Sales In Private Residential Market Dip In April

Source : Channel NewsAsia, 15 May 2008

Sales in the private residential market have dipped in April after a mild recovery in March.

According to the numbers of private home sales released by the Urban Redevelopment Authority (URA), only 274 units were sold last month – down from 301 units in March.

Developers were also holding back, with only 271 units launched in April – the lowest number of units since market weakness surfaced in September last year.

Analysts said they expect the market to continue moving gingerly.

Homebuyers in the mass market are keeping the numbers moving along as nine out of every 10 units sold in April were in the suburban areas. This belies the overall cautious stance that homebuyers are taking.

Chua Chor Hoon, Senior Director of Research, DTZ Debenham Tie Leung, said: "Speculation is almost nil. Most buyers we see in the market are probably those buying for owner occupation, with needs for accommodation."

With buying and selling almost at a standstill, analysts said the ball is now in the developers' court.

Colin Tan, Director of Research & Consultancy, Chesterton International, said: "Looking forward, you can see that in order to raise their sales, developers will need to price their units more realistically. As you can see from the April figures, those that have done so are being rewarded with higher sales."

But the URA figures also show that prices remain firm for high-end units and developers for those units are choosing to wait out.

"Developers are still holding back launches, especially for bigger projects and those at higher end range. What we see are mostly launches in suburban areas with units priced below S$1,000 psf," Mr Chua said.

While the latest data may seem to provide more evidence of a weak housing market, analysts said numbers are very thin and have cautioned against reading too deeply into them as they could be potentially misleading. - CNA/so

Banyan Tree Reports 38% Increase In Q1 Earnings To S$15.4m

Source : Channel NewsAsia, 15 May 2008

Mainboard listed Banyan Tree Holdings on Thursday announced it has booked a 38 per cent increase in first quarter earnings.

Its net income for the three months ended March 31 came in at S$15.4 million, largely driven by growth in its hotel investment and hotel residence/property sales segments.

Its revenue rose by 34 per cent to S$140.3 million.

Banyan Tree said it is cautiously optimistic for the next few quarters.

It has a strong pipeline of 49 new resorts opening over the next four years, with 11 new spas expected to open in the next few quarters.

Ho Kwon Ping, executive chairman of Banyan Tree, said: "What we see for the balance of this year - both in terms of hotel business and property sales remain strong.

"We do not seem to be affected by the sub-prime crisis. So we remain optimistic that this year, we should be able to perform quite well." - CNA/ac

Yong Nam Holdings Posts 267% Jump In Q1 Profit To S$6m

Source : Channel NewsAsia, 15 May 2008

The building boom in Singapore and the Middle East is proving to be a boon for engineering and construction company Yong Nam Holdings.

Its net profit for the first quarter rose 267 percent to about S$6 million. Revenues increased 56 percent to S$47.4 million.

Yong Nam saw increased activities from projects such as Orchard Turn, Marina Bay Sands Integrated Resort, Formula One and the Dubai Metro Rail.

Going forward, Yong Nam said it is optimistic that the strong operational performance will continue in financial year 2008.

The company is citing the government's S$50 billion plan to improve the Singapore's transport infrastructure in the coming years.

This includes the construction of the Marina Coastal Expressway, the Thomson MRT line, the MRT Downtown line and the Eastern Region MRT line.

The Building and Construction Authority has estimated that 2008 will see a record S$27 billion in construction contracts being awarded – 10 percent higher than the year before.

In the Middle East, Yong Nam said it continues to experience an upsurge of infrastructure developments.

The company's order book stood at S$277 million as at March 31. - CNA/so

GIC Says Sub-Prime Crisis Beginning To Hurt Asian Property Markets

Source : Channel NewsAsia, 15 May 2008

The US sub-prime crisis has begun to hurt Asian property markets, the real estate investment arm of the Government of Singapore Investment Corporation (GIC) said at the FT Asia Property Summit on Thursday.

While Wall Street starts picking up the pieces from the sub-prime crisis, GIC said, the Asian property market has just started to feel the impact.

The investor added the fallout would be even greater if the US went into a full-blown recession.

Seek Ngee Huat, president of GIC Real Estate, said: "The contagion effects of the sub-prime crisis can potentially put a downward spin (on) the current cycle. While the sub-prime crisis may be seen essentially as a transatlantic problem, its ripple effects are certainly being felt here in Asia."

GIC, however, remained upbeat, saying that the sub-prime meltdown presents not just threats but also opportunities.

It noted that Asia will continue to be the growth region of the future, attracting foreign investors in search of higher returns and diversification, as emerging cities in China and India move aggressively to become first-tier cities in the world in 10 to 20 years.

Mr Seek said: "It, therefore, may make sense to take some short-term risk in order to position for the long term, for many of these institutional investors. In fact, if one takes a long view, the pricing in emerging markets, which is starting from a low base, should have tremendous upside."

GIC Real Estate has some 300 investments spread across 30 countries around the world. - CNA/ac

DBS To Sell Preference Shares To Supplement Regulatory Capital Base

Source : Channel NewsAsia, 15 May 2008

DBS Bank says it will sell non-convertible hybrid Tier 1 securities in the form of preference shares to supplement its Tier 1 regulatory capital base.

The bank, in a filing with the Singapore Exchange, did not disclose the size of the offering. But reports have estimated the preference shares could be worth between S$500 million and S$750 million.

DBS said it is taking advantage of favourable market conditions to issue the hybrid Tier 1 securities.

Tier 1 capital is a financial institution's most secure resources, which include its earnings and funds raised from selling ordinary shares as well as subordinated debt.

DBS said the proceeds will be used to strengthen its capital position and support its regional expansion.

As of March 31, the lender's capital adequacy ratio stood at 13.4 percent, while its Tier 1 capital was 9.2 percent, well above the central bank's requirement of 6 percent.

DBS said further details will be released when the process is completed. - CNA/ir