Property agent Goh Chong Liang, first accused of cheating in December last year, was yesterday slapped with 35 additional charges in a district court.
The 37-year-old father of two is accused of having perpetrated a $900,000 cashback scam between December 2003 and March last year.
A cashback deal refers to a property seller declaring a price higher than the actual transacted sum - helping the buyer get a bigger bank loan and thus providing him with instant cash.
The cash difference is kept by the buyer, or split between the two parties.
Yesterday, Goh’s case was moved to the Bail Court in the afternoon for the bail amount to be reviewed.
The prosecution said the sum - set at $300,000 in December last year - should be raised to $900,000.
District Judge Danielle Yeow asked the two sides to make submissions on issues such as Goh’s family background and cooperation with investigators - which would help determine if the accused is a flight risk.
She also allowed Goh’s lawyer, Mr Peter Fernando, and police prosecutor Shabbir Yusuf to agree on a bail amount - which they did, at a total of $600,000.
The first charge against Goh in December last year concerned the selling price of a Bukit Batok flat. He allegedly duped a bank into believing it was $312,000, when the actual price was only $285,000.
This led the bank to approve a $292,000 loan to the buyers of the flat.
Investigations into Goh have brought up a name the courts are becoming increasingly familiar with - David Rasif.
The runaway lawyer and his former partner David Tan - though not charged with any crime - are alleged to have conspired to help Goh pull off the cashback scam.
It was not mentioned exactly what their role was.
Rasif, 42, disappeared on June 5 last year - allegedly with $12 million of clients’ money.
Goh, who could be jailed for up to seven years if convicted, will return to court on May 15.
Source: The Straits Times, 12 May 2007
Showing posts with label re. Show all posts
Showing posts with label re. Show all posts
Sunday, May 13, 2007
Friday, April 27, 2007
Despite benchmark prices at recent property launches, the upswing in Singapore home prices is only just beginning, according to an analyst at banking giant Citigroup.
Yesterday, Ms Wendy Koh told reporters that the residential market is still in an ‘early phase’ of a cyclical upswing.
The property market recovery starting this year is across the board, she said.
Prior to a pickup in the mid-market segment in the second half of last year, the upturn was clearly visible only in the luxury home sector.
According to Ms Koh, demand continues to outweigh supply and occupancy rates are likely to reach new highs.
Taking into account recent collective sales, real occupancy is already at a record high of 95.7 per cent versus the reported 93.9 per cent, and it will rise further, she said.
That means home prices are expected to keep rising this year and next, she said. The luxury home market will continue to rise by another 10 per cent to 15 per cent this year.
The mid-market segment may go up by 10 to 20 per cent, the mass market by 10 per cent and the Housing Board (HDB) market by 5 to 10 per cent, she said.
The HDB market is helped by the lessening supply of unsold but completed HDB flats, she said. There are now 4,000 such flats, dramatically down from 25,000 units a few years ago.
Ms Koh also said the office market will be strong, with prime Grade A rentals rising from $11.80 per sq ft to $14.50 psf by the end of the year and to $18.50 psf by the end of next year.
She was speaking yesterday at a media conference held alongside the Citigroup Asia Pacific Property Conference, which was closed to the media.
Trade and Industry Minister Lim Hng Kiang made the opening speech, distributed to the media.
He said: ‘Singapore can play an important role as a gateway for global investors to access Asian opportunities via our capital markets.’
A property derivatives market is a potentially exciting area for innovation, he added. If such a market were developed, Singapore would need ‘transparent, reliable and well-followed’ direct property indexes.
Industry players are currently studying the construction of such indexes, he said. These indexes would enhance information on Singapore’s property market and provide benchmarks for structuring property derivatives and other innovative products.
Derivatives are instruments taking their value from another underlying asset, such as a stock or even a stock index.
Generally positive sentiment suggests that this year and the years ahead will be exciting for Asia and its property sector, Mr Lim concluded.
‘I am certain that with judicious planning and sound execution, the sector will see strong growth, sustained by liquidity from the capital markets,’ he said.
Yesterday, Ms Wendy Koh told reporters that the residential market is still in an ‘early phase’ of a cyclical upswing.
The property market recovery starting this year is across the board, she said.
Prior to a pickup in the mid-market segment in the second half of last year, the upturn was clearly visible only in the luxury home sector.
According to Ms Koh, demand continues to outweigh supply and occupancy rates are likely to reach new highs.
Taking into account recent collective sales, real occupancy is already at a record high of 95.7 per cent versus the reported 93.9 per cent, and it will rise further, she said.
That means home prices are expected to keep rising this year and next, she said. The luxury home market will continue to rise by another 10 per cent to 15 per cent this year.
The mid-market segment may go up by 10 to 20 per cent, the mass market by 10 per cent and the Housing Board (HDB) market by 5 to 10 per cent, she said.
The HDB market is helped by the lessening supply of unsold but completed HDB flats, she said. There are now 4,000 such flats, dramatically down from 25,000 units a few years ago.
Ms Koh also said the office market will be strong, with prime Grade A rentals rising from $11.80 per sq ft to $14.50 psf by the end of the year and to $18.50 psf by the end of next year.
She was speaking yesterday at a media conference held alongside the Citigroup Asia Pacific Property Conference, which was closed to the media.
Trade and Industry Minister Lim Hng Kiang made the opening speech, distributed to the media.
He said: ‘Singapore can play an important role as a gateway for global investors to access Asian opportunities via our capital markets.’
A property derivatives market is a potentially exciting area for innovation, he added. If such a market were developed, Singapore would need ‘transparent, reliable and well-followed’ direct property indexes.
Industry players are currently studying the construction of such indexes, he said. These indexes would enhance information on Singapore’s property market and provide benchmarks for structuring property derivatives and other innovative products.
Derivatives are instruments taking their value from another underlying asset, such as a stock or even a stock index.
Generally positive sentiment suggests that this year and the years ahead will be exciting for Asia and its property sector, Mr Lim concluded.
‘I am certain that with judicious planning and sound execution, the sector will see strong growth, sustained by liquidity from the capital markets,’ he said.
Investments in commercial buildings in Malaysia more than doubled last year to a record RM2.67 billion (S$1.18 billion) as real estate investment trusts (Reits) and foreign investment funds piled into A-grade buildings, according to a survey.
Office investments have accelerated considerably since 2004, when Malaysia sought to boost Reits by exempting them from tax on income distributed to unit-holders.
From 2000 to 2003, investments in the office sector amounted to a mere RM1.16 billion. But they soared 490 per cent in the following three years to almost RM5.7 billion, according to a survey by Zerin Properties Corporate Real Estate Services.
Local Reits have been aggressive in the market, but foreign investment funds have not been idle. Zerin’s annual survey shows foreign funds accounted for just under a fifth of the value of office transactions in 2005 - but 45 per cent last year.
In 2000, foreigners accounted for 100 per cent of office transactions - all two of them worth RM245 million: the sale of Wisma Goldhill to Jeddah-based Saudi Economic Development Company or Sedco and Menara Phileo to Singapore’s Asia Life.
Office supply in Kuala Lumpur is estimated at 63.5 million sq ft, with KL City accounting for 62 per cent of total space. Average occupancy in the city has increased over the past two years to about 84 per cent now.
Because of the interest in commercial buildings, office space continues to expand noticeably, notwithstanding a general freeze on new offices in the Kuala Lumpur city centre - unless developers can show they have ready buyers or tenants, said Zerin CEO Previndran Singhe.
Current developments in the city centre have readily found buyers and/or tenants - many of them foreign.
Baitak Asia Real Estate Fund, a joint venture between Kuwait Finance House and Singapore-based Pacific Star Group, owns 49 per cent of The Pavillion, a RM3 billion mixed development project of offices, shops, a hotel and apartments now going up in KL’s shopping belt. Al-Batha Real Estate Co of the United Arab Emirates is the 49 per cent joint venture partner of Glomac Al Batha, which plans to build a 40-storey office tower in the city centre at a gross development value of RM450 million.
And HSBC said recently it will lease a 25-storey office annexe to be constructed by the Quill group. The annexe could later be injected into Quill Capita Trust, the Reit that Quill co-owns with Singapore’s CapitaLand.
CapitaLand, which is bullish on Malaysian real estate this year, has established the Malaysia Commercial Development Fund - a US$250 million closed end private equity investment fund - in partnership with Aseambankers. The fund has a gross development value of US$1 billion and has already identified a number of projects for seed capital injection.
Foreigners have also increased equity investments in listed property companies. California-based Capital Group has taken substantial stakes in E&O Properties and SP Setia. Other property firms, too, are substantially held by foreign funds. YNH Properties for example, is owned as much as 40 per by foreigners.
Mr Singhe does not expect foreign interest to diminish any time soon. Because Malaysian real estate is much cheaper than some elsewhere, foreign investment funds will continue to seek ‘arbitrage opportunities’, he said.
Not surprisingly, land prices in KL are rising. A property developer who declined to be named said they have jumped 40-60 per cent in just a few months.
Source: The Business Times, 27 April 2007
Office investments have accelerated considerably since 2004, when Malaysia sought to boost Reits by exempting them from tax on income distributed to unit-holders.
From 2000 to 2003, investments in the office sector amounted to a mere RM1.16 billion. But they soared 490 per cent in the following three years to almost RM5.7 billion, according to a survey by Zerin Properties Corporate Real Estate Services.
Local Reits have been aggressive in the market, but foreign investment funds have not been idle. Zerin’s annual survey shows foreign funds accounted for just under a fifth of the value of office transactions in 2005 - but 45 per cent last year.
In 2000, foreigners accounted for 100 per cent of office transactions - all two of them worth RM245 million: the sale of Wisma Goldhill to Jeddah-based Saudi Economic Development Company or Sedco and Menara Phileo to Singapore’s Asia Life.
Office supply in Kuala Lumpur is estimated at 63.5 million sq ft, with KL City accounting for 62 per cent of total space. Average occupancy in the city has increased over the past two years to about 84 per cent now.
Because of the interest in commercial buildings, office space continues to expand noticeably, notwithstanding a general freeze on new offices in the Kuala Lumpur city centre - unless developers can show they have ready buyers or tenants, said Zerin CEO Previndran Singhe.
Current developments in the city centre have readily found buyers and/or tenants - many of them foreign.
Baitak Asia Real Estate Fund, a joint venture between Kuwait Finance House and Singapore-based Pacific Star Group, owns 49 per cent of The Pavillion, a RM3 billion mixed development project of offices, shops, a hotel and apartments now going up in KL’s shopping belt. Al-Batha Real Estate Co of the United Arab Emirates is the 49 per cent joint venture partner of Glomac Al Batha, which plans to build a 40-storey office tower in the city centre at a gross development value of RM450 million.
And HSBC said recently it will lease a 25-storey office annexe to be constructed by the Quill group. The annexe could later be injected into Quill Capita Trust, the Reit that Quill co-owns with Singapore’s CapitaLand.
CapitaLand, which is bullish on Malaysian real estate this year, has established the Malaysia Commercial Development Fund - a US$250 million closed end private equity investment fund - in partnership with Aseambankers. The fund has a gross development value of US$1 billion and has already identified a number of projects for seed capital injection.
Foreigners have also increased equity investments in listed property companies. California-based Capital Group has taken substantial stakes in E&O Properties and SP Setia. Other property firms, too, are substantially held by foreign funds. YNH Properties for example, is owned as much as 40 per by foreigners.
Mr Singhe does not expect foreign interest to diminish any time soon. Because Malaysian real estate is much cheaper than some elsewhere, foreign investment funds will continue to seek ‘arbitrage opportunities’, he said.
Not surprisingly, land prices in KL are rising. A property developer who declined to be named said they have jumped 40-60 per cent in just a few months.
Source: The Business Times, 27 April 2007
Cambridge Industrial Trust (CIT), a real estate investment trust, yesterday said that its distributable income in the quarter to March 31 came to $7.4 million, exceeding forecast by 8.8 per cent. This means 1.434 cents per unit is available to unitholders.
Trust manager CIT Management Ltd said the total income of $7.4 million represents an annualised yield of 7.09 per cent, based on the closing price of 82 cents per unit on March 30.
CIT’s gross revenue came to about $11 million, with net property income of $9.4 million.
The trust said the higher gross revenue for the quarter was due to rental revenue from two properties acquired during the quarter - 63 Hillview Avenue and 55 Ubi Avenue. Independent valuers priced the two at $91 million.
Net property income was 5 per cent higher than forecast, due to higher revenue and lower actual property expenses of $1.6 million, due mainly to lower land rent, property tax and non-routine expenses.
CIT said it expects to deliver the projected yield and is on track to increase its portfolio through further acquisition of properties.
The management company’s chief executive, Wilson Ang, said: ‘Besides completing the acquisition of two new properties this quarter, we have also announced four option agreements worth $58.3 million which, upon completion, will contribute an additional annual gross revenue of $5.71 million.
‘Together with signed MOUs worth $115 million as at March 31, 2007, we are targeting to acquire approximately $500 million worth of properties this year.’
Source: The Business Times, 27 April 2007
Trust manager CIT Management Ltd said the total income of $7.4 million represents an annualised yield of 7.09 per cent, based on the closing price of 82 cents per unit on March 30.
CIT’s gross revenue came to about $11 million, with net property income of $9.4 million.
The trust said the higher gross revenue for the quarter was due to rental revenue from two properties acquired during the quarter - 63 Hillview Avenue and 55 Ubi Avenue. Independent valuers priced the two at $91 million.
Net property income was 5 per cent higher than forecast, due to higher revenue and lower actual property expenses of $1.6 million, due mainly to lower land rent, property tax and non-routine expenses.
CIT said it expects to deliver the projected yield and is on track to increase its portfolio through further acquisition of properties.
The management company’s chief executive, Wilson Ang, said: ‘Besides completing the acquisition of two new properties this quarter, we have also announced four option agreements worth $58.3 million which, upon completion, will contribute an additional annual gross revenue of $5.71 million.
‘Together with signed MOUs worth $115 million as at March 31, 2007, we are targeting to acquire approximately $500 million worth of properties this year.’
Source: The Business Times, 27 April 2007
MapletreeLog beats forecasts
Mapletree Logistics Trust (MLT), which owns warehouses and container depots in Singapore and abroad, said yesterday its distributable income for first-quarter 2007 grew 84.2 per cent to $15.3 million, from $8.3 million a year earlier.
The trust’s dividend per unit (DPU) rose 34.5 per cent to 1.48 cents, from 1.10 cents in Q1 2006. Distributable income was 8.5 per cent higher than forecast, while DPU was 7.2 per cent above the forecast. Net property income rose 128 per cent to $25.7 million.
Chua Tiow Chye, chief executive of MLT’s management team, attributed the performance to the 25 new properties acquired in the past year. The new acquisitions took the number of completed assets to 49 with a combined value of more than $1.5 billion.
Thirteen acquisitions are pending completion. Once they are completed, MLT will have 62 properties in its portfolio - 38 in Singapore, nine in Malaysia, six in Japan, six in Hong Kong and three in China.
Mr Chua said the trust is also exploring new markets such as Vietnam, India and South Korea. MLT hopes to have assets in Vietnam and South Korea by the end of this year. In India it has no assets lined up for acquisition and will work with its sponsor Mapletree Investments to build properties the trust can later acquire.
Right now, Singapore and Hong Kong together account for about 94 per cent of the trust’s gross revenue, with Japan, China and Malaysia making up the balance. Going forward, MLT expects more income contributions to come from Japan, China and Malaysia.
Mr Chua said the trust is confident of delivering its 5.69 cents DPU forecast this year on the back of a strong first quarter performance. MLT closed unchanged at $1.33 yesterday.
Source: The Business Times, 27 April 2007
The trust’s dividend per unit (DPU) rose 34.5 per cent to 1.48 cents, from 1.10 cents in Q1 2006. Distributable income was 8.5 per cent higher than forecast, while DPU was 7.2 per cent above the forecast. Net property income rose 128 per cent to $25.7 million.
Chua Tiow Chye, chief executive of MLT’s management team, attributed the performance to the 25 new properties acquired in the past year. The new acquisitions took the number of completed assets to 49 with a combined value of more than $1.5 billion.
Thirteen acquisitions are pending completion. Once they are completed, MLT will have 62 properties in its portfolio - 38 in Singapore, nine in Malaysia, six in Japan, six in Hong Kong and three in China.
Mr Chua said the trust is also exploring new markets such as Vietnam, India and South Korea. MLT hopes to have assets in Vietnam and South Korea by the end of this year. In India it has no assets lined up for acquisition and will work with its sponsor Mapletree Investments to build properties the trust can later acquire.
Right now, Singapore and Hong Kong together account for about 94 per cent of the trust’s gross revenue, with Japan, China and Malaysia making up the balance. Going forward, MLT expects more income contributions to come from Japan, China and Malaysia.
Mr Chua said the trust is confident of delivering its 5.69 cents DPU forecast this year on the back of a strong first quarter performance. MLT closed unchanged at $1.33 yesterday.
Source: The Business Times, 27 April 2007
CapitaLand plans to take an initial US$100 million stake in a big Russian logistics property developer with big expansion plans in the Commonwealth of Independent States (CIS) involving a total of US$3 billion investment under a Memorandum of Understanding announced yesterday.
The Singapore property giant will also help its Russian partner, Eurasia Logistics, float a Russian logistics real estate investment trust (Reit), possibly in about 1 1/2 years, going by its quick track record in spinning Reits.
CapitaLand Group CEO and president Liew Mun Leong said yesterday it is also exploring the residential and office property markets of affluent Russian cities like Moscow and St Petersburg, as part of its strategy to invest in fast-growing, oil-rich countries.
The group’s service residences arm, The Ascott Group, has tied up with Russia’s Amtel Properties for a US$100 million fund to buy and develop service apartments in Moscow and St Petersburg.
Eurasia Logistics has so far bought six sites worth about US$500-700 million for development into Grade A logistics facilities and plans to buy 10 more. The 16 Grade A logistics facilities in Russia, Kazakhstan and
Ukraine, will have a total space about 5 million square metres when completed by end-2010.
The total development cost of the 16 properties is estimated at US$3 billion, but when completed, they could be worth about US$7-8 billion, ‘depending on market rates in Russia and international market rates’, according to Eurasia Logistics chief executive Alexander Volkov.
Assuming the current average net rental of US$120 per square metre per annum for Grade A logistics space in Russia, the 16 properties will yield about US$600 million annual net rental income. Assuming a capitalisation rate of, say, 12 per cent, the value of the properties would be about US$5 billion.
CapitaLand officials indicated that an initial five or six properties, when completed and their income stabilised, would be sufficient for spinning off a Reit.
Mr Volkov said the partnership with CapitaLand will be the biggest real estate deal involving Singapore and Russian parties ‘and we believe that it’s only the beginning’. ‘Within a year’s time, we will expand our programme,’ he said. Mr Liew said the two sides hit it off after an initial meeting at last month’s Russia-Singapore Business Forum held in Singapore.
CapitaLand is proposing to take an initial 10 per cent equity stake through a new share subscription - possibly costing around US$100 million - in Eurasia Logistics with the possibility of raising this stake to about 25 per cent.
CapitaLand will also be strategic adviser to Eurasia Logistics to optimise its portfolio value. The two will also set up a fund management company.
Eurasia Logistics’ parent company, Moscow-based Eurasia Investment and Industrial Group, was founded in 2003 by a group of private investors from Kazakhstan and Russia. It is developing a huge oceanarium in Moscow, Europe’s biggest underground mall (also in Moscow), and a new master-planned city in a Moscow suburb.
Eurasia Logistics’s five-year plan to build the 16 Grade A logistics facilities began last year. It has a strong global client base that includes consumer giants Nestle Waters and Pepsi, and it plans to create a network of logistics facilities to unite the main hubs in Russia and CIS into a single system of distribution centres. This will enable Eurasia Logistics to become Europe’s largest commercial property developer.
Eurasia officials yesterday said the strong demand in Russia for international-standard-logistics facilities from MNCs, far outstrips supply. And Eurasia, with its pole position, has a first-mover advantage.
Construction is on at some of the six plots Eurasia has bought. Severnoye Domodedovo facility in the Moscow Region will be the first to come on stream. Construction began in July last year, the first phase, with 360,000 sq m of space that will be ready in Q3 2007, is already 90 per cent leased. Phase 2A, with another 180,000 sq m, is 95 per cent pre-let and will be operational in November.
Source: The Business Times, 27 April 2007
The Singapore property giant will also help its Russian partner, Eurasia Logistics, float a Russian logistics real estate investment trust (Reit), possibly in about 1 1/2 years, going by its quick track record in spinning Reits.
CapitaLand Group CEO and president Liew Mun Leong said yesterday it is also exploring the residential and office property markets of affluent Russian cities like Moscow and St Petersburg, as part of its strategy to invest in fast-growing, oil-rich countries.
The group’s service residences arm, The Ascott Group, has tied up with Russia’s Amtel Properties for a US$100 million fund to buy and develop service apartments in Moscow and St Petersburg.
Eurasia Logistics has so far bought six sites worth about US$500-700 million for development into Grade A logistics facilities and plans to buy 10 more. The 16 Grade A logistics facilities in Russia, Kazakhstan and
Ukraine, will have a total space about 5 million square metres when completed by end-2010.
The total development cost of the 16 properties is estimated at US$3 billion, but when completed, they could be worth about US$7-8 billion, ‘depending on market rates in Russia and international market rates’, according to Eurasia Logistics chief executive Alexander Volkov.
Assuming the current average net rental of US$120 per square metre per annum for Grade A logistics space in Russia, the 16 properties will yield about US$600 million annual net rental income. Assuming a capitalisation rate of, say, 12 per cent, the value of the properties would be about US$5 billion.
CapitaLand officials indicated that an initial five or six properties, when completed and their income stabilised, would be sufficient for spinning off a Reit.
Mr Volkov said the partnership with CapitaLand will be the biggest real estate deal involving Singapore and Russian parties ‘and we believe that it’s only the beginning’. ‘Within a year’s time, we will expand our programme,’ he said. Mr Liew said the two sides hit it off after an initial meeting at last month’s Russia-Singapore Business Forum held in Singapore.
CapitaLand is proposing to take an initial 10 per cent equity stake through a new share subscription - possibly costing around US$100 million - in Eurasia Logistics with the possibility of raising this stake to about 25 per cent.
CapitaLand will also be strategic adviser to Eurasia Logistics to optimise its portfolio value. The two will also set up a fund management company.
Eurasia Logistics’ parent company, Moscow-based Eurasia Investment and Industrial Group, was founded in 2003 by a group of private investors from Kazakhstan and Russia. It is developing a huge oceanarium in Moscow, Europe’s biggest underground mall (also in Moscow), and a new master-planned city in a Moscow suburb.
Eurasia Logistics’s five-year plan to build the 16 Grade A logistics facilities began last year. It has a strong global client base that includes consumer giants Nestle Waters and Pepsi, and it plans to create a network of logistics facilities to unite the main hubs in Russia and CIS into a single system of distribution centres. This will enable Eurasia Logistics to become Europe’s largest commercial property developer.
Eurasia officials yesterday said the strong demand in Russia for international-standard-logistics facilities from MNCs, far outstrips supply. And Eurasia, with its pole position, has a first-mover advantage.
Construction is on at some of the six plots Eurasia has bought. Severnoye Domodedovo facility in the Moscow Region will be the first to come on stream. Construction began in July last year, the first phase, with 360,000 sq m of space that will be ready in Q3 2007, is already 90 per cent leased. Phase 2A, with another 180,000 sq m, is 95 per cent pre-let and will be operational in November.
Source: The Business Times, 27 April 2007
Shareholders of Keppel Land will have much to be pleased about as they head into the developer’s annual general meeting today on the back of good first-quarter results, but there will no doubt be concerns that need to be addressed.
For starters, shareholders are likely to be very interested in the company’s plans for asset divestment. KepLand has previously said that it intends to go asset light by divesting all its investment properties. However, since it sold four office buildings to K-Reit in April 2006, the company has been quiet about its plans for the rest of its $1.8 billion worth of investment properties.
In its latest research note, OCBC Investment Research speculated that KepLand might want to redevelop its older prime office assets such as Ocean Building, therefore delaying divestment plans. However, this means that divestment plans will have to be put off for at least a few more years - by which time the real estate investment trust (Reit) market, which is red hot at the moment, could have cooled down substantially.
There should also be some questions about the company’s plans for its overseas division, which is underperforming KepLand’s Singapore unit.
The developer’s latest first-quarter results were boosted by the company’s Singapore business, where net profit grew 162.8 per cent to $45.2 million in the first quarter. However, profit from KepLand’s overseas ventures fell 9.4 per cent to $17.3 million. Earnings from overseas represented about 26 per cent of the company’s attributable profit, compared with 53 per cent for the same three months last year. KepLand attributed this to its strong performance in Singapore. However, the developer also said that it saw lower contributions from The Seasons and 8 Park Avenue in China, and Elita Promenade in India in the first quarter of 2007, compared to the last quarter of 2006.
China, where KepLand has a substantial amount of investment, is a particular concern. The fast pace at which the Chinese economy is growing has given rise to fears that the growth is a ‘bubble’ which might soon burst. Also, measures that could potentially be taken by the Chinese authorities to cool the market could affect KepLand’s business. Shareholders need some assurance from the management that the situation in China is being closely monitored.
Lastly, investors might want to know if KepLand is planning a stock split in the near future. KepLand’s stock has appreciated 30.4 per cent since the start of the year, and climbed 50 cents to close at $9 yesterday.
By most analysts’ estimates, the stock is trading above its fair value, leading to ‘hold’ calls by some research houses. A stock split will offer shareholders more liquidity.
Source: The Business Times, 27 April 2007
For starters, shareholders are likely to be very interested in the company’s plans for asset divestment. KepLand has previously said that it intends to go asset light by divesting all its investment properties. However, since it sold four office buildings to K-Reit in April 2006, the company has been quiet about its plans for the rest of its $1.8 billion worth of investment properties.
In its latest research note, OCBC Investment Research speculated that KepLand might want to redevelop its older prime office assets such as Ocean Building, therefore delaying divestment plans. However, this means that divestment plans will have to be put off for at least a few more years - by which time the real estate investment trust (Reit) market, which is red hot at the moment, could have cooled down substantially.
There should also be some questions about the company’s plans for its overseas division, which is underperforming KepLand’s Singapore unit.
The developer’s latest first-quarter results were boosted by the company’s Singapore business, where net profit grew 162.8 per cent to $45.2 million in the first quarter. However, profit from KepLand’s overseas ventures fell 9.4 per cent to $17.3 million. Earnings from overseas represented about 26 per cent of the company’s attributable profit, compared with 53 per cent for the same three months last year. KepLand attributed this to its strong performance in Singapore. However, the developer also said that it saw lower contributions from The Seasons and 8 Park Avenue in China, and Elita Promenade in India in the first quarter of 2007, compared to the last quarter of 2006.
China, where KepLand has a substantial amount of investment, is a particular concern. The fast pace at which the Chinese economy is growing has given rise to fears that the growth is a ‘bubble’ which might soon burst. Also, measures that could potentially be taken by the Chinese authorities to cool the market could affect KepLand’s business. Shareholders need some assurance from the management that the situation in China is being closely monitored.
Lastly, investors might want to know if KepLand is planning a stock split in the near future. KepLand’s stock has appreciated 30.4 per cent since the start of the year, and climbed 50 cents to close at $9 yesterday.
By most analysts’ estimates, the stock is trading above its fair value, leading to ‘hold’ calls by some research houses. A stock split will offer shareholders more liquidity.
Source: The Business Times, 27 April 2007
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