Saturday, November 3, 2007

KepLand's 2 New Viet Projects Make It 7 For year

Source : The Business Times, November 3, 2007

Latest joint ventures involve villa and condominium developments

KEPPEL Land has entered into two separate joint ventures (JV) to build a luxury villa development and a condominium development in Vietnam. This takes the number of projects in Vietnam announced by Keppel Land this year to seven.

In a statement yesterday, Keppel Land said that the two projects in District 9 of Ho Chi Minh City will be developed in phases and that the combined investment capital is estimated at S$319.5 million.

The JVs will be done through Keppel Land's wholly owned subsidiaries, Dattson Pte Ltd and Sophia International Pte Ltd. Its Vietnamese JV partner is An Phu Corporation.

Keppel Land said that it expects to take up 55 per cent stakes in the JV companies while An Phu will subscribe for the remaining interest.

The luxury villa development will be built on a 13-hectare site and have about 200 homes while the condominium development, on an adjacent 6.8 ha site, will have about 1,940 apartments.

In 2005, Keppel Land launched Villa Riviera, its first luxury development in Ho Chi Minh City which subsequently sold out.

Ang Wee Gee, director of regional investments at Keppel Land said: 'We are capitalising on our hallmark quality and success with Villa Riviera which has shown that our introduction of an exclusive gated community has been very positively received.'

He added: 'Our first mover advantage and established network in Vietnam have enabled us to build up a strong portfolio of prime properties rapidly.'

The latest developments will be near Ho Chi Minh City's Saigon Hi-Tech Park where Intel's US$1 billion test and assembly plant is being built.

Construction of the villas and condominiums is expected to start when planning approval is obtained, with the sales launch of the first phase slated for early 2009.

Keppel Land is also jointly developing with An Phu waterfront condominiums fronting the Saigon River in Binh Thanh District, only four kilometres away from Ho Chi Minh City's CBD.

These latest joint ventures follow Keppel Land's announcement to develop a 5.1-ha waterfront residential site in District 2 last month.

The soft launch of The Estella, an up-market development comprising 1,500 apartments in the popular An Phu Ward of District 2, is slated for Q4 2007.

Keppel Land's other developments in Ho Chi Minh City include three waterfront residential developments fronting the Saigon River in Binh Thanh District, Ca Cam River in District 7 and Ca Tre River in District 2.

受撤消延迟付款计划影响 新加坡英莪街A地段 仅两发展商投标

《联合早报》Nov 2, 2007

政府撤消延迟付款计划,影响了英莪街(Enggor Street)A地段的投标气氛。在昨天截止的投标活动中,只有远东机构和国浩置业这两家发展商出手,其他大发展商全部都持守望态度,完全没有露面。

出价差距大

更令人侧目的是,两家发展商的出价差距非常大。远东机构通过碧山房地产(Bishan Properties)出价2亿3380万元,即容积率每平方英尺852元来投标这幅地段。国浩置业则通过第一资本(First Capital)出价1亿5098万元,即容积率每平方英尺550元来投标有关地皮,双方的价格差距高达55%。

市场人士相信,这显示发展商对市场的“解读”相当分歧。国浩置业的出手相当保守,其他大发展商,包括丰隆集团、吉宝置业、嘉德置地、星狮地产等甚至连出手都不愿意。但是在海天大楼(The Icon)有过成功经验的远东机构,却还是相当乐观,似乎不受延迟付款计划撤销的影响。

莱坊研究部主管麦俊荣说:“政府撤销延迟付款计划,使到整个市场增添了不明朗因素。一些房地产发展商可能要采取观望态度,观察接下来推出的房地产项目,特别是没有了延迟付款配套后,销售表现如何?”

市场人士认为,当年卖得一片火红的海天大楼,就是借助延迟付款配套而取得惊人的销售成绩。有人估计,这个靠近丹戎巴葛地铁站的共管公寓,有高达八九成的买主选择延迟付款。

市区重建局今年招标的纯私宅地段,一直都有相当不错的投标反应。例如最近高文地铁站旁边的地段就吸引了6方人马投标、波东巴西地铁站附近的地段吸引了8方人马进场、汉地(Handy)路地段则吸引了4组人马投标。

世邦魏理仕执行董事李晓和说:“这次的投标活动只有两方人马参与,而且从投标价格看来,发展商的态度相当谨慎。这可能跟最近政府撤销延迟付款计划有关,也可能因为地段本身的地点。”

他指出,英莪街地段不但位于海天大楼后面,而且还夹在一幅商业地段和另外一幅即将招标截至的住宅地段(英莪街B地段)中间。这意味,发展商以后销售共管公寓时,将面对附近其他项目的竞争。海天大楼拥有649个单位,英莪街B地段则估计能兴建190至210个共管公寓单位。英莪街A地段占地0.30公顷,属于99年地契,容积率为8.4,估计能兴建260至300个公寓单位。

他原本猜测,英莪街A地段的投标价格可能介于1亿8000万至2亿元(相等于容积率每平方英尺655至715元)。不过,他认为,远东机构昨天的出价还是相当合理,因为它建起来的共管公寓,总成本应该能控制在每平方英尺1300元左右,这也就是说,它应该会以每平方英尺1500元以上来推出其单位。

最近几个星期来,海天大厦的单位成交价格介于每平方英尺1500元至2100元。英莪街B地段将在本月15日投标截止。麦俊荣认为,昨天英莪街A地段的淡静反应,不一定会在两个星期后历史重演。

新加坡土管局有意出售Atrium@Orchard

《联合早报》Nov 2, 2007

新加坡土地管理局(SLA)有意出售乌节路一带的Atrium@ Orchard办公楼。这个99年地契的办公项目,约有37万6740平方公尺的可出租面积,市价估计约超过10亿元。

土管局昨天发表文告说,它已经委任世邦魏理仕(CBRE)为这个办公大楼的房地产代理公司。这将是政府第一次出售甲级商业大楼。
  
土管局发言人说:“继续持有一个像Atrium@Orchard这样的优质与纯商业资产,并不符合政府的策略,因此最好让私人企业接过其商业用途。从目前蓬勃的市场条件来看,政府相信这是为国家脱售这个大楼的最佳时机。”

靠近狮城大厦(Plaza Singa- pura)的Atrium @ Orchard,位于多美歌地铁站上,是乌节路上少有建在地铁站上的办公大楼。整个项目共有两栋大楼,一栋高7层、一栋高10层,占地面积约10万3065平方英尺,可建筑楼面为55万5207平方英尺。

以37万6740平方英尺的可出租面积计算,超过10亿元的市价,意味这栋大楼的每平方英尺价格将在2654元以上。

Atrium@Orchard在2002年4月取得临时入伙准证,共有大约100个停车位。现有的租户有不少知名的跨国企业,其中包括淡马锡控股、汇丰银行、巴克莱(Barclays)和MTV亚洲。

SingLand, UIC Profits Up On Higher Rentals

Source : The Straits Times, Nov 3, 2007

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.

Broad-Based Demand For Ready-Built Space

Source : The Business Times, November 3, 2007

JTC says net allocation rises 29% q-o-q in Q3.

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.

Toa Payoh Condo Site Available For Application Under Reserve List

Source : The Business Times, November 3, 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 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.

Q3 Profits Up At SingLand, UIC

Source : The Business Times, November 3, 2007

SingLand's net earnings 30% higher at $30.1m, UIC's 43% up at $25.4m

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

Share of associates' results at UIC 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 (above) and The Regency @ Tiong Bahru residential projects in which the group has interests of 35 per cent and 40 per cent respectively.

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.

Dream Of Other Shores For A Villa By The Sea

Source : The Business Times, November 3, 2007

For those who find beachfront living in S'pore costly, there are options in Bali, Phuket

Don't let your dream of owning a beachfront home get washed away by rising prices.

In the lap of luxury: Waterfront bungalows at Bayou Water Village (left) in Johor cost about $500K, while villas at Alila Villas Tanah Lot in Bali (next) cost about $3m
Sure, an exclusive beachfront home at Sentosa Cove will cost anywhere in the region of $15 million to $20 million these days, but there are cheaper options.

Consider that a bungalow land parcel in Sembawang went for around $200 psf at an Urban Redevelopment Authority (URA) auction this week - cheap compared to Sentosa Cove, where a bungalow site recently sold for over $1,500 psf.

Unfortunately, only one parcel out of 12 in the auction was designated for bungalow development.

To find an affordable beachfront villa, one will really have to look overseas.

The Alila Villas Tanah Lot in Bali costs just under $3 million. For this, you get a three-bedroom villa designed by award-winning Singapore firm SCDA Architects on about 6,000 sq ft of prime beachfront real estate near the fabled Tanah Lot temple.

Fu Hui Ling, whose family is in the mining business in Indonesia, is one of the partners behind the venture.

The development comprises 12 three-bedroom villas and 38 one-bedroom villas and all have been sold, mostly by word of mouth, and sight unseen.

Ads for property in Bali are easily found on the Internet but buying a property overseas does require some nerve. An unscrupulous developer will sell you a beachfront home that could be miles from the beach, say Ms Fu. She herself was talked into buying a beachfront property that was landlocked with no access from the road.

But such occasional pitfalls aside, property values are on the rise. Since 2005, prime property prices have increased 50-60 per cent, reckons Ms Fu.

'And nothing beats nature,' she enthuses.

Closer to home - just across the Causeway, in fact - nature is a little less expensive.

Bayou Water Village is the latest phase of the huge Leisure Farm Resort Residences in Johor developed by Mulpha International Berhad and waterfront bungalows there cost about $500,000. That is until they were all sold too. There are still terrace units available and these cost about $215,000. The built-up area for all three-bedroom units is 1,777 to 2,234 sq ft.

Peter Lim, sales manager at Leisure Farm, says that half the buyers of the waterfront homes are either Singaporeans or Singapore PRs. They include professionals, businessmen, and people, 'looking for a shortcut to their dream home'.

To give an idea of the capital appreciation, Mr Lim says that its The Pinggiran Bayou cluster homes were first launched at around $100 psf about four years ago while Bayou Water Village was launched at about $150 psf last year.

There are real challenges to buying property overseas, including restrictions and taxes pertaining to foreign ownership.

Mr Lim reveals that with the implementation of the special economic zone, the Iskandar Development Region, in Johor, certain obstacles are being removed. 'Among the slew of incentives to entice foreign direct investment into the region is the removal of the property gains tax, which immediately connotes a capital appreciation element in investing in Johor and that has translated into many more sales inquiries and purchasing activities for us,' adds Mr Lim.

Restrictions on foreign ownership vary.

Keppel Land, which is building luxury waterfront villas in Shanghai, says that foreign buyers have to provide proof that they have resided in China for one year with employment at the point of purchase. They are also required to declare that the property is their first in the city.

A Keppel Land spokesman also said: 'There are different taxes imposed on different property types and they also vary from city to city. In general, there is sales tax, capital gains tax, stamp duty and income tax on rental.'

Keppel Land's Villa Riviera, which is incidentally also designed by SCDA Architects, has waterfront bungalows that start at 6.5 million yuan (S$1.26 million) and go up to 13 million yuan, ranging from about 3,500 to 6,500 sq ft in size.

The development comprises 88 units of villas and 80 units of semi-detached and terraced houses, and so far, about 20 per cent of the buyers are Singaporeans. Keppel Land added: 'Most of them purchase for own occupation while some are for investment.'

Phuket in Thailand is also where the wealthy are going to build their beachfront homes. At present, there is no tax in Thailand on the occupation of property or ownership.

Other restrictions on ownership do apply but this has not stopped about 2,000 foreigners from buying condominiums, apartments and villas, says CB Richard Ellis (Thailand).

According to CBRE, luxury villas weigh in at under $2 million while your entry-level villa will cost around $700,000.

Some people will want to know how much domestic help will cost - after all, you don't want to be doing laundry in your own luxury villa, do you? But then, if you have to ask, you probably can't afford it.

Nevertheless, the good people at CBRE estimate that full-time staff such as maids, cooks, drivers and gardeners can be hired at approximately $300-$600 per person per month.

Case Seeks Greater Regulation Of Real Estate Agents

Source : The Straits Times, Nov 3, 2007

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.

Demand For JTC Ready-Built Facilities For Q3 Up 29%

Source : Channel NewsAsia, 02 November 2007

Demand for JTC Corporation's industrial facilities continued to push ahead in the third quarter.

Net allocation for ready-built facilities - a key gauge for demand - amounted to 75,100 square metres, a 29 percent increase from the previous three months.

Growth was broadly-based with the flatted factory segment registering a two-fold increase in net allocation to 54,000 square metres.

The strong overall net allocation pushed the occupancy rate for ready-built facilities to 91 percent from 89 percent.

However, net allocation for prepared industrial land continued to drop. For the third quarter, this amounted to 56 hectares, down 13 percent from over 64 hectares in the previous quarter. - CNA /ls

KepLand Taking 55% Stake In Two JVs With Vietnamese Partner

Source : Channel NewsAsia, 02 November 2007

Keppel Land (KepLand) is expanding its presence in Vietnam with two joint ventures with Vietnamese property developer An Phu Corporation.

The joint ventures will develop luxury villas and condominiums in Ho Chi Minh City.

The combined investment for the two projects is estimated at US$213 million (S$320 million).

KepLand will have a 55 percent stake while An Phu will subscribe for the remaining interest.

The villas will be built on a 13-hectare site which can yield about 200 premier residences.

The condominiums will be located on an adjacent 6.8-hectare site. The site can yield over 1,900 apartments.

Sales for the first phase is slated to start in early 2009. - CNA /ls

Wall St Pummelled As Credit, Economic Worries Resurface

Source : The Straits Times, Nov 2, 2007

NEW YORK - WALL Street took a tumble on Thursday as fresh concerns about the United States economy, corporate earnings and tight credit conditions prompted a sharp reversal from a rally a day earlier fuelled by a US rate cut.

The latest selloff came after a rout in European shares hurt by high oil prices and worries about the financial sector's hit from a global credit squeeze.

The Dow Jones Industrial Average slid 362.14 points, or 2.60 per cent, to close at 13,567.87, more than erasing the gains from a rally in the prior session.

The Nasdaq composite sank 64.29 points, or 2.25 per cent, to 2,794.83 and the Standard & Poor's 500 plummeted 40.94 points, 2.66 per cent, to end at 1,508.44.

The market action came as oil giant ExxonMobil missed Wall Street profit expectations and analysts at CIBC World Markets downgraded Citigroup, saying the banking sector leader needs to raise US$30 billion (S$44 billion) in capital over the near-term.

Also on Thursday, the Federal Reserve injected US$41 billion in temporary reserves into the US money markets to help ease ailing credit markets.

Mr Patrick O'Hare at Briefing.com said the Citigroup downgrade, highlighting the woes of the finance sector, 'can clearly be identified as a market-moving catalyst'. The banking giant's shares were down nearly seven per cent at the close.

Some said Citigroup's woes following a massive third quarter loss at Merrill Lynch underscored concerns that the financial sector will feel more pain from the housing crisis and its spillover.

;The downgrade of Citigroup today was a stark reminder that the full extent of exposure to the loan problems may not be known,' said Mr Gregory Drahuschak at Janney Montgomery Scott.

'The market hates this kind of uncertainty. This probably assures that volatility will remain high.'

The market opened lower as crude oil prices surged above US$96 a barrel for the first time.

Crude prices later retreated but the stock market worsened after Chrysler announced a new reorganisation plan with thousands of job cuts in the face of a 'smaller' market for vehicles. -- AFP

Wall Street Plunges On Credit Worries

Source : The Straits Times, Nov 2, 2007

NEW YORK - Financial stocks dragged Wall Street sharply lower on Thursday, wiping out the previous day's Fed-fueled gains, after brokerages downgraded Citigroup and Bank of America, sparking fears of more fallout from the credit crisis.

Those concerns resurfaced with a vengeance just a day after the Federal Reserve cut benchmark interest rates and said financial market strains had eased somewhat, fueling broad gains for stocks.

By Thursday, however, investors were honing in on the U.S. central bank's signal that more rate reductions were far from a sure bet. Financial stocks fell the hardest, with American International Group sliding 6 percent and Citi tumbling nearly 7 percent, its biggest daily drop in five years.

Exxon Mobil added to the gloom after reporting a profit that fell short of expectations even as oil has threatened to reach the $100-a-barrel mark. The oil producer's shares fell 3.8 percent.

"It almost feels as if yesterday's action in the market was a dream and we woke up today to a stark reality -- that we're not going to be getting rid of this significant, persistent and consistent downdraft in the financials for some time," said Peter Kenny, managing director at Knight Equity Markets, in Jersey City, New Jersey.

"And even with that backdrop, it seems as if the Fed has given us what it's going to give us and we're just going to have to tough our way through this," he said.

The Standard & Poor's 500 Index dropped 40.94 points, or 2.64 percent, to 1,508.44 -- the index's biggest percentage point drop since August 9, the day French bank BNP Paribas spooked global markets by freezing three funds that had invested in U.S. subprime mortgages.

The Dow Jones industrial average <.DJI> sank 362.14 points, or 2.60 percent, to end at 13,567.87. The Nasdaq Composite Index <.IXIC> fell 64.29 points, or 2.25 percent, to 2,794.83.

The Nasdaq's and the Dow's declines were the worst since October 19, the 20th anniversary of the 1987 stock market crash.

The S&P financials index <.GSPF> fell the most in five years. The index ended the session down 4.6 percent.

CITI DIVIDEND CUTS?

CIBC World Markets downgraded Citigroup to "sector underperformer," citing capital concerns. CIBC analyst Meredith Whitney, who cut her 2008 and 2009 earnings estimates for the bank, said she believes Citi will be forced to sell assets, raise capital or cut its dividend to shore up its capital ratios. Credit Suisse also cut its rating on Citigroup.

Bank of America , the second-largest U.S. bank, was also downgraded by CIBC, which said it sees a diminished revenue outlook for the bank.

Citigroup shares dropped 6.9 percent to $38.51, while Bank of America shares shed 5.3 percent to $45.71.

American International Group fell 6 percent to $59.34.

Exxon shares slid 3.8 percent to $88.50 on the NYSE.

Shares of plastic shoe maker Crocs plunged 36.1 percent to $47.74 and ranked among the Nasdaq's biggest percentage losers after the company's profit outlook trailed Wall Street forecasts.

In economic news, an Institute for Supply Management report showed manufacturing growth deteriorated last month to its slowest pace since March on tightened credit conditions and the housing downturn.

Trading was fairly active on the NYSE, with about 1.75 billion shares changing hands, though it was still below last year's estimated daily average of 1.84 billion. On Nasdaq, about 2.57 billion shares traded, ahead of last year's daily average of 2.02 billion.

Declining stocks outnumbered advancing ones by a ratio of about 7 to 1 on the NYSE and by 4 to 1 on the Nasdaq.

Confirmed: Atrium @ Orchard For Sale

Source : The Business Times, November 2, 2007

THE Singapore Land Authority has confirmed a BT report yesterday that it plans to sell The Atrium @ Orchard - the first state sale of a Grade A prime commercial building.

‘The government does not own other commercial buildings of the same grade and category as The Atrium,’ an SLA spokeswoman said. ‘It is not in the government’s strategic interest to continue to own a well-developed and pure commercial asset like The Atrium @ Orchard.

‘It is best to let the private sector take over its commercial utilisation. Given the buoyant market conditions, the government has decided that now is a good time to divest it with best value for the state.’

SLA has appointed CB Richard Ellis (CBRE) sole marketing consultant to advise on the planned sale. CBRE was chosen from a short list of five firms, SLA said. It clinched the job based on its competitive bid and strong track record under a two-stage selection process, SLA said without elaborating.

Market watchers suggest the other contenders were likely to have been Colliers, DTZ Debenham Tie Leung, Jones Lang LaSalle and Knight Frank.

‘On the mode of sale, the government expects CBRE to recommend a sale strategy that is consistent with the prevailing best market practices for selling large commercial buildings, to enable the state to obtain the best price for the property in a level playing field for all interested buyers,’ SLA said.

The Atrium @ Orchard, next to Plaza Singapore and above the Dhoby Ghaut MRT Station, comprises two towers of seven and 10 storeys with a total net lettable area of about 375,000 sq ft. The building’s basement carpark has 100 lots. The project received Temporary Occupation Permit in April 2002.

SLA did not indicate how much the property is worth, but in yesterday’s BT report a market observer suggested a range of $2,500 to $3,000 psf of net lettable area, which would work out to $937.5 million to $1.13 billion.

A plus point is that SLA is expected to sell The Atrium on a fresh 99-year lease.

Keppel Land Invests US$213m In Vietnam Housing Projects

Source : The Business Times, November 2, 2007

Singapore developer Keppel Land said on Friday it will invest US$213 million in two joint ventures that will develop luxury homes in Vietnam's Ho Chi Minh City.

The joint ventures, both with Vietnam developer An Phu Corp, will build 200 villas and about 1,940 condominium apartments in Ho Chi Minh City's District 9 near the site of a US$1 billion Intel test and assembly test. -- REUTERS