Is CCT Getting 1 George Street Too Easily?

Source : The Business Times, April 24, 2008

CAPITACOMMERCIAL Trust's (CCT) $1.165 billion proposed acquisition of 1 George Street from CapitaLand announced last month will be put to a vote of unitholders before June 30 - with CapitaLand abstaining.

By all accounts, CCT unitholders will approve the acquisition. After all, it's not easy for Singapore real estate investment trusts (Reits) to grow through acquisitions these days. On the one hand, tight credit market conditions make it difficult to get debt funding while on the other, Reits are trading at relatively high distribution yields - because of the general stock market slide - making it difficult to make yield-accretive acquisitions if they need to raise equity to foot the bill.

CCT, however, is more fortunate. It won't be issuing any equity and has secured full debt funding for its proposed purchase of 1 George Street; and even then, its gearing will rise to only about 40 per cent from 27 per cent now.

However, CapitaLand shareholders will not get to vote on the sale of 1 George Street to CCT because the size of the transaction does not cross any of the thresholds that would trigger a mandatory shareholder vote. Put simply, although the transaction is big, it's small relative to CapitaLand's size.

Some parties are complaining that CapitaLand should have conducted an open competition to ensure that it obtained the highest price for the award-winning property.

CapitaLand may have gotten more than the $1.165 billion or $2,600 per square foot (psf) of net lettable area that it will get from CCT. A competition would have been more transparent, especially since the deal with CCT involves an income-support element. CapitaLand will top up any shortfall to ensure a minimum annual net property income of $49.5 million till 2013.

Bidding competition

Another reason CapitaLand should have had a bidding competition is because the headline price of $2,600 psf is lower than the $2,700 psf at which the asset was valued in a deal last August when CapitaLand bought the remaining half-share in the property - notwithstanding that confidence in the office market is weaker today and that the higher price earlier reflected control premium.

From the viewpoint of CapitaLand shareholders, the group could make a bigger profit from selling 1 George Street to external parties than the $47.1 million it expects to book from the proposed deal with CCT. (This amount is after accounting for the five-year income guarantee and CapitaLand's 30.5 per cent stake in CCT.)

Last month, when the deal was announced, CapitaLand Commercial CEO Wen Khai Meng said that the group has a 'certain responsibility to help our sponsored-Reit to grow'. CapitaLand is aiming for a balanced strategy on its office portfolio by allocating part of it for outright divestment to reap capital gains - as it has done for Temasek Tower, Hitachi Tower and Chevron House - and keeping a core portfolio of office properties for recurring income by divesting them to its sponsored Reits, which provide a tax-efficient structure for holding income-producing assets. Not only does CapitaLand retain a sponsor's stake in such Reits, it earns fees from managing the Reit - forming an integral part of its successful property fund management model. This strategy is a key attraction to CapitaLand as a stock.

Move is a departure

However, critics also note that CapitaLand's decision to offer 1 George Street directly to CCT marks a departure of what it has done for its divestments of other Singapore office assets in the past year or so. Temasek Tower, Hitachi Tower and Chevron House were sold through a competitive bidding process to external parties.

In the case of Temasek Tower which was sold in March 2007, CapitaLand Group president and CEO Liew Mun Leong subsequently revealed that CCT had made an offer for Temasek Tower, but its price was below the $1.04 billion offered by the eventual buyer, Macquarie Global Property Advisors Group. 'Its (CCT's offer) was below Macquarie's. We have no reason to give them. That shows we are very transparent. We are not inbreeding. Fair game,' Mr Liew had said.

Why was 1 George Street different? One point to note is that CapitaLand owned Temasek Tower, Hitachi Tower and Chevron House jointly with other parties, so it could not simply offer these office buildings to CCT on a platter; CCT would have had to compete with other bidders if it had wanted to buy these assets. 1 George Street is also a newer, higher-grade office block compared with the three sold earlier and hence a more desirable asset to CCT.

Perhaps CapitaLand may wish to make clear the criteria it uses in deciding when to offer assets directly to one of its sponsored Reits and when to have an open competition. Otherwise, some big-name overseas property investors may feel that there's a lack of transparency and a level playing field.

Of course, one could also argue that such investors may have to accept that Reits will always get the first bite when it comes to its sponsor's assets. After all, that's what it means to have a long-term sponsor committed to ensuring the Reit's growth.

New Home Sales Slip To 16 1/2-Year Low

Source : The Business Times, April 25, 2008

LATEST US DATA

(NEW YORK) Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season.

The median price of a new US home in March compared to a year ago fell by the largest amount in nearly four decades.

The Commerce Department reported yesterday that sales of new homes dropped by 8.5 per cent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The median price of a home sold in March dropped by 13.3 per cent compared to March 2007, the biggest year-over-year price decline since a 14.6 per cent plunge in July 1970.

The dismal news on new home sales followed earlier reports showing that sales of existing homes fell by 2 per cent in March.

Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.

For March, sales were down in all regions of the country, dropping the most in the northeast, a decline of 19.4 per cent.

In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession, while applications for unemployment benefits fell by 33,000 to 342,000.

The Commerce Department said that demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession.

The weakness in manufacturing orders was led by a 4.6 percent drop in orders for autos, a sector that has been hard hit by soaring gasoline prices and the weakening economy, which have cut sharply into car sales. Orders in the category that includes home appliances fell by 6.6 percent. This industry has been hurt by the two-year slump in home sales.

Manufacturing has held up better than in past economic downturns as a drop in the dollar makes American products cheaper to foreign buyers.

Gains in exports and lean inventories are keeping assembly lines moving, helping to offset slowing US sales and softening the severity of a possible recession.

'Manufacturing is proving to be fairly resilient,' Julia Coronado, a senior economist at Barclays Capital here, said before the report.

'The manufacturing sector is benefiting from some of the strength in the global economy that is helping it offset some of the weakness we've seen locally.'

Yesterday's figures were one of the last that may influence forecasts ahead of the Commerce Department's advance report on first quarter gross domestic product due on April 30. -- AP, Bloomberg

US Slowdown Impact Will Last Longer Than Foreseen: OECD

Source : The Business Times, April 25, 2008

(PRAGUE) US economic weakness and its impact on the global economy are likely to last up to nine months longer than previously expected, OECD secretary-general Angel Gurria was quoted as saying yesterday.

Mr Gurria said the OECD had initially thought the crisis would weigh on global economic growth in the first half of this year and there would be a slight recovery starting in early 2009.

'We expect a drop in the US economy this year and very weak growth in Europe. The crisis will be six to nine months longer than we had previously expected,' Mr Gurria was quoted as saying by Czech daily Hospodarske Noviny.

Mr Gurria is due to present the OECD's economic outlook for the Czech Republic later yesterday. His comments were translated into Czech by the paper.

He said no developed country will completely escape the global turmoil triggered by problems in the US sub-prime mortgage market.

'The crisis will have an impact on all developed countries,' he told the paper. 'But the problem is not the mortgage crisis itself and the real problems of the US economy. We are devastated by a huge crisis of trust.'

A Reuters poll earlier this week showed analysts' views that the US economy nearly stalled in the first quarter and will shrink between now and June, but any recession should be less severe than the last major downturn in the early 1990s.

For the year, economists saw the US economy expanding by one per cent, below forecasts in March of 1.4 per cent, although they predicted a rebound to 2.1 per cent in 2009.

Another Reuters poll showed forecast growth at 1.5 per cent in the eurozone this year, down from a January forecast of 1.8 per cent.

Mr Gurria said he would not recommend widespread action by European governments to keep economies running by easing tax burdens, as this move could deepen fiscal deficit problems. -- Reuters

Bet On Asian Currencies Rising: Goldman

Source : The Business Times, April 25, 2008

Asian currencies are 25 per cent undervalued against the euro and investors should look for opportunities to bet on the region's foreign exchange rates to rise, said Goldman Sachs Group.

Room to grow: Asian currencies are now undervalued against the euro

All 10 Asian currencies outside of Japan have fallen against the euro since the start of the global credit crisis in July as investors sought Europe's safer securities.

Asian currencies should now rise as the region exports more to Europe, domestic consumers spend more and central banks allow stronger currencies to curb inflation, said the biggest securities firm.

'Asian currencies are undervalued versus the euro by about 25 per cent,' wrote Goldman Sachs analysts - London-based Themos Fiotakis and New York-based Jens Nordvig - in a research note issued on Wednesday.

'It's hard to explain why the euro should be outperforming Asia during this dollar decline. If anything, it has led to a more pronounced fundamental imbalance between Asia and Europe.'

Eight of the 10 most active Asian currencies have risen against the US dollar since July as investors shunned American assets as the sub-prime mortgage crisis unravelled. The Philippine peso, Singapore dollar and Chinese yuan have risen more than 10 per cent in the last year against the US currency.

'Asia is no longer hugely undervalued versus the US dollar but is very undervalued against the euro,' said the Goldman Sachs analysts. They forecast the current undervaluation to be more than double the 12 per cent estimate Goldman made in mid-2007.

French President Nicolas Sarkozy said on March 27 that the euro is too high compared to the US dollar, yuan and the yen given Europe's economic growth.

'Timing of entering this theme is tricky,' the note said. 'We will be monitoring the price action and fundamentals closely for opportunities in this space.' - Bloomberg

CapLand JV Buys IT Park Site Near Mumbai

Souece : The Business Times, April 25, 2008

CAPITALAND said yesterday that its associate Loma IT Park Developers has bought a 121,450 sq m site at the Trans Thana Creek industrial area in Navi Mumbai, India, for $79 million. The seller is Standard Industries, a company listed on the Bombay Stock Exchange and the National Stock Exchange of India.

CapitaLand and its partner plan to build an information technology park and a Grade A office complex on the site, which is in the heart of the Mumbai-Pune 'Knowledge Corridor'. The project will be CapitaLand's first such development in India.

Loma is a wholly owned subsidiary of Arc-CapitaLand India - a joint venture set up by CapitaLand and Bahrain-based Arcapita Bank to develop the site. The proposed development will comprise 2.5 million sq ft (about 232,342 sq m) of built-up space, roughly half of which will be set aside for IT companies.

Construction is expected to begin by the first quarter of 2009. Completion will be in phases over the next five years. CapitaLand president and chief executive Liew Mun Leong said: 'India has been identified as an important new market in Asia for the CapitaLand group. Its immense potential as a high growth market cannot be ignored.'

Arc-CapitaLand India has appointed London-based Foreign Office Architects to design the project.

The development is expected to set quality benchmarks to meet the demands of multinational companies and high-tech businesses. It will also be one of the first major developments in Mumbai to feature environmentally sustainable commercial space.

MapletreeLog Distributable Income Up 37% In Q1

Source : The Business Times, April 25, 2008

MAPLETREE Logistics Trust (MapletreeLog) yesterday reported distributable income of $21 million for the first quarter ended March 31, up 37 per cent from the corresponding period last year.

This comes on the back of a 48 per cent jump in gross revenue from the year-ago period to $42.6 million.

The increase in distributable income came as MapletreeLog acquired an additional 23 properties within the past one year. As at March 31, the trust has a portfolio of 72 properties. Eight acquisitions are pending completion, which will raise the trust's portfolio to 80 properties spread across Singapore, Malaysia, Hong Kong, Japan, China and South Korea, with a book value of more than $2.7 billion.

Unitholders will receive distribution per unit (DPU) of 1.90 cents for Q1 2008, which is 28.4 per cent higher than in the year-ago period.

MapletreeLog's website shows analysts' DPU forecasts for 2008, made in January, ranged from 6.70 cents to 8.01 cents.

MapletreeLog also reported an improvement in borrowing costs. Due to a sharp drop in interest rates for major currencies during the quarter, the trust's weighted average annualised interest rate fell from 3.3 per cent per annum in the Q4 2007 to 2.9 per cent in Q1 2008.

According to Mapletree Logistics Trust Management (MLTM) CEO Chua Tiow Chye, the trust has started the year with a strong performance.

'We will continue with our yield plus growth strategy but in the current environment, we will remain focused on optimising yield from the existing portfolio while continuing to identify selective acquisition opportunities which we can undertake when the environment normalises,' Mr Chua said.

MapletreeLog had announced a $500 million rights issue in December last year but deferred the plan in January when the capital market softened.

On this, Mr Chua said: 'We will continue to monitor and review when it will be conducive to re-visit an equity fund raising.'

MapletreeLog also reported a higher leverage ratio of 54.7 per cent as at March 31, up 1.3 percentage points from Dec 31 last year. This was largely due to borrowings drawn down to fund the trust's committed acquisitions in Q1 2008.

CRCT Income For Distribution 8.5% Higher Than Forecast

Source : The Business Times, April 25, 2008

CAPITARETAIL China Trust (CRCT) has announced income available for distribution to unit-holders of $6.3 million for the period Feb 5 to March 31 - $0.5 million or 8.5 per cent higher than its forecast of $5.8 million.

Available distribution per unit (DPU) for the period is 1.02 cents (6.66 cents on an annualised basis), which is 8.5 per cent higher than its forecast of 0.94 cents (6.14 cents on an annualised basis). This translates to 9 per cent year-on- year DPU growth.

Based on the unit price of $1.50 on April 23, the distribution yield works out to 4.44 per cent.

CRCT explained that the last distribution was scheduled to take place in respect of its semi-annual distributable income for the period July 1 to Dec 31, 2007. 'In order to ensure fairness to unit-holders in issue on the day immediately prior to Feb 5, 2008, the day on which the new units are issued under the equity fund-raising for the acquisition of Xizhimen Mall, the manager has made a cumulative distribution of 4.04 cents for the period July 1, 2007 to Feb 4, 2008,' it added.

Lim Beng Chee, CEO of CRCT manager CapitaRetail China Trust Management, said: 'Following a year of proactive asset management of our portfolio, the malls have registered robust top-line growth, with Wangjing Mall and Qibao Mall delivering a year-on-year revenue increase of 18.8 per cent and 45.6 per cent respectively. Tenants have also enjoyed remarkable sales growth, with same-store sales at Wangjing Mall, Qibao Mall and Xinwu Mall growing 30.9 per cent, 27.4 per cent and 51.8 per cent respectively.'

Gross revenue for Q1 2008 was 116.3 million yuan(S$22.5 million), representing a y-o-y increase of 29.8 million yuan or 34.4 per cent. This was mainly attributed to revenue from Xizhimen Mall, which was acquired on Feb 5, as well as occupancy growth at Wangjing Mall and Qibao Mall. Excluding Xizhimen Mall, gross revenue for Q1 2008 was 95 million yuan, a y-o-y increase of 8.5 million yuan or 9.8 per cent.

Net property income (NPI) for the quarter was 72.7 million yuan, a y-o-y increase of 18.5 million yuan or 34.2 per cent. Excluding Xizhimen Mall, NPI for the quarter was 59.2 million yuan, a y-o-y increase of 5 million yuan or 9.2 per cent.

CRCT's unit price closed 10 cents higher at $1.60 yesterday.

Asia Securitisation Growth On Track In Long Term

Source : The Business Times, April 25, 2008

But sector needs to tackle origination, credit ratings, market pricing

SECURITISATION activity in Asia should grow in the medium to long term, even if the current credit crunch causes a pause or slowdown, Monetary Authority of Singapore (MAS) deputy managing director Ong Chong Tee said yesterday.

But the financial sector will need to tackle the three key areas of origination, credit ratings and market pricing if investor faith and long-term viability are to be restored.

Speaking at the second annual structured credit conference, Mr Ong said that Asia has largely been spared the worst of the credit storm, although liquidity has tightened and spreads have widened. 'Perhaps the fact that Asia is still largely centred on traditional bank intermediation, and that Asia is a relatively late entrant in the securitisation market, are a blessing in disguise,' he said.

The crisis has delivered some hard lessons, Mr Ong said. 'I think it is necessary to distinguish the 'tool' from the 'greed and deed' of market excesses.' Securitisation helps to repackage smaller loans into larger parcels and distribute them to investors, he said. This helps to spread risks and provide cheap capital. But the crisis has revealed some deficiencies.

One is origination standards. The business model of originators is to 'warehouse' loans for a period, then securitise them into the capital market, earning a fee in the process. 'Their revenue and bonuses are tied to the volume of loans they securitise, and not the repayment of these loans,' said Mr Ong. 'Thus there may not be the incentive to implement and monitor tight underwriting standards.'

The second issue is the role of credit rating agencies. While investors have noted the risk of conflict of interest when rating agencies receive fees from originators, investors are also partly at fault, he said. 'Many have chosen to over-rely on, or some may say, misuse credit ratings to justify their investment decisions. Credit ratings are measures of default risk. But investors have extended them to be indicators of market or even liquidity risk.' In extreme situations, AAA-rated securities may exhibit the illiquidity and price volatility of lower-rated securities.

The third issue is the assumption that market prices are a good gauge of an asset's value. Market pricing can be severely distorted, especially for complicated structures, Mr Ong said. 'There is a necessary simplification of products going forward. Furthermore, investors have come to realise that market pricing can be driven by a myriad of factors that are not linked to the intrinsic quality of the security.'

On the future of securitisation, he expects to see a greater proportion of deals in local currency, partly because Asian currency products are gaining favour.

Plan To Lift Curbs On Insurers Could Boost Property Deals

Source : The Business Times, April 25, 2008

Regulator looking at allowing insurers to invest in property, infrastructure

(HONG KONG) Chinese moves to allow insurance firms to invest in property could unleash billions of dollars in deals for commercial buildings and embolden developers and foreign investors who hanker for a more active market.

Property investment typically gives insurers the steady income they need to balance long-term liabilities. But because Beijing wants to cool property prices, particularly in a housing sector fuelled by an influx of 8 million people into cities each year, it has been wary about giving the green light to the prospective new players.

However, a slump of over 40 per cent by the Shanghai stock market since an October peak has instilled a sense of urgency, with regulators realising insurance firms, flush with US$300 billion for investment, need to diversify risk beyond stocks, bonds and deposits.

Yuan Li, a top executive at the China Insurance Regulatory Commission, told a news briefing on Wednesday the authority was studying the possibility of allowing insurers to expand investment in infrastructure and property but gave no time frame.

Such a move could release as much as US$30 billion to US$40 billion in investment in Chinese commercial property, said Stuart Leckie, an actuary and Chinese pensions expert who heads advisory firm Stirling Financial.

'It's not going to happen this week or this month, but maybe over the next five years,' Mr Leckie said, adding his estimate was based on global industry norms of 10 to 15 per cent portfolio allocations to property.

Chinese insurers have long been property investors on the sly - taking advantage of being allowed to own their own headquarters and branch offices, but leasing out a lot of space.

Top-notch offices in Shanghai and Beijing give an annual rental yield of about 8 per cent, compared to 3 per cent in Tokyo and 4 per cent in Hong Kong.

Some insurers, though still technically barred from investing in property, are already getting a nod for specific projects.

Industry leader China Life Insurance owns 20 per cent of Beijing's Oriental Plaza shopping, office and apartment complex.

Big investment by insurers would benefit developers of commercial properties such as Guangzhou R&F Properties and Hong Kong's Cheung Kong (Holdings) and Sun Hung Kai Properties .

It would also encourage foreign investors, who are lured by China's fast economic growth but need to know that domestic funds can buy their buildings when it's time to exit and take profits.

'It's certainly going to create more liquidity, but it also creates more competition for foreign players,' said David Dudley, regional capital markets director for Jones Lang LaSalle in Hong Kong. - Reuters

Tony Tan's 'Worst Recession' Remark Not A Forecast

Source : The Business Times, April 25, 2008

'Pessimistic scenario' is one of three that GIC is working on

Government of Singapore Investment Corp (GIC) deputy chairman Tony Tan yesterday clarified that his remarks earlier this week that the world could be facing its worst recession in 30 years unless policymakers act soon were not meant as a forecast for the global economy.

Instead, they referred to a 'pessimistic scenario' - one of three basic economic scenarios that GIC is working on as part of its risk management, he said.

GIC 'continuously reviews a range of economic scenarios' that can affect its investment strategy, he added.

GIC, which invests Singapore's foreign reserves overseas, is the world's third largest sovereign wealth fund, with an estimated US$330 billion in assets under management, according to Morgan Stanley in February.

Dr Tan, who is also an executive director of GIC, had warned at the inaugural GIC Staff Conference on Monday this week that unless policymakers act decisively, the world 'could be facing a recession which is longer, deeper and wider than any recession that we have encountered in the last 30 years'.

Yesterday, he indicated that GIC is working on three scenarios - an optimistic scenario in which neither the US economy nor global economy suffers a recession and the credit crisis ends quickly; a pessimistic scenario with a deep, prolonged global recession; and a 'middle' scenario in which the US suffers a mild recession but the global economy avoids a recession.

In 'normal' times, there would be a 'central' scenario representing the most likely outcome, with the optimistic and pessimistic scenarios on either side of it as extreme cases, each with a much lower chance of occurring than the central scenario, Dr Tan said.

'However, in light of the current fluid and uncertain times, the probability of the pessimistic scenario, while not the highest, has risen to a level that warrants serious consideration by GIC. That is why I highlighted this scenario at the GIC Staff Conference,' he said.

He did not state the respective probabilities GIC has attached to each of the three scenarios.

S'pore Private Home Prices Rise 3.7% In Q1

Source : The Business Times, April 25, 2008

Singapore private home prices rose 3.7 per cent between January and March, the second straight quarter of slower growth as property sales slowed, government figures showed on Friday.

The Urban Redevelopment Authority (URA) said the price index for private homes, an indicator of inflation that is already at 26-year highs, rose to 177.2 for the three months ended March, from 170.8 in the previous three-month period.

Private home prices jumped 31 percent in 2007 for the largest increase in eight years, but growth has slowed since the final quarter of 2007 while the Jan-March sales volume slumped to the lowest since 2003.

Moves by the government to cool the Singapore housing market, coupled with fears of a global economic downturn, have kept homebuyers away from showrooms and are expected to hit developers such as CapitaLand and City Developments. -- REUTERS

London Office Market Hit By Credit Crisis Fallout

Source : The Business Times, April 24, 2008

Rents, occupancy rates, sale prices may worsen if crisis continues: Moody's

(LONDON) London's office market faces 'imminent stress' as the fallout from the global credit crisis weakens demand for space in the city's financial district, Moody's Investors Service said.

Sign of the times: About 7.3m sq ft of office space is due to be completed in London this year

Conditions in the City of London deteriorated faster than any other European market last year, Moody's analysts wrote in a report on commercial mortgage-backed debt yesterday. Rents, occupancy rates and sale prices may worsen if the credit crisis continues and the supply of property increases, the New York-based ratings firm said.

Banks and securities firms may cut as many as 40,000 jobs in London in the coming months, according to forecasts by analysts at JPMorgan Chase & Co.

About 7.3 million square feet of office space is due to be completed in London this year with a further 8.3 million square feet available by 2010, CB Richard Ellis Group, the world's largest realtor, said in a April 21 report.

'We regard the growing supply pipeline to be an important threat to the European office occupation markets,' wrote Moody's analysts Rod Bowers and Jeroen Heijdeman in London.

'In addition, occupier demand could be negatively affected if the financial turmoil in the global market continues for the next few quarters.'

Moody's report scores cities out of 100 based on factors including vacancy rates, the demand for property and expected supply.

The analysis covers 24 European office markets including Paris, Munich and Barcelona. The average score fell to 61 from 64.

The City of London's score dropped to 20 at the end of 2007 from 53 a year earlier. A level of 33 or below indicates markets under 'imminent stress' where supply is outstripping demand, usually coupled with rising vacancy rates, CBRE said.

Paris' La Defense financial district, previously the highest-ranking market, fell to 67 from 88. Dublin scored worst at 15, though up from 0 a year earlier.

Conditions improved most in Edinburgh, which rose to 88 from 59, making it the highest-scoring market. Any city scoring above 67 is considered 'basically sound,' with demand for property typically outpacing the growth in supply, the analysts wrote. -- Bloomberg

GIC Says Deep Recession Is But One Of Three Likely Outcomes

Source : The Straits Times, Apr 25, 2008

Risk of worst-case scenario is much higher now though: Tony Tan

THE world could face its worst recession in 30 years, but that is, for now, just one of three possible scenarios that the Government of Singapore Investment Corporation (GIC) has drawn up.

GIC deputy chairman Tony Tan yesterday said the gloomy outlook he delivered at a staff meeting on Monday was not a prediction for the global economy.

As the probability of this worst-case scenario being realised had risen substantially, however, he decided to highlight it at the event.

'Let me state clearly that this is not GIC's forecast for the global economy,' he said, in response to queries by The Straits Times. 'As part of GIC's risk management discipline, GIC continuously reviews a range of economic scenarios which can affect GIC's investment strategy.'

Dr Tan on Monday warned that the world could descend into a deep and long recession.

This, however, can be mitigated if policymakers in the United States and elsewhere take decisive action soon. In particular, he has urged governments to move quickly to address the ailing US housing market that is at the heart of the current crisis.

His remarks were considered too pessimistic by economists. They said this slump, while serious, should not be as bad as those in the 1980s and 1990s.

Dr Tan declined to elaborate on what additional policy action the GIC was looking for.

He clarified, though, that the gloomy outlook he spoke of on Monday was referring only to one of three basic eventualities the GIC was looking into.

The optimistic case is one where the US and the world escape a recession and the credit crisis ends.

The pessimistic scenario is the one that he has raised. It envisions a deep and prolonged downturn across the globe.

Finally, the third possibility straddles the two extreme scenarios, where the US enters a mild recession but the rest of the world economy continues to expand.

In normal times, the central scenario would be the most likely one, with a 'dominant probability', said Dr Tan, while the optimistic and pessimistic scenarios would be outliers, each with much lower probabilities.

'However, in light of the current fluid and uncertain times, the probability of the pessimistic scenario, while not the highest, has risen to a level that warrants serious consideration by GIC,' he explained. 'That is why I highlighted this scenario at the GIC staff conference.'

His comments on Monday likely also reflect the GIC's conservative and cautious investment stance.

Dr Tan has said before that the GIC's investment philosophy is: If you look after the downside, the upside will look after itself.

He declined to disclose the actual probabilities the GIC had attached to each scenario.

His latest comments, however, suggest that the likelihood of each of the three scenarios may be far more similar these days, reflecting the great uncertainty that is noted widely by forecasters the world over.

The International Monetary Fund, for instance, has predicted that global economic growth will clock in at 3.7 per cent this year. But it also attaches a 25 per cent chance for a world recession, which it defines as global growth that is 3 per cent and below.

The world's economic woes today are largely the result of an ongoing credit crisis in the US and Europe.

Economists seem to be growing more optimistic that the risk of a complete financial meltdown has passed.

They note, however, that the possibility of things spiralling quickly out of hand is high. With the world's major financial systems being threatened, and credit being the lifeblood of almost every economy, the ongoing financial crisis-led downturn is not to be sniffed at.


Three basic scenarios

OPTIMISTIC SCENARIO

No recession in the United States or globally, and the credit crisis ends.

PESSIMISTIC SCENARIO

A deep, prolonged global recession.

MIDDLE SCENARIO

A mild US recession, but no global recession.

AmCham To Look Into International School Admissions Crunch

Source : Channel NewsAsia, 24 April 2008

The American Chamber of Commerce (AmCham) has formed a committee to address the continuing shortage of places at international schools here.

Several schools such as the United World College and the Canadian International School announced expansion plans last year.

But AmCham noted that the problem is worsening as admissions in the short-term reach saturation point.

It added that some members have been unable to move key employees over to Singapore because their children failed to gain admittance to the schools of their choice.

The new committee will initially focus on getting AmCham members access to international schools' waiting lists. It will also distribute information to members about other educational options.

More information such as the expected number of expatriates entering Singapore will be given to the Singapore American School and other international schools to help them plan future facility and expansion needs.

AmCham will also work with the Singapore government to address the issue, including managing the number of expatriate workers coming into Singapore in the near term.- CNA/so

Lack Of Schools A Problem For AmCham

Source : The Business Times, April 25, 2008

A SELECT Committee has been set up by the American Chamber of Commerce (AmCham) to look into the issue of school admission for its members' children, it said yesterday.

'One of the greatest issues facing AmCham members today is ensuring their children have access to international schools,' said AmCham chairman Steve Okun.

'There are many examples of members who are unable to move key employees to Singapore because their children cannot gain admittance to their selected schools,' he noted.

'With most international schools at their admissions saturation, the situation is only worsening.'

He added that schools are creating 'programmes for candidates to secure enhanced placement rights' by getting employers to buy a place in the programme.

To tackle the problem, the committee will help AmCham members gain access to international school waitlists and inform them about educational options that businesses may consider if schools cannot increase their enrolment due to space constraints, it said.

The committee will also inform the Singapore American School board and the boards of other international schools of the numbers of expatriates entering Singapore, as well as AmCham members' concerns, so that the schools can determine future facility and expansion needs.

In addition, the committee will keep relevant government ministries and agencies updated on the waiting list situation, as well as strategies to ensure schools can be expanded.

Airview Towers En Bloc Case Back To Strata Board

Source : The Straits Times, Apr 25, 2008

RULING OVERTURNED

THE $202 million collective sale of Airview Towers may now be back on after the Court of Appeal yesterday overturned a High Court decision to axe the sale.

The case now goes back to the Strata Titles Board (STB), which will decide whether to approve the sale.

The Court of Appeal found that the 80 per cent requirement for a collective sale to go through was not necessary at the point of application with the STB.

Owners can apply for an STB order as long as the 80 per cent approval of owners is achieved within the set 12-month period for collecting signatures.

The STB and the High Court had rejected the sale of the River Valley area condominium to Bukit Sembawang Estates. They interpreted the law to mean that the 80 per cent requirement was necessary as at the date of application with the STB over the sale.

The Court of Appeal also found that the collective sale agreement bound all owners, including new ones who might have purchased a unit from a majority owner during the collective sale process.

The original owners, in signing up for a collective sale, signed for themselves and future buyers. Part of the dispute centred on two flats the owners sold after signing up for the sale.

The 100-unit estate had one objector, Mr Ken Lee, who was unrepresented. He was ordered to pay costs at the STB, High Court and Court of Appeal levels.

Majority Owners At Airview Towers Win Appeal

Source : The Business Times, April 25, 2008

THE Court of Appeal has overturned the ruling by the High Court and Strata Titles Board (STB) on the collective sale of Airview Towers, paving the way for mainboard-listed Bukit Sembawang Estates to acquire the property for $202 million.

Located at St Thomas Walk, Airview Towers became the subject of a civil appeal after a sole resident, Ken Lee, objected to the collective sale, arguing that the minimum 80 per cent approval rate needed was not met in time.

This was because during the process of the collective sale, a few owners had sold their units and their successors had apparently not signed the documents agreeing to the en bloc sale at the date of application.

Although STB and the High Court had ruled in Mr Lee's favour, the Court of Appeal rejected their decision, based on a different interpretation of the reference period during which the minimum approval should be obtained.

The Court of Appeal also ruled that when previous flat-owners signed in favour of the en bloc sale during the permitted period, they also bound their property successors in title.

The group of majority owners in favour of the collective sale was represented by Harry Elias Partnership. The collective sale of the freehold property is expected to rake in about $2 million for each of the 100 owners.

Bukit Sembawang Estates plans to build a 36-storey condominium at the site.

Shares of Bukit Sembawang Estates were unchanged at $9.50 yesterday.

Far East Organization Headed For Rebranding

Source : The Business Times, April 25, 2008

FAR East Organization (FEO), headed by Singapore's richest man, Ng Teng Fong, looks set to undergo a corporate rebranding exercise as it gears up for challenging times ahead.

'We need to be much more attuned to the life of other international cities so that we understand the lifestyles and preferences of our customers.' - Chief executive Philip Ng

Mr Ng's son, Philip, who is also the company's CEO, said that it will be 'embarking on a formal and articulated programme to circumscribe a more visible corporate brand as well as define new sub-brands for our residential property sales and hospitality operations'.

The CEO also said: 'In this next phase of our organisational development, we will continue to be true to the vision of our founder and this means we must all participate in making Far East Organization an entrepreneurial organisation.'

Mr Ng was addressing his staff through the company newsletter, Landmark.

In it, he also outlined the challenges it faced in the preceding year as well as those it faces in the years ahead.

Saying that 2007 had been 'a rather chequered year', he added: 'Our performance across our spectrum of operations was somewhat uneven although business conditions for the better part of the year were quite rosy.'

While Mr Ng noted that 'business risks have heightened', and that 'there are now cycles within a cycle as globalisation impacts on us', he said: 'We see opportunities for business growth as Singapore transforms into a vibrant, global city that has an international marketplace for real estate and real estate products.'

Mr Ng revealed that its property sales operations have already been augmented with 'a network of regional offices and multi-country marketing channels'.

A substantial portion of FEO customers now come from overseas, including the Middle East, Europe, Russia, India and China, revealed Mr Ng. 'They are much more demanding especially of international products for which they are prepared to pay international prices,' he added.

'We need to be much more attuned to the life and living of other international cities and markets so that we understand the lifestyles and preferences of our customers,' he added.

To this end, FEO has already made considerable headway in fashioning new products for the global set, including The Scotts Tower, designed by Pritzker Prize winner Rem Koolhaas's architectural firm, Office for Metropolitan Architecture.

Also in the works is the 108-room hotel, Quincy, located off Orchard Road and styled after the trendy hotel chain, W Hotel.

To date, FEO has a development landbank of 11 million sq ft in Singapore. In 2007, it invested $1.15 billion to acquire development sites that will yield some 2.7 million sq ft of buildable area.

Pender Court En Bloc Sale Fails, Owners Keep $12m

Source : The Business Times, April 25, 2008

Deal called off as buyer decides to cut losses on investment

The sale of Pender Court off West Coast Highway to a unit of Bravo Building Construction has been called off. The buyer failed to complete the transaction by paying the remaining $72 million that it owed the sellers on the purchase price.

Costly choice: A unit of Bravo Building Construction didn't meet yesterday's deadline to cough up the remaining $72 million that it owed the sellers

Owners of the 48 units will keep the $12 million, or an average of $250,000 per unit, they have received so far from the associated Bravo company, Pender Development Pte Ltd.

A Bravo spokeswoman told BT yesterday that the group decided to cut its losses on the investment so far rather than pump in more money as the venture was no longer profitable, given the bad publicity the company had been receiving lately from the rescission of two other en bloc sales to Bravo units - those of Tulip Garden in Holland Road and Makeway View in the Newton area.

Also, a party that was to buy an entire proposed 50-unit cluster housing project to be developed on the Pender Court site pulled out at the end of last month. 'My breakeven cost would have been about $2.7 million per cluster house. My purchaser withdrew. With the bad publicity that we currently have, I don't think the project can even fetch $2.3 million to $2.5 million per unit if I were to launch the development now,' said a Bravo spokeswoman.

'So we'd lose money. We might as well cut our loss now - I've lost $12 million - rather than make a bigger loss by pursuing the redevelopment.'

Even if Bravo had pursued its original plan to build a condo on the Pender Court site, the breakeven cost would be about $1,300 to $1,400 psf today, which would not be viable in the current market, the spokeswoman said.

BT understands that the $12 million that Pender Development has paid Pender Court's owners comprised two initial deposits of $4 million each - on the $80 million price - and a further $4 million that the buyer paid the owners for the latest extension. The deadline to complete the transaction ended yesterday.

Pender Court's $80 million en bloc sale was announced in July last year, which is when the Bravo associate paid an initial 5 per cent deposit. When the collective sale was approved by Strata Titles Board on Nov 21 last year, the Bravo associate paid the second 5 per cent deposit.

The completion date, which is when the remaining 90 per cent of the purchase price must be paid up, was to have been in late February. However, when this was not completed, the owners' lawyer served a notice advising the Bravo associate that if it does not complete the purchase within 14 days, the owners would rescind the deal. Before the 14 days ran out around mid-March, Bravo asked for an extension to April 24 and paid the owners a further $4 million on top of the original $80 million purchase price.

All $12 million have been disbursed to the owners, BT understands.

No further notice of rescission is required under a supplementary agreement signed seeking the extension until yesterday.

UOB Kay Hian Wins Office Site With $242.5 PSF Bid

Source : The Business Times, April 25, 2008

UOB Kay Hian Trading has landed the Scotts Road/ Anthony Road 15-year lease site with a surprising record bid of $242.5 per square foot (psf), double original estimates in a strongly contested tender.

The stockbroker beat seven other bidders for the transitional office site by offering $34 million for parcel A at Scotts Road/ Anthony Road with an area of 8,682.8 square metres (93,461 square feet). It is offered on a short-term lease of 15 years.

The tender surprised consultants who had expected bids to come in between $100 and $130 psf.

UOB Kay Hian's $242.5 psf bid was 16.5 per cent higher than the second bid from Sun Venture (S) Investments.

It is also 11 per cent more than what had been paid for the first transitional office site in Newton in August 2007.

This was awarded to Hwa Hong Corporation and KOP Capital for $37 million, or $219 psf.

The Urban Redevelopment Authority (URA) yesterday released the results of the latest transitional office tender, its fifth. The previous tender for a site in Aljunied Road closed with only one bidder and was withdrawn as the reserve price was not met.

But consultants said that the results of the latest tender does not necessarily signal a turnaround of the moribund property sector. They noted the prestigious location of the site and that it is a hop and skip away from the Newton MRT.

'I think it's too early to pop the champagne yet,' said Nicholas Mak, director of consultancy & research department, Knight Frank.

'As the site is located next to Newton MRT station and proximate to the Central Business District, companies leasing the space here can reduce their occupancy costs significantly yet still have their office located in a strategic location,' said Mr Mak.

Specifically, continued tight office supply and strong demand have sustained the growth in rentals for Q1 2008 in which average grade A office rentals in Raffles Place reached $17.63 psf per month. This rental level is much higher compared with the current monthly gross rent of $6-8 psf in the Scotts Road area.

UOB Kay Hian, consultants speculated, will move its back room offices to the Newton office when it is ready and free up the expensive space it currently occupies in Raffles Place.

Ku Swee Yong, Savills' director of business development and marketing, estimated that after factoring construction and the land costs, UOB Kay Hian will still make a nice profit on the Newton site based on monthly rental of $7 psf.

'Given this bid, the economics makes total sense,' he said.

Scotts Rd Site Gets $34m Bid

Source : TODAY, Friday, April 25, 2008

UOB Kay Hian Trading has submitted the highest bid of $34 million in the Urban Redevelopment Authority’s (URA) tender for a transitional office site at Scotts Road.

The tender for the 93,461 sq ft plot of land closed yesterday. Offered on a short-term lease of 15 years, the site attracted seven other bidders. UOB Kay Hian’s bid was more than 16 per cent above the closest competing one from Sun Venture Investments.

If UOB Kay Hian’s bid is successful, its average price of $242.50per sq ft per plot ratio will be the highest paid for a transitional office site since the introduction of the scheme by the URA last July, said Mr Nicholas Mak, director of consultancy and research at property firm Knight Frank.

Located next to Newton MRT station and close to the Central Business District, the site offers businesses a strategic location while allowing them to reduce their occupancy costs, he said.

Resorts World Gets The $4b Loan It Needs Tto develop IR

Source : TODAY, Friday, April 25, 2008

Resorts World has completed the syndication of $4 billion in credit facilities to develop its integrated resort with casino on Sentosa.

The loan, one of the largest taken in Singapore, was made at an interest rate of 1.75 per cent above the Singapore swap offer rate. The tenure of the loan extends to 2015. Ten banks participated in the syndication, jointly underwritten by five lead arrangers: DBS Bank, OCBC, Hongkong and Shanghai Banking Corp, Royal Bank of Scotland and Sumitomo Mitsui Banking Corp.

The syndicated loan will fund two-thirds of the resort’s $6-billion project cost, with the remainder to be financed by equity from a rights issue last year by Resorts World’s parent company, Genting International.

More than $2 billion in building contracts have been awarded for four of the resort’s six hotels and its main thoroughfare, Resorts World said. The project, which will house South-east Asia’s first and only Universal Studios theme park and the world’s largest oceanarium, is expected to be completed in early 2010.

Transitional Office Site In Newton Draws 8 Offers

Source : The Straits Times, Apr 25, 2008

UOB Kay Hian tops bullish bidding for attractive plot next to MRT with $34m offer

A PRIME transitional office site in Newton attracted eight bids by the close of its tender yesterday, a clear reminder that demand for office space remains high.

The surprise top bidder was not the usual developer, but brokerage UOB Kay Hian. It offered $34 million, or $242.5 per sq ft (psf) of gross floor area, said the Urban Redevelopment Authority.

This was 16.5 per cent higher than the second bid, an offer of $29.2 million, or $208 psf, from Sun Venture Investments.

Property experts said UOB Kay Hian could be relocating some of its back-room operations from the financial district or expanding its office space.

Other bidders for the tender launched on Feb 28 include Scotts Development, Hersing Corporation and Sim Lian Land.

Mezzo Development trailed the field with a bid of $11.9 million, or $85 psf, for the 93,461 sq ft site.

Market watchers said the 15-year leasehold plot's attractive location next to the Newton MRT station fuelled the bullish bidding.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said tight office supply and strong demand have sustained the growth in rentals.

For the first quarter this year, average Grade A office rentals in Raffles Place reached $17.63 psf per month - much higher compared with monthly gross rentals of $6 psf to $8 psf in the Scotts Road area.

Companies leasing the Newton site, which can yield a maximum gross floor area of about 13,000sq m, could reduce their occupancy costs, yet still enjoy a strategic location, said Mr Mak.

He noted that the top bid is the highest average price paid for a transitional office site since the initiative was launched in July last year to address supply concerns.

Earlier this year, the Government chose not to award the tender for a similar office site in Aljunied because the only bid was too low. Mezzo Development had offered $7.8 million, or $38.35 psf.

Mr Ku Swee Yong, Savills Singapore's director of marketing and business development, said that if UOB Kay Hian relocates to the Newton site, it could gain by renting out its offices at UOB Plaza.

But Mr Mak reckons that the site will be used for expansion purposes. He added that the site could be merged with an adjacent land parcel, also a transitional office site. The tender for this plot closes on April 30.

As a result, the bidding for this site is expected to be relatively less aggressive.

Condo Unit To Be Auctioned Off To Recover Money Owed

Source : The Straits Times, Apr 25, 2008

FEES UNPAID FOR 10 YEARS, OWNERS UNCONTACTABLE, SO...

AN UNUSUAL auction of an apartment worth over $1 million is scheduled for next week - after the mysterious disappearance of the owners.

The three-bedroom unit at King's Mansion off Tanjong Katong Road has been vacant for more than 10 years.

Repeated attempts by the condo's management corporation (MC) to get in touch with the owners and their lawyers have failed.

The four owners, all foreigners, owe possibly $30,000 or more in maintenance fees.

So the MC is taking the rare step of putting the flat up for sale to recover the money without the owners' cooperation. The auction is set for next Wednesday.

Little information is available about the owners but it is believed they are Malaysians.

Although MCs are legally able to seize the property of debtor owners, such action is rare as few want to take action against their neighbours, property consultants say.

But this case is unusual as the owners have been absent from the freehold unit for so long - even ignoring the recent property boom.

The guide price for the 1,604 sq ft high-floor unit is about $1.1million to $1.2 million, said auctioneer Mary Sai of Knight Frank, which is conducting the auction. She said numerous attempts by the MC to get in touch with the owners and their lawyers had failed.

It is not known how much is owed by the owners as the MC has refused to comment.

But based on the condo's current fees, it could be up to $35,000 over 10 years - not counting interest.

MCs are permitted to lodge a charge against an owner's property if contributions are unpaid for more than 30 days after they have served a written notice of demand, said lawyer Vijai Parwani. They then have the authority to sell the property as if they were a registered mortgagee, he said.

If the owner wants to sell his property, he would not be able to complete the sale until the debt is settled.

MCs can also go to court or the Small Claims Tribunal to recover outstanding contributions. If owners still refuse to pay, the MCs can get a writ to seize and sell some household items to pay the debt, he said.

If the debt exceeds $10,000, the MC can apply to make the owner a bankrupt.

No matter what, seizing a defaulter's property for sale is absolutely the 'last resort', said Mr Raymond Choo, executive director of Chesterton International's property, assets and facilities management department.

It is a 'tedious and costly' process, he said.

It involves upfront costs, getting a resolution for the sale, doing a property valuation and engaging an auctioneer.

'There are other ways you can use before you resort to the power of sale,' he said.

Property consultants say they have not heard of any such cases recently as owners usually appear when threatened with a sale.

Ms Sai says the MC of Pandan Valley tried to put a unit up for auction a few months ago, but the owner appeared and paid up before the sale could happen.

More Securitisation Deals May Be Seen In Local Currencies

Source ：Channel NewsAsia, 24 April 2008

An increasing proportion of securitisation deals will probably be seen in local currencies, said Deputy Managing Director of the Monetary Authority of Singapore (MAS) Ong Chong Tee at the Singapore Structured Credit Conference on Thursday.

This is due to the turmoil in G3 markets (Japan, Europe and the United States) and partly because Asian currency products are gaining favour.

To fully restore investors' faith and the market's long-term viability, Mr Ong recommended that issues regarding the origination standards, credit ratings and market pricing be addressed.

He added that the industry should confront the issue of whether retention of risks goes against the entire idea of risk transfer.

Mr Ong noted that investors may have chosen to misuse credit ratings, even using them as indicators of market or liquidity risk.

He also discredited the assumption that market prices provide a good gauge of an asset's value when they can be severely distorted. - CNA/so

Yongnam, KTC Secure S$81.4m Contract For Marina Bay Sands IR

Source : Channel NewsAsia, 24 April 2008

Structural steel contractor and engineering solutions provider Yongnam Holdings will form a 70-30 percent joint venture with KTC Civil Engineering and Construction to work on a Marina Bay Sands project.

They have secured an S$81.4 million contract for temporary decking, steel waling and excavation works at the South Podium of the Marina Bay Sands integrated resort.

The South Podium area will include convention and meeting facilities, a grand ballroom and retail space.

Yongnam, along with its partners, has won over S$170 million worth of contracts for the Marina Bay Sands development.

Yongnam will be in charge of overall site supervision and control. - CNA/so

UOB Kay Hian Offers Highest Bid For Site At Scotts Road

Source ：Channel NewsAsia, 24 April 2008

The tender for the transitional office site at Scotts Road/Anthony Road has attracted strong bids.

There were a total of eight bids at the close of the tender on Thursday.

UOB Kay Hian put in the highest offer at S$34 milllon, 16 per cent higher than the second bid. The bid works out to more than S$242 per square foot per plot ratio.

The almost 8,700-square-metre site is offered on a short-term lease of 15 years.

Property consultant Knight Frank offered a few reasons for the strong bids. It noted that the site is near to an MRT station and is located just outside the central business district.

In addition, office supply continues to be tight, and the site has potential for amalgamation with an adjacent land parcel. - CNA/ac

Resorts World At Sentosa Completes S$4b Credit Syndication

Source : Channel NewsAsia, 24 April 2008

Resorts World at Sentosa has completed the syndication of S$4 billion in credit facilities for its resort development.

The tenure of the loan extends to 2015. The loan is one of the largest to be successfully undertaken in Singapore.

In a statement on Thursday, Resorts World said the borrowings were made at an interest rate of 175 basis points above the Singapore Swap Offer Rate.

A total of 10 banks were involved in the syndication, which is jointly underwritten by five original mandated lead arrangers - DBS Bank, Oversea-Chinese Banking Corporation, HSBC, the Royal Bank of Scotland and Sumitomo Mitsui Banking Corporation.

The credit facilities will fund two-thirds of the resort's S$6 billion project cost.

Resorts World has since awarded more than S$2 billion in building contracts for works on four of its six hotels, as well as its main thoroughfare Festive Walk.

It said progress on the resort is on track for an early 2010 soft opening. - CNA /ls

CapitaLand Acquires Site To Build IT Park, Office Complex In India

Source : Channel NewsAsia, 24 April 2008

CapitaLand has acquired a prime 30-acre site to build its first IT park and a grade-A office complex in India.

The deal was done through its 49 percent-owned associate, LOMA IT Park Developers.

The site was purchased at a price of S$79 million from Standard Industries, a company listed on the Bombay Stock Exchange and the National Stock Exchange of India.

It is located in the Trans Thana Creek industrial area in Thana district, Navi Mumbai.

CapitaLand said the development will comprise about 2.5 million square feet of built-up space, of which about half will be set aside for IT companies.

The development will be built over the next five years. Construction work is expected to start by the first quarter of 2009. - CNA/ac

Mapletree Logistics Trust Posts S$21m In Q1 Earnings, Up 37% On-Year

Source : Channel NewsAsia, 24 April 2008

Mapletree Logistics Trust has booked a distributable income of S$21 million for the first quarter, up 37 percent compared to a year ago.

Mapletree Logistics will distribute 1.90 Singapore cents per unit for the first quarter, up from 1.48 Singapore cents a year earlier.

Net property income rose 45 percent on-year to S$37.4 million, while gross revenue shot up by 48 percent on-year to S$42.6 million.

Mapletree Logistics is continuing to see strong demand for its logistics space. It renewed 50,000 square metres of space in the first quarter, with 94 percent coming from existing tenants. Rentals in the first quarter jumped by almost 29% over the same period last year.

"Going forward, we have about another 124,000 square metres of space that are coming up for renewals in two major countries - Hong Kong and Singapore. And with that, we are looking at something like about a 12 percent increase in terms of rental reversion," said Chua Tiow Chye, CEO of Mapletree Logistics Trust.

But given the overall market conditions, the REIT is delaying plans for a rights issue.

Chua said: "We will continue to monitor the situation, and at a right time, we will re-enter the market to raise fresh equity from new investors or existing investors.

"But for the time being, we have a strong, robust portfolio of existing assets, and from this we should be able to give our investors a good yield of DPU growth for the current year."

The REIT manager also dismissed market speculation that it may merge its logistics and industrial trusts.

Mapletree Logistics said it will continue to stay focused on the logistics real estate market in Asia. - CNA /ls

GIC's Dr Tony Tan Ｃlarifies 'Worst Recession' Remarks Just One Of 3 Scenarios Considered

Source :Channel NewsAsia, 25 April 2008

Dr Tony Tan, the deputy chairman of the Government of Singapore Investment Corporation (GIC), has clarified that recent comments made on the world facing its worst recession in 30 years is just one of three scenarios GIC is contemplating.

It is not the GIC's forecast for the global economy.

The other two are an optimistic scenario where there is a recession in the US or globally, with an end to the credit crisis; and, a middle scenario where there is a mild US recession but no global recession.

Speaking at the GIC Staff Conference earlier this week, Dr Tan had said the world "could be facing a recession which is longer, deeper and wider than any recession that we have encountered in the last 30 years."

He had also said that this could be mitigated if decisive and timely actions are taken by policy makers in the United States and elsewhere.

Putting those remarks in perspective, Dr Tan said that as part of GIC's risk management discipline, it continuously reviews a range of economic scenarios which can affect its investment strategy.

Dr Tan explained, "In normal times, there will be a central scenario with a dominant probability, with the optimistic and pessimistic scenarios as outliers, each with much lower probability. However, in light of the current fluid and uncertain times, the probability of the pessimistic scenario, while not the highest, has risen to a level that warrants serious consideration by GIC."

And this was why he had highlighted the scenario at the conference. - CNA/ir

受JTC脱售资产影响的租户每年租金上涨的顶限维持在5％

《联合早报》Apr 24，2008

未来三年内 受JTC售资产影响租户 每年租金上涨顶限5％

在接下来的三年内，丰树投资(Mapletree Investment）将把受裕廊集团（JTC）脱售资产计划影响的一些租户，每年租金上涨的顶限维持在5％，协助中小型企业抵销部分因资产转手所带来的租金上涨压力。

丰树投资昨天接受本报询问时指出，从今年7月1日开始的三年内，受影响的多层工厂和堆叠式和坡道式厂房的租户，每年租金上涨的顶限是5％，以裕廊集团在去年7月定下的租金时价（posted rent）为基础。换句话说，那些租约在今年6月30日以后到期的租户，接下来的三年，每年租金上涨的顶限是5％。

租金时价是指裕廊集团发布的当前租金，也即政府新的工业厂房租户所获得的租金报价。这与厂商为工厂签定的合同租金（contracted rent）不同，也就是说，就算合同租金较低，计算涨幅的基础还是去年7月的租金时价为准。

裕廊集团前天宣布，会把这62个现成厂房，以17亿1000万元的价格，脱售给由丰树投资担任保荐机构的一个私人信托。

这些资产就包括：39栋多层工厂(flatted factory)、12个设施中心（amenity centres）、六个堆叠式和一个坡道式厂房、三栋多租户商业园建筑和一个仓储建筑，预计资产转移将会在今年7月1日完成。

丰树工业基金管理总裁潘国金说，从7月1日以后定下或更新的新租约，租金还是必需拥有竞争力。例如，这个组合内的多层工厂楼面只占本地所有多用户工业楼面（不包括商业园楼面在内）的8％。丰树在这个领域并不占支配地位，因此还受到市场供应和需求的影响。

潘国金说，向裕廊集团购买的工业资产组合，将纳入由丰树投资担任保荐机构的丰树工业信托（Mapletree Industrial Trust，简称MIT）中，由丰树的独资子公司——丰树工业基金管理公司来管理。丰树是淡马锡集团的子公司。

针对本报询问，丰树投资将以什么方式集资，来偿还17亿元的买价？

潘国金说，由丰树保荐的私募基金——丰树工业基金（Mapletree Industrial Fund）将成为丰树工业信托的投资者。他说，集团也打算邀请其他投资者一起投资。除此之外，也将通过向银行贷款融资。当纳入原属裕廊集团的资产后，管理丰树旗下所有工业业务的丰树工业基金管理，也将聘请更多员工，并设立热线，来接听裕廊集团客户的询问。

裕廊集团在接受询问时指出，集团将连同现有的这些租约，一起脱售给丰树，并会同丰树合作，确保顺利过渡，降低为租户带来的影响。

据本报了解，裕廊集团已经发信给受影响的租户，向这些租户解释未到期的租约将不受影响，以及在6月30日以后更新以后的租约计算方式。

伦敦豪宅全球最贵

《联合早报》Apr 24，2008

富人变得更加富有，推动英国首都豪华宅邸的价格大幅攀升，与其他地区房价的不断下跌形成鲜明对比。

花旗私人银行与地产中介机构（Ｋｎｉｇｈｔ Ｆｒａｎｋ）４月２１日发布的２００８年财富报告显示，伦敦是全球购买豪华住宅价格最为昂贵的城市。去年的价格涨幅轻松超过了摩纳哥等竞争对手。

由于全世界逾３０万人在２００７年加入百万美元富翁的行列，富翁们正将史无前例的巨额现金投入超级奢侈地产。

虽然Ｃａｎｄｙ ｂｒｏｔｈｅｒｓ等奢侈地产开发商正在向市场输送更多奢侈住宅，但伦敦去年的价格升势基本没有放缓。

该报告称，伦敦豪宅的均价去年上涨２９％，至每平方米４．６万欧元（合３．６５万英镑）。在截至２００８年１月的６个月中，在切尔西、骑士桥及贝尔格拉维亚，１０００万英镑以上住宅的交易数量同比增长１９０％。萨里郡、白金汉郡、汉普郡及贝克郡现已跻身于全球３５个最昂贵地区之列。上述地区能与蔚蓝海岸、米兰及巴巴多斯等更具异国情调的区域比肩，这一事实验证了过去１０年英国房地产牛市的强劲程度。

全球高端房地产的资本价值在２００７年平均上涨１１％。但该报告表示，全球高端住宅的价格增长有所放缓，一些黄金地段的价格甚至出现下跌。

澳大利亚近百万家庭 将面对房贷压力

《联合早报》Apr 24，2008

（悉尼路透电）到了今年9月，澳大利亚有接近100万户人家将面对房贷压力，其中8万户家庭还可能失去为贷款而作抵押的家园；个中原因是全球信用紧缩，还有是贷款利率越来越高。

根据昨天公布的经济数据，澳大利亚的通货膨胀率是4.25%，这是接近17年来的最高水平。通胀率居高不下是由于燃油、食品和住屋的价格都上涨，人们因此担心利率可能再次上扬。

澳大利亚财政部长斯旺说，通胀率攀上新高也能透露，“厨房餐桌边的人正感受到个中的苦楚。”

澳大利亚的通货膨胀率接近17年来的最高水平。人们担心利率可能再次上扬。（路透社）

过去3年来，澳大利亚贷款利率一涨再涨，前后上调了8次。富士通咨询公司的诺思说，随着利率上升，到了九月，被抵押贷款压得喘不过气的人家估计有93万户，其中陷入严重困境的家庭大约有40万户。

诺思指出：“市场上从来没有出现这样深重的困境，也没有发生如此艰难的情景。”
他指出：“当人们陷入深重困境时，其中20%就会被逼卖掉或者放弃作为抵押的住宅，能够摆脱困境的机会大约只有50%。”

富士通咨询公司3年来调查了2万6000户人家，结果发现，其中13％已经出现支撑问题，他们全家的总收入，超过30%是用来偿还贷款。

至于出现严重困境者，指的是抵押贷款人必须依靠重新筹钱来尝还债务。

澳大利亚有过连续16年的经济增长，而且经历了长时期的低利率，使得最近几年来出现置业和贷款热潮。可是，自从去年8月起，澳大利亚中央银行为了制止通货膨胀，连续四次提高利率，使利率攀上12年来的新高，达到7.25%。澳大利亚好多银行在全球性信用紧缩的压力下，被迫进一步把抵押利息调高到9%。

富士通的报告说，每当银行把利率提高25个基点，就会导致15万户家庭出现轻微的财务困境，另外7万5000户人家陷入严重困境。

澳大利亚的抵押房贷当中，30%左右是属于固定利率，不过，这种固定利率将在今年较后时间调整，到时，贷款利率可能从当前的6%提高到9%。

该报告指出，年轻家庭承受的打击最大，他们之中35%已经尝到个中滋味，比较富裕的人家也不能幸免，12%已经感受到利息攀升的压力。

诺思说：“借贷者千方百计挣扎求存，他们动用更多信用卡，或者借贷新债务，以填补陷入的债坑，可是债坑越挖越大。重新筹钱并不是万灵丹，一旦陷入困境，脱身是难上加难了。”