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Archive for April 29th, 2008

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31 ‘stayers’ back en bloc resister

Posted by luxuryasiahome on April 29, 2008

A GROUP of 31 home-owners — most of them facing en bloc battles in condominium estates islandwide — have showed their support for one of their ilk, who was featured on the cover of Weekend Today.

Yesterday, representatives of the group, who call themselves the “Stayers”, delivered an envelope containing a letter and $520 to Today’s newsroom, in a symbolic show of support for business consultant Ken Lee.

Mr Lee, 52, had earlier got an en bloc application for his condominium, Airview Towers on River Valley Road, voided. But on Thursday, the Court of Appeal overturned the High Court’s decision and Mr Lee — who represented himself — was ordered to pay his opponents’ legal costs.

Today understands this amount, to be decided in court, could be anywhere from $150,000 to $300,000.

In the letter with 31 signatures, the group — residents from estates such as Bayshore Park, Horizon Towers and Mandarin Gardens — expressed their “admiration” for Mr Lee’s fight and said they wanted to “start a fund to help him pay his efforts”.

“We, in our own condos, are fighting against the en blocs affecting all of us and would like Mr Lee to know that we share his sentiments, and we too will oppose the sale of our homes even if we have to fight alone, like him, to do so,” the group wrote.

A member of the group, sales director Augustine Cheah, who lives in Bayshore Park, said the en bloc issue needed to be told from the point of view of the resident.

“The case for en bloc is being presented by developers and agents and they are all profit motivated,” he said.

Members of the group, who come from some 13 estates, had met each other online by word of mouth and share an interest in resisting en bloc attempts.

When shown the letter, Mr Lee said he was “touched by the gesture and appreciate the kind thoughts”, but doesn’t know what to do with the money yet.

He added that he would consult a lawyer on the issue of repaying the legal costs.

Source : Today – 29 Apr 2008

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Asia: some bright spots amid challenges

Posted by luxuryasiahome on April 29, 2008

Asia expected to weather real estate downturn

THE mood was generally subdued at a property conference held by Citi yesterday although a few positive assessments of the market provided some bright spots.

Opening the event, Citi country officer Piyush Gupta said that 2007 was a strong year for property across Asia but the first quarter of this year had been challenging.

Property indices are under-performing the broad market in several regional cities, such as Hong Kong and Singapore, he said.

Amid this broad picture however, it is not all doom and gloom. Banyan Tree executive chairman Ho Kwon Ping pointed out that the US sub-prime crisis and the resulting credit crunch have so far had minimal impact on the high-end hospitality business.

In fact, having just returned from a roadshow in the Middle East to promote the group’s Indochina hospitality fund, Mr Ho said that investors’ reception was positive.

According to him, there has been no perceptible slowdown in the hotel business, though travel within the US has probably come down.

‘Even the sale of branded residences by us this year has increased several-fold over the last year,’ said Mr Ho, as buyers probably see them as a relatively attractive form of alternative investment.

Citi’s real estate research team also reckoned that there are some worthwhile investment real estate plays, despite the market slowdown, in the form of real estate investment trusts (Reits).

An April 25 Citi report on Singapore property says: ‘We believe news flow for developers will remain negative and are hence putting a cap on developers’ performance. Suntec, Ascendas, Parkway Life and Capitamall Trust are our preferred buys among Reits.’

Ending yesterday’s media session on a hopeful note, Citi’s Asia-Pacific director of research Adrian Faure said that although Asia will not be immune from the sub-prime crisis, it is in good shape to weather the real estate downturn, underpinned by low loan-deposit ratios and strong liquidity.

Source : Business Times – 29 Apr 2008

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Renovation aggravation

Posted by luxuryasiahome on April 29, 2008

Radac-accredited company refused to use the Radac Standard Contract

About three weeks ago, I was sourcing for home renovation contractors. After performing some due diligence and referring to the Singapore National Registry of Accredited Renovators 2007 – a book given to purchasers by the Housing and Development Board (HDB) on the day of the final sales transaction – I contacted a company that was a member of the Renovation and Decoration Advisory Centre (Radac).

I specifically stipulated my requirement that a Radac Standard Contract be used. Initially, the sales designer had confidently acknowledged this.

However, after three weeks of negotiation, the sales designer came up with the company’s own agreement with their own terms of payment, claiming that was the Radac Standard Contract.

I advised him to purchase a copy of the contract from Radac to use and waited for a week before he finally replied.

He stated that his boss would not sign the Radac Standard Contract as his firm does not use it. I called off the deal, after having put so much faith on Radac and its accredited member scheme, as well as having expended so much precious time.

Under the eight “commandments” of renovation published in the registry, the fifth one states that: “Consumers should ensure that a proper contract is drawn out before renovation. They are advised to use the Radac Standard Contract for Radac Accredited Renovators.”

According to the Radac website, the contract contains legal terms and obligations covering negotiable payment terms and warranties, among other clauses, to protect both parties.

The contract drafted by the firm was not equitable.

I urge Radac to constantly review their members’ activities and ensure the members abide to the standards as stated in the Radac constitution and live up to the corporate mission.

I would also suggest that the Ministry of National Development or the HDB look into the feasibility of introducing a Standard Renovator Contract and publish quarterly renovation cost data and guidelines to help educate and protect consumers from errant contractors.

Raymond Ng

Source : Today – 29 Apr 2008

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Property market looks weak: Citi

Posted by luxuryasiahome on April 29, 2008

THE broader economic backdrop for the Singapore property market generally looks weak in the next 18 months, says Mr Don Hanna, Citi’s global head of emerging markets economic and market analysis.

‘The level of economic activity that we foresee in general continues to weaken this year and next,’ he told reporters on the sidelines of Citi’s closed-door Asia Pacific property conference at the Ritz-Carlton Millenia hotel yesterday.

One of the implications of the United States subprime crisis is that central banks in Singapore and many other nations are more concerned about the way real estate is financed, he said.

‘In an economy like Singapore, which is probably the most open in the world, where you are going to see weaker global demand and lower trade flows, and as a result, lower income,’ he added. And that would affect general demand for property, he said.

But Asia is in much better shape to ride out the downturn, said Citi Investment Research’s director of research for the Asia-Pacific, Mr Adrian Faure.

He told reporters that a speaker from US home-loan lending giant Fannie Mae had said that there has never been a time when the US saw a fall in property prices all across the nation.

‘But all of us in this part of the world are used to extreme and sharp up-and- down cycles, where these markets tend to be very efficient. They correct rapidly,’ said Mr Faure.

In good markets, investors tend to be less choosy but as credit conditions get tougher, companies with high quality credit will have it easier, he said.

‘Inevitably, this downturn is going to be a great opportunity for the big (firms) to consolidate, and to get better access to capital and projects.’

Source : Straits Times – 29 Apr 2008

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Hong Leong Asia to sell materials business

Posted by luxuryasiahome on April 29, 2008

HONG Leong Asia (HLA) is injecting its building materials and cement business worth $323.5 million into a Malaysian-listed company.

As a result of the deal, Malaysian-based Tasek will become a subsidiary of HLA, which will have a 68.3 per cent stake in the firm. The Malaysian firm will pay for the assets by issuing 212.2 million new shares, representing 53.5 per cent of its enlarged share capital, to mainboard-listed HLA.

Tasek is involved in manufacturing and selling cement as well as other related products. This deal will ‘consolidate the group’s building materials business into Tasek’, said HLA.

HLA is a group with businesses in home appliances, diesel engines, industrial packaging and building materials. It will sell its stakes in several companies, including Singapore Cement Manufacturing and Angkasa Hong Leong. The transaction will also ‘eliminate any potential conflicts of interests between HLA and Tasek’, HLA added.

Tasek has proposed a special net interim dividend of 54 sen per share, provided the deal is completed. It has also proposed to raise its authorised share capital from RM300 million (S$130 million) to RM1 billion.

The issue price for the shares allotted to HLA, which excludes the special dividend, was RM3.54.

The deal is subject to the approval of the Malaysian regulators and authorities.

Source : Straits Times – 29 Apr 2008

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PropNex takes home buyers to court over fee dispute

Posted by luxuryasiahome on April 29, 2008

A COUPLE who bought a home and refused to pay the seller’s agent the 1 per cent commission are being taken to court by a property company.

PropNex associate director Ricky Low Yong Sern is seeking about $4,000 in commission or a service fee in a case that is likely to turn the spotlight on the issue of whether home buyers should pay a fee to sellers’ agents.

He was the exclusive agent handling the sale of a terrace house in Whampoa built over 30 years ago and classified as a Housing Board flat.

Marketing specialist Loh Yi Min, 29, and his wife, polytechnic lecturer Ariel Wee, 33, bought it for $400,000 in April last year. They had acted on their own without engaging an agent.

In documents submitted to court, Mr Low claimed that he had a right to collect a commission as he had exclusive rights to market the property. He also claimed that he had provided services to the buyers.

However, the couple refused to sign the commission agreement when they inked the sale last year. They claim they had made no deal to pay him a fee in the first place.

Both sides will attempt to reach an agreement when they attend a court dispute resolution session next month.

This is the first lawsuit of its kind started by eight-year-old PropNex.

The issue of commissions payable by independent buyers, or buyers who deal without agents, has been hotly debated in recent years.

While there is no law fixing the fees payable, property sellers typically pay their agents a 2 per cent fee, while buyers pay their agents a 1 per cent fee.

Many agents marketing HDB flats also charge independent buyers a 1 per cent fee, but this is not practised in private property deals. Property veterans said this disparity was due to the lower prices of HDB flats, which amount to a lower commission for agents.

Some independent buyers have complained that sellers’ agents inform them that they have to pay a commission just before the purchase documents are signed, leaving them with little time to find out about their rights.

Once the buyers sign the commission agreements, they are bound to pay the fee.

However, agents have countered that independent buyers often leave the paperwork to the sellers’ agents but refuse to pay a service fee.

Major real estate agencies contacted by The Straits Times have varied responses to such situations, although all maintain that independent buyers of HDB flats should pay a fee.

HSR property group chief executive Patrick Liew said his company takes three to four independent buyers to the Small Claims Tribunal each year for similar claims and has won payment each time.

ERA Singapore’s assistant vice-president Eugene Lim said his company does not take independent buyers to court when no commission agreements are signed.

Meanwhile, the Consumers Association of Singapore has, in recent years, questioned the practice of agents taking commissions from both buyer and seller in the same transaction, citing a possible conflict of interest.

Source : Straits Times – 29 Apr 2008

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LMIR Trust posts distributable income of $23.3m

Posted by luxuryasiahome on April 29, 2008

LIPPO-MAPLETREE Indonesia Retail (LMIR) Trust has reported a distributable income of $23.3 million for its first interim financial period from Nov 19, 2007 to Mar 31 this year. This was 3 per cent higher than the forecast income available for distribution set out in its prospectus. Distribution per unit (‘DPU’) for the same period was 2.2 cents, corresponding to an annualised DPU of 6.04 cents.

During the period, its gross revenue of $29.3 million was $1.6 million lower than forecast, due to lower than expected gross rentals. Net property income was 4 per cent lower than expected at $27.6 million.

The fund recently completed its acquisition of Sun Plaza in Medan, Sumatra, at a price of $147 million. The purchase increased its total net lettable area in the trust’s portfolio by about 20 per cent to 376,035 square metres.

The acquisition was 20 per cent funded through internal cash resources and 80 per cent through debt.

Said chief executive officer Viven G Sitiabudi: ‘Growth is expected to be sustainable in 2008 and, despite a recent rise in inflation, we expect the retail market in Indonesia to remain relatively strong. We intend to press ahead with our acquisition growth strategy.’

Looking ahead, the fund sees a positive outlook for Indonesia’s retail sector, adding that it is confident of distributing the projected payout of 5.85 cents for the year 2008.

Source : Business Times – 29 Apr 2008

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LMIR Trust posts distributable income of $23.3m

Posted by luxuryasiahome on April 29, 2008

LIPPO-MAPLETREE Indonesia Retail (LMIR) Trust has reported a distributable income of $23.3 million for its first interim financial period from Nov 19, 2007 to Mar 31 this year. This was 3 per cent higher than the forecast income available for distribution set out in its prospectus. Distribution per unit (‘DPU’) for the same period was 2.2 cents, corresponding to an annualised DPU of 6.04 cents.

During the period, its gross revenue of $29.3 million was $1.6 million lower than forecast, due to lower than expected gross rentals. Net property income was 4 per cent lower than expected at $27.6 million.

The fund recently completed its acquisition of Sun Plaza in Medan, Sumatra, at a price of $147 million. The purchase increased its total net lettable area in the trust’s portfolio by about 20 per cent to 376,035 square metres.

The acquisition was 20 per cent funded through internal cash resources and 80 per cent through debt.

Said chief executive officer Viven G Sitiabudi: ‘Growth is expected to be sustainable in 2008 and, despite a recent rise in inflation, we expect the retail market in Indonesia to remain relatively strong. We intend to press ahead with our acquisition growth strategy.’

Looking ahead, the fund sees a positive outlook for Indonesia’s retail sector, adding that it is confident of distributing the projected payout of 5.85 cents for the year 2008.

Source : Business Times – 29 Apr 2008

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Allgreen Q1 profit plunges 65%

Posted by luxuryasiahome on April 29, 2008

ALLGREEN Properties yesterday posted net earnings of $17.5 million for the first quarter ended March 31 – a 65 per cent slump from $49.6 million in the same period last year.

Earnings per share plunged 66 per cent to 1.10 cents, from 3.28 cents in Q1 2007. And in similar fashion, revenue sank 52 per cent to $87.9 million, mainly due to a drop in development income.

Citing the US sub-prime crisis as a factor, Allgreen said the property market was subdued, which led to lower number of transactions in the residential sector.

‘In view of the slowdown, the group held back launching residential projects,’ it said. But landed properties launched at Pavilion Park, Bukit Batok saw good take-up.

The saving grace for Q1 was investment property revenue, which improved from Q1 2007 due to higher rents from offices, serviced apartments and retail space. Revenue from Traders Hotel also rose as a result of higher room rates.

But costs and expenses were up sharply. Finance cost increased 51 per cent from a year earlier due to borrowings for investments in China and Vietnam and land purchases in Singapore.

Other operating expenses soared 79 per cent, mainly due to higher depreciation and an ‘unrealised exchange loss arising from US-dollar transactions in respect of investment in Vietnam’.

Despite the lacklustre first quarter results, Allgreen said it expects to be profitable in 2008, as it forecast when it issued its 2007 results.

According to Allgreen yesterday: ‘The property sector saw a decline in transactions in Q1 2008 and this is likely to extend into Q2. However, we expect a pick-up in activity in the second half of 2008.’

Allgreen’s stock closed three cents higher at $1.33 yesterday, with with more than 2.2 million shares changing hands.

Analysts are divided on the company’s prospects. In the past month, CIMB-GK has anticipated it will ‘underperform’, while DBS Vickers and UBS have called a ‘buy’ on the shares.

Source : Business Times – 29 Apr 2008

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IHG to launch 30 hotels over 3 years

Posted by luxuryasiahome on April 29, 2008

INTERCONTINENTAL Hotels & Resorts (IHG) is launching 30 new hotels – predominantly in China – over the next three years in the Asia-Pacific region, banking on strong domestic markets as well as inter-Asia travel to bolster revenue.

Five hotels and resorts are slated to open this year, of which four will be in the Chinese cities of Beijing, Qingdao, Huizhou and Dalian. The 16-storey, 337- room InterContinental Beijing Beichen, for one, is located close to the National Olympics Stadium and seeks to open its doors in June, just in time for the Olympic Games.

IHG expects to increase its portfolio of hotels in China from the current nine to 24 by 2010.

‘In Asia, there’s huge opportunity, given such strong domestic markets and strong inter-Asia markets,’ said Gary Rosen, senior vice-president of sales and marketing for IHG Asia Pacific.

He added that the Asia-Pacific operations were generally protected from the effects of the economic turmoil overseas as they were not reliant on travellers outside Asia for significant business.

Other Asia-Pacific markets that IHG is expanding into include Ho Chi Minh City, New Delhi and Melbourne, adding to the 35 hotels currently owned across the Asia-Pacific region.

For its Singapore branch, demand stems largely from South-east Asia. InterContinental Singapore reported an average occupancy rate in the high 80s.

With regard to rising costs, Mr Rosen said IHG would ‘act as a unified system’ and leverage on its various hotels to keep costs competitive when it came to managing its supply chain and logistics.

Finding quality staff to fulfil its expansion needs was also a challenge. ‘We want to make sure we continually fill our network with great people,’ added Mr Rosen.

IHG chalked up a total gross revenue of £pounds;9 billion (S$24.5 billion) for the FY2007 ended Dec 31, up 14 per cent from the previous fiscal year.

Net profit fell 43 per cent to £231 million from £405 million due to reduced property sales.

Other hotel brands owned by the group include Crowne Plaza & Resorts and Holiday Inn Hotels & Resorts.

Source : Business Times – 29 Apr 2008

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