Frasers Centrepoint In Rebranding Move

Source : The Business Times, September 13, 2008

It wants a new name and fresh look to gel better with its increasing push overseas

A MAINSTAY on the Singapore property scene, Frasers Centrepoint is going for a new name and a fresh look as it moves to conquer markets abroad. The company is reviewing its brand to reflect its global perspective.

PREPARED FOR THE WORST - Mr Lim says that Frasers Centrepoint will just hold onto its landbanks, where market sentiment is bearish, until recovery

'We want to continue to push overseas,' says chief executive Lim Ee Seng. 'In future, more and more of our revenue will come from overseas.'

In 2006, the then-Centrepoint Properties was renamed Frasers Centrepoint to better reflect the link to parent company Fraser & Neave, one of Singapore's biggest conglomerates. But when Frasers Centrepoint grew its assets abroad, it found that the Centrepoint name was far from unique.

'There were always other companies called Centrepoint - in Sydney, in Bangkok, in the UK,' says Mr Lim. In the UK, for example, Frasers Centrepoint shared the Centrepoint name with a coal-mining company and a security firm.

The solution? Frasers Centrepoint has rebranded itself Frasers Property.

'For now, the main challenge is finding the right talent. We have to find the right people in each country to take charge, to work independently. Property is a very local business, so the people on the ground in each country should also be locals whenever possible.'
Mr Lim

According to Mr Lim, the continuing rebranding exercise and the name change underscore how serious the company has become about building its overseas presence.

The numbers speak for themselves. In the first half of its 2008 financial year, 39 per cent of the developer's assets were abroad. Some 15 per cent of Frasers Centrepoint's $8.3 billion portfolio was parked in China, the biggest overseas market. Australia and New Zealand together accounted for 12 per cent of assets, while 9 per cent were in the UK. The remaining 2 per cent were in various countries, including Thailand, Vietnam, Malaysia and the Philippines.

By contrast, in 2005, just 22 per cent of total assets were overseas. Back then, the company had total assets of $4.4 billion.

There is no doubt that Frasers Centrepoint has become the most important unit in Fraser & Neave's stable. For F&N's third quarter ended June 30, 2008, property development accounted for 60 per cent of net profit before exceptional items. This was despite the food & beverage business being the largest contributor to the top line.

To build on this strength, Frasers Centrepoint has been quietly working to consolidate its overseas presence in the past three years. In the UK and Australia/New Zealand, it has set up holding companies and built up its teams. These steps were taken for 'tax reasons' and to allow the units to function more effectively.

Yet, for all his bullishness, Mr Lim is well aware of the challenges that Frasers Centrepoint and its fledgling overseas spin-offs face amid the current global slowdown.

The main problem is poorer liquidity from banks, he says. And perhaps more immediately, many overseas markets are gripped by poor buyer sentiment. 'This is a problem even in markets where the problems are not serious, where all the fundamentals are actually okay - such as Australia,' says Mr Lim.

In light of this, Frasers Centrepoint will take a step back in some foreign markets. In the UK, the company has a pipeline of 2,700 homes that were supposed to be delivered in the medium term through direct development or via joint ventures. Some of these projects will now be put on hold until the market turns.

In Australia and New Zealand, on the other hand, Frasers Centrepoint will go ahead with projects because prospects don't look as bad. 'The financial markets have been hit but interest rates have come down,' says Mr Lim. 'There is also a shortage of apartments in Australia, especially in Sydney.'

Frasers Centrepoint has a pipeline of about 5,000 residential units and about one million square foot of commercial space to be delivered over the medium term in Australia and New Zealand.

Things are murkier when it comes to China, where the company has a pipeline of close to 12,000 homes and about six million sq ft of commercial space in the medium term.

But in any case and in all the markets where Frasers Centrepoint is present, 'if worst comes to worst, we will just hold onto our landbanks until recovery', Mr Lim says.

For now, Frasers Centrepoint's main problem is finding the right people to staff its offices as it expands.

'We have to find the right people in each country to take charge, to work independently,' says Mr Lim. 'Property is a very local business, so the people on the ground in each country should be locals whenever possible.'

China Property Meltdown Feared

Source : The Straits Times, Sep 13, 2008

Morgan Stanley analysts say prices are cracking in major cities, demand down by half

HONG KONG: China's property market could be headed for a 'meltdown' as home prices and sales slump, Morgan Stanley analysts said.

'Property prices are already cracking in China in major cities,' the investment bank's analysts, led by Mr Jerry Lou, wrote in a note yesterday.

'We believe the likelihood of a property sector meltdown is high.'

Property demand in Chinese cities has dropped by as much as half since the government last year raised minimum down payment requirements and increased rates on some mortgages to cool home prices, said CSC Securities HK analyst Liu Bin. A 60 per cent drop in the stock market this year and concerns that China's economic growth is slowing have contributed to the slump in demand.

Mainland developers, including China Vanke and Poly Real Estate Group, have reported falling sales as government lending curbs deterred home buyers.

Vanke, the nation's biggest publicly traded real- estate developer, said this week that last month's sales fell 35 per cent from a year earlier, the third monthly drop.

The firm said yesterday it has rejected demands from buyers for compensation on homes bought before the company cut prices to boost sales.

One such buyer was Shenzhen resident Li Zhiwei, 38, who paid about 900,000 yuan (S$190,000) last May with 30 per cent down for his 72 sq m home.

After tripling in some districts since 2005, property prices in the city have fallen to earth with such a thud that Mr Li's apartment is now worth less than the 600,000 yuan mortgage he took out.

Mr Li, who pays 7,000 yuan a month, or half of his income, to service his mortgage, blames the real-estate developer for his negative equity.

'I want to be refunded, or they must pay for my loss,' he said.

Mr Li, along with 67 other owners in his complex, is putting pressure on the developer by threatening to swallow a 300,000 yuan loss and walk away from his home - a common occurrence in the United States sub-prime mortgage crisis but still very rare in China.

The spectre of mortgage defaults is hanging over the southern boomtown of Shenzhen as China's property market loses altitude.

By the end of June, 3,612 people in Shenzhen had fallen 90 days behind on their mortgage payments since 2006, causing 1.7 billion yuan of loans to turn sour, according to state media reports.

'Most mortgage defaults come from professional investors who have no intention to hold property for long,' said Ms Hou Liying, a professor at Shenzhen University who specialises in China's property market. 'When prices start to head south, they try everything possible to halt their losses.'

It was precisely in order to tackle such speculative excesses that Beijing introduced a raft of curbs over the past 18 months.

Still, analysts are confident that banks will avoid the big home-loan losses suffered by US lenders.

Mortgages made up just 10.5 per cent of total Chinese bank lending at the end of June, according to the central bank, and house buyers must make minimum down payments of 20 or 30 per cent, reducing the risks that banks run.

But a prolonged drop in prices would be a major worry for the government, which regards housing as a crucial motor of economic development and wealth generation. - BLOOMBERG, REUTERS

Architects & Their Homes - Angle Management

Source : The Straits Times, Sep 13, 2008

A slanted design for architect Rene Tan's home turned the terrace house into a light-filled one

Terrace homes, with neighbours sharing common walls on either side, can be dark places as windows can be put only at the front and back.

Large floor-to-ceiling windows help to let light into Mr Tan's home. -- ST PHOTOS: NG SOR LUAN

Not so at the home of architect Rene Tan, who thought outside the box when he designed it. Light streams into his twostorey-plus-attic terrace house, thanks to an ingenious slanted design.

Rather than being a rectangular box, the house is bent at an angle, hence enabling light to enter from the side. There are fewer common walls to share as well.

To make it look brighter, the entire interior is painted in variations of white.

Mr Tan, a partner at RT+Q Architects which he founded with architect T.K. Quek, admits that he treated designing his home like an experiment, testing out unusual designs that he would normally not do for clients' homes.

'This was something more unusual,' says the Penang-born permanent resident here. 'The shape was an instinctive response to the site.'

The 44-year-old shares the threebedroom Bukit Timah home with his wife Chuah Woei Woei, a vice-president at a bank, and their four-year-old daughter, Lara.

They moved in only about two months ago, after seven months of construction. They were previously living in a shophouse in Everton Road. He declined to disclose how much he paid for the 2,300 sq ft land, plus construction.

He says the conventional way to introduce light into a terrace home is to create a courtyard. But by slanting the house, light can enter from the side. The many large floor-to-ceiling windows also allow plenty of light to enter.

'Demanding' clients at home, too

His 'experiment' also includes the interiors. Visitors are amazed by how white the home is - from the walls and ceiling to the cabinets, shelves and flooring.

'There are 20 shades of white here,' he says with a laugh.

Another experiment involved the doors for two bedrooms on the second floor - they do not have frames. 'The doors now look like part of the walls,' he says. A doorstopper prevents them from swivelling too much.

He jokes that while experimenting with the home, he also had to satisfy the desires of his two most difficult clients - his wife and daughter.

Lara wanted a swimming pool, so he created a 10m by 2m by 1m lap pool on the ground floor. Entry is via a side passageway near the living room or by opening a sliding door in the room.

Ms Chuah wanted a big kitchen and lots of storage space. She, too, got her wish: There is a dry kitchen in the dining area with a marble-top island kitchen and a spacious wet one at the home's rear.

Instead of having numerous cupboards, he created plenty of built-in storage with sliding doors throughout the home, from the kitchen to the living room to the bedrooms. Having such storage saves space and also gives the home a cleaner look.

A spiral staircase in the 3,900 sq ft home links the two floors and the attic.

Another feature that links the attic to the first floor is a three-storey-high bookcase filled with books on architecture, literature and travel books. MrTan affectionately calls it the wall of knowledge.

Although he designed his home, he does not think it is perfect. 'If I could, there would be areas I would do differently, such as building a straight staircase.'

He was juggling various other projects while building his home and says 'my own home was the most neglected job'.

Not that anyone can tell.

摩根士丹利：中国房市可能崩盘

Source : 《联合早报》September 13, 2008

（北京综合电）投资银行摩根士丹利一份研究报告表示，中国大城市的房价已经在急跌，房地产行业崩盘的可能性很高，而且可能会对银行的盈利造成重大冲击。

据彭博社报道，由娄刚牵头的几位分析员在报告中表示，他们所关注的发展商中，没有一家不存在潜在的偿付能力问题。他们指的是在香港上市的五家发展商。这几家发展商也面临严重的盈利风险。

摩根士丹利研究报告表示，中国大城市的房价已经在急跌，房地产行业崩盘的可能性很高。

群益证券(香港)公司分析员刘斌表示，自政府在一年前上调首付比例并提高部分抵押贷款的利率为房价降温以来，中国各城市的房产需求已锐减多达一半。中国股市今年已惨跌60％左右，加上人们担心中国经济增长放缓，导致房产需求降低。

另据《第一财经日报》报道，据不完全统计，中国20个大中城市今年以来已有超过120幅土地流拍、流标或未成交。而截至今年4月底的统计数据显示，自去年10月后的半年内，全国范围内的土地流拍数量也不过40幅。

这意味着，在过去五个月，全国各城市的土地流拍数量呈激增态势。另据国土资源部下属全国地价监测中心统计数据，今年上半年，全国流标、流拍的土地达到出让总数的10％。

此外，中国最大的上市房地产发展商万科本周表示，8月份销售金额较上年同期锐减35％，为连续第三个月下降。

万科昨天提交给深圳证券交易所的一份公告表示，已回绝在公司最近降价提振销售前已买房客户的补偿和退房要求。此前上海《新闻晨报》报道，万科考虑对前期购房者进行赔偿。

万科附属子公司上海万科近期针对特定项目推出了“喜迎中秋，八盘同庆”的优惠促销措施，市场反应良好，截至9月10日，实现认购360套，认购金额6亿1600万元人民币（1亿2936万新元）。部分前期客户提出补偿或退房要求。

据《金融时报》前天报道，因遭到前期购房者打砸，万科上周末被迫关闭杭州一个售楼处，这些前期购房者对万科就他们先前高价购买的楼盘提供高达25％折扣感到义愤填膺。

Developers Appeal To Govt Over Bay Window Ruling

Source : The Straits Times, Sep 13, 2008

THEY might look innocuous, but bay windows and planter boxes have become a hot topic of discussion between property developers and the Government.

The talks centre on a controversial decision by the Urban Redevelopment Authority (URA) to include the area of such design features in gross floor area (GFA) calculations.

Bay window and planter boxes, which often make up about 5 per cent of a condo’s saleable area, used to be exempt from GFA calculations. But buyers paid developers for this area as it was provided with the unit.

The URA caught the industry by surprise on July 7 when it stated that the revised guidelines would take effect from Oct 7. It was reported at the time that the move would close a ‘loophole’ that developers had been exploiting.

Planter boxes were originally introduced to provide greenery and visual relief to high-rise condos.

However, the URA said feedback and its own investigations found extensive unauthorised conversions of planter boxes into balcony space or extensions of the living room - which defeated the original purpose.

This also led to the buildings being less energy efficient, said the URA.

But developers said yesterday it was a ‘misconception’ that they were profiting from it.

UOL Group chief operating officer Liam Wee Sin told The Straits Times that contrary to general perception, developers did not ‘have it free’.

‘There’s a reason why it’s there in the first place,’ he said. ‘It costs money to construct these features, and it is not given to us free.’

It is part of the ‘residual land value’ and developers factor this when bidding for a site, he said.

A Lianhe Zaobao report quoted market sources who suggested the change might lead developers to pay less for land.

It cited the sale of a site next to Tanah Merah MRT station that was awarded recently at $282 per sq ft per plot ratio (psf ppr). This was 11 per cent less than the $318.50 psf ppr attained by a neighbouring site before the GFA change was announced.

The president of the Real Estate Developers’ Association of Singapore (Redas), Mr Simon Cheong, said he could not comment further because talks were ‘in process’.

Mr Cheong, who was speaking at Redas’ annual Mid-Autumn Festival celebration, said that developers were cautious in their short-term outlook due to high construction costs.

‘Hopefully in 12 months’ time, we’ll be in a better state than now,’ he said.

He cited Singapore’s low interest rates and upcoming events such as the Formula One race and Youth Olympics for his bullish outlook.

On the price of real estate, he said that ‘if it drops, it will not be much more’.

The replacement cost of apartments, including cost of construction, is very close to selling prices already, he added.

Mass market home prices are dependent on local demand and ‘this is subjective to how the economy is’.