Return On US Investments In S'pore Hits 34.8%

Source : The Business Times, August 29, 2008

Overall FDI return in 2006 averages an unchanged 20.5%

BAR the Bahamas and the Cayman Islands, the US scored the best returns on foreign direct investments in Singapore in 2006.

This was despite US direct investments here slipping to $37.1 billion, from $40.6 billion in 2005, according to figures released yesterday by the Department of Statistics.

The US achieved a 34.8 per cent return on its Singapore investments in 2006, up from 32.8 per cent the year before.

The respective returns for the Bahamas and the Cayman Islands were 36.1 and 77.9 per cent.

Overall, the average return on foreign direct investments in Singapore was 20.5 per cent in 2006 - the same as in 2005.

Total cumulative foreign direct investments here jumped 12.4 per cent from 2005 to $363.9 billion in 2006.

The stock of foreign equity rose 15.5 per cent to $365.9 billion, with most of it - 90.2 per cent - in direct equity investments and the remainder in portfolio equity investments.

Asia and Europe accounted for the bulk of foreign direct investments in Singapore in 2006 - 47.2 per cent from Europe and 22.4 per cent from Asia.

By country, the UK ($54.78 billion) was the largest foreign direct investor in 2006, followed by the Netherlands ($48.27 billion) and Japan ($45.02 billion).

The US was the fourth-largest foreign direct investor here.

The UK got only a 4.8 per cent return on its investments, down from 18 per cent in 2005 and among the lowest.

The Netherlands achieved a return of 24.3 per cent and Japan 12.1 per cent.

Among regions, Asia achieved a 12.6 per cent return, up from 11.4 per cent in 2005.

Europe's return fell to 17.4 per cent, from 19.5 per cent in 2005.

By industry, the wholesale and retail trade, hotels and restaurants offered the best investment returns in 2006 - 27.1 per cent, up from 23.6 per cent in 2005.

Led by petroleum products, the return for manufacturing was 22.9 per cent, down from 27 per cent in 2005.

According to the Department of Statistics, foreign direct investments in Singapore in 2006 were mainly in financial services (38.7 per cent) and manufacturing (29.9 per cent).

The wholesale and retail trade, hotels and restaurants (18.2 per cent) and transport and storage (6.2 per cent) sectors were also popular with foreign investors.

More than four-fifths of investments in financial and insurance services went into investment-holding companies.

In manufacturing, more than a third - 35.2 per cent - of investments were concentrated in pharmaceuticals, 29.7 per cent in electronics and 13.2 per cent in petroleum.

European investments in Singapore went mainly into manufacturing (37.7 per cent of Europe's total investments), financial services (35 per cent) and wholesale and retail trade, hotels and restaurants (14.4 per cent).

Asian investments went mainly into financial services (36.3 per cent) and wholesale and retail trade, hotels and restaurants (29 per cent).

While US direct investments in Singapore dipped in 2006, those from Europe - except Germany - rose, with Norwegian investments jumping 72.6 per cent to $14.8 billion.

Direct investments from the Netherlands increased 50 per cent, while those from the US went up 10.5 per cent.

Japan, which accounted for more than half - 55.3 per cent - of total Asian direct investments, saw its investments edge up 0.5 per cent in 2006.

South Korea raised its stake 29.8 per cent to $1.65 billion, and Hong Kong 29.3 per cent to $6.08 billion.

Allco Reit Gets BB Long-Term Rating From S&P

Source : The Business Times, August 29, 2008

Agency also places rating on CreditWatch with positive implications

STANDARD & Poor's Ratings Services yesterday said it has assigned its 'BB' long-term corporate credit rating to Allco Commercial Real Estate Investment Trust (Allco Reit).

Anchor Point: The weighted average lease term of 4.8 years for Allco Reit's portfolio is higher than average

At the same time, it placed the rating on CreditWatch with positive implications.

The rating on Allco Reit reflects the trust's smaller asset base compared with its global peers'.

It has nine properties (excluding units in unlisted property fund Allco Wholesale Property Fund).

'Allco Reit also has high tenant concentration, with its top two tenants representing about 30 per cent of the gross revenue of its portfolio,' said Standard & Poor's credit analyst Wee Khim Loy.

'In addition, the trust's market and tenant diversity could decline. Should Allco Reit's manager, Frasers Centrepoint Asset Management (Commercial) Ltd, continue the previous manager's strategy to exit the Australian market and focus on properties in Singapore and Asia, the trust's asset portfolio and cash flow stability would be negatively affected.'

The above weaknesses are partly offset by the quality of Allco Reit's investment portfolio.

The Asian properties, which require minimal capital expenditure, are mostly strategically located in central business districts.

These benefits are complemented by the stable rental cash flow of Australian properties, which are backed by longer term leases.

In addition, the weighted average lease term of 4.8 years for Allco Reit's combined diversified portfolio is higher than the average for comparable real estate investment trusts focusing on Asian office commercial properties.

Allco Reit's nine properties have more than 400 tenants in total, spanning five markets in three countries.

The diversification strength of the investment portfolio provides cash flow stability to the business.

The rating is also supported by the enhanced financial flexibility of Allco Reit following the change in the ownership of its manager.

Impending refinancing risk declined after Allco Reit was 'de-linked' from Allco Finance Group (AFG). Frasers Centrepoint Ltd (FCL) acquired 17.6 per cent of Allco Reit and 100 per cent of its previous manager, Allco Singapore Ltd, from AFG on Aug 14, 2008.

Allco Reit will be eventually renamed Frasers Commercial Trust. FCL is the wholly owned property arm of Fraser and Neave Ltd, a leading consumer group with a satisfactory credit profile.

Sands Wants To Build A Casino Strip In India

Source : The Business Times, August 29, 2008

(HONG KONG) Las Vegas Sands Corp, operator of Asia's biggest gambling resort, would consider spending US$12 billion to build a strip of casinos in India similar to its project in Macau, chairman Sheldon Adelson said.

'We would like to build a Cotai Strip in India,' Mr Adelson told reporters at a briefing in Macau yesterday. 'We would be happy to spend US$12 billion there' if India invites the company. India is the world's second most populous nation, behind China. Mr Adelson didn't give details of the potential investment. India now has only one legal casino, in the western state of Goa, a Portuguese colony until 1961.

Las Vegas Sands is investing more than US$15 billion building casinos in Singapore and Macau, the only place in China where casinos are legal. The company and rival Wynn Resorts are vying for the casino market in Asia, where economic growth is faster than in the US and Europe.

The Cotai Strip, modelled on the Las Vegas Strip, is on reclaimed land between Macau's Coloane and Taipa Islands. Mr Adelson plans to build as many as 14 hotels there by 2013. He spoke yesterday at the opening of the Four Seasons Macao, its second property in the district. The Four Seasons will be part of a complex of hotels that will have more than one million square feet of gambling space, three million square feet of shops and almost 21,000 hotel rooms.

Mr Adelson visited India, meeting the ministers of tourism and trade, before he arrived in Macau, he said yesterday, without giving details of their discussions. -- Bloomberg

Asian Market Fallout Set To Get Far Worse

Source : The Business Times, August 29, 2008

Property, stocks will be hit bad as foreign capital is pulled: symposium speakers

FALLOUT in Asian financial markets and institutions from the sub-prime crisis could become more serious now as foreign capital, from the US and other leading markets, is withdrawn, speakers at a symposium predicted yesterday. Asian property markets - in China and Vietnam especially - are likely to be hit hard while stock markets could take a battering, along with banks and other financial institutions, they suggested.

'There may be a sudden shift in capital flows as a result of fallout from the sub-prime crisis,' warned South Korea's former commerce minister Duck Koo Chung at the conference organised by the Asian Development Bank Institute (ADBI) and the North East Asia Research Foundation (NEAR).

'Coming weeks will be crucial' in this regard, Mr Chung later told BT.

ADBI dean Masahiro Kawai, who told the conference that 'global financial turmoil may continue longer than hoped for', suggested to BT that a flight from Asian property market investment by banks, investment funds and various stock market vehicles could damage these institutions as the property boom unwinds.

The warnings came as a sobering counter to the widely held view that Asian markets and institutions are likely to escape relatively unscathed from the sub-prime credit crunch that has wrought havoc upon major investment banks and others in the US and Europe. The theory of a 'decoupling' of Asian economies from outside problems has similarly been shattered by recent events.

Recent weeks have seen the collapse of a series of property development firms in Japan as US and other investors pulled funds from them. The most recent collapse - developer Urban Corp - marked Japan's biggest corporate bankruptcy this year and the implication of yesterday's warning at the conference was that firms elsewhere in Asia could be facing a similar fate.

Mr Chung told BT that property markets in China and Vietnam are especially vulnerable, while South Korea's property market is also facing problems along with those of other East Asian economies. 'There will be another round of credit crisis in developing economies', as money is 'pulled', he said. Foreign direct investment as well as portfolio investment in many Asian economies has been directed into property, added Mr Chung, who is now chairman of NEAR.

The cause of the US dollar's strength in recent weeks has been partly to do with the repatriation of investment funds from overseas, and this process could accelerate now as a fresh credit crunch threatens, in spite of injections of financial liquidity by the US Federal Reserve, Mr Chung commented. 'This will lead to a further correction in asset markets' in Asia and elsewhere, he suggested.

'We have been planting the seeds of the current crisis for many years,' said Mr Chung, who noted that Asia had supplied much of the financial liquidity that fed asset bubbles in the US and elsewhere. Now that US credit markets have seized up, the Fed is having to pump liquidity but this 'can only jeopardise the anchor position of the dollar' in global financial markets.

Recent Fed actions 'imply an expectation of continuing stress in financial markets', and meanwhile, economic slowdown has hit both Japan and Europe, Mr Kawai noted at the conference.

CapitaLand Sells 30% Stake In Menara Citibank In KL For M$176m

Source : The Business Times, August 29, 2008

CapitaLand is divesting its 30 per cent stake in Menara Citibank, a 50-storey office tower in Kuala Lumpur's Jalan Ampang, for a consideration of RM$176 million (US$52 million). Upon completing the divestment, CapitaLand will recognise a gain of about $22.1 million (US$15.6 million).

CapitaLand owns the asset through its stake in Inverfin Sdn Bhd, whose principal asset is Menara Citibank. The Singapore-based property giant is making divestment along with all the other shareholders of Inverfin, who are selling their respective shareholdings in Inverfin to IOI Corporation Berhad.

Development Charge Rates Mostly Flat

Source : The Business Times, August 29, 2008

The Ministry of National Development (MND) has left development charge (DC) rates - which may be payable for enhancing the use of some sites or building a bigger development on them - unchanged for most use groups, including commercial, landed residential and hotel/healthcare.

However, the average DC rate for non-landed residential use has been trimmed 6 per cent while the average DC rate for the industrial/warehouse use group increased by 0.1 per cent.

The new DC rates take effect from Sept 1, 2008. MND revises the DC rates twice a year in consultation with Chief Valuer, who takes into account current market values.

DC rates are listed by use groups across 118 locations or geographical sectors throughout Singapore. Under the latest revision, the boundaries of eight geographical sectors have been re-demarcated to better reflect current market values.

Fragrance Is Top Bidder

Source : The Straits Times, August 29, 2008

THE Fragrance Group, a hotel and property developer, has submitted a whopper bid in a tender for the use of two blocks at the old Changi military camp.

Its Fragrance Hotel Management has offered a monthly rent of $125,000, or $24.52 per sq m (psm), for the vacant state properties, which it plans to develop into a hotel.

The bid is miles ahead of the $28,500-a-month guide rent set by the Singapore Land Authority (SLA), which is effectively the landlord.

Fragrance’s offer is also twice as much as the next bid - $61,000 a month, or $11.97 psm - lodged by Forward Alliance, which is primarily in the general wholesale trade.

Orientus (Asia) Holdings, a new entrant in the property development sector, was next with a $52,000-a-month offer.

Two other bids came in at just $15,099 and $13,000 a month.

It is understood that the keen response will prompt the SLA to release the other four blocks at the Hendon Road camp for interim use, possibly also as hotels.

It earlier said it would consider leasing out the other blocks.

The lease for the first two blocks and a covered shed is for an initial term of three years, renewable up to 2018. The properties sit on 9,666 sq m of land, nearly twice as large as a football field.

The dilapidated three-storey buildings have a gross floor area of 5,097 sq m.

The SLA has said a hotel will help transform Changi Point into a homely, seaside destination with lots to do.

Property consultants believe a hotel on the site, likely at the mid-tier level, is appropriate, given Changi’s charm.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, says such a hotel will need a unique concept to differentiate it from nearby competitors.

Fragrance Hotel directors could not be reached for comment.

The firm is part of the listed Fragrance Group and is known for its budget hotels. It now has 18 no-frills outlets in Singapore, including those in Geylang and Balestier.

Fragrance Group chief executive Koh Wee Meng, 45, recently made headlines with his debut at No. 24 on Forbes magazine’s list of the 40 richest Singaporeans. He has a net worth of $230 million.

The SLA will spend the next two to three months evaluating the bidders.

‘Among other factors, the SLA would consider the best value for the state based on allowable uses and, in this case, hotel, business concept, track record and the financial health of the company,’ it said yesterday.

Shunfu Ville Gets HDB Approval To Go Private

Source : My Paper. Fri, Aug 29, 2008

SHUNFU Ville, an HUDC estate in Marymount Road, has been privatised.

The Housing Board (HDB) approved the required mandate for the estate to go private more than a week ago.

Out of 18 HUDC estates in Singapore, Shunfu Ville is the 13th to go private.

In April, my paper reported that a mass-signing exercise by residents of its 358 units had secured enough votes to go ahead with the move.

This was after an unsuccessful exercise in 2001 held by Shunfu's pro-tem committee, which fell short of the 75 per cent of votes needed. At the time, only 50 per cent agreed to privatisation.

According to the chairman of the committee, Mr Philip Liau, 57, gaining approval from the flat owners had not been easy.

Some residents were reluctant because of the uncertain economic outlook and the high cost of privatisation, a media report said.

Now, Shunfu's residents are allowed to sub-let their units without prior approval from HDB. They will also be allowed to purchase a second property.

Lessees will be able to re-finance or re-mortgage their properties.

When an estate is made private, HDB takes over the ownership of common areas, such as carparks, along with the management of the estate from the town councils.

BCA Taps China As Costs Go Through The Roof

Source : The Business Times, August 29, 2008

Construction industry can't cope with demand; tender price index shoots up

With the cost of construction escalating to new highs, the Building and Construction Authority (BCA) has flown missions to China in the hope of attracting construction companies to set up business here.

A spokesman for BCA said: 'A few Chinese contractors have since registered with BCA.'

Many firms were weakened after the construction industry hit rock bottom at the turn of the last decade. As demand picks up again, the industry cannot cope with the upswing in jobs.

One industry player put the number of top-tier construction companies currently at 45, down from 100 during the last peak.

A spokesman for the Singapore Contractors Association Ltd (SCAL) added: 'The reduced capabilities of (construction) companies and their respective available resources were directly proportionate to construction contracts awarded during the period of the downturn.'

BCA said that, currently, it has more than 6,000 firms registered with its Contractors Registry. 'During the last prolonged downturn in the construction industry, the number of firms did not change much but many had reduced their capacity, in varying degrees, to cope with the downturn. As a result, the sudden steep upsurge in construction demand recently has added tremendous pressure on the supply of construction resources and contracting capacity,' BCA added.

According to a report by construction cost consultant Rider Levett Bucknall (RLB), Singapore has risen the fastest on its International Tender Price Relativity Matrix.

The report reveals that between October 2007 and July 2008, Singapore's Tender Price Index (TPI) - which is based on a universal basket of construction cost variables - increased by 18.7 per cent.

Singapore ranks 13th on the matrix with an index score of 122, below cities like New York (154), London (151) and Honolulu (141).

According to RLB, the cost range for Premium Office Buildings is $2,450- $4,580 per square metre in Singapore, $3,115-$4,407 psm in New York, $6,230- $8,049 psm in London, and $2,505-$3,373 in Hong Kong.

Apart from 'volatile commodity prices', 'high demand and competition for limited resources, (and) the lack of tendering capacity among contractors', has also worsened the rise in building costs.

A Citi note this month highlights that crane rentals surged to a record high of $446 per tonne per month (up 7 per cent quarter-on-quarter and 29 per cent year-on-year). So, the cost of building materials is not the only worry the industry faces.

Citi expects other major infrastructure projects to take up the slack after the integrated resorts (IRs) are completed. Its forecast seems in line with RLB's projection for the Singapore TPI, which RLB expects to increase by 20 per cent for the whole of 2008, and 15 per cent for 2009.

United Engineers Ltd (UEL) managing director Jackson Yap does agree that resources are tight. 'Currently, most contractors are overstretched with projects, and this is on top of the postponement of projects by the government and some private developers,' he added.

To date, $4.7 billion worth of government construction contracts have been deferred.

Mr Yap reckons the TPI will increase by 20 per cent in 2008 but does not expect it to increase by more than 10 per cent next year. 'The outlook for the construction industry at least for the next three years will be good,' he added.

Bovis Lend Lease, which is building 313@Somerset on Orchard Road, said that there are signs of the TPI moderating. And this could be attributed to rising costs.

A spokesman for Bovis Lend Lease said: 'While the construction market is still pretty tight based on the backlog of work flowing through from the major capital investments in the last 12 months, there are discernible signs of the industry's growth decelerating.' High costs and the uncertain global economic climate are contributing to this.

CapitaLand maintains that its projects, 'are progressing on schedule'.

City Developments Ltd is taking a slightly different tack. It said earlier this month that 'the group will proceed to construct developments where it has favourably secured construction costs from reputable and strong construction companies, even before launching them'.

More players in the construction industry will certainly ease some cost pressure but SCAL cautions that companies working in any new market will need to understand the regulatory environment and market practices.

SCAL's spokesman added: 'The effort and final success to bring new construction companies to work here will be limited and will not help much in relieving pressure in the industry.'

But he added: 'The industry is always open to foreign competition, and local construction companies have always been competitive in their project prices, quality and delivery time.'

Swissotel Merchant Court Up For Sale

Source : The Business Times, August 29, 2008

Clarke Quay hotel on the market for $330m-$380m

After a holding period of barely two years, a fund managed by LaSalle Investment Management which bought Swissotel Merchant Court in the Clarke Quay area is putting the 476-room property up for sale.

The hotel, which stands on a site with a remaining lease of about 85 years, is being sold subject to a long-term management contract with Swissotel, part of Fairmont Raffles Hotels International.

The indicative price is understood to be in the $700,000 to $800,000 per room range, translating to an absolute quantum of around $330 million to $380 million.

The LaSalle Investment Management fund that currently owns the property bought it in late 2006 for about $250-300 million, it is understood.

The hotel, which stands on a site with a remaining lease of about 85 years, is being sold subject to a long-term management contract with Swissotel, part of Fairmont Raffles Hotels International.

Despite the softer visitor arrivals into Singapore lately, Jones Lang LaSalle Hotels, the sole marketing agent for the property, is confident that investors will find the property appealing given that Asia's hotel investment market is tightly held. 'Long-term investors don't take a weekly or monthly perspective, and the overall infrastructure being invested in Singapore gives them comfort on the long-term growth prospects here,' says Mike Batchelor, managing director, investment sales (Asia) at JLL Hotels.

The hotel will be marketed through an international tender that will close on Oct 3.

'Investor interest for the property is expected to be strong. We anticipate the property will attract interest from Europe and the Middle East as well as from the more traditional investment markets across North and South Asia,' Mr Batchelor said.

In May last year, CDL Hospitality Real Estate Investment Trust bought the nearby Novotel Clarke Quay in a deal that priced the 398-room hotel at $219.8 million or about $552,000 per room. Mr Batchelor argues that Swissotel Merchant Court's average room size of 30 square metres is larger than Novotel Clarke Quay's. Also, room rates are higher at Swissotel Merchant Court, which would allow for a higher pricing on the hotel. 'Historically, hotels in Singapore have been transacted at net yields ranging from about 4 per cent to 5.5 per cent,' he noted.

The LaSalle Investment Management fund reportedly bought Swissotel Merchant Court in 2006 from Fairmont Raffles Hotels International (owned by Kingdom Hotels International and Colony Capital), which had in turn acquired it as part of the entire hotel business of Raffles Holdings in 2005.

The hotel has three food-and-beverage outlets, conference facilities, an Amrita Spa complete with a fitness centre.

'The incoming purchaser will also have the opportunity to further enhance the asset through the redevelopment of the prime riverfront space overlooking Clarke Quay,' said JLL Hotels senior vice-president Tom Oakden.

'The hotel's ground floor space offers the ideal location for a new state-of-the-art indoor/out- door food-and-beverage facility, tying in well with plans to revitalise the riverfront precinct and new signature events such as The Singapore River Festival,' he added.

Swissotel Merchant Court Offered For Sale

Source : The Business Times, August 28, 2008

Swissotel Merchant Court in Singapore is being offered for sale by international tender through Jones Lang LaSalle Hotels.

The 476-room hotel also has three food & beverage outlets, conference facilities and an Amrita Spa and fitness centre.

'The incoming purchaser will also have the opportunity to further enhance the asset through the redevelopment of the prime riverfront space overlooking Clarke Quay,' said Jones Lang LaSalle Hotels senior vice-president Tom Oakden.

'The Hotel's ground floor space offers the ideal location for a new state-of-the-art indoor/outdoor food & beverage facility, tying in well with plans to revitalise the riverfront precinct and new signature events such as The Singapore River Festival,' he added.

S&P Assigns BB Long-Term Credit Rating To Allco Reit

Source : The Business Times, August 28, 2008

Standard & Poor's Ratings Services on Thursday said it has assigned its 'BB' long-term corporate credit rating to Allco Commercial Real Estate Investment Trust (Allco REIT).

At the same time, it placed the rating on CreditWatch with positive implications.

'The rating on Allco REIT reflects the trust's smaller asset base compared with its global peers'.

It has nine properties (excluding units in unlisted propertyfund Allco Wholesale Property Fund).

Allco REIT also has high tenant concentration, with its top two tenants representing about 30 per cent of the gross revenue of its portfolio,' said Standard & Poor's credit analyst Wee Khim Loy.

'In addition, the trust's market and tenant diversity could decline. Should Allco REIT's manager, Frasers Centrepoint Asset Management (Commercial) Ltd, continue the previous manager's strategy to exit the Australian market and focus on properties in Singapore and Asia, the trust's asset portfolio and cash flow stability would be negatively affected.'

The above weaknesses are partly offset by the quality of Allco REIT's investment portfolio.

The Asian properties, which require minimal capital expenditure, are mostly strategically located in central business districts.

These benefits are complemented by the stable rental cash flow of Australian properties, which are backed by longer-term leases.

In addition, the weighted average lease term of 4.8 years for Allco REIT's combined diversified portfolio is higher than the average for comparable real estate investment trusts focusing on Asian office commercial properties.

Allco REIT's nine properties have more than 400 tenants in total, spanning five markets in three countries.

The diversification strength of the investment portfolio provides cash flow stability to the business.

The rating is also supported by the enhanced financial flexibility of Allco REIT following the change in the ownership of its manager.

Impending refinancing risk declined after Allco REIT was 'de-linked' from Allco Finance Group (AFG). Frasers Centrepoint Ltd (FCL) acquired 17.6 per cent of Allco REIT and 100 per cent of its previous manager, Allco Singapore Ltd, from AFG on Aug 14, 2008.

Allco REIT will be eventually renamed Frasers Commercial Trust. FCL is the wholly owned property arm of Fraser and Neave Ltd, a leading consumer group with a satisfactory credit profile.

Property Transactions With Contract Dates Between Aug 11th - 16th, 2008

Chinese Banks Told To Be Careful On Property Loans

Source : The Business Times, August 28, 2008

(BEIJING) China's banking regulator and central bank yesterday ordered commercial lenders to be more careful when lending to real estate developers.

In an joint statement published on the People's Bank of China's website (www.pbc.gov.cn), they said that banks should not lend any money to property developers for land purchases.

The statement also encouraged banks to give preference in their lending to affordable housing projects.

China has introduced a raft of measures to cool the property market, including a clampdown on loans for construction, a requirement for developers to build quickly or lose their land, and a tax on land price appreciation.

The tightening steps have already hit a few markets hard, especially in the southern cities of Shenzhen and Guangzhou.

The statement posted on the central bank's website was dated July 29 and said the guidelines should go into effect immediately. -- Reuters

New Dubai Registration Law To Curb Speculation

Source : The Business Times, August 28, 2008

Sales of unfinished properties must be registered before they can be resold

(DUBAI) Dubai has issued a new law to regulate the sale of real estate still under construction in an effort to curb speculation that has sent property prices in the Gulf Arab emirate skyrocketing, an official said on Tuesday.

Upside: Dubai property prices will probably jump 35 per cent this year and another 8.5 per cent in 2009, according to a poll

Under the law issued this week, sales of off-plan properties in Dubai must be registered with the department before they can be resold, Marwan bin Ghalita, chief executive of the Dubai Real Estate Regulatory Authority (RERA), said.

Standard Chartered Bank warned in July that Dubai's property market showed signs of overheating as speculators betting on quick gains inflate prices of units still under construction.

'It will help to curb speculation,' Mr Marwan said of the mew law. 'In Dubai we are introducing laws step by step . . . Now everything is going to be transparent because it is with the Land Department.'

Dubai property prices have surged 79 per cent since the beginning of 2007, Morgan Stanley said earlier in the month.

Demand for real estate in Dubai, home to the world's tallest tower and three man-made islands in the shape of palms, has surged since the government first allowed foreigners to invest in properties in 2002.

The government passed a freehold property law in 2006 granting foreigners the right to own properties at selected developments.

The off-plan law follows the issuance of a mortgage law last week as part of a drive to regulate the Gulf Arab business hub's booming real estate sector.

It will also prevent master and sub-developers from charging transfer fees on off-plan sales, Mr Marwan said. Developers however can be paid administration fees of 1,000-3,000 dirhams (S$386-1,157) for each transaction after approval by the Land Department, he said.

Property prices will probably jump 35 per cent this year and another 8.5 per cent in 2009, when they are expected to peak as Dubai takes measures to weed out short-term speculators, a Reuters poll showed on Tuesday.

The analysts said property prices would fall at least 15 per cent from peak to trough. -- Reuters

Condo Site Near Circle Line Station Up For Sale

Source : The Straits Times, August 28, 2008

A LAND plot for a condominium has been made available for sale in Serangoon Avenue 3, next to the Lorong Chuan MRT Station on the new Circle Line.

Despite lacklustre activity in the private housing market, property consultants expect this 1.39ha site to be favourably received, given its choice location.

'Although the current cautious mood and slow sale activity in the residential market have diminished developers' appetite for development sites, there is a high probability that the site will be released for sale by tender because of its favourable location with good surrounding amenities,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

The plot is adjacent to Nanyang Junior College and near other schools such as St Gabriel's Primary and the Australian International School. It is also close to Serangoon Gardens and the Chomp Chomp food centre, as well as the mega mall in the future Serangoon Hub.

Mr Mak expects site bids of between $83 million and $107 million, or $200 to $255 per sq ft (psf) of potential gross floor area.

Mr Ku Swee Yong, director of business development and marketing at Savills Singapore, was slightly more optimistic. He said bids could come in at about $130 million, or $300 per sq ft of potential gross floor area, based on an expected selling price of $850 psf for the finished units.

'There are a couple of smaller developers who may be in need of land, and who may find this medium-sized mass market property suitable,' Mr Ku said. A new condo on the site could host 350 to 400 units of 1,000 to 1,200 sq ft each.

The Government yesterday said the site was open for applications by interested buyers. If a developer submits a minimum acceptable bid, it will trigger a public tender for others to submit offers.

Laguna Park En-Bloc Spat - Condo's MC Chairman Nabbed

Source : The Straits Times, Aug 28, 2008

Arrest followed 'glued doors' attack at two units this week; he's now out on police bail

THE chairman of the management committee at Laguna Park, recently hit by a spate of vandalism, was arrested this week on suspicion of gluing shut two residents' apartment doors.

No charges were brought against Mr Lee Kok Leong, 61, who has since been released on police bail.

He could not be contacted yesterday despite several attempts to do so.

A resident who declined to be named said he was surprised by the news of the arrest as Mr Lee was well respected in the 530-unit East Coast condominium, whose residents are now split over a collective sale.

The resident said of Mr Lee: 'Although he supported the en-bloc sale, he had claimed he was a victim - he said his mailbox was glued shut.'

The rift over the collective sale has turned ugly in recent months after several instances of vandalism against those opposed to the sale.

In the latest incident on Monday, two residents found their apartment doors stuck to the frames by glue.

Both live in Block E, and are against the sale.

In recent months, cars belonging to residents not keen on the sale were splashed with a corrosive liquid or paint, or scratched; mailboxes have also been found with glue in their keyholes.

Some residents were hit more than once.

One resident who found glue on the door to her apartment this week said she was worried that the culprits have accomplices, and did not feel safe.

To address the fears of residents like her, an extraordinary general meeting will be called in October.

Contacted yesterday, a spokesman for the management committee told The Straits Times that the purpose of the meeting was to find out where the residents stood on having closed-circuit television (CCTV) cameras installed.

'The big question is whether they would be willing to pay. Everyone wants security, but who is going to pay for it in the end?

'If they want a CCTV camera outside every unit, it would be very costly,' he said.

The move was in response to the vandalism in the estate, he added.

The possibility of a collective sale of the units in this seaside estate arose last December.

Residents have until the end of this year to secure an 80 per cent vote to put it up for sale.

So far, 65 per cent have indicated their agreement to it.

Residents have been told by a property valuer that an average unit could be worth more than $2.1 million in a collective sale, and the penthouses, almost $4m.

Developers Weigh Odds For Launches After Ghost Month

Source : The Business Times, August 28, 2008

Some may want to test market now rather than risk deterioration in sentiment

Some developers have been quietly oiling their launch machinery in the past few weeks as they get ready for previews and launches, especially with the Hungry Ghosts Month ending this Saturday.

Boulevard Vue's facade will be designed by well-known Japanese interior designer Super Potato. The freehold project's 26 apartments (one per floor) are about 4,500 sq ft each, while the two duplex penthouses occupying the top four levels are 8,000-plus sq ft and 11,000-plus sq ft.

With the property outlook expected to worsen before it gets better, there may just be an incentive for some to launch their projects sooner - or wait it out till late-2009/2010, a seasoned property consultant told BT.

Another consultant, Knight Frank executive director Peter Ow, said: 'Whatever name you call it - preview, private invitation, etc, the aim is for developers to test the market. If the response is sufficient at the price they want, they'll begin sales. If the response isn't up to what they want, they won't sell. As a developer, you don't want to risk launching a project, selling a few units and getting stuck.'









Projects that have begun to be previewed this month include Far East Organization's 85-unit freehold Miro at the corner of Lincoln and Keng Lee roads (at an average $1,600 per square foot) and a 54-unit cluster housing project at Greenwood Avenue. Units in the 103-year leasehold development range from 3,000 to 3,700 sq ft.

Over at Nathan Road, Tat Aik Group has been inviting potential buyers to view Nathan Residences, a 91-unit freehold project priced at around $2,000 psf on average.

Keppel Land is also expected to release this weekend in Hong Kong and Singapore about 30-40 units under the next phase of Reflections at Keppel Bay.

The average price is expected to be similar to the earlier phase launched around April last year, at about $1,800 to $2,000 psf. Deferred payment is expected to continue to be offered.

Hong Fok Corporation's 360-unit Concourse Skyline apartments at Beach Road, KepLand's 56-unit freehold Madision Residence near the junction of Bukit Timah and Keng Chin roads, and City Developments Ltd's The Arte at Thomson are understood to be other projects that could hit the market soon.

In the high-end segment - where sentiment is weakest - Far East Organization, which has already sold two units at its 28-unit luxury development Boulevard Vue at Cuscaden Road, opened its showflat for the project recently and is expected to step up marketing activity.

The project's 26 apartments (one per floor) are about 4,500 sq ft each, while the two duplex penthouses occupying the top four levels are 8,000-plus sq ft and 11,000-plus sq ft. Prices for low- and mid-level units in the 33-storey freehold project range from $3,600 psf to $3,900 psf.

BT understands the price tag for the bigger penthouse will likely be around the $4,500 psf mark, working out to an absolute sum of about $50 million. If achieved, the absolute amount would set a new record for a penthouse in Singapore.

Boulevard Vue's facade will be designed by well-known Japanese interior designer Super Potato. BT understands that the unit layouts will be customised to buyers' preference.

A critical factor affecting developers' launch decisions is pricing, given the bearish sentiment.

'Pricing will be more realistic for fresh launches, but for projects released earlier, it would be difficult for established developers to trim prices without upsetting earlier buyers, especially VIPs,' the seasoned property consultant said.

Agreeing, Jones Lang LaSalle Singapore's residential head Jacqueline Wong said: 'Such developers may just hold the remaining units in the project if necessary and have another shot at selling them upon the project's completion. For new projects too, the financially stronger players can hold off developing for a while.

'However, developers who are fairly new or need the cashflow will have to be realistic in their pricing and will be more amenable to negotiating with buyers.'

Another industry observer said that instead of outright price cuts, it may be easier for developers to attract new buyers into existing projects by offering furnishing vouchers, guaranteed yields (for newly completed projects) or arranging for attractive mortgage packages.

A mid-sized developer said: 'We have to accept the fact that prices have to be marked to market; otherwise we can't sell enough units to generate the required cashflow. For sites bought within the past 12 months, developers would need to sell at least 50 per cent of the development to generate sufficient cashflow to finance the project's construction - taking into account high land price paid and rising construction costs, among other factors.'

Sim Lian Net Profit Up A Third To $44m

Source : The Business Times, August 28, 2008

PROPERTY and construction group Sim Lian has posted a 33 per cent jump in fiscal full-year net profit to $44.1 million despite rising raw materials costs, thanks to higher revenue, a reversed impairment loss and a divestment.

Sim Lian also plans to launch three projects in fiscal 2009 at Surrey Road, Keng Lee Road and its second design, build and sell scheme project at Simei Road, it said in its financial statement, but added that they are not expected to contribute significantly to 2009 financials.

The company declared a first and final cash dividend of 1.6 cents per share.

Revenue rose 22 per cent to $389.6 million for the 12 months ended June 30, 2008. Property development sales were up 20 per cent to $250.4 million due mainly to revenue recognised from its projects, The Premiere @ Tampines and Carabelle.

Other operating income rose 92 per cent to $5.2 million due mainly to the divestment of its data centre.

Sim Lian's construction division posted a 22 per cent rise in revenue to $116.7 million, thanks to higher-value contracts clinched this year as well as a higher percentage of project completion.

Earnings per share rose to 7.8 cents from 6.3 cents, while its cashflow fell 33 per cent to $53.3 million.

The cost of raw materials and consumables jumped 56 per cent to $13 million, mainly due to pricier industrial lubricants.

The company also posted a negative balance of $258,000 in other operating expenses, thanks to a $6 million increase in valuation of its investment property and a $2.2 million reversal of impairment loss on property, plant and equipment. Stripping that out, other operating expenses would have jumped 58 per cent to $7.9 million due to a higher exchange loss recorded by its Malaysian subsidiary and in allowance for doubtful trade receivables.

Projects including The Premiere @ Tampines and Carabelle, as well as Clover by the Park at Bishan and The Amery at Telok Kurau - which were launched in June - are expected to contribute positively to the company's performance in fiscal 2009, said Sim Lian.

Despite rising construction costs and weak sentiment in the property sector, the company expects to achieve profitable operating results in fiscal 2009.

Singapore Is World's Top Brand

Source : My Paper, Thu, Aug 28, 2008

SINGAPORE is the best, based on how the Republic is perceived in leading international media.

This is according to a global survey of 200 countries conducted by Washington-based East West Communications, a company which helps countries improve the way they are viewed by the world.

All 192 members of the United Nations were included in the survey. The remaining eight were major non-members and territories, including Hong Kong and Taiwan.

Hong Kong and Malaysia were ranked second and third respectively.

The bottom three countries were Sudan, Iraq and Afghanistan.

In its press announcement earlier this week, the company said it hopes that these results will encourage countries to strive for a better ranking in the future.

The current results are valid only for the second quarter of this year. The first full-year Global Index 200 will use the same methodology to cover this year, and the results will be published early next year.

'Using our reports, governments can address their branding and messaging weaknesses, and build on their strengths,' said Mr Thomas Cromwell, president of East West Communications.

The company analysed five million references to the 200 countries or regions in '38 leading publications and other news sources in the United States and worldwide', from April 1 to June 30 this year, to compile the survey.

Based on the number of country references or mentions alone, Singapore was ranked 17th while the US came first.

However, the survey also used a text-analysis system developed by Ohio's Perception Metrics - which comprises a dictionary of 16,000 words and phrases - to determine positive and negative messages in any given text.

From the analysis of these positive and negative messages, and the number of times a country is mentioned, a score was calculated for each country.

Branding expert and author of the book Corporate Image Management, Mr Steven Howard, attributes Singapore's high ranking to the positive news the country generates.

Mr Howard, who has lived here for 28 years, said: 'Singapore is strong in terms of business growth, manufacturing productivity and government initiatives.

'It is well known globally as a leader in implementing innovative concepts, ranging from Singapore Airlines being the first to fly the Airbus 380, to being the host city for the world's first night Formula One race.'

A country's brand is much more difficult to manage, he added. 'It is created by an amalgamation of everything that is linked to that country.'

The managing director of branding consultancy BrandStory Inc, Ms Reene Ho-Pang, said that people's perception of a brand is what makes it successful.

'A brand rests in the minds of the people. What people around the world say and share about Singapore is extremely important and reflected in the media,' she said.

But Ms Ho-Pang hopes Singaporeans will not get complacent about managing the country's brand image.

'We must continue to do the right things for our brand, to evolve and make it relevant to the world.'

TOP TEN
(East West branding survey, Q2 2008)

1. Singapore
2. Hong Kong
3. Malaysia
4. Taiwan
5. Australia
6. United Arab Emirates
7. Qatar
8. Monaco
9. Canada
10. United Kingdom