Lian Beng Posts Higher Q1 Receivables

Source : The Business Times, October 16, 2008

CONTRACTOR Lian Beng Group yesterday said that trade receivables has increased $11.8 million 'as the group has yet to receive payments for some of its progress billings'. This was despite a fall in revenue for its first quarter to Aug 31, to $36.2 million from $42 million a year ago. Net profit, however, doubled to $2 million from $998,000 on lower cost of goods sold. From the year ago period, earnings per share rose to 0.36 of a cent from 0.21 cent.

Explaining the revenue drop, Lian Beng said that several construction projects have not attained the minimum percentage of completion in order for revenue to be recognised. Likewise, profits rose on higher recognition of several construction projects.

The company said that it held cash on hand of $6 million, up from $4 million a year ago. However, it had overdrafts of $19.4 million, slightly more than $18.3 million last year. Net cash from operating activities came to $10 million, from negative $2.46 million a year ago, on higher payables due to advance payments on construction projects.

Flood Of New Homes But Sept Sales Up Just 18%

Source : The Business Times, October 16, 2008

Developers quadrupled the number of new homes for sale last month, but units sold rose only 18 per cent from August.

Accompanying the less-than-satisfactory take-up were lower prices in some areas, according to Urban Redevelopment Authority data released yesterday.

The number of units sold recovered slightly to 376 last month from 320 in August, which coincided with the traditionally slow Hungry Ghost month.

A total of 767 new units were put up for sale - including 258 in the core central region (CCR) where sentiment is weakest.

Given the big jump from 194 in August, some analysts say that this could be due to smaller developers with less holding power launching units even during a weak market.

'They could be pushing out projects in the CCR, even though sentiment is bad in the high-end segment, because they have no choice,' one analyst said.

Take-up was especially poor in the CCR. The region accounted for 34 per cent of units launched last month but only 19 per cent of sales.

On the other hand, September's jump in launch volume could be because some projects were withheld during the Hungry Ghost month, said Nicholas Mak, director of research and consultancy at Knight Frank.

Last month also saw prices ease slightly in areas such as Bukit Timah and Newton. CBRE said that some units at Madison Residences and Floridian along Bukit Timah Road were sold at median prices of $1,801 per square foot (psf) and $1,443 psf - 10 per cent lower than a year ago.

Similarly, Viva in Thomson Road and Park Infinia in Wee Nam Road achieved $1,555 psf and $1,501 psf - about 5 per cent less than comparable projects early this year, CBRE noted.

Preliminary URA estimates show that the Q3 residential price index fell 1.8 per cent, after climbing 3.9 per cent in the first half.

But many developers are holding prices firm. 'There is still no broad-based decline in home prices based on the September sales, although news about Lehman Brothers and AIG has dampened sentiment,' said Li Hiaw Ho, executive director at CBRE Research.

Sales volume last month was driven mostly by new launches such as Concourse Skyline (68 units sold), The Peak At Balmeg (47), Traselveo (41), Viva (19) and Mulberry Tree (13). Most of the units launched and sold were in the rest of central region (RCR).

Analysts said that buyers are looking at mid-range private properties - even more than at mass-market homes. The RCR, where most mid-tier private homes are located, accounted for 48 per cent of launches and 60 per cent of sales last month.

Colliers director for research and advisory Tay Huey Ying said that sales volume is likely to dip to 250-300 this month. 'The mood in October will likely be sombre due to the shockwaves from recent events in the global financial industry,' she said. 'Hence, developers's launch volume is likely to come in lower than September's but still higher than August's.'

Developers will not cut asking prices drastically in the next few months, analysts reckon. But small falls can be expected. Colliers, for example, expects prices of high-end and luxury homes to continue to slide by up to 5 per cent in Q4, while prices of mid-tier homes could fall up to 3 per cent.

Ms Tay said that prices of mass-market homes can be expected to hold firm or weaken less than 2 per cent in Q4.

YTL Launches Sandy Island Villas On Sentosa Cove

Source : The Business Times, October 16, 2008

It also sells 3 villas, and the highest price registered so far is $2,100 psf

ULTRA-high net worth individuals with at least $13.9 million to spare will now have a new piece of luxury to own - a Sandy Island villa on Sentosa Cove - after Malaysia's YTL Group launched its collection of 18 waterfront villas hereyesterday.

Waterfront luxury: The Sandy Island villas have been designed by Italian architect Claudio Silvestrin, while gardens for the villas and the island's lush setting are the works of Australian landscape designer Jamie Durie

Nestled within a tropical rainforest setting, the villas have generated strong local and global interest, said YTL Group. Three villas have been sold, and the highest price registered so far stands at $2,100 per square foot (psf).

The 99-year leasehold properties have built-up areas ranging from 7,500 to 9,200 sq ft. Designed by Italian architect Claudio Silvestrin, whose work includes the Giorgio Armani flagship stores, each villa is unique in layout and furnishings.

Gardens for the villas as well as the island's lush setting are the works of Jamie Durie, one of Australia's best landscape designers.

'Singapore is an increasingly sophisticated country attracting the global affluent who want to buy luxury landed property, which is permitted only in Sentosa Cove. These wealthy individuals expect the best,' said Francis Yeoh, chairman of YTL Corporation, parent of the YTL Group.

In fact, the desire to create 'the best' for potential clients contributed to a delay in Sandy Island's launch. Nonetheless, this was none too worrying for Dr Yeoh, whose overriding concern was to assemble a strong team of designers to create properties which can withstand the test of time. 'You can't hurry a good thing,' he said in an interview with BT.

Neither is Dr Yeoh overly worried about launching the villas amid today's global financial fallout. 'For me, (timing) is not important, just because there is an economic cycle that is not the most pleasant to launch this product,' he said. 'You need not suffer the cycles if you truly have the quality.'

Savills Singapore is the marketing agent for the Sandy Island collection. According to its marketing and business development director Ku Swee Yong, there remain cash-rich individuals who have not been significantly affected by the financial turmoil.

Apart from locals, individuals from regions such as Hong Kong, Japan, Europe and the Middle East have also shown interest in the villas, he said. In today's climate, 'the urgency to commit (to a purchase) is a bit less', Mr Ku remarked. But he added that the financial turmoil has also caused some investors to feel more secure parking their wealth in properties instead of banks.

For YTL, Sandy Island is among several other projects it has for the Singapore market. Should the right prime address come along, the group will develop a new luxury mall - Starhill Gallery - here. The company is also working on a new development at the Westwood Apartments site in Orchard. 'Singapore is an address which I believe cannot be ignored,' said Dr Yeoh. 'I would say that the Chinese, Indians and Southeast Asians, the future's very rich would love to invest in a place like Singapore.'

And beyond Singapore, weaker global markets could present more investment opportunities for YTL globally. 'I hope this is my opportunity to pick up a few prime properties around the world. . . I'm looking forward to doing a few deals this calendar year.'

Parkway Centre Up For Collective Sale

Source : Channel NewsAsia, 15 October 2008

The 99-year leasehold Parkway Centre has been put up for collective sale.

The commercial property, which is located in the Marine Parade town centre, can be redeveloped into an office-cum-retail development, with a gross floor area of up to 157,625 square feet.

The building is located opposite Parkway Parade and near Roxy Square. It is surrounded by residential projects like Parc Seaview, Silversea and Amber Residences.

The property is linked to the East Coast Park Expressway and is near Singapore's central business district.

Jones Lang LaSalle is the sole marketing agent for the project.

The tender will close at 3pm on November 19. - CNA /ls

September Figures Show Continued Softness In Private Home Sales

Source : Channel NewsAsia, 15 October 2008

Sales of private homes in Singapore improved 17.5 per cent in September, compared to the previous month.

But analysts said the pickup fell short of expectations, given the low base in August caused by the Hungry Ghost Festival. The seventh month of the Lunar calendar is traditionally regarded as an inauspicious period and buyers usually refrain from making purchases during that time.

Almost 300 per cent more units were launched for sale in September, compared to August. Property developers sold 376 units in September, just 51 units more than the preceding month. Nonetheless, some analysts see something to cheer about in the data.

Ku Swee Yong, director, Marketing & Business Development, Savills (Singapore), said: "I already see that as a positive (sign) because in September, the stock market beat the whole market down, so many investors were spooked."

The stock of private residential properties has been building up in the past year and was compounded by a large oversupply in September.

As buyers become more cautious in light of the economic downturn, prices are expected to fall.

Nicholas Mak, director, Consultancy & Research, Knight Frank, said: "Whatever gains made in the first half of this year will probably be lost by Christmas. Depending on how the global economic and financial situation plays out, I think there's still a lot of uncertainty and turmoil out there.

"There is a possibility we could see further weakness in home prices in 2009, especially if the Singapore economy were to slip into a prolonged recession.

"At the moment, we haven't seen some of the major bad news like massive retrenchments or fall in salary levels. If such a thing were to happen, we could see people giving up homes or downgrading."

Knight Frank said bad economic outlook could result in a double-digit fall in home prices in 2009. But others are not as pessimistic.

Ku said: "Private residential prices in mass market will still hold up very well, probably for the next 18 months... we believe so because the demand for public housing is still strong.

"In the third quarter, HDB price index for resale HDB (flats) still managed to climb 4.2 per cent. That should support mass market prices for HDB upgraders very well."

However, all agree that within the private residential sphere, luxury properties will bear the brunt of price pressures.

"For luxury and mid-tier residential market, we think that over the next 18 months, we might see about 5, 10 per cent drop. For the very luxurious properties, about 15 per cent drop in prices," Ku added.

Luxury properties tend to attract speculators who have retreated from the market in the current unpredictable financial environment. - CNA/so