to get rental back or claim for damages. Also, if you’ve lost rental income because of a delinquent tenant, the policy - based on what policy type you take - will cover part of your rental.”

While insurance companies that were contacted declined to comment, saying they were not familiar with the proposal, the Institute of Estate Agents (IEA) thinks the suggestion is worth considering.

Jeff Foo, President of Institute Of Estate Agents, said: “Landlords buy the insurance to cover themselves against loss of income, damage, malicious damage to their property, theft and perhaps legal fees. But a lot of this will depend on supply and demand because a month’s rental will go into paying for the premium of such policies. But it may not be a bad idea.”

Ms de Souza had also suggested that property agents be paid their commissions on a staggered, monthly basis, instead of a total sum upfront once the Tenancy Agreement is signed.

However, property agents told Channel NewsAsia that adopting such a system is harder in Singapore.

Vincent Chong of Colliers International explained: “It’s because generally, our rental rates are relatively low for the lower end of the market. For instance, if it’s a S$2,000 rent and it’s spread over 24 months, it’s going to be less than S$100 per month for the property agent. But of course, if the rental prices are in the region of S$20,000, it would be possible for agents to accept a kind of staggered commission.”

There was also a suggestion on how landlords could deal with difficult tenants, especially when it is a long-distance relationship.

“We suggest to the landlord that they engage a Property Managing Agent to do the day-to-day running of the lease, which includes collection of the rent, maintenance of the air-conditioning,” said Mr Chong.

Engaging such a Lease Management Agent could cost you 10 percent of your monthly rental fee, although some property agencies offer it free-of-charge to landlords as a value-added service.

As for the tenants, Low Swee Kim, Vice-President of Institute of Estate Agents, said: “We have a Small Claims Tribunal where tenants or landlords can go to resolve their disputes. They don’t need to pay any high legal fees because they don’t need to be represented by lawyers. They can go anytime when they have a dispute during the tenancy; they don’t have to wait till the end of the tenancy period.”

But as in any relationship, sometimes all it takes to close the door on a nasty chapter, is simply by talking it out.

Source : ChannelNewsAsia - 8 Nov 2007

Climate Change Capital, a London-based fund manager and adviser on global warming, plans to start a fund to invest in properties in Singapore

Climate Change Capital, a London-based fund manager and adviser on global warming, plans to start a fund to invest in properties that use energy more efficiently.

Climate Change, which manages about US$1.6 billion, will start meeting investors in the first quarter of 2008 and aims to raise ‘hundreds of millions’, said James Cameron, vice- chairman. So-called green buildings cut energy usage and reduce carbon dioxide emissions.

‘We will build a portfolio of properties, either retrofitted or improved, and buildings built from scratch or those that already meet the high standards that we would like to own a piece of,’ Mr Cameron said in an interview in Singapore yesterday. ‘It is not yet proven but perhaps we will get more value because it’s green.’

Scientists say carbon dioxide is one of the main emissions causing temperatures to rise, which may lead to potentially irreversible climate shifts and rising sea levels that would threaten world economies, ecosystems and human health.

The Kyoto Protocol binds 35 industrialised nations to curb carbon emissions by 5.2 per cent from 1990 levels by 2012. Developing nations including China and India are not required to cut emissions.

The United Nations’ climate change body will host its annual meeting in Bali next month to discuss a successor to the Kyoto Protocol. The European Union (EU) introduced ‘The Directive on the Energy Performance of Buildings’ in January 2003, to increase awareness of energy use in buildings and result in a substantial increase in investments in energy efficiency measures, according to Frost & Sullivan, a research company.

European countries wasted at least 20 per cent of their energy due to inefficiency in 2006 and applying more stringent standards to new buildings and renovations will enable the EU to reduce greenhouse gas emissions and realise an energy-saving potential of more than 20 per cent by 2020, Frost & Sullivan said.

‘The case is not proven that we will get a premium at all, but what we are sure about is that the changes that are taking place in Europe will stratify the market,’ Mr Cameron said. ‘There will be winners and losers and there will be value shift in the property sector and we want to be on the right side of that value shift.’ - Bloomberg

Source : Business Times - 8 Nov 2007

Katong Hostel will be given a master lease on the flats on a 3+3-year tenancy.

THE Housing & Development Board (HDB) yesterday awarded the tender for the master lease of 120 three- and four-room vacated flats in Tiong Bahru to Katong Hostel at a tender price of $230,280 per month. The company was the highest of 15 bidders at the tender which closed on Oct 9.

Katong Hostel will be given a master lease on the flats on a 3+3-year tenancy. The flats were vacated under the Selective En bloc Redevelopment Scheme (Sers) and the tender to seek a master tenant was a pilot project by HDB to boost the supply of flats for rental housing.

‘This will put these flats to better use in the interim period, pending their redevelopment,’ HDB said. ‘HDB will assess the response to this pilot project before deciding whether to expand the scheme in future. If needed, HDB has a potential supply of about 4,000 to 5,000 units that can be introduced to bolster rental supply in the HDB market over the next three years.’

Source : Business Times - 8 Nov 2007

Tuan Sing Holdings has declared a net special dividend of 0.5 cent per share for the financial year ending Dec 31, 2007

MAINBOARD-listed Tuan Sing Holdings has declared a net special dividend of 0.5 cent per share for the financial year ending Dec 31, 2007. The company announced this when it unveiled its third-quarter results yesterday.

Tuan Sing achieved net profit of $14.5 million for the July-September quarter, down 66 per cent from $43.1 million for the previous corresponding quarter, which included a $43.6 million profit after tax from discontinued operations. Q3 revenue rose 2 per cent to $81.1 million.

The Q3 results raised its net profit for the first nine months to $62.5 million, a 19 per cent year-on-year rise. This is despite revenue for the nine months slipping 5 per cent to $260.8 million from $273.6 million, and the absence of the $43.6 million one-off deconsolidation gain on its investment in Gul Technologies Singapore that boosted its results last year.

Earnings per share for the nine months stood at 5.5 cents, up from 4.6 cents. This represents an annualised return on equity of 27 per cent.

NTA per share was 31.9 cents, up from 22.5 cents nine months ago.

The company made no mention of plans to redevelop its cluster of three properties comprising the ageing 13-storey Robinson Towers on Robinson Road, its adjacent Annex building, and the 13-storey International Factors Buildings which sits sandwiched between Robinson Road and Maxwell Street.

Source : Business Times - 8 Nov 2007

Cushman & Wakefield found rent rises of up to 24 per cent over the past two years in the area

SOARING rents for retail office space at Raffles Place have stunned Ms Yeap Cheng Guat, the executive director of Cedele By Bakery Depot, which has two outlets in the major office hub.

‘Rents have gone up by 100 per cent. It’s that crazy,’ she said.

The bakery cafe chain has operated at Republic Plaza for about eight years now and has a newer outlet at One Raffles Quay.

Singapore’s office space crunch is spilling over to tenants like Cedele in office districts such as Raffles Place.

‘When they told me about the increase, I nearly fell off my chair,’ Ms Yeap said.

‘If my rentals rise by 100 per cent, can my food price increase by the same?

‘Then the tenant can sell only bird’s nest and abalone,’ she said, referring to expensive delicacies.

Occupancy levels for retail space such as cafes and fashion outlets in Raffles Place are close to 100 per cent.

A recent study by property consultant Cushman & Wakefield found rent rises of up to 24 per cent over the past two years in the area.

Supply of shop space is tight with no major new retail space expected for the financial district in the short term.

That means retail rents there will keep rising by another 10 to 15 per cent in the year ahead, the firm’s managing director here, Mr Donald Han, told The Straits Times. This is up from about 14 per cent in the last 12 months, he said.

The rise is relatively high, considering that rentals in the traditional shopping belt of Orchard Road have experienced single- digit rises in recent years.

Overall, rentals for prime retail space are expected to climb by 15 to 20 per cent year on year, with capital values up by 10 to 15 per cent, according to Knight Frank.

Ms Maye Kwok, 32, who sells bags and shoes from a ground-level shop at The Arcade, is convinced she will soon be paying higher rent.

‘Across the board, rents have gone up. My neighbours here have paid higher rents. I am 100 per cent sure they will raise the rent when my lease is up for revision.’

Mr Han said the office space crunch was affecting nearby retail space.

‘Most developers within the financial district prefer to maximise office use rather than retail,’ he said.

‘The irony is that when more offices are built, retail demand from the office population will grow in tandem.’

Most retail centres in Raffles Place such as OUB Centre, Raffles Xchange, One Fullerton and Republic Plaza are enjoying full occupancy.

Average gross rent for Raffles Place ground-level shops is between $18 and $35 per sq ft (psf) a month - well up from $13 to $25 psf two years ago.

Basement level space is between $12 and $25 psf a month, again well up from $9 to $18 psf two years back.

On the upper floors, which have less pedestrian traffic, rents hover between $8 and $14 psf a month, up from $6 to $9 psf a month two years ago.

As Raffles Place’s retail rents rise, several landlords have already started to either reposition their retail developments or add new retail supply, said Cushman & Wakefield.

Sino Land, the Hong Kong-based sister firm of property developer Far East Organization, recently announced plans to revamp a 26,000 sq ft retail and entertainment complex at Clifford Pier, a site that it had obtained late last year.

At OUB Centre, an additional 32,000 sq ft of retail space will be added, said Cushman & Wakefield.

It noted that newly retrofitted projects like the Market Street carpark have done well, with space nearly fully leased out at $10 to $25 psf a month.

‘The retail market situation in Raffles Place is coming to a level where nothing is available. This sub-market is being ignored when there is demand,’ said Mr Han.

Source : Straits Times - 8 Nov 2007

THE Strata Titles Board (STB) hearing the Horizon Towers sale application said that it was under no obligation to deliver its ruling before Dec 1

THE Strata Titles Board (STB) hearing the Horizon Towers sale application said yesterday that it was under no obligation to deliver its ruling before Dec 11.

That is the deadline for the estate’s $500 million collective sale to Hotel Properties (HPL) and its partners.

The majority owners want approval for the sale, after it was thrown out on a technicality in August. The minority owners want it stopped.

The STB came to its decision after it took submissions from lawyers for both the majority and minority owners. The owners were asked if they considered that the STB had a legal duty to rule before Dec 11.

Both camps, after morning deliberations, said no.

But that did not sit well with the buyers. HPL group executive director Christopher Lim said it was ’surprising’ the tribunal took that view as it may ‘potentially scuttle’ the transaction.

‘We are also very disappointed that the majority sellers did not take the position that the matter be dealt with expeditiously and before Dec 11.’

Mr Lim said the buyers had made it clear during earlier hearings that the majority sellers would be in breach of contract if they did not deal with the sale expeditiously.

‘As a result of these developments, we are currently reviewing our position.’

The STB did try to move the proceedings along yesterday, by rejecting a request by lawyers representing the minorities that they be allowed to cross-examine expert witnesses such as valuers. It also rejected an application from the lawyers that Mr Arjun Samtani, chairman of the first sale committee, take the stand as a witness.

The hearing continued with the cross-examination of Mr Wee Hian Siew, the former sale committee secretary, that began on Tuesday.

He was again asked why he did not notify owners of the $500 million offer and if he recalled the talks with Mr Bharat Mandloi.

The latter resigned from the first sale committee because he regarded the $500 million sale price as too low.

Mr Mandloi had told the committee that the owners might as well sell their units in the Leonie Hill estate on the open market at the same price.

Source : Straits Times - 8 Nov 2007

The Strata Titles Board (STB) tribunal has delivered a startling decision that could spell the end of the en bloc sale of Horizon Towers.

The Strata Titles Board (STB) tribunal has delivered a startling decision that could spell the end of the en bloc sale of Horizon Towers. The ruling could in turn resurrect the $1 billion lawsuit filed by the buyers against the sellers.

Tribunal chairman Philip Chan announced yesterday that the board was under no legal obligation to rule on whether to approve the collective sale on or before Dec 11, the sale completion date.

This means, if the tribunal chooses to make a decision only after Dec 11, the sale agreement between the buyers and the sellers will lapse - and the en bloc sale will collapse.

The decision took many observers by surprise since a ruling after the sale completion deadline would effectively render the role of the tribunal pointless.

Mr Chan said yesterday the board made its decision after considering the submissions made by all the parties involved: the majority owners who have applied for a collective sale order, and the minority owners who are opposing the sale.

The would-be buyers - Hotel Properties (HPL) and its partners - were not permitted to be parties to this hearing, and could not make any submissions on the matter.

The tribunal on Tuesday asked the relevant parties to submit their arguments on whether the board had a legal obligation to make a decision on the collective sale order on or before Dec 11.

Mr Chan announced yesterday that, as all parties were in agreement that the board was under no such obligation, the tribunal would not be bound to make a decision by Dec 11.

The position seemingly runs counter to the one taken by the tribunal at an earlier Horizon Towers hearing in June, when Mr Chan agreed to bring forward the hearing dates - so as to allow the tribunal to make its decision before the earlier sale completion deadline of Aug 11.

Mr Chan said then, as grounds for doing so, that ‘courts do not sit for futility’, adding: ‘Courts are here to make sure that if we do give an order, that order must stick. The order must be put into operation; otherwise it would be unproductive. It may even be silly for a court to sit.’

The tribunal’s decision yesterday has not gone down well with HPL and its partners.

HPL group executive director Christopher Lim told BT: ‘We are very concerned about this development. It is surprising that the tribunal took the view that it had no duty to make a ruling before Dec 11, as that may potentially scuttle the transaction.’

He added: ‘We are also very disappointed that the majority sellers did not take the position that the matter be dealt with expeditiously and before Dec 11. During the earlier hearings, we had made it clear that such conduct by the majority sellers is in breach of contract.

‘As a result of these developments, we are currently reviewing our position.’

HPL and its partners have already sued the majority owners for breach of contract - claiming damages of up to $1 billion - but that suit has been stayed, pending the outcome of this STB hearing.

But HPL and its partners earlier also made it clear that they will consider resurrecting the legal claim against the majority owners if the en bloc sale ultimately falls through.

The dramatic reaction sparked by this one announcement was in marked contrast to the humdrum proceedings of the rest of the day. Former sales committee member Wee Hian Siew spent a second day on the stand, being grilled on whether he did his utmost to act in the owners’ best interests in the en bloc sale.

The session also saw a few laughs, as Mr Chan quipped that he would refrain from making any more jokes during the hearing - ‘in case I get reported’, he said. BT reported Mr Chan’s wisecrack about Mr Wee being a secretary ‘without a skirt’ yesterday.

The mood among the owners was generally upbeat, with some even distributing Deepavali sweets to those present.

Source : Business Times - 8 Nov 2007

Collective sale of Grange Heights has been launched. And sources say the reserve price could be around $845 million, or $2,200 psf per plot ratio

THE tender for the collective sale of Grange Heights has been launched. And sources say the reserve price could be around $845 million, or $2,200 psf per plot ratio (ppr).

No development charge is payable for the 136,678 sq ft freehold plot, according to marketing agent Jones Lang LaSalle.

Owners controlling more than 80 per cent of share values in the estate have signed the collective sale agreement. In March this year an expression of interest exercise was launched before the minimum consent level had been secured.

The price expectation then was ‘upwards of $1,700 psf ppr’, according to a BT report at the time.

Grange Heights has been zoned for ‘permanent residential’ use with a 2.8 maximum plot ratio and a height of up to 36 storeys. The current development has access from three entrances - Grange Road, River Valley Grove and St Thomas Walk. The existing development comprises three blocks with a total of 120 apartments. The tender closes on Nov 28.

Source : Business Times - 8 Nov 2007

Tender for a transitional office site in Tampines yesterday drew just one bid - from City Developments Ltd’s (CDL) unit Glades Properties.

In a possible reflection that caution among developers may be extending to the office sector, a tender for a transitional office site in Tampines yesterday drew just one bid - from City Developments Ltd’s (CDL) unit Glades Properties.

And its bid of $10 million, which worked out to $80.65 psf per plot ratio (ppr), was lower than the $100 psf ppr region that most property consultants had expected the 15-year leasehold site to fetch.

The government has indicated recently that it will inject more office space into the market soon - a step that could cool prices. Some felt that yesterday’s bidding reflected caution on part of the developers while others suggested Tampines may not be a popular location among office investors.

They pointed out that the next-door 99-year leasehold office site offered through a tender that closed in May this year had also drawn just one bid, again from CityDev, although at a more substantial price of $622 psf ppr.

The maiden 15-year leasehold transitional office plot next to Newton MRT station attracted a whopping 11 bids with a top price of $219 psf ppr in August.

Whether the weaker sentiment among office investors is confined to Tampines or is spreading to the Central Business District (CBD) as well will be seen in a tender closing on Nov 13 for Marina View Land Parcel B, a 99-year leasehold site with stipulated minimum office and hotel components.

Property consultants polled by BT unanimously expect URA to award the 124,000 sq ft transitional office site at Tampines Ave 5 to CDL, despite its bid being the sole offer and that too at a price lower than expected.

‘Government should make the award since as a transitional office site, it is part of the interim solution to the acute office shortage here. Otherwise, the government objective would not be met,’ Knight Frank managing director Tan Tiong Cheng reasoned.

The Urban Redevelopment Authority said yesterday in response to a query by BT that ‘the government will continue to release more transitional office sites to meet business needs; details on these sites will be released shortly’.

Colliers International director (research and consultancy) Tay Huey Ying said: ‘If the government releases more transitional office sites in or near the CBD, I believe demand will be healthy.’

She reckons the thin bidding for the Tampines plot yesterday may be due to concern among developers that strong office demand currently outside the CBD is the result of an overflow of demand from the CBD.

‘There may be concern that post-2010, when there will be a large influx of new office space being completed within the CBD, the spillover demand for suburban offices may recede,’ she added.

‘Next week’s tender for Marina View Land Parcel B will be interesting to watch, to see whether developers are also concerned about office supply in the CBD itself,’ she added.

CB Richard Ellis executive director Li Hiaw Ho said: ‘That is a much better site (than today’s Tampines plot), although I do not expect a lot of bidders because it is a huge site with a substantial outlay.’

Source : Business Times - 7 Nov 2007

It is the minorities’ contention that the en bloc sale of Horizon Towers - to Hotel Properties and its partners for $500 million

Suggestions that the Horizon Towers sales committee failed to act in owners’ best interests took centrestage when the Strata Titles Board (STB) hearing resumed yesterday.

The serious mien of the session was, however, periodically broken by moments of frivolity - some more tasteful than others.

Former sales committee secretary Wee Hian Siew spent a tough full day on the stand, as lawyers for the minority owners - those who didn’t agree to the collective sale - grilled him on how he and the sales committee handled the sale.

It is the minorities’ contention that the en bloc sale of Horizon Towers - to Hotel Properties and its partners for $500 million - was carried out in bad faith and should not be approved by the STB.

Philip Fong of Harry Elias Partnership questioned Mr Wee for almost three hours on the collective sale procedures carried out by the sales committee.

Mr Fong cited specific instances of when key procedures were not followed - such as when notices and circulars to owners on the collective sale were insufficient, untimely or inaccurate.

Mr Fong also asked why Mr Wee didn’t try to get a better sale price when it became known that residential property prices were beginning to soar; he referred Mr Wee to a Jan 11 Business Times article, ‘Developers revive interest in unsold collective sale sites’, reporting just such a surge in home prices.

Mr Wee’s response - ‘I don’t believe anything in the papers.’ - drew sniggers from the crowd.

When Mr Fong pressed on, saying that BT was ‘a respectable daily’, Mr Wee clarified his comment to mean that he felt ‘we should not take everything at face value’.

The protracted session, however, prompted several abrupt remarks from the tribunal’s chairman Philip Chan, who interrupted Mr Fong on more than one occasion - once, for an early lunch break and a second time to tell the senior lawyer that his allotted time was up.

Kannan Ramesh of Tan Kok Quan Partnership also subjected Mr Wee to a lengthy cross-examination.

He focused on the promise made to owners that they would get an 80 per cent premium if they sold their unit in an en bloc sale than if they were to sell them individually.

Referring again to the Jan 11 BT article - and the fact that neighbouring development, The Grangeford, had upped its minimum asking price by a quarter - Mr Ramesh said these should have alerted the Horizon Towers’ sales committee to the fact that property prices were rising, that the promised premium had been ’significantly eroded’ and that they should have done more to get a higher price.

Mr Wee said the sales committee did try but relied on the expert advice of their sales agent, Alvin Er, that $500 million was the best price they could get. He said it never occurred to him that he could seek advice from other experts.

The tribunal’s chairman, Mr Chan, then asked Mr Wee if he felt he had carried out the duties expected of a secretary of the sales committee.

That prompted Mr Wee to ask, ‘What do you mean by a secretary?’, to which Mr Chan retorted ‘without a skirt’ - a comment that drew an audible objection from some members of the viewing public.

The STB also rejected one majority owner’s application to have separate representation in this hearing.

Susanna Rusli had applied last week to participate in the hearing, separately from the other majority owners - but the board yesterday dismissed her arguments.

The hearing continues today with a second former sales committee member, Henry Lim, on the stand.

Source : Business Times - 7 Nov 2007

THE home owners opposed to the $500 million collective sale of Horizon Towers have renewed their complaints that the sale was not handled properly

THE home owners opposed to the $500 million collective sale of Horizon Towers have renewed their complaints that the sale was not handled properly, resulting in a price that was too low given a fast-rising market.

They were opening their case to stop the sale in front of the Strata Titles Board (STB) yesterday with a barrage of arguments.

They claimed that the sale committee and the property agent had mismanaged the sale process of the condominium.

It was the second day of the resumed STB hearing in which the majority owners are seeking approval to have the sale approved, after it was thrown out on a technicality in August.

They are battling it out with the minority owners who have filed objections to the sale. These objectors include three groups, each represented by different lawyers, along with two sets of owners representing themselves.

Hotel Properties (HPL) and its two partners have been trying to buy the 99-year leasehold Horizon Towers for $500 million, the estate’s reserve price that was set in April or May last year.

Opponents of the sale argued that by the time the deal was signed, that reserve price was too low, and out of date.

They said the $500 million price came with an 80 per cent premium - an inducement that had shrunk significantly by the time the estate was sold to the HPL consortium in January this year, due to a fast-rising market.

One witness, Mr Wee Hian Siew, who was the secretary of Horizon Towers’ first sale committee and one of the first to moot the idea of a sale, was called at the STB hearing yesterday.

He was asked numerous questions, including whether he knew about the rising market and why he did not ask for a fresh mandate for the $500 million offer from the owners, many of whom were said to have learnt of the sale via a newspaper report.

Mr Wee said he knew about the rising market and insisted that he was under the impression that the collective sale premium had slipped to about 40 per cent to 50 per cent, which he was happy with.

Earlier, one of the three minority owners’ lawyers, Mr Philip Fong of Harry Elias partnership, had asked if Mr Wee knew that Horizon Towers’ agent First Tree Properties was a tiny company with a paid-up capital of $50,000 for instance.

Also, he asked if he knew that the company had agreed to take a commission from the purchaser, instead of the owners as with usual practice. Mr Wee said he knew about it.

He later agreed that this would create a potential conflict but it was one that was not apparent to him when they were making the deal.

These were just some of the arguments brought up yesterday when the STB board also dismissed the case of a majority owner who wanted to participate in the hearing as an objector.

The hearing continues today.

Source : Straits Times - 7 Nov 2007

Dr Han Cheng Fong has landed himself a new job.

JUST a month after his exit as chief executive officer (CEO) of Fraser & Neave (F&N) caused a swirl of controversy, Dr Han Cheng Fong has landed himself a new job.

Dr Han, 65, has joined the operations of property tycoon Ng Teng Fong - Singapore’s richest man, according to Forbes magazine.

His job will focus on expansion plans in China. This is right up his alley as the property heavyweight is said to have focused on property in China when he was at F&N, a property, publishing and beverage conglomerate.

F&N has service residences in China and is developing residential properties and shopping centres there as well.

Since Dr Han’s departure from F&N, there has been much speculation as to where he would go.

Prior to F&N, he was CEO at DBS Land but left after it merged with unlisted Pidemco Land to form CapitaLand.

In a statement issued on the day he quit F&N, Dr Han had said: ‘Yes, I have been in discussion with several organisations in the last few months and it is likely I will make up my mind on what my future will be after a break in Europe’.

Mr Ng’s Far East Organization (FEO) is Singapore’s largest unlisted property developer. His son, Philip, is the company’s CEO.

Hong Kong-based Sino Land is the listed arm of FEO. It ranks as Hong Kong’s fifth- largest property developer and has a market value of about $115HK billion ($21S.5 billion). Mr Ng’s son, Robert, is the chairman of Sino Land.

When contacted yesterday, the Sino Group said: ‘We are delighted to welcome Dr Han as the chief executive officer of the Sino Group’s China division.’

Sino Group consists of listed Sino Land and the Ng family’s private group in Hong Kong.

Dr Han will also head a FEO unit, Far East International.

Sino Group said: ‘The job is to expand our real estate interests in China and other markets of interest.’ Dr Han will be doing likewise for the Fullerton Hotel brand.

Sino Land owns the Fullerton waterfront properties which comprise the Fullerton Waterboat House, The Fullerton Hotel, One Fullerton with its trendy restaurants, and the recently acquired Collyer Quay site.

Dr Han, who started his job last Thursday, is in Hong Kong and could not be contacted.

However, his appointment does not clear up the cloud of uncertainty that hangs over F&N’s business and future as a result of his departure.

There has been no elaboration on F&N’s statement that Dr Han’s departure resulted from ‘differences of opinion with the board’.

Just before he quit, F&N announced it had found a new chairman, former SingTel chief Lee Hsien Yang, to take over from Dr Michael Fam who has since retired. F&N took pains to emphasise that Dr Han’s departure had nothing to do with Mr Lee’s arrival.

Then there was talk that Mr Lee’s appointment as well as Temasek Holdings’ entrance early this year as a strategic investor were to fend off takeover plans by Heineken.

Heineken is F&N’s joint venture partner in its beverage business, which includes the famed Tiger Beer.

There was also talk that Dr Han, coming from a property background, was less keen on the traditional parts of the business such as the beer and dairy operations, than the rest of the board.

Property brought in about two-thirds of F&N’s profits last year.

Source : Straits Times - 7 Nov 2007

A PROPERTY fund that won the tender for a leasehold office plot on Anson Road has roped in construction group Lum Chang Holdings to jointly develop

A PROPERTY fund that won the tender for a leasehold office plot on Anson Road has roped in construction group Lum Chang Holdings to jointly develop the site.

Lum Chang will take a 5 per cent stake in Firstoffice, a vehicle set up to develop the land.

The remaining 95 per cent is held by Homerun 28, a wholly-owned subsidiary of LaSalle Asia Opportunity Fund III.

The total development cost, including the land, is estimated at $379.2 million.

Lum Chang has been appointed the main contractor for the $82.5 million contract to build a 20-storey office tower on the land next to International Plaza.

When completed by end-2009, the 99-year leasehold property is expected to yield 200,208 sq ft of net lettable office space and 1,668 sq ft of carpark space.

Given the rising demand and shortage of prime office space, the project is expected to draw keen interest from multinational tenants looking for Grade A offices near the Tanjong Pagar MRT station, said Lum Chang in a statement.

LaSalle won the tender with a top offer of $237.2 million in a government tender in August.

The Anson Road site is the maiden Singapore investment for LaSalle Asia Opportunity Fund III, which is planning to make about $12US billion ($17S.4 billion) worth of acquisitions over the next three to four years. The fund is part of the Jones Lang LaSalle group.

Source : Straits Times - 7 Nov 2007

Property developer SP Setia Bhd, which currently has 2,160 hectares of undeveloped landbank worth RM30 billion (S$13 billion) in gross development val

Property developer SP Setia Bhd, which currently has 2,160 hectares of undeveloped landbank worth RM30 billion (S$13 billion) in gross development value (GDV), plans to focus on luxury and commercial development projects.

Its group managing director and chief executive officer, Liew Kee Sin, said the company was now shifting from being a purely residential developer to a full-range developer.

Mr Liew said SP Setia had been involved in developing its normal housing and eco-focused branding over the years.

‘This can sustain us for only a number of years. We want to expand to other parts of the business cake. We want to go into condominiums, super high-end brands like bungalows and commercial developments, and venture into Vietnam,’ he said.

The company, he added, planned to sell 15 high-end bungalows valued at about RM30 million per unit next year.

He was speaking to reporters after a signing ceremony for the proposed issuance of RM500 million nominal redeemable serial bonds with 168.15 billion detachable warrants between SP Setia, Aseambankers Malaysia Bhd and United Overseas Bank (Malaysia) Bhd here yesterday.

On overseas ventures, Mr Liew said SP Setia had joined forces with Vietnam’s top state-owned conglomerate, Becamex IDC Corp, to undertake a residential project with a GDV of RM2.1 billion. He said the proposed township involved 200 hectares of land located in Ho Chi Minh City and was expected to be launched next year.

According to him, the project is expected to contribute about 10 per cent of SP Setia’s profit by 2010.

For the RM500 million bonds, SP Setia plans to utilise it to repay existing borrowings and to finance its operating activities, capital expenditure and working capital requirements.

Mr Liew said the bonds would allow SP Setia to diversify its funding sources and lock in fixed interest rate to rebalance the group’s current financing portfolio, which is mainly based on floating interest rates. — Bernama

Source : Business Times - 7 Nov 2007

Luxury-home prices in London rose last month at the slowest pace since July 2005

Luxury-home prices in London rose last month at the slowest pace since July 2005 as the prospect of job cuts and smaller bonuses deterred investment bankers and other buyers, Knight Frank LLC said.

The average price of houses and apartments costing at least £2.5 million (S$7.55 million) increased 0.3 per cent in October from the previous month, according to an index compiled by the London-based property broker. Prices gained about 34 per cent from a year earlier.

Companies in the City of London financial district may cut 6,500 jobs and reduce bonuses by 16 per cent this year, the Centre for Economic and Business Research said on Oct 8. For the past two years, most of the bonuses have been spent on real estate, fuelling demand for apartments in London neighbourhoods such as Chelsea, Kensington and Notting Hill.

‘The impact of the credit crunch and a weaker City economy have contributed to a more sober market,’ said Liam Bailey, head of residential research at the London-based firm.

Bonus-earners in the city will invest only £2 billion in homes next year, compared with £5.5 billion this year, as they seek assets that offer higher returns, according to Savills plc estimates. Savills and Knight Frank are the biggest brokers for prime London properties, the most expensive in the world.

The lack of investment will restrict the gain in luxury-home prices to 3 per cent in 2008, less than a tenth of this year’s rate, Knight Frank forecast this week. The company cut its estimate from 10 per cent.

For homes costing more than £5 million, the average price increase will probably be about 8 per cent next year compared with the estimated 2007 gain of 34 per cent, Knight Frank said. The main customers for the most expensive houses and apartment are wealthy investors from Russia and the Middle East, according to the broker.

The contrast with the rest of the London market ‘illustrates the strength of the super-prime market with demand from international buyers remaining very strong,’ Mr Bailey said. — Bloomberg

Source : Business Times - 7 Nov 2007

LUXURY brand Hugo Boss will set up a 2,000 square feet boutique in the upcoming Marina Bay Sands integrated resort (IR)

LUXURY brand Hugo Boss will set up a 2,000 square feet boutique in the upcoming Marina Bay Sands integrated resort (IR) - the first luxury brand to confirm taking space there - as it seeks to grow its sales in Singapore by as much as 50 per cent over the next three years.

‘I see a potential upside for growth of about 50 per cent over the next few years, especially with the new stores,’ said Hugo Boss chief executive Bruno Salzer. ‘We will definitely have a presence in the two casinos.’

In addition to the Marina Bay Sands boutique and the one targeted for Genting’s Sentosa IR, Hugo Boss is also keen to have a presence in upcoming Orchard Road mall Ion Orchard, said Brian Ang, managing director for the Hugo Boss franchise in Singapore and Bangkok. ‘It is important for us to be in Ion Orchard,’ he said. ‘Most probably we will be somewhere prominent in the mall.’

Hugo Boss recently celebrated its 20th anniversary in Singapore, for which Dr Salzer flew into town. The upcoming boutiques in Singapore are part of Hugo Boss’s push to expand in the region at a fast clip.

The label has about 170 stores in Asia (excluding Japan) at present, but Dr Salzer wants to grow the number by about 15-20 stores yearly over the next few years, he said. ‘Asia now contributes about 10-11 per cent of total sales, and I expect double-digit growth over the next couple of years,’ said Dr Salzer.

Within the region, Japan and China are the biggest markets for the group. Of the 15-20 new stores the brand aims to add each year, the bulk are likely to be in China, he said. But Dr Salzer is also excited about the potential for growth in Singapore, especially with the new stores coming up.

Mr Ang said that in addition to the planned new stores, Hugo Boss is looking at revamping its existing boutiques.

Right now, the brand’s flagship boutiques in Ngee Ann City are split across two levels. But by the end of next year, the brand hopes to have its space all on one floor, - with a 7,000 sq ft floor plate - Mr Ang said. He did not specify if the boutique will be in Ngee Ann City as well. In addition, there are also plans to revamp Hugo Boss’s 1,600 sq ft store in Paragon. Mr Ang is looking at taking up more space. The brand also has a boutique at Changi Airport.

The Boss boutique in Marina Bay IR will be ‘more luxurious’ and will be designed to appeal to high-rollers, Mr Ang said.

Source : Business Times - 7 Nov 2007

Global hoteliers are riding a building boom in Asia, and using plush new hotels as giant advertisements to lure newly rich Chinese and Indians

Global hoteliers are riding a building boom in Asia, and using plush new hotels as giant advertisements to lure newly rich Chinese and Indians to their US and European properties.

Operators such as InterContinental Hotels Group and Hilton Hotels Corp are growing fast in an Asian market worth US$115 billion a year, spurred on by a regional travel craze.

But they also hope to lodge their brands in local minds. That’s because despite a reputation for cramming into cheap package tours, Chinese tourists spend an average US$3,786 on trips to the United States and US$5,253 in Europe.

The number of Chinese travelling to the US has jumped 44 per cent in four years to 320,000 last year, and Indian visitors increased nearly 60 per cent to 406,000, according to the Pacific Asia Travel Association.

InterContinental’s acting Asia head, Anthony South, said the chance to capture the outbound market was a motive in a deal to buy a controlling stake in the hotel management unit of Japan’s All Nippon Airways Co (ANA) last year.

ANA later sold its 13 hotels, jointly branded with InterContinental, to US investment bank Morgan Stanley.

‘Through good times and bad, the Japanese go to all corners of the globe and are very well-heeled,’ Mr South said. ‘The same applies to China, where the outbound market is growing off a small base very rapidly. If they identify with our brand at home, it’s good for our business.’

InterContinental, which like most hotel firms has eschewed ownership to only operate hotels, aims to add 130 new properties to its 190 in Asia over three years. And at its Holiday Inns outside China, the firm is starting to stock hard pillows popular with the Chinese and installing water boilers for instant noodles.

Asia’s hotel market is far from a sure bet, with the 1997 economic crisis and an outbreak of the Sars respiratory disease in 2003 each causing a 20 per cent drop in visitor arrivals. But the travel industry has a knack for bouncing back quickly so hotels are taking long-term views, focusing on the economic growth rates of around 10 per cent in India and China.

‘As the wealth in both countries increases, the first thing people want to do is travel,’ said Gerald Lawless, chief executive of Jumeirah, a hotel firm owned by the ruler of Dubai. Jumeirah aims to operate 60 hotels by 2011, with three or four each in India and China.

The company now runs 11 luxury hotels, including the sail-shaped Burj al-Arab in Dubai and the Jumeirah Essex House in New York. ‘The outbound market is vital for us,’ Mr Lawless said. ‘There’s been a surge in Chinese visitors at the Burj.’

China’s US$16 billion hotel market, growing at 15 per cent a year, is the main focus in Asia for most operators and investors.

The number of domestic trips per year has doubled since 2001, and domestic tourism is expected to rise to 8 per cent of gross domestic product within a decade, from 5.4 per cent in 2002.

And with the 2008 Olympic Games expected to put China on the world travel map, Hilton has clinched a deal to manage around 20 new hotels being built by Deutsche Bank’s property arm RREEF and private equity firm H&Q Asia Pacific.

Hilton, now with six hotels in China, has tied its loyalty programme to Air China and China Eastern Airlines to hook Chinese on its brand when they travel abroad.

India’s hotel market is even more lucrative, with US$300 room rates common because of a massive shortage. The country has only 110,000 hotel rooms, with internationally branded rooms making up less than 40,000 of the total - less than half on offer in tiny Singapore.

But the inflated prices could hurt the industry. Average room rates have risen 30 per cent in the last year. ‘Inflated room rates will have a severe negative effect on potential demand, especially in leisure destinations,’ said Manav Thadani, managing director of consultants HVS International.

Investors are keen to build more - Citigroup, for example, is building a luxury hotel in Bangalore with developer Nitesh Estates.

Around 100,000 rooms are forecast to enter the market over the next five years, but India’s creaking infrastructure could stall the plans. ‘Unless the airport situation is addressed and new ones opened, it’s going to be a barrier,’ said InterContinental’s Mr South. ‘Hotel development will be in a stop-start manner.’ - Reuters

Source : Business Times - 7 Nov 2007

The Sports Hub could cost as much as $1 billion to build

The Sports Hub could cost as much as $1 billion to build, some $200 million more than the higher end of the original estimates, it was suggested yesterday.

The new costings emerged as the three bidders presented their proposals to build the nation’s mega-sports complex through a public-private partnership - said to be a world first.

To ensure its financial sustainability and funding of non-profitable community events, the contenders revealed funding plans which would result in ploughing back significant amounts of revenue and profits into the 25-year project. These range from initial seed money (SingaporeGold) to a percentage of commercial revenue (Singapore Sports Hub).

Sources told BT the construction cost of the Sports Hub would be around $1 billion. But Singapore Sports Council spokesman Alvin Hang yesterday said the initial cost estimate of $650 million to $800 million remains.

All three groups said the building cost would be met through bank loans, with the shareholders retaining a typical 10 per cent equity, which is how such projects are generally structured. Returns expected by the shareholders and investors for infrastructural projects would be between the high single digits and the mid-teens.

Lynn Tho, HSBC director of project and export finance, said the project met with enthusiastic response from banks when they were sounded out on financing the project. ‘We had a funding competition and received over 200 per cent funding commitment for our costs,’ she said.

HSBC Infrastructure Fund Management is the main shareholder of the Singapore Sports Hub Consortium, with 90 per cent equity. Dragages (Singapore) and United Premas each have 5 per cent.

Although this is said to be the world’s first public-private partnership sports complex, members of the consortiums were confident of financing support. Babcock & Brown Securities director Marc-Antoine Thiriez said: ‘A certain proportion of revenue will come from sports events which are volatile but our pool of banks have a level of tolerance for this.’

Much of the revenue model centres on retail and events.

The 50-50 Macquarie and John Laing Infrastructure-led SingaporeGold Consortium’s Sports Quay concept boasts 2.6 km of waterfront promenade. It says it is teaming up with the strong retail credentials of Australia’s Lend Lease, and the events management pedigree of IMG puts it in a good position.

The Alpine consortium, meanwhile, has a radical plan for a 7,000 sq metre lifestyle/sports hypermarket. This will be similar to the Rebel chain of stores in Australia, said Stephen McMillan, managing director of Citta, a unit of major equity partner Babcock & Brown, which is in charge of the retail component.

The equity partners are Alpine (46 per cent), Babcock & Brown (48 per cent) and Woh Hup (6 per cent).

Singapore Sports Hub has Frasers Centrepoint as its retail partner. They will allocate about one-third of their 41,000 sq m gross floor area to food and beverage outlets and say they expect daily retail traffic of about 20,000. The consortium is counting on World Sport Group’s ability to bring in international cricket and Asian-level football as an advantage.

Alpine is partnering US-headquartered SMG.

Source : Business Times - 7 Nov 2007

Genting International said on Tuesday that it expects to spend as much as $6 billion (US$4.14 billion) to build an integrated resort

Genting International said on Tuesday that it expects to spend as much as $6 billion (US$4.14 billion) to build an integrated resort on Singapore’s Sentosa Island, up 15 per cent from an earlier estimate of $5.2 billion.

The new figure, which includes a contingency provision of $250 million, will cover the cost of six new attractions as well as the rising cost of construction, Genting International said in a statement.

Genting International and sister company Star Cruises, which are both units of Malaysian casino operator Genting Bhd, won in December last year the right to build and operate Singapore’s second casino resort.

Called Resorts World at Sentosa, the 49-hectare project will include a Universal Studios theme park, a giant oceanarium with 700,000 aquatic creatures, and six hotels with more than 1,800 rooms. The resort is scheduled to be completed in 2010.

Singapore’s first casino site, a 20.6-hectare piece of waterfront land at Marina Bay near the financial district, was awarded to Las Vegas Sands in May 2006.

Singapore legalised casino gaming in 2005 as part of ambitious plans to double visitor arrivals to 17 million by 2015. — REUTERS

Source : Business Times - 7 Nov 2007

PROPERTY giant City Developments (CDL) has teamed up with United States financial services group Wachovia to buy 44 homes

PROPERTY giant City Developments (CDL) has teamed up with United States financial services group Wachovia to buy 44 homes in CDL’s freehold Grange Road project for $432.4 million.

Industry analysts suggest CDL might be preparing to list a real estate investment trust (Reit) using the properties. Knight Frank executive director Peter Ow said: ‘The only reason I can think of for this deal is so that they can put the apartments in a Reit in the future.’

CDL, however, declined to say if a Reit was in the pipeline, but it acknowledged it was studying this as well as other business models.

Under the deal, which works out to an average price of $3,750 per sq ft (psf), Wachovia’s real estate arm, Wachovia Development, will take a 60 per cent stake in the joint-venture company.

According to CDL, there are plans to rent out the 44 three- and four-bedroom apartments and penthouses - which take up two of the four towers at Cliveden at Grange - as well as possibly selling them off later if prices rise.

CDL executive chairman Kwek Leng Beng said yesterday: ‘The development has seen strong foreign interest from both individual buyers and retail investors since its launch… The deal is in line with our business strategy of leveraging on the capital appreciation potential of our developments.’

He had earlier indicated that CDL was considering keeping two blocks of homes at Cliveden instead of selling them off in a rush.

The deal could also mark the start of CDL’s preparation for a residential Reit, property analysts said.

The venture would mean that there are now just 24 units left for sale at Cliveden, which was launched for sale in July.

A total of 42 units were sold at an average price of $3,690 psf before the joint venture was announced yesterday. Many of the buyers are foreigners from Britain, Australia, Hong Kong, China, Taiwan and Indonesia, among other centres.

Wachovia is not new to the local real estate scene. It is also teaming up with CapitaLand to redevelop Char Yong Gardens and Farrer Court.

Mr Ow said the deal was positive for CDL due to the limited upside now for luxury homes. Putting the homes in a Reit, he said, would allow CDL to keep the apartments over a longer period of time, say three to seven years, and ride out any possible drop in prices in the near future.

Source : Straits Times - 6 Nov 2007

A JOINT venture between City Developments Ltd (CDL) and US-based Wachovia Development Corporation is buying two blocks at CDL’s Cliveden

A JOINT venture between City Developments Ltd (CDL) and US-based Wachovia Development Corporation is buying two blocks at CDL’s Cliveden at Grange condo for $432.4 million or an average price of about $3,750 per sq ft (psf).

And according CDL executive chairman Kwek Leng Beng, the deal attests to the freehold project’s ‘high investment potential’ and reflects CDL’s ‘business strategy of leveraging on the capital appreciation potential of our developments’.

In an interview with BT in May this year, Mr Kwek said he was considering retaining a portion of some new residential developments for rental income and capital appreciation.

At CDL’s Q2 results briefing in August, he said he was considering retaining two blocks at Cliveden.

A Hock Lock Siew column in BT later that month speculated on whether CDL was mulling a residential real estate investment trust (Reit) to which it could spin off apartments held for investment.

CDL was silent on this in its statement to the Singapore Exchange yesterday. But market watchers reckon a possible exit strategy for the CDL-Wachovia joint venture for their investment in the two Cliveden blocks would be to divest them to a residential Reit.

Without elaborating, a CDL spokesman said yesterday: ‘We will look into this business model of retaining units in some of our future residential developments.’

CDL is taking a 40 per cent stake in the joint venture company Grange 100 Pte Ltd that is buying the Cliveden blocks, comprising 44 apartments. Wachovia holds the majority 60 per cent.

The 44 units are three and four-bedders, and two penthouses. The prices at which they were bought range from $3,392 psf to $4,313 psf.

Before the deal was announced yesterday, CDL had sold 42 units at Cliveden at an average price of $3,690 psf since the project’s soft launch in June. More than 90 per cent of these units were bought by foreign buyers from the UK, Australia, Hong Kong, China, Taiwan, Indonesia, France, Korea and Japan.

After the latest deal, only 24 apartments will be left at the 110-unit Cliveden, which is coming up on the former Kim Lin Mansion site.

Last year, CDL bought the Lucky Tower site, diagonally opposite the Kim Lin plot, for $1,134 psf per plot ratio.

Source : Business Times - 6 Nov 2007

A restored three-storey shophouse at the corner of Trengganu and Temple streets, often featured as an icon of Singapore’s Chinatown area

A restored three-storey shophouse at the corner of Trengganu and Temple streets, often featured as an icon of Singapore’s Chinatown area, has been put up for auction.

The owner’s indicative price is $3 million for the property, which is on a site with a remaining lease of 65 years. This works out to $4,274 per square foot based on the property’s 702 sq ft land area.

That sounds steep, considering that No 20 Trengganu Street nearby, comprising seven shophouses also with a remaining lease of 65 years, was sold earlier this year for $18 million, or $1,722 psf of land area, to Asok Kumar of Royal Brothers Group.

That property has a total land area of about 10,450 sq ft and a total lettable area of nearly 24,000 sq ft.

However, Knight Frank’s auctions director Mary Sai, whose firm is offering 15 Trengganu Street at its auction at Carlton Hotel on Nov 22, points to the property’s aesthetic appeal, with intricate arches and columns, and its historical background - it was an opera house in the 1930s/1940s.

‘It also has dual frontage along Trengganu Street and Temple Street,’ Ms Sai says.

The property is being put up for sale by its owner, a local businessman active in the Chinatown circle.

He occupies the building’s upper floors, according to Ms Sai. He will vacate the property for the new owner, although he has leased out the ground floor to a tenant until September 2008.

The property has about 2,200 sq ft of floor area.

Knight Frank is also offering at the same auction a two-storey pre-war intermediate terrace house at Lorong 40 Geylang. The freehold property has been put up for auction by the Inland Revenue Authority of Singapore to recover outstanding property taxes.

The property has the address Nos 17 and 17A Lorong 40 Geylang. No 17A is the second storey, which is served by a separate external staircase.

The property’s land area is 1,392 sq ft.

Knight Frank, which points out that the property is not part of the Geylang red light district, says the indicative price is $700,000 to $750,000. Surrounding uses include residential and associations.

IRAS auctions off properties only as a last resort to recover property tax - after the owner repeatedly fails to pay or defaults on his payment despite many reminders. IRAS will return any balance on the sum received to the owner, after recovering outstanding tax, penalty payment, interest, and the cost of recovery.

Source : Business Times - 6 Nov 2007

UPMARKET developer Wheelock Properties yesterday reported a 77.6 per cent drop in second-quarter net profit to $30.4 million.

UPMARKET developer Wheelock Properties yesterday reported a 77.6 per cent drop in second-quarter net profit to $30.4 million.

But profit from continuing operations was up 90.3 per cent from $16 million previously.

The reason for the drop in bottom-line profit was that Wheelock had booked a one-off gain of $116 million in the second quarter last year from the sale of its British-based Hamptons Group.

Revenue for the three months ended Sept 30 slipped 9.8 per cent to $97.6 million.

The company attributed this mainly to lower revenue recognition of units that had been sold in The Sea View and The Cosmopolitan condominium projects.

This was partly offset by higher dividend income from the group’s 20 per cent stake in Hotel Properties.

Second-quarter earnings per share were 2.55 cents, down from 11.38 cents previously while net asset value per share stood at $1.71 compared with $1.69 as at March 31.

Six-month net profit slipped by 65.6 per cent to $55.9 million on revenue of $191.6 million.

Wheelock said the prospects for improved rental rates are good for both office and retail space at its commercial property, Wheelock Place.

Its 338-unit Scotts Square, a luxurious condominium project, was well received during its soft launch. Half of the development has been sold at an average price of $3,986 per sq ft. Sales of the remaining units are ongoing.

Source : Straits Times - 6 Nov 2007

Monday, November 5, 2007

SC Global Developments property had been sold for more than $4,800 psf. The lowest price fetched was $3,500 psf.

PRICES ranging from $7 million to $12 million have been racked up for each of the 28 units at the posh Hilltops condo.

The flats were sold for an average price of just over $3,900 per sq ft (psf), which has made the Cairnhill Circle estate one of the most expensive in town.

Sources said one unit in the SC Global Developments property had been sold for more than $4,800 psf. The lowest price fetched was $3,500 psf.

The three-bedroom units were believed to have commanded a price of nearly $7 million, while the four- to five-roomers went for up to $12 million.

About half of the buyers were foreigners, with the rest locals and permanent residents, said sources.

Most opted for the progressive payment scheme, instead of the deferred payment scheme that the Government recently axed, although it was still available for Hilltops.

The 28 units sold are among the 30 launched about a month ago. The freehold 20-storey condo has 240 flats, mostly three- and four-bedroom units.

Prices at Hilltops have pipped those at the nearby 140-unit Helios Residences, where 69 units were sold for an average of just over $3,000 psf each.

Values in the Cairnhill area have increased dramatically with new launches in recent months following a spate of collective sales in the area.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said developers with a solid product and a willingness to tolerate a slower pace of sales will be able to achieve relatively high prices.

‘While the market seems to be a bit quieter recently, there is still strong interest for luxurious properties, as more and more wealthy people park their funds in Singapore,’ he said.

Source : Straits Times - 5 Nov 2007

PROPERTY investors love new launches - they can get their hands on a unit fresh off the plans and hope for huge overnight gains.

PROPERTY investors love new launches - they can get their hands on a unit fresh off the plans and hope for huge overnight gains.

But long-term investors would do well to also check out completed properties that can generate an immediate rental income.

‘Too many people are overweight in their investment portfolio in terms of new launches,’ says Savills Singapore director for marketing and business development, Mr Ku Swee Yong. ‘To lower one’s risks, part of the portfolio should be income-producing.’

That will give investors a certain amount of income from property even during a short-term market dip, he says.

Although Singapore’s market is currently buoyant, it has its ups and downs as any homebuyer over the past 10 years knows only too well.

For those buying on a progressive payment scheme, the instant income from a completed property could help cover mortgage payments.

This option has become more attractive with the recent axing of the deferred payment scheme, which puts buying a completed property on a level playing field with buying an uncompleted one.

Buyers will have to take out a loan sooner since they can no longer defer the bulk of the payment for an uncompleted property until completion.

When it comes to getting a mortgage, it may not necessarily be easier to get a loan for a completed property compared with an uncompleted one.

OCBC Bank says it does not differentiate between completed and uncompleted property.

Still, in line with the pickup in home prices, the rental market has shot up across the board, making the purchase of a completed property for rental gains more worthwhile.

Official data showed that rents of private homes rose by 11.4 per cent in the third quarter, making a 32.2 per cent rise between January and September.

Completed properties are generally more ‘reasonably priced’ compared with new launches, says one investor.

A recent Jones Lang LaSalle study found that the gap between new sale prices and resale prices is at a record high.

But this is likely to narrow as buyers find it less attractive to buy new developments when habitable resale homes at more affordable prices are readily available, it said.

A tip from a seasoned investor: Consider projects that will get their temporary occupation permit within the next three to six months.

‘These projects would have been launched about three years ago when prices were low,’ he says, so their sub-sale prices will usually be lower than those of new launches.

‘Another advantage is that you will be the first landlord and have the privilege of charging rental based on the current market rate,’ he adds.

‘There’s no point taking over a lease that has two years to go and that was based on old, lower rental rates.’

As a guide, properties offering a rental yield of at least 3 per cent are a safe bet, says Mr Ku. These can be found in completed properties in city fringes such as Siglap and Balestier.

Bargains are tougher to find in hot areas like Amber and Meyer roads where asking prices have risen so much that yields have fallen below 2.5 per cent, he says.

Some older properties may offer fairly high yields but investors must factor in maintenance costs, consultants say.

Source : Sunday Times - 4 Nov 2007

THE Housing & Development Board has made a 99-year leasehold condo site at the corner of Lorong 2/3 Toa Payoh available for application

THE Housing & Development Board has made a 99-year leasehold condo site at the corner of Lorong 2/3 Toa Payoh available for application under the reserve list.

The 1.4-hectare plot can be developed into a project of about 530 units averaging 1,200 sq ft, property consultants say.

Market watchers suggest the site could attract bids ranging from $450 to $630 per sq ft per plot ratio - a spread that reflects uncertainty after recent market dynamics.

Last week’s withdrawal of the deferred payment scheme seems to have made developers cautious, as seen on Thursday when a state tender for a 99-year condo plot behind the Icon in Tanjong Pagar attracted just two bids.

But some observers say Far East Organization could submit a bid that matches the $601 psf per plot ratio it offered in September for a 99-year condo site next to Ang Mo Kio Hub. The $601 psf ppr was a record for suburban condo land.

Knight Frank managing director Tan Tiong Cheng believes a condo on the Toa Payoh site could sell for an average price of about $900 psf at most, considering it would be pitched mostly at HDB upgraders. That works out to a land bid of about $450 psf ppr and a breakeven cost for the project of about $800 psf.

But Sim Lian Holdings director Ken Kuik believes a new condo on the site could sell for an average price of close to $1,000 psf, going by recent launches. He was alluding to strong sales last weekend of freehold Park Natura at Bukit Batok, much further from the city, at an average price of $1,000 psf. The project is being sold on a partial deferred payment scheme.

Mr Kuik reckons the Toa Payoh site could fetch $500 to $550 psf ppr, which would result in a breakeven cost of $850 to $900 psf ppr and a selling price for the new condo of about $950-$1,000 psf.

Another developer reckons Far East, controlled by tycoon Ng Teng Fong, will at least match the $601 psf ppr it offered for the Ang Mo Kio site. ‘My gut feel is Far East could bid $620-630 psf ppr this time,’ the developer said.

‘Because of its size it can get lower construction costs and its architects are known to maximise efficiency, so even at this bid price its breakeven cost may be just above $900 psf.’

The 150,211 sq ft Toa Payoh site is flanked by Kheng Cheng School and the Singapore Federation of Chinese Clan Associations Building. It is within walking distance from Braddell MRT Station. The site has a plot ratio of 4.2.

Sites on the reserve list under the Government Land Sales Programme are launched for tender only after an application by a developer who undertakes to pay a minimum price acceptable to the state.

Source : Business Times - 3 Nov 2007

A ROBUST property market lifted net profits at Singapore Land and its parent, United Industrial Corporation (UIC), in the third quarter.

A ROBUST property market lifted net profits at Singapore Land and its parent, United Industrial Corporation (UIC), in the third quarter.

SingLand said its earnings in the quarter rose 30 per cent to $30.1 million from $23.2 million a year earlier. Revenue was up 27 per cent at $70.5 million.

It attributed the revenue jump for the three months ended Sept 30 to ‘the contribution from the Pan Pacific Singapore Hotel and higher rental income’.

The company acquired full ownership of the hotel in April.

Higher rental rates and improved occupancy lifted its rental income by $8.1 million, although it did not say where this increase came from.

Earnings per share in the third quarter came to 7.3 cents, up from 5.6 cents in the same period last year. Net asset value per share was $7.45, a slight dip from $7.50 as at Dec 31.

UIC had an even rosier story to report. Its earnings were up 43 per cent in the third quarter at $25.4 million from $17.8 million a year earlier on a 76 per cent surge in revenue to $134.8 million.

The higher revenue was due to stronger sales of residential properties, contributions from the Pan Pacific Singapore Hotel and increased rental income.

UIC named One Amber, the Grand Duchess at St Patrick’s and Northwood as the sites that had contributed $26.5 million to the company’s coffers.

It is bullish about its prospects, noting that with ‘Singapore’s economic growth and positive consumer sentiment, demand for office and retail space and private housing is expected to remain steady’.

Earnings per share stood at 1.8 cents, up from 1.3 cents. Net asset value was $1.78, down from $1.77 as at Dec 31.

Source : Straits Times - 3 Nov 2007

SINGAPORE Land (SingLand) and its parent company United Industrial Corporation (UIC) have both reported higher third-quarter earnings.

SINGAPORE Land (SingLand) and its parent company United Industrial Corporation (UIC) have both reported higher third-quarter earnings.

For the three months ended Sept 30, SingLand posted a 30 per cent year- on-year increase in net profit to $30.1 million, on the back of a 27 per cent gain in revenue to $70.52 million. SingLand, a major office landlord, said rental rates and occupancy rates improved, which resulted in an $8.1 million or 20 per cent rise in gross rental income to $47.4 million.

UIC’s Q3 net earnings rose 43 per cent to $25.4 million. UIC was in the news earlier this week for having sold more than 100 units of its Park Natura condo in Bukit Batok since last weekend. Its Q3 revenue jumped 76 per cent to $134.8 million, due to higher sales of residential properties and revenue recognition on a percentage of completion basis, contribution from Pan Pacific Singapore hotel as well as higher rental income. ‘The residential property sales pertain to the One Amber, Grand Duchess at St Patrick’s and Northwood residential property developments, which have been fully sold,’ UIC said in its results statement.

Share of associates’ results increased by $1.2 million or 23 per cent to about $6.2 million for Q3, due mainly to higher contribution from The Sixth Avenue Residences and The Regency @ Tiong Bahru residential projects in which the group has interests of 35 per cent and 40 per cent respectively.

UIC said Q3 earnings per share rose to 1.8 cents from 1.3 cents in the corresponding period last year. Net asset value per share as at Sept 30, 2007, was $1.78, up one cent from Dec 31, 2006. Its shares eased four cents to close at $3.06 yesterday.

UIC’s net earnings for the first nine months of this year rose 40 per cent to $75.8 million. Revenue increased 51 per cent to $351.4 million.

SingLand’s Q3 EPS rose to 7.3 cents from 5.6 cents in the corresponding year-ago period. NAV per share stood at $7.45 as at Sept 30, 2007, down five cents from Dec 31, 2006.

For the first nine months of this year, SingLand’s net profit rose 29 per cent to $92.1 million on a 16 per cent rise in turnover to $184.5 million.

SingLand shares closed 35 cents lower at $9.35.

Source : Business Times - 3 Nov 2007

JTC’s ready-built facilities are proving particularly popular, with net allocation up by 29 per cent quarter-on-quarter to hit 75,100 sq m

JTC’s ready-built facilities are proving particularly popular, with net allocation up by 29 per cent quarter-on-quarter to hit 75,100 sq m in the third quarter of this year.

Occupancy rates were in turn pushed up to 91 per cent from 89 per cent in the previous quarter.

JTC says: ‘Growth was broad-based, with flatted factory, stack-up factory and business park space all experiencing positive growth in net allocations.’

Commenting, Savills Singapore’s director of industrial business space Dominic Peters said demand for business park space will continue to be strong. ‘Rents could increase another 10 per cent in the next quarter to about $3.50 to $3.80 psf on average,’ he said.

Net allocation for JTC’s business park space increased 157 per cent to 1,800 sq m, with occupancy reaching 94 per cent.

Net allocation for flatted factory space was 54,000 sq m, an increase of 94 per cent over the previous quarter. The bulk of the gross allocation of flatted factory space came from the services industry, followed by general manufacturing industry and precision engineering industry.

Net allocation for stack-up factory space increased 62 per cent to 9,700 sq m.

In the same segment, net allocation in technopreneur space and standard factory space fell 88 per cent and 55 per cent respectively.

Net allocation for JTC’s prepared industrial land fell 13 per cent to 55.9 ha quarter-on-quarter.

The logistics sector share of gross allocation was up 37 per cent to 24.4 ha, with the precision engineering sector increasing 16 per cent to take 10.8 ha.

Demand for logistics space could see rents increase by 10 per cent in the next quarter, noted Mr Peters. Supply in the East is particularly tight, he added.

Net allocation for generic land remained at 22.3 ha. Local establishments formed the bulk of gross allocation of generic land at 19.1 ha (or 78 per cent). Foreign firms’ take-up of generic land increased by 11 percentage points to 5.5 ha in Q3.

Net allocation for specialised parks was 33.6 ha and accounted for 60 per cent of the total net take-up for prepared industrial land. This is a 3.4-fold increase over the 9.9 ha registered in the same period last year. Specialised parks achieved 41.6 ha in gross allocation. Of this, logistics parks contributed 43 per cent of total land take-up for specialised parks.

Source : Business Times - 3 Nov 2007

Gross allocation of ready- built space in JTC’s business parks almost doubled to 5,300 sq m in the third quarter.

THE take-up among businesses for JTC Corp’s ready-built facilities is at a two-year high.

Net allocation of such industrial space stood at 75,100 sq m in the July to September quarter - 29 per cent more than in the previous quarter and the highest since the third quarter of 2005.

This increase in take-up from the industrial landlord was due mainly to good demand for factory space and business park space.

Gross allocation of ready- built space in JTC’s business parks almost doubled to 5,300 sq m in the third quarter.

If the amount of space given up is taken into account, the net amount of business park space taken up stood at 1,800 sq m for the third quarter, more than double the figure achieved from April to June.

Occupancy of JTC’s business parks was 94 per cent as at the end of September.

The net take-up of JTC’s prepared industrial land stood at 55.9ha in the quarter.

This is 13 per cent down from the previous quarter but still more than twice the figure achieved in the third quarter of last year.

Such land - which has road access, drains, water and sewer mains so companies can develop their own facilities - is provided both inside and outside specialised parks such as Changi Business Park, International Business Park in Jurong East and Biopolis at one-north in Buona Vista.

JTC said demand came mostly from companies dealing in logistics, precision engineering and services.

Meanwhile, consultants expect more companies to consider moving operations from the Central Business District (CBD) as office rentals soar.

Rents grew 14.8 per cent in the third quarter and have shot up more than 40 per cent since the end of last year.

The director of research and consultancy at Colliers International, Ms Tay Huey Ying, said: ‘We are seeing firms that are more prepared to consider alternative business premises other than office space within the CBD.’

Companies providing management services or those in the insurance, design or aviation sectors, for example, have already made the move out or are preparing to do so, she said.

Ms Tay expects the trend to continue until more prime office space is added from 2010, mainly at Marina Bay.

Meanwhile, JTC said that the first phase of its research and development complex, Fusionopolis in one-north, is expected to be completed by the end of this year. It will offer about 120,730 sq m of business park space.

Source : Straits Times - 3 Nov 2007

THE Consumers Association of Singapore (Case) has issued a fresh call for greater regulation of property agents plying Singapore’s red-hot property

THE Consumers Association of Singapore (Case) has issued a fresh call for greater regulation of property agents plying Singapore’s red-hot property market.

The call comes amid a rising number of complaints against agents in a market where fast money can be made.

Case president Yeo Guat Kwang told The Straits Times on Thursday that talks with relevant government agencies were held last month to discuss mandatory licensing for housing agents.

‘There is very little control at the moment on the behaviour of estate agents, and many users have suffered as a result,’ said Mr Yeo, an MP for Aljunied GRC, addressing property agency PropNex’s quarterly convention.

Case’s renewed calls for intervention from the authorities follow a recent media report on a property agent who allegedly tried to sell the same flat twice to different buyers.

Mr Yeo said industry regulation could involve some form of compulsory standardised tests and training before any agent is allowed to operate.

Currently, there is no compulsory qualification or licence requirement for housing agents. To operate, an agent only has to join a licensed property agency, whose licence is issued by the Inland Revenue Authority of Singapore (Iras).

At last month’s talks, Iras, the Housing Board, Case and the Institute of Estate Agents (IEA) met to discuss the need for more industry regulation.

Iras is ‘currently reviewing’ the situation, and more meetings will be held’, said Mr Yeo.

The IEA represents about 1,000 agents and aims to act for the entire industry eventually.

Two months ago, it launched a new ‘practising certificate’ for its members, aimed at boosting their credibility and giving homebuyers and sellers more confidence in the professionalism of these agents.

In a show of support for greater industry regulation, PropNex on Thursday held a ceremony in which 100 of its members pledged to abide by the IEA’s code of conduct.

‘We need to show that agents will take responsibility for their actions,’ said PropNex chief executive Mohamed Ismail.

Although becoming an IEA member is not compulsory for agents, Mr Ismail said at least 1,000 of PropNex’s 6,000-strong team will be IEA members by year-end.

Mr Yeo added: ‘For extra protection, consumers should look for agents who have practising certificates.’

The IEA has a disciplinary and mediation board that deals with disputes and can take actions like suspending or expelling a member. Such records are also sent to Iras, which issues licences, said IEA president Jeff Foo.

Complaints lodged against estate agents have almost doubled in the last two years.

Case said it received 991 complaints last year, up from 672 in 2005 and 469 in 2004.

Source : Straits Times - 3 Nov 2007

Sunday, November 4, 2007

AEON aims to build shopping centre in Bandar Nusajaya

AEON aims to build shopping centre in Bandar Nusajaya
Story By : Lim Yu Min

KUALA LUMPUR: AEON Co (M) Bhd (Aeon), which operates the Jusco stores, wants to put up a shopping centre in Bandar Nusajaya.

Aeon has offered RM106.97 million to buy a 15.11-hectare piece of land within the Bukit Indah Township in Johor. Bukit Indah is part of Bandar Nusajaya, which in turn, is a key component of the Iskandar Development Region (IDR). Bandar Nusajaya is being developed by UEM Land Sdn Bhd.

Bukit Indah Township is a 10-year-old mixed residential development, situated approximately 16km north-west of the Johor Bahru city centre.

Aeon says its plan to construct a shopping centre is in line with its corporate strategy of accelerating the expansion of its retail business through opening of new outlets and shopping centres.

The proposed acquisition will be fully satisfied by cash and financed through the company¡¦s internally generated funds. It is not expected to have any material impact on the EPS (earnings per share), NTA (net assets per share) and net gearing of the company.

ABN Amro sets sights on IDR

ABN Amro sets sights on IDR

JOHOR BARU: ABN Amro Bank Bhd, which sees good economic growth in the southern region with the implementation of the Iskandar Development Region (IDR), said the bank¡¦s expansion to Johor would further strengthen its presence in Malaysia.

Managing director and country executive Harry Naysmith said: ¡§Being present in the areas with potentially high growth in the future such as the IDR is a priority for the bank in Asia,¡¨ he said at the opening of the bank¡¦s latest branch at Taman Molek near here by chairman General (Rtd) Tan Sri Mohd Ghazali Seth on Friday.

The bank is a wholly-owned subsidiary of ABN Bank N.V. It has been in Malaysia since 1889, with branches in Kuala Lumpur, Penang and Labuan.

ABN Amro Malaysia offers cash management, trade services, working capital facilities, derivatives, structured finance, foreign exchange, fixed income and capital market transactions.

He said the bank anticipated that there would be strong demand for wealth management and financial services with the establishment of the Southern and Northern economic growth regions.

Naysmith said the bank wanted to partner with more Malaysian companies and customers to help them tap the opportunities offered by the growth corridors.

¡§Our Johor Baru branch in the heart of the IDR is an ideal location to serve local and foreign investors,¡¨ he added.

The Johor Baru branch features exclusive Van Gogh Preferred Banking services that provide wealth management solutions with tailor-made quality financial products.

Naysmith said one of the key reasons for the bank¡¦s success in Malaysia was its ability to offer global banking expertise with an understanding of local customers' needs.