Friday, January 25, 2008

$11.3m Q3 Distributable Income For Ascendas India

Source : The Business Times, January 24, 2008

ASCENDAS India Trust has reported a distributable income of $11.3 million for the third quarter ended Dec 31, 2007.

Net property income was $15.7 million - 57 per cent higher than the same quarter last year - while DPU was 1.50 Singapore cents over the period.

For the first nine months of the year, the trust reported a DPU of 4.45 cents - representing an annualised yield of 5 per cent over the IPO price of $1.18 per unit.

The trust attributed the strong showing to continued high portfolio occupancy of 99 per cent, rising average rental rate and constant focus on cost efficiency.

Net asset value as at end-December was $857.7 million or $1.14 per unit.

Said chief executive officer of the trustee-manager, Jonathan Yap: 'We are pleased to report the construction completion of two buildings - Vega at The V (Hyderabad) and Crest at International Tech Park Chennai - with a combined 1.1 million sq ft of space.

'The two buildings expanded the trust's portfolio by 31 per cent to 4.7 million sq ft and their combined occupancy is 91 per cent as at Jan 23, 2008.'

The trust said this provides a 'solid foundation to the forecast 22 per cent distributable income increase in the next financial year over the forecast for the current year, as disclosed in the listing prospectus'.

It added that works on additional development are also in progress.

For example, a master plan has been completed to develop 'the balance 2.7 million sq ft of space' in International Tech Park, Bangalore.

Plans are in place to make government approval submission for the first phase of the development.

In addition, the manager aims to add an additional level of growth through acquisition, 'be it through the two first rights of refusal it enjoys or from the market'.

It has a first right of refusal from Ascendas Land International and Ascendas India Development Trust to acquire substantially income-producing business space.

The former is Ascendas' main overseas investment vehicle and the latter is a private fund managed by Ascendas with a target investment value of $1 billion.

Looking ahead, the trust manager said the trust will continue to focus on growing the operating earnings of its assets, optimising its capital structure, and growing the portfolio.

Given the strong nine- month results, it is confident of at least meeting the 5.6 Singapore cents forecast for the current financial year.

ART Distributable Income For Q4 Up 54% To $12.8m

Source : The Business Times, January 24, 2008

ASCOTT Residence Trust (ART), which owns serviced apartments, yesterday announced distributable income of $12.8 million for the fourth quarter, boosted by new acquisitions and strong operating performance.

The distribution for the three months ended Dec 31, 2007 is 16 per cent better than its forecast and 54 per cent up year-on-year.

Distribution per unit for the quarter was 2.12 cents, 16 per cent higher than projected and a rise of 28 per cent year-on-year.

The quarter's results brought full-year distributable income to $45.1 million, 12 per cent better than forecast.

Full-year distribution is 7.7 cents per unit, 9 per cent higher than projected. Revenue for the quarter came to $42.9 million, beating ART's projection by 10 per cent and 47 per cent higher year-on-year. Full- year revenue was $154.8 million, beating projection by 7 per cent.

Revenue was higher on new acquisitions and greater income stability through increased diversification, especially into rental housing which now makes up 22 per cent of its portfolio.

ART recognised a revaluation surplus of $136.9 million (net of tax and minority interest). The group's net asset value per unit as at Dec 31, 2007, was $1.60, up from $1.33 a year ago.

ART is a Pan-Asian serviced residence real estate investment trust managed by Ascott Residence Trust Management Limited (ARTML), a subsidiary of The Ascott Group.

It was launched in March 2006 with an initial portfolio of 12 properties across Asia. Upon the completion of its latest acquisition in Perth, its portfolio will expand to 37 properties in 11 cities, valued at $1.52 billion.

Lim Jit Poh, chairman of ARTML, said: 'We will continue to pursue organic and acquisition growth to deliver growing and stable income to unit-holders. We remain focused on achieving our target total asset portfolio of $2 billion by end-2008.'

The trust said that operating performance this year is expected to grow.

ART yesterday closed at $1.18, up one cent.

Singapore Listings Of Indian Reits May Be Delayed

Source : The Business Times, January 24, 2008

THEY should be perfect for choppy markets - low volatility securities in a mature stock market based on assets in a fast-growing Indian economy that many believe will weather the global storm.

But planned Singapore listings of real estate investment trusts, spun off by Indian developers, are being thwarted by the US subprime crisis, which has rocked stock markets and raised doubts about property investment, wherever it is.

DLF Ltd, India's most valuable property firm, Unitech and Indiabulls Real Estate have been talking to investment banks about listing Reits in Singapore, possibly as early as the first quarter.

But Australian-backed MacarthurCook Industrial Reit last week became the latest to delay a deal when it shelved a $200 million secondary offering in a Singapore market that has fallen by a fifth this year.

One banker, who asked not to be named, said his team has been advising Indian issuers to hold off on Singapore issuance plans because of volatile markets.

'The market is crap right now. I wouldn't advise anyone to come and list now,' the investment banker said.

Indian developers are keen to raise funds for expansion by selling buildings into property trusts, in which they would retain a controlling stake. The trusts should then become willing buyers of buildings as the developers roll out new projects.

The Indians have been watching the success of Singapore's Reit market, which has grown to almost US$19 billion.

India does not yet allow the securities, although regulators issued draft Reit guidelines last month and analysts expect next month's Budget to give some indication of when India will get its own Reit market.

DLF is looking to raise US$1.5 billion and has picked Goldman Sachs and Lehman Brothers, bankers have said.

Unitech wanted around US$600 million from listing an office trust and has mandated Deutsche Bank, JPMorgan, UBS and Morgan Stanley as book-runners, two people involved in the deal told Reuters.

The two developers had been looking to launch early 2008 IPOs, banking sources said, but the cost of equity has jumped as much as 30 per cent for some Singapore-listed Reits since July, said Mark Ebbinghaus, head of Asian real estate investment banking at UBS.

'Where we are at present, clearly the cost of equity for a number of Reits is under pressure, largely because of the flow of capital leaving Asia,' he said.

But deals could be pushed through because of the scarcity value of Indian property accessible to foreign investors.

'As long as the pricing is acceptable, we would see a variety of vehicles having some support levels in the Singapore business trust environment,' Mr Ebbinghaus said. 'But the timing remains uncertain.'

Reits, which pay most of their rent as dividends, have caught on across Asia in the past five years, with investors liking the bond-like steady income with the prospect of growth if rents and property values rise.

But although Reits are usually regarded as defensive plays, trusts across the world suffered in the second half of last year as the US sub-prime crisis unfolded and hit commercial property markets in the United States and Europe.

The only Indian Reit, Singapore-listed Ascendas India Trust, closed at 99 cents yesterday, well below its IPO price of $1.18.

Singapore's Reit index has fallen 21 per cent since the start of the year through Monday, in line with a 20 per cent slide by the benchmark Straits Times Index .

Because of the market downturn, at least US$800 million worth of IPOs in Singapore and several million dollars worth of secondary share offerings were delayed in the October-December period. -- Reuters

K-Reit Plans Rights Issue; Q4 Distributable Income Up 62.6%

Source : The Business Times, January 24, 2008

Distributable income boosted by One Raffles Quay, higher rental contributions

K-REIT Asia, which yesterday posted a 62.6 per cent year-on-year jump in fourth-quarter distributable income to $6.9 million, is proposing a rights issue to raise gross proceeds of up to $700 million.

Net proceeds from the issue will be used to repay part of the $942 million bridging loan it took from Keppel Corp when it purchased a one-third stake in One Raffles Quay last year.

The issue price will be determined closer to the launch date and will be at a discount of up to 20 per cent to the then-prevailing trading price. On the stock market yesterday, K-Reit ended two cents higher at $1.50.

The trust, which owns prime office space in Singapore, plans to proceed with the rights issue 'as soon as practicable' instead of waiting until September when the bridging loan expires, K-Reit Asia Management Ltd's chief executive Tan Swee Yiow said yesterday.

The rights issue will be effectively fully underwritten. Keppel Land and Keppel Corp, which jointly own about 72 per cent of K-Reit, have undertaken to take up their respective provisional allocations of rights shares and to make excess applications for any rights units not subscribed for by minority shareholders. However, Mr Tan said the intention is to keep K-Reit listed, which would mean that it must have a free float of at least 10 per cent.

Asked about the impact that the sub-prime crisis will have on demand for Singapore office space given layoffs at international banks, major occupiers of prime CBD offices, Mr Tan acknowledged it will probably result in tenants becoming more cautious in their forward planning commitment of space.

K-Reit's 62.6 per cent rise in Q4 distributable income included a $2.8 million maiden contribution from One Raffles Quay. K-Reit completed the acquisition of its one-third stake in the prime office development in December last year. Also contributing to the improved Q4 performance was higher rental income arising from higher rental rates achieved for new and renewed leases.

Average gross monthly rental rates for the investment properties directly held by K-Reit rose from $3.80 per square foot (psf) in December 2006 to $4.65 psf in December 2007.

Net property income for the quarter ended Dec 31, 2007 was slightly over $7 million, up 13 per cent from the corresponding year-ago period. Gross rental income rose 19 per cent to $39.1 million last year.

K-Reit's unitholders will receive a distribution per unit (DPU) of 4.99 cents for 2007's July-December period.

The full-year payout amounts to 8.82 cents, reflecting a distribution yield of 5.88 per cent based on yesterday's closing price.

For the year ended Dec 31, 2007, distributable income increased 42.5 per cent to $21.8 million, while net property income rose 19.6 per cent to $28.3 million.

The $951.4 million acquisition of the One Raffles Quay stake, coupled with portfolio revaluation gains of $433 million, have enlarged K-Reit Asia's portfolio size by 210 per cent to $2.1 billion as at end-2007 from $677 million as at end-2006.

MapletreeLog Defers Its Proposed Rights Issue

Source : The Business Times, January 24, 2008

GLOBAL capital market volatility has forced Mapletree Logistics Trust (MapletreeLog) to defer its proposed rights issue aimed at raising up to $500 million to fund acquisitions.

The rights issue was announced late last month, but this was swiftly followed earlier this month by Moody's Investors Service placing the 'Baa1' rated real estate investment trust (Reit) on review for a possible downgrade because of its high gearing of over 50 per cent and the market conditions.

Speaking at a press conference yesterday, Chua Tiow Chye, CEO of Mapletree Logistics Trust Management (MLTM), the Reit's manager, said candidly that MapletreeLog's share price had been 'beaten down' since the rights issue was proposed. He added that it would not 'raise funds at any price'.

'We will revisit our fund-raising exercise when market conditions are more conducive,' MLTM said in a statement yesterday.

MapletreeLog yesterday reported distributable income of $19.7 million, a 68 per cent year-on-year rise, for the fourth quarter ended Dec 31, 2007.

MapletreeLog started FY2007 with 41 properties and ended the year with 70, a rise of 29. 'Of these 29 properties, nine were acquired during the fourth quarter, bringing the trust's portfolio size to 70, valued at about $2.4 billion,' said Mr Chua. The asset value as at Dec 31, 2006, was about $1.43 billion.

MapletreeLog's full-year 2007 distributable income came to $71.8 million, 78 per cent up year-on-year.

Available distribution per unit (DPU) for Q4 2007 was 1.78 cents, a 23 per cent year-on-year increase. On a full-year basis, DPU was 6.57 cents, 16 per cent higher than its forecast and 30 per cent up year-on-year.

As at Dec 31, 2007, five of its acquisitions pending completion amounted to $183 million, while gearing stood at 53.4 per cent, representing a total debt of about $1.3 billion.

MapletreeLog said that it is comfortable with a 40-45 per cent leverage in the long run, but its current leverage leaves it with an available debt capacity of $405 million to fund future acquisitions.

While this leaves MapletreeLog with 'enough headroom' to fund these acquisitions, Richard Lai, deputy CEO of MLTM said that one of the options (for raising funds) open to MapletreeLog would be to sell some of its assets. While there were no plans to sell any buildings, Mr Lai said: 'We have people knocking on our doors.'

Looking forward, Mr Chua cited the 'internal logistics' sector in China and India as showing most potential.

But apart from those acquisitions already announced in Q4 - including three in China, four in Malaysia and two in Japan - Mr Chua was careful to add that given market conditions, MapletreeLog would be more 'selective' with respect to new acquisitions.

Instead, he said that 'yield optimisation', with a possible upside from rental reversions from 180,000 sq m, would be its driving strategy for 2008. Making reference to the volatile global market conditions, he added: 'It would be foolish to go for aggressive acquisitions.'

Pacific Star Launches Bangkok Project Here

Source : The Business Times, January 24, 2008

Singapore-based Pacific Star Group yesterday said that its first freehold residential-cum-retail development in Thonglor, Bangkok's up-and-coming shopping and entertainment street, would be launched in Singapore this weekend.

The group said in a press statement that a select number of residential units in the project, called 8 Thonglor Residences, would be on sale at an exhibition to be held at Swissotel The Stamford's Bras Basah Room from Jan 26-27.

The project, located between Sukhumvit Soi 55 and H1 - two bustling areas in the heart of Bangkok, with upmarket malls and trendy shops - is being marketed by DTZ Debenham Tie Leung.

Until recently, Thonglor was an unfashionable side street off Sukhumvit Road, Bangkok's pre-eminent designer district. But the street, once dotted with tacky wedding centres, shabby restaurants and dilapidated car showrooms, has transformed itself into a swanky thoroughfare lined with designer boutiques.

8 Thonglor Residences is a 5,058 sq m mixed-use development comprising a 34-storey apartment tower with a mall spread over three levels housing a mix of food and beverage outlets and other lifestyle stores.

The building was acquired by Pacific Star's 500 million euros (S$1 billion) fund Asian Real Estate Income Fund in November 2006 and redeveloped into a grade A property development.

Its residential component has a total of 196 units of one, two, three-bedroom apartments and penthouse duplexes.

Unit sizes range from 45 to 636 sq m each. Prices for the units have yet to be released.

Dutch Office Property A Safe Haven: Savills

Source : The Business Times, January 24, 2008

Prime Dutch office properties could provide a safe haven for those who want to invest in real estate but sidestep falling values in Britain's embattled market, research published yesterday by property services group Savills showed.

After a period of uncertain occupier demand, Savills said that double-digit year-on-year rental growth in the Netherlands' prime office market encouraged record investments of 4.5 billion euros (S$9.4 billion) in 2007, as investors spooked by the falling capital values in UK property flocked to more stable commercial real estate markets.

Savills said that foreign buyers would have to work hard to penetrate the upper end of the Dutch property market but that the potential rewards were worthwhile, with steady average annual returns of 8 per cent.

In contrast to larger markets like the UK, where some banks have recoiled from property lending since securitisation markets seized up, Dutch banks were still willing to lend to equity-driven property investors, Savills said. -- Reuters

Asian Developers Rise After US Cut

Source : The Business Times, January 24, 2008

Optimism that Fed's interest rate cuts will bolster real estate sales

Sun Hung Kai Properties Ltd, Hong Kong's biggest builder, and CapitaLand Ltd, Singapore's largest, led gains in Asian property stocks on optimism that the US Federal Reserve's interest rate cuts will bolster real estate sales.

Sun Hung Kai rose 9.3 per cent to HK$154.90 at the 4 pm close in Hong Kong, the most in more than eight years as the city followed the US in cutting borrowing costs. Capitaland rose 7.8 per cent to $5.84 at the 5.05 pm close in Singapore. That helped drive the Bloomberg Asia Pacific Real Estate Index of 164 stocks up 6.5 per cent, the largest advance in at least nine years.

'For those who've got cash in their hands, they're taking advantage of the recent slump to accumulate on weakness,' said Nancy Lee, who helps manage US$200 million at Taifook Asset Management Ltd in Hong Kong. 'Now that we have a further rate cut, developers are looking even more attractive.'

Demand for real estate may rise as banks across Asia trim borrowing costs. HSBC Holdings plc cut its Hong Kong lending rate to 6 per cent after the US reduction, fuelling demand for credit in a city where property prices have been forecast to rise 45 per cent by 2010. HSBC's cut would slash monthly payments on a 20-year, HK$1 million (S$185,900) loan to HK$7,164, down 13 per cent since the bank started cutting rates in September.

Sun Hung Kai and CapitaLand are among developers from developed Asian markets that are expanding into faster-growing countries such as India and China, gauging that their greater access to international capital markets will give them an edge over domestic builders.

DLF Ltd, India's biggest developer, surged 7.1 per cent to 925 rupees as at 3.21 pm in Mumbai, snapping a six-day slide that slashed about US$14.5 billion from its market value.

India's biggest developer has projects including a US$15 billion contract to develop with Dubai World a township near Bangalore, India's technology hub.

Lower borrowing costs may also assist Emaar MGF Land's plans to sell US$1.8 billion of shares in India beginning on Feb 1. The developer is a unit of Emaar Properties PJSC.

Unitech Ltd, India's second biggest developer, traded 13 per cent higher at 396.90 rupees, reversing most of yesterday's 15 per cent slide.

Central banks including those in Taiwan, Japan and the Philippines are under pressure to reduce interest rates or hold off further increases to boost growth amid concerns that the US will slip into recession amid fallout from the sub-prime mortgage crisis.

Cheung Kong (Holdings) Ltd, the developer controlled by Asia's richest man, Li Ka-shing, surged 10 per cent in Hong Kong trading. Sino Land Co increased 9.3 per cent and Hang Lung Properties Ltd jumped 9.9 per cent. The Hang Seng Property Index rose 9.5 per cent, the biggest one-day jump since 1998.

Singapore stocks rose for the first time in four days after the US Federal Reserve cut its benchmark interest rate, seeking to avoid a recession in the city state's biggest export market.

City Developments Ltd, Singapore's second biggest property company, rose 8.1 per cent to $11.70. Keppel Land Ltd, the third largest, added 4.9 per cent to $5.95, its first gain in four days.
Sun Hung Kai, which in September said that it plans to increase investment in China to about HK$77 billion, last month joined Guangzhou R&F Properties Co and KWG Property Holding Ltd in a 4.6 billion yuan (S$923.2 million) project to build service apartments, offices, shops and hotels in southern China.

Investors are likely to put more money into Hong Kong real estate this year, following a 53 per cent increase in the value of deals last year, said CB Richard Ellis Group Inc, the world's largest commercial real estate broker, in a report on Tuesday.

'Following the buoyant investment activity in 2007, the investment market should remain robust in 2008, thanks to the influx of new international investors from the Middle East and South-east Asia,' Henry Lam, executive director of investment properties for CB Richard Ellis in Hong Kong, said on Tuesday.

Strategists at Credit Suisse and Celestial Asia Securities Holdings Ltd expressed concern that yesterday's rally could be short-lived.

Changes in Hong Kong housing prices tend to track changes in stock prices, Clifford Lam and Miranda Lai from Credit Suisse wrote yesterday in a research note.

'We still believe that the chance of disappointment in the housing market is going to be high,' the Hong-Kong based analysts wrote. -- Bloomberg

Sub-Prime Crisis Will Hit Singapore In Indirect Way

Source : The Straits Times, Jan 25, 2008

I REFER to the article, ‘China bank may incur loss on US sub-prime write-offs’ (ST, Jan 22).

Last August, Minister of State for Trade and Industry S. Iswaran told Parliament that the exposure of Singapore financial institutions to the troubled US sub-prime mortgage market is small and problems from it have been contained.

A key fact for this optimism is that Singapore banks held S$2.6 billion worth of collateralised debt obligations (CDOs), of which only 25 per cent may contain some exposure to US sub-prime mortgages.

In the same month Nobel laureate Joseph Stiglitz, speaking in Kuala Lumpur, said that the US sub-prime mortgage crisis will probably ‘get worse’ as banks tighten lending rules and borrowing rates increase. ‘The countries which are most adversely affected are the countries like Indonesia,’ he said.

Last month, the Monetary Authority of Singapore revealed that three local banks had set aside S$434 million in extra provisioning for losses on collateralised debt.

In the same month, the Swiss bank UBS announced losses of 6.8 billion euros due to exposure to the US sub-prime mortgage crisis. The bank, which is the biggest in Europe in terms of assets, obtained emergency funds from the Government of Singapore and an unnamed Middle East investor.?

This week, we hear that the Bank of China is likely to suffer a 2007 loss because of a big write-down on billions of dollars of US sub-prime related investments. Two other state banks will also make provisions for assets hit by US mortgage defaults.

The direct effects of the sub-prime crisis may seem harmless to Singapore’s economy due to the very low exposure of assets, including CDOs, that are subject to its adverse effects.

However, it may be worthwhile to consider the systemic and indirect effects of the sub-prime crisis. For example, if China’s economy and the economies of other regional countries are affected then Singapore may not be able to escape its adverse effects. Its open economy is closely integrated with the world’s economy. The effects of the sub-prime crisis will therefore more likely impact Singapore’s economy in an indirect way.

We urge the Government to consider the indirect and systemic effects of the sub-prime crisis on Singapore’s economy in order to fully address all the risks associated with this deepening crisis.

Penelope Phoon (Ms) Country Head, Singapore ACCA Singapore

Singapore's Private Home Prices Up 6.8% In Q4

Source : Channel NewsAsia, 25 January 2008

Singapore's private home prices rose a slower 6.8 percent in the October-December from the previous quarter.

The price index for private home sold rose 8.3 percent in the previous quarter, bringing prices to their highest in a decade.

For the whole of 2007, private home prices rose 31.2 percent, the Urban Redevelopment Authority (URA) said.

Wing Tai Reports 25% Rise In H1 Earnings To S$105m

Source : Channel NewsAsia, 25 January 2008

Property developer Wing Tai has reported a 25 percent rise in half-time earnings to S$105 million.


This is due mainly to higher contributions from the sale of its condominium projects.

Revenue fell 52 percent to S$211 million.

In the second quarter, earnings fell 19 percent to S$44 million, following a 59 percent fall in the topline figure to S$111 million.

Wing Tai did not give a guidance on its outlook, but said it would monitor the market closely in light of the volatility. - CNA/ms

The Ascott Group Reports 8% Rise In Full-Year Net Profit

Source : Channel NewsAsia, 25 January 2008

The Ascott Group has reported an 8 percent increase in full-year earnings, in line with market forecasts.

Net profit came in at S$177.3 million.

The jump was due to an increase in rental rates as well as higher portfolio gains from asset divestment and revaluation.

The owner-cum-operator of serviced residences said it is looking to further grow its portfolio in the next two years.

The Ascott Group now has 20,618 units worldwide, crossing its 20,000 target in December.

It aims to add another 5,000 more units by 2010 - pushing its portfolio up to 25,000.

Over the past year, Ascott said it saw strong revenue growth, both in new as well as its more established markets.

Chong Kee Hiong, Deputy CEO, Finance and Investment, The Ascott Group, said, "Europe has been a great contributor, contributing about close to 50 percent of our revenue. And the growth has been very good, more than 10 percent in all the regions within Europe. And over than above that, Singapore grew well (with) double digit growth as well as Philippines."

Net portfolio gains, including revaluation, came in at S$154.6 million.

Net gains from the divestment of properties came in at S$112.8 million, while revaluation gains from the Ascott Residence's Trust's properties was S$41.8 million.

Ascott opened nearly 1,500 units in nine properties last year, mostly in China.

It is looking to expand its footprint even more - with an eye on cities attracting strong foreign investment.

Mr Chong said, "What is most important to us is grow in cities where it makes economic sense for us and grow it well. In Asia, we are looking at China, India and Vietnam, In Europe we're looking at the established cities like Paris, London."

Ascott on Friday announced that it was pumping in more than S$170 million to grow its presence in Australia.

It is developing Citadines Melbourne on Bourke, a new serviced residence in Melbourne.

CapitaLand - which owns 66.5 percent of Ascott - has announced plans to take the serviced residence operator private.

Ascott plans to release a circular to shareholders later next month after all the details of CapitaLand's offer comes next week.

For the whole year, Ascott is proposing a dividend of 6 cents per share, which includes a first and final dividend of 1.2 cents and a bonus dividend of 4.8 cents. - CNA/ms

Analysts Say Properties Will See Boost From MRT Expansion Plans

Source : Channel NewsAsia, 25 January 2008

Property prices are expected to rise around ten to 15 per cent around the 100 new MRT stations to be built, analysts said.

The government announced Friday that it would pump S$20 billion to double the rail network by 2020.

Properties are going to be hot around the new 100 stations, with malls and public facilities expected to draw crowds to the stations.

Property consultants are forecasting price increases of ten to 15 per cent.

But with the new MRT lines to be completed only by 2020, they said the impact on the property market will not kick in until the next five to ten years.

Savills' director of corporate business and residential Ku Swee Yong said, "Generally, properties that are (within) 200 metres of an MRT station do trade at what about ten to 15% premium over properties that are less accessible but still within the same neighbour hood. It is too early to speculate because the government hasn't announced exactly where the line is going to pass through."

The rail plans include pushing forward opening dates for announced projects and extending existing lines. Two new lines will also be built, the first in the Thomson area, which goes up as far north as Woodlands, and the second along the East Coast, starting from Marina Bay.

Property analysts said properties along the Eastern Region Line will see the largest benefit as MRT coverage will be extended to those areas for the first time.

But until the new lines are fully operational, analysts said residents living near the new lines may experience inconvenience because of the construction works and government land acquisitions involved in the projects. - CNA/ac

Average Cash Above Valuation For HDB Flats Up 30% In Q4

Source : Channel NewsAsia, 25 January 2008

HDB resale prices have gone up by a better-than-expected 17.5 per cent in 2007, the fastest rate since prices soared by 25 per cent in 1996, latest official figures by the Housing Development Board (HDB) showed.

Most homes in Singapore have appreciated to the highest levels since 1996. The price of a three-room HDB flat was an average of S$149,000 in the last quarter while a five-room flat in Marine Parade fetches an average of S$598,000.

Islandwide, the median price for an HDB flat was S$340,000.

Cash above valuation has also risen to an average of S$22,000, up from S$17,000 in the third quarter.

Related Video Link -

Knight Frank's director for consultancy and research Nicholas Mak said, "It basically means that transacted prices are actually growing at a faster rate than the valuation. The effect can be quite positive for the private property market because it means that sellers of HDB flats will have more cash in hand for the down payment of their purchases of private properties. So that could lead to an increase in the demand for private properties."

Rental prices have also gone up by S$100 a month for flats with four rooms or more. For instance, executive flats in Bishan are being let out for as much as S$2,200 a month.

Analysts said this is clearly a spillover-effect from the private property market.

Rents of private homes went up by 41.2 per cent in 2007. The increase in rents and sales prices, however, slowed to 6.8 per cent in the last quarter.

"In terms of prices of private homes, we realised areas that actually had the best performance in the fourth quarter (was) actually the fringe areas – just outside the prime districts of 9, 10 and 11, such as District 5 and in the Tanjong Rhu area. The reason is... I think there are some buyers who find that prices in the prime districts (have) already gone to quite a high level and they're looking for homes that are near to the cities but just somewhere in the more-affordable areas."

Analysts agreed that sales price and rent increases of both HDB and private properties are likely to be more subdued in the first quarter of 2008.

Jones Lang LaSalle's head of research and consultancy Dr Chua Yang Liang said, "With the overhanging sub-prime issue that we're not certain at this moment, what the impact is, I think it'd be a more cautionary leasing market in 2008."

Prices of private properties went up by an expected 31.5 per cent last year. - CNA/ac

MRT Network Length To Double By 2020; Two New Lines To Be Built

Source : Channel NewsAsia, 25 January 2008

In a massive new investment, the government will pump in another S$20 billion on new rail lines and extensions islandwide, Transport Minister Raymond Lim announced Friday.

This is over and above the S$20 billion the government has already committed for the on-going Boon Lay extension, the Circle Line and the Downtown Line.

Related Video Link -

Mr Lim said the new and extended lines will go to places as diverse as Marine Parade and even Tuas.

The rail update is the second in a series of three major policy announcements in a sweeping review of the land transport network. A bus system overhaul was announced last week.

When the plans come to fruition in 2020, there will be one MRT station within five minutes' walk in the city, in a network that will become denser than Tokyo's.

Outside the city, more areas will be served by high-speed MRT.

There are currently 138 kilometres of rail lines. By 2020, authorities hope to double the network length and expect it to carry three times as many journeys, from today's 1.4 million a day to 4.6 million in 2020.

Two new lines will be built.

The Thomson Line, to be ready by 2018, will run from Marina Bay through the Central Business District, all the way up to Ang Mo Kio and Woodlands. It will connect to another new Line, the Eastern Region Line, at Marina Bay.

The Eastern Region Line, to be ready by 2020, will serve areas such as Siglap and Marine Parade.

Existing lines will also be extended.

The North-South Line will be extended one kilometre south to serve the Marina Bay area developments while the East-West Line will be extended another 14 kilometres west into Tuas.

To avoid long waiting time and crowded trains, there will be 93 additional train trips during the morning and evening peaks.

The authorities will work with SMRT to increase the number of trains and to improve the infrastructure over the next four years to reduce waiting time from the current 2.5-4 minutes to two minutes at busy stations during peak periods.

"When all this is done, what will we have? We hope we would have transformed the public transport system... And by doing so, Singaporeans will indeed consider the public transport system as their other car," said the transport minister.

Completion dates of the various lines are also being fast-forwarded. Part of the Circle Line which was due to open from 2010 onwards, will now open in mid-2009. Completion of the Downtown Line will also be brought forward by two years to 2016.

Mr Lim made the announcement when he visited Kim Chuan Depot on Friday morning.

Transport Minister's speech on expansion of Singapore's MRT network :-

Share your views and comments on the latest transport proposals here. - CNA/ir/ac

Govt To Accelerate MRT Expansion

Source : The Straits Times, Jan 25, 2008

In what could well be Singapore's most aggressive public transport infrastructure plans ever, the Government is spending $40 billion to double the MRT network by 2020.

By then, Singapore will have 278km of rail link, from 138km today. Its network density will rise from 31km per million residents today to 51km per million - surpassing what Hong Kong and Tokyo has today and comparable to current densities in places like New York and London.

Announcing these targets on Friday as part of a sweeping Land Transport Review, Transport Minister Raymond Lim said two new lines will be built - barely nine months after he gave the go-ahead to the $12 billion 40km Downtown Line.

One, the Thomson Line, runs to the left of and almost parallel to the North-east Line. It is 27km long and links Marina Bay in the south to Woodlands in the north. To be completed in 2018, it will have 18 stations, in places such as Ang Mo Kio, Kebun Baru, Sin Ming, Thomson and Kim Seng.

The other is the Eastern Region Line, which is a southern loop of the Downtown Line's eastern wing. It is 21km long and links Marina Bay to Changi. This line has 12 stops in places such as Tanjong Rhu, Siglap, Bedok South and Marine Parade, and is scheduled for completion in 2020.

'We expect our rail network to carry three times as many journeys, rising from today's 1.4 million a day to 4.6 million in 2020,' Mr Lim said.

Existing MRT lines will also be lengthened. The North South Line will dip towards Marina South, with one station, and should be ready by 2015. Elsewhere, the East West Line will go west to serve the Tuas Industrial Estate. Also to be ready in 2015, it is 14km long and dotted with five stations.

More immediately though, Mr Lim said residents can look forward to riding one stage of the Circle Line from middle of next year. This stage is a five-station section linking Bartley to Marymount, with interchanges at Serangoon and Bishan.

Completion of the Downtown Line has also been brought forward by two years to 2016.

The accelerated rail plans are attributable to a new financing framework for rail infrastructure. Instead of assessing the viability of new lines in isolation, the Government will now evaluate its contribution to the entire network. As such, future MRT projects could be implemented 'a few years earlier... so long as the entire rail network remains viable'.

Like changes he announced for buses last week, the minister said the Government will introduce more competition to the rail industry. Operating contracts will be 10 to 15 years long, instead of the current 30-year tenures. This is to keep the operators on their toes so that they keep service standards high.

In line with Prime Minister Lee Hsien Loong's promise that no one would be left behind, accessibility to wheelchairs and prams will likewise be speeded up. By 2010, access to MRT stations, taxi and bus shelters will be barrier free within a 400m radius. Because there are 4,500 bus-stops here, practically all walkways will be accessible to the handicapped, elderly and those using baby prams.

And by 2010, 40% of public buses will be wheelchair accessible, with the rest to follow by 2020.

The minister took the opportunity to announce other transport-related initiatives during a visit to the Kim Chuan MRT Depot on Friday morning. These include:
# July: A single telephone number for booking a cab.

# March: Six-month trial for foldable bicycles to be allowed onboard MRT trains during off-peak periods.

# Next year: Better bicycle parking facilities at MRT stations, starting with Tampines and Pasir Ris.

# March: Road signs warning motorists of cyclists in popular bicycle routes.

# 2014: All taxis to meet Euro IV emission standards.

# 2020: All buses to meet Euro IV emission standards.

On what commuters can look forward to in the coming years, Mr Lim said: 'By 2020, people who live or work in the city and those who shop and find enjoyment there will be able to reach an MRT station within 400 metres on average, a mere five-minute walk.

'Travelling across the city will be a breeze, because we will have a dense network of MRT stations like what we see in London and New York today.'

He added: 'With a vast rail network and a bus network that works in partnership with rail, commuters will have fast and reliable connections that bring them where they want to go. A gamut of transport choices including premium buses, taxis and cycling among others, will enable different needs to be met.'

The Minister said as society evolves and people's needs change, Singapore's land transport offerings must keep pace as well as encompass the diversity of needs and aspirations.

'To achieve this, we will plan our land transport system around people, not the other way round. This then will be our touchstone in the planning of land transport policies going forward,' he promised

Work On New Sentosa Bridge Begins

Source : The Strait Times, Jan 25, 2008

WORK started yesterday on a new bridge linking Sentosa to the mainland.
Developer of the island's casino resort, Resorts World at Sentosa (RWS) said that the new vehicular bridge will ease traffic for the anticipated 15 million visitors expected at the resort when it opens in early 2010.

The three-lane 710m bridge will be built parallel to the current Sentosa bridge, which currently has four lanes. When completed, the two bridges will be merged. Lanes and traffic directions are being finalised.

RWS awarded the bridge building contract, worth more than $80 million, to McConnell Dowell, an Australian-based engineering and construction company.

The work involves widening lanes at the Harbourfront end of the current Causeway, and the construction of the parallel new bridge from Sentosa.

McConnell Dowell's project director, Mr David Christodoulou said: 'The marrying of the structures into one cohesive roadway is the precise reason why this project is so exciting.'

To help alleviate congestion near the Telok Blangah junction, the existing admission booths will be relocated within the island along Gateway Avenue by Sentosa Leisure Group.

By April, Gateway Avenue will be diverted to make way for the development of RWS. From the vehicular bridge, drivers will then coast along Gateway Avenue, before the road fans out into seven lanes to expedite island admission.

Sentosa Leisure Group's Executive Director for Special Projects, Planning & Development, Low Tien Sio, added: 'Set to take on up to four times more traffic when it opens, the new vehicular bridge will not only facilitate travel to RWS, but also drive traffic smoothly to Sentosa's popular destinations and give our Cove residents a welcome ride home.'

Orchard Rd Puts On A Full Frontal Act To Woo Shoppers

Source : The Straits Times, Jan 25, 2008

TO PUBLIC relations manager He Peiwen, it's a retail haven of canny buys and upmarket fashion brand names that is as comfy and familiar as, well, an oft-worn pair of shoes.

It is Orchard Road, Singapore's most famous shopping street.

Ms He, 26, visits it at least once a week. However, familiarity sometimes breeds contempt, and she has tired of its decades-old grey blocks and impenetrable mall frontages.

'It's all right, it's not particularly sophisticated,' she says.

So to her, it is good news that malls are kicking off multi-million-dollar plans to wow shoppers by changing the face of Orchard Road to make it inviting, contemporary and exciting.

What makes the facelift stand out is a new 'show-and-sell' tactic, where malls and stores use prime shop frontages to turn heads and win the battle for the consumer dollar.

Retailers say first impressions count more than ever today, where bigger and better shops, like flagships and concept stores, fight for shoppers' attention.

So instead of consumers merely venturing into a store, retailers now want to reach out to them - in the form of big, welcoming windows that make the road and racks of clothes interconnect.

The malls plan to do this by doing away with dated, enclosed veneers and introducing glass facades, double-storey 'duplex' stores and a 'jewel-box' glass-fronted shop suspended in mid-air outside the building - to the tune of at least $115 million.

For example, Paragon Shopping Centre is spending $45 million on a facelift due to be completed in October in which the mall's glass-and-granite cladding will make way for pop-out, glass-

boxed shop fronts facing Orchard Road and featuring luxury labels. These will include Italian marque Gucci, which will turn shoppers' heads with a glitzy, five-storey facade.

Of course, adding dazzle to this razzle will be the eagerly awaited $1.35 billion worth of new malls soon to open along the Orchard stretch, such as Ion Orchard, next to Wisma Atria, and Orchard Central, opposite The Centrepoint.

Ion Orchard, at the prime position of Orchard Turn, will have six international luxury brand names - Prada, Giorgio Armani, Dolce & Gabbana, Cartier, Christian Dior and Louis Vuitton - form an 11m-tall, 117m-long facade when the building opens early next year.

Down the road, Ngee Ann City is launching its own charm offensive, updating its landmark red marble facade.

It will double the retail space of two of its Orchard Road-facing tenants, French luxury labels Louis Vuitton and Chanel, by mid-2009 and late 2010, respectively. Each brand will also have its own facade design.

Retailers are excited too. Ms Amy Lim, general manager of Macquarie Pacific Star Property Management, which owns Wisma Atria and Ngee Ann City, said the facelifts will 'enhance the attractiveness' of the shopping strip.

The Far East Organization-owned Orchard Central, due to be completed later this year, will feature a suspended 'jewel box' shop on the outside of the building. It will also boast a 160m-long frontage - the longest among the Orchard Road malls, says Far East, to give tenants maximum visibility.

By 2011, Singapore's main shopping street will be lined with at least 14 new two-storey flagship stores boasting international luxury brand names. And there is space on the 2km strip to accommodate more.

The Singapore Tourism Board - which recently unveiled a $40 million rejuvenation plan for Orchard Road, including landscaping - estimates 1 million sq ft of retail space will open up on the street. This is thanks largely to the opening of Ion Orchard, Orchard Central and another big newbie, Somerset Central, above Somerset MRT station, by next year.

With space at a premium, it is no wonder the likes of Orchard Central want a full frontal scene for impact.

Mrs Vivienne Tan, president of Far East Retail Consultancy, the consultancy arm of property giant Far East Organization, notes: 'Many retailers and brands are jostling for position in this prime stretch of retail.

'The extra volume and height in the format of duplex stores, ideally on the ground level, provide retailers and brands the opportunity to distinguish themselves and establish a strong presence.'

She adds: 'Duplex flagship stores will also bring prominence to Orchard Road, making this popular strip comparable to the main shopping streets in cities across the world, like Nathan Road in Hong Kong and New York's Fifth Avenue.'

Indeed, Mr Lim Shien Yau, marketing communications manager of Orchard Turn Developments, which owns Ion Orchard, points out: 'The six superbrands fronting our facade are all brands that have designed their own building facades in other major fashion cities.'

Already, Orchard Road attracts more than seven million visitors each year. The move to put up a bold front comes as Singapore gears up to welcome 17 million tourist arrivals by 2015.

Says Robinsons' chief executive officer John Cheston: 'What this city's got that others in the region would give an arm for is one main shopping stretch ...But if Orchard Road remains in its present guise, it probably won't do justice to upcoming exciting events, like the opening of the integrated resorts and the Formula One race.'

Singapore Retailers Association president and executive vice-chairman of The Hour Glass, Ms Jannie Tay, says Orchard Road 'used to be a row of disjointed shopping centres', and the new malls give it 'a more modern look, compared with 10 years ago'.

'Everyone wants to be part of a nice, new image. And international brands can afford to do so here because Asia has new wealth,' she notes.

Asia is now the world's biggest market for luxury goods, accounting for 37 per cent of the estimated US$80 billion (S$115 billion) sector.

Shoppers like Ms He contribute to that, and Orchard Road's fresh look will set the scene for even more retail therapy. As another shopper, 30-year-old bank executive Jasmine Foo, says: 'A bigger and newer store will...catch my attention before a smaller and older one does. And if it's facing Orchard Road, I'll be able to see it from further away.'

Top Hedge Fund Manager Sets Up S'pore Office

Source : The Business Times, January 25, 2008

Outlook for Asia still bright despite US woes: research head

The US is in recession and equity markets are in bear territory, said Thomas Della Casa, head of research at Man Investments, one of the world's largest hedge fund managers, yesterday.

'We're in a tough market. Equity markets are trying to find a bottom and eventually won't. People might lose more money than they thought. It's a good opportunity for us,' he said.

Rising volatility and the prospect of muted or negative returns are likely to put hedge funds back on investors' radar screens. This is because a number of hedge fund strategies strive for low volatility and stable returns, which tend to underperform in bull markets.

'In 2008, we expect that equity investors will have a tough time; bond investors will also have a tough time. Getting a return of 10 per cent or close to it is not a bad proposition,' he said. The Hedge Fund Research Index of hedge funds' performance showed a 10 per cent return over the 12 months to end-December, compared to 3.73 per cent for the MSCI World Index.

Man Investments, the asset management arm of London-listed Man Group, has set up a Singapore office in a clear nod to Singapore's growing role as an asset gathering base.

Man Investments has about US$70 billion in assets under management, of which 15 per cent or US$10.5 billion is sourced from Asia. Singapore is the booking centre for 80 per cent of the funds sourced from the South-east Asian region. Previously, business sourced out of Singapore had been serviced from the Hong Kong office.

Tim Rainsford, Man Investments managing director for Asia Pacific, said the Singapore office was a direct response to the growing demand for alternative investments. 'Singapore is by no means a new market for us. We have been working closely with clients in Singapore for more than 10 years. However the growth of our business as well as the growth of the hedge fund sector (here) and in South-east Asia means that the time is right to set up shop here so we might serve our clients better.'

In a press briefing yesterday, Mr Della Casa also spoke about the market outlook. 'The US is in recession. The question is not hard landing or soft landing. The question is how long it will last and how they will get out of it.'

Historically, trouble in the US housing market often leads to a prolonged recession, he said. The US savings and loan crisis in the 1980s resulted in a nine-year recession.

Asia would lead global growth, thanks to ongoing infrastructure investments, he added. 'The outlook for Asia is still very, very bright. China and India will hold up the global economy.' Among hedge fund strategies, he expects an 'improved opportunity set' for fixed income, credit and convertible bond arbitrage given the increased volatility, varying opinions and yield curve moves. He sees opportunities in distressed securities as well, and is neutral on the outlook for equity-hedged strategies.

Bumper Prices Fetched By HDB Flats Fuel Condo Demand

Source : The Business Times, January 25, 2008

High cash over valuation provides 'filter-up' demand for private homes

More Housing Development Board flats in prime locations are now being sold for more than half-a-million dollars each, and the trend is pushing up the asking prices for mass market condominiums and adding to demand for entry-level private homes.

Data compiled by property firm ERA showed that 269 HDB flats were sold for $500,000 or more in the fourth quarter of 2007 - a 69 per cent increase over the 159 flats sold for more than $500,000 each in the previous quarter.

While most of such flats in the fourth quarter of 2007 went for between $500,000 and $599,999, 50 were sold at $600,000 to $699,999.

And 12 changed hands at $700,000 or higher.

Anecdotal evidence also suggests that larger HDB flats in Singapore's central locations are fetching more money than before.

For instance, a 21st-storey executive flat along Mei Ling Street in Queenstown sold for a record $890,000 earlier this month.

Last November, another executive flat along the same street went for a then-record $780,000.

The sellers of such flats will now have the capacity to buy entry-level private homes, said ERA assistant vice-president Eugene Lim.

New homeowners could also look at private homes for their first property purchases, rather than at resale HDB flats in the more central parts of Singapore.

'HDB flats provide the support for entry-level types of private housing,' said Mr Lim.

'If HDB prices keep moving up, people will begin to look at private properties.'

CB Richard Ellis executive director Joseph Tan pointed out that the recent surge in HDB prices has narrowed the price gap between public housing and private homes.

Many of the pricier flats are being sold for high amounts of cash-over-valuation (COV), which means that sellers will have cash on hand to make the downpayment when they purchase private properties.

'The HDB sellers now have greater purchasing power, especially with the high COVs, which can be used for downpayments on private properties,' said Nicholas Mak, director of research and consultancy at Knight Frank.

HDB statistics show that the median COV for executive flats in Bukit Timah rose to $137,500 in the third quarter of 2007.

In Marine Parade, the COV for five-room flats hit $84,000 in the same quarter.

The massive growth in COV for larger flats in central districts can largely be attributed to homeowners that have sold their properties through en bloc sales and are now moving into HDB flats.

But the reverse also applies now, analysts said. Sellers of these flats are starting to upgrade to mass market private homes with spare money fetched from the high COVs of their old flats.

Property agents told BT that sellers of HDB flats with cash on hand are looking mostly at mass market condominiums in the resale market as they need replacement properties to move into.

New mass market homes, by contrast, are not as popular.

But eventually, this 'filter-up' demand will cause mass market property prices to climb, analysts said, which could once again put private homes out of reach of HDB upgraders.

Property agents also report that sellers of mass market private homes are upping their asking prices as they see HDB prices in prime locations head skywards.

'Sellers are seeing five-room and executive HDB flats fetching $700,000,' said one property agent.

'So they think, I can ask for $1 million for my four-room private home.'

The agent said that at least two sellers of mass market homes that he is representing have recently upped their asking prices, even though the new prices are not 'realistic', in his opinion.

Knight Frank's Mr Mak agreed. 'Word gets around that HDB prices are going up, and quite quickly, sellers (of mass market private homes) start upping their asking prices.'

Resorts World To Build New $80m Bridge To Sentosa

Source : The Business Times, January 25, 2008

RESORTS World at Sentosa (RWS) yesterday announced the award of a $80 million contract to Australian-based engineering and construction company McConnell Dowell to build a new vehicular bridge to Sentosa.

Work on the bridge begins this week and is expected to be completed by end-September 2009.

The 710-metre three-lane bridge will connect Singapore to Sentosa and provide visitors with a smooth and convenient entry into Sentosa and RWS. It will be built parallel to the present four-lane Sentosa bridge. When the new link is completed, the two bridges will be merged.

RWS anticipates 15 million visitors calling on its $5.2 billion resort when it opens in early 2010. 'This is the first vehicular bridge infrastructure of this scale built by a private developer in Singapore,' said RWS's senior director of projects Michael Chin. 'We are committed to provide our visitors with a once-in-a-lifetime holiday experience, and that includes hassle-free access to the resort,' he added.

According to Sentosa Leisure Group executive director for special projects, planning and development Low Tien Sio, the new link is 'set to take on up to four times more traffic when it opens . . . and will not only facilitate travel to RWS, but also drive traffic smoothly to Sentosa's popular destinations and give our Cove residents a welcome ride home'.

To help ease congestion near the Telok Blangah junction, the existing admission booths to Sentosa will be relocated on the island along Gateway Avenue and by April, Gateway Avenue will be diverted to make way for the development of RWS.

From the vehicular bridge, drivers will then travel along Gateway Avenue, before the road fans out into seven lanes to expedite island admission.

Property Developer Evergro Posts Full-Year Earnings Of S$196,000

Source : Channel NewsAsia, 24 January 2008

Property developer Evergro has reported full-year earnings that are sharply lower than the previous year.

It booked a profit of S$196,000 compared to the S$7.5 million in 2006.

Evergro says there was no divestment gain this time, after it recorded returns from selling a property company in the previous financial year.

Also dampening the financial numbers were higher administrative and other expenses, which included a S$2.2 million land use tax in China.

Evergro expects the Chinese government to introduce further measures to cool the property market.

These may be in the form of credit tightening, financing of real estate projects and control of foreign investments. - CNA/ch

OCBC's Lee Family Makes Counterbid For Straits Trading

Source : Channel NewsAsia, 24 January 2008

A bidding war appears to be looming for diversified Straits Trading Company.

The Lee family that controls OCBC Bank is making a counter-offer for shares in Straits Trading Company that it does not already own.

The Lees, who already own 34 percent of Straits Trading, are offering to pay S$5.76 cash a share.

This values Straits Trading at S$1.88 billion.

The latest offer is higher than the one by rival, Tecity, an investment firm controlled by the family of the late Tan Chin Tuan.

Tecity had made a conditional cash offer earlier this month for Straits Trading Company at $5.70 per share.

Straits Trading shares closed at $5.71 on Thursday.

The stock has rise 14 percent since the start of the year, after Tecity made its bid and talk that there would be a counter offer.

Straits Trading's businesses range from hotels and properties to the metals and mining sectors.

In the first nine months of the financial year ended September 2007, it earned net profit of more than S$300 million on revenues of $727 million. - CNA/ch

Germany's SEB Group Buys 12 Floors Of Anson 79 For S$215m

Source : Channel NewsAsia, 24 January 2008

Germany's SEB Group has bought 12 strata-title floors of the office building Anson 79.

It is paying S$215 million to Farrell Asset Management for some 10,300 square metres of Grade A office space.

SEB already owns another nearby Grade A office building Springleaf Tower.

Anson 79 is a 23-storey building in Shenton Way and is within walking distance of Tanjong Pagar MRT station.

It has an occupancy of around 98 percent with Kellogg Brown & Root and Mitsubishi Chemicals among its tenants.

SEB Asset Management is the specialist real estate and securities investment house of the SEB Group in Germany. - CNA /ls

Lippo-Linked Fund Sells Anson 79 Stake

Source : The Straits Times, Jan 25, 2008


A REAL estate fund linked to Indonesia's Lippo Group has sold its stake in an Anson Road office block - achieving a 139 per cent gain in just two years.

Ferrell Asset Management said yesterday it sold the 12 floors it owned at Anson 79 for $215 million - more than double the $90 million it originally paid in January 2006.

The buyer is SEB Asset Management, part of German pension fund manager SEB. It bought 12 floors of office space in nearby Springleaf Tower in October.

SEB's purchase price for the 117,423 sq ft of freehold office space at Anson 79 worked out to $1,831 per sq ft (psf) of strata area. This was slightly lower than the $2,088 psf of net lettable area the company paid for the 99-year leasehold Springleaf Tower.

One reason is that Springleaf Tower is a newer development that commands higher rents, according to market experts. 'No doubt, Anson 79 is freehold, but it is an older building that was completed in 1992,' said one expert.

Asking rents were $10.50 psf in September at the now fully-occupied Springleaf Tower. At Anson 79, average rents stand at $5 psf due to locked-in leases, but the latest rent achieved there is $9.50 psf.

Property consultants estimate SEB's entry yield at Anson 79 to be about 2.5 per cent to 3 per cent. The sale agreement was struck in September but completed only last week.

79 Anson Rd Stake Sold For 3rd Time In 2 years

Source : The Business Times, January 25, 2008

SEB Asian Property Fund pays $215m for 55% stake

TRADING office buildings continues to be flavour of the month in the real estate market. A 55 per cent stake in the freehold 79 Anson Road has changed hands for the third time in about two years. The latest deal involves a fund managed by Ferrell Asset Management selling the space to an SEB Asset Management fund for $215 million.

Ferrell's fund, FAM Maximilian Real Estate Investment Fund, last year bought the space - spread over 12 floors of the 23-storey building, for $149 million from two parties, at least one of which is linked to the Lippo group.

Pramerica Asia had sold the property to Lippo entities for over $90 million in early 2006.

The latest acquisition, by SEB Asian Property Fund SICAV-FIS, for $215 million works out to about $1,937 per square foot based on a lettable area of 110,976 sq ft.

The fund, which was launched in late-August last year, invests in Asia only. The plan is to develop a broad-based portfolio, primarily in China, Japan, South Korea and Singapore, over the coming months.

This is not the German group's first acquisition in the Singapore office sector. It made at least two purchases last year.

In September, SEB bought 12 floors at Springleaf Tower nearby for $2,088 psf of net lettable area. And a few months before that, in April, the group bought SIA Building for about $526 million or $1,783 psf from TSO Investment, a fully owned subsidiary of a property fund managed by CLSA Capital Partners.

TSO had purchased the office block from Singapore Airlines in June 2006 for $343.88 million, or about $1,165 psf.

A Ferrell-SEB joint release yesterday said the space transacted at 79 Anson Road is currently about 98 per cent occupied. Major tenants include Kellogg Brown & Root, Mitsubishi Chemicals, interTouch and Infor Global Solutions.

Ferrell Group managing director David Lee said the group will keep searching for development and investment opportunities in the commercial property sector.

SEB Immobilien-Investment managing director Choy-Soon Chua said the group expects to capitalise on the 'extremely positive growth prospects' in the Singapore office sector due to rising demand and limited supply.

The remaining 45 per cent of 79 Anson Road is owned by the Central Provident Fund Board.

Private Property Prices To Grow More Slowly Amid Market Uncertainty

Source : Channel NewsAsia, 24 January 2008

Private property prices will see slower growth in the first quarter of this year, amid the current upheaval in global financial markets and a possible US recession.

That is according to property consultants who said prices will be supported by rentals which will continue to climb higher this year.

Related Video Link -

There has been frenzied buying and selling in the financial markets, but according to consultants, that is not likely to be replicated in the property sector.

"What the uncertainty is doing is that it's keeping speculative investors at bay and injecting realism into the minds of potential genuine purchasers. So, we're unlikely to see the frenzied level of buying as we've seen in the first half of last year. So the net result is likely to keep price growth in check moving forward," said Tay Huey Ying, Research & Consultancy Director of Colliers International.

According to the latest numbers from the URA, the number of private residential properties transacted fell to 328 in December, after hitting a high of 1,800 units in August last year.

"We suspect there will be more choices available for new projects from second half of February right up to the March and April period. That's when I think we'll see continued demand spillover into the market, particularly onto the mass as well as mid-end projects," said Donald Han, MD of Cushman & Wakefield.

While that demand is expected to support prices in the mass market segment, property consultants said the current market turmoil may impact on the high-end segment.

Still, they believe that prices will hold up because of strong rentals.

"If you look at last year, rentals are expected to rise by as much as 40%. This year, we expect rents to go up by at least about 15-20 percent, so that would potentially provide a higher yield in terms of investing in Singapore residential property market," said Han.

Private property prices were up by about 30% last year. - CNA /ls

S'pore F1 Promoters Looking At Leasing Strategic Locations Along Race Route

Source : Channel NewsAsia, 24 January 2008

There has been strong demand for the corporate hospitality suites which will be set up for the Singapore F1 race later this year.

Singapore Cricket Club

About three quarters of these suites, as well as the Paddock Club tickets, have been taken up.

To capitalise on this, organisers Singapore GP is looking to rent out other choice locations along the track to provide more viewing options.

These include a strategic venue along the race route - the Singapore Cricket Club.

Related Video Link -

"No timeline has been fixed but they have made offers to us. They have given us various options and we are considering it. But we are nowhere near concluding it... the door is still open for negotiations," said Anwarul Haque, president of the Singapore Cricket Club.

And up for discussion is the upper terrace which can accommodate up to 300 people. For this location, the club president added that Singapore GP plans to charge close to S$7,000 per head.

The Singapore Cricket Club is not the only location along trackside that the race promoters have approached. Other venues include the Singapore Recreation Club and the Boat House at the Fullerton, but nothing is confirmed at the moment.

What is certain, however, is that the adjoining Padang will also be leased by the race organisers. Part of it will be turned into a grandstand that can seat 12,000 spectators while the rest of the Padang will be converted into a carnival ground.

Some have other bright ideas to cash in on the world's first night street race in Singapore.

"A lot of people are thinking of locations far away from the F1 track, so that you can give an experience of Singapore which is totally different from the usual busy city life Singapore. (Locations) as far as Seletar are being considered, and Changi as well," said Anand Vathiyar, Executive Director of UP Media.

Vathiyar claimed that a few very high-end places are already organising viewing parties far away from the track, and the cost per guest is likely to be around S$2,000.

And that is the price guests will pay for a 5-star treatment to view the race, minus the deafening noise of the F1 cars. - CNA /ls

Resorts World At Sentosa Builds S$80m Bridge To Ease Visitor Traffic

Source : Channel NewsAsia, 24 January 2008

Resorts World at Sentosa has started work on a new vehicular bridge which costs S$80 million.

The new bridge is aimed at easing visitor traffic as over 15 million of them are expected to visit the Resort when it opens in early 2010.

The 710-metre, 3-lane bridge will run parallel to the existing causeway which connects Sentosa to the mainland.

And when completed in September 2009, both will be merged.

To help alleviate congestion near the Telok Blangah junction, existing admission booths will be relocated by Sentosa Leisure Group within the island, along Gateway Avenue.

By April, Gateway Avenue will be diverted to make way for the development of RWS.

From the vehicular bridge, drivers will then coast along Gateway Avenue, before the road fans out into seven lanes. Lanes and traffic directions are still being finalised.

The winning bid went to McConnell Dowell, an Australian-based engineering and construction company.

Resorts World at Sentosa said this is the first vehicular bridge of this scale to built by a private developer in Singapore. -CNA/vm