Thursday, March 6, 2008

Property Transactions With Contract Dates Between Feb 11th - 16th, 2008

UOL Betting Big On Hospitality Business

Source : The Business Times, March 6, 2008

The UOL Group has earmarked some $500 million - or a third of its available funds - to expand its hospitality business in Asia-Pacific over the next three years, the group's president and chief executive Gwee Lian Kheng told BT in an interview.

Lap of luxury: Pan Pacific Serviced Suites is likely to be the only one of its kind, as rising property prices mean that such an offering will be 'hard to replicate', says UOL

The property company plans to add some 15-20 hotels and service apartment properties over the next three years, Mr Gwee said.

'(Right now), if you ask me to put down money, I will put it into hospitality,' he said.

For Singapore especially, the hospitality sector looks to be the brightest going forward - even as the overall property market takes a breather - Mr Gwee said.

Yesterday, UOL launched its new 126-unit service residence development called Pan Pacific Serviced Suites, which the company hopes will be the first of many service residences under the Pan Pacific brand name.

Five such properties could open in the next three years, Mr Gwee said. Next up is Pan Pacific-branded service residences in Bangkok, which will open in about a year.

In Singapore, Pan Pacific Serviced Suites is likely to be the only one of its kind, as rising property prices mean that such an offering will be 'hard to replicate', the company said.

'Moving forward, our strategy is to look at high growth markets such as China, Vietnam, Thailand and Malaysia,' Mr Gwee said.

The Singapore property, which is located right next to Somerset MRT station, cost the group $38.5 million to build. Guests can check in from early April, and pre-opening interest has been strong, UOL said.

The company explored building a small office, home office (Soho) development on the site, but decided to go with service residences in order to ride on the current international business expansion into Singapore and the corresponding growth in expatriates looking for short-term housing, as well as the chance to grow the Pan Pacific brand.

UOL bought the hotel brand last year in a bid to become a key player in hotel management in the Asia-Pacific region.

The deal brought the Pan Pacific group's 12 hotels in the US, Canada and Asia into the UOL portfolio, adding some 3,800 rooms.

Now, UOL is looking to take the brand further with its first foray into service residences.

'Moving into the extended serviced accommodation business is a logical extension of the brand as it is complementary to our current hotel accommodation offering,' Mr Gwee said.

UOL itself, however, is not a newcomer to the service residences scene. It owns such a property under its Parkroyal brand, which it will maintain as a four-star property.

Pan Pacific Serviced Suites, on the other hand, is slated to be a five-star offering.

UOL also bought a hotel plot at Upper Pickering Street in a government tender in October last year. This 'may, or may not' be branded as a Pan Pacific hotel when it is completed by early-2011, Mr Gwee said.

For the overall property market, Mr Gwee said that UOL is 'cautiously optimistic' on the back of the sub- prime lending crisis in the US and the resultant credit crunch.

The developer plans to launch its 'mid-range' condo Breeze by the East on Upper East Coast Road as soon as it can.

Mr Gwee expects mid- level home prices to climb at least 10 per cent this year, pushed up by en-bloc sellers looking for replacement homes.

UOL shares closed four cents down at $3.65 yesterday.

Mixed Landed Housing Site For Sale

Source : The Business Times, March 6, 2008

CHESTNUT VILLE (I and II), a mixed landed site at Dairy Farm Crescent, has been put up for collective sale and the indicative price for the combined plot is $90 million.

Collective sale: The indicative price for the combined plot of Chestnut Ville I (above) and II at Dairy Farm Crescent is $90 million

This represents a land price of $741 psf over the land area, inclusive of an estimated $1 million development charge.

The development currently comprises 11 townhouses and 34 walk-up maisonette units with a combined land area of about 122,677 sq ft.

Credo Real Estate, which is marketing the site, says that the site is zoned for three-storey mixed landed housing.

This means the site may yield a combination of conventional terrace houses, semi-detached and detached houses; or cluster landed housing with strata terrace houses, strata semi-detached houses and strata bungalows with communal facilities. Credo executive director Tan Hong Boon added that it commissioned a study by an architect and one of the possible schemes allows the site to be developed into 10 strata detached, 22 strata semi-detached and 27 strata terrace houses, together with another four conventional semi-detached houses and two bungalows.

Based on the indicative price of $90 million, the potential developer's breakeven price for an intermediate strata terrace house and a conventional bungalow should be about $2.1 million and $3.8 million respectively, added Mr Tan.

Credo also pointed out that according to the Land Transport Authority, the planned Bukit Timah MRT Line is slated to include a Chestnut Station and a Hillview Station, both of which could be expected to be close to the site.

Mr Tan also expects good response for the mixed landed housing site as 'they are not easily available in the market'.

Energy-Efficient Properties Popular With Companies

Source : The Business Times, March 5, 2008

Contrary to what some developers think, a majority of companies are willing to pay a premium for properties designed with ’sustainable’ principles in mind, a recent survey by real estate firms Jones Lang LaSalle and CoreNet Global shows.

The bottleneck is, rather, on the supply side, where the ability to address market demand is ‘presently sporadic at best and needs to be urgently addressed’, says the survey, which was published yesterday.

Entitled Global Trends in Sustainable Real Estate: An Occupier’s Perspective - Feb 2008, it was conducted on 400 corporate occupiers at conferences in Singapore, Denver, Melbourne and London last year.

Most occupiers recognise that energy-efficient and environmentally friendly property , such as buildings designed to US LEED or equivalent standards, could cost 10 per cent more to build.

However, 62 per cent of respondents globally, said they were prepared to pay a premium of up to 10 per cent, and 8 per cent indicated willingness to pay even more.

The willingness to pay varied across markets. American occupiers were most enthusiastic, with 77 per cent willing to pay more, followed by occupiers in Australasia and Europe.

In Asia, 48 per cent were willing to pay up to 10 per cent more, significantly less than elsewhere, but 16 per cent were willing to pay a premium of over 10 per cent, significantly higher than elsewhere. This was ‘possibly due to the market scarcity of solutions’, said JLL and CoreNet.

Globally, ‘despite willingness to pay the price, a lack of options and services in some areas has been a limiting factor’, the survey found.

Overall, 46 per cent of respondents felt there was minimal availability, while about 38 per cent felt it was good in some markets but not in others. The remainder felt there was good availability in all markets.

‘Various elements of the real estate industry are not yet doing a good job in thinking and acting ahead’, or at least that’s what the market perceives, the survey said.

Appraisers, brokers, contractors and landlords, in that order, were perceived as the least proactive, though architects and designers were regarded as generally proactive.

The survey also asked the corporates what factors might influence their future attitudes to sustainability.

The most common factor, cited by four-fifths of respondents, was significant increases in energy costs - showing that cost-saving through green design is very much on the mind, said JLL and CoreNet.

Other well-cited factors were increased regulation, influence from customers or employees, and better technology.

Specific environmental issues like water utilisation and carbon emissions were ‘ranked lower , and by a significant gap’, suggesting that not all the details of sustainability are yet in full focus, the survey said.

‘Corporate occupiers may not fully grasp how interdependent the components are in terms of their cumulative impact on the environment’, it said.

Parkway Got The Medicine Right For Novena Deal?

Source : The Business Times, March 5, 2008

AS THE property investment chant goes, there are three factors that one needs to consider in a purchase: location, location, and location.

But for a hospital operator, does location count too?

In Parkway Holdings’ case, apparently it does.

Having been punished by the market recently for paying what is considered an exorbitant price for a piece of land in Novena, Parkway has been taking pains to explain the rationale for its bid.

A key reason was the group’s need for new capacity, given that its existing Mt Elizabeth, Gleneagles and East Shore hospitals are already facing expansion constraints. The group has had to move out some of its administrative functions from the hospital premises in recent years.

And the trend is not unique to Parkway. Also in close proximity to Novena, Thomson Medical Centre, too, has shifted its non-clinical functions across the road from its hospital building. And even in the public sector, administrative staff at Tan Tock Seng Hospital will soon have to operate from temporary offices in containers as a result of the space crunch.

Adding to the urgency is the long lead time required to build up a hospital from a green field before it becomes operational. That means development work has to start now to cope with the rising demand for hospitals in the coming years.

Considering that about 60 per cent of its patients today are foreigners, Parkway’s new venture is aimed at capturing this pool which is growing at double-digit pace a year. And as major projects like the integrated resorts take shape, more high net worth individuals and expatriates descending here could use the ‘hospital of the future’ and six-star services that Parkway plans to deliver.

Critics would argue that all these plans could still be delivered without such an aggressive bid. As Health Minister Khaw Boon Wan has announced previously, three other land parcels have been identified for the construction of private hospitals. One of them will be in Outram, another in Buona Vista, and the third in the northern part of the island. It is not known when the sites would be released.

Compared to the rest, the Novena location appears to be the most strategic one for Parkway. Being minutes away from the Orchard Road shopping belt, and easily accessible by MRT, it would be attractive to international patients looking to combine their healthcare needs with leisure.

It would also be easier for incoming overseas patients who come with their families to find temporary accommodation in close proximity to the Novena hospital. Apart from the Newton/Orchard Road area, foreign patients could also look towards upcoming commerce-hotel projects at nearby Sinaran Drive and Race Course Road.

Right next door, doctors taking up space at Far East Organisation’s Novena Medical Suites add another potential pool of users to Parkway’s Novena Hospital. It could provide that extra wing, like what Paragon Medical Centre is to Mt Elizabeth Hospital now.

Clearly, clinching the Novena site is paramount to its expansion. With a rising expatriate population and more than 400,000 foreign patients arriving in Singapore every year, getting a new hospital up and running in time is pivotal for it to maintain its lead in the private healthcare space.

Parkway itself has said its new venture will set a new benchmark in private healthcare here. It will have an emphasis on cardiovascular disease, oncology, and orthopedics, and healthcare delivery designed with a great deal of attention to individual patients.

At $1,600 psf per plot ratio, the bid works out to more than $1.2 billion just for the 99-year leasehold land. Add another $500 million to the development cost and the total bill comes closer to $2 billion.

When compared to the next highest bid of $694.50, the price is seen as excessive. But seen against the light of the location’s potential, Parkway may have the last laugh in the longer term.

UOL Group Unveils New Luxury Serviced Apartment

Source : Channel NewsAsia, 05 March 2008

Property developer UOL Group has unveiled a new luxury serviced apartment, marking its entry into the extended stay business.

Pan Pacific Serviced Suites, located in the Somerset area, will open for business in April. It offers 126 deluxe units, which come with personal assistants to tend to the needs of guests.

Besides waking up to a view of downtown Singapore in an apartment kitted out with designer European furniture, there is also a swimming pool filled with mineral water for one's use.

Ten personal assistants – trained by the former butler of the King of Jordan – will work around the clock to ensure everything goes smoothly.

It might come as no surprise then that the room rates at Pan Pacific Serviced Suites are 20 to 25 percent higher than those at other luxury serviced apartments in Singapore.

Prices start from S$420 a night in an executive suite to over S$1,000 a night in a two-bedroom penthouse. But UOL is sure there will be takers.

Kam Tin Seah, Senior GM, Investment & Strategic Development, UOL Group, said: "We have arranged at least 20 appointments with our existing top client list that Pan Pacific Hotels and Resorts has, as well as new opportunities that we have identified from the current demand level, so I would say we are confident to keep to at least 75 percent occupancy for six months."

UOL said the decision to move into the extended stay business is unrelated to the current hotel crunch. But it expects to benefit as demand spills over from hotels to the serviced suites.

UOL plans to roll out five more Pan Pacific Serviced Suites in the next three years. One will be launched in Bangkok next year and the others in fast-growing countries such as China, Vietnam and Malaysia. - CNA/so

Mix-Landed Site At Dairy Farm Crescent Offered For En Bloc Sale

Source : Channel NewsAsia, 05 March 2008

The private residential property market may be seeing subdued times, but that is not stopping owners of Chestnut Ville I and II from testing the en bloc sale market.

The mix-landed site at Dairy Farm Crescent, off Upper Bukit Timah Road, has been put up for collective sale by property consultant Credo Real Estate.

The owners have an indicative price of S$90 million for the combined plots. With the inclusion of an estimated development charge of S$1 million, the price works out to S$741 per sq ft of gross floor area.

The developer's break-even price for an intermediate strata terrace house development is estimated to be about S$2.1 million.

If conventional bungalows are built, the break-even price rises to about S$3.8 million.

Chestnut Ville I and II currently comprise 11 townhouses and 34 walk-up maisonette units with a combined land area of 122,677 sq ft.

Under the 2003 Master Plan, the site is zoned for three-storey mixed-landed housing. This means the site can be redeveloped into a combination of conventional terrace houses, semi-detached houses and detached houses or cluster landed housing.

The tender for Chestnut Ville I and II closes at 2.30pm on April 8. - CNA/so

New Housing Grant To Encourage Singles To Live With Parents

Source : Channel NewsAsia, 05 March 2008

There will be a new financial incentive to encourage singles to live with their parents.

Minister-in-Charge of Ageing Issues Lim Boon Heng disclosed this in Parliament on Wednesday when he responded to concerns raised by MPs over the needs of lonely elderly.

Over the last few years, the Housing and Development Board (HDB) has built studio flats for the elderly who still want to stay within the community.

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But now, there will be a new initiative which will benefit not just the elderly, but also their unmarried children.

Currently, families get a S$40,000 grant if they purchase a resale flat near their parents or with their parents. A similar scheme will be extended to singles but only if they live with their parents.

Mr Lim said: "The HDB will introduce a similar scheme for singles who buy a resale flat and live with their parents. Eligible singles will now get an additional S$9,000 grant or a total of S$20,000 if they choose to buy a resale flat to live together with their parents."

Presently, singles aged 35 and above are only eligible for an S$11,000 housing grant for a resale flat in any location. HDB will announce details of this new scheme at a later date.

The move is one of several new measures to make life better for senior citizens, with day care centres being another place where the elderly can enjoy social interactions.

Transport subsidies for trips to these centres would be introduced in the second half of this financial year. Currently, such trips cost about S$150 per person a month. - CNA/so