Saturday, March 29, 2008

Putting On The Ritz

Source : The Business Times, March 29, 2008

Luxury living goes up a notch with personal housekeeping and sommelier services at the first Ritz-Carlton Residences in Singapore.

THE first Ritz-Carlton Residences in Singapore - and Asia - is sparing no expense to make its residents feel right at home.

The 36-storey luxury residence in Cairnhill Road, which has 58 residential units, will feature three recreation sky terraces. Spanning over 5,000 sq ft each, the one on the fourth level will have a 34m-long lap pool, hydro pool, gym, yoga space and spa facilities.

There will also be a reading room and a cafe with billiard tables on the 14th floor. With a gourmet kitchen and a wine cellar on the 24th floor, a team of service staff can also help residents organise private parties for up to 20 people.

The project is a partnership between The Ritz-Carlton and Hayden Properties , which is a joint venture between real estate firm KOP Capital and Emirates Tarian Capital.

Prices for each 2,800 sq ft three-bedroom unit start from $11.5 million, while the 3,057 sq ft four-bedroom ones go from $15.5 million, says Hayden’s managing director Ong Chih Ching.

The junior penthouses, which are more than 3,500 sq ft, cost from $18 million. The project is expected to be completed in 2010.

At the launch last December, the development achieved a record price of $5,146 per sq ft (psf) or over $15 million for a four-bedroom unit. That month, it also sold four other units from $5,053 psf upwards.

But sales have slowed down since. Last month, only a three-bedroom unit was sold at $4,140 psf, which is about $11.6 million, and none in January.

The market is expected to remain lacklustre given the snowballing global financial crisis originating from the United States, say property experts.

Property developers in Singapore say they sold only 185 new units in February, down from the 328 sold in January.

So far, 30 per cent of the The Ritz-Carlton Residences’ apartments have been snapped up. Currently, more than 50 per cent of the buyers are from Russia, Indonesia, Japan, Korea and the Middle East. A few also intend to lease out their units, says Ms Ong.

Monthly rentals at The Ritz-Carlton Residences could fetch more than $25,000 for the four-bedroom units. Already, a 2,885 sq ft four-bedroom unit at the nearby Ardmore Park, which is located off Draycott Drive, is going for $22,000 a month.

However, all this luxury does come at a price. At The Ritz-Carlton Residences, residents have to pay a $2,500 monthly fee, which will include a 24-hour concierge service, housekeeping and sommelier service.

LTA Awards Site At Serangoon Ffor Transport Hub Development

Source : The Business Times, March 29, 2008

SINGAPORE will have 10 integrated public transport hubs in about 10 years.

The Land Transport Authority (LTA) yesterday awarded a ‘white’ site at Serangoon Central for an integrated development to a unit of Pramerica RealEstate Investors (Asia) and reiterated that four more integrated public transport hubs will be built - at Marina South, Jurong, Joo Koon and Bedok - over the next 10 years.

Typically, these developments comprise air-conditioned bus interchanges, MRT stations and retail/other developments.

So far, three such hubs have been completed - at Ang Mo Kio, Toa Payoh and Sengkang. Another two are being built - at Boon Lay and Clementi - slated for completion by 2009 and 2011 respectively, LTA announced.

‘Integrated public transport hubs will enhance connectivity by making our bus interchanges and MRT stations more accessible,’ LTA chief executive Yam Ah Mee said in a statement yesterday.

‘Residents have told us they enjoy the comfort and convenience of our air-conditioned bus interchanges at Ang Mo Kio, Toa Payoh and Sengkang. Public transport ridership at these areas has gone up steadily.’

Pramerica Asia will develop a mall on the Serangoon Central site, which it clinched for $800.9 million or $850 psf per plot ratio.

LTA said in its statement: ‘Under this tender, the developer will design and construct a development with a bus interchange, to be integrated with the Serangoon North-East Line MRT Station and the Serangoon Circle Line MRT Station.’

In its release yesterday, LTA did not give the locations of the four new integrated public transport hubs.

But market watchers reckon the ones in Jurong and Bedok are likely to be around the existing Jurong East and Bedok MRT stations.

The Marina South hub could be in the vicinity of a new station planned to serve the new cruise terminal at Marina South as part of an extension to the current North-South Line, which now ends at Marina Bay Station.

Parking Squeeze May Take Shine Off New Buildings

Source : The Business Times, March 29, 2008

Rules vastly reducing carpark lots in new office buildings and malls are poised to bite.

New office buildings and shopping malls coming up in the central areas of Singapore - especially in new downtown Marina Bay - are likely to feel the full force of existing rules limiting the number of parking spots allowed for each building.

And with a whole slew of commercial buildings nearing completion over the next few years, a severe shortage of carpark lots is imminent. New ‘white’ sites, such as the Marina View land parcels, get just one carpark spot for every 425 sq m - or 4,575 sq ft - of commercial space. White sites can be developed into a combination of uses.

Developers are allowed to provide more spots, but at the expense of giving up office or retail space. As yields for commercial space are significantly higher than those for carpark lots, most will not do so.

What this translates to is quite startling - a company that takes up one entire floor in Marina Bay Financial Centre (MBFC) with a large floor plate of 25,000 sq ft could be entitled to just six carpark lots.

Similarly, in a medium- sized building, a company occupying an entire floor - or some 10,000 sq ft of space - will get just two parking spots.

And for the upcoming mega office building on the Marina View site, this means that the 1.7 million sq ft of office space the owner is required to provide would entitle the development to around just 380 parking spots.

While the rules have been in place for all new buildings since May 2002, the impact has not really been felt so far because in the old central business district (CBD), an excess of carpark lots in older buildings make up for the shortfall in newer ones.

Golden Shoe Car Park and Market Street Car Park also provide some much-needed supply.

But for new downtown Marina Bay, there will be no such buffers. Buildings in the area will mostly all be new - which means that they will not have excess carpark spaces.

‘The ruling is a bit harsh, especially if you look at all the big projects coming up in Marina Bay,’ said one local developer. ‘Those buildings will have thousands of workers, and only a few hundred carpark lots each.’

Singapore is trying to attract more financial institutions, which means that more professionals from the banking and financial services sectors are expected to relocate from abroad. But some of them may find that they cannot drive to work, the developer added.

Macquarie Global Property Advisors’ Marina View development - which combines two sites won in government land tenders - is one building that will likely be hit by the shortage, industry players said. The project is required to provide some 1.7 million sq ft of office space.

MBFC, on the other hand, is expected to fare slightly better. Although the building is a white site and therefore subject to the ‘one carpark lot for 425 sq m of commercial space’ rule, it also has ‘hub status’, which means that it is allowed to have slightly more carpark lots without having to sacrifice its commercial gross floor area (GFA). But while Marina Bay will likely be the first to be hit, the existing CBD is also going to face the same problem in the future, market watchers said.

‘Right now, the CBD is managing,’ said Nicholas Mak, director of research and consultancy at Knight Frank. ‘But if developers continue tearing down and then building new buildings, then we will have a problem.’ This is because new projects on the sites of old buildings are also subject to the newer guidelines.

For some of these buildings, the number of parking spots will be reduced from one for every 400 sq m (4,306 sq ft) of office space to one for every 425 sq m (4,575 sq ft). Parking space was a lot more liberal in some older buildings.

Adding to the woes of drivers is also the impending loss of Market Street Car Park. CapitaCommercial Trust (CCT) recently said that it has been granted planning permission to redevelop the building into an office tower.

Other than office buildings, any upcoming new shopping malls, hotels, cinemas, theatres, restaurants and bars will also be affected. The impact will be greatest in the central areas, but are also being felt elsewhere - especially for white sites.

A retail development slated for a plum white site above Serangoon MRT Station will have only slightly over 200 carpark spots - which Danny Yeo, Knight Frank’s deputy managing director, said would be a ‘tricky situation’. The mall has a maximum permissible GFA of 942,132 sq ft.

By contrast, Singapore’s now-largest suburban mall Causeway Point has a GFA of 629,160 sq ft of GFA and 915 carpark lots. Even then, it gets ‘pretty crowded’ during the weekends as the mall is the only shopping centre in Woodlands, a spokeswoman for Frasers Centrepoint said.

Industry players believe the squeeze is part of the government’s move to push more people to use public transport. But developers point out that the shortage of parking spaces will come at a time when the car population is climbing.

BT understands that for the Serangoon site, analysts recommended that the authorities provide close to 1,000 parking spots. But despite this, only over 200 units were allowed. ‘Shopping centres without enough carpark lots will suffer,’ said one property analyst. ‘There will be a complete change in shopping patterns.’

When contacted, the Land Transport Authority (LTA) said it currently regulates parking by stipulating the minimum number of car parking lots to be provided based on the given floor area of a development. ‘Developers may build more carpark lots but they have to balance them with the opportunity cost of the additional space.’

Prudential And SingPost Launch Property Fund

Source : The Business Times, March 29, 2008

SINGAPORE Post and Prudential Singapore Asset Management (Singapore) have launched an International Opportunities Fund (IOF) - Asian Property Securities, exclusive to SingPost customers.

The fund, offered from yesterday, will invest mainly in closed-end real estate investment trusts (Reits) and property -related securities of companies incorporated, listed in or focused on the Asia-Pacific region.

‘Asia’s concrete long-term growth, large population and growing middle-class fuel demand for commercial and residential properties ,’ said Jene Lua, general manager of Prudential Singapore.

SingPost and Prudential Singapore said the fund may also invest in depository receipts including American Depository Receipts and Global Depository Receipts, as well as debt securities convertible into common shares, preference shares and warrants.

A minimum investment of $1,000 is required for Class F shares, while $5,000 is the minimum for Class Fd shares. The fund aims to make one per cent payout every quarter for Fd shares.

The initiative is the result of the growing partnership between SingPost and Prudential Singapore since 2006. For SingPost, the fund increases the range of investment products under its Care for Life Portfolio.

‘The synergy between the two companies can create value to customers,’ Prudential’s Ms Lua said. ‘The partnership allows SingPost customers direct access to Prudential’s range of funds. The investment products we offer via the branches are funds with established track records, spread across a spectrum of asset classes.’

CCT’s Ratings May Be Downgraded

Source : The Straits Times, Mar 29, 2008

CAPITACOMMERCIAL Trust (CCT) faces a possible ratings downgrade after it said on Thursday that it would buy the prime office building at 1 George Street for $1.17 billion.

Ratings agency Moody’s Investors Service yesterday placed the trust’s ratings ‘on review for possible downgrade’, it said in an e-mail.

The move stems from concerns that the proposed acquisition, which is to be fully funded through debt that CCT has already secured, will ‘weaken CCT’s financial metrics’, said Moody’s vice-president and senior analyst Kathleen Lee.

CCT’s corporate family rating is now A3, or upper- medium grade. Its senior unsecured debt rating is Baa1, meaning it is subject to moderate credit risks.

Ms Lee, however, was quick to add that CCT’s ability to line up enough debt funding for the deal in the first place ’speaks of its ability to maintain funding access amid a weak credit environment’. She also said buying 1 George Street would enhance the ‘asset quality and income diversity’ of the $5.1 billion trust.

She said, though, that CCT’s weaker credit metrics were unlikely to improve soon without an equity injection, which was unlikely given the state of the equity markets.

CCT is not the only Singapore-listed property trust to deal with ratings issues. Allco Reit hit headlines last week for going to court to fend off a downgrade.

FCT To Buy $480m Malls From Parent

Source : The Business Times, March 28, 2008

FRASERS Centrepoint Trust (FCT) , which owns suburban malls, said yesterday that it would buy three properties worth $480 million in two years, funded mostly through loans as investor appetite for new equity dries up. 'Right now, the capital market is not there unfortunately, but the banks are still lending and I've got the debt headroom to go much higher,' Christopher Tang, CEO of Fraser Centrepoint Asset Management, told Reuters.

FCT is acquiring the three suburban malls from parent Frasers Centrepoint, the property arm of conglomerate Fraser and Neave, and is prepared to raise its debt gearing from 29 per cent to 45 per cent to do so, he said. 'Our long-term target is always about 30-35 per cent but we're now prepared for short periods of time to go as high as 40-45 per cent, until the capital market works through its issues.'

FCT's share price rose up to 3.3 per cent in late session trading before ending 0.9 per cent up in line with the broader market. Rival retail Reits CapitaMall Trust was up 1.2 per cent, while Suntec Reit lost 0.7 per cent.

Poor market conditions have caused Reits such as MacarthurCook Industrial and Allco Commercial to scrap plans for fund-raising by issuing new shares. With the Reits' ability to fund their growth and repay existing debts squeezed, analysts such as Goldman Sachs and UBS are predicting that smaller Reits such as MacarthurCook will become acquisition targets.

Mr Tang said that FCT's balance sheet remained strong with most debts due in 2011, and FCT had an A3 corporate rating from Moody's. He declined to say if he was planning to acquire another Reit, but did not rule it out. 'I think, as a strategy, it's something that most people would not rule out. It's obviously another way of growing. M&A will probably be an area that will have more activity in the Singapore Reit market in the future. Like in the United States and Australia, it's an inevitable phase for the market that there will be consolidation from time to time.'

Mr Tang remains bullish about the outlook for suburban malls, despite concerns that consumers would cut expenses amidst fears of a slowing global economy and surging inflation. 'Even in the worst of times, during the Sars period in 2003, our occupancy never dropped because suburban malls are non-discretionary spending and it rides economic cycles very well,' he said. -- Reuters