Frasers, Ascendas To Invest $500m In Changi Biz Park

Source : The Business Times, December 20, 2008

Their JV plan is to build an integrated retail, hotel and business park on the 60-year leasehold plot, which they paid $150.8m for.

A JOINT venture between Frasers Centrepoint and Ascendas will invest about $500 million building an integrated retail, hotel and business park project next to Expo MRT Station and within Changi Business Park (CBP).

















BUDDING PARTNERSHIP - Mr Lim of Frasers Centrepoint and Ms Chong of Ascendas. The new mixed development will support and leverage on the upcoming financial backend facilities to be located in CBP as well as Singapore's fourth university and the Singapore Expo, says JTC

The two partners are paying $150.8 million or about $119 per square foot of potential gross floor area for the 60-year leasehold plot. The tender, conducted by JTC Corporation, is understood to have attracted just one other bidder, United Engineers, which is developing the plot next door.

JTC said bids were evaluated on concept and tender price under the two-envelope system. The 4.7-hectare site can have a maximum gross floor area of about 1.26 million sq ft. Groundbreaking for the project is expected to take place by June 2009, JTC's assistant CEO Philip Su said in a release yesterday.

BT understands the project will be developed in stages. The first phase, for about 220,000 sq ft net lettable area of retail space, is expected to be completed around 2011. The hotel component in the project is likely to have about 250-300 rooms and will probably cater to longer-staying business visitors. There's a shortage of hotel rooms and serviced apartments in the eastern part of Singapore. Frasers Centrepoint will bring to the partnership its expertise in the retail and the hospitality businesses while Ascendas (a fully owned subsidiary of JTC Corp) will contribute its experience with developing and managing business parks.

JTC launched the tender for the plot in June this year. It was the first time that private developers were invited to submit proposals to design, build and operate a mixed-use development in CBP. The plot has a 2.5 plot ratio (ratio of maximum potential gross floor area to land area) and is zoned 'Business Park - White 40'. This means up to 40 per cent of the maximum GFA will be set aside for 'white' or commercial activities. And of this 'white' component, up to 60 per cent can be for retail activities with the rest for hotel.

Ascendas president and CEO Chong Siak Ching said: 'This project will set a new benchmark for business parks in Singapore.'

'When completed, we fully expect the development to inject a fresh vibrancy to the area and offer a unique alternative to companies seeking high quality business space outside the Central Business District,' she added.

Frasers Centrepoint CEO Lim Ee Seng said: 'The retail and hotel components are expected to capitalise on demand generated from the CBP, the Singapore Expo, the upcoming university at Changi as well as the nearby estates. On top of that, they are able to reach out to beyond the immediate catchment as a result of the convenience and connectivity afforded by the future Downtown Line and the present Expo MRT station.'

Next to the site awarded yesterday, United Engineers is developing a global information and communications centre with a hotel, offices and retail mall.

JTC yesterday noted that despite challenging economic conditions, pipeline projects in CBP remain strong. 'Its current working population of 6,000 is expected to surge to 20,000 by 2011,' JTC said.

The new mixed development by Ascendas and Frasers Centrepoint will support and leverage on the upcoming financial backend facilities to be located in CBP as well as Singapore's fourth university and the Singapore Expo which are located nearby,' JTC said.

Citibank, Credit Suisse, DBS Group Holdings and OCBC Bank are poised to set up backroom operations in CBP.

Property Stocks Rally On China's Fiscal Boost

Source : The Business Times, December 20, 2008

But measures might have limited impact on reviving sales amid tough economic conditions, analysts say

leePROPERTY stocks savoured a sweet respite over the last two days from the market gloom after China announced plans to boost the real estate market.

LIGHTER TAX BURDEN - The Chinese government will abolish urban real estate tax and cut the transaction tax for properties with ownership of two years or less

But the rally is likely to be short-lived, some analysts argued, noting that the measures might have a limited impact on propping up sales amid a difficult economic climate.

The Chinese government said on Wednesday that it would abolish urban real estate tax, as well as cut the transaction tax for properties with ownership of two years or less.

It added that it would encourage banks to extend credit lines to developments in the mass-market housing segment.

Bigwigs in the property market - CapitaLand and Keppel Land - saw the biggest jump among sector peers with their exposure to the mid-tier Chinese market.

Shares of property bigwig CapitaLand surged 16.6 per cent over the last two days to end at $3.30 yesterday while shares of Keppel Land jumped 20.9 per cent to finish at $1.79.

Yanlord Land Group - which targets the Chinese luxury segment - rose on the dovetails of the rally in property stocks on Thursday, rising 17.4 per cent to $1.01.

But the stock fell back 2 per cent to 99 cents yesterday, with analysts noting that these measures are not targeted at luxury players.

'As the overall policy still focuses on supporting the housing needs of the low to middle income homebuyers, high-end developers might not benefit substantially from these changes,' wrote DBS Vickers Securities analyst Carol Wu.

'While the policy environment has continued to improve, full recovery of the sector remains uncertain amid the deteriorating economic outlook,' she said, adding that excessive inventory would prompt developers to cut prices and that the property downcycle trend in China could drag on for as long as two years.

Reuters reported yesterday that an analyst from Morgan Stanley saw the sharp increases in shares of Keppel Land as 'premature and unjustifiable' as solvency and refinancing risks were non-issues for the firm.

It would take time before such fiscal measures filter down to the provinces, said Brandon Lee, an analyst from DMG & Securities.

These steps are also aimed at cushioning a fall in demand rather than to engineer sales given the expected rise in unemployment in China, said Barclays Capital economist Leong Wai Ho.

Projects In The Works Will See Value Shrink

Source : The Business Times, December 20, 2008

Drop of 20-30% in 2009 partly due to halted residential developments

THE value of projects under construction in Singapore could fall by 20-30 per cent to some $17 billion in 2009. And according to construction information services provider BCI Asia, about 45 new residential developments in various stages of design and development have been put on hold this year, exacerbating the contraction of construction contracts.

SLOWDOWN - Public building works worth about $4.7 billion were deferred in 2008. These were reported as ranging from $10 million to $400 million

BCI Asia's database is derived from developers, architects, engineers and contractors who have reported project delays. These occur at various stages of development, including design, documentation, tender and the awarding of contracts.

For 2008, it estimated that the value of projects under construction here was about $25 billion.

BCI Asia's figure is also more conservative than official figures which put the total value of contracts in 2008 at between $27 billion and $32 billion.

Thor Kerr, managing director at BCI Asia, added that the decline in construction follows a significant rise in construction contracts over the last year and any drop in the figures should be judged in this context.

He also said that compared to other South-east Asian countries, Singapore's construction industry has the most to gain from government spending including infrastructure projects. BCI Asia estimates that for 2008, there were about $4 billion worth of infrastructure projects alone.

The government has also recently said that it could bring public construction contracts forward.

Public building works worth about $4.7 billion were deferred in 2008. These were reported as ranging in value from $10 million to $400 million and included the Jurong General Hospital, the National Art Gallery, the National Addiction Management Centre, the Communicable Disease Centre and an extension of Changi Prison.

The total public construction demand for 2008 has been reported to reach between $10.5 billion and $13.5 billion this year.

On the downside, BCI Asia expects construction spending in cities such as Singapore and Hong Kong to suffer most from the slowdown in the global economy, attributed to a slowdown in construction in the CBDs.

In its survey of Asian markets consisting of Singapore, Hong Kong, Indonesia, Malaysia, Philippines, Thailand and Vietnam, it estimates that, out of the total US$140 billion of construction projects, a fall of 16 per cent in 2009 to US$118 billion is possible, assuming a 'low-growth economic trough' scenario.

Mr Kerr said: 'All data indicates that construction spending in this region peaked in 2008. The value of projects at design and documentation phases has contracted by 2 per cent this year and we have seen major projects abandoned for lack of finance.'

In a worst-case scenario, if the economies of these cities suffer a 'deep recession', BCI Asia believes the total value of construction contracts could fall to US$96 billion, representing a contraction of over 30 per cent.

BCI Asia's forecast is from an upcoming study of how the construction sector has reacted to changing economic conditions since the 1997 Asian financial crisis. In this study, it was noted that during the recent trough of 2002, the total value of construction projects had fallen to $47.9 billion, 66 per cent lower than the 2008 peak. However, Mr Kerr said that it is unlikely that the value of construction contracts would fall to this level again.

Size Of The DPS Behemoth

Source : The Business Times, December 20, 2008

10,450 sold & uncompleted private homes under the DPS now; analysts worried about those getting TOP in 2010-11

SOME 10,450 sold and uncompleted private homes are now under the deferred payment scheme (DPS), according to official data released yesterday.

Of the amount, close to half - 4,560 units - will be completed in 2009, while another 2,540 homes will be completed in 2010, the Urban Redevelopment Authority (URA) said. Under the DPS, which was introduced by the government in October 1997 and withdrawn in October 2007, the bulk of the purchase price of a property is due only after a project obtains its temporary occupation permit (TOP).






















The data was welcomed by both analysts and the Real Estate Developers' Association of Singapore (Redas). Over the past several months, many market watchers and analysts have been estimating how big an impact the DPS will have on developers' cashflow and earnings if buyers default on their homes as TOP approaches.

'I think it provides a clearer picture as to the extent of the problem,' said Citigroup's head of Singapore equity research, Chua Hak Bin. 'And it is good that the government acted to stop the system when it did. If not, things would have got a lot worse.'

Said Redas: 'URA data, together with data compiled by Redas, helps to allay concerns that speculators may repudiate their DPS purchases at below-market prices as the completion date nears.' In its statement, Redas highlighted 10 projects - including City Developments' The Sail and Keppel Land's Park Infinia - where the DPS was offered but full payment was still made to the developers once TOP was obtained.

Redas also said that while units may be affected by market sentiments, sales contracts cannot be repudiated easily.

URA's data proves that the DPS scheme was 'very popular', Citigroup's Dr Chua said. To arrive at its numbers, URA did a survey among property developers of uncompleted DPS-approved projects. In total, developers of 605 projects, comprising 72,384 units, were granted approval to offer the DPS. Of this amount, there were 18,208 sold but uncompleted units as at end-November this year. And of this figure, 10,450 (57 per cent) were still under the DPS.

The fact that the bulk of DPS units will be completed in 2009 is cause for some concern, analysts said. '2009 is going to be a tough year for the economy, and there are 4,650 units under the DPS that will be completed,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

But assuming a three-year construction period, a large proportion of the units that will obtain TOP in 2009 were probably launched and sold in 2006 and early 2007, at prices that are relatively lower than today's level or the expected level in 2009. So even if the property market continues to weaken in 2009, the owners of these 4,560 units could still lease out the homes or sell them, analysts said. However, if developers had offered the DPS to many sub-purchasers when the original purchasers sub-sell the units, then defaults could be expected.

But for now, the real area of concern is thought to be the 2,540 units under the DPS that will obtain TOP in 2010. Of this number, 1,270 of the units are located in the core central region (CCR), which includes Sentosa and Marina Bay.

'Generally, I'm more concerned over the units which will receive TOP in 2010-2011, which could have been purchased in 2007 at the peak of the property market,' said DMG & Partners Securities analyst Brandon Lee.

And while developers have the legal right to pursue buyers who walk away from their deals, it could be harder to do this when it comes to foreigners, said Knight Frank managing director Tan Tiong Cheng.

Normally, about 75-90 per cent of uncompleted private residential units will be bought by Singaporeans, said DMG's Mr Lee. But in 2007, the proportion fell to 63-68 per cent, with the remaining purchases made by PRs, foreigners and companies. 'We see this segment as the most likely to return their units,' he said. His back-of-the-envelope figure puts the amount expected to be returned as possibly somewhere between 20-30 per cent.

URA said that it provided the data to enable the public to make a better assessment of the private housing market. 'This information was provided by developers in confidence and with the understanding that data for individual projects would not be released to the public. Hence URA is only releasing aggregated data and not data for individual projects,' the government agency said.

'Conducting a survey of developers of all uncompleted DPS-approved projects requires a lot of time and resources from the developers as well as the government. Given that the number of uncompleted units sold under DPS is likely to decline as projects are completed over time, we will monitor the situation and consider whether there is a need to conduct further surveys in future,' URA said in response to a query from BT.

延迟付款私宅楼花约一万个

Source : 《联合早报》December 20, 2008

市场期待已久的延迟付款计划（deferred payment scheme，简称DPS）真正数据，在千呼万唤下终于出炉。

截至11月30日，还有1万零450个未竣工的单位，还在延迟付款计划下，这意味着，这些单位有可能是楼市中潜伏的“定时炸弹”，若买家无法继续支付期款，这些单位可能就得交还发展商。

分析师普遍认为，公布这些数据，让市场更透明是件好事，但对延迟付款计划的实施，接下来会对房地产市场造成多大的冲击，则意见分歧。

在明年竣工的单位中，有4560个单位的买家使用延迟付款计划，后年竣工的单位中则有2540个。

一些分析师认为，买家是在高价时购下单位，由于接下来信贷紧缩，经济环境又欠佳，这两年买家毁约的风险相信最高。然而，也有分析师认为，扣除了打算自住和能获得贷款的买家，明年可能毁约的单位或许只有10％，也即450个单位。

代表发展商的新加坡房地产发展商公会（REDAS）昨天也发表文告指出，多数在2009年竣工的单位，买家其实是在2005／2006年买下这些单位，而非在2007年的高峰期时买入，因此售价还是比目前的市价低，因此有信心买家会坚持到取钥匙那天。

市区重建局表示，为了让私宅市场更透明，在今年第三季首次向发展商展开问卷调查，收集并公布以上数据，好让公众可掌握更多讯息。

数据也显示：从1997年至2007年10月，605个私宅项目（共有7万2384个私宅单位）获准提供延迟付款计划给买家。

当局是在1997年开始推出这项计划，以刺激当时疲弱的房市，但在去年10月突然宣布撤销延迟付款计划，让当时火热的房市开始降温。　　

然而，截至今年11月，未竣工、已出售，加上使用延迟付款计划的单位则有1万零450个（包括楼花转售），占整个总数的57％。

本报从今年4月就开始促请有关当局提供确实的数据，因为这些尚未竣工，只支付了一二成楼价的单位，很可能威胁接下来楼市走向，甚至是整体的购屋信心，成为楼市的一颗“定时炸弹”。

房地产股逆市上涨

由于一直没有确实数据，一些金融机构的分析师开始根据自己的算法来估计，延迟付款配套到底会给市场带来多大的冲击。因此各种揣测纷纷出炉，分歧很大，每发表一份报告，就影响了房地产上市公司的股价。

市建局昨天公布的新数据似乎给市场打了一支强心针，尽管海峡时报指数闭市时下滑，一些主要的房地产上市公司的股票却逆市上涨。

至于接下来还会否提供这类数据，市建局受询时指出，进行这类调查相当耗时和消耗资源，因此将观察情况才决定是否要继续。

分析员：延迟付款是“定时炸弹”　会否引爆取决不少因素

市场展望欠佳，人们原本担心，那些在延迟付款计划下（DPS）出售的单位买家，到了2009年或2010年，当项目竣工时，需要支付大部分（65％至75％）的款项时，许多可能会因无法贷到所需款额，无法支付余款，而必须在市场上“降价抛售”，进一步刺激原本已疲弱的市场，让房价进一步下泻。

然而，在这之前，由于缺乏有关数据，分析师一般都没有办法鉴定问题到底有多严重。

昨天，在市建局公布有关的数据后，分析师和房地产发展商公会都表示欢迎。

但受访分析师也认为，延迟付款计划这颗“定时炸弹”最终是否会引爆，杀伤力有多大，还取决于不少因素。

花旗集团投资研究部董事蔡学敏认为，这批“前线”单位（1万零450个单位），占了所有延迟付款计划单位总数的57％，足以显示计划非常受欢迎。

他指出，不少可能受影响的单位会在明年（4560个单位）和后年（2540个单位）竣工，这将使问题加剧，因为届时信贷估计会更加收紧，银行也更不愿意借贷。

他认为，最可能断供的单位，是那些在房地产高峰（07年中至年底）时推出的单位，因为当时延期付款配套非常受欢迎，而现在这些房地产单位的售价的下滑幅度，多已超过当时支付的10至20％首期款项了。

我国问题 不像美次贷问题严重

蔡学敏说：“无法避免地，其中一定会有一些没有量入为出的投资者，会以比目前估价高的价格买下单位。”

银行收紧银根、估价更严，经济不好或许导致失业率上升等问题都可能让情况雪上加霜。但他不认为，我国的问题会像美国次贷问题那么严重，因为风险不是由银行承担。

因此，就算是发展商最终必须从断供的买家手中取回单位来转售，发展商至少也有原来的10至20％的首期款项来垫一垫，减低冲击。

蔡学敏去年写的一系列延迟付款计划的报告书，在市场上引起相当大的回响。

莱坊(Knight Frank)研究部主管麦俊荣指出，在2005年至2008年售出的1万零450个单位中，68％会在明年和后年竣工。换句话说，在明年竣工的所有单位中，45％使用了延迟付款计划；后年竣工的所有单位中，30％使用了该计划。

卓登新达国际(Chesterton Suntec)研究部主管陈瑞谨认为，乍看之下，4560个单位不是个大数目。但是，在房市大好的时候，一年可售1万至1万2000个单位，一般情况下可售8000个单位，但若房地产市场疲弱时，4560个可能就是一年可出售的新私宅的单位总数了。

第一太平戴维斯(Savills)行销与业务开发主管邱瑞荣也相信，明年和后年竣工的7000多个单位，风险最高，但明年最终断供的人数或许只有450个，因为银行或许会开始发放贷款，且多数买家或许已在竣工前就已将单位脱手。

但他也指出，由于高档私宅的买家有60％是外地人，贷款应该不会有问题，大众私宅一般是自己居住，因此，比较可能出问题的，是用每平方英尺超过1000元，买下其他中央区的单位，且希望能套利者。

邱瑞荣也认为，最糟的情况可能会在明年下半年或2010年出现。但需要分析单一项目，确定有多少是长期投资者和自住人士，有多少具有投机成分。

其他中央区(RCR)楼价一般代表中档私宅、核心中央区(CCR)一般代表高档私宅、中央区以外(OCR)屋价则代表大众私宅价格。

麦俊荣也认为，核心中央区的房子一般较好出租，问题应该也不大。

但陈瑞谨却认为，美国、英国和挪威的房价下滑，或许会将海外人士吸引过去，因此，核心中央区可能风险较大。

同时，他也认为，一般自住者较谨慎，会选择分阶段付款计划。但一些投机者则可能一口气买下五至七个单位，而非一个单位，因此要借贷更难，也可能因无法持守而所有单位都需要断供，因此，归还给发展商或许是唯一较好的选择。