Thursday, October 30, 2008

Shui On To Delay Plan To Build Resorts In China

Source : The Business Times, October 30, 2008


(HONG KONG) The global credit squeeze has prompted Shui On Land to delay plans to build resorts in four cities in China's Yunnan province.

Mr Lo: 'Under the circumstances, it's just not realistic to expect us to obtain sufficient finances.'

'Under the circumstances, it's just not realistic to expect us to obtain sufficient finances,' said Vincent Lo, chairman of the Hong Kong-listed, Shanghai-based developer.

The billionaire was speaking in an interview in the western Chinese city of Chongqing yesterday.

The projects in Kunming, Diqing, Lijiang and Dali, costing as much as 50 billion yuan (S$10.9 billion), may be delayed until the second half of next year, Mr Lo said.

Central banks around the world are trying to thaw frozen credit markets and avert a global recession. China's economy, the world's fourth biggest, is under threat from weaker demand for exports and slumping property sales that may undermine investment.

Global credit and stock markets 'need to settle', Mr Lo said.

The 60-year-old is worth US$2.5 billion according to a Forbes magazine ranking of the world's richest people, published in March. Market declines may have trimmed that number.

He is the sixth son of Lo Ying-shek, the late founder of Hong Kong-based developer Great Eagle Holdings.

Shui On's shares fell 1.6 per cent to HK$1.26 in Hong Kong yesterday. The stock has lost 86 per cent this year, more than the 54 per cent decline in the benchmark Hang Seng Index.

China Vanke Co, the country's largest publicly traded real estate developer, this week reported a drop in third-quarter profit amid what it described as a housing market 'recession'.

Mr Lo was speaking at a ceremony to mark the start of construction of one of the office towers at its eight billion yuan Chongqing Tiandi project.

Hong Kong-based Winnington Capital may raise its stake in the project to 50 per cent from 20 per cent, according to chief investment officer Kenneth Hung. The fund is raising US$1 billion to invest in Chinese property, Mr Hung told reporters after the ceremony yesterday.

In May, Winnington bought 25 per cent of a Shanghai residential project from Shui On for US$162 million and may buy another 25 per cent, Mr Hung said. It may also invest in a Shui On project in Foshan, he said.

Shui On, known for the Xintiandi office and entertainment complex in Shanghai, has been expanding outside of eastern China. In May, the company said that it will invest in a software park in the north-eastern city of Dalian and it's also building replicas of the Xintiandi complexes in Wuhan, Hangzhou, Chongqing and Foshan. -- Bloomberg

Wing Tai Reports Q1 Earnings Fall Of 47%

Source : The Business Times, October 30, 2008

WING Tai Holdings said Thursday that its first quarter profit fell 47 per cent to S$32.6 million, from S$61.8 million a year ago as it saw lower profit contributions from associated and joint venture companies. Earnings per share fell to 4.13 Singapore cents, from 8.58 Singapore cents a year ago.

For the three months ended September 30, 2008, Wing Tai saw revenue climb 34 per cent to S$134.3 million, from S$100.2 million in the previous corresponding period. This increase is mainly attributable to the higher contributions from the development properties division, Wing Tai said.

Revenue for the current period came largely from the units sold in Helios Residences and The Riverine by the Park in Singapore, and Sering Ukay in Malaysia. Profits recognized from these projects also contributed to the increase in the group's operating profit from S$15.0 million to S$41.1 million, an increase of 174 per cent.

However, Wing Tai's share of profits of associated and joint venture companies fell by 88 per cent to S$7.8 million in Q1 due to the substantially lower profit recognition from the sale of residential units in VisionCrest and USI Holdings.

Looking ahead, demand for properties is expected to slow down with the slower economic growth and weaker market sentiment, Wing Tai said: 'The group will continue to monitor the market closely and will exercise prudent management to ride through these difficult times.'

As at September 30, 2008, Wing Tai's net gearing ratio is 0.4 times and it has no loan maturing in Singapore for the next twelve month, the developer said.

Property Transactions With Contract Dates Between Oct 13th - 18th, 2008

UK House Prices Fall 7.3% Y-O-Y In October

Source : The Business Times, October 28, 2008

(LONDON) English and Welsh house prices fell by 7.3 per cent in the year to October, with the pace of decline accelerating to take prices back to their lowest since March 2006, property consultancy Hometrack said yesterday.

Average house prices fell by 1.3 per cent to £163,200 in Hometrack's October survey, faster than the one per cent drop recorded in September.

Forecasters from London's Centre for Economics and Business Research predicted in a separate report yesterday that British house prices would fall by 25 per cent from their peak in the third quarter of 2007 to a likely trough at the end of 2009. This would take property prices to below 2004 levels.

The downturn in property prices - which have doubled since the start of the decade - is both a consequence and a cause of the economic gloom settling on Britain, where two-thirds of households own their own home.

Official data released last week showed that the British economy shrank for the first time in 16 years between July and September, contracting 0.5 per cent, and British Prime Minister Gordon Brown has warned that the country risks recession.

'The outlook for demand is set to remain weak as consumers focus their attention on the economy,' said Richard Donnell, Hometrack's director of research.

'The expectation of a forthcoming recession and rising unemployment will further undermine demand for housing and continued price falls are inevitable in the months ahead.'

Homes took an average of 11.9 weeks to sell, up from 11.5 weeks in September, and buyers paid just 89 per cent of sellers' asking prices, down from 90 per cent last month. - Reuters

Tokyo Residential Property Set For Full-Blown Decline

Source : The Business Times, October 28, 2008

Japan's slowing economy and the credit crisis has damped commercial, residential demand

(TOKYO/SHANGHAI) Tokyo residential property prices may be poised for a major decline because of excess housing supply and flagging demand, said Minoru Mori, chairman of Japan's biggest privately held developer. 'We foresee full-blown drops in residential property prices,' Mori Building Co's chairman said in an Oct 25 interview in Shanghai.

Gloomy days: The capital value of grade A office buildings in Tokyo's commercial business districts fell 2% on average as of March from three months earlier, according to an estimate by Jones Lang LaSalle

Japan's slowing economy and the credit crisis that tightened lending has damped demand for commercial and residential property in Japan. The slump in Tokyo's condominium market may last longer than the drop after Japan's asset-price bubble burst in 1990, according to an estimate by the Real Estate Economic Research Institute.

Condo supply in Tokyo fell 24 per cent for the first six months of the year from the same period a year earlier. The number of new condos put up for sale in Tokyo, which stayed above 80,000 units since 1999, fell to 69,194 units in 2007 because sales declined and inventories rose. Commercial real estate is holding up better than residential property, said Mr Mori.

'Tokyo's commercial property market remains relatively healthy. The current price decline probably won't be more than 10 per cent,' Mr Mori said.

Tokyo-based Mori has scrambled to manage the impact of the global financial market turmoil. Lehman Brothers Holdings Inc, which last month filed for the largest bankruptcy in history, was a tenant of the developer's Roppongi Hills complex, occupying 275,000 square feet of office space.

Nomura Holdings Inc, which agreed to buy Lehman's European and Asian assets, has expressed an interest in taking over Lehman's lease at Roppongi Hills, Mr Mori said in the interview. Japan's biggest brokerage also 'hinted' at possibly increasing the floor space it leases at the complex, he said.

Other tenants at the complex such as Goldman Sachs Group Inc are under long- term agreements that incorporate increases in the rents they pay, Mr Mori said. 'On a contractual basis, we don't foresee any problems,' he said.

The capital value of grade A office buildings in Tokyo's commercial business districts fell 2 per cent on average as of March from three months earlier, according to an estimate by Jones Lang LaSalle.

As commercial prices declined, Mr Mori said now is the time to prepare for land acquisition for large-sized projects similar to Roppongi Hills. 'We have plans to introduce second, third, fourth and fifth Roppongi Hills,' said Mr Mori. 'This is a good time to plan for large-size projects.'

Mori is in talks with local residents to redevelop Toranomon-Roppongi. The developer plans to build a 46-storey commercial tower and a six-floor residential building on a 15,350 square metre site in 2009.

Other projects under planning include Loop Road No 2 from Toranomon to Shimbashi in central Tokyo and a waterfront development project in Yokohama, according to the company's website.

These projects will require infrastructure such as roads and large blocks of available land, both of which may take some time, he said.

Mori Building's Shanghai World Financial Center, China's tallest building, was opened to the public on Aug 30. Space in the building was leased 'faster than expected' to near 50 per cent of capacity currently from 40 per cent in August, Mr Mori said.

Japanese financial institutions such as Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc have taken space, he said. Demand for space may slow with the opening of new office developments in Shanghai, such as Sun Hung Kai Properties Ltd's Shanghai IFC complex, located next to Mori's building.

'As new developments come on line, it might be difficult to enjoy the same occupancy rates as before, and net demand might decline somewhat,' Mr Mori said. -- Bloomberg

Foreclosure Crisis Vexes US Govt

Source : The Business Times, October 28, 2008

Over 4m homeowners with a mortgage are at least one month behind on their payments as at end-June

(WASHINGTON) Each day from July through September, more than 2,700 Americans lost their homes in foreclosure. That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programmes have done little to help troubled homeowners.

Sign of the times: The No1 reason people fall behind on their mortgage is loss of a job, or some source of income, perhaps from a divorce or death of a spouse. If a borrower is unemployed, lenders do not have many options but foreclosure

The mortgage market's troubles have proved to be far more serious and intractable than most in government or the private sector had predicted a year ago.

'We are behind the curve. We are falling behind,' Sheila Bair, head of the Federal Deposit Insurance Corp (FDIC), told a Senate hearing last week. 'There has been some progress, but it's not been enough, and we need to act. And we need to act quickly, and we need to act dramatically to have more wide-scale, systematic (loan) modifications. . .'

More than four million homeowners with a mortgage were at least one month behind on their payments at the end of June, according to the latest data from the Mortgage Bankers Association, and a record 500,000 had entered the foreclosure process.

So why is the foreclosure crisis so hard to fix? There are five main reasons: 1) Crashing home prices: A massive speculative bubble in housing prices caused millions of Americans to think of their homes as an investment, rather than a place to live.

Now prices are plummeting, especially in once-sizzling markets like California, Florida and Nevada. And the bleeding might not stop until the end of next year.

The median home price in the US dropped 9 per cent in September from a year ago to US$191,600, and is down 17 per cent from the peak in July 2006, the National Association of Realtors said last week. Already, 23 per cent of homeowners with a mortgage owe more on their loans than their homes are worth, and that figure is expected to rise to 28 per cent by this time next year, according to Moody's

2) Investor speculation: Plunging prices have had even more impact on investors than on homeowners because investors have less emotional attachment to a house. They are even more likely to walk away, especially if they have put little money into a property. Investors purchased one of every five homes last year, and almost one of every three when the market peaked in 2005, according to the Realtors trade group.

Now, more than 30 per cent of properties in the foreclosure process are owned by someone with a different address, indicating the home is likely owned by an investor, according to foreclosure listing service RealtyTrac Inc. Government programmes to help homeowners are specifically designed not to help such investors, though in reality it may be hard to weed them out.

3) Complex investments: Traditionally, lenders evaluated borrowers carefully because they held onto the mortgages for the life of the loan. That process started to change in the late 1980s, as Wall Street found new ways to package the loans into securities to sell to investors.

Investors were attracted to these new mortgage-backed securities because they paid better returns than government bonds.

At the beginning of this decade, the Federal Reserve started cutting interest rates to historic lows. So investors poured money into the US mortgage market, particularly into securities made up of high-interest mortgages made to borrowers with poor credit records.

The high-interest, risky mortgages, called 'sub-prime', boomed, from US$160 billion in new loans in 2001 to more than US$600 billion in both 2005 and 2006, according to Inside Mortgage Finance, a trade publication.

Lenders stopped worrying about the creditworthiness of borrowers and offered them ever-riskier mortgages. Most of those loans were made by commission-driven mortgage brokers, who had nothing to lose if the mortgage went bad because it had been resold. 'By the time it defaults, it's somebody else's headache,' said Barry Ritholtz, CEO of research firm FusionIQ.

4) Job losses: The No 1 reason people fall behind on their mortgage is loss of a job, or some source of income, perhaps from a divorce or death of a spouse. If a borrower is unemployed, lenders do not have many options but foreclosure.

Two years ago, about 36 per cent of mortgage delinquencies were caused by loss of income or unemployment, according to research by mortgage finance company Freddie Mac. But that number has risen to 45 per cent this year as the unemployment rate has ticked up to a five-year high of 6.1 per cent.

Jon Falen, 33, put his four-bedroom house in Olathe, Kansas on the market more than two years ago, after health problems forced him to leave his job as an air traffic controller. Mr Falen and his wife, now delinquent on their two home loans, are finally scheduled to sell their house next month. But there is a big catch: The buyer has agreed to pay only US$490,000, which is US$70,000 less than what the couple paid for it in 2002.

Making matters worse, Mr Falen and his wife owe US$675,000 to two lenders because they used their home equity to pay off student loans and remodelling expenses. Though Mr Falen and his family seem to have avoided becoming another foreclosure statistic by cashing out on retirement plans and dipping deeply into savings, he is chastened by the drawn-out experience.

5) Falling behind again: It's hard to fix something that keeps breaking. Roughly one-third of all sub-prime loans modified in the third quarter of last year were delinquent again within 10 months, according to a Credit Suisse report released this month.

Maria Martinez, 57, an administrative worker at the county jail in Stockton, California, is typical of homeowners who have gotten help, but not enough. She is three months behind on her mortgage, even after receiving a loan modification earlier this year.

Though Ms Martinez bought the house more than a decade ago for only US$76,000, she now owes about US$230,000 because she refinanced her home loan several times.

- So what has and should be done? The scale of the mortgage crisis became clear in July 2007 when Countrywide Financial, then the largest US mortgage lender, reported an unexpected surge in defaults in high-quality mortgages.

Three months later, the Bush administration announced a new mortgage industry coalition - dubbed the Hope Now alliance. The coalition had an 'aggressive plan to reach more homeowners and help them find a way to stay in their homes', Treasury Secretary Henry Paulson said at the time.

Faith Schwartz, the coalition's executive director, said the effort was never meant to be the only solution to the foreclosure crisis. She says there 'has been a tremendous effort' on the industry's part, noting that 1.9 million households have received letters urging them to call a housing counsellor.

Industry and government responses have also drawn fire from consumer advocates for being too slow and too narrow. The Federal Housing Administration (FHA), a government agency that backs loans to borrowers with weak credit, says it has helped about 400,000 borrowers refinance over the past year, though only about one per cent were behind on their loans.

This month, the FHA started the 'Hope for Homeowners' programme, included in legislation passed over the summer by Congress. It is designed to let another 400,000 troubled homeowners swap their mortgages for traditional 30-year fixed rate mortgages, but only if lenders agree to reduce the value of a loan and take a loss.

But there are still questions about how eager lenders will be to participate. Faced with public outrage that they passed a US$700 billion plan to rescue the financial industry, politicians in Washington are going to keep trying to find ways to fix the foreclosure crisis. One promising approach came this month when 11 states entered into a more than US$8 billion settlement with Countrywide Financial and its new parent Bank of America Corp.

The settlement, which goes into effect on Dec 1, is projected to help an estimated 400,000 Countrywide borrowers by allowing them to replace risky loans with ones at substantially lower interest rates.

And in Washington, the FDIC's Ms Bair has proposed a plan in which the government would provide guarantees for mortgages that have been reworked by banks, lowering payments to more affordable levels. All eyes now are on Ms Bair, Mr Paulson and other top officials to see if the government can craft a plan that gets at the heart of the global financial meltdown - the US foreclosure crisis. -- AP

51% Of US Owners Say Their Property Value Fell

Source : The Business Times, October 30, 2008

Perception of values more accurate as economy's weakness hits home: survey

(NEW YORK) A majority of US homeowners believe the value of their property fell over the past year, according to a survey of real estate market confidence by data company

On the block: Foreclosure-related sales accounted for 35%-40% of total September sales

The survey of 1,388 homeowners between Oct 7 and Oct 9 found 51 per cent said their houses had lost value, while 49 per cent believed the value had stayed the same or increased, Seattle-based Zillow found.

In an earlier survey, taken from June 30 to July 2, 38 per cent said their homes had lost value and 62 per cent said they had gained or stayed the same. Three quarters of homes have actually fallen in value over the past year, Zillow said.

'The bad news on the general economy front is getting through to people and certainly is making their perception of home values more accurate,' Zillow's vice-president of Data and Analytics Stan Humphries said in an interview.

The median price of an existing home dropped to US$191,600 in August, down from a record high of US$230,200 in July 2006, according to the Chicago-based National Association of Realtors.

The disconnect between owners' perception of value and actual market conditions makes it harder for real estate agents to price homes to sell, Mr Humphries said.

Homeowners 'have a larger sense of the personal wealth of their portfolio than is actually the case,' he said.

Zillow's Home Value Misperception Index shrank to 16 in the third quarter from 32 in the second quarter. An index value of zero indicates homeowner perceptions are in line with actual values.

Homeowners also were less optimistic about the future. About 21 per cent said they believe their home's value will rise over the next six months, compared with 32 per cent who predicted price appreciation in the previous survey.

About 57 per cent said they thought property values in their local market will fall.

'It's human nature for people to imagine that what they have is nicer than what their neighbours have and unfortunately that's not always the case,' said realtor Elizabeth Blakeslee, an agent with Coldwell Banker Residential Brokerage in Washington, DC and a regional vice-president of the National Association of Realtors.

Purchases of existing homes jumped 5.5 per cent in September to a 5.18 million annual pace, the highest level in a year, according to NAR. Part of the reason is that a flood of less expensive foreclosed property drew buyers.

Foreclosure-related sales accounted for 35 per cent to 40 per cent of total September sales, NAR said. The median price dropped 9 per cent.

Respondents to the Zillow survey who said they plan to vote for Republican presidential nominee John McCain were more optimistic about their home values than were supporters of Democrat Barack Obama.

About 50 per cent of would-be McCain voters said their home values have decreased in the last year, compared with 56 per cent of Obama voters, Zillow said. -- Bloomberg

China, Korea Face Housing Market Bust

Source : The Business Times, October 30, 2008

Analysts say both countries have to take more steps to spur demand

(HONG KONG/SEOUL) China and South Korea have moved to prop up their frazzled housing markets but probably need to do much more to avoid major price slides that could ruin developers, damage banks and threaten the region's economies.

A share price collapse this week for Chinese property developers such as Guangzhou R&F and China Overseas Land suggests that many investors believe a housing market bust is on the cards, despite a policy U-turn by Beijing.

'Investors might just be throwing in the towel,' UBS analyst Eric Wong said of the sharp drop, which saw some stocks lose as much as 35 per cent of their value over Monday and Tuesday. The Chinese government, fearing a price bubble, was in market cooling mode only a year ago, squeezing developers with a clampdown on loans and hatching moves to stamp out speculation.

New home prices then slumped by up to 40 per cent in the southern cities of Guanzhou and Shenzhen as sales dried up, and property firms began slashing prices across the country to keep cash flowing in.

The outlook grew even dimmer as the global credit crisis began to buffet Asia and batter its financial markets, stalling the region's once-roaring economies.

So last week Beijing unveiled cuts in taxes, mortgages and down payments on homes in an effort to breathe life into a property industry that accounts for about 10 per cent of gross domestic product (GDP) in the world's fourth-largest economy. But the country's biggest developer, China Vanke Co, reported on Tuesday a 13 per cent decline in net profit and a nearly 30 per cent drop in sales volume, in another reminder of how deep-seated the problems are.

If the housing market fails to perk up, analysts say policy makers will probably resort to macro-economic measures to spur demand, such as cutting taxes and interest rates.

'The usual monetary cocktail is a blunt instrument but it's longer lasting,' said UBS's Mr Wong, adding that Beijing might also raise export subsidies and hike pay at state companies.

On the property side, the government could reel back on its measures to dissuade people from buying apartments as investments and tell banks to start lending to developers again, Mr Wong said.

In South Korea, where around half the country's personal wealth is tied up in property, the government pledged five trillion won (S$5.3 billion) last week to buy unsold homes and land from developers to prevent mass bankruptcies in the industry.

An interest rate cut of 75 basis points followed on Monday as policy makers tried to keep the global financial storm at bay.

The steps are a reaction to slowing economic growth and a steep climb in the number of unsold new homes on the market, which rose 43 per cent to a record 160,595 units in July from the end of 2007, according to government data.

Just as in China, the government had a hand in slowing the market in early 2007, tightening restrictions on mortgages and buying second homes.

Analysts believe freeing up finance for homebuyers is the answer, not just taking homes off the market. Apartment prices in the most expensive districts in Seoul and in satellite towns have fallen up to 20 per cent from their peaks in 2006.

'The measures came too late and are too weak,' Daiwa Institute of Research analyst Hyo Yim said of the government's action to shore up the property market.

The government should loosen rules on mortgage lending and cut back taxes on owners of two or more homes, Mr Yim said.

Mortgage debt in South Korea is still only a quarter of GDP, compared to 61 per cent in Australia, and 105 per cent in the United States, according to CLSA. In China, home loans equal only 12 per cent of GDP.

'The government cracked down on so-called speculative buyers, but people won't buy homes if they don't expect prices to rise,' said Mr Yim, adding that the housing market would probably not recover before 2010.

Many of South Korea's 12,000 builders face a cash crunch as credit dries up and home sales slow, with 88 firms defaulting in the first nine months of 2008, up 17 per cent from a year earlier.

Even top developers are not immune to such worries, with shares in GS Construction, Hyundai Development and Samsung Engineering tumbling between 37 and 50 per cent in the last month.

But some analysts are suggesting that South Korean construction stocks may have bottomed thanks to the government's actions, with valuations at historical lows and at a 30 per cent discount in price/earnings terms to the overall stock market. BNP Paribas analyst Jae Rhee has a 12-month target stock price for Hyundai Development that is double its current price. And the potential upside for GS Construction and Samsung Engineering is about 70 per cent, he wrote in a report last week.

Chinese developers are now trading at near 70 per cent discounts to net asset value, and at 7.4 times forecast 2008 earnings, according to Citigroup analyst Oscar Choi, who believes the stocks have been sold off 'indiscriminately'.

And Beijing will do all it can to stop a property market crash, said CLSA analyst Nicole Wong, who has a buy rating on New World China Land and Agile Property.

'Policy is very supportive; basically they're underwriting a put option on market,' she said. 'For sure the government will take further steps if the downward spiral doesn't stop.' - Reuters

Marina IR Not Likely To Open Fully In End-'09

Source : The Strait Times, Oct 30, 2008

THE integrated resort (IR) at Marina Bay is unlikely to be fully open for business at the end of next year, sources have said.

An old British-built sea wall on its site, which stands on reclaimed land, is among the problems. It delayed foundation works by three to four months, and then a shortage of labour and the rising cost of building materials also created setbacks.

When the Marina Bay project was awarded to Las Vegas Sands in 2006, its top executives announced that the entire resort would be ready by end-2009 - a departure from the industry practice of opening such mega projects in stages.

But sources now confirm that it is 'several months' behind schedule and that, even if the physical structure can be ready by then, it will be 'impossible' for all its facilities to be fully operational.

The 2,600-room resort with a gross floor area bigger than 70 football fields is supposed to be the new hub for the meetings, incentives, conventions and exhibitions business with its 200 meeting rooms, exhibition hall for 2,000 booths and ballroom for 6,600 diners.

Asked about the delay, Marina Bay Sands general manager George Tanasijevich maintained: 'As previously announced, we are scheduled to launch at the end of 2009.'

But show organisers and wedding couples hoping to book the venue at the end of next year have been turned away.

Bride-to-be Rachel Law, 27, called the resort in August to ask about holding her wedding dinner there next November and was turned down despite having begged for her booking to be taken.

An event organiser, who said the earliest booking available was for an April 2010 event, asked: 'If they are opening next year, why are they turning away business until 2010?'

Construction woes aside, the free-fall in the stock value of the resort's parent company Las Vegas Sands Corp - from US$178 13 months ago to under US$5 now - has also raised questions about the fate of the US$4.5 billion (S$6.7 billion) project here.

CIMB-GK economist Song Seng Wun, predicting that the gaming sector will be hit by the global recession, said the operators' vulnerability is on everyone's mind.

The collapse of banks like Lehman Brothers Finance Asia and Merrill Lynch International Banks has also put a question mark on the $5.25 billion loan secured by Marina Bay Sands. The two American banks were among the lead arrangers for the loan, along with local banks like DBS Bank, United Overseas Bank and OCBC Bank.

Mr Tanasijevich did not reply to questions on the status of the Singapore loan, nor those on whether the IR will open in phases and when it would accept bookings for events.

Singapore Tourism Board (STB) director of integrated resorts Margaret Teo told The Straits Times the board is monitoring the situation, but did not respond to other queries on penalties or whether the resorts will open in phases.

She said, however, that the STB was working with key agencies and the resorts to resolve potential delays and to enable the resorts' completion.

Analysts note that the two resorts have up to eight years to finish construction, but delays are bound to hurt the Singapore economy because of the 60,000 new jobs and $5.4 billion in revenue that they are expected to generate.

Tourism and gaming consultant Jonathan Galaviz, reckoning the losses to run into millions of dollars every month, said: 'It brings into question the true economic value each bidder promised the Singapore Government in the formal proposal.'

The rules of the awards of the two projects given in 2006 stated that both companies must start construction within three years and complete them in eight years.

They stand to lose their deposits of $200 million each and the Government could repossess the land as a penalty.

What Is Sustainable Construction?

Source : The Strait Times, Oct 30, 2008

SUSTAINABLE construction involves building and designing eco-friendly buildings that reduce adverse impact not only on the environment but also on the health of their occupants.

The Building and Construction Authority (BCA) encourages green buildings here with its Green Mark Scheme.

It rates buildings for their environmental performance and provides financial incentives to go green.

The scheme aims to promote sustainability and raise environmental awareness among developers, designers and builders when they begin designing a building as well as during construction.

One example of sustainable construction is the use of products that are made from recycled materials.

Holcim Singapore and the BCA have developed a product called 'Holcim Green' that promotes greener building practices.

This is a form of concrete which uses recycled material such as granite from demolition debris and used copper slag as sand.

Developers who use this form of green concrete, for example, can score extra points in the assessment of their buildings under the Green Mark scheme, said Holcim Singapore chief executive Sujit Ghosh.

The BCA Green Mark is awarded based on five key criteria:

# Energy efficiency

# Water efficiency

# Site/project development and management (building management and operation for existing buildings)

# Good indoor environmental quality and environmental protection

# Innovation

Sentosa IR To Delay Parts Of Project

Source : The Strait Times, Oct 30, 2008

Only four hotels, casino and Universal Studios to open as scheduled in first quarter of 2010

FOUR hotels, Universal Studios and the casino of the Sentosa integrated resort are set to open as scheduled in the first quarter of 2010.

But sources told The Straits Times that Resorts World at Sentosa is negotiating with the Government to defer the opening of the remaining facilities in the $6 billion resort.

The setback, The Straits Times understands, has arisen out of a pressing need to find storage space for the equipment for the 14 attractions in the Universal Studios theme park.

To create space on-site, the resort has had to turn one of its venues into a store and, while the venue is used this way, construction has to be put on the backburner.

Asked about this, Resorts World at Sentosa head of communications Krist Boo would only say the project is 'on track' for a 'soft opening' in 2010.

She added: 'Due to the tight labour market and the need for many varied specialist skills - both front-line and in operations - in the resort and in Universal Studios Singapore, we will be progressively opening our many hotels, food and beverage outlets, casino, entertainment and attractions from the first quarter of 2010.'

Like Las Vegas Sands Corp, Resorts World at Sentosa's parent company Genting has been hit by the financial crisis. Its stock price fell by half from RM8.50 a year ago to its current value of about RM4.

The Singapore Tourism Board declined to respond to queries on the ongoing negotiation.

US Economy Shrinks 0.3%

Source : The Straits Times, Oct 30, 2008

WASHINGTON - THE US economy jolted into reverse during the third quarter as consumers cut back on their spending by the biggest amount in 28 years, the strongest signal yet the country has hurtled into recession.

Consumers ratcheted back their spending at a 3.1 per cent pace in the third quarter, the most since the second quarter of 1980, when the country was in the grip of recession. -- PHOTO: AP

The broadest barometer of US economic health, gross domestic product, shrank at a 0.3 per cent annual rate in the July-September quarter, the Commerce Department reported on Thursday.

It marked the worst showing since the economy contracted at a 1.4 per cent pace in the third quarter of 2001, when the nation was suffering through its last recession.

The latest GDP reading marked a rapid loss of traction for the economy, which logged growth of 2.8 per cent in the second quarter, and is sure to buttress the belief of many economists that the nation is in the throes of a painful downturn.

The deterioration reflected a sharp retrenchment by consumers, whose spending accounts for the largest chunk of national economic activity.

Consumers ratcheted back their spending at a 3.1 per cent pace in the third quarter, the most since the second quarter of 1980, when the country was in the grip of recession.

GDP measures the value of all goods and services produced within the United States and is the broadest barometer of the country's economic health.

While the third-quarter's contraction wasn't as deep as the 0.5 per cent annualized decline analysts expected, the poor showing underscored the terrible toll of the housing, credit and financial crises.

The grim report comes just days before Americans pick their next president on Nov 4.

Whether Democrat Barack Obama or Republican John McCain wins the White House, the incoming president will inherit a deeply troubled economy and a record-high budget deficit that could cramp his domestic agenda.

Jobless claims remain elevated due to weak economy

WASHINGTON - NEW claims for US unemployment benefits were unchanged last week, remaining at the same elevated level due to the struggling economy, the government said on Thursday.

The Labor Department said new claims for jobless benefits for the week ending Oct. 25 stood at a seasonally adjusted 479,000, the same as the previous week and above analysts' estimates of 475,000.

The four-week average, which smooths out fluctuations, was 475,500, down 5,000 from the previous week's total.

The number of people continuing to claim unemployment benefits also improved, falling 12,000 to 3.72 million.

The figures still reflect a weak economy struggling from a financial meltdown, rapid drops in housing prices and cutbacks in consumer spending.

Jobless claims above 400,000 are considered a sign of a recessionary economy. A year ago, claims stood at 332,000, the department said.

Four weeks ago, the impact of the economic slowdown as well as Hurricanes Ike and Gustav sent jobless claims to a seven-year high of 499,000. This week, the impact of Hurricane Ike added about 7,500 claims in Texas, the department said.

Companies cut 760,000 jobs in the first nine months of this year, sending the unemployment rate to 6.1 per cent in September. Many economists expect the rate to increase to 8 per cent or higher by next year.

Several companies have announced mass layoffs recently, including Whirlpool Corp., financial services company National City Corp. and Xerox Corp. -- AP

广州市一手住房价 跌破每方米9000元

Source :《联合早报》October 30, 2008










Property Auctions See Few Takers

Source : The Business Times, October 29, 2008

Buyers waiting for prices to fall further, despite recent drop, say auctioneers

PROPERTIES for auction are being left on the shelf even after vendors cut prices - as buyers hold out for further drops.

198 properties were put on the block by the five main auction houses from July to September this year, according to figures from one of them, Knight Frank. But just 14 of these properties were sold during their first time on the podium.

And in October, there have been no takers at the two auctions held so far - one by Knight Frank and the other by Jones Lang LaSalle. DTZ, Colliers and CKS have yet to hold auctions this month.

The abysmal results are a far cry from 2006 and 2007, when many properties were snapped up the first time they were auctioned.

'The current market is essentially a buyer's market as sentiment is very sluggish in view of the global financial turmoil,' said Knight Frank's executive director for auctions Mary Sai.

The slowdown started early this year, auctioneers say. 'The auction market has been generally quiet since the beginning of 2008, and as such, buyers are adopting a wait-and-see attitude,' said Shaun Poh, DTZ's senior director for investment advisory services and auction.

Buyers are not biting because they are waiting for prices to fall, even though asking prices have already come down as much as 20 per cent in some cases, auctioneers say.

'Vendors generally are more realistic in their pricing now as property values have declined in the past few months in the wake of bad news on the economy, inflation and sub-prime woes,' said Ms Sai.

Mr Poh said that properties from various sectors are being put up for auction, and vendors are mostly hoping to make just a slight profit or break even.

But despite this, transaction volumes are low, although property firms are still getting enquiries.

Demand from investors is weak, but there is still some interest in value buys and properties that are well located and priced right, as investors are very price-sensitive, said Grace Ng, Colliers' deputy managing director for agency and business services.

Demand from owner-occupiers is slightly better. Colliers says that it is seeing good interest in mass-market private homes from upgraders and for landed properties such as terraced houses.

As yet, there are no fire sales, auctioneers report. But looking ahead, fire sales from owners who need to unload properties and cut losses before banks step in to foreclose are likely, said Knight Frank's Ms Sai.

There will also be more mortgagee sales as borrowers default on loan payments - if they lose their job or find themselves unable to hold multiple properties they acquired earlier at much higher prices and are now unable to rent out, she added.

Demand will come from owner occupiers, said Colliers' Ms Ng. 'As for the investors, they are likely to take advantage of the current market situation and offer prices that are below market valuation,' she said.

Natura Loft To Be Launched On Friday

Source : The Straits Times, Oct 29, 2008

QingJian upbeat about condo-style HDB project despite market blues

UNDETERRED by gloomy sentiment in the local financial and private property market, Chinese firm QingJian Realty is launching Singapore's fourth condo-style public housing project on Friday.

Invited guests previewing the model of HDB's Design, Build and Sell Scheme project - Natura Loft in Bishan - developed by QingJian Realty. The three 40-storey blocks of 160 four-room and 320 five-room units will be launched on Friday. -- PHOTO: LIANHE ZAOBAO

Natura Loft at Bishan, a project under the Housing Board's Design, Build and Sell Scheme (DBSS), will feature three 40-storey blocks of 160 four-room units and 320 five-roomers.

The four-room units of about 95 sq m each are priced from $465,000 to $586,000 while the five-roomers of 120 sq m will go from $600,000 to $739,000.

That works out to around $450 to $570 per sq ft (psf).

QingJian Realty's move reflects the relative strength of the HDB market amid a general downturn in the property market here. Managing director Zuo Hai Bin said demand is still strong and resale flat prices are holding.

'We're very confident that there'll be a strong demand for our flats, which are new and attractively priced compared to resale flats in Bishan,' he added.

Natura Loft is QingJian Realty's first foray into property development here. The firm is a unit of QingJian Group, formerly known as Qingdao Construction Group Corporation. The China-based builder won the tender in February with a bid of $135.9 million or $237 psf per plot ratio for the Bishan Street 24 site.

QingJian Realty has 15 property and construction units worldwide with real estate developments in Qingdao, Jinan and Beijing. It began operations here nine years ago, starting as a sub-contractor on HDB projects. It then moved to taking on the main contractor role for HDB homes in Sengkang and Punggol and now to being a DBSS developer, said Mr Zuo.

'We've moved step by step in the Singapore market and we see it as an important expansion location in our firm's overall strategy,' he added.

The firm is on the look-out for more DBSS sites to develop but considers the private market 'too risky' to venture into at the moment, said Mr Zuo.

Flat prices at Natura Loft are a notch higher than HDB's third DBSS project, Park Central at Ang Mo Kio. This was priced between $400,000 and $500,000 each for four-roomers, and $600,000 and $670,000 for five-roomers.

Mr Zuo said his firm has already revised the Bishan prices down due to the prevailing cautious sentiment. Its prices are competitive, considering Sim Lian's Clover By The Park condo in Bishan sold for about $750 psf, he added.

Natura Loft is also an eco-friendly project, with bamboo flooring for its bedrooms - a first for public housing - bay windows and energy-saving inverter air-conditioning systems, said architect Tang Too Voon of ADDP Architects.

The homes are also built with universal design, and have amenities such as basement carparks, playgrounds, fitness corners, jogging track and barbecue pits.