Saturday, December 20, 2008

Frasers, Ascendas To Invest $500m In Changi Biz Park

Source : The Business Times, December 20, 2008

Their JV plan is to build an integrated retail, hotel and business park on the 60-year leasehold plot, which they paid $150.8m for.

A JOINT venture between Frasers Centrepoint and Ascendas will invest about $500 million building an integrated retail, hotel and business park project next to Expo MRT Station and within Changi Business Park (CBP).

BUDDING PARTNERSHIP - Mr Lim of Frasers Centrepoint and Ms Chong of Ascendas. The new mixed development will support and leverage on the upcoming financial backend facilities to be located in CBP as well as Singapore's fourth university and the Singapore Expo, says JTC

The two partners are paying $150.8 million or about $119 per square foot of potential gross floor area for the 60-year leasehold plot. The tender, conducted by JTC Corporation, is understood to have attracted just one other bidder, United Engineers, which is developing the plot next door.

JTC said bids were evaluated on concept and tender price under the two-envelope system. The 4.7-hectare site can have a maximum gross floor area of about 1.26 million sq ft. Groundbreaking for the project is expected to take place by June 2009, JTC's assistant CEO Philip Su said in a release yesterday.

BT understands the project will be developed in stages. The first phase, for about 220,000 sq ft net lettable area of retail space, is expected to be completed around 2011. The hotel component in the project is likely to have about 250-300 rooms and will probably cater to longer-staying business visitors. There's a shortage of hotel rooms and serviced apartments in the eastern part of Singapore. Frasers Centrepoint will bring to the partnership its expertise in the retail and the hospitality businesses while Ascendas (a fully owned subsidiary of JTC Corp) will contribute its experience with developing and managing business parks.

JTC launched the tender for the plot in June this year. It was the first time that private developers were invited to submit proposals to design, build and operate a mixed-use development in CBP. The plot has a 2.5 plot ratio (ratio of maximum potential gross floor area to land area) and is zoned 'Business Park - White 40'. This means up to 40 per cent of the maximum GFA will be set aside for 'white' or commercial activities. And of this 'white' component, up to 60 per cent can be for retail activities with the rest for hotel.

Ascendas president and CEO Chong Siak Ching said: 'This project will set a new benchmark for business parks in Singapore.'

'When completed, we fully expect the development to inject a fresh vibrancy to the area and offer a unique alternative to companies seeking high quality business space outside the Central Business District,' she added.

Frasers Centrepoint CEO Lim Ee Seng said: 'The retail and hotel components are expected to capitalise on demand generated from the CBP, the Singapore Expo, the upcoming university at Changi as well as the nearby estates. On top of that, they are able to reach out to beyond the immediate catchment as a result of the convenience and connectivity afforded by the future Downtown Line and the present Expo MRT station.'

Next to the site awarded yesterday, United Engineers is developing a global information and communications centre with a hotel, offices and retail mall.

JTC yesterday noted that despite challenging economic conditions, pipeline projects in CBP remain strong. 'Its current working population of 6,000 is expected to surge to 20,000 by 2011,' JTC said.

The new mixed development by Ascendas and Frasers Centrepoint will support and leverage on the upcoming financial backend facilities to be located in CBP as well as Singapore's fourth university and the Singapore Expo which are located nearby,' JTC said.

Citibank, Credit Suisse, DBS Group Holdings and OCBC Bank are poised to set up backroom operations in CBP.

Property Stocks Rally On China's Fiscal Boost

Source : The Business Times, December 20, 2008

But measures might have limited impact on reviving sales amid tough economic conditions, analysts say

leePROPERTY stocks savoured a sweet respite over the last two days from the market gloom after China announced plans to boost the real estate market.

LIGHTER TAX BURDEN - The Chinese government will abolish urban real estate tax and cut the transaction tax for properties with ownership of two years or less

But the rally is likely to be short-lived, some analysts argued, noting that the measures might have a limited impact on propping up sales amid a difficult economic climate.

The Chinese government said on Wednesday that it would abolish urban real estate tax, as well as cut the transaction tax for properties with ownership of two years or less.

It added that it would encourage banks to extend credit lines to developments in the mass-market housing segment.

Bigwigs in the property market - CapitaLand and Keppel Land - saw the biggest jump among sector peers with their exposure to the mid-tier Chinese market.

Shares of property bigwig CapitaLand surged 16.6 per cent over the last two days to end at $3.30 yesterday while shares of Keppel Land jumped 20.9 per cent to finish at $1.79.

Yanlord Land Group - which targets the Chinese luxury segment - rose on the dovetails of the rally in property stocks on Thursday, rising 17.4 per cent to $1.01.

But the stock fell back 2 per cent to 99 cents yesterday, with analysts noting that these measures are not targeted at luxury players.

'As the overall policy still focuses on supporting the housing needs of the low to middle income homebuyers, high-end developers might not benefit substantially from these changes,' wrote DBS Vickers Securities analyst Carol Wu.

'While the policy environment has continued to improve, full recovery of the sector remains uncertain amid the deteriorating economic outlook,' she said, adding that excessive inventory would prompt developers to cut prices and that the property downcycle trend in China could drag on for as long as two years.

Reuters reported yesterday that an analyst from Morgan Stanley saw the sharp increases in shares of Keppel Land as 'premature and unjustifiable' as solvency and refinancing risks were non-issues for the firm.

It would take time before such fiscal measures filter down to the provinces, said Brandon Lee, an analyst from DMG & Securities.

These steps are also aimed at cushioning a fall in demand rather than to engineer sales given the expected rise in unemployment in China, said Barclays Capital economist Leong Wai Ho.

Projects In The Works Will See Value Shrink

Source : The Business Times, December 20, 2008

Drop of 20-30% in 2009 partly due to halted residential developments

THE value of projects under construction in Singapore could fall by 20-30 per cent to some $17 billion in 2009. And according to construction information services provider BCI Asia, about 45 new residential developments in various stages of design and development have been put on hold this year, exacerbating the contraction of construction contracts.

SLOWDOWN - Public building works worth about $4.7 billion were deferred in 2008. These were reported as ranging from $10 million to $400 million

BCI Asia's database is derived from developers, architects, engineers and contractors who have reported project delays. These occur at various stages of development, including design, documentation, tender and the awarding of contracts.

For 2008, it estimated that the value of projects under construction here was about $25 billion.

BCI Asia's figure is also more conservative than official figures which put the total value of contracts in 2008 at between $27 billion and $32 billion.

Thor Kerr, managing director at BCI Asia, added that the decline in construction follows a significant rise in construction contracts over the last year and any drop in the figures should be judged in this context.

He also said that compared to other South-east Asian countries, Singapore's construction industry has the most to gain from government spending including infrastructure projects. BCI Asia estimates that for 2008, there were about $4 billion worth of infrastructure projects alone.

The government has also recently said that it could bring public construction contracts forward.

Public building works worth about $4.7 billion were deferred in 2008. These were reported as ranging in value from $10 million to $400 million and included the Jurong General Hospital, the National Art Gallery, the National Addiction Management Centre, the Communicable Disease Centre and an extension of Changi Prison.

The total public construction demand for 2008 has been reported to reach between $10.5 billion and $13.5 billion this year.

On the downside, BCI Asia expects construction spending in cities such as Singapore and Hong Kong to suffer most from the slowdown in the global economy, attributed to a slowdown in construction in the CBDs.

In its survey of Asian markets consisting of Singapore, Hong Kong, Indonesia, Malaysia, Philippines, Thailand and Vietnam, it estimates that, out of the total US$140 billion of construction projects, a fall of 16 per cent in 2009 to US$118 billion is possible, assuming a 'low-growth economic trough' scenario.

Mr Kerr said: 'All data indicates that construction spending in this region peaked in 2008. The value of projects at design and documentation phases has contracted by 2 per cent this year and we have seen major projects abandoned for lack of finance.'

In a worst-case scenario, if the economies of these cities suffer a 'deep recession', BCI Asia believes the total value of construction contracts could fall to US$96 billion, representing a contraction of over 30 per cent.

BCI Asia's forecast is from an upcoming study of how the construction sector has reacted to changing economic conditions since the 1997 Asian financial crisis. In this study, it was noted that during the recent trough of 2002, the total value of construction projects had fallen to $47.9 billion, 66 per cent lower than the 2008 peak. However, Mr Kerr said that it is unlikely that the value of construction contracts would fall to this level again.

Size Of The DPS Behemoth

Source : The Business Times, December 20, 2008

10,450 sold & uncompleted private homes under the DPS now; analysts worried about those getting TOP in 2010-11

SOME 10,450 sold and uncompleted private homes are now under the deferred payment scheme (DPS), according to official data released yesterday.

Of the amount, close to half - 4,560 units - will be completed in 2009, while another 2,540 homes will be completed in 2010, the Urban Redevelopment Authority (URA) said. Under the DPS, which was introduced by the government in October 1997 and withdrawn in October 2007, the bulk of the purchase price of a property is due only after a project obtains its temporary occupation permit (TOP).

The data was welcomed by both analysts and the Real Estate Developers' Association of Singapore (Redas). Over the past several months, many market watchers and analysts have been estimating how big an impact the DPS will have on developers' cashflow and earnings if buyers default on their homes as TOP approaches.

'I think it provides a clearer picture as to the extent of the problem,' said Citigroup's head of Singapore equity research, Chua Hak Bin. 'And it is good that the government acted to stop the system when it did. If not, things would have got a lot worse.'

Said Redas: 'URA data, together with data compiled by Redas, helps to allay concerns that speculators may repudiate their DPS purchases at below-market prices as the completion date nears.' In its statement, Redas highlighted 10 projects - including City Developments' The Sail and Keppel Land's Park Infinia - where the DPS was offered but full payment was still made to the developers once TOP was obtained.

Redas also said that while units may be affected by market sentiments, sales contracts cannot be repudiated easily.

URA's data proves that the DPS scheme was 'very popular', Citigroup's Dr Chua said. To arrive at its numbers, URA did a survey among property developers of uncompleted DPS-approved projects. In total, developers of 605 projects, comprising 72,384 units, were granted approval to offer the DPS. Of this amount, there were 18,208 sold but uncompleted units as at end-November this year. And of this figure, 10,450 (57 per cent) were still under the DPS.

The fact that the bulk of DPS units will be completed in 2009 is cause for some concern, analysts said. '2009 is going to be a tough year for the economy, and there are 4,650 units under the DPS that will be completed,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

But assuming a three-year construction period, a large proportion of the units that will obtain TOP in 2009 were probably launched and sold in 2006 and early 2007, at prices that are relatively lower than today's level or the expected level in 2009. So even if the property market continues to weaken in 2009, the owners of these 4,560 units could still lease out the homes or sell them, analysts said. However, if developers had offered the DPS to many sub-purchasers when the original purchasers sub-sell the units, then defaults could be expected.

But for now, the real area of concern is thought to be the 2,540 units under the DPS that will obtain TOP in 2010. Of this number, 1,270 of the units are located in the core central region (CCR), which includes Sentosa and Marina Bay.

'Generally, I'm more concerned over the units which will receive TOP in 2010-2011, which could have been purchased in 2007 at the peak of the property market,' said DMG & Partners Securities analyst Brandon Lee.

And while developers have the legal right to pursue buyers who walk away from their deals, it could be harder to do this when it comes to foreigners, said Knight Frank managing director Tan Tiong Cheng.

Normally, about 75-90 per cent of uncompleted private residential units will be bought by Singaporeans, said DMG's Mr Lee. But in 2007, the proportion fell to 63-68 per cent, with the remaining purchases made by PRs, foreigners and companies. 'We see this segment as the most likely to return their units,' he said. His back-of-the-envelope figure puts the amount expected to be returned as possibly somewhere between 20-30 per cent.

URA said that it provided the data to enable the public to make a better assessment of the private housing market. 'This information was provided by developers in confidence and with the understanding that data for individual projects would not be released to the public. Hence URA is only releasing aggregated data and not data for individual projects,' the government agency said.

'Conducting a survey of developers of all uncompleted DPS-approved projects requires a lot of time and resources from the developers as well as the government. Given that the number of uncompleted units sold under DPS is likely to decline as projects are completed over time, we will monitor the situation and consider whether there is a need to conduct further surveys in future,' URA said in response to a query from BT.


Source : 《联合早报》December 20, 2008

市场期待已久的延迟付款计划(deferred payment scheme,简称DPS)真正数据,在千呼万唤下终于出炉。















分析员:延迟付款是“定时炸弹” 会否引爆取决不少因素








我国问题 不像美次贷问题严重





莱坊(Knight Frank)研究部主管麦俊荣指出,在2005年至2008年售出的1万零450个单位中,68%会在明年和后年竣工。换句话说,在明年竣工的所有单位中,45%使用了延迟付款计划;后年竣工的所有单位中,30%使用了该计划。

卓登新达国际(Chesterton Suntec)研究部主管陈瑞谨认为,乍看之下,4560个单位不是个大数目。但是,在房市大好的时候,一年可售1万至1万2000个单位,一般情况下可售8000个单位,但若房地产市场疲弱时,4560个可能就是一年可出售的新私宅的单位总数了。