Sunday, June 28, 2009

HK Not Out Of Crisis Yet

Source : The Straits Times, June 28, 2009

HONG KONG - HONG Kong has still to emerge from the effects of the global economic slowdown despite early signs of returning stability, the city's chief executive Donald Tsang said on Sunday.

Mr Tsang said that big challenges remained for the city, whose key industries of finance and exports have been hit hard by the crisis. -- PHOTO: AFP

Mr Tsang said that big challenges remained for the city, whose key industries of finance and exports have been hit hard by the crisis.

'There is no doubt we have yet to emerge from the impact of the financial tsunami,' he said on local broadcaster RTHK's weekly Letter to Hong Kong.

'While recent statistics have shown some signs of economic stability returning, there are still many uncertainties in the global market.' He said reforms put in place after the Asian Financial Crisis of 1997 meant Hong Kong had not suffered a breakdown in its financial system.

He said that the latest crisis presented similar opportunities to improve the city's economic fundamentals.

The government has pointed out six sectors the city should focus on - including education and environmental industries.

Tsang countered accusations that such directives went against Hong Kong's free market economic principles. 'Hong Kong has thrived as a free and open market. This must and will continue,' he said.

'At the same time, increasing globalisation and regional competition have resulted in a need for a strong government role in facilitating economic development.

'So, we are not picking winners. Rather, we are providing a more favourable environment for industries to become even bigger winners than they are now.'

Hong Kong fell into recession in the third quarter of 2008 and in May the government slashed its growth forecast for this year, saying the economy would contract 5.5-6.5 percent in 2009, from a previous forecast of 2.0-3.0 per cent. -- AFP

Property Investors Eye China, Australia

Source : The Business Times, June 27, 2009

CHINA and Australia are seen as good bets in the Asia-Pacific for real estate investments, according to two recent reports.

A survey of 73 investors, fund managers and fund of funds managers showed that they rank China, Australia and Japan as the three most appealing locations.

Singapore, on the other hand, was ranked last among seven places in terms of preferred location - after China, Australia, Japan, South Korea, Hong Kong and India. The survey was conducted by the Asian Real Estate Association (AREA) together with its partners.

Investors were especially bullish on the residential and retail sectors in China, as well as the Australian office market.

In the same vein, property firm DTZ said in a report that it expects continued weakness in property markets across the region through 2009 and into 2010, but a divergent profile of recovery - with Australia and China ahead of other key markets.

While total returns are forecast to be negative in 2009 across the region, China and Australia will be back in positive territory in 2010, ahead of Japan, Hong Kong and Singapore, DTZ's June 24 report predicted.

'2009 will continue to be a difficult year for investor and occupier markets,' said David Green-Morgan, head of Asia-Pacific research at DTZ. 'We see fair-value opportunities emerging in Australia and China towards the end of 2009 and 2010 as the two economies embark on a period of recovery.'

In 2008, the Asia-Pacific felt the full effects of the global downturn - and property markets were not spared.

'The value of the invested real estate stock in the Asia-Pacific declined in 2008, for the first time since 2001,' DTZ said. The fall in value amounted to 8 per cent in local currency terms, but a more moderate one per cent in US dollar terms.

Transaction volumes almost halved in 2008 from 2007.

AREA's survey, conducted in April this year, also showed a downturn in sentiment over the past 12 months. In the 2008 survey, all respondents - institutional investors, fund managers and fund of funds managers - indicated that they wanted to increase their activity in Asian non-listed real estate.

Since then, there has been a big drop in the number of investors who intend to allocate funds to Asian non-listed real estate in the short term. The percentage has fallen from 88 per cent of respondents in 2008 to just 24 per cent in the latest survey.

However, the respondents are more upbeat about mid-term prospects for Asian real estate. Twice as many intend to increase allocations to non-listed real estate over the medium term - three to five years - versus the short term. This is consistent with most investors' expectations of a market recovery in 2010.

DTZ reckons that things are beginning to look up for the key property markets in the Asia-Pacific. Opportunistic deals are continuing to occur across the region and a broad 'hunting season' should emerge over the next 12-18 months. Looking at specific markets, Sydney is expected to reach 'fair value' in the second half of 2009, followed by Shanghai in early 2010.

However, some concerns remain. 'While we will start to see value returning to markets in the Asia-Pacific, funding remains a concern, and may become a bottleneck for the recovery of activity in the commercial property markets both in Asia-Pacific and worldwide,' said DTZ's Mr Green-Morgan.

Investors should not lose sight of the fact that economic growth across the region is expected to be lower in 2009 and still below trend growth in 2010, DTZ warned. 'The implications for property markets, through below-trend occupational demand and, in some cases, the required clearing of excess supply, will translate into continued weakness in the near-term,' it said.

Likewise, in the AREA survey, respondents said that obstacles remain when it comes to investing in Asian non-listed real estate funds. Market conditions were identified as the top challenge faced. This was followed by 'transparency and market information on non-listed vehicles' and 'availability of suitable products'.

DTZ also said that it may be too soon to call a bottom as research shows that the historic series is volatile. 'We need to see a few more quarters of data before we can call the bottom of the market,' Mr Green-Morgan said.

First-Half Auction Sales Top $72m

Source : The Business Times, June 27, 2009

Small investors have been active at recent sessions, with savvy bidders also making counter offers

A STRONG showing at auctions this week raised the tally for properties sold under the hammer in the first half-year to $72.4 million - just 13 per cent shy of the $83.7 million for the whole of last year, based on figures compiled by Colliers International. The second quarter of 2009 saw a total $54.5 million of auction deals after a quiet Q1, with $17.9 million.

The momentum is expected to continue. Colliers' deputy managing director and auctioneer Grace Ng predicts that full-year 2009 auction sales could exceed $160 million - almost twice the figure in 2008.

Jones Lang LaSalle, which yesterday conducted its last scheduled auction for Q2, saw four properties change hands for a total of $11.3 million. One was a 7,232 square foot vacant freehold plot in Fernhill Road that was sold for $6.4 million, working out to $632 per square foot (psf) of potential gross floor area. The Singaporean buyer is expected to develop the residential site, which can be built up to five storeys, for his family's use, according to JLL's head of auctions, Mok Sze Sze.

Another big-ticket item sold was a 12th floor unit in Leonie Towers, a freehold condo that is more than 30 years old. The 2,906 sq ft maisonette sold for $3.45 million or $1,187 psf of strata area. 'The buyer is a company. We held two viewings for the property over the past week, and it attracted around 70-80 parties,' Ms Mok said. The sheriff's sale was held to recover a debt owed by the owner to two individuals. There is also an oustanding mortgage on the asset.

Residential properties accounted for almost half of the $72.4 million of auction sales in the first half, followed by industrial properties, with a 19 per cent share, Colliers' analysis shows.

It noted that activity in the auction market picked up dramatically from late March, when the stock market rallied. 'Based on historical observations, property auctions have always been an accurate barometer of market confidence, and are usually swift in reflecting any changes in market sentiments,' the firm said.

Colliers also noted that 77 per cent of the 440 properties put up for auction in the first half were offered by their owners, leaving only a 23 per cent share for mortgagee sales. 'Historically, from 1998 to 2006, the number of mortgagee properties always tended to be higher than the number of properties put up by owners. The trend started to reverse in 2007,' said Colliers' Ms Ng.

DTZ senior director and auctioneer Shaun Poh has noticed keen participation by property investors at his firm's recent auctions. 'Small investors are particularly aggressive in bidding for smallish apartments in the central area, for example, Icon, The Clift, even an old development like International Plaza,' he said. 'Generally, properties priced between $700,000 and $1.3 million tend to move very fast.'

Knight Frank executive director Mary Sai, another veteran auctioneer, said that attendances, as well as success rates, at auctions have gone up markedly since April.

'However, there is a sense of caution among bidders. They don't want to be overly financially stretched,' she said. 'A clever move by some bidders now is to make a counter offer to the auctioneer's opening price. So they start within their comfort zone. Eventually, however, the bidding competition will draw out the true price level, often surpassing the opening price.'

A New Look For Yishun

Source : The Straits Times, June 27, 2009

LOOK out for a three-storey lookout tower.

Coming up too are a new shopping complex linked to a condominium, an air-conditioned bus interchange and a remake of Yishun Pond. --PHOTO: HDB

That is one attraction that residents in Yishun can look forward to when the town centre is transformed in the coming years.

Coming up too are a new shopping complex linked to a condominium, an air-conditioned bus interchange and a remake of Yishun Pond.

Yishun is one of three towns selected for rejuvenation under the Housing and Development Board's Remaking Our Heartland initiative. The other two are Punggol and Queenstown.

The HDB shared its plans with reporters on Saturday.

The lookout tower in Yishun Pond, beside the new Khoo Teck Puat Hospital, will offer panaromic views of the town centre.

The 12.5m tall tower has a 94m long curving ramp that will take visitors to the top.

Said Ms Nina Yang, senior vice-president at CPG Consultants, the firm in charge of the design: 'The tower is designed according to the theme of nature and the metamorphosis of a butterfly. Similarly, it showcases the metamorphosis of Yishun New Town too.'

The area near the MRT station will have a shopping complex integrated with housing. The retail space is touted to exceed that at the Northpoint Shopping Centre.

A tender for the project is expected to be called in 2011.

Read the full report in The Sunday Times.

Retail Shops In New Underpass

Source : The Straits Times, June 27, 2009

WHEN ION Orchard opens on July 21, the new underpass connecting it to Wheelock Place will have a 'first' in the Orchard-Scotts belt.

The 20 shops along the stretch are food and beverage and mass-appeal fashion outlets. --PHOTO: ST

While the four existing underpasses in the area only connect point A to point B, this fifth, and latest, one features retail shops as well.

Set to open on the same day ION has its soft launch, the 75-m underground stretch will link Orchard MRT, through basement two of ION, to Wheelock Place.

The 20 shops along the stretch are food and beverage and mass-appeal fashion outlets.

Making its reappearance there is Dunkin' Donuts after a decade-long absence.

Brand names such as Itacho Sushi from Hong Kong and footwear label Rubi Shoes will make their debut along the stretch. So will flip-flop brand Havaianas with its first monobrand store. Among the familiar brand names there are Levi's, Mango and Guess.

Currently, there is one major underpass linking Orchard MRT to Tangs Plaza, Scotts Road and Wisma Atria.

There are three underpasses linking Lucky Plaza to Ngee Ann City, Wheelock to Shaw House, and Shaw House to Tangs.

Unlike the CityLink Mall in the City Hall area which has over 50 retail outlets, the existing Orchard underpasses do not have such facilities.

CityLink connects Suntec City, Marina Square, the Esplanade and One Raffles Link to the City Hall MRT.

Read the full report in The Sunday Times.

Geylang Market Reopens July 13

Source : The Straits Times, June 27, 2009

AFTER a 40-month makeover, Geylang Serai Market will reopen on July 13.

New hygiene measures have been taken as has lighting and ventilation. Hawkers hope it will be a cultural icon and a new start from the infamous temporary Geylang Serai Market. --PHOTO: ST

Its stallholders, now at a temporary market, have good reason to want to make it 'the best market ever'.

The food hawkers want to put behind them the incident in April when tainted Indian rojak from one stall killed two people and left 152 people ill.

The rojak stallholder is still under suspension.

The original market site, to which the hawkers will be going back to, is at Jalan Turi, some 500m from the temporary one.

Originally just a single storey, the new two-storey building, with about 8,730 sq m of floor space, cost $18.2 million.

Looking forward to the new start is Mr Razak Ismail, 46, whose family owns Hajjah Mona Nasi Padang.

'The downturn and food poisoning case caused business to drop,' he said.

Added Mr Oli Abdul Latiff, 49, who runs a thosai stall and who will be the new chairman of the Market Area Sub-Committee: 'We are all very happy because the new place is very beautiful. We also think business will go up, because we are now nearer the residents.'

Mr Mohd Asaduz Zaman, vice president (architectural) for Surbana International Consultants, designed the new market with its history, lighting, ventilation and hygiene needs in mind.

'The old market was up to the standards for its time, but in the new market we've added things like disabled access, better lighting and ventilation,' he said.

Read the full report in The Sunday Times.