Thursday, August 30, 2007

CapitaLand Sells 50% Stake In Chevron House For Over S$366m

Source : Channel NewsAsia, 30 August 2007

SINGAPORE : CapitaLand has sold its entire 50 percent stake in Chevron House for over S$366 million.

When the deal is done, the property developer will book a gain of S$151 million on the investment.

Chevron House is an office building in the banking and financial district of Raffles Place.

It was formerly known as Caltex House.

CapitaLand has been taking advantage of the buoyant office property market to divest its interest in several commercial buildings.

Another of its property, Hitachi Tower, is also said to be up for sale. - CNA/ms

Fed Pumps US$5.25b Into Banking System

Source : Channel NewsAsia, 29 August 2007

WASHINGTON : The US Federal Reserve pumped 5.25 billion dollars into the banking system Wednesday, the third consecutive daily injection this week aimed at easing a credit squeeze.

The Fed has injected a total of 134.25 billion dollars into the financial system since August 9 in a bid to boost credit flows which have seized up due to problems linked to the distressed US mortgage market.

Wednesday's action was announced by the Federal Reserve Bank of New York, which oversees such operations for the Washington-based Fed. The bank injected two billion dollars Tuesday and 9.5 billion Monday.

The US central bank typically buys billions of dollars worth of securities from major banks, pumping extra cash into the banking system, which the banks are obliged to repurchase at a later date.

- AFP /ls

S'pore Banks' Earnings To See Minimal Impact From CDOs: Analysts

Source : Channel NewsAsia, 30 August 2007

Singapore bank stocks have been under selling pressure in recent weeks, on concerns over their exposure to the US sub-prime mortgage sector.

Sentiment in DBS has been especially hit, after the bank admitted to a much higher exposure to collaterised debt obligations (CDOs) than previously announced.

But analysts that Channel NewsAsia spoke to say some perspective is needed.

They note that Singapore banks invest in high-grade CDOs and so they are unlikely to directly impact their earnings or their capital positions in the long term.

Banks have come under the spotlight recently, amid concerns over the fallout from the US housing credit woes.

Their share prices have succumbed to selling pressure - with DBS, UOB and OCBC all losing ground.

But according to international ratings agency Fitch, Singapore banks are among the most transparent in Asia, in terms of disclosing their sub-prime exposure.

David Marshall, Managing Director, Fitch Ratings, said, "I would argue that the overall exposure of the three big Singapore banks is really not very material. The numbers might look large in terms of hundreds of millions of dollars, but really we're talking about 1 or 2 percent of their equity capital, and somewhat less than that for UOB."

For DBS, it has disclosed US$1.5 billion in total CDO exposure.

Out of that, asset or mortgage-backed securities with sub-prime exposures come to about US$188 million - or only 1.5 percent of total equity.

And analysts say this is not material to the bank's earnings or capital position in the long term.

OCBC only has US$181 million in asset or mortgage-backed securities exposure - or only 2 percent of the bank's equity.

As for UOB, it has US$60 million in asset or mortgage-backed securities - or 0.5 percent of total equity.

Still, analysts say the banks may see some CDO-related accounting losses in the third or fourth quarter.

Mr Marshall said, "In the short term, they could take some mark to market losses, because the markets have become very illiquid right now, so their earnings could be hurt by some market value adjustments. But I think we should determine between that and real economic losses, because those mark to market losses are accounting losses that could be reversed if those securities perform well until maturity and the banks can get their money back in full."

CDOs are securities backed by assets, from housing mortgages to corporate loans.

They are divided into tranches with different ratings, with the Singapore banks mostly holding top-graded CDOs rated AAA to AA for their low default risk.

Analysts say that some perspective is needed; they stress that credit problems are really concentrated in CDOs with sub-prime exposure, especially sub-prime loans made in late 2005-2006.

And top-graded CDOs are unlikely to see losses at the end of the day. - CNA/ms

Asian Stocks Make Cautious Rebound With Eyes On Fed

Source : Channel NewsAsia, 30 August 2007

Picture : Elderly Investors Monitoring Stock Markets Outside a Local Bank in HK

TOKYO - Asian stock markets made a cautious rebound Thursday as investors kept an eye on US Federal Reserve moves to combat housing woes that have battered global bourses.

Asian markets were in positive territory after a strong recovery on Wall Street overnight but early gains were pared in Tokyo and some other bourses as dealers looked to a speech Friday by Fed chairman Ben Bernanke.

Hong Kong was among the top regional performers, closing up 2.0 percent on hopes for interest rate cuts both in the United States and locally.

"Asian shares are following Wall Street and recovered due to renewed sense that the Fed will solve this crisis," said Toshihiro Matsuno, equities research head at SMBC Friend Securities in Tokyo.

"Volatility remains but I think the volatility will start calming down. It will move in waves, with periods of volatility followed by relative calm," he said.

The Federal Reserve pumped more money into the market and Bernanke told a senator the central bank was "prepared to act as needed," raising hopes that the Fed will cut its key rate when it meets next month.

The problems in the US mortgage market erupted due to "sub-prime" home borrowers with shaky credit histories defaulting on their loans. Investors then rushed to cover their losses, triggering fears of a liquidity squeeze.

"The sub-prime problem will continue for a long time. But the world economy will start looking at it as a US problem and that it won't hurt the overall economy," Matsuno said.

Tokyo closed up 0.88 percent, losing some of its momentum on a modest appreciation of the yen, which makes Japanese exports less competitive.

In times of financial crisis, many players seeking to contain the damage unload the yen, which they had borrowed because of Japan's super-low interest rates to invest in higher-yielding markets.

The dumping of the so-called "carry trades" leads to a spike in the yen, making Japanese exports less competitive overseas.

"Share prices turned top-heavy as investors thought the rebound on Wall Street was within the range of the recent volatility," said Mitsushige Akino, chief fund manager at Ichiyoshi Management.

"Investors were sceptical whether US shares will be able to maintain the gains," he added.

In Hong Kong, the gains were led by interest rate speculation and also expectations Beijing will allow individual investors in Hong Kong to expand investments into mainland China.

"The sell-off in the last two days was quite high. Some investors may go on bargain hunting today," said Kenny Tang, associate director at Tung Tai Securities.

The Shanghai market, which has been less exposed than most to the sub-prime problems, closed up 1.14 percent, in part due to the rub-off effect of Hong Kong.

"Excluding China, Asian shares followed developments on Wall Street. Shares recovered because of heightened expectations that the Fed will lower its fed funds rate," said Hirokazu Fujiki, equity strategist at Okasan Securities in Tokyo.

He said that the market was now waiting for clues when Bernanke delivers a speech Friday at the Fed's annual symposium in Jackson Hole, Wyoming.

"I think Bernanke's awareness of the problem has heightened," Fujiki said.

Among other markets, Taipei closed 1.48 percent higher, Sydney was up 0.6 percent, Seoul rose 0.9 percent, Mumbai was up 0.86 percent and Jakarta ended 0.7 percent higher.

But Singapore share prices closed 0.41 percent lower and Bangkok ended 0.06 percent lower. - AFP/ir

CapitaLand Sells S'pore Building Stake For US$241m

Source : The Business Times, August 30, 2007

SINGAPORE - CapitaLand, Southeast Asia's largest property developer, said on Thursday that a subsidiary will sell its 50 per cent stake in an office building in Singapore for $366.4 million (US$240.7 million).

The company said that upon completion it will gain $150.8 million in its consolidated accounts from the sale. -- REUTERS

CapitaLand's announcement

Global Credit Crunch Almost Over: Mobius

Source : The Business Times, August 30, 2007

Fund manager says markets may soar to new heights barring unforeseen events

(NEW YORK) The global economy is 'very healthy' and the credit crunch stemming from the United States mortgage losses has 'almost passed', said Mark Mobius, who oversees US$30 billion at Templeton Asset Management Ltd in Singapore.

'We're pretty bullish,' he said during an interview from Hong Kong. 'Markets are probably going to surge ahead to new highs barring any other unforeseen circumstances.' The fund manager said that he has purchased shares of energy companies Sinopec Shanghai Petrochemical Co, PetroChina Co and Petroleo Brasileiro SA during the market rout of the past month. South African shares and those of Chinese companies traded in Hong Kong are among the most attractive in emerging markets worldwide, he said. Dr Mobius added that US shares are 'not very expensive'. The Morgan Stanley Capital International Emerging-Markets Index, a global benchmark, has dropped 9.3 per cent since reaching a record high on July 23, on concern that defaults among US subprime borrowers will spill over to other markets and slow economic growth.

The Federal Reserve earlier this month lowered the interest rate it charges banks and acknowledged for the first time that an extraordinary policy shift is needed to contain the sub-prime mortgage collapse that began roiling the world's financial markets two months ago.

'The Fed has been doing the right thing,' Dr Mobius said. 'The US economy will continue to power along as a result.' The fund manager said that he's 'looking at companies in Egypt and Dubai' and mentioned real-estate stocks in the latter market, without elaborating.

'I can't think of any market where we've been paring down because money continues to flow into the funds,' he said.

His bullishness on stocks is shared by some of the biggest banks. Credit Suisse Group recommended on Aug 21 that investors should raise holdings of stocks worldwide following the sell-off in the past month and on speculation that the Fed won't let a credit-market debacle hurt growth.

Teun Draaisma, the Morgan Stanley strategist who advised trimming holdings in Europe before declines in February and July, raised his recommendation on stocks in the region to 'overweight' from 'neutral', on Aug 13. -- Bloomberg

Property Transactions With Contract Dates Between Aug 6 - Aug 11, 2007

Las Vegas Sands Optimistic About Marina Bay Integrated Resort

Source : Channel NewsAsia, 30 August 2007

HONG KONG: The Venetian Macao which opened on Tuesday, will give a taste of what Singapore can expect when its very own Marina Bay Sands integrated resort opens in 2009.

Both projects are developed by US-based Las Vegas Sands, which is aggressively expanding its presence in the Asia Pacific.

More than just gaming, Sands is eager to draw more convention and exhibition business to this region.

Las Vegas Sands is confident that its integrated resort at Marina Bay will open as scheduled in late 2009, even though construction costs may escalate by up to 40 percent due to sand supply and refinements to the original design.

Will Weidner, president of Las Vegas Sands Corp., said: "We'll build the building substantially the way it was presented in the model. We're looking for means and methods to construct it more effectively. Obviously, if you can pour the concrete faster, the period of time needed is shorter as well; the labour costs (will also be) lower."

Sands appears to be riding the crest of the wave with the opening of the world's largest casino in Macau.

It hails the Venetian as a showcase of what Marina Bay promises to be – plenty of shops, events and entertainment.

Already, Sands is seeing what it calls "phenomenal" interest in the retail space at Marina.

Sands has been talking to over 500 parties representing more than 1,000 brands.

Its 100,000 square metre of convention centre or roughly 11 football fields has already confirmed up to 20 major international events, rolling as far ahead as 2013.

The exhibition space offered by the Venetian Macao dwarves what Hong Kong has to offer in terms of exhibition space.

There is already plenty of competition in the region, but a similar sized venue in Singapore is proving to be double-sell for Las Vegas Sands.

Sands is bullish about the Marina Bay project, saying there are already infrastructure and efficient transport links in place, which will help the resort get off to a booming start. - CNA/so

URA Invites Applications For Condominium Site At Alexandra Road

Source : Channel NewsAsia, 29 August 2007

The Urban Redevelopment Authority is inviting applications from developers for a condominium site at Alexandra Road.

This is one of the residential sites placed for sale under the Reserve List of the Government Land Sales Programme for the second half of 2007.

According to property consultant CBRE, the site can be developed into a condominium development of at least 40 storeys high.

It expects the site to fetch bids in the range of S$650 to S$750 per square foot per plot ratio.

This will translate to an average selling price of between S$1,200 and S$1,300 per square foot.

Meanwhile, property consultant Knight Frank says it expects the site to be popular with developers due to its proximity to the Redhill MRT station and to the Tanglin Road area.

It is forecasting that the site will fetch up to S$180 million, or about S$400 per square foot per plot ratio.

Under the Reserve List, the Government will only release a site for sale if an interested party offers to bid a minimum purchase price that is acceptable. - CNA/ch

Asian Stocks Recover As Fed Tames Trouble

Source : Channel NewsAsia, 30 August 2007

TOKYO: Asian stock markets rebounded in early trade Thursday as investors grew confident that the Federal Reserve would take action to combat housing woes that have battered global bourses.

Asian markets all opened in positive territory, with Hong Kong jumping by more than two per cent, after a strong recovery overnight on Wall Street.

The Federal Reserve pumped more money into the market and Fed chairman Ben Bernanke told a senator the central bank was "prepared to act as needed," raising hopes that the Fed will cut its key rate when it meets next month.

"Asian shares are following Wall Street and recovered due to renewed sense that the Fed will solve this crisis," said Toshihiro Matsuno, equities research head at SMBC Friend Securities in Tokyo.

"Volatility remains but I think the volatility will start calming down. It will move in waves, with periods of volatility followed by relative calm," he said.

The problems in the US mortgage market erupted due to "sub-prime" home borrowers with shaky credit histories defaulting on their loans. Investors then rushed to cover their losses, triggering fears of a liquidity squeeze.

The Federal Reserve on Wednesday pumped 5.25 billion US dollars more into the banking system, the third consecutive daily injection this week aimed at easing the credit squeeze.

"The sub-prime problem will continue for a long time. But the world economy will start looking at it as a US problem and that it won't hurt the overall economy," Matsuno said.

In Tokyo, share prices also benefitted from a stabilising yen.

In times of financial crisis, many players seeking to contain the damage will unwind their yen positions, which they had borrowed because of Japan's super-low interest rates to invest in higher-yielding markets.

The dumping of the so-called "carry trades" leads to a spike in the yen, making Japanese exports less competitive overseas.

The Tokyo Stock Exchange's benchmark Nikkei-225 index was up close to one per cent in early afternoon trade.

In Hong Kong, the Hang Seng index was up more than two per cent.

"The sell-off in the last two days was quite high. Some investors may go on bargain hunting today," said Kenny Tang, associate director at Tung Tai Securities.

The Shanghai market, which has been less exposed than most to the sub-prime problems, was up nearly one per cent, in part due to the rub-off effect of Hong Kong.

"Excluding China, Asian shares followed developments on Wall Street. Shares recovered because of heightened expectations that the Fed will lower its fed funds rate," said Hirokazu Fujiki, equity strategist at Okasan Securities in Tokyo.

He said that the market was now waiting for clues when Bernanke delivers a speech Friday at the Fed's annual symposium in Jackson Hole, Wyoming.

"I think Bernanke's awareness of the problem has heightened," Fujiki said.

Among other markets, Taipei was up 1.60 per cent, Sydney was up 0.74 per cent and Seoul was up 0.88 per cent. Both Singapore and Jakarta were up nearly one per cent. - AFP/ac

When An Agent's Presence Prevents A Legitimate Property Deal From Going Through

Source : The Straits Times, Forum, Aug 30, 2007

I READ with interest the letter, 'Why flat buyers should approach sellers directly'.
In some cases, agents become a stumbling block to a successful transaction.

My friend experienced this just a few days back. He went with his agent to buy an executive apartment. He liked the house as it met all his requirements. Both the seller and buyer agreed on the price.

Then the seller's agent dropped a clanger. As this was a negative sale (whereby the seller is incurring a loss and won't get any cash out of the sale), the seller will not be able to pay his agent's commission. Therefore the seller's agent said that an amount of $10,000 had to be paid in cash separately by the buyer and the selling price will be declared after deducting this amount.

My friend's agent was a genuine guy and he turned down the offer of the seller's agent, saying it was illegal. Now because of the presence of the seller agent's in the picture, a legitimate transaction had to be aborted. Both my friend and the seller are disappointed.

The seller's agent told my friend that since the $10,000 was to be paid in cash, there would be no record and no one would know about it. Should we attribute this to agents functioning unscrupulously or is it a genuine case where their efforts have also to be rewarded?

N. Nageswaran

Law Society Has Compensation Fund

Source : The Straits Times, Forum, Aug 30, 2007

THE Law Society refers to the letter by Mr Heng Cho Choon, 'Law Society should pay clients of errant lawyers' (ST, Aug 25).

Mr Heng referred to compensation funds established by overseas law associations to compensate clients who suffered loss owing to the dishonesty of a lawyer.

We wish to point out to Mr Heng that the Law Society of Singapore has a compensation fund, which was established in 1967.

Information on our Compensation Fund is provided on the society's website which Mr Heng visited.

Under the scheme, any person who has suffered loss due to the dishonesty of a lawyer or his employee in connection with his practice of law may apply to the society for a grant under the Compensation Fund.

Every lawyer with a practising certificate contributes annually to the Compensation Fund.

Since June 2004, the society has carried out inspections of clients' accounts when appropriate, and will continue to do so.

In addition, every year all law practices that hold clients' monies must submit an accountant's report to the society. This accountant's report will highlight any shortcomings in accounting practices.

The incident of a lawyer allegedly absconding with $68,000 of clients' money is indeed deeply regrettable. Investigations are under way concerning this incident.

Misappropriation of clients' money results in the errant solicitor being struck off.

No less than any responsible legal profession anywhere else, we are rigorous in prosecuting misconduct.

Philip Jeyaretnam
The Law Society of Singapore

Exempt Annuitants From Compulsory Scheme

Source : The Straits Times, Fourm, Aug 30, 2007

NOW that the brouhaha has settled down somewhat over the recent proposal for a compulsory annuity, I believe the issue is not as complicated as it is made out to be.
Currently, most of those who reach the age of 55 leave their Minimum Sum with the Central Provident Fund (CPF) Board for a higher monthly income from age 62 till it runs out rather than buy a life annuity which pays less but for life.

So, logically, if a person chooses the life-annuity option, he should be exempted from the proposed life-annuity scheme as he is already covered for life.

Hence, only those who leave their Minimum Sum with the CPF Board should be subject to the compulsory-annuity scheme.

Statistics show that only half of those aged 62 will live beyond 85.

So it is only fair that only those who have not covered themselves for life contribute to the scheme and insure one another.

Mohamad Rosle Ahmad

Rethink Proposal For Compulsory Annuity

Source : The Straits Times, Forum , Aug 30, 2007

ON THE proposed compulsory annuity, I would strongly urge the Government not to cross the fine line on CPF policy, so as to preserve Singaporeans' trust and faith.

Like most Singaporeans, I have always regarded CPF money as my retirement nest egg and even if I could not touch this hard-earned money locked up in CPF by the Government until age 67, the money is still rightfully mine and should be disbursed to my next-of-kin when I die.

But if the Government forces me to part with my money to buy an annuity which starts paying only at age 85 and the remaining money is not given back to my heir when I die, then I would view this as a very serious breach and abuse of my trust in the CPF system.

Please take into consideration the intense feelings we have against mandatory measures like a compulsory annuity scheme.

It is a double whammy: money is taken away from us without giving us a choice, and there is no refund to my family when I die.

I don't think people will accept this.

Dr Lim Boon Hee

Sunset Way's Bold And Trendy Makeover Benefits Retailers

Source : The Straits Times, Aug 30, 2007

Area poised to be next dining hot spot with cafes, pubs and eateries

DOING WELL: The estate is fast challenging hot spots such as Dempsey Road due to its charm and lower rental prices for retailers. -- ST PHOTO: DESMOND LIM

HEARTLAND shops in the once sleepy neighbourhood centre of Sunset Way have undergone a bold transformation to become Singapore's next hot dining spot.

Not long ago, these 50 or so Housing Board (HDB) shops were almost forgotten as a number of struggling businesses took a payout to leave. Now, the area is buzzing with new life, as crowds throng trendy new wine shops, cafes, pubs and restaurants - all in a relaxed, alfresco setting.

Sunset Way's new look will only get better: its town council and the HDB will pump in another $1.5 million to complete its makeover, said Mr Andrew Lim, chairman of the Sunset Way Trades Association (SWTA).

The estate is fast challenging hot spots such as Holland Village and Dempsey Road, due to its lush greenery and charm - and much cheaper rental prices for retailers.

Some new food and beverage retailers told The Straits Times they looked at Tanglin Village before settling on Sunset Way, forking out an average $250,000 to set up shop.

One tenant, who did not want to be named, said he was paying rent of about $5.50 per sq ft (psf).

That is far cheaper than the rent at Holland Village of $15 psf, and those at Tanglin Village of about $8 to $10 psf, as well as nearby Rochester Park of about $12 psf, estimated Sunset Way's master tenant, Mr Victor Koh of Circles International Solutions. 'I did my research before deciding on the prices here. It's important to be affordable when the estate's just starting again.'

The rejuvenated HDB neighbourhood centre - comprising about 50 shops from Block 105 to 109 in Clementi - is the first success story under the HDB's Restructuring Programme for Shops.

Launched in 2005, it gives struggling retailers in a location a way out with an ex-gratia $60,000 payment if more than half opted to quit.

This trigger point was revised recently to 30 per cent.

When over half the retailers at Sunset Way's Block 106 quit two years ago, the remaining business faltered as crowds thinned out.

Under the scheme, HDB converts the empty shops into spaces for communal uses.

But Sunset Way's potential was too good to ignore.

Shopkeepers began talks with HDB and the ward's MP, Mr Christopher de Souza, to save the centre.Outlets that have seized the opportunity include steak house Grill-Out, a cafe specialising in New Zealand wine and food, and a bistro, peaberry & pretzel.

Even Rocky's Pizza is back. It was synonymous with the area for 15 years before it was edged out by a new condo. Owner Daniel Cooley decided to return as soon as he learnt of a vacancy.

Resident Madam Celestine Yuan, 35, is pleased. 'Now I don't have to go far to get a unique, casual yet sophisticated dining experience.'

Mr de Souza said Sunset Way paves the way for more HDB estates to revamp themselves. 'This involves very careful consideration of the area's trade mix and different ways to attract crowds.'

He has been invited to officially open the revamped centre next month. Shopkeepers will soon launch a marketing campaign to raise its profile.

'Now I don't have to go far to get a unique, casual yet sophisticated dining experience.'

MADAM YUAN, a resident of Sunset Way

'Business is already booming, and hardly anyone knows about us yet.'

MR COOLEY, owner of Rocky's Pizza

Soilbuild Buys Margate Mansion, Off Meyer Road

Agents Who Discourage A Transaction If Told They Won't Get A Commission

Source : The Straits Times, Forum, Aug 30, 2007

I HAVE a two-room flat which I rent out. I used to get agents to find tenants for my flat.

Because I am now retired and am free, I do the advertising, answering calls and taking all the details myself. But I encounter a lot of harassment by agents who want a commission although they do not do anything but just bring in clients who want to view the place. They want commission from both parties.

When I reckon that clients like my place, and the rental is negotiated, the agent approaches me for commission for which he had not done anything. When I tell him I don't intend to give him/her a commission, he/she would persuade the client to 'abandon' this place and go for a 'better' accommodation.

The client, therefore, loses the opportunity to rent this place. It is, in my view, unethical as the client has lost an opportunity. I guess this is a common case, but something must be done about it.

D Sambasivan

Apartment Price Up $140K In 5 mins

Source : The Straits Times, Forum, Aug 30, 2007

I WOULD like to share my experience with a dishonest housing agent, in the hope that future sellers will not be fooled by unscrupulous 'I will try my best to get you the best price' agents.

Two years ago, I appointed an agent to sell my apartment for $940,000.

It took a while to sell it because market conditions at that time were not too good. Eventually, she called and said she had received an offer of $800,000 for the unit.

Desperate I might have been but I refused to sell because the price was too low. I told her that I would not sell for less than $900,000.

Playing the good, honest agent, she asked me if I would split the difference with her if she could get the buyer to pay more than $900,000.

Thinking that no buyer would agree to pay an additional sum of more than $100,000 after having offered such a low price, I agreed to split the difference with her.

Less than five minutes later, she called and said she managed to convince the buyer to pay $940,000, which was the price I wanted to sell my apartment for originally.

It was only then that I realised that I had been duped. I learnt an expensive lesson.

Goh Leng Choon

En Bloc Sales Without Tears

Source : The Straits Times, Aug 30, 2007

SELLERS both eager and reluctant in collective property deals will find out in time if the legislative changes Deputy Prime Minister and Law Minister S. Jayakumar tabled in Parliament on Monday balance their competing interests. What the latest draft amendments to the Land Titles (Strata) Act will do, as much as they can do for the time being, is to provide more safeguards and make the process more transparent for both groups. These will go a long way to helping them avoid doubt and dispute that could lead to drawn-out and costly litigation, such as in the current Horizon Towers case. The proposed changes could not have come sooner. They strengthen the practice in the crucible of a booming property market. Many - sellers, buyers, realtors and lawyers as well as the authorities - have learnt much in the last few months of en bloc frenzy.

More than 100 people recently made over 400 suggestions in six weeks of public consultation that resulted in more than 30 proposed measures. The intensive and extensive exercise appears to have thrown up fixes that are sorely needed. Up to now, no rules exist governing the establishment and conduct of an en bloc sales committee. With the changes, the decision to set one up and the consideration of its proposals will lie with the management corporation, thus effectively safeguarding owners from any sharp practices outsiders may have in mind. The requirement that a sale must be launched through public tender or auction will help ensure the best price. The five-day cooling-off provision will protect sellers from making a hasty decision. The presence of a lawyer to witness documents and to clarify terms will increase everyone's comfort level while guarding the deal from technical pitfalls.

Another significant change is that the consent owners must give for an en bloc sale will relate to the size as well as the share value of their property. The additional condition is a sensible attempt to deal with the concerns of owners of residential properties, which generally have a smaller share value than offices or shops in a mixed development. Beyond that, the 80 per cent and 90 per cent owner consent requirement will be left untouched for developments more than 10 years old and less than 10 years old respectively. It is probably felt that increasing the percentages will make such deals unduly onerous. If the proposals make possible en bloc sales without tears while encouraging urban renewal at an optimal pace, an objective not to be lost sight of, they will have done their job. If not, further tweaks can always be made.

Good Class Bungalow Sold For Record $29m

Source : The Straits Times, Aug 30, 2007

A BIT OF HISTORY : Glencaird - a restored, 105-year-old Victorian bungalow - was completed in 1999 as part of The Glencaird Residences. -- PHOTO: WHEELOCK PROPERTIES

A GOOD class bungalow at 15 White House Park has become mainland Singapore's most expensive, after it was sold for a record $1,308 per sq ft (psf) - eight years after the historic property was restored and put on sale.

The 22,000 sq ft conservation bungalow - called Glencaird - was sold to a Singaporean for $28.8 million, Wheelock Properties said in a statement yesterday.

Wheelock has been managing the property for Oroll, a wholly-owned unit of The Wharf (Holdings), which is also owned by Wheelock's parent, Wheelock and Company.

Glencaird is one of 12 luxury bungalows that make up The Glencaird Residences and the only conservation bungalow in the series.

Oroll developed the bungalows.

The other 11 bungalows have already been sold at an average price of $838 psf.

Before it finally found a buyer, Glencaird - a restored, 105-year- old Victorian bungalow with five bedrooms - had sat empty since its completion in 1999.

'We received several offers for Glencaird over the years,' said Mr David Lawrence, Wheelock's chief executive officer, in the statement.

'However, we felt they were not reflective of the value, given that this is a very unique conservation piece in an excellent location.'

Prior to Glencaird's sale, the record for mainland Singapore's priciest bungalow was held by 63 Dalvey Road - sold in March for $16.45 million, or $1,091 psf.

On Sentosa, the highest price fetched by a bungalow plot is $1,473 psf.

Good class bungalows, Singapore's most prestigious homes, are now enjoying astronomical asking prices amid the property boom.

Ascott Pays $79m For Wilkie Road Development

Source : The Straits Times, Aug 30, 2007

THE Ascott Group has splashed out $79.3 million on a 99-year leasehold service residence in Wilkie Road.

Asia's largest service-residence operator acquired the 154-unit development from Capita- Commercial Trust and CapitaLand Selegie.

The two companies - both, like Ascott, are owned by property giant CapitaLand - are developing Wilkie Edge, a sprawling lifestyle project comprising offices, retail, food and beverage outlets.

The new Ascott acquisition - to be called Citadines Singapore Mount Sophia - will be the residential component at Wilkie Edge. It will take in its first guests in the first half of 2009.

The Citadines brand is one of three chains which Ascott operates. It differs from the other two - Ascott and Somerset - in that it caters to the 'young and trendy', said the company.

Ascott expects the Wilkie Edge development - which will be Citadines' first in Singapore - to appeal to such a market, including academics, foreign students and expatriates working in the creative services industries.

Ascott has 15 Citadines residences across Asia, including those in Xian, Shanghai and Bangkok.

There are 44 Citadines developments in Europe, where the chain first started.

Ascott acquired the Citadines brand from its European operator in 2004 and expanded the brand to Asia.

Citadines Mount Sophia will be Ascott's seventh service residence in Singapore. The group has an 'Ascott' development in Raffles Place due to open next year and five Somerset developments around the island.

The acquisition is subject to approval from Ascott's shareholders and those from other authorities

Ascott To Buy Wilkie Road Serviced Apts For $79m

Source : The Business Times, August 30, 2007

Property to take on Citadines brand, will open in 2009

THE Ascott Group has agreed to buy a 99-year leasehold serviced residence in town for $79.3 million, the company announced yesterday.

The property, located at Wilkie Road, is part of lifestyle complex Wilkie Edge, which is under construction. Wilkie Edge is a mixed development consisting of offices, retail, and food and beverage outlets.

Strategic location: The property is part of lifestyle complex Wilkie Edge, a mixed development consisting of offices, retail, and F&B outlets currently being built

The acquisition, to be funded from internal resources and external borrowings, will bring Ascott's property portfolio in Singapore to 11, with a combined 1,042 units. It will be named Citadines Singapore Mount Sophia and open in the first half of 2009.

'Citadines Singapore Mount Sophia is strategically located in the heart of Singapore's upcoming arts, learning and entertainment hub in the Bras Basah-Bugis area,' said Ascott president and CEO Jennie Chua. 'It is in the city centre with excellent access to the central business district and the shopping and entertainment attractions of Orchard Road.'

The Ascott Group had earlier inked a memorandum of understanding to manage Wilkie Edge's serviced residences for an initial 10-year term with an option to extend it for another 10 years.

'Strong demand for extended-stay accommodation, the vibrant real estate market, and the property's attractive location are reasons for Ascott to acquire leasehold interests in the serviced residence instead of only managing the property for fee income,' added Ms Chua. 'This will enable us to maximise shareholder returns.'

The new property will have 154 units and be Ascott's first Citadines-branded serviced residence in Singapore. It will cater to the young and trendy, expatriates working in the creative services community as well as foreign students and academics from the nearby Singapore Management University, Nanyang Academy of Fine Arts and LaSalle College of The Arts.

The acquisition agreement is inked between Ascott's indirect wholly owned subsidiary Ascott Scotts Pte Ltd, CapitaLand Selegie Pte Ltd and HSBC Institutional Trust Services, which is the trustee of CapitaCommercial Trust (CCT).

Just last month, CCT had announced that it is buying Wilkie Edge for $262 million. The pact comes with an option to lease the serviced apartments for a $79.3 million consideration. When this option is exercised, CCT's purchase price for Wilkie Edge will be reduced to $182.7 million.

Alexandra Condo Site Up For Tender

Source : The Business Times, August 30, 2007

HDB also invites bids for sale of commercial plot at Toa Payoh Lorong 6

THE Urban Redevelopment Authority yesterday asked for tenders for a 99-year leasehold residential plot at Alexandra Road, close to the Redhill MRT station and opposite the Metropolitan, after receiving a minimum bid price that triggered the launch from the Reserve List.

The site occupies some 8,559 square metres with a gross plot ratio of 4.9, which can generate a maximum permissible gross floor area of 41,939 square metres.

It is zoned for development of condominium or serviced apartments. Property consultancies said the site could be developed into a 40-storey condominium.

Knight Frank managing director Tan Tiong Cheng said that he expects the project to have some 380 units averaging 1,200 square feet in size, given that its height and plot ratio are similar to those of the Metropolitan - a joint project between CapitaLand and Lippo Group.

Mr Tan reckons that bids for the site could have been in the region of $400 per square feet per plot ratio (psf ppr) or a lump sum of $180 million and expects the units to fetch average prices of $950-1,000 psf when they are put on the market, given that units in the nearby Metropolitan are fetching some $924 psf in resale prices in the third quarter.

CB Richard Ellis executive director Li Hiaw Ho estimates that the site could have drawn bids in a higher range of $650-750 psf ppr.

'This will translate to an average selling price of between $1,200 psf and $1,300 psf, which could be attainable in the second half of 2008,' he said, expecting strong demand to come from upgraders and investors who are looking to rent out the units given its proximity to the city and amenities.

In comparison, the Metropolitan site was purchased by the developers at $350 psf ppr in November 2005.

Based on the strong demand seen in Metropolitan where all 382 units were sold within six months, market watchers said that they expect the Alexandra site to draw strong interest from developers given that it is located at the fringe of the established Tanglin housing district which is within a five to 10 minute drive to Orchard Road, the Central Business District, Marina Bay, and the southern waterfront area.

Yesterday, the Housing & Development Board invited tenders for the sale of a commercial site at Toa Payoh Lorong 6, under the Confirmed List of the Government Land Sales Programme.

The 99-year leasehold site has a land area of 1,396.8 square metres with maximum allowable gross floor area of 4,190.4 square metres, and is located near the HDB Hub.

Its tender will close on Oct 16 and the project is expected to be completed by 66 months from the date of tender acceptance.

Mr Li from CBRE estimates that the site could yield about 34,000 square feet of net lettable area of commercial space and can be developed for a variety of uses including retail, F&B, office and entertainment facilities such as cinemas, bowling alleys and fitness centres.

'It is likely that the successful bidder would devote 100 per cent of the maximum gross floor area for retail use, so as to tap on the large population catchment within the Toa Payoh housing estate as well as workers and visitors at HDB Hub,' he added.

'We expect bids to range between $600 and $700 psf ppr. Assuming that the mall is able to fetch a monthly rent of about $7-9 psf per month, this would provide the developer with a stabilised yield of about 5.5-6 per cent.'

Sub-Prime Culprit: Irrational Exuberance

Source : The Business Times, August 30, 2007

The Bottom Line
(WASHINGTON) We are now in the 'blame phase' of the economic cycle. As the US housing slump deepens and financial markets swing erratically, Americans have embarked on the usual search for culprits. Who got us into this mess?

Our investigations will doubtlessly reveal, as they already have, much wishful thinking and miscalculation. They will also find incompetence, predatory behaviour and probably some criminality. But let me suggest that, though inevitable and necessary, this exercise is also simplistic and deceptive. It assumes that, absent mistakes and misdeeds, we might remain in a permanent paradise of powerful income and wealth growth. The reality, I think, is that the economy follows its own Catch-22: by taking prosperity for granted, people perversely subvert prosperity. The more we - business managers, investors, consumers - think that economic growth is guaranteed and that risk and uncertainty are receding, the more we act in ways that raise risk, magnify uncertainty and threaten economic growth. Prosperity destabilises itself.

This is not a new idea. Indeed, it explains why terms such as 'the business cycle' and 'boom and bust' survive. But it gets overlooked in periods of finger-pointing: now, for instance. The housing downturn and credit fears are undeniable. Someone or something must be held responsible. Here's a rundown of popular suspects:

# The Federal Reserve. It allegedly held short-term interest rates too low for too long. From late 2001 to late 2004, the overnight Fed funds rate was 2 per cent or less. Credit was supposedly 'too easy'.

# The Chinese. They funnelled their huge export surpluses (mostly in US dollars) into US Treasury bonds. That kept long-term interest rates low even after the Fed began raising short-term rates in 2004. China's foreign exchange reserves now exceed US$1.3 trillion.

# Mortgage bankers. They relaxed lending standards for weak borrowers, leading to numerous defaults. In 2006, about 90 per cent of new 'sub-prime' mortgages had adjustable interest rates. That exposed borrowers to future rate increases - which many now can't afford.

# Wall Street. The mortgage bankers got giddy only because they could sell the loans to pension funds, hedge funds and others as mortgage-backed securities (bonds created by bundling loans).

# Credit rating agencies. Moody's and Standard & Poor's - which rate the creditworthiness of bonds - allegedly weren't tough enough on sub-prime mortgages. That fanned investor appetite.

Did the Fed foster easy credit for too long? Maybe. But economist Mark Gertler of New York University argues that if this were so, inflation would have exploded. It didn't. From 2003 to 2005, it rose modestly, from 1.9 per cent to 3.4 per cent.

What seems to have happened was a broad and mistaken reappraisal of risk. Bonds that were once considered highly risky were judged much less so. China's appetite for Treasury bonds may account for some of this. It may have lowered interest rates on Treasuries and sent investors scurrying into riskier bonds with higher rates (corporate 'junk' bonds, mortgage bonds, and bonds of 'emerging market' countries like Brazil).

But that can't fully explain the extraordinary drop of interest rate 'spreads' - the gap between rates on riskier bonds and safer Treasuries. In early 2003, junk bonds carried rates eight percentage points above Treasuries; early this year, the gap was less than three percentage points. Somehow, junk bonds were no longer so risky; therefore, it was okay to accept lower rates.

Paradoxically, the fact that the US economy grew in spite of so many daunting obstacles - corporate scandals, 9/11, higher oil prices - may have created a false sense of confidence that it could overcome almost anything.

Sophisticated investors and ordinary consumers alike seem to have fallen under the spell of this logic. Believing risks had declined, the first group actually adopted ever riskier investment strategies - and unknowingly increased financial risk. The second, believing in continuing economic growth and rising home prices, assumed ever heavier debt burdens - and created potential obstacles to future spending. In 2000, household debt was 103 per cent of disposable income; in 2007, it's 136 per cent.

Mistakes and misdeeds do not occur in a vacuum. The ultimate culprit here may be irrational exuberance. As economic expansions lengthen, people become more complacent and careless. The very fact that the economy has done well creates conditions in which it may - at least temporarily - do less well. Prosperity inevitably interrupts itself with losses, popped bubbles and recessions. This produces recriminations and promises to do better, but there is always a next time. -- The Washington Post Writers Group

US Sub-Crime Crisis May Worsen: Nobel Laureate

Source : The Business Times, August 30, 2007

(KUALA LUMPUR) The US sub-prime mortgage crisis will probably 'get worse' as banks tighten lending rules and borrowing rates increase, Nobel laureate Joseph Stiglitz said.

The sub-prime fallout has roiled global markets as investors dumped riskier assets and lenders tightened credit.

US homes facing foreclosure almost doubled in July as property owners with adjustable-rate mortgages saw their payments rise and were unable to refinance because of the sub-prime crisis, RealtyTrac Inc said last week.

'People assumed they could roll over their mortgages when the teaser rates ended and they had to pay the full interest rate, because after all the price would go up,' Prof Stiglitz said in an interview. 'Now credit standards are getting tighter and more people are going to have debt beyond their ability to pay.'

An increase in foreclosures will add more homes to the market and further erode values.

US home sales dropped to a four-year low in the second quarter and prices fell in a third of US cities, according to the National Association of Realtors.

'House prices in the country as a whole are beginning to fall,' he said. 'There's a very high probability problems in the subprime markets are going to start showing up in the markets that are a little bit above the sub-prime.'

The global credit crisis sent benchmark indexes in the US, Europe and Asia to their lowest levels in five months earlier in August after investors withdrew from riskier assets.

Financial institutions, including Barclays plc and State Street Corp, may be facing losses from units they set up that bought collateralised debt obligations. The credit crunch forced central banks to inject money into their financial systems to boost liquidity.

'These toxic sub-prime mortgages - the result of predatory lending where financial institutions took advantage of the least-informed Americans - were hidden in all kinds of complicated financial products and shipped overseas,' he said. 'People are discovering all over the world that they own billions of dollars' of such products.

Investors will demand higher yields to hold fixed-income assets they deem risky, said Prof Stiglitz, who is in Kuala Lumpur to present a lecture organised by Khazanah Global Lectures.

'The countries which are most adversely affected are the countries like Indonesia,' he said. 'The overall risk premia will go up and those countries, innocent bystanders to this crisis which are viewed to be somewhat riskier, will find that markets will demand higher rates.'

Prof Stiglitz won the Nobel prize for economics in 2001. -- Bloomberg

Worry Over US Crisis Takes Shares Down

Source : TODAY, Thursday, August 30, 2007

Indonesia among the Asian economies that could buck trend

ASIAN shares fell yesterday in a broad selloff sparked by worries that a housing slump and credit crisis in the United States will pull its economy into a slowdown, or even a recession.

The falls show that for all the talk of decoupling, few Asian stocks are holding up well to pressure and even those are unlikely to avoid being dragged into the mess.

Still, indiscriminate selling creates buying opportunities, and that means stock pickers are likely to be busy these days scrubbing their markets to find companies that are least likely to be impacted by a slowdown in the US.

Analysts say two groups are worth exploring: Those housed in economies that aren’t exposed to the US and the infrastructure giants whose work comes with long-term contracts that aren’t exposed to the factors that will weigh on the US economy.

The big picture is a starting point. ABN Amro recently ranked Asian territories by their exposure to a US slowdown, categorising Thailand and Taiwan as having the highest risk — thanks to their dependence on exports for gross domestic product growth — and India and Indonesia as having “relatively low vulnerability”.

“Indonesia’s reliance on exports to the US is one of the lowest in Asia, with economic growth mainly driven by domestic factors,” Citi Investment Research analyst Stephan Hasjim said.

The Indonesian government has said it plans to increase its capital spending by nearly US$11 billion ($16.7 billion) to pay for infrastructure projects — from highways to electricity and irrigation infrastructure.

Bank Rakyat Indonesia and Bank Danamon Indonesia stand out as two banks most likely to increase earnings as they do their loan portfolios and are also sheltered from falling yields on bonds and assets.

But for those unwilling to count on companies being able to survive the spillovers sure to come their way, a second transnational group of stocks might offer a compelling opportunity.

These are the giants that build national infrastructure like airports, power plants and roads that countries like Indonesia are pouring billions of dollars worth of investments into.

“Infrastructure is a megatrend,” said Mr Roger Groebli, head of Asian equity research at ABN Amro Private Banking. — DOW JONES

Brakes On En Bloc Sales May Not Be All Bad, Says Developer

Source : TODAY, Thursday, August 30, 2007

COLLECTIVE sales of property may slow due to the Government’s proposed amendments to them, but that may not necessarily be negative, said Mr Cheung Wai-Keung, chairman of luxury property developer Wing Tai Holdings.

Tightening may make developers less aggressive in acquiring land for development.

“I think it’s good, at least it will allow the market to consolidate and adjust itself. (The proposed changes) have also taken away some of the uncertainty created over en bloc rules,” said Mr Cheung.

He was speaking at the release of the company’s financial results for the year ended June 30.

The firm’s net profit rose 198 per cent to $381.8 million from $128 million a year earlier, due to increased sales of residential units, a drop in finance costs and higher contributions from its associated companies.

The Ascott Group Pay $79.3m For Upcoming Residence In Wilkie Edge

Source : TODAY, Thursday, August 30, 2007

The Ascott Group plans to pay $79.3 million for an upcoming serviced residence in Wilkie Edge, a mixed development with offices, shops and eateries.

Ms Jennie Chua’s first acquisition since becoming Ascott’s president and chief executive this month, the 99-year leasehold interest will be purchased from CapitaCommercial Trust and will open in 2009 as Citadines Singapore Mount Sophia, the first foray here by Citadines, a European value-for-money brand. — CHRISTIE LOH

Have An ERP Express Lane

Source : TODAY, Thursday, August 30, 2007


WITH regard to the letter, “Are ERP hikes the only way?”(Aug 27), here are more ways to reduce traffic congestion:

As the Central Expressway (CTE) is a key route for many living in the north, why not have an express lane for those who need speed and do not mind paying more? It requires only minor technical adjustments to charge the use of lane 1 at $5, and that for lanes 2 and 3 at, say, $1.

Let those who can afford to pay, choose to do so. Many cannot choose not to use the CTE.

And why not encourage more buses, even the private ones, to ply the CTE during the peak hours?

Rather than pay $3.50, the Electronic Road Pricing toll of travelling from Ang Mo Kio to Shenton Way, taking a bus may be more cost-effective.

URA Opens Site For Tender

Source : TODAY, Thursday, August 30, 2007

The Urban Redevelopment Authority (URA) is inviting applications for a reserve site at Alexandra Road that has been zoned for residential development.

The site, near the Redhill MRT station, has an area of about 0.86 ha and a gross plot ratio of 4.9. A site in the reserve list will only be put up for tender if the developer’s minimum bid price in his application is acceptable to the Government. More details can be found at:

The URA also announced it had awarded the tender for a commercial site at Anson Road to Firstoffice. The latter had submitted the winning bid of $237,204,839 for the site.

Wing Tai Triples Q4 Net

Source : The Business Times, August 30, 2007

WING Tai Holdings yesterday posted fourth-quarter group net profit of $243.2 million, more than triple the $75.4 million for the previous corresponding period.

The results brought the group's net earnings for the full year to June 30, 2007 to $381.8 million - a record for the property and retail group - and almost three times the $128 million for the preceding year. The full-year results include $189 million in fair value gains on investment properties (mostly Winsland House I & II) as well as profits booked from the sale of residential property units. Wing Tai sold 1,311 homes for $1.8 billion in FY2007.

Shareholders are being rewarded with total net dividends of $194.7 million for FY2007, up from $34.5 million for FY2006. The latest dividend payouts, subject to a tax rate of 18 per cent, comprise a three-cent per share first and final cash dividend, a five-cent per share special cash dividend and a 'special rights' dividend of 25 cents per share to utilise about $42 million of Wing Tai's $82 million Section 44 credit balance as at June 30, 2007.

To strengthen its capital base, Wing Tai also announced a one-for-10 rights issue at $2.05 a rights share, a 41 per cent discount to its stock closing price on Aug 28. Shareholders wishing to subscribe for the rights shares have a choice of using up to all of their 'special rights' dividend (net 20.5 cents a share) for this purpose. If they elect to use all the 'special rights' net dividend, no cash outlay is necessary.

Wing Tai has sold about 70 of the 90 units released earlier this year at its 140-unit Helios Residences project along Cairnhill Circle, achieving an average price of around $3,000 psf. It has has also fully sold its 96-unit The Riverine by the Park condo in the Kallang area for around $1,500 psf.

Projects that the group plans to market in its current financial year include L'viv on Newton Road and Belle Vue Residences on Oxley Walk. Wing Tai has a residential landbank that can be developed into one million sq ft gross floor area (GFA) in Singapore, 10.8 million sq ft GFA in Malaysia and 0.5 million sq ft GFA in Suzhou.

Wing Tai's full-year earnings per share jumped from 17.84 cents in FY2006 to 53.12 cents in FY2007. Net asset value per share rose from $1.60 as at June 30, 2006 to $2.07 as at June 30, 2007. On the stock market yesterday, the counter closed two cents lower at $3.44.

Wing Tai Chief Cautiously Upbeat On Property Prices

Source : The Business Times, August 30, 2007

Mr Cheng: Sub-prime crisis has temporarily affected property market

WING Tai Holdings' head honchos yesterday said the US sub-prime woes have slowed property transactions across the whole market here but believe that property prices are still on a growth path 'if the sub-prime (crisis) stabilises within a reasonable period'.

Wing Tai chairman Cheng Wai Keung said: 'Yes, temporarily, it has affected some of the take-up rates. But it is actually not a bad thing. The market needs a bit of consolidation. High-end home prices have gone up 100 per cent within the last six to nine months. It's just not sustainable. But if sub-prime settles within a reasonable period, I believe there is still room to grow in the property market. We are not at the end of the property cycle.'

Mr Cheng and his brother, Edmund, the group's deputy chairman, were fielding questions during the group's full-year results briefing.

'On the other hand, if sub-prime or the credit market continues to be in turmoil and it affects confidence in general, then of course it will be a completely different scenario,' he added.

Mr Cheng also acknowledged that Wing Tai had seen an increase in buyers not exercising options but the rate is 'not alarming', at 'just a handful'.

Buyers giving up options is a factor of two things: how aggressively a developer pushes for a sale and its selling price. 'Our style is that given that the market is slow, there's no point to push for a sale (and then have the buyer) back out later. Secondly, our pricing maximises our profit but we also leave something on the table (for the buyer) so at least he has a hope that the price is supportable,' Mr Cheng said.

As for the proposed changes to legislation governing collective sales, Mr Cheng reckons they will slow down en bloc sales since such deals will now take longer to execute. 'From a positive angle, it will slow down supply of land with redevelopment potential which means there will be less competition for companies that already have some landbank. But on the other hand, if you have less land to buy, then you cannot grow your business as fast as you would like to.

'But given the recent run-up in property prices, people will be a lot more cautious in buying more development land. So in a nutshell, I think it's good. At least it allows the market to consolidate and adjust itself, and also takes away some of the uncertainty under old en bloc rules.'

Wing Tai Full-Year Income Soars To $382m

Source : The Straits Times, Aug 30, 2007

PROPERTY and retail group Wing Tai Holdings almost tripled its full- year net profit to $382 million on sparkling home sales and revaluation gains.

Revenue grew 10 per cent to $982 million.

Wing Tai proposed a one-for-10 rights issue at a price of $2.05 a share - a discount of 41 per cent - as well as a special rights dividend of 25 cents per share, on top of the final dividend of three cents per share and a special dividend of five cents per share.

A revaluation of assets - mainly of its Winsland House property - alone lifted Wing Tai's income by $189 million.

More income was also booked from homes sold in its developments - Draycott Eight, Kovan Melody, The Light@Cairnhill and Amaryllis Ville.

The company sold 1,311 homes worth $1.79 billion in Singapore in the 12 months ended June 30. It sold a further 313 units worth $219 million in Malaysia, Hong Kong and China.

Among its projects under development or completed, Wing Tai has only 30 unsold units in VisionCrest Residence in Oxley Rise and 70 left among the 140 units in Helios Residences in Cairnhill Circle.

The company has residential projects covering one million sq ft of floor area in the pipeline in Singapore, including Belle Vue Residences in Oxley Walk and L'viv in Newton Road, and a further 11.3 million sq ft in Malaysia and China.

It aims to launch most of these within the next 12 to 18 months.

Earnings per share grew from 17.84 cents last year to 53.12 cents, while net asset value per share grew 30 per cent to 2.07 cents.

Chairman Cheng Wai Keung did not appear too concerned yesterday when asked if the impending tightening of rules on collective sales would affect the company's prospects.

He said the rules would lengthen the procedure for collective sales, increasing the risk that developers face.

Developers who cannot buy enough land will find it hard to expand, but Wing Tai is in a 'reasonable position', he said.

Mr Cheng added that the subprime crisis in the United States had temporarily affected the take- up rate of properties.

'But it's actually not a bad thing,' he said, adding that the prices of high-end homes had risen very fast over the past few months and that the market needed some consolidation.

Mr Cheng believes that there is still room for property prices to grow if the US sub-prime crisis resolves itself within 'a reasonable period of time'.

He said Singapore's economy is performing well, and property prices here are lagging behind in cities with similar developments.

Property Firms Record Good H1 gains, Outlook Bright

Source : The Business Times, August 30, 2007

Progressive booking of profits from projects sold will underpin results

ALL the big listed property groups have reported substantial gains in net earnings for the period ended June 30, 2007.

And the earnings outlook for the second half is positive, as developers continue to progressively recognise profits from Singapore residential projects already sold based on percentage of completion, enjoy higher rents from their Singapore office portfolios and book fair value gains on investment properties, says DBS Vickers Securities analyst Wallace Chu.

In fact, in the latest results reason, bottom lines were substantially boosted in many instances by revaluation gains on investment properties - particularly office properties that have gone up sharply in price - arising from the implementation this year of Financial Reporting Standard 40 (FRS 40).

This standard requires that fair-value gains and losses on investment properties be recorded in the profit-and-loss account. Some companies chose to do valuations and book gains on investment properties for their financial periods ended June 30 this year, such as CapitaLand and UOL Group, while others, such as Keppel Land and Singapore Land, have said they will do so at the end of the year.

The biggest revaluation gains seen this reporting season came from CapitaLand. It booked fair value gains of $645.4 million for Q2 ended June 30, 2007 and $647.4 million in H1 2007. But that's not surprising since the group, including its listed unit CapitaCommercial Trust, has one of the biggest office portfolios in Singapore.

But even without such gains, CapitaLand's net earnings were up substantially year-on-year for Q2 and H1, due to the strength of its overall operations, especially residential development sales in Singapore and China, and higher fee-based income from commercial and retail operations.

City Developments, too, posted the best result in its history - with strong showings from residential property development, rental properties and hotel operations under listed Millennium & Copthorne Hotels and CDL Hospitality Trusts. Q2 net earnings rose 333 per cent year on year to $194.4 million, and CityDev's H1 bottom line improved 272 per cent to $320.5 million.

Management emphasised that the sterling results were achieved without booking any revaluation gains on the group's substantial investment property portfolio, including offices.

CityDev said it is continuing its conservative accounting policy of stating investment properties at cost less accumulated depreciation and impairment losses, an option allowed under FRS 40.

KepLand, which has said it will revalue its investment properties at year-end, saw its Q2 and H1 net earnings go up 42 per cent and 56 per cent respectively on the back of strong residential sales in Singapore and overseas and the robust Singapore office market.

Analysts expect the group to book gains of $221.6 million in the second half of this year from the divestment of its one-third stake in One Raffles Quay to K-Reit Asia - if the transaction is approved by shareholders of both companies.

As well, KepLand's second-half earnings are expected to be boosted by fair-value gains on revaluation of its investment properties at year-end under FRS 40, given the group is a major office landlord.

Most Singapore listed developers, which have enjoyed strong Singapore residential sales in the recent past, can look forward to continue progressively booking profits from these projects in accordance with the percentage of completion. CityDev will start booking from its Solitaire condo from Q4 2007 onwards, while profits from One Shenton will be recognised in stages starting next year.

The group sold 1,315 homes valued around $2.4 billion in H1 2007 - about three times the value in the same period last year. The group's share of pre-tax profit from residential sales yet to be booked is about $1.4 billion. This is expected to be recognised progressively over the next few years.

So far, the sub-prime woes and ensuing credit crunch in the US do not appear to have cooled developers' residential sales in Singapore or prices - as is evident from the strong take-up rate for Frasers Centrepoint's Soleil @ Sinaran launch, despite the benchmark price for the location.

But if and when they do, that could cast a pall on developers' residential profits going forward. 'Sentiment and strength of the equity market will be more important share price drivers for listed property groups,' an analyst with a foreign broking house says.

Marina Barrage Will House World's Largest Water Pumps

Source : Channel NewsAsia, 29 August 2007

Singapore's flood control measures will go one step further after the Marina Barrage becomes operational by the end of this year.

Works are currently underway to install drainage pumps next to the reservoir.

These pumps are the world's largest and are specially brought in from the Netherlands. Their job is to drain out excess water during flooding.

Each pump weighs 28 tonnes, or about the weight of 400 men.

And when operational, it will be able to drain, in one minute, an amount of water that can fill up an Olympic-sized swimming pool.

When completed, water from the southern and central parts of Singapore such as Ang Mo Kio and Thomson will flow into the Marina Reservoir, which has a catchment area one-sixth the size of the island.

Related Video Link -
Marina Barrage will house world's largest water pumps

When there is heavy rain and high tide, the pumps will be set in motion, draining water from the reservoir into the sea.

But if the tide is low during heavy rain, flood gates will open to release the water into the sea.

This will help ensure that water levels in the Marina Reservoir, which is set to be a freshwater lake, is kept constant.

It also means that low-lying areas like Chinatown and Little India will be spared from flooding.

Yap Kheng Guan, Director, 3P Network, PUB, said: "So look at this system - the gates and the pumps - as (a) means in which you can manage this water level. The water level will not become so high that it will threaten some of the low-lying areas in Singapore".

Water agency PUB expects to activate two of the pumps for an average of 4 to 5 times a year during high tide or monsoon seasons. - CNA/ch

Arab Money Flows Into IDR

Source : TODAY, Thursday , August 30, 2007

Infusion of funds give the Johor project a boost

PUTRAJAYA — Malaysia’s close ties with the Arab world have produced their biggest dividend yet with the signing of a US$1.2-billion ($1.8 billion) deal to develop art of the Iskandar Development Region (IDR) in southern Johor.

Firms from Gulf Cooperation Council countries will initially invest the money in land and infrastructure development, in a deal signed with Malaysia’s South Johor Investment Corporation (SJIC).

SJIC chairman Azman Mokhtar hailed the agreement as a milestone for the IDR, which aims to turn southern Johor into a new Asian metropolis.

“This is a historic and strategic landmark transaction between our two regions,” Mr Azman said at the signing ceremony yesterday. “By far, this is the biggest single foreign investment ever made in Malaysia.”

The investors are led by Mubadala Development Company, the investment arm of Abu Dhabi, which committed US$520 million. The rest of the money is coming from Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, and Abu Dhabi’s Millennium Development International Company. The project will be managed by Abu Dhabi-based developer, Aldar Properties PJSC.

“This will be a flagship development for the region, not just for Malaysia,” said Mubadala chief executive Khaldoon Khalifa Al Mubarak.

The Malaysian government hopes to attract RM50 billion ($21.7 million) to the IDR over five years.

However, some analysts said the ambitious plans to develop not only the IDR, but also the Northern Corridor Economic Region, have been clouded by problems involving the new trade zone at Port Klang outside Kuala Lumpur.

The trouble started when the Dubai partner — which had been granted a 15-year concession to manage and operate a new trade zone at Port Klang — suddenly pulled out amid reports of mounting debt problems, reported the Financial Times.

The Jebel Ali Free Trade Zone Authority had complained that state bureaucrats were hindering the zone’s operations, while the Malaysian government claimed that the Dubai group pulled out because officials had denied it permission to become a main shareholder.

It emerged that the state-run Port Klang Authority had amassed debts of RM4.6 illion because of cost overruns. The government said it would bail out Port Klang with a soft loan, to prevent its bankruptcy. Officials have also suggested starting a corruption probe into the project.

Analysts told the Financial Times that Port Klang’s troubles are likely to raise doubts as to whether the Kuala Lumpur can fulfil its promise to build and operate the development regions in Johor and the Northern Corridor, which covers Perlis, Kedah, Penang and northern Perak.

However, Mr Song Seng Wun, regional economist at CIMB-GK Research in Singapore, believes that the Abdullah administration has put so much of its prestige into the two projects that it would seek to avoid the problems it inherited from the Port Klang project, which the previous government started. — AGENCIES

Mid-East Backers Sign On Dotted Line To Launch Mega Johor Project

Source : The Business Times, August 30, 2007

They will have 70% stake with SJIC holding the rest

THREE Middle Eastern firms signed agreements with the South Johor Investment Corporation (SJIC) yesterday to kick-start the development of the Iskandar Development Region (IDR) in what is likely to become the single largest ever foreign real estate investment in Malaysia.

The three firms are Mubadala Development Company, the investment arm of the Abu Dhabi emirate; Kuwait Finance House, and Millennium International Development Co, a Lebanese-owned construction firm based in Saudi Arabia.

Together with the SJIC - which is owned by Khazanah Nasional, the Economic Planning Unit and the Johor state government - the three firms will develop 902 hectares in southern Johor into 'Rim City', a mix of cultural, leisure and financial habitats for an initial US$1.2 billion that just includes the cost of land and to-be-done infrastructure and landscaping. The final price tag, according to a government official, could be anything between US$6 and US$10 billion.

That the Middle Eastern investors will call the shots is implicit in the control they will have in each joint venture - 70 per cent with the SJIC holding the rest. The master developer for the project is also one of their own - listed Abu Dhabi based Alda Properties.

Even so, the actual work is only likely to begin in a year after the SJIC completes the infrastructure and landscaping to the investors' satisfaction and land titles get transferred. Still, the government converted the land, previously freehold, to leasehold land presumably to avoid political controversy.

The project is deeply significant as this is probably the first time that the government is encouraging the establishment of an international city without affirmative action policy restraints and playing by the international rules of the game.

According to several officials, the investors will be permitted to sell their facilities to all comers without restriction nor will they be subject to state government approvals.

The development also illustrates the wealth of the Middle East. Mubadala, for example, is said to have reserves of over US$1 trillion. And for two of the investor companies - Mubadala and Millennium - this is their first investment in South-east Asia.

Indeed, the IDR project signals a sea change in the investment attitudes of Middle Eastern interests which have traditionally opted to place their excess funds in the US and Europe . But after the 9/11 terrorist attacks, more and more have cast their eyes towards South-east Asia, especially Muslim Malaysia.

The project is also likely to raise asset values in the Iskandar Development Region as the deal values the land at around RM42 (S$18) a square foot. Even after lopping off the costs of infrastructure and landscaping, the land would still be values at over RM30 which is remarkable - a year ago raw land there was going for around RM8 a square foot.

The IDR project is also expected to radically change the way of doing business in Malaysia especially in big project developments. Because the Middle Eastern investors will have control of the project, all contracts are likely to be based on open and international tenders to ensure best prices and quality. So politically connected companies hoping to ride on the boom through negotiated awards are likely to be disappointed.

Moreover, the presence of the Middle Eastern investors is a shrewd political move as it is likely to quell criticism about Malaysia selling out to foreigners especially Singaporean interests. The officials said that there was little to carp about when the foreign investors were all 'our Muslim brothers'.

Finally, the announcement of the project is likely to renew foreign interest in the IDR which has been criticised as 'all talk and no action' .