Source : The Straits Times, July 29, 2008
Is the US in recession? Tough call as GDP grows amid financial turmoil
NEW YORK - COULD this be the first US recession without a decline in economic output?
While house prices in America are tumbling, job losses growing and financial markets struggling with their worst shock in decades, the economy is expanding.
The Wall Street Journal in a report yesterday said economists are weighing the possibility of a United States in recession while enjoying economic growth.
The US economy is likely to show a growth rate of more than 2 per cent when the government gives its first estimate of the second-quarter performance on Thursday.
The country's gross domestic product (GDP) - its total output of goods and services - expanded at a 1 per cent pace in the first three months of this year, thanks to a rise in exports because of the falling US dollar.
This means a recession under the most common definition - two straight quarters of declining GDP - did not occur in the first half of this year.
But the non-profit National Bureau of Economic Research (NBER), which decides whether the US has slipped into a recession, uses a different gauge. It looks for 'a significant decline in economic activity spread across the economy, lasting more than a few months'.
Those gauges include GDP, incomes, employment, industrial output and retail and manufacturing sales, says the NBER's seven-member Business Cycle Dating Committee, which is composed mostly of economists from academic institutions.
The panel can declare a recession, even if GDP remains positive, based on other measures, said the Journal.
Most of those gauges have been especially weak in recent months and some are in outright decline, it said.
The job market, for instance, has been contracting all year and the government is expected to report on Friday that payrolls dropped this month, the seventh consecutive monthly decline.
Harvard University's Professor Martin Feldstein, president of the NBER until this month, told the Journal the US has been 'sliding into a recession' since January, when many monthly statistics peaked.
But a GDP decline is not necessary 'if there is enough other evidence that the economy is contracting', he said.
Whatever the case, the NBER committee will not be making the call any time soon. The 2001 recession went from March to November of that year, but the committee did not declare the start of the slump until November 2001 and did not call the end until 2003.
'We take our time,' Stanford University economist Robert Hall, chairman of the committee, told the Journal. 'We like to get things right.'
Tuesday, July 29, 2008
S'pore Developer Heeton Sees Overseas Projects Rise To 30%
Source : The Straits Times, July 29, 2008
HONG KONG - SMALL Singapore developer Heeton Holdings Ltd expects to do more property projects with JPMorgan, an executive with the company said on Tuesday.
Mr Danny Low, chief operating officer, said Heeton would push into overseas markets such as Thailand, Vietnam and China. He expects overseas projects to account for about a third of total revenue in 3 to 5 years times, compared to about 10 percent now.
The company's revenue was S$49.25 million in its 2007 financial year, up 6.2 per cent from the previous year.
Mr Low said a surge in Singapore property prices had allowed the company to record a growth margin of 100 per cent on its Lumos residential development in Singapore, where it had sold 19 of out its 53 units.
The company had just signed a deal with JPMorgan to jointly build a 28 apartment buildings in Singapore, and Mr Low was hopeful of more deals with the US investment bank.
'We hope to do more with them and on a bigger scale as well,' Mr Low said. 'JPMorgan's criteria is to work with a developer with a proven track record and they will start with a small project and then come in with more.'
The Singapore developer expects its revenue growth to grow 30 to 40 per cent annually this year and next year, thanks to soaring property prices in its home market.
'It will probabaly be 30 to 40 per cent,' Mr Low said. -- REUTERS
HONG KONG - SMALL Singapore developer Heeton Holdings Ltd expects to do more property projects with JPMorgan, an executive with the company said on Tuesday.
Mr Danny Low, chief operating officer, said Heeton would push into overseas markets such as Thailand, Vietnam and China. He expects overseas projects to account for about a third of total revenue in 3 to 5 years times, compared to about 10 percent now.
The company's revenue was S$49.25 million in its 2007 financial year, up 6.2 per cent from the previous year.
Mr Low said a surge in Singapore property prices had allowed the company to record a growth margin of 100 per cent on its Lumos residential development in Singapore, where it had sold 19 of out its 53 units.
The company had just signed a deal with JPMorgan to jointly build a 28 apartment buildings in Singapore, and Mr Low was hopeful of more deals with the US investment bank.
'We hope to do more with them and on a bigger scale as well,' Mr Low said. 'JPMorgan's criteria is to work with a developer with a proven track record and they will start with a small project and then come in with more.'
The Singapore developer expects its revenue growth to grow 30 to 40 per cent annually this year and next year, thanks to soaring property prices in its home market.
'It will probabaly be 30 to 40 per cent,' Mr Low said. -- REUTERS
Builder Has Designs On Posh Condo Market
Source : The Straits Times, July 29, 2008
Heeton recruits style-setting design firm yoo for Grange Road apartments
A COMPANY once famed for its wet markets is now rubbing shoulders with one of the world's trendiest firms in a bid to build Singapore's most chic condos.
Heeton Holdings has roped in yoo - a design-focused property firm co-founded by French style-setter Philippe Starck and British developer John Hitchcox - for its 74 Grange Road project.
STARCK SIMPLICITY: A showroom designed by yoo, the 'Prada of the property industry', inspired by its co-founder Philippe Starck. The firm was behind Hong Kong's JIA hotel and has other residential projects in Thailand and Taiwan. -- PHOTO: YOO
It has also recruited investment bank JP Morgan, which will take a 45 per cent stake in the 28-unit condo.
But yoo does not come cheap. The 'Prada of the property industry' designed Hong Kong's JIA hotel and has hooked up with designers like Jade Jagger, daughter of Rolling Stone Mick.
Heeton is paying a flat fee of around $2 million, well over double the standard design fee, for the interior design of the units and the show suite, plus an undisclosed incentive bonus if yoo sells the units.
In return, yoo is offering a cutting-edge concept intended to draw buyers worldwide. 'This will undoubtedly set a new standard here. Our focus is to help developers achieve higher prices,' said yoo's London-based chief executive Chris Boulton. 'We do add value and ensure they sell in tough markets.'
Mr Boulton said that the firm's projects had achieved a premium of 10 to 30 per cent above market value by capitalising on innovative design and the yoo brand to drive more traffic towards the project.
'It's also about making more noise about the project' to raise its profile, he added.
Heeton's chief operating officer Danny Low said it recruited yoo to give the freehold condo an edge over others.
'The Singapore market is very competitive and buyers have become increasingly sophisticated. That is why we have to present a highly differentiated product for our targeted buyers, who are high-net-worth individuals and couples.'
These are the buyers who like spacious two-bedroom units of 1,600 to 1,800 sq ft or the two penthouses of 3,600 sq ft and 4,000 sq ft.
Heeton will meet yoo next week to discuss the design for the project.
This is yoo's first residential design job here and its services will be exclusive to Heeton until the middle of next year. It also has residential projects in Thailand and Taiwan.
The project will be launched late this year or early next year. Construction should start by the first quarter of next year.
Heeton declined to give a break-even price as it has yet to appoint a contractor. It bought Grange Court for $72.8 million or $1,706 psf per plot ratio, excluding development charge, in a collective sale last August.
Knight Frank, the sole marketing agent, helped introduce yoo to Heeton. Yoo's managing director for Asia, Mr Andrew Pang, used to work for Knight Frank.
Heeton recruits style-setting design firm yoo for Grange Road apartments
A COMPANY once famed for its wet markets is now rubbing shoulders with one of the world's trendiest firms in a bid to build Singapore's most chic condos.
Heeton Holdings has roped in yoo - a design-focused property firm co-founded by French style-setter Philippe Starck and British developer John Hitchcox - for its 74 Grange Road project.
STARCK SIMPLICITY: A showroom designed by yoo, the 'Prada of the property industry', inspired by its co-founder Philippe Starck. The firm was behind Hong Kong's JIA hotel and has other residential projects in Thailand and Taiwan. -- PHOTO: YOOIt has also recruited investment bank JP Morgan, which will take a 45 per cent stake in the 28-unit condo.
But yoo does not come cheap. The 'Prada of the property industry' designed Hong Kong's JIA hotel and has hooked up with designers like Jade Jagger, daughter of Rolling Stone Mick.
Heeton is paying a flat fee of around $2 million, well over double the standard design fee, for the interior design of the units and the show suite, plus an undisclosed incentive bonus if yoo sells the units.
In return, yoo is offering a cutting-edge concept intended to draw buyers worldwide. 'This will undoubtedly set a new standard here. Our focus is to help developers achieve higher prices,' said yoo's London-based chief executive Chris Boulton. 'We do add value and ensure they sell in tough markets.'
Mr Boulton said that the firm's projects had achieved a premium of 10 to 30 per cent above market value by capitalising on innovative design and the yoo brand to drive more traffic towards the project.
'It's also about making more noise about the project' to raise its profile, he added.
Heeton's chief operating officer Danny Low said it recruited yoo to give the freehold condo an edge over others.
'The Singapore market is very competitive and buyers have become increasingly sophisticated. That is why we have to present a highly differentiated product for our targeted buyers, who are high-net-worth individuals and couples.'
These are the buyers who like spacious two-bedroom units of 1,600 to 1,800 sq ft or the two penthouses of 3,600 sq ft and 4,000 sq ft.
Heeton will meet yoo next week to discuss the design for the project.
This is yoo's first residential design job here and its services will be exclusive to Heeton until the middle of next year. It also has residential projects in Thailand and Taiwan.
The project will be launched late this year or early next year. Construction should start by the first quarter of next year.
Heeton declined to give a break-even price as it has yet to appoint a contractor. It bought Grange Court for $72.8 million or $1,706 psf per plot ratio, excluding development charge, in a collective sale last August.
Knight Frank, the sole marketing agent, helped introduce yoo to Heeton. Yoo's managing director for Asia, Mr Andrew Pang, used to work for Knight Frank.
Developer Collaborates With Starck For Luxury Residential Project
Source : Channel NewsAsia, 28 July 2008
Luxury-end private residences in Singapore are facing price pressures, and one developer hopes to get around that by having a famous brand-name designer work on its project.
Philippe Starck whose design works include the Eurostar
Heeton Realty – a joint venture between Singapore developer Heeton Holdings and JP Morgan – is counting on the collaboration with a company co-founded by well-known French designer, Philippe Starck, to draw in the buyers.
It is hoping that this marketing strategy will help sales at its upcoming development that is located just outside the prime Orchard Road area at Grange Road.
Danny Low, COO & executive director of Heeton Holdings, said: "For people who want to buy a brand, it's like buying a Mercedes Benz. If you want to buy a brand, you don't care what the market is. You want to be the first to own it and you must remember that Philippe Starck is a worldwide-acclaimed name."
The 28-unit development will have its interiors, common areas and landscaping exclusively designed by a company co-founded by Philippe Starck.
The collaboration with the French designer is costing Heeton Realty more than US$2 million. But developer believes it will be able to sell its units at a 15 to 30 per cent price premium over other properties in the area, despite the current slow sales in the high-end residential sector in Singapore.
Heeton Realty said it has seen strong interest from at least two serious buyers at this stage.
The joint venture is also planning for more developments here in the year ahead.
Bryan Southergill, executive director and head of Asia Real Estate, Global Special Opportunities, JP Morgan, said: "There's been some consolidation recently. We've got a global credit crisis unfolding right now.
"But in the long term, with the IR (integrated resorts), gaming, Marina Bay, F1, and everything else Singapore has going for it, there will be strong and stable demand for projects."
Construction on the luxury residential project will begin late this year or early 2009. - CNA/so
Luxury-end private residences in Singapore are facing price pressures, and one developer hopes to get around that by having a famous brand-name designer work on its project.
Philippe Starck whose design works include the EurostarHeeton Realty – a joint venture between Singapore developer Heeton Holdings and JP Morgan – is counting on the collaboration with a company co-founded by well-known French designer, Philippe Starck, to draw in the buyers.
It is hoping that this marketing strategy will help sales at its upcoming development that is located just outside the prime Orchard Road area at Grange Road.
Danny Low, COO & executive director of Heeton Holdings, said: "For people who want to buy a brand, it's like buying a Mercedes Benz. If you want to buy a brand, you don't care what the market is. You want to be the first to own it and you must remember that Philippe Starck is a worldwide-acclaimed name."
The 28-unit development will have its interiors, common areas and landscaping exclusively designed by a company co-founded by Philippe Starck.
The collaboration with the French designer is costing Heeton Realty more than US$2 million. But developer believes it will be able to sell its units at a 15 to 30 per cent price premium over other properties in the area, despite the current slow sales in the high-end residential sector in Singapore.
Heeton Realty said it has seen strong interest from at least two serious buyers at this stage.
The joint venture is also planning for more developments here in the year ahead.
Bryan Southergill, executive director and head of Asia Real Estate, Global Special Opportunities, JP Morgan, said: "There's been some consolidation recently. We've got a global credit crisis unfolding right now.
"But in the long term, with the IR (integrated resorts), gaming, Marina Bay, F1, and everything else Singapore has going for it, there will be strong and stable demand for projects."
Construction on the luxury residential project will begin late this year or early 2009. - CNA/so
K-Reit's Distributable Income Up 173% To $14.2m In Q2
Source : The Business Times, July 29, 2008
K-REIT Asia said yesterday its second-quarter distributable income rose 173 per cent to $14.2 million, from $5.2 million a year ago.
Major boost: K-Reit's better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007
The better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007. Distribution per unit rose 1.9 per cent to 2.18 cents, from 2.14 cents in Q2 2007.
Net property income for the three months ended June 30, 2008 rose 26 per cent to $9.2 million, from $7.3 million the year before.
K-Reit also saw better rental income, with higher rents achieved for new and renewed leases, as well as improved occupancy. The average gross rental rate for investment property held directly by K-Reit rose to $5.66 per sq ft in June 2008, from $4.28 psf a year earlier.
For the first half of 2008, distributable income rose 169.8 per cent to $25.6 million, from $9.5 million in 2007. DPU for the first six months of the year rose 0.8 per cent to 3.94 cents, from 3.91 cents in 2007.
The trust also reduced its leverage to 27.7 per cent at June 30, 2008, from 53.9 per cent at Dec 31, 2007. Based on a 60 per cent aggregate leverage limit, this provides K-Reit with an additional debt headroom of $680 million to fund acquisitions and for working capital. Based on K-Reit's existing portfolio, there will be no debt re-financing requirement until 2011, the trust said.
For the longer term, the trust's manager is establishing a medium-term note programme to allow the Reit to swiftly tap the debt capital market.
K-Reit is upbeat about its prospects, even though the global economy is slowing. Some 35.4 per cent of its tenants are from the banking, insurance and financial services sectors. Most of these tenants have lease terms of six years or more, and 'provide very stable income going forward', said Tan Swee Yiow, chief executive of the trust's manager.
Mr Tan pointed out that despite the weaker external environment, Singapore's office rents rose slightly in Q2 2008, reflecting the tight supply of space.
'Office rents will be supported by continued demand for prime office space as Singapore transforms itself into a global city and with spin-off multiplier effects from the two integrated resorts currently under construction,' K-Reit said in a filing to the Singapore Exchange.
K-Reit's stock closed unchanged at $1.40 yesterday. The stock has shed 29.6 per cent since the start of the year.
K-REIT Asia said yesterday its second-quarter distributable income rose 173 per cent to $14.2 million, from $5.2 million a year ago.
Major boost: K-Reit's better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007The better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007. Distribution per unit rose 1.9 per cent to 2.18 cents, from 2.14 cents in Q2 2007.
Net property income for the three months ended June 30, 2008 rose 26 per cent to $9.2 million, from $7.3 million the year before.
K-Reit also saw better rental income, with higher rents achieved for new and renewed leases, as well as improved occupancy. The average gross rental rate for investment property held directly by K-Reit rose to $5.66 per sq ft in June 2008, from $4.28 psf a year earlier.
For the first half of 2008, distributable income rose 169.8 per cent to $25.6 million, from $9.5 million in 2007. DPU for the first six months of the year rose 0.8 per cent to 3.94 cents, from 3.91 cents in 2007.
The trust also reduced its leverage to 27.7 per cent at June 30, 2008, from 53.9 per cent at Dec 31, 2007. Based on a 60 per cent aggregate leverage limit, this provides K-Reit with an additional debt headroom of $680 million to fund acquisitions and for working capital. Based on K-Reit's existing portfolio, there will be no debt re-financing requirement until 2011, the trust said.
For the longer term, the trust's manager is establishing a medium-term note programme to allow the Reit to swiftly tap the debt capital market.
K-Reit is upbeat about its prospects, even though the global economy is slowing. Some 35.4 per cent of its tenants are from the banking, insurance and financial services sectors. Most of these tenants have lease terms of six years or more, and 'provide very stable income going forward', said Tan Swee Yiow, chief executive of the trust's manager.
Mr Tan pointed out that despite the weaker external environment, Singapore's office rents rose slightly in Q2 2008, reflecting the tight supply of space.
'Office rents will be supported by continued demand for prime office space as Singapore transforms itself into a global city and with spin-off multiplier effects from the two integrated resorts currently under construction,' K-Reit said in a filing to the Singapore Exchange.
K-Reit's stock closed unchanged at $1.40 yesterday. The stock has shed 29.6 per cent since the start of the year.
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