HK Shop Sold For 2nd Highest PSF Price In City

Source : The Business Times, May 14, 2009

Brother of tycoon pays HK$447,800 psf, banks on influx of mainland visitors

(HONG KONG) The brother of a Hong Kong property and gambling tycoon has paid the second-highest per square foot (psf) price on record for a shop in the city, hoping to benefit from an influx of mainland Chinese visitors.

Comparing prices: Rents for retail shops in Hong Kong dropped 20per cent between October and February and may have reached bottom

Ricky Yeung bought a 134 square footshop in Kowloon for HK$60 million (S$11.3 million), Tony Lo, director of Midland Realty Shop Ltd, said yesterday.

Valued at HK$447,800 psf, the shop is the second most expensive sold in Hong Kong after a 40 sq ft retail space went for HK$515,000 psf in March 2006, he said.

'There's a lack of supply in the area as most of the shops are in malls that are owned by Wharf (Holdings) Ltd,' Mr Lo said.

Mr Yeung, Midland's client, is the brother of Albert Yeung, he said.

Mr Albert Yeung controls developer Emperor International Holdings Ltd, luxury-watch retailer Emperor Watch & Jewellery Ltd and hotel and casino company Emperor Entertainment Hotel Ltd.

The street-level shop is near Wharf's Harbour City, one of Hong Kong's biggest shopping centres, and the Star Ferry pier in Kowloon.

The mall and Wharf's Times Square in Causeway Bay on Hong Kong island account for 10 per cent of the city's retail sales, Wharf deputy chairman Stephen Ng said in March.

Rents for retail shops in Hong Kong dropped 20 per cent between October and February and may have reached bottom as more mainland Chinese visit, Wong Leung-sing, an associate director at Centaline Property Agency Ltd, said yesterday. The price of leases has risen by 2 per cent since February, he said.

Shenzhen, the adjoining southern China export hub, relaxed rules last month for residents' travel to Hong Kong.

About 2.2 million Shenzhen residents can now apply for multiple-entry visas to Hong Kong, China Daily reported in April, citing local public security authorities. They were previously only allowed to apply for double-entry three-month visas.

Mr Yeung, who sees the shop as a long-term investment, hopes to rent it for more than HK$200,000 a month, double current prices, when it becomes vacant in July, providing a rental yield of 4.5 per cent, Mr Lo said.

The sale was reported earlier by the South China Morning Post.

The number of Hong Kong office and retail-space real estate transactions has risen to the highest since August last month, climbing 27 per cent from a month earlier to 648, the Wen Wei Po newspaper reported last week.

The combined transaction value fell 9 per cent month on month to HK$2.69 billion, the paper said. -- Bloomberg

Pickup In UK Housing Market

Source : The Straits Times, May 14, 2009

LONDON - NEW data released on Thursday provided further signs of a pickup in the British housing market, with a survey showing that the number of new mortgages jumped by 29 per cent in March.

The Council of Mortgage Lenders said that a total of 31,000 mortgages were advanced during the month for people buying a property - up from 24,000 in February - although the figure was still 33 per cent lower than March last year.

There was also a rise in the number of people buying their first home, with 12,500 first-time buyers taking out a mortgage during the month, accounting for 40 per cent of all loans, the highest proportion since April 2005.

The figures add to growing evidence that activity in the housing market has passed its low point.

Earlier this week the Royal Institution of Chartered Surveyors said inquiries from potential buyers rose at their fastest pace in almost a decade during April.

But analysts have stressed caution, pointing out that activity is still very low by long-term norms.

Bob Pannell, head of research at the Council of Mortgage Lenders said that there was a sharp dividing line in the housing market between those potential buyers who can afford a substantial deposit and those who cannot as tight lending restrictions line up against a record low official interest rate of 0.5 per cent.

'For those who can, the burden of debt payments is low and mortgage interest is consuming proportionately less income than for a number of years,' he said. 'But for those without substantial deposits, entering the market is still both difficult and uncertain. While there are some signs of demand increasing, house prices remain weak and lending criteria inevitably remain inherently conservative as lenders necessarily seek to rebuild their capital position.'

Abbey, Britain's second largest mortgage lender, later on Thursday said it would relax its lending criteria to make its best deals available to people with smaller deposits.

The lender said that it would make all its fixed rate mortgages available to people borrowing up to 70 per cent of their home's value, rather than restricting them to those with at least a 40 per cent deposit, as had previously been the case. -- AP

Weekend Launch For BelleRive Off Bt Timah

Source : The Business Times, May 14 2009

Sing Hldgs to price it between $1,325 and $1,464 per sqft.

SING Holdings is launching its latest residential development, BelleRive, this weekend at indicative prices of between $1,325 and $1,464 per sq ft. The listed developer is also extending an interest absorption scheme to all buyers.

BelleRive, located off Bukit Timah Road between Balmoral and Robin roads, is a 15-storey apartment tower with a total of 51 units. Its two and three-bedroom units range from 958 sq ft to 1,679 sq ft.

The two penthouses, at 2,734 sq ft and 3,735 sq ft, each have a private roof garden, swimming pool and pool deck. The development boasts fittings and finishes from notable brands including kitchen appliances by Gaggenau and imported kitchens by Hoffen.

Project facilities include a swimming pool, barbecue area, children's playground and gymnasium. Project completion is scheduled for end-2010.

Sing Holdings chief executive Lee Sze Hao said yesterday that about 50 per cent of the freehold project was sold during a recent preview.

BelleRive is within walking distance of the upcoming MRT station in Stevens Road. It is also reasonably close to several schools including the Singapore Chinese Girls' School, Anglo-Chinese School (Barker Road), Raffles Girls Secondary School and St Joseph's Institution.

Sing Holdings' previous projects include 38 Draycott Drive, a high-end apartment block in the Ardmore Park area, and an office building named EastGate in the East Coast area.

Residential projects in the pipeline are Meyer Residence on the East Coast, an 85 per cent-owned project, and a joint-venture project called The Laurels at Cairnhill.

Goldman Sees S'pore Home Prices Rising In 2010

Source : The Business Times, May 13, 2009

It reverses earlier forecast of 10% slide next year, upgrades CDL to 'buy'

Goldman Sachs is now projecting a 5 per cent gain in Singapore private home prices next year, reversing its previous forecast of a 10 per cent fall in 2010. It has also upgraded City Developments, which it terms 'the Singapore residential bellwether', to a 'buy' rating from 'sell' previously.

'The recent pick-up of transaction volumes in the primary residential market is a harbinger of price stabilisation being just around the corner, in our view,' the US bank said in a report dated May 12.

It expects the residential property sector to stabilise by end-2009, ahead of the office and retail sectors, which it sees stabilising around the end of next year.

Goldman Sachs sees the average luxury residential capital value sliding some 38 per cent for the whole of 2009, on top of last year's 36 per cent drop, and the average islandwide 99-year leasehold residential capital value easing 13 per cent in 2009, similar to the 12 per cent fall last year. Much of these price declines have already taken place year to date, and Goldman Sachs sees price stability setting in by year-end.

The 5 per cent residential price increase projection for 2010 will be supported by expected healthy, above-consensus take-up activity that will gradually draw down on supply.

'Firmness witnessed in the mass end of the segment is gradually filtering up to the mid-end segments, though investors are still harbouring concerns over sustainability of demand. What may not be so apparent is the relative wealth of HDB owners,' said the report.

'We expect the pick-up in transaction volumes witnessed over the past three months to continue, driven by HDB upgrader demand in the mass end of the market as affordability has improved,' it added.

'While we acknowledge that there are still overhangs (eg deferred payment scheme defaults) weighing down on the broader sector, we think the risk/reward trade-off in the Singapore residential market is currently favourable,' the report said.

With residential cycles tending to be shorter than commercial ones, Goldman Sachs expects commercial property to underperform when recovery takes place eventually. It also continues to be relatively more cautious about the retail and office segments given the challenges that are likely to affect businesses and consumers over the near term.

'Unlike in residential, where (sales) take-up has been healthy, leasing and transaction activity in the commercial space continues to be weak,' the report noted.

'On the basis that a residential property recovery is in the works, we turn more constructive on the Singapore developers as we see the residential sector leading the property sector recovery. We think property investors (Reits) mainly exposed to commercial real estate will see trends deteriorating into 2010 and are likely to underperform when the eventual recovery does take place.'

In addition to upgrading CDL to 'buy', Goldman Sachs has upgraded Wing Tai to 'neutral' from 'sell' and reiterated its 'conviction buy' for CapitaLand for their exposure to the Singapore residential sector. For CapitaLand, it said that maiden profits from The Seafront and Orchard Residences condos expected this year should help shelter the stock from potential writedowns.

Goldman downgraded CapitaCommercial Trust to 'neutral' from 'buy' and Suntec Reit to 'sell' from 'buy'. It kept its 'sell' rating for Keppel Land, which has substantial exposure to the Singapore office market.

Mandarin Gallery At 85 Per Cent Occupancy

Source : The Business Times, May 13, 2009

MANDARIN Gallery, the high-end Orchard Road mall now undergoing a revamp, reported an 85 per cent occupancy rate yesterday - five months ahead of its re-opening in October.

Nearby Orchard Central, which is set to open in June, said last month it was 65 per cent taken up.

And another upcoming mall, Ion Orchard, had leased out more than 80 per cent of its space by March, four months before its July opening.

At a price tag of $200 million, the revamped 190,000 sq ft Mandarin Gallery will feature a 152m frontage along Singapore's prime shopping street and five flagship duplexes swathed in floor-to-ceiling glass windows.

It has already attracted several international fashion brands including Hugo Boss and Mauboussin, which will open flagship stores, as well as new labels like Trioon by upcoming local designer WeiLing Liu.

'The Mandarin Gallery proposition has resonated well with tenants and we are glad to report that we are well on target with our lease projections,' said Patrina Tan, senior vice-president of retail, marketing and leasing for Overseas Union Enterprise (OUE), which owns the mall.

OUE started by defining a core customer base, then sought out specific brands, she said. 'Essentially, our strategy is not to sell space on prime Orchard Road but make our prospective tenants understand how being at Mandarin Gallery will be of relevance to their business.'

However, faced with unfavourable economic conditions, Mandarin Gallery has joined the ranks of Orchard Central and Ion Orchard in using the tried and tested marketing strategy of rent rebates to sweeten the offerings.

'In the first quarter of 2009, when the economy started to feel the impact of the meltdown, we reviewed the terms of tenants on a case-by-case basis and made adjustments, including rent rebates and marketing collaboration assistance, to realign ourselves with their revised projections,' said Ms Tan, who declined to disclose figures.