Source : The Straits Times, Aug 30, 2007
PROPERTY and retail group Wing Tai Holdings almost tripled its full- year net profit to $382 million on sparkling home sales and revaluation gains.
Revenue grew 10 per cent to $982 million.
Wing Tai proposed a one-for-10 rights issue at a price of $2.05 a share - a discount of 41 per cent - as well as a special rights dividend of 25 cents per share, on top of the final dividend of three cents per share and a special dividend of five cents per share.
A revaluation of assets - mainly of its Winsland House property - alone lifted Wing Tai's income by $189 million.
More income was also booked from homes sold in its developments - Draycott Eight, Kovan Melody, The Light@Cairnhill and Amaryllis Ville.
The company sold 1,311 homes worth $1.79 billion in Singapore in the 12 months ended June 30. It sold a further 313 units worth $219 million in Malaysia, Hong Kong and China.
Among its projects under development or completed, Wing Tai has only 30 unsold units in VisionCrest Residence in Oxley Rise and 70 left among the 140 units in Helios Residences in Cairnhill Circle.
The company has residential projects covering one million sq ft of floor area in the pipeline in Singapore, including Belle Vue Residences in Oxley Walk and L'viv in Newton Road, and a further 11.3 million sq ft in Malaysia and China.
It aims to launch most of these within the next 12 to 18 months.
Earnings per share grew from 17.84 cents last year to 53.12 cents, while net asset value per share grew 30 per cent to 2.07 cents.
Chairman Cheng Wai Keung did not appear too concerned yesterday when asked if the impending tightening of rules on collective sales would affect the company's prospects.
He said the rules would lengthen the procedure for collective sales, increasing the risk that developers face.
Developers who cannot buy enough land will find it hard to expand, but Wing Tai is in a 'reasonable position', he said.
Mr Cheng added that the subprime crisis in the United States had temporarily affected the take- up rate of properties.
'But it's actually not a bad thing,' he said, adding that the prices of high-end homes had risen very fast over the past few months and that the market needed some consolidation.
Mr Cheng believes that there is still room for property prices to grow if the US sub-prime crisis resolves itself within 'a reasonable period of time'.
He said Singapore's economy is performing well, and property prices here are lagging behind in cities with similar developments.
Thursday, August 30, 2007
Property Firms Record Good H1 gains, Outlook Bright
Source : The Business Times, August 30, 2007
Progressive booking of profits from projects sold will underpin results
ALL the big listed property groups have reported substantial gains in net earnings for the period ended June 30, 2007.
And the earnings outlook for the second half is positive, as developers continue to progressively recognise profits from Singapore residential projects already sold based on percentage of completion, enjoy higher rents from their Singapore office portfolios and book fair value gains on investment properties, says DBS Vickers Securities analyst Wallace Chu.
In fact, in the latest results reason, bottom lines were substantially boosted in many instances by revaluation gains on investment properties - particularly office properties that have gone up sharply in price - arising from the implementation this year of Financial Reporting Standard 40 (FRS 40).
This standard requires that fair-value gains and losses on investment properties be recorded in the profit-and-loss account. Some companies chose to do valuations and book gains on investment properties for their financial periods ended June 30 this year, such as CapitaLand and UOL Group, while others, such as Keppel Land and Singapore Land, have said they will do so at the end of the year.
The biggest revaluation gains seen this reporting season came from CapitaLand. It booked fair value gains of $645.4 million for Q2 ended June 30, 2007 and $647.4 million in H1 2007. But that's not surprising since the group, including its listed unit CapitaCommercial Trust, has one of the biggest office portfolios in Singapore.
But even without such gains, CapitaLand's net earnings were up substantially year-on-year for Q2 and H1, due to the strength of its overall operations, especially residential development sales in Singapore and China, and higher fee-based income from commercial and retail operations.
City Developments, too, posted the best result in its history - with strong showings from residential property development, rental properties and hotel operations under listed Millennium & Copthorne Hotels and CDL Hospitality Trusts. Q2 net earnings rose 333 per cent year on year to $194.4 million, and CityDev's H1 bottom line improved 272 per cent to $320.5 million.
Management emphasised that the sterling results were achieved without booking any revaluation gains on the group's substantial investment property portfolio, including offices.
CityDev said it is continuing its conservative accounting policy of stating investment properties at cost less accumulated depreciation and impairment losses, an option allowed under FRS 40.
KepLand, which has said it will revalue its investment properties at year-end, saw its Q2 and H1 net earnings go up 42 per cent and 56 per cent respectively on the back of strong residential sales in Singapore and overseas and the robust Singapore office market.
Analysts expect the group to book gains of $221.6 million in the second half of this year from the divestment of its one-third stake in One Raffles Quay to K-Reit Asia - if the transaction is approved by shareholders of both companies.
As well, KepLand's second-half earnings are expected to be boosted by fair-value gains on revaluation of its investment properties at year-end under FRS 40, given the group is a major office landlord.
Most Singapore listed developers, which have enjoyed strong Singapore residential sales in the recent past, can look forward to continue progressively booking profits from these projects in accordance with the percentage of completion. CityDev will start booking from its Solitaire condo from Q4 2007 onwards, while profits from One Shenton will be recognised in stages starting next year.
The group sold 1,315 homes valued around $2.4 billion in H1 2007 - about three times the value in the same period last year. The group's share of pre-tax profit from residential sales yet to be booked is about $1.4 billion. This is expected to be recognised progressively over the next few years.
So far, the sub-prime woes and ensuing credit crunch in the US do not appear to have cooled developers' residential sales in Singapore or prices - as is evident from the strong take-up rate for Frasers Centrepoint's Soleil @ Sinaran launch, despite the benchmark price for the location.
But if and when they do, that could cast a pall on developers' residential profits going forward. 'Sentiment and strength of the equity market will be more important share price drivers for listed property groups,' an analyst with a foreign broking house says.
Progressive booking of profits from projects sold will underpin results
ALL the big listed property groups have reported substantial gains in net earnings for the period ended June 30, 2007.
And the earnings outlook for the second half is positive, as developers continue to progressively recognise profits from Singapore residential projects already sold based on percentage of completion, enjoy higher rents from their Singapore office portfolios and book fair value gains on investment properties, says DBS Vickers Securities analyst Wallace Chu.
In fact, in the latest results reason, bottom lines were substantially boosted in many instances by revaluation gains on investment properties - particularly office properties that have gone up sharply in price - arising from the implementation this year of Financial Reporting Standard 40 (FRS 40).
This standard requires that fair-value gains and losses on investment properties be recorded in the profit-and-loss account. Some companies chose to do valuations and book gains on investment properties for their financial periods ended June 30 this year, such as CapitaLand and UOL Group, while others, such as Keppel Land and Singapore Land, have said they will do so at the end of the year.
The biggest revaluation gains seen this reporting season came from CapitaLand. It booked fair value gains of $645.4 million for Q2 ended June 30, 2007 and $647.4 million in H1 2007. But that's not surprising since the group, including its listed unit CapitaCommercial Trust, has one of the biggest office portfolios in Singapore.
But even without such gains, CapitaLand's net earnings were up substantially year-on-year for Q2 and H1, due to the strength of its overall operations, especially residential development sales in Singapore and China, and higher fee-based income from commercial and retail operations.
City Developments, too, posted the best result in its history - with strong showings from residential property development, rental properties and hotel operations under listed Millennium & Copthorne Hotels and CDL Hospitality Trusts. Q2 net earnings rose 333 per cent year on year to $194.4 million, and CityDev's H1 bottom line improved 272 per cent to $320.5 million.
Management emphasised that the sterling results were achieved without booking any revaluation gains on the group's substantial investment property portfolio, including offices.
CityDev said it is continuing its conservative accounting policy of stating investment properties at cost less accumulated depreciation and impairment losses, an option allowed under FRS 40.
KepLand, which has said it will revalue its investment properties at year-end, saw its Q2 and H1 net earnings go up 42 per cent and 56 per cent respectively on the back of strong residential sales in Singapore and overseas and the robust Singapore office market.
Analysts expect the group to book gains of $221.6 million in the second half of this year from the divestment of its one-third stake in One Raffles Quay to K-Reit Asia - if the transaction is approved by shareholders of both companies.
As well, KepLand's second-half earnings are expected to be boosted by fair-value gains on revaluation of its investment properties at year-end under FRS 40, given the group is a major office landlord.
Most Singapore listed developers, which have enjoyed strong Singapore residential sales in the recent past, can look forward to continue progressively booking profits from these projects in accordance with the percentage of completion. CityDev will start booking from its Solitaire condo from Q4 2007 onwards, while profits from One Shenton will be recognised in stages starting next year.
The group sold 1,315 homes valued around $2.4 billion in H1 2007 - about three times the value in the same period last year. The group's share of pre-tax profit from residential sales yet to be booked is about $1.4 billion. This is expected to be recognised progressively over the next few years.
So far, the sub-prime woes and ensuing credit crunch in the US do not appear to have cooled developers' residential sales in Singapore or prices - as is evident from the strong take-up rate for Frasers Centrepoint's Soleil @ Sinaran launch, despite the benchmark price for the location.
But if and when they do, that could cast a pall on developers' residential profits going forward. 'Sentiment and strength of the equity market will be more important share price drivers for listed property groups,' an analyst with a foreign broking house says.
Marina Barrage Will House World's Largest Water Pumps
Source : Channel NewsAsia, 29 August 2007
Singapore's flood control measures will go one step further after the Marina Barrage becomes operational by the end of this year.
Works are currently underway to install drainage pumps next to the reservoir.
These pumps are the world's largest and are specially brought in from the Netherlands. Their job is to drain out excess water during flooding.
Each pump weighs 28 tonnes, or about the weight of 400 men.
And when operational, it will be able to drain, in one minute, an amount of water that can fill up an Olympic-sized swimming pool.
When completed, water from the southern and central parts of Singapore such as Ang Mo Kio and Thomson will flow into the Marina Reservoir, which has a catchment area one-sixth the size of the island.
Related Video Link - http://tinyurl.com/2reee7
Marina Barrage will house world's largest water pumps
When there is heavy rain and high tide, the pumps will be set in motion, draining water from the reservoir into the sea.
But if the tide is low during heavy rain, flood gates will open to release the water into the sea.
This will help ensure that water levels in the Marina Reservoir, which is set to be a freshwater lake, is kept constant.
It also means that low-lying areas like Chinatown and Little India will be spared from flooding.
Yap Kheng Guan, Director, 3P Network, PUB, said: "So look at this system - the gates and the pumps - as (a) means in which you can manage this water level. The water level will not become so high that it will threaten some of the low-lying areas in Singapore".
Water agency PUB expects to activate two of the pumps for an average of 4 to 5 times a year during high tide or monsoon seasons. - CNA/ch
Singapore's flood control measures will go one step further after the Marina Barrage becomes operational by the end of this year. Works are currently underway to install drainage pumps next to the reservoir.
These pumps are the world's largest and are specially brought in from the Netherlands. Their job is to drain out excess water during flooding. Each pump weighs 28 tonnes, or about the weight of 400 men.
And when operational, it will be able to drain, in one minute, an amount of water that can fill up an Olympic-sized swimming pool.
When completed, water from the southern and central parts of Singapore such as Ang Mo Kio and Thomson will flow into the Marina Reservoir, which has a catchment area one-sixth the size of the island.
Related Video Link - http://tinyurl.com/2reee7
Marina Barrage will house world's largest water pumps
When there is heavy rain and high tide, the pumps will be set in motion, draining water from the reservoir into the sea.
But if the tide is low during heavy rain, flood gates will open to release the water into the sea.
This will help ensure that water levels in the Marina Reservoir, which is set to be a freshwater lake, is kept constant.
It also means that low-lying areas like Chinatown and Little India will be spared from flooding.
Yap Kheng Guan, Director, 3P Network, PUB, said: "So look at this system - the gates and the pumps - as (a) means in which you can manage this water level. The water level will not become so high that it will threaten some of the low-lying areas in Singapore".
Water agency PUB expects to activate two of the pumps for an average of 4 to 5 times a year during high tide or monsoon seasons. - CNA/ch
Arab Money Flows Into IDR
Source : TODAY, Thursday , August 30, 2007
Infusion of funds give the Johor project a boost
PUTRAJAYA — Malaysia’s close ties with the Arab world have produced their biggest dividend yet with the signing of a US$1.2-billion ($1.8 billion) deal to develop art of the Iskandar Development Region (IDR) in southern Johor.
Firms from Gulf Cooperation Council countries will initially invest the money in land and infrastructure development, in a deal signed with Malaysia’s South Johor Investment Corporation (SJIC).
SJIC chairman Azman Mokhtar hailed the agreement as a milestone for the IDR, which aims to turn southern Johor into a new Asian metropolis.
“This is a historic and strategic landmark transaction between our two regions,” Mr Azman said at the signing ceremony yesterday. “By far, this is the biggest single foreign investment ever made in Malaysia.”
The investors are led by Mubadala Development Company, the investment arm of Abu Dhabi, which committed US$520 million. The rest of the money is coming from Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, and Abu Dhabi’s Millennium Development International Company. The project will be managed by Abu Dhabi-based developer, Aldar Properties PJSC.
“This will be a flagship development for the region, not just for Malaysia,” said Mubadala chief executive Khaldoon Khalifa Al Mubarak.
The Malaysian government hopes to attract RM50 billion ($21.7 million) to the IDR over five years.
However, some analysts said the ambitious plans to develop not only the IDR, but also the Northern Corridor Economic Region, have been clouded by problems involving the new trade zone at Port Klang outside Kuala Lumpur.
The trouble started when the Dubai partner — which had been granted a 15-year concession to manage and operate a new trade zone at Port Klang — suddenly pulled out amid reports of mounting debt problems, reported the Financial Times.
The Jebel Ali Free Trade Zone Authority had complained that state bureaucrats were hindering the zone’s operations, while the Malaysian government claimed that the Dubai group pulled out because officials had denied it permission to become a main shareholder.
It emerged that the state-run Port Klang Authority had amassed debts of RM4.6 illion because of cost overruns. The government said it would bail out Port Klang with a soft loan, to prevent its bankruptcy. Officials have also suggested starting a corruption probe into the project.
Analysts told the Financial Times that Port Klang’s troubles are likely to raise doubts as to whether the Kuala Lumpur can fulfil its promise to build and operate the development regions in Johor and the Northern Corridor, which covers Perlis, Kedah, Penang and northern Perak.
However, Mr Song Seng Wun, regional economist at CIMB-GK Research in Singapore, believes that the Abdullah administration has put so much of its prestige into the two projects that it would seek to avoid the problems it inherited from the Port Klang project, which the previous government started. — AGENCIES
Infusion of funds give the Johor project a boost
PUTRAJAYA — Malaysia’s close ties with the Arab world have produced their biggest dividend yet with the signing of a US$1.2-billion ($1.8 billion) deal to develop art of the Iskandar Development Region (IDR) in southern Johor.
Firms from Gulf Cooperation Council countries will initially invest the money in land and infrastructure development, in a deal signed with Malaysia’s South Johor Investment Corporation (SJIC).
SJIC chairman Azman Mokhtar hailed the agreement as a milestone for the IDR, which aims to turn southern Johor into a new Asian metropolis.
“This is a historic and strategic landmark transaction between our two regions,” Mr Azman said at the signing ceremony yesterday. “By far, this is the biggest single foreign investment ever made in Malaysia.”
The investors are led by Mubadala Development Company, the investment arm of Abu Dhabi, which committed US$520 million. The rest of the money is coming from Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, and Abu Dhabi’s Millennium Development International Company. The project will be managed by Abu Dhabi-based developer, Aldar Properties PJSC.
“This will be a flagship development for the region, not just for Malaysia,” said Mubadala chief executive Khaldoon Khalifa Al Mubarak.
The Malaysian government hopes to attract RM50 billion ($21.7 million) to the IDR over five years.
However, some analysts said the ambitious plans to develop not only the IDR, but also the Northern Corridor Economic Region, have been clouded by problems involving the new trade zone at Port Klang outside Kuala Lumpur.
The trouble started when the Dubai partner — which had been granted a 15-year concession to manage and operate a new trade zone at Port Klang — suddenly pulled out amid reports of mounting debt problems, reported the Financial Times.
The Jebel Ali Free Trade Zone Authority had complained that state bureaucrats were hindering the zone’s operations, while the Malaysian government claimed that the Dubai group pulled out because officials had denied it permission to become a main shareholder.
It emerged that the state-run Port Klang Authority had amassed debts of RM4.6 illion because of cost overruns. The government said it would bail out Port Klang with a soft loan, to prevent its bankruptcy. Officials have also suggested starting a corruption probe into the project.
Analysts told the Financial Times that Port Klang’s troubles are likely to raise doubts as to whether the Kuala Lumpur can fulfil its promise to build and operate the development regions in Johor and the Northern Corridor, which covers Perlis, Kedah, Penang and northern Perak.
However, Mr Song Seng Wun, regional economist at CIMB-GK Research in Singapore, believes that the Abdullah administration has put so much of its prestige into the two projects that it would seek to avoid the problems it inherited from the Port Klang project, which the previous government started. — AGENCIES
Mid-East Backers Sign On Dotted Line To Launch Mega Johor Project
Source : The Business Times, August 30, 2007
They will have 70% stake with SJIC holding the rest
THREE Middle Eastern firms signed agreements with the South Johor Investment Corporation (SJIC) yesterday to kick-start the development of the Iskandar Development Region (IDR) in what is likely to become the single largest ever foreign real estate investment in Malaysia.
The three firms are Mubadala Development Company, the investment arm of the Abu Dhabi emirate; Kuwait Finance House, and Millennium International Development Co, a Lebanese-owned construction firm based in Saudi Arabia.
Together with the SJIC - which is owned by Khazanah Nasional, the Economic Planning Unit and the Johor state government - the three firms will develop 902 hectares in southern Johor into 'Rim City', a mix of cultural, leisure and financial habitats for an initial US$1.2 billion that just includes the cost of land and to-be-done infrastructure and landscaping. The final price tag, according to a government official, could be anything between US$6 and US$10 billion.
That the Middle Eastern investors will call the shots is implicit in the control they will have in each joint venture - 70 per cent with the SJIC holding the rest. The master developer for the project is also one of their own - listed Abu Dhabi based Alda Properties.
Even so, the actual work is only likely to begin in a year after the SJIC completes the infrastructure and landscaping to the investors' satisfaction and land titles get transferred. Still, the government converted the land, previously freehold, to leasehold land presumably to avoid political controversy.
The project is deeply significant as this is probably the first time that the government is encouraging the establishment of an international city without affirmative action policy restraints and playing by the international rules of the game.
According to several officials, the investors will be permitted to sell their facilities to all comers without restriction nor will they be subject to state government approvals.
The development also illustrates the wealth of the Middle East. Mubadala, for example, is said to have reserves of over US$1 trillion. And for two of the investor companies - Mubadala and Millennium - this is their first investment in South-east Asia.
Indeed, the IDR project signals a sea change in the investment attitudes of Middle Eastern interests which have traditionally opted to place their excess funds in the US and Europe . But after the 9/11 terrorist attacks, more and more have cast their eyes towards South-east Asia, especially Muslim Malaysia.
The project is also likely to raise asset values in the Iskandar Development Region as the deal values the land at around RM42 (S$18) a square foot. Even after lopping off the costs of infrastructure and landscaping, the land would still be values at over RM30 which is remarkable - a year ago raw land there was going for around RM8 a square foot.
The IDR project is also expected to radically change the way of doing business in Malaysia especially in big project developments. Because the Middle Eastern investors will have control of the project, all contracts are likely to be based on open and international tenders to ensure best prices and quality. So politically connected companies hoping to ride on the boom through negotiated awards are likely to be disappointed.
Moreover, the presence of the Middle Eastern investors is a shrewd political move as it is likely to quell criticism about Malaysia selling out to foreigners especially Singaporean interests. The officials said that there was little to carp about when the foreign investors were all 'our Muslim brothers'.
Finally, the announcement of the project is likely to renew foreign interest in the IDR which has been criticised as 'all talk and no action' .
They will have 70% stake with SJIC holding the rest
THREE Middle Eastern firms signed agreements with the South Johor Investment Corporation (SJIC) yesterday to kick-start the development of the Iskandar Development Region (IDR) in what is likely to become the single largest ever foreign real estate investment in Malaysia.
The three firms are Mubadala Development Company, the investment arm of the Abu Dhabi emirate; Kuwait Finance House, and Millennium International Development Co, a Lebanese-owned construction firm based in Saudi Arabia.
Together with the SJIC - which is owned by Khazanah Nasional, the Economic Planning Unit and the Johor state government - the three firms will develop 902 hectares in southern Johor into 'Rim City', a mix of cultural, leisure and financial habitats for an initial US$1.2 billion that just includes the cost of land and to-be-done infrastructure and landscaping. The final price tag, according to a government official, could be anything between US$6 and US$10 billion.
That the Middle Eastern investors will call the shots is implicit in the control they will have in each joint venture - 70 per cent with the SJIC holding the rest. The master developer for the project is also one of their own - listed Abu Dhabi based Alda Properties.
Even so, the actual work is only likely to begin in a year after the SJIC completes the infrastructure and landscaping to the investors' satisfaction and land titles get transferred. Still, the government converted the land, previously freehold, to leasehold land presumably to avoid political controversy.
The project is deeply significant as this is probably the first time that the government is encouraging the establishment of an international city without affirmative action policy restraints and playing by the international rules of the game.
According to several officials, the investors will be permitted to sell their facilities to all comers without restriction nor will they be subject to state government approvals.
The development also illustrates the wealth of the Middle East. Mubadala, for example, is said to have reserves of over US$1 trillion. And for two of the investor companies - Mubadala and Millennium - this is their first investment in South-east Asia.
Indeed, the IDR project signals a sea change in the investment attitudes of Middle Eastern interests which have traditionally opted to place their excess funds in the US and Europe . But after the 9/11 terrorist attacks, more and more have cast their eyes towards South-east Asia, especially Muslim Malaysia.
The project is also likely to raise asset values in the Iskandar Development Region as the deal values the land at around RM42 (S$18) a square foot. Even after lopping off the costs of infrastructure and landscaping, the land would still be values at over RM30 which is remarkable - a year ago raw land there was going for around RM8 a square foot.
The IDR project is also expected to radically change the way of doing business in Malaysia especially in big project developments. Because the Middle Eastern investors will have control of the project, all contracts are likely to be based on open and international tenders to ensure best prices and quality. So politically connected companies hoping to ride on the boom through negotiated awards are likely to be disappointed.
Moreover, the presence of the Middle Eastern investors is a shrewd political move as it is likely to quell criticism about Malaysia selling out to foreigners especially Singaporean interests. The officials said that there was little to carp about when the foreign investors were all 'our Muslim brothers'.
Finally, the announcement of the project is likely to renew foreign interest in the IDR which has been criticised as 'all talk and no action' .
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