Thursday, May 15, 2008

Sales In Private Residential Market Dip In April

Source : Channel NewsAsia, 15 May 2008

Sales in the private residential market have dipped in April after a mild recovery in March.

According to the numbers of private home sales released by the Urban Redevelopment Authority (URA), only 274 units were sold last month – down from 301 units in March.

Developers were also holding back, with only 271 units launched in April – the lowest number of units since market weakness surfaced in September last year.

Analysts said they expect the market to continue moving gingerly.

Homebuyers in the mass market are keeping the numbers moving along as nine out of every 10 units sold in April were in the suburban areas. This belies the overall cautious stance that homebuyers are taking.

Chua Chor Hoon, Senior Director of Research, DTZ Debenham Tie Leung, said: "Speculation is almost nil. Most buyers we see in the market are probably those buying for owner occupation, with needs for accommodation."

With buying and selling almost at a standstill, analysts said the ball is now in the developers' court.

Colin Tan, Director of Research & Consultancy, Chesterton International, said: "Looking forward, you can see that in order to raise their sales, developers will need to price their units more realistically. As you can see from the April figures, those that have done so are being rewarded with higher sales."

But the URA figures also show that prices remain firm for high-end units and developers for those units are choosing to wait out.

"Developers are still holding back launches, especially for bigger projects and those at higher end range. What we see are mostly launches in suburban areas with units priced below S$1,000 psf," Mr Chua said.

While the latest data may seem to provide more evidence of a weak housing market, analysts said numbers are very thin and have cautioned against reading too deeply into them as they could be potentially misleading. - CNA/so

Banyan Tree Reports 38% Increase In Q1 Earnings To S$15.4m

Source : Channel NewsAsia, 15 May 2008

Mainboard listed Banyan Tree Holdings on Thursday announced it has booked a 38 per cent increase in first quarter earnings.

Its net income for the three months ended March 31 came in at S$15.4 million, largely driven by growth in its hotel investment and hotel residence/property sales segments.

Its revenue rose by 34 per cent to S$140.3 million.

Banyan Tree said it is cautiously optimistic for the next few quarters.

It has a strong pipeline of 49 new resorts opening over the next four years, with 11 new spas expected to open in the next few quarters.

Ho Kwon Ping, executive chairman of Banyan Tree, said: "What we see for the balance of this year - both in terms of hotel business and property sales remain strong.

"We do not seem to be affected by the sub-prime crisis. So we remain optimistic that this year, we should be able to perform quite well." - CNA/ac

Yong Nam Holdings Posts 267% Jump In Q1 Profit To S$6m

Source : Channel NewsAsia, 15 May 2008

The building boom in Singapore and the Middle East is proving to be a boon for engineering and construction company Yong Nam Holdings.

Its net profit for the first quarter rose 267 percent to about S$6 million. Revenues increased 56 percent to S$47.4 million.

Yong Nam saw increased activities from projects such as Orchard Turn, Marina Bay Sands Integrated Resort, Formula One and the Dubai Metro Rail.

Going forward, Yong Nam said it is optimistic that the strong operational performance will continue in financial year 2008.

The company is citing the government's S$50 billion plan to improve the Singapore's transport infrastructure in the coming years.

This includes the construction of the Marina Coastal Expressway, the Thomson MRT line, the MRT Downtown line and the Eastern Region MRT line.

The Building and Construction Authority has estimated that 2008 will see a record S$27 billion in construction contracts being awarded – 10 percent higher than the year before.

In the Middle East, Yong Nam said it continues to experience an upsurge of infrastructure developments.

The company's order book stood at S$277 million as at March 31. - CNA/so

GIC Says Sub-Prime Crisis Beginning To Hurt Asian Property Markets

Source : Channel NewsAsia, 15 May 2008

The US sub-prime crisis has begun to hurt Asian property markets, the real estate investment arm of the Government of Singapore Investment Corporation (GIC) said at the FT Asia Property Summit on Thursday.

While Wall Street starts picking up the pieces from the sub-prime crisis, GIC said, the Asian property market has just started to feel the impact.

The investor added the fallout would be even greater if the US went into a full-blown recession.

Seek Ngee Huat, president of GIC Real Estate, said: "The contagion effects of the sub-prime crisis can potentially put a downward spin (on) the current cycle. While the sub-prime crisis may be seen essentially as a transatlantic problem, its ripple effects are certainly being felt here in Asia."

GIC, however, remained upbeat, saying that the sub-prime meltdown presents not just threats but also opportunities.

It noted that Asia will continue to be the growth region of the future, attracting foreign investors in search of higher returns and diversification, as emerging cities in China and India move aggressively to become first-tier cities in the world in 10 to 20 years.

Mr Seek said: "It, therefore, may make sense to take some short-term risk in order to position for the long term, for many of these institutional investors. In fact, if one takes a long view, the pricing in emerging markets, which is starting from a low base, should have tremendous upside."

GIC Real Estate has some 300 investments spread across 30 countries around the world. - CNA/ac

DBS To Sell Preference Shares To Supplement Regulatory Capital Base

Source : Channel NewsAsia, 15 May 2008

DBS Bank says it will sell non-convertible hybrid Tier 1 securities in the form of preference shares to supplement its Tier 1 regulatory capital base.

The bank, in a filing with the Singapore Exchange, did not disclose the size of the offering. But reports have estimated the preference shares could be worth between S$500 million and S$750 million.

DBS said it is taking advantage of favourable market conditions to issue the hybrid Tier 1 securities.

Tier 1 capital is a financial institution's most secure resources, which include its earnings and funds raised from selling ordinary shares as well as subordinated debt.

DBS said the proceeds will be used to strengthen its capital position and support its regional expansion.

As of March 31, the lender's capital adequacy ratio stood at 13.4 percent, while its Tier 1 capital was 9.2 percent, well above the central bank's requirement of 6 percent.

DBS said further details will be released when the process is completed. - CNA/ir

Frasers Centrepoint Trust Plans To Refurbish Suburban Malls

Source : Channel NewsAsia, 15 May 2008

Following the S$13 million makeover of Anchorpoint Shopping Centre, Frasers Centrepoint Trust has plans to turn its attention to other suburban malls under its stable.

Anchorpoint's new look appears to be getting the thumbs up from retailers.

Lee Hsien Yang, chairman of Fraser & Neave, said: "Anchorpoint used to be occupied by furniture shops, but I think we felt there was a niche in the market for this kind of concept, so we mixed it with food and beverage. We think people will come and try, and we think we have some interesting restaurants here."

Rents have gone up by 40 percent following the makeover to as much as S$7.50 psf.

Since refurbishments were completed in March this year, the mall has seen a jump of almost 20 percent in shopper traffic and Frasers expects this to increase substantially going forward.

Frasers' next step is an almost S$40 million expansion of Northpoint, which is due to complete in mid-2009. This will be followed by works on Yew Tee Mall, which comes under its wing next year, and Bedok Mall by 2011.

The REIT said it is continuing to look for overseas potential.

Christopher Tang, CEO of Frasers Centrepoint Trust, said: "We are looking into the emerging market of Vietnam. We are looking at some of the malls there and other than that, we already have two malls in China that are under development. We will be launching a smaller suburban mall in Australia soon."

Despite the anticipated global economic slowdown, Frasers said it remains bullish about Singapore's retail and urban mall sector.

The latest numbers show that retail sales rose by a better-than-expected 5.6 percent in March, compared to a year ago. - CNA/so

No Gold Award Winner At Universal Design Awards As BCA Raises Benchmark

Source : Channel NewsAsia, 15 May 2008

Several buildings have won silver and bronze in the Building and Construction Authority's (BCA’s) annual Universal Design (UD) Awards 2008.

The office housing Xilinx's Asia Pacific headquarters which boasts natural sunlight, wide passageways and employee-friendly facilities clinched the silver award.

Changi Airport Terminal 3 clinched the silver award

However, the competition which has been held for the second year, did not see any gold award winners again.

Its organiser, BCA has raised the benchmark.

Professor Cheong Hee Kiat, Chairman, Universal Design Award Panel, said: "We need buildings to provide UD the facilities, more comprehensively in an integrated manner. And I suppose, another thing is that UD is relatively new in Singapore, and so it will take time for developers and owners to raise the standards by which they provide UD designs. "

Singapore Changi Airport's Terminal 3 is another one of the three silver award recipients.

Besides new buildings, the award also recognises upgraded buildings like the old National Museum of Singapore which is now called the Singapore History Museum. It also grabbed the silver award.

Among the six bronze recipients was the Mandai Crematorium & Columbarium which was completed in 2004.

Some of its award-winning features include smooth integration with adjacent buildings and its user-friendly layout.

Other bronze award recipients include Ang Mo Kio Bus Interchange, The Coris condominium, Ghim Moh Gardens housing estate, IMM Building and Plaza Singapura shopping mall. - CNA/vm

US Recession A Reality, Says Merrill Economist

Source : The Business Times, May 15, 2008

He expects house prices to fall another 15-20% over the next 20 months

THE worst is far from over for the US economy, which is facing its worst consumer-led recession in more than three decades, the top economist for North America at Merrill Lynch said yesterday.

Mr Rosenberg: Recession is a reality and no longer a forecast

Despite aggressive efforts by the US government and central bank to boost economic growth through tax rebates and interest rate cuts, a mix of falling house prices due to excess housing stock, tighter lending standards by banks, and weak consumer sentiment will cause US consumer spending to contract, with large knock-on effects for the overall economy, said David Rosenberg, Merrill Lynch's chief economist for North America.

'I believe the recession is a reality, no longer a forecast,' he said.

He delivered his stark warning at this year's Rising Stars conference organised by Merrill Lynch, which ends on Friday.

'I think this could end up being a consumer recession the likes of which we had in 1973-75.' That contraction lasted 16 months, ending in March 1975.

Spending by US consumers drives about 70 per cent of the country's economic output, as measured by its gross domestic product (GDP).

The main driver of his forecast is his pessimistic view of the US housing market. Large stocks of unsold housing have led to a supply glut that will drive prices even lower, he said.

'In my opinion, we're about halfway through the real estate deflation.' By his estimates, based on current housing sales rates and the stock of unsold vacant units, 'another 20 months of excess supply has to be worked out of the system' and he expects house prices to fall by another 15-20 per cent over that period.

At the same time, the tightening of lending standards by banks on loans to businesses and consumers and slowing demand for credit mean that the impact on the broader economy of the rapid succession of interest rate cuts by the US Federal Reserve has so far been muted, he said.

Since last September, the Fed has slashed its key interest rate by 3.25 percentage points to 2 per cent. By his estimates, however, average borrowing rates for individuals and firms in the private sector have only come down about 0.65 percentage point.

'The credit crunch has not totally gone away and it's mitigating to a very large extent the traditional monetary policy transmission mechanism to the real economy,' he said.

And despite 65 quarters of uninterrupted growth in US consumer spending, discretionary or non-essential consumer spending 'most assuredly is in a recession', he said, citing data from the official first-quarter GDP estimates, which put overall real GDP growth at 0.6 per cent.

Over the past six years at least, US consumer spending has been driven mainly by ever-increasing levels of debt rather than income - a trend that has now peaked with the end of easily available credit, he said. 'This was not about resilience (of the US consumer). This was about the most pronounced, debt-financed consumer spending cycle of all time.'

Not only is the supply of easy credit drying up, 'demand for consumer loans is bordering on historic lows' as people struggle to meet their existing debts on everything from mortgages to credit cards, he said.

'This is a long story of a post-bubble de-leveraging. The story's not over.'

In US equity markets, 'I still find at this stage that no asset class or security is fully priced for a recession scenario' with the possible exception of financials, he said.

He expected the pace of job losses in the US, while not yet 'dramatic', to accelerate in the coming months. That will act as 'a very strong offset' to the impact of the US government's tax rebates in the second quarter, he said.

With higher unemployment and stagnating wage growth, price inflation in the US is far less worrying than the other economic risks, he said.

IMF Chief Says Worst Of Financial Crisis Is Over

Source : AFP, May 15, 2008

BRUSSELS: The worst of the financial sector crisis is over although the impact on the broader economy will likely drag on in coming months, IMF managing director Dominique Strauss-Kahn said on Thursday.

"There are good reasons to believe that the largest part of disclosure in financial institutions has been done, especially in the United States ... so that the worst news is behind us," he told a panel at the European Parliament.

"The main problem is the linkages between the financial crisis and the real economy and this is not behind us," he said, estimating that the financial turmoil would weigh on economic activity for another "several quarters."

Growth has slowed in most major economies in the wake of a slump in the US housing market, which has triggered extreme financial market volatility and reluctance among banks to make all but the safest loans.

However, Strauss-Kahn acknowledged later at a conference on the euro that it was impossible to know exactly whether the worst of the financial crisis was over or not because there were good reasons to argue that it is not.

"We don't know exactly where we are," he said, adding that there was a sound argument that because "the housing market in the United States still has prices going down ... the source of the problem is still there."

After months of nerve-wracking swings in financial markets, optimism has begun to emerge among market participants that the worst of the storm has blown over since the collapse of the US investment bank Bear Stearns in mid-March.

While past financial crises tended to be triggered by problems in developing countries, often with current account problems, Strauss-Kahn warned that in the long-term, the recent turmoil would likely be "a taste of the new kind of crisis that we are going to face."

With big developed economies such as the United States and Europe slowing following the turmoil, Strauss-Kahn said emerging countries would be the biggest motors behind world growth this year.

Nevertheless, he insisted that such fast growing economies would also eventually feel the impact of the slowdown in rich countries, although perhaps with "some delay."

"In no way is there some sort decoupling" between economic growth trends in developed countries and emerging economies, he said, weighing into one of the hottest debates currently in economics.

Strauss-Kahn said the coming months would reveal just how well the European economy can hold up.

"The resilience of the European economy is at stake," he said. "The slowdown of 2001 is not very assuring - it took a lot of time to recover.

"The coming six months, or maybe nine months, are certainly a very interesting stress test for the European economy.

The eurozone economy rebounded with unexpected growth of 0.7 percent in the first quarter this year, according to initial official estimates issued on Thursday.

The growth in the 15 countries sharing the euro beat both economists' predictions and the 0.4-percent growth recorded in the last quarter of 2007, thanks largely to bumper 1.5 percent expansion in Germany, the data showed. - AFP/de

DBS Raises $1.5b For Expansion

Source : The Business Times, May 15, 2008

DBS raised a higher-than-expected $1.5 billion (US$1.1 billion) from preference share sale to bolster its books as it seeks to expand in China and elsewhere in Asia.

DBS Group Holdings' fundraising comes just two weeks after its new Chief Executive Richard Stanley took over and may signal it is pursuing growth outside its established markets of Singapore and Hong Kong more aggressively.

Mr Stanley last week unveiled plans to expand DBS in China, India and Indonesia, in contrast to other banks that have been forced to shore up their books in the wake of writedowns due to the credit crisis.

'DBS seems to be taking advantage of the drop in bank debt spreads,' noted Sanjay Jain, an analyst at Credit Suisse.

He said there could be three possible reasons for the move: organic growth, acquisitions, and possible provisioning against potential credit losses. But the bank said last week it does not expect any significant credit-related losses after taking a charge for the first quarter.

According to the term sheet of the deal, co-managed by Goldman Sachs and JPMorgan, it sold $1.5 billion worth of preference shares as demand exceeded earlier estimates of $500-$750 million.

'The issue has been priced on very strong demand,' Clifford Lee, DBS' head of fixed income, told Reuters. 'Book size exceeded $1.8 billion with books open at 9am and closing at 3 pm.'

The fixed-rated securities would offer 5.75 per cent per annum for the first 10-years of the issue after which the bank has the first right to redeem its shares. If it decides to extend the maturity, DBS will offer 3.415 per cent above the three-month Singapore swap offered rate.

Analysts said the capital raising could be needed to catch up with local rivals United Overseas Bank and Oversea-Chinese Banking Corp and sustain loan growth.

DBS' capital adequacy ratio was 13.4 per cent, with the Tier 1 at 9.2 per cent at end-March, above the regulatory requirement of 6 per cent.

UOB's Tier 1 stood at 9.9 per cent and OCBC's at 12.2 per cent.

'If you are growing your loan book at 20-25 per cent, you need more capital to sustain that growth,' said David Lum, analyst at Daiwa Institute of Research.

Chief financial officer Jeanette Wong said in a statement proceeds from the issue would strengthen DBS' capital position and support the growth of its Asian business.

DBS shares closed up 0.2 per cent at $20.06. -- REUTERS

GIC Says Sub-Prime Hurting Asia Property

Source : The Business Times, May 15, 2008

The real estate arm of sovereign wealth fund the Government of Singapore Investment Corp (GIC) said on Thursday that the US sub-prime crisis is beginning to hurt Asian property markets such as Japan and Australia.

'The contagion effects of the sub-prime crisis can potentially accelerate the downward spin of the current property cycle,' Seek Ngee Huat, the president of GIC Real Estate, said in a speech at a property industry conference.

'Some market weakening is being sensed in Asia, particularly in Japan and in Australia.'

The comments came after Dubai World, the investment firm of the Dubai government, said last month the US sub-prime housing crisis has slowed its investment decisions this year, but it is still holding on to US real estate assets.

GIC, estimated to be the world's third-largest sovereign wealth fund with US$330 billion in assets, is also ranked among the world's top 10 property investors, owning buildings such as Merrill Lynch's London office and Westin Paris.

GIC's Mr Seek said that he sees opportunities amid the sub-prime wreckage, but added there would be competition from other institutional players.

'As always weak markets favour those with the capacity to take strategic positions, and so the sub-prime meltdown presents threats as well as opportunities,' he said.

Mr Seek said GIC started out investing in developed markets and only started to focus on emerging markets in Asia in the mid-1990s.

Singapore, which saw private home prices jump 31 per cent in 2007 in the largest rise in eight years, is witnessing a slowdown as sales volumes slumped in the first quarter to the lowest since the 2003 Sars epidemic.

The Singapore government's moves to cool the property market, by ending a scheme that allowed delayed payments, coupled with the impact of a global slowdown, have already hit the bottomline of developers CapitaLand and Keppel Land. -- REUTERS

Banyan Tree Q1 Net Profit Up 38%, Outlook Cautiously Optimistic

Source : The Business Times, May 15, 2008

Resorts developer, Banyan Tree Holdings Limited, today announced a 38 per cent increase in net profit to $15.4 million, largely driven by hotel investment and hotel residences/property sales segments.

Revenue grew 34 per cent to $140.3 million.

'Hotel Investment segment continue to perform well in line with our expectation and we are optimistic that the positive trend will continue into the rest of 2008,' executive chairman, Ho Kwon Ping said.

The strong growth in Hotel Investment segment was mainly due to better performance from resorts in Laguna Phuket, Banyan Tree Bangkok and the newly refurbished Angsana Velavaru, coupled with additional revenue from the newly opened Banyan Tree Madivaru and Angsana Riads Collection, Morocco.

Mr Ho added:'Barring unforeseen circumstances, we therefore remain cautiously optimistic on the performance of the Group in the next few quarters.'

The company has in the pipeline close to 50 resorts slated to be opened in the next four years. These were previously announced. -- BT Newsroom

S'pore Hotel Rates Will Rise Further: CityDev

Source : The Business Times, May 15, 2008

Singapore hotel rates will continue to rise this year despite the slowing global economy due to a shortage of rooms, the head of the city state's largest hotel operator said on Thursday.

'Because of the sub-prime crisis, the higher-end ... hotels have less ability to increase their rates. But we are still having a shortage,' said City Developments executive chairman Kwek Leng Beng.

He told reporters on the sidelines of a real estate conference that there had been many periods this year when the company's hotels in Singapore were 100 per cent occupied due to the sharp rise in intra-Asian travel.

Singapore's average hotel room rate rose 24 per cent to $238 (US$172.70) a night in the 12 months to March, bringing it close to the level in Hong Kong, which stood at HK$1,362 (US$174.60).

Occupancy levels in the city state averaged 87 per cent last year, above the 85 per cent mark that hoteliers consider optimal to manage any daily mismatch between supply and demand.

Mr Kwek said the rise in intra-regional travel within Asia and changing lifestyles would ensure demand for rooms remains strong even if there is a decline in visitors from the West.

'In the old days, you go for holidays once a year. Now you go three to four times a year,' he said.

CityDev owns the ultra-luxury St Regis hotel in Singapore and is the largest shareholder in CDL Hospitality Trusts, a property trust that owns five hotels in the city state. -- REUTERS

Property Transactions With Contract Dates Between April 28th - May 3rd, 2008

New Trail Links Southern Ridges To Keppel Bay

Source : The Business Times, May 15, 2008

THE Urban Redevelopment Authority (URA) yesterday announced details of its plan for a new 2.2-km 'linear park', which will connect the Southern Ridges parks, including Mount Faber Park, Telok Blangah Hill Park, Kent Ridge Park and West Coast Park - with Labrador Park and Keppel Bay further south.

The Labrador and Nature Coastal Walk was first announced last Saturday by Prime Minister Lee Hsien Loong at the opening of HortPark and two new pedestrian bridges, which effectively created a 9km long green trail with West Coast Park and Vivocity at either end.

To further enhance Singapore's Southern Ridges and southern waterfront as a leisure and recreation destination, the 'linear park' will consist of three distinct portions, a garden trail, a mangrove boardwalk and a harbour view walk along Keppel Harbour.

The Alexandra Road Garden Trail, complete with foot and bicycle paths and rest stops, will branch off southwards along Alexandra Road from the new Alexandra Arch to the future Circle Line Labrador Park MRT station.

Continuing southward across Telok Blangah Road, nature lovers will enter a proposed landscaped plaza marking the beginning of the Berlayer Creek Mangrove Trail.

The trail will run parallel to a previously inaccessible mangrove habitat, with several boardwalks puncturing the mangrove at strategic points to both allow visitors a glimpse into its rich biodiversity and minimise any impact on the local ecosystem.

At the end of the mangrove trail, visitors may turn west to Labrador Park or continue east along a waterfront boardwalk, which will eventually connect with the waterfront promenade at Reflections @ Keppel Bay, open to the public.

The project is estimated to cost $10 million. Its construction is scheduled to begin in 2009 and is expected to be completed by 2011, along with Labrador Park MRT as well as Reflections @ Keppel Bay.

US Home Foreclosures Hit Fresh High In April

Source : The Business Times, May 15, 2008

(WASHINGTON) In a further sign of the still-troubled US housing market, a survey yesterday showed home foreclosure actions hit a fresh all-time high in April of 243,353.

The survey by the research firm RealtyTrac said the percentage of foreclosure actions - including default, auction sale notices and bank repossessions - rose 4 per cent from the prior month and 65 per cent year-over-year.

The report showed one in every 519 US households received a foreclosure filing during the month.

'The total number of US properties with foreclosure activity in April was the highest monthly total we've seen since we began issuing the report in January 2005,' said James Saccacio, chief executive of RealtyTrac.

'Although only about 2 per cent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale, and put downward pressure on home values.' Areas of California, Florida, Nevada and Arizona that had seen booming home values before the property meltdown continue to be particularly hard-hit by foreclosure activity, the survey showed.

Despite a 5 per cent month-on-month decrease in foreclosure activity in April, Nevada continued to hold the nation's highest state foreclosure rate, RealtyTrac said, with one in every 146 Nevada households in foreclosure, 3.6 times the national average. - AFP

Foreigners More Upbeat On M'sian Real Estate

Source : The Business Times, May 15, 2008

(KUALA LUMPUR) Foreigners are more bullish about the Malaysian property market than locals, according to a survey by one of the country's property websites,

Its chief executive officer Asim Qureshi said in the survey involving 250 participants, significantly more foreigners were positive about Malaysian real estate.

In a statement yesterday, he said 48 per cent of the foreigners surveyed indicated that the outlook over the next 12 months was positive, with 19 per cent negative and the remaining 33 per cent neutral.

Foreign participants believed that Malaysia will be relatively immune from the expected global slowdown as 45 per cent of them said the collapse of the US sub-prime market will not significantly affect local property prices, compared to 38 per cent who believed the impact will be significant.

'Foreigners are in a great position to be able to compare Malaysian real estate with that in other countries. Most foreign investors will not look at Malaysian property in isolation, but compare Malaysia with a number of other property hotspots,' Mr Asim said.

'In my view, foreigners are seeing the bigger picture - a picture in which they see that Malaysia has not had a property boom for over a decade. With robust fundamentals there is a good possibility Malaysia will see its own property boom in the next few years,' he said.

Mr Asim said reassuringly, Malaysians were positive about real estate in the country, with 33 per cent saying that the outlook was positive, and only 21 per cent opting for the negative outlook.

However, he noted that locals were more concerned about global events, with 43 per cent saying that the US sub-prime crisis will not affect Malaysian property prices significantly compared with 41 per cent who felt otherwise.

The survey also showed that property remained the most favoured investment type by far as indicated by 60 per cent of participants, compared to 26 per cent who favoured fixed deposits as the best performing investment type over the next 12 months, and 14 per cent who chose shares.

'Participants are unsurprisingly still most positive about residential property and this is likely due to the fact that the residential sector has been the backbone of the property sector and the most resilient property type since the Asian financial crisis,' Mr Asim said.

He said 28 per cent of those surveyed believed that detached or semi- detached houses will be the best performing asset type in Malaysia over the next 12 months, followed by 22 per cent for apartments and condominiums, and 18 per cent for linked houses.

Foreigners preferred condominiums over linked houses while locals favoured linked houses, and 11 per cent of the survey participants believed that offices will be the best performing property type while 7 per cent opted for the retail sector. -- Bernama

Sino Land Project 60% Sold As Mortgage Costs Fall

Source : The Business Times, May 15, 2008

Average prices for apartments smaller than 1,000 sq ft rise 15.6% in Q1

(HONG KONG) Hong Kong existing home sales rose last week and Sino Land sold almost 60 per cent of the new apartments at its Palazzo development in the city's Shatin district, as low interest rates spurred demand for housing.

Demand still firm: Existing home sales rose 22% to 361 in April from a month earlier, the sixth consecutive month that transactions exceeded 200

Thirty-five of Hong Kong's biggest private developments recorded 178 sales of existing residences between May 5 and May 11, up from 173 a week earlier, according to figures compiled by Midland Holdings Ltd, the city's biggest publicly-traded real estate agency.

Mortgage costs in Hong Kong have fallen below the inflation rate this year, fuelling a property boom. Average prices for residential apartments smaller than 1,000 square feet rose 15.6 per cent in the first quarter from the end of 2007, according to Vigers International Property Consultant Ltd.

'This really shows the strength of the fundamentals in the property market,' said Buggle Lau, chief research analyst at Midland. 'Normally when a big project like the Palazzo goes on the market you'll see secondary apartment transaction falling.' Sino Land, Hong Kong's fifth-biggest builder by market value, sold more than 800 apartments at its Palazzo project in the first four days after May 9 when sales started, said Una Lau, a spokeswoman for Sino Land.

Hong Kong developers begin selling apartments while they are being built.

Sun Hung Kai Properties Ltd, the city's biggest builder, and Henderson Land Development Co also sold 18 apartments at the Harbour Place project in the Hung Hom district last weekend, Hong Kong-based newspaper Ming Pao reported yesterday. Fiona Wan, a spokeswoman for Sun Hung Kai, didn't immediately return calls from Bloomberg seeking comment.

Existing home transactions rose 22 per cent to 361 in April from a month earlier, according to Centaline Property Agency Ltd. It was the sixth consecutive month that transactions exceeded 200, the agency said in a statement.

The Hang Seng Property Index, which tracks the share prices of the six biggest Hong Kong-listed developers, has gained 23 per cent since March 21, cutting its loss in 2008 to 17 per cent.

Sino Land has lost 27 per cent this year, Sun Hung Kai, the city's biggest builder by market value, has fallen 18 per cent. Henderson Land has dropped 20 per cent. -- Bloomberg

UK Building Work Slumps Again In April

Source : The Business Times, May 15, 2008

(LONDON) Commercial building activity in Britain shrank for a sixth straight month in April and was expected to fall further in the next three months, data showed on Tuesday.

Property services firm Savills said its Total Commercial Development Activity Index showed a net balance of minus 20.8 per cent last month - the lowest level recorded in the monthly survey's five-year history and evidence that the country's property downturn has further to run.

Almost a third of commercial developers and building contractors reported a fall in overall activity in April, compared with 12 per cent who signalled a rise. The data also showed respondents were more pessimistic than at any point since the data series began in 2003 about the three-month outlook for development work on offices, retail or leisure properties, and industrial and warehouse projects. -- Reuters

UK House Prices To Fall 5% This Year: Economists

Source : The Business Times, May 15, 2008

Tumbling house prices may further dent consumer confidence

(LONDON) British house prices are likely to fall 5 per cent this year, a Reuters poll of economists showed, and many believed that they could tumble twice that as soaring consumer inflation restricts the scope for interest rate cuts.

Ms Flint: Her briefing notes say that house prices could fall as much as 5-10 per cent this year

Forecasts for 2008 house prices on an annual basis ranged from a 10 per cent fall to a 2.9 per cent rise, with a median forecast of a 5.0 per cent drop, according to the poll of 30 analysts at banks, investment firms and research institutes.

Nearly a third of the respondents - nine of the 30 - predicted a 10 per cent drop in the poll, which was taken on May 8-14. The median compares with that of a 0.8 per cent fall in a Reuters survey in March, highlighting the deteriorating outlook.

The government has a similar view. Briefing notes for Housing Minister Caroline Flint said that house prices could fall as much as 5-10 per cent this year and that the government does not know how bad it will get.

The housing market, a bedrock of consumer wealth which has tripled in value over the last decade, has been slowing rapidly in the face of a global credit crunch and despite cuts in official interest rates.

'The fundamentals are so weak that it would require a prolonged period of base rate cuts to re-stoke house price inflation,' said Andrew Goodwin at Experian.

Analysts in the poll also predicted that monthly mortgage approvals will drop to 63,000 in six months, before recovering to 73,000 in 12 months. This compares with a record low level of 64,000 approvals in March and a 2007 average of around 104,000.

Approvals - loans agreed but not yet made - are a good early indicator of where house prices are heading.

Forecasters gave a nearly one in three chance of a US-style market correction where housing is experiencing the biggest price falls on record. Many US homeowners are now stuck with bigger mortgages than their property is worth.

House prices had their most widespread decline across Britain for 30 years in April, according to figures released by the Royal Institution of Chartered Surveyors on Tuesday, falling in every part of the country.

Tumbling house prices may further dent consumer confidence which is at levels not seen since the recession of the 1990s - something the ruling Labour party is keen to avoid as it already faces diminishing voter support.

Property website Rightmove said this week that over one million properties were currently for sale in the UK, 15 per cent more than a year ago, but the average selling time had gone from 71 days to 85 days.

However, it is not all doom and gloom in the property market. Last week, a wooden beach hut in Suffolk was valued at up to £80,000 (S$213,720) while housebuilders have been taking advantage of falling land prices and snapping up plots that were previously too expensive.

The Bank of England (BOE) cut interest rates by 25 basis points to 5.0 per cent in April after making a similar cut in February.

These followed a 25 point cut in December, the first reduction in two years.

But forecasters are wavering on their calls for another cut in June as consumer price inflation has rocketed to 3.0 per cent.

UK rates have not fallen nearly as fast as in the US where they have plummeted 325 basis points since September in an attempt to avoid a recession in the world's biggest economy.

BOE policymaker and arch-dove David Blanchflower has warned that house prices could fall as much as a third and the economy will slip into recession unless the bank takes swift action.

Many lenders have been tightening credit conditions for new borrowers even though base rates have dropped. Millions of homeowners are set to be hit by higher mortgage rates when cheaper fixed-rate deals from two years ago expire this year.

HBOS , Britain's biggest mortgage lender, and Alliance & Leicester are among banks asking for larger deposits and raising the criteria to obtain credit as they try to avoid risky lending. -- Reuters

S'pore Is World's 2nd Most Competitive Nation, After US

Source : The Straits Times, May 15, 2008

GENEVA - THE United States topped world competitiveness rankings for the 15th straight year, but its economy is showing the same signs of weakness that sank booming Japan in the early 1990s, according to an annual survey released on Thursday.

Asian tigers Singapore and Hong Kong ranked just behind the US, as they did last year. Switzerland jumped two places to fourth, while Luxembourg rounded out the top five most competitive national economies, said the Lausanne, Switzerland-based, IMD business school, publisher of the World Competitiveness Yearbook.

'The big question is whether the United States will be No. 1 after this year,' project director Stephane Garelli said, adding that the report was based on 2007 data that do not fully reflect all of the problems in US financial markets. 'Everyone is catching up very quickly, but so far the US economy is showing a lot of resilience.'

The study lists 55 economies according to 331 criteria that measure how the nations create and maintain conditions favorable to businesses.

The US position was cemented by its domestic economy, which is the world's strongest, topping all others in its amount of investments, stock purchases and commercial service exports. The US also ranks as the easiest place to secure venture capital for business development and dominates all other economies in key technology criteria such as computers in use, according to the report.

But Mr Garelli warned that US economic health is vulnerable because of its heavy reliance on the financial sector for corporate profits.

Parallels between now and then

The 2008 report says there are parallels between now and two decades ago, when the business school first started to study competitiveness and 'Japan's competitiveness seemed unassailable, with a strong domination in economic dynamism, industrial efficiency and innovation. Then all hell broke loose,' it added.

'The stock market went into reverse in 1989, land prices collapsed in 1992, credit cooperatives and regional banks came under attack in 1994, large banks teetered on the edge of bankruptcy in 1997, and a major credit crunch occurred in 1998. Does this ring a bell?'

While the report called the similarities 'frightening', Mr Garelli said there are important differences between the Japan that stagnated for nearly a decade and the US economy teetering on the brink of a recession now.

Japan's decision-makers were bureaucrats or politicians who reacted too slowly. The US administration, by contrast, is full of business and financial experts that know when things need to be shaken up.

'The US always seems to find the means to reinvent itself in ways that Japan - and much of Europe - often lacks,' he said. -- AP

Global competitiveness survey rankings

RANKINGS of the World Competitiveness Yearbook 2008 by the IMD business school of Lausanne, Switzerland, based on a study of 55 national economies (2007 rankings in parentheses).

1. United States (1)
2. Singapore (2)
3. Hong Kong (3)
4. Switzerland (6)
5. Luxembourg (4)
6. Denmark (5)
7. Australia (12)
8. Canada (10)
9. Sweden (9)
10. Netherlands (8)
11. Norway (13)
12. Ireland (14)
13. Taiwan (18)
14. Austria (11)
15. Finland (17)
16. Germany (16)
17. China (15)
18. New Zealand (19)
19. Malaysia (23)
20. Israel (21)
21. Britain (20)
22. Japan (24)
23. Estonia (22)
24. Belgium (25)
25. France (28)
26. Chile (26)
27. Thailand (33)
28. Czech Republic (32)
29. India (27)
30. Slovakia (34)
31. South Korea (29)
32. Slovenia (40)
33. Spain (30)
34. Jordan (37)
35. Peru (-)
36. Lithuania (31)
37. Portugal (39)
38. Hungary (35)
39. Bulgaria (41)
40. Philippines (45)
41. Colombia (38)
42. Greece (36)
43. Brazil (49)
44. Poland (52)
45. Romania (44)
46. Italy (42)
47. Russia (43)
48. Turkey (48)
49. Croatia (53)
50. Mexico (47)
51. Indonesia (54)
52. Argentina (51)
53. South Africa (50)
54. Ukraine (46)
55. Venezuela (55) -- AP

CDL's Gain Up 31% In Quiet Market

Source : The Straits Times, May 15 2008

Firm notches $165m in profits but sees weaker times ahead

DESPITE the subdued residential property market, Singapore developer City Developments (CDL) still notched up a 31 per cent growth in first-quarter net profit to $164.97 million.

It has held back launches here given the quiet market.

NOT READY: CDL is holding back launches of Shelford Suites (above), The Arte @ Thomson, Pasir Ris Phase 1 and The Quayside @ Sentosa. -- PHOTO: CDL

Revenue in the three months ended March 31, however, fell 1.3 per cent to $758.75 million.

CDL sees weaker times ahead. Property market sentiment may remain subdued in the next 12 months with problems linked to the United States sub- prime crisis still looming and given the expected credit tightening by some financial institutions, it said.

But the current uncertainty is a 'temporary environment' and Singapore's nimbleness in responding to economic changes will provide the Republic with the resilience to cope, it added.

'While there are currently less forthcoming individual property buyers, the group notes that foreign funds from Europe, US, Korea and China are migrating their focus to Asia,' it said. And Singapore is one of the key markets they are keen on, it added.

Nevertheless, for now, the group is still holding back launches of its Shelford Suites, The Arte @ Thomson, Pasir Ris Phase 1 and The Quayside @ Sentosa.

First-quarter profits, CDL said, were recognised from projects such as City Square Residences and One Shenton, as well as joint-venture projects such as The Sail @ Marina Bay, St Regis Residences and Parc Emily.

The group has profits yet to be recognised from residential developments sold over the last three years that are still being built.

CDL also benefited from the strong office market, even though rent increases have moderated to 7.8 per cent in the first quarter, from 10.9 per cent in the previous quarter.

Office leasing, it said, should remain strong with upward adjustment of existing rentals to a higher level when the existing leases are up for renewal.

In the hotel sector, CDL - which has a 53 per cent interest in Millennium and Copthorne Hotels - said it was too early to tell whether the slowdown in the US economy and current credit crunch will hit it.

First-quarter earnings per share were 18.1 cents, up from 13.9 cents, while net asset value per share was $5.84 as at March 31, up from $5.72 as at Dec 31.

Global Economy Will Not Recover Before 2009: IMF

Source : The Business Times, May 15, 2008

Problems include imbalances between currencies; rising oil and food prices

(JERUSALEM) The International Monetary Fund does not expect the global economy to recover before next year, its chief Dominique Strauss-Kahn said yesterday.

Mr Strauss-Kahn told a conference in Jerusalem to mark Israel's 60th birthday that while a 'large part' of a global financial crisis was 'probably' over, he did not foresee an end to the economic slowdown before next year.

'It's too early to know if the financial crisis is really behind us,' he told a session at the conference on the global economy. 'Probably a large part of the financial crisis is behind us, but it is difficult to know if everything is behind us.'

'How long will the slowdown last? I don't see a recovery before 2009,' he said, noting that emerging markets were doing well despite problems in the United States and other developed economies.

Mr Strauss-Kahn also said that along with the sub-prime mortgage crisis, one of the biggest problems to solve was imbalances between global currencies, with some undervalued and some overvalued. He did not give specifics.

Rising oil, commodity and food prices also remained a drag on the global economy, he said.

Former Federal Reserve chairman Alan Greenspan also said that the US could face a mild recession.

US economic data suggests that the world's biggest economy could face a mild recession, he was quoted as telling Asian investors yesterday.

'He said that the data coming out of the US so far suggests a mild recession. The risk is really on the housing side,' a participant quoted Mr Greenspan as telling a private Deutsche Bank event.

The former Fed chairman spoke to the meeting in Singapore via videolink from Washington.

Mr Greenspan, who was quoted as saying earlier this month that the US had fallen into an 'awfully pale recession', also told the investor meeting that the credit crisis would end when home prices in the United States begin to stabilise, members of the audience said.

'When home prices stabilise, that would mark the end of the credit crisis,' the participant quoted Mr Greenspan as saying.

'The last part of liquidation will only occur in early 2009, but he argued that it is likely home prices could well stabilise before that,' the participant, who declined to be identified, added.

The US economy is reeling from a housing-led slowdown.

Mr Greenspan also said that global price pressures could remain firm because the effect of China's cheap exports is waning.

'We are entering a period where the disinflationary pressure from the exports of China have bottomed out,' the participant quoted Mr Greenspan as saying. -- Reuters

S'pore The Second Most Competitive Economy

Source :The Business Times, May 15, 2008

Singapore remains the world's second most competitive economy but is closing the gap on the top-ranked United States, according to an annual analysis.

Now in its 20th year, the World Competitiveness Yearbook (WCY) by Swiss business school IMD gives Singapore a score of 99.33 in its 2008 study, up from 99.12 last year. The US - firmly entrenched in pole position since 1994 - has the 100 perfect score.

But the latest report has IMD asking if the US run will continue - or go the way of Japan, which was by far the most competitive in 1989, when the WCY was first published but has since dropped out of the top league, beset by numerous domestic economic crises. (In the 2008 rankings, Japan is 22nd, up from 24th in 2007.)

Says Stephane Garelli, director of IMD's World Competitiveness Center: 'In our 20th anniversary edition this year, we may be seeing the US in the number one position for the last time. Singapore is closing the gap with the US and 2008 might be the turning point where the US falls from its leadership of top competitors.'

Taking lessons from Japan's downfall in the 1990s, Prof Garelli says that the present turmoil in the US 'bears some resemblance' with past crises in Japan that followed 'a period of economic boom, real estate price follies and exuberant assets expansion'.

But there are also huge differences between the two economic societies, he notes: Apart from 'notable successes' such as Toyota and Canon, much of Japanese industry was 'paralysed' by the 1990s as 'the Japanese never practised creative destruction'.

The US, on the other hand, 'because of its openness, resilience and entrepreneurship, always seems to find the means to re-invent itself in ways that Japan (and much of Europe) often lacks', he says.

In any case, one takeaway from 20 years of analysing competitiveness: 'No nation, however competitive, is immune to a breakdown, especially when it stems from the financial sector.'

The WCY - which sees competitiveness as essentially the capacity of a country to manage its long-term prosperity - uses a mix of hard statistical data and soft survey feedback for its analyses. In all, 55 economies are assessed on some 330 criteria in four broad factors: economic performance, government efficiency, business efficiency and infrastructure.

Singapore is third on economic performance (up from fourth last year); up to second on business efficiency (fourth in 2007); and retains for the second straight year its first and third places on government efficiency and infrastructure, respectively.

Singapore's challenges are, in the short term, managing costs in a global inflationary environment, and in the medium term, becoming a globalised, entrepreneurial and diversified economy, IMD notes.

According to Prof Garelli, a more advanced economy increasingly focuses on the 'something else' that makes the difference between economic growth and prosperity, such as sustainable development, quality of life, even happiness. 'These objectives, which would not be attainable without economic growth, are very subjective, hard to measure and linked to national value systems,' he says. 'Managing the 'softer' side of an economy is thus a priority for any leader today.'

Competitiveness encompasses all these dimensions, and remains the key to success and prosperity, he maintains.

Private Home Sales Slide In April

Source : The Straits Times, May 15, 2008

Number of new homes sold and launched fall sharply

PRIVATE home sales weakened further last month, with the number of new homes launched and sold dropping sharply from March.

Developers launched just 271 units in April, most of them in mass market projects. This was less than half of what they launched in March, and the lowest number since the Urban Redevelopment Authority started releasing monthly sales figures last June.

Buyers took up 274 homes, down from the 301 sold in March.

Prices also continued to dip, with the median price of new sales sliding 8.9 per cent to $943 per sq ft.

Among the best-selling projects last month were the 56-unit Stadia in Yio Chu Kang Road, which sold 52 units, and the 88-unit Breeze by the East in Upper East Coast Road, where 22 units were sold.

The 848-unit Lakeshore in Jurong West saw another 32 units sold, while 14 units were taken up at the 625-unit Quartz in Buangkok.

Top Strategist Predicts Slow US Rebound

Source : TODAY, Thursday, May 15, 2008

IT COULD take a few years for the United States economy to bounce back. This was the prediction from one of Merrill Lynch's top strategists at the start of its "Rising Stars" conference in Singapore yesterday.

Mr Mark Matthews, the firm's chief Asia strategist, said: "We are looking at a protracted recovery that's going to take the economy two to three years to unwind from its excessive leverage. So, it's a 'L'-shaped recovery."

This was one of the scenarios painted by Singapore Prime Minister Lee Hsien Loong during his May Day Rally.

Mr Lee deemed an "L"-shaped downturn a worst-case scenario, especially if it resembled Japan's decade-long stagnation after its 1990s slump.

This would be bad for Singapore, which relies heavily on the US for exports.

Despite a gloomier outlook, Mr Matthews believes Asia is now successfully decoupled from the US, thanks to growing demand within the region.

"People are wealthier now and many are millionaires when they weren't five years ago, so, even if they don't like the fact that gasoline and food prices are higher, they are spending more than the beginning of the decade," he said.

In his keynote address, Trade and Industry Minister Lim Hng Kiang noted that China and India would remain "twin engines" propelling Asia forward.

Separately, Merrill's vice-chairman William McDonough said US Fed rate cuts and liquidity initiatives may have succeeded in containing the US financial crisis.

"It's the beginning of the end of the sub-prime crisis. We are starting to see situations where some mortgaged-backed securities are being sold," he said.

CDL Delays Home Sales

Source : TODAY, Thursday, May 15, 2008

US sub-prime crisis hurts confidence of likely buyers

City Developments (CDL) will delay sales of new residential projects in Singapore, where it gets more than half of its revenue.

The confidence of prospective home buyers has been eroded by the sub-prime mortgage crisis in the United States and the downturn in global credit markets, the company said.

"How long the uncertainty and credit squeeze will pan out has yet to be determined," CDL said in a statement accompanying its first quarter earnings result.

"The group is confident of remaining profitable during the next 12 months, even if it decides to continue to hold back or pace its property launches."

According to Urban Redevelopment Authority figures, total Singapore home sales slowed to 787 in the first quarter of this year — about half of the 1,449 units sold the previous three months. Prices rose 3.7 per cent over this period, the slowest gain in a year.

While CDL still managed to make strong profits during this period, this will get harder in coming months as sales slow.

Singapore's second-largest real estate company said its first-quarter profit to end March rose 31 per cent to $165 million. Sales fell 1.3 per cent to $758.8 million.

CDL's profit was also bolstered by a pickup in the global travel industry. The company owns 53 per cent of Millennium and Copthorne Hotels, the United Kingdom chain that owns the Biltmore in Los Angeles, which said May 6 that first-quarter profit rose 16 per cent to £14.1 million ($37.8 million) as it charged more for rooms.

Millennium and Copthorne is boosting room rates in some cities to capitalise on surging demand from business travellers. The company's average room fee rose 7.4 per cent during the quarter. — Bloomberg

Labrador Trail Afoot

Source : TODAY, Thursday, May 15, 2008

Newest pedestrian link between HarbourFront and West Coast Park launched

Come 2011, Singaporeans will be able to set foot on a part of Singapore's coastline that is currently inaccessible to the public.

The Labrador area, which is near Alexandra Road, has one of the few mangrove swamps in the south of Singapore. And plans are afoot to open a nature and coastal walk there.

It is part of a larger push to give a green hue to leisure and recreation in the southern part of Singapore.

The $10-million project, consisting of a 2.2-km trail and boardwalk, will be added to a 9-km series of green links starting from HarbourFront MRT Station and ending at West Coast Park.

The first of the links — two pedestrian bridges known as Henderson Waves and Alexandra Arch at the southern ridges (Mount Faber, Telok Blangah Hill and Kent Ridge Park) — was officially launched last Saturday.

Yesterday, the Urban Redevelopment Authority (URA) revealed details of the Labrador segment of its southern initiative.

The Labrador Nature and Coastal Walk will be connected to the southern ridges via an 830-metre Alexandra Road Garden Trail, which will see footpaths being widened and cycle paths built, as well as more landscaping being done alongside existing matured trees to act as a buffer from the traffic along Alexandra Road.

After crossing Telok Blangah Road, a visitor would reach the 960-metre Berlayer Creek Mangrove Trail, which will feature an entrance plaza with an information gallery about the mangroves, as well as a rest area. The proposed trail will have lookout points with storyboards about the flora and fauna.

At the end of the Creek would be the 330-metre Bukit Chermin Harbour View Walk, which will have an elevated walkway providing scenic waterfront views of Keppel Harbour and Sentosa, in an area that was once exclusive to members of the Keppel Club.

URA's conservation and development services director Ler Seng Ann told reporters that the project aims to "enhance the southern ridges and southern waterfront as a recreational leisure destination … to allow the public to appreciate and enjoy areas that were previously inaccessible".

He added that construction work, scheduled to start next year, would be carried out carefully to ensure that the ecosystem would not be affected.

The nature and coastal walk is scheduled to be completed in tandem with the opening of the Labrador Park MRT station along the Circle Line.

UOL Group Posts 44% Drop In Q1 Net Profit To S$43m

Source : Channel NewsAsia, 14 May 2008

Property developer UOL Group has posted a 44 percent drop in first-quarter net profit to about S$43 million.

This was due to the absence of a one-time gain on the sale of Central Plaza, which lifted the number in the year-ago period.

Revenue rose 11 percent to about S$162 million, boosted by better performances from its hotels in the key markets of Singapore, Australia and Vietnam.

UOL also benefited from higher rental income from its property investments and profit contribution from property development and associated companies.

Going forward, UOL said sentiment in the private residential market is likely to remain cautious, while the increase in rental rates for office space is likely to be more moderate.

The firm is also cautiously optimistic on the outlook of the tourism sector in Singapore and most of the region. - CNA/ms

City Developments Posts 31% Rise In Q1 Net Profit To S$165m

Source : Channel NewsAsia, 14 May 2008

Property developer City Developments has reported a 31 percent rise in first-quarter earnings to S$165 million.

The results came at the lower end of expectations. Revenue fell 1.3 percent to about S$759 million.

The Singapore property market cooled substantially in the first quarter in the wake of the US sub-prime crisis late last year.

The government also scrapped a deferred payment scheme, which allowed home buyers to purchase properties with a small initial downpayment, with the bulk coming when the properties are ready to be occupied.

With the government's moves to cool the red-hot market last year, private home prices have also risen at a slower pace.

City Developments said it deferred the launch of new projects in the first quarter due to the continued poor sentiment.

But going forward, City Developments said it is optimistic about its outlook. It said the uncertainty in the global economy is only temporary.

It believes it can remain profitable in the next 12 months, citing profits yet to be recognised from residential developments sold over the last three years. - CNA/ms

NPS International Is Third Indian School To Open In Singapore

Source : Channel NewsAsia, 14 May 2008

A new international school - NPS (National Public School) International - has officially opened in Singapore.

While classes began less than 6 months ago, the school already has plans to expand.

NPS has 212 students from kindergarten to Grade 9. It will extend its curriculum to include early childhood programmes in the near future.

NPS is the third Indian school to set up in Singapore. The other two are Global Indian International and DPS International.

Senior Minister of State for Trade and Industry S Iswaran said the move came at the right time, as the number of Indian companies here has been growing. - CNA /ls

Live And Work Under One Roof

Source : The Business Times, May 15, 2008


Multiple-usage buildings bring commercial and retail conveniences closer to their residents and is an approach that urban planners in land-scarce Singapore is encouraging

MOST of us relate to the necessary evil that is the early-morning commute through snarling traffic to work and the evening one back home.

Now imagine if work was just a ride on the lift down from your apartment. Another journey on the lift after work to de-stress with some retail therapy at the mall located just a few floors below the office, and a final one at the end of the day - back to the apartment for a good night's rest. An entire day's work and play carried out without even having to leave your building of residence.

Prime property: Eight out of Ion Orchard's 56 storeys will be assigned retail space and the rest of the floors will be designated as luxury residential apartments

While that may be somewhat of an exaggerated depiction of modern living that will probably remain in the domain of the distant future, it is not an entirely inconceivable one either. With more multiple-usage (or 'multi-use') buildings being built in Singapore, there is an unmistakeable trend in that direction.

And at least one aspect of that prospect has already become reality. Such integrated buildings not only introduce lifestyle conveniences to its occupants in a unique manner, but also make for more efficient use of land.

One prominent example would be Ion Orchard, the highly anticipated development currently being constructed next to Orchard MRT station. While eight of its eventual 56 storeys will be assigned retail space, the rest of the floors will be designated as luxury residential apartments.

Walk this way: The subterranean CityLink Mall links One Raffles Link to City Hall MRT Station

The prospect of high-end shopping without having to change out of your bedroom slippers will undoubtedly be appealing to some. But even though Ion Orchard represents the latest upscale development along this trend, the concept itself is not entirely novel. Ion's precursor predates it by almost four decades.

The first structure to be recognised as a multi-use building in Singapore is the People's Park Complex in Chinatown. When it opened for business in 1970, it pioneered the concept by integrating shopping, commercial, residential and parking facilities within a single building structure. For the first time, a ride in the lift or a short walk down the stairs was all that kept residents from their shopping and marketing needs.

And it was a groundbreaking construction endeavour in more ways than that, as it was also the first structure to be built in the podium and tower block design, as well the first significant public building project that involved the private sector's participation. Today, it still manages to retain the rustic charm of a bygone era.

Since then, more buildings that combine traditionally separate uses of space - typically residential with commercial - have been built.

While such buildings bring commercial and retail conveniences closer to their residents, there is also the urban planning case to be made for this trend.

Assigning more uses to a single building means that less land would have to be freed up for otherwise separate developments. In land-scarce Singapore, this is the approach that urban planners are encouraging.

And it's not just the residential-commercial integration that is becoming popular. New public amenities such as community libraries no longer occupy their own buildings, but are being built into shopping malls and other existing buildings.

Police and fire stations are being housed in common operating bases. Community centres are also beginning to accommodate permanent tenants, such as childcare centres and offices of other social welfare organisations. These trends give an insight into what the all-in-one building of the future may look like.

While such combinations of public amenities and spaces undoubtedly make good planning sense, combining residential with commercial spaces is rather trickier.

While some may relish the idea of living above a shopping mall, not everyone may be sold on it, especially when you consider certain problematic implications.

According to Yan Kum Seng, the past president of the Singapore Institute of Building, there is one obvious lifestyle drawback associated with such an integrated building.

'When it comes to residential (spaces),' he says, 'people may prefer to be more private instead of being exposed to the public.'

It is a valid concern that also has to do with security and noise pollution. While having the world at your feet can be great, it also means that the world will be able to look up at you, whether you like it or not.

Still, smart architectural design and utilisation of specialised building materials to maintain privacy and keep out noise pollution can go some way in mitigating those concerns with residents.

Then there is also the potential problem of a future en bloc sale. According to Mr Yan, who has 30 years of experience in the building industry, if you think that a regular residential en bloc process is a hassle, requiring agreement among sometimes fractious neighbours, the process for a multi-use development with a residential component can be even more of a headache. This is because it is far more difficult to apportion the evaluation shares of both the commercial and residential property owners.

Natural Disasters Won't Dent Asia Property Allure

Source : The Business Times, May 15, 2008

European investors find region's GDP growth too attractive

(LONDON) The recent catalogue of natural disasters such as earthquakes and cyclones will not stop European property investors seeking value in Asia's most promising real estate markets, fund managers said here on Tuesday.

Days after Cyclone Nargis ravaged Myanmar's Irrawaddy region, a quake measuring 7.9 on the Richter Scale struck China's Sichuan province, felling buildings and shaking high-rise offices in cities as distant as Thailand's Bangkok and Vietnam's Hanoi.

Aid agencies and local governments are still assessing damage inflicted by the events, but neither has tarnished Asia's appeal to European property investors, who say opportunities to make double and even triple-digit percentage net returns in the region more than offset worries about natural disasters.

'I can't imagine the latest events are going to put a major halt on Asian property transaction volumes or the level of cross-border investment into the region,' said Mark Callender, head of international property research at Schroders, whose US$321 million International Selection Property Securities Fund was around 27 per cent invested in Asian stocks on March 31.

'Long-term, the opportunities are still there. Markets like Hong Kong and Singapore might look close to their peak, but places like Tokyo and Seoul are only halfway up,' he said.

Asian commercial property transaction volumes rocketed 27 per cent to US$145 billion in 2007, on the back of an 87 per cent rise in foreign investment to US$73 billion, according to data from property services firm Cushman & Wakefield.

China was one of the world's top 10 markets for deal volumes last year, leapfrogging more mature markets such as Hong Kong and Singapore for the first time, the data showed.

Cushman & Wakefield said investment volumes were expected to rise again this year, as global funds ramped up allocations to the region.

ING Real Estate, one of the world's biggest property fund managers, and a leading player in China's burgeoning residential market, said it did not expect international investment or domestic occupational demand to be severely affected by the quake.

'We see no reason for a decline in the strong demand for mid-tier residential housing in both Chengdu and Chongqing provinces and in China as a whole,' said Richard van den Berg, ING's China country manager.

'Some slowdown is expected in the immediate aftermath, but we expect that the sales momentum will recover when Sichuan province returns to normality,' he said.

Standard Life Investments Property Fund manager Andrew Jackson said property team members did weigh up the prevalence of natural disasters when assessing an area, but such studies had limited bearing on investment decisions.

'We are aware of the risks and there are certain areas we would be cautious about investing in because of vulnerability to cyclones, quakes or flooding,' Mr Jackson said, while adding that efforts to pin down new opportunities for its global property funds would not be undermined by the catastrophes.

But not even the most conservative fund managers will be tempted to abandon potentially moneyspinning Asian property investment plans in the wake of the disasters, said Trevor Hankin, a fund investment director at PRUPIM, the property unit of insurer Prudential.

'People are attracted to the huge GDP growth on show throughout Asia, which taken as a whole is probably double that of the USA and Europe,' said Mr Hankin.

'No investment is without risk, and clearly geographic phenomena are a risk to investment, but a small one. As investors go, the Pru is about as conservative as it gets, and this has no effect on our appetite for Asian property,' he said. -- Reuters

Wheelock's Q1 Profit Drops 33.9% To $16.9m

Source : The Business Times, May 15, 2008

WHEELOCK Properties Singapore yesterday posted a 33.9 per cent year-on-year drop in first-quarter net earnings to $16.9 million but said that it is in a strong financial position to take advantage of opportunities that may arise. It had cash and cash equivalents of $616.9 million at March 31, 2008, up from $557.7 million at end-2007.

The bigger kitty was due mainly to sales proceeds received from development projects and the sale of 34 Grosvenor Square in London.

Investments in Wheelock's balance sheet fell to $344.6 million at March 31 from $523.5 million at end-2007, mainly because of a slide in the market value of investments in Hotel Properties Ltd and SC Global Developments. The decrease was charged to the fair value and revaluation reserve. However, Wheelock said that the total market value of the group's investments is above the original cost.

Q1 revenue slipped 31.1 per cent to $64.8 million. Wheelock attributed the lower top and bottom lines primarily to lower contributions recognised from units sold at The Sea View and The Cosmopolitan condominium developments. 'This was partly offset by revenue and profit recognition in respect of units sold in Ardmore II in the current period and gain on disposal of 34 Grosvenor Square,' it said. The Grosvenor Square property comprises three floors of a leasehold building in London.

This financial year the group will recognise the remaining profits from The Sea View and The Cosmopolitan on completion of these two projects. 'We will continue to recognise profits from Ardmore II based on the progress of construction works,' it said.

Wheelock also said it has sold more than 70 per cent of the units at Scotts Square, achieving an average price of $3,994 psf. Wheelock expects to sell the remaining units progressively over the next two years. Scotts Square is slated for completion in 2011.

Orchard View is expected to be completed and launched in 2009. Ardmore 3 is also expected to be launched next year.

The first phase of The Sea View received a Temporary Occupation Permit (TOP) last month. TOP for Phase II is expected in mid-2008. The Cosmopolitan, on the corner of River Valley and Kim Seng roads, is expected to be ready in Q3 this year.

UOL Q1 Net Slides On Lack Of One-Off Gain, Writeback

Source : The Business Times, May 15, 2008

Hotel Plaza's Q1 earnings surge 38% to $14.5m

UOL Group's net profit dropped 38 per cent to $50.5 million for the first quarter ended March 31 - from $81.5 million in the previous corresponding period.

The sharp drop was due to two factors: Q1 2007 included an exceptional gain of $37.1 million from the sale of Central Plaza and a $4.9 million writeback last year of deferred income tax after the corporate tax rate was reduced to 18 per cent.

Earnings per share fell to 5.38 cents from 9.57 cents. Net asset value per share was $4.97 as at March 31.

Stripping out one-time gains and tax expenses, profit was 30 per cent higher at $60.2 million.

For the first quarter, revenue rose 11 per cent to $161.7 million from $145.7 million on the back of better contributions from hotel operations in Singapore, Australia and Vietnam, as well as higher rental rates for its investment properties.

However, revenue from property development was slightly lower due to the absence of contributions from Twin Regency and Newton Suites, both completed last year.

UOL also benefited from higher profits from associated companies, including the progressive recognition of income from the sale of units in one-north residences and Le Marquis in Shanghai as well as profits from Marina Centre Holdings Pte Ltd and Aquamarina Hotel Pte Ltd.

The company said that financial market volatility and inflation 'have created uncertainties in the business and economic outlook' and that 'sentiments in the private residential market are likely to remain cautious while the increase in rental rates for office space is likely to be more moderate'.

It added that it was cautiously optimistic on the tourism sector in Singapore and most of the region.

UOL's listed hotel arm Hotel Plaza reported a 38 per cent rise in net profit to $14.5 million. Revenue was 16 per cent higher at $76.7 million and earnings per share fell to 2.42 cents from 2.64 cents because of a higher share base.

Hotel Plaza said better hotel performance and lower interest cost contributed to the increase in net profit. It added that performance of Sheraton Suzhou continued to be affected by increased competition while the operating conditions remain difficult for Parkroyal Yangon.

UOL shares closed trading yesterday unchanged at $3.84 while Hotel Plaza shares eased three cents to $1.85.

CDL Offers Words Of Cheer

Source : The Business Times, May 15, 2008

It posts 30.8% increase in Q1 net profit to $165m

THE Singapore residential property market has slowed to a trickle, but shareholders of City Developments Ltd (CDL) should feel heartened by strongly worded reassurances in the group's first-quarter results statement, which showed a 30.8 per cent increase in net earnings to almost $165 million.

CDL vowed that it is 'committed to do everything possible within our means to face any problems which may arise'. 'Importantly, we continue to be creative and innovative in our business strategies.'

'With profits yet to be recognised from residential developments sold over the last three years which are still in the course of construction, the group is confident of remaining profitable during the next 12 months, even if it decides to continue to hold back or pace its property launches,' CDL, which is part of Singapore's Hong Leong Group, said.

When the future looks uncertain, there's nothing like turning to history to draw some inspiration. 'The group has seen many of such economic challenges, having operated for over 40 years. This is not new to us. Our track record has demonstrated profitability over many years, reflecting our success in weathering out these trials because we have remained flexible in our business approach,' CDL said.

For the first quarter ended March 31, 2008, profit before tax from property development rose 49.1 per cent from the same year-ago period to $155.1 million on the back of higher profit margin achieved for projects launched in recent years as well as profit recognised for The Oceanfront @ Sentosa Cove and Ferraria Park, and higher contributions from The Sail @ Marina Bay and St Regis Residences. Pre-tax profit from hotel operations rose 24.5 per cent to $52.1 million, thanks to encouraging hotel market conditions in New York and Singapore.

First-quarter pre-tax profit from rental properties nearly doubled from $12.9 million to $25.1 million primarily due to improved rental income, the recovery of some property taxes from tenants and increased contribution from CDL Hospitality Trusts.

Group revenue dipped 1.3 per cent to $758.8 million, but the figure excluded the group's share of revenue in jointly controlled entities. If this were to be included, Q1 revenue would show an increase of 6.9 per cent to $956.8 million.

CDL said the group has lined up four projects for launch 'once sentiments improve and when pent-up demand can be expected' - the 77-unit Shelford Suites; 336-unit The Arte @ Thomson; the first phase of a 724-unit condo at Pasir Ris; and The Quayside @ Sentosa Cove, with 228 units.

The Shelford and Thomson Road developments are freehold while the Pasir Ris and Sentosa Cove projects are on sites with 99-year leasehold tenure.

CDL, which is also a major office landlord here, said that it is expediting the construction of two office projects in Tampines to meet growing demand for offices outside the Central Business District. One is the three-storey Tampines Concourse, with 105,000 sq ft of total lettable area that will come up on a 15-year leasehold transitional office site CDL bought earlier at a state tender. The second project is 9 Tampines Grande, which will offer 300,000 sq ft housed in two eight-storey office blocks.

Earnings per share rose from 13.9 cents in Q1 2007 to 18.1 cents in Q1 2008. CDL closed unchanged at $11.70 yesterday.

DP Architects Tapped For Bahrain Health Island

Source : The Business Times, May 15, 2008

DP ARCHITECTS will now have its name linked to a unique health island in the Middle East, adding to the number of major projects it already has in its bag.

In a statement yesterday, the Singapore architectural firm announced for the first time that it is the master planner for Bahrain's US$1.6 billion health island located in Dilmunia. However, it did not say how much the contract is worth.

The company completed the concept master plan for the health island last year. The reclaimed island will be the first in the Middle East to focus on healthcare amenities.

- TODAY's Picture

At 1.25 million square metres, the island is designed like a township with spaces for residences, retail, entertainment and recreation. It will feature a wellness hospital, a 216-bed women and children's hospital and specialised medical centres, as well as spas, boutique hotels and luxury homes.

There will be four themed hotels anchoring the development. Each of them will offer spa treatments in different styles, complemented by restaurants offering healthy cuisines.

A plethora of residential options will be available, including office home studios, quayside townhouses and villas.

The Dilmunia health island is backed by Ithmaar Development Company, a unit of Bahrain-based Ithmaar Bank. According to the Bahrain Tribune, the company is aiming for a combination of private equity funds and sale of land parcels to fund the project construction. It recently awarded a US$69 million reclamation contract to Boskalis Westminster Middle East. Reclamation work for the health island project started yesterday.

DP Architects is also helping to design Resorts World@Sentosa and the Singapore Sports Hub.

4 Bungalows Sold For $5.5m Each

Source : The Business Times, May 15, 2008

$22 million transaction works out to $1,128 psf of built-up area

AMID the current quiet residential market, some deals are still being stitched up.

All four strata bungalows in a freehold cluster housing development near Eng Neo Avenue were snapped up at $5.5 million each at a preview on Friday last week by a European with a Singaporean wife.

Quartet on Vanda: The freehold cluster on a 12,300 sq ft site at Vanda Crescent off Dunearn Road was bought by a European and his Singaporean wife. Each two-storey unit has an attic, a basement and a swimming pool

The $22 million transaction works out to $1,128 psf of built-up area. 'The units were bought partly for the buyers' own use and partly for investment,' said Jerry Tan, managing director of JTResi, the sole marketing agent for Quartet on Vanda. JTResi previewed the development over a 'champagne supper' at its premises on Club Street May 9 evening and the four units were sold during the course of the evening.

The bungalows, which are expected to be completed early next year, are being developed by Stanley Quek's Region Development on a 12,300 sq ft site at Vanda Crescent off Dunearn Road. Each two-storey unit has an attic, a basement and a swimming pool. Built-up areas range from 4,844 sq ft to 4,919 sq ft.

'The market is not as dead as people may perceive it to be. For better quality developments that are priced sensibly, there will be buyers,' Mr Tan said.

Dr Quek is also developing a couple of conventional bungalows on the next-door plot which will come on the market soon, Mr Tan revealed. Each two-storey bungalow will have an attic and have a land area of about 5,000 sq ft.

JTResi, a seven-year-old boutique residential property consultancy, has also been quietly doing resale and leasing deals at The Grange, which received its Temporary Occupation Permit a couple of months ago. 'About four weeks ago, we sold the penthouse at The Grange for $11 million to a Singapore PR who is from mainland China,' Mr Tan revealed. The deal for the 4,400 sq ft duplex unit worked out to just under $2,500 psf and the seller had bought it from the developer for about $6.8 million in 2005, according to Mr Tan.

JTResi also recently brokered leasing deals in the development at a monthly rental of $15,000 for a three-bedroom apartment of 1,765 sq ft below the penthouse, and four-bedroom, pool-facing unit on a low floor at $16,000.

The Grange comprises two freehold blocks of 19 and 23 storeys.

Cushman & Wakefield last month also brokered the sale of a four-bedroom unit on the 17th floor of The Grange for $6.2 million or $2,692 psf. The buyer is a Singapore PR who is believed to have invested in other luxury apartments here.

The seller had bought the unit (in the subsale market) for $4.15 million or $1,801 psf in late 2006. 'The vendor made a cool $2 million profit after holding the asset for 1.5 years. Due to the run-up in prices in the last 12 months, some vendors have made enough 'paper gains' to realise a decent profit even if they sell at today's prices,' said Cushman managing director Donald Han.

Mr Han estimates The Grange unit his firm sold recently might have fetched just under $3,000 psf had it changed hands last year when sentiment was stronger. 'Generally, there's support for prime residential properties which appeal to foreign investors and where yields are fairly attractive,' he added.