Friday, March 14, 2008

M&As Likely To Hit Singapore Reit Market: Fitch

Source : Today, Thursday, March 13, 2008

Fitch Ratings expects property trusts to see more mergers and acquisitions (M&As) in the near-to-medium term, with those trading below their book values likely to become targets of acquisitions.

Under certain conditions, the ratings firm said: “Such M&As could affect the credit ratings of the affected” real estate investment trusts (Reits). “Fitch believes that consolidation of the Singapore Reit market is likely but tempers this view with the knowledge that funding for such acquisitions may become more expensive or difficult to get.”

It noted that despite a relatively-liquid banking sector here, the current woes in the global credit market could affect the institutional real estate market here as many of the participants are either headquartered or have significant business interests outside Singapore.

Reits with foreign sponsors appear vulnerable to mergers and acquisitions or asset divestment, as are those “with small market capitalisations, experiencing difficulty in raising funds for asset expansion or refinancing debt and those also trading at below book value,” Fitch said.

Industrial property player Ascendas yesterday said it will pay $158 million for a 6.28-per-cent stake in Ascendas Reit held by a unit of Australia-based Goodman Group. The acquisition will increase Ascendas’ total unitholding in the Reit from 19.96 per cent to 26.77 per cent.

Allco Commercial Reit said on Sunday that it may sell its Australian assets.

Macquarie MEAG Prime Reit, which has interests in Wisma Atria and Ngee Ann City, said its biggest shareholder, Macquarie Real Estate, received “unsolicited offers” for its 26-per-cent stake. It is conducting a strategic review.

Fitch said that the latter two Reits and several others have their shares trading below book values, spurring discussion about how best “to unlock the shareholder value”.

But those with well-established presence and highly-regarded sponsors, such as CapitaMall Trust, are more likely able to take advantage of current opportunities to acquire assets from other Reits as they are better able to raise funding.

Goodman Exit Seen As Chance For A-Reit Expansion

Source : The Business Times, March 13, 2008

IN A move that could pave the way for Ascendas Real Estate Investment Trust (A-Reit) to finally expand overseas, Australia’s Goodman Group has exited the trust.

Goodman is selling its 40 per cent stake in the entity that manages A-Reit as well as a 6.28 per cent stake in the trust itself. The latter transaction is for $158.16 million or about $1.90 per A-Reit unit. The counter closed at $1.95 yesterday, down two cents.

The buyers in both transactions are fully owned units of Ascendas Pte Ltd, which will gain full control of the Reit manager, which will be renamed from Ascendas-MGM Funds Management to Ascendas Funds Management (S).

Ascendas’ stake in A-Reit will also go up to 26.77 per cent.

An announcement last night put an end to speculation late last year that Goodman would exit A-Reit. Market watchers expected Goodman to sell its stake in the A-Reit manager when the Australian group was tipped to land the job of managing a proposed Reit that will hold some properties being divested by JTC Corp.

The strategy would have been to remove the conflict of interest of Goodman having an interest in two Singapore industrial Reit managers potentially competing for the same assets and tenants.

However, JTC eventually gave its Reit management job to Mapletree Investments in February. Although Goodman did not clinch that deal, some market watchers nonetheless welcome Goodman’s exit from A-Reit’s manager, as it paves the way for A-Reit to invest in properties outside Singapore.

A-Reit has never expanded overseas because of an understanding among the shareholders of the Reit manager to avoid conflict of interest, analysts say.

Goodman Group CEO Greg Goodman possibly hinted almost as much when he told BT last night that ‘we have operations in the region, and so does Ascendas’ and parting ways will minimise mutual conflict of interest.

Another important reason Goodman is exiting its involvement with A-Reit’s manager is because ‘our approach is that we prefer to have full control of any Reit manager we’re involved with, and that’s not possible in this case’, Mr Goodman said.

However, the group is not bidding goodbye to the Singapore industrial property market.

‘Goodman will re-enter the Singapore market at some point. We know this market well and we like it,’ Mr Goodman said.

The group could invest in the Singapore industrial property scene again, possibly through its wholesale property funds, or development activity.

London Is Europe's Priciest Business Venue

Source : The Business Times, March 13, 2008

London is still by far Europe's priciest business location, but the cost of buying an office - as opposed to leasing one - is now greater in Madrid, Paris, Dublin, Munich, Barcelona and Stockholm, according to a report issued yesterday.

According to real estate services firm Knight Frank, rental yields - a valuation measure which moves inversely to price and is key for property investors - have leapt by a full percentage point in London in the last six months as global credit conditions have tightened.

However, commercial property yields have been more static elsewhere in the region.

As a result, the prime office yield for Europe's premier financial hub was at 5 per cent, but as low as 4 per cent in other European cities.

And yet, London was still the most expensive European city to rent not just prime office space but also well-located distribution warehouse and retail space.

'The yield correction already seen in the UK has yet to be fully evidenced in the other major European centres,' said Joe Simpson, Knight Frank's head of international research.

The fact that it has happened without denting London's position at the top of the European rental league was a strong argument in favour of London as an investment destination, he said.

Prime office rents in London's West End stood at 1,607 euros (S$3,427) per square metre per year, while prime distribution warehouse rents around London's Heathrow Airport were 212 euros per sq m and retail space in the UK capital's shopping malls was available at 6,427 euros per sq m, Knight Frank said.

Europe's next highest office rents were 1,358 euros per sq m in Moscow's central business district, where a building boom has so far failed to improve availability due to strong demand and where prime yields of 8 per cent were still the norm.

Dublin was second in the case of industrial warehouse and retail space but still around 30 per cent cheaper than in London. -- Reuters

UK Commercial Property Prices May Not Increase This Year

Source : The Business Times, March 13, 2008

UK commercial property prices won't start rising until next year, according to Evans Randall Investment Management Ltd, the co-owner of the Gherkin office tower in London that's started a fund to buy assets in forced sales.

'We will probably look at 2008 as being relatively flat,' chief executive officer Michael Evans said in an interview on Tuesday at the MIPIM real estate conference in Cannes, France. 'A year from now, things will come back with a vengeance.'

Evans Randall, a closely held London-based investment bank, plans to complete a £250 million (S$700 million) acquisition within about a month, Mr Evans said. He wasn't more specific about the transaction.

UK commercial real estate prices fell 7.7 per cent last year, the biggest drop since 1990, according to Investment Property Databank Ltd, as banks curbed lending as a result of the US sub-prime mortgage crisis. Investors also became concerned a slowing British economy would curb demand for offices and crimp consumer spending.

Mr Evans, whose investors paid £452 million for Bank of America Corp's European head office in London's Canary Wharf district in July, said he was still able to finance deals about 80 per cent by debt compared with about 90 per cent before the credit crunch. His lenders include HBOS plc, HSH Nordbank, Bayerische Landesbank and Eurohypo.

Prices will start to recover next year because UK interest rates will be brought down as the economy slows, Mr Evans noted. 'I am still pretty bullish,' he added. 'There is still a big appetite to invest in London and it is coming to the point where it makes sense for investors to buy in London.'

Evans Randall has bought £300 million of assets in three transactions for its £1 billion fund.

That includes its first acquisition in London's West End, home to the world's most expensive offices, as well as Commerzbank AG's London head office. -- Bloomberg

Office Demand Unaffected By Global Credit Crunch

Source : The Business Times, March 13, 2008

No threat of financial sector redundancies: URA

The credit crunch has so far failed to dent demand for office space in Singapore or derail its bid to become Asia's leading financial centre, a senior member of the city-state's Urban Redevelopment Authority (URA) told Reuters.

Speaking at the annual MIPIM trade fair in Cannes on Tuesday, Choy Chan Pong, head of land administration at the URA, said that Singapore had not felt the threat of vast financial sector redundancies and its construction boom continued.

'We have not seen any evidence of a decline in demand for office space, and for now most financial institutions in Asia are still hiring,' he said.

The URA said earlier this week that it planned to double the size of Singapore's Marina Bay financial district to 2.82 million square metres - or twice the size of London's Canary Wharf financial district - as international financial sector occupiers continued to seek presence in the city.

The authority had set aside 101 hectares of green parkland directly adjacent to the Marina Bay financial district that would serve as 'lungs' for the city, and which would never be sold for office schemes, at any price.

'We have had offers from several Middle Eastern developers and investors to buy the land we have allocated for the Marina Gardens but we will never sell it,' Mr Choy said. 'It stops Singapore from becoming a concrete jungle. It is priceless.'

Standard Chartered Bank and DBS Bank have agreed to take a total of 111,500 square metres of space at the Marina Bay Financial Centre, a 438,000 square metre office and residential project being developed by Keppel Land, Cheung Kong Holdings/ Hutchison Whampoa and Hongkong Land.

According to data from global property broker Cushman & Wakefield last month, Singapore prime office rents climbed 78 per cent in local currency terms in 2007 but Mr Choy quelled fears that this surge in rental costs had begun to price some occupiers out of the market, and towards rival markets of Tokyo and Hong Kong.

'You have to remember this rental increase was from a very low base. Singapore is still cheaper than Hong Kong . . . and Tokyo is almost full,' Mr Choy said.

Hong Kong is the second most expensive office market in the world, behind London, with annual office rents averaging US$239 per square foot. Tokyo is in third place with annual office rents at US$210 per square foot. Singapore is in seventh place.

Its annual office rents average US$130 per square foot.

'We do not expect financial institutions will have to choose one market over another, so we have no concerns about growth of China or Japan,' Mr Choy said.

'Realistically, banks know they have to be in all three cities because we serve different markets, and if banks want access to India or South East Asia, they need to be in Singapore.'

Macquarie Reit Refinances $220m Loans

Source : The Business Times, March 13, 2008

Singapore-listed Macquarie MEAG Prime Reit said on Thursday it has refinanced $220 million (US$159 million) of short-term loans to extend their maturity until September, following a strategic review.

The loans comprises $190 million, which were due in May, and $30 million, due in August. MMP Reit did not disclose the financial terms of the deal or the banks involved.

The trust said last month it was conducting a review to lift the value of its units, and may sell assets or go private after main shareholder Macquarie received unsolicited offers for its 26 per cent stake. -- REUTERS

No US Recovery Till Next Year, Say CFOs

Source : The Business Times, March 14, 2008

More than half the execs in a survey say the economy is already in recession

(WASHINGTON) Jamie Dimon, chief executive officer of JPMorgan Chase & Co, said the US economy is now in a recession.

'I think we are in one,' Mr Dimon, head of the third-largest US bank, said at a dinner sponsored by the Economic Club of Washington on Wednesday.

The US economy is in a prolonged contraction that will not dissipate until next year, according to a survey of chief financial officers.

More than half of the executives surveyed said the world's biggest economy is already in a recession and eight out of 10 said one is likely by the end of this year, according to the first-quarter Duke University/CFO Magazine Business Outlook index.

The gauge was at the lowest level since its inception in June 2001, when the US was in an eight-month contraction.

'The news from CFOs is pretty grim,' John Graham, director of the survey and a finance professor at Duke, said in a statement. 'With overwhelming CFO pessimism, we expect weak capital spending and employment in 2008.'

A slowdown in consumer spending, credit restrictions, fallout from the deepening housing slump and high fuel prices were all cited as contributing to the decline in growth. Nine out of 10 company leaders said a recovery will not begin until next year, with a plurality forecasting a rebound late in 2009.

The results are based on responses from 475 US chief financial officers in a survey taken through March 7.

A third of the respondents said their businesses had been 'directly' affected by decreased availability of credit, having to pay 1.18 percentage point more on average for financing than in the last three months of 2007.

Three-quarters of the finance chiefs said the Federal Reserve's interest rate reductions that started in September have had no influence on their businesses.

'Clearly, the Fed needs to switch to plan B,' Campbell Harvey, a professor of international business at Duke and the survey's founding director, said in a statement.

Meanwhile, Mortimer Zuckerman, co-founder of Boston Properties, the largest US office real estate investment trust, was even more pessimistic. He sees no sign for recovery for the recessionary US economy.

'We are looking at the worst set of macroeconomic conditions since the Great Depression,' Mr Zuckerman said in an interview with Bloomberg Television. 'I don't know where the bottom is. The federal government's going to have to do a lot more to contain what I think is the potential of a perfect storm.'

'The most dangerous part in my judgment is what is going on in the housing world, where we're now running foreclosures at the rate of two million a year, where nine million homes, according to the government, just slightly under nine million homes, have either no equity in them or negative equity,' he said.

'That will go up to 15 million if housing prices continue to go down this year as they've done last year,' Mr Zuckerman added.

He said the Fed's move to lend, in return for mortgage debt, US$200 billion of Treasuries to the securities firms that trade directly with the central bank, was not enough. The Fed can't solve the problems of banks that aren't willing to make loans, falling home prices or a lack of confidence in the economy over the next year or two, he said.

Businesses, on average, planned to increase investment in new equipment and software by 3.3 per cent in the next 12 months, according to the Duke poll. In December, executives had planned to boost spending by 4.1 per cent.

Companies planned to control labour costs, the report showed. Respondents foresaw 'no significant' increase in payrolls, compared with December's projected 0.5 per cent gain in employment. -- Bloomberg

Private Fund Buys Remaining 53 Grange Infinite Units

Source : The Business Times, March 14, 2008

Average price for the units, bought for $400m, is said to be $2,600-$2,700 psf

A PRIVATE fund managed by ARA Asset Management group is believed to have bought the remaining 53 units at Chip Eng Seng's and Citadel's Grange Infinite freehold condo project for almost $400 million.

Savills Singapore is believed to have brokered the latest bulk deal. The 68-unit condo is now fully sold.

The average price for typical three and four-bedroom units in the transaction is believed to be about $2,900 per square foot (psf).

However, for all 53 units sold under the deal, the average price is said to be slightly lower, at $2,600-$2,700 psf, as the three penthouses and other larger units included in the transaction were priced lower.

This marks a reversal of the previous trend, which set in around late-2006, of bigger units fetching higher psf prices than smaller ones.

'Now people are more wary and start to get concerned if the overall purchase quantum reaches a very high level, so the tendency is to pay lower psf prices for bigger units,' a property consultant said.

Another interesting feature of the bulk sale at Grange Infinite is that it is priced lower than individual units sold earlier in the project.

The initial 15 units in the condo fetched a median price of $3,201 psf in September, according to Urban Redevelopment Authority data.

The 15 apartments were sold at prices ranging from $3,025 to $3,299 psf.

This too marks a reversal of what was happening in December, when a Kuwait Finance House (KFH) unit bought 97 apartments at Guocoland's Goodwood Residence in the Bukit Timah/Scotts Road area for a median price of $3,200 psf - about 25-30 per cent above the $2,500 psf average price that Sui Generis was fetching at nearby Balmoral Crescent at the time.

GuocoLand said this week that KFH is letting the options on that purchase lapse, but added that the two sides are in talks with 'a view to a grant of fresh options for units in the development'.

A seasoned market watcher said overseas funds, particularly from Europe and Asia, remain interested in bulk purchases in Singapore condo projects - but only at fair valuations, that is, at a discount to the prices at which the units would be sold to individual investors.

'Right now, such investors are looking for mid to long-term plays. The mood for short-term play is not so positive,' said the market watcher.

'Of course, some developers may not want to sell units at a discount, unless sentiment in the market weakens, like now.'

The 36-storey Grange Infinite condo will come up on the former Grange Tower site next to the Indian High Commission.

The property launch scene has generally been quiet lately, as buyers adopt a wait-and-see approach amid US sub-prime jitters in the stock market.

However, some developers have been quietly releasing projects.

Frasers Centrepoint has sold 30 units at its freehold Martin Place Residences in the Kim Yam Road area since mid-January through private previews.

The 30 units were sold at an average price of about $1,800 psf after discounts.

Some Gillman Heights Owners Fight On For Their Homes

Source : The Straits Times, Mar 14, 2008

22 minority owners in bid to overturn sale; they simply don't want to move

A GROUP of owners at Gillman Heights Condominium is fighting hard to stop the $548 million sale of the property, despite reports that hint at a market slowdown.

The deal was struck when the market was in full flight in February last year - but now, such deals to sell en bloc have dried up.

UNITED FRONT: These owners of homes at Gillman Heights showed up in court proudly sporting T-shirts emblazoned with their condo's name as they remained bent on overturning the collective sale inked last year. -- ST PHOTO: SHAHRIYA YAHAYA

The group's stated reason for opposing the sale? They love their homes.

The owners opposing the sale of the Alexandra Road estate turned up on day one of a High Court appeal yesterday wearing specially-made T-shirts with the condo's name emblazoned on them.

Said one: 'We made it for the appeal to show our unity and our love for our home.'

The 22 minority owners are trying to overturn the collective sale of their estate to CapitaLand, Hotel Properties (HPL) and two private funds.

They are appealing on various grounds, including the way the sale process was conducted, how the former HUDC estate's age was calculated and how the price was achieved.

Three other groups, representing 18 owners, are also in court. One is made up of eight owners from four units who want to know if a supplementary deal to extend the original collective sale agreement is valid. They face legal action from the buyers for alleged breach of contract.

The Strata Titles Board (STB) approved the sale of the 607-unit, 99-year leasehold estate late last year. The sale was inked in February last year at $363 per sq ft (psf) of potential gross floor area.

Owners stand to reap $870,000 to $950,000 per unit - then 40 to 55 per cent above the levels they would have got in an individual sale.

Still, some never wanted to sell. 'We had no intention to sell,' said one of the 22 minority owners. 'The price was never our problem... You can't find another place like this in Singapore.'

The 46-year-old, who declined to give his name, lives in a 1,880 sq ft unit with his family.

Mr Pang Tee Lian, one of eight owners to sign the first agreement, but not the supplementary one, said: 'A collective sale means you can get decent proceeds. But it appears to us we would have no choice but to downgrade. And that means moving to a smaller place farther away.'

The 59-year-old did not agree to the supplementary deal as he felt the sale process had not been done properly.

'The market has quietened down but we don't just swing with the tide,' said the general manager of a building facade firm, who also declined to be named. 'It's not so much about the money anymore. After this experience, I just want to stay away from collective sales.'

To minority owners, a collective sale is akin to a compulsory acquisition, said Senior Counsel Michael Hwang yesterday. He has been engaged by Tan Chin Hoe & Co to act for the 22 owners.

He argued that before amendments last year to laws governing collective sales, former HUDC estates had not been intended by Parliament to be covered by these laws.

Outside court, a property consultant said the owners may have trouble finding comparable replacement homes, even with the weaker market.

'Demand for land has weakened, but if you look at individual deals, prices have yet to fall. Owners would be looking at the price they can get and not the price of the land their estate sits on.'

If they sold individually, they would still 'be able to get the same price or more'.

The hearing continues today.

Asia Helps Savills Beat Profit Forecasts

Source : The Business Times, March 13, 2008

Profit rises 14% to £85.5m as consultancy division also performs well

(LONDON) British property services firm Savills reported a forecast-beating 14 per cent rise in 2007 profit, as Asia and consultancy businesses shielded it from the global credit crunch, lifting its shares 6.5 per cent.

Savills yesterday said underlying profit before tax rose to ??pounds;85.5 million (S$238.6 million), beating an average forecast of ??pounds;71.3 million, as it had benefited from a broader international presence which followed its acquisition of New York-based brokerage Granite Partners in August.

Savills said its Asia-Pacific business showed strong growth in revenue, spurred by strong residential occupier demand in hotspots such as Hong Kong, China, Australia and Singapore.

'Asia was largely unaffected by the credit squeeze with investor and occupier markets continuing to perform strongly,' it said.

The region's bullish economic growth outlook and consultancy business will continue to drive growth this year, although overall performance will depend on a recovery in the financial market, Savills chief executive designate Jeremy Helsby, who will take over from Aubrey Adams in May, said.

Shares in Savills rose 4.6 per cent to 348 1/4 pence by 0918 GMT, after hitting 354 3/4p.

'Underlying pretax profit was ahead of our forecast of ??pounds;81.1 million,' Arbuthnot analyst Nan Rogers said. 'The consultancy division's contribution was up 42 per cent and the uplift from Asia-Pacific was also ahead by 40 per cent. These are the two areas which seem to be least affected by the credit crunch.'

But Savills cautioned that 2008 will be a challenging year for the property industry worldwide, as the global financial market turmoil persists.

'The outlook for our UK and US Commercial Capital Markets businesses and our UK Residential and Mortgage Broking businesses continues to depend on how quickly confidence returns to financial markets.'

In the UK, commercial investment transactions slowed in the second half while residential markets showed some signs of slowing towards the year-end.

It said office demand in central London will remain subdued until the credit squeeze has eased, although it sees no sharp downturn, given the current low levels of vacancy.

In the UK residential market, Savills expected low turnover and flat house price growth. -- Reuters

Sprucing Up Of Reservoir Park Halted

Source : The Straits Times, Mar 14, 2008

NATURE lovers and fitness buffs may have to wait at least nine more months before they can enjoy some of the new visitor-friendly facilities at the MacRitchie Reservoir.

A $5 million MacRitchie spruce-up, the first phase of which was slated for completion this month, came to a stop when the contractor - Wacon Construction & Trading - went bust.

The project is the brainchild of the National Parks Board and PUB, the national water agency.

According to PUB's director of best sourcing, Mr Moh Wung Hee, construction work came to a virtual halt two months ago. Mr Moh said the PUB has since terminated its contract with the company for failing 'to make satisfactory progress on the project'.

The upgrade was part of PUB's Active, Beautiful, Clean Waters (ABC) programme to spruce up Singapore's reservoirs and rivers.

It was meant to provide MacRitchie with new features such as shower facilities, a specially designated warm-up area and a two-storey carpark that would double the number of lots.

In the meantime, PUB said it will be calling for a new tender this month to find a replacement contractor. It aims to complete construction of the carpark by the end of this year, while the other new amenities are expected to be up and running by next October.

When contacted by The Straits Times, MrOng Say Kiat, who is managing director of Wacon Construction, declined to talk about the MacRitchie project, but blamed rising operation costs as the main reason for his company's financial troubles.

He said: 'My company had to fold because of the price increase in raw materials, especially sand.'

Sighing, Mr Ong added that it was 'a heartache' to see the company that he had built collapse.

He declined to reveal how much debt his company was in, or if there were other projects that had also been put on hold.

However, The Straits Times understands that several companies have taken legal action against Wacon Construction this year for slightly over $1 million in money that they said was owed to them.

Three other companies are also taking Wacon Construction to court for alleged debts amounting to more than $83,000.

Back at MacRitchie, some regulars were disappointed when told of the delay.

Mr Bernd Nordhausen, 46, who jogs at MacRitchie regularly, said he was annoyed as the delay would mean that the problem of finding a parking lot, especially on weekends, would continue longer than expected.

'A bigger carpark is desperately needed. It has already been about 14 months since the upgrading began. That's just too excessive,' he said.

Another regular jogger, Mr Surinder Singh, 50, said of the delay: 'It has caused a lot of inconvenience because everyone was looking forward to the facilities, especially the showers. Now it's, 'Oh, suddenly stop!''

But Mr Singh conceded that unforeseen circumstances cannot be helped.

'Hopefully we can expect quick action from PUB,' he said.

Some Gillman Heights Owners Fight On For Their Homes

Source : The Straits Times, March 13, 2008

PROPERTY market sentiment may be souring but a group of owners at Gillman Heights Condominium is still fighting hard to stop the $548 million sale of their property.

The deal was struck when the market was in full flight in February last year - but now en bloc deals have dried up.

Their stated reason? They love their homes.

The owners opposing the sale of the Alexandra Road estate turned up to day one of a High Court appeal on Thursday wearing specially-made T-shirts with the condo's name emblazoned on them.

Said one: 'We made it for the appeal to show our unity and our love for our home.'

The group of 22 minority owners is trying to overturn the collective sale of their estate to CapitaLand, Hotel Properties (HPL) and two private funds.

They are appealing on various grounds, including the way the sale process was conducted, how the ex-HUDC estate's age was calculated, and how its price was achieved.

Three other groups representing 18 owners are also in court opposing the appeal.

One is made up of eight owners from four units who want to know if a supplementary deal to extend the original collective sale agreement is valid. They face legal action from the buyers for alleged breach of contract.

The Strata Titles Board (STB) approved the sale of the 607-unit 99-year leasehold estate late last year. The sale was inked in February lsat year at $363 per sq ft (psf) of potential gross floor area.

Apartment owners stand to reap about $870,000 to $950,000 per unit, which was then about 40 to 55 per cent above the levels they would got in an individual sale.

Still, some owners never wanted to sell.

Read the full report in Friday's edition of The Straits Times.

Major Singapore Property Launches Unlikely In Next Three Months - Report

Source : Thomson Financial, Thursday March 13, 2008

Singapore may not see major property launches over the next three months as the negative sentiment on the sector was exacerbated by recent events, including the Kuwait fund pullout from a major purchase of high-end residential units, the Straits Times (news) reported Thursday, quoting market analysts.

Kuwait Finance House balked at its option to buy 97 units at Goodwood Residence, a project of GuocoLand (F17.SI - news) , for 818 million Singapore dollars to lapse while a landed housing site in Jurong West fetched a top bid of 78 dollars per square foot, which was significantly lower than expected, the newspaper said.

Major property developers such as CapitaLand (C31.SI - news) and City Developments (C09.SI - news) have said earlier they are willing to defer property launches until sentiment improves, probably in the second half of the year.

Only the 405-unit Waterfront Waves in Bedok Reservoir has been the new major condo launch this year, the Straits Times said.

'Not everyone can hold back their launches for a long time. But nobody is ready to lower their prices yet,' the newspaper quoted an unnamed property consultant as saying.

(1 US dollar = 1.38 Singapore dollars)

Positive Outlook For Global Property Sector In The Medium Term

Source : Channel NewsAsia, 13 March 2008

The sub-prime crisis has intensified the necessary corrections in the property market. But according to Henderson Global Investors, there's an upside to it.

The asset management firm, which has some $117 billion worth of assets under its wing, is positive on the medium term outlook for the global property sector.

The likelihood of a US recession and the current global credit crisis is hurting investor sentiment, and is expected to have an impact on the property sector in the region.

In its latest report on the global property outlook, Henderson Global Investors noted that price increases are cooling off in Singapore, Hong Kong and China. But office rentals are still expected to climb, albeit at a slower pace.

Over the next 12 months, Henderson said growth will be led by retail properties and retail space. It remains positive on Singapore REITs such as CapitaMall Trust and Ascendas REIT.

"In terms of industrial and retail space, we think these companies (Singapore REITS) can still benefit from very solid rental growth and good yield offered for the unit-holders. Our pick is strong companies such as CMT, CapitaMall and also Acendas REIT. The reason is, the price corrections have offered us very good entry opportunity," said Frankie Lee, a fund manager with Henderson Global Investors.

On the private residential market, Henderson said caution needs to be exercised in the next two to three years.

It projects some 19,000 apartments to come on stream during that period, and it's uncertain if demand will be sufficient. For this year, it expects prices of private residential properties to weaken by up to 10 percent.

Henderson is also less positive about the UK property sector, which it expects will underperform other markets.

As for the US market, Henderson projects yields from REITs there to come in at the high single digits. - CNA /ls

MacRitchie Facelift Stalled

Source : TODAY, Thursday, March 13, 2008

The wait for shower facilities and more carpark spaces at MacRitchie Reservoir — the first phase of which was scheduled for completion the end of this month — has just gotten longer.

According to the PUB, the construction work for the $5-million makeover would be delayed for at least another nine months after the construction work on the carpark "has virtually stopped in the last two months".

Artist's impression of how the new green carpark will look when it is completed (PUB picture)

The contractor, Wacon Construction, is understood to be undergoing financial difficulties due to the rising costs of raw materials including sand. It is facing several lawsuits from creditors.

First announced in October 2006 as part of the PUB's Active, Beautiful, Clean Waters programme to spruce up Singapore's waterways, the project would equip MacRitchie with new features, including shower facilities, a designated warm-up area and a two-storey carpark that would double the number of parking lots.

PUB's director for best sourcing Moh Wung Hee said it has terminated the contract with Wacon and would be calling for a new tender by the end of the month. Mr Moh added that the PUB "aims to complete the construction of the carpark by the end of the year and the amenities centre by next October".

In 2003, the tendering system for public projects was tightened after a couple of Housing and Development Board projects — an upgrading project in Marine Terrace and the building of flats in Sengkang — were stalled.

Among the new rules introduced then was the empowerment of the Building and Construction Authority to audit the financial status of contractors more frequently, to act as an early-warning system against contractors in danger of insolvency. - TODAY/fa

文华酒店亿余元扩建翻新 重点建高档次购物廊

《联合早报》Mar 13, 2008

配合旅游局重新打造乌节路计划,文华酒店(Meritus Mandarin)将进行扩建与翻新设施工程,加宽乌节路前的人行道及乌节连路前的停车处。


华联企业集团执行总裁张清福昨天接受本报访问时透露,文华酒店扩建设施计划的焦点是建设全新的走高档次路线文华购物廊(Mandarin Gallery)。












本地旅游业发展蓬勃促使酒店业者在这几年展开大大小小的翻新计划,以维持竞争力。过去一年,重新命名的乌节泛太平洋酒店(Pan Pacific Orchard)及东方文华酒店(Oriental Mandarin Singapore)先后完成翻新。两家酒店的翻新项目集中在提升客房素质及主要设施。

乌节泛太平洋酒店总经理黄宝娘受询时说,旅游业增长使酒店业竞争升温,促使酒店重新策划市场策略,应付挑战。乌节泛太平洋酒店原为丽嘉酒店(Negara on Claymore)。至今花费在翻新工程的费用有500万元。