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Archive for July 23rd, 2008

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FCT’s Q3 distributable income up 19%

Posted by luxuryasiahome on July 23, 2008

Frasers Centrepoint Asset Management, the manager of Frasers Centrepoint Trust (FCT), on Wednesday reported the distributable income for third quarter 2008 ended June 30, 2008 rose 19 per cent from a year ago to $12.2 million (US$9.02 million).

This translated to a distribution per unit of 1.88 Singapore cents versus 1.67 cents a year ago.

Third quarter gross revenue grew 10 per cent to $20.8 million while net property income increased 12 per cent to $14.1 million.

The strong growth in gross revenue was driven by strong rental renewals at Causeway Point, improved portfolio occupancy and Anchorpoint’s strong performance post its enhancement.

Source : Business Times – 23 Jul 2008

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ART reports 10% climb in Q2 income

Posted by luxuryasiahome on July 23, 2008

Ascott Residence Trust (ART) on Wednesday said that its second quarter distributable income climbed 9.6 per cent to $13.3 million (US$9.83 million), from $12.1 million a year ago. Dividend per unit came to 2.19 Singapore cents, up 9.0 per cent from 2.01 cents for the same period last year.
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ART said that its better performance was due to both organic growth across its portfolio, particularly in Singapore and Vietnam, and contributions from newly acquired properties over the past year. On the back of this, revenue for the second quarter rose 13.1 per cent to $46.0 million.

The trust added that the global financial turmoil triggered by the sub-prime crisis and the reduced credit supply have had some impact on the Asian hospitality industry in the first half of 2008.

‘Should these factors persist, there will be further impact on business travel patterns to the markets we operate in, although the group’s geographical diversity and extended stay business model allow it to mitigate these factors,’ the trust said.

ART will look to emerging markets such as China, Vietnam and India for acquisitions in the future, said Chong Kee Hiong, chief executive of the trust’s management team.

Source : Business Times – 23 Jul 2008

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CCT open to options on Market Street carpark

Posted by luxuryasiahome on July 23, 2008

CapitaCommercial Trust (CCT) has said that it is ‘open to all options’ when it comes to plans for Market Street Car Park (MSCP), and these include selling the site.

CCT had obtained outline planning permission from the Urban Redevelopment Authority to redevelop MSCP into an office tower for $1 billion to $1.5 billion.

In April, the trust said that it was evaluating the project’s financial viability and funding structure, and would not decide on redevelopment anytime before mid-2009. It cited the project’s significant size, rising construction costs, volatility in financial markets and the uncertain development premium as reasons for the deferment.

Responding to an analyst’s query on whether CCT would consider selling MSCP instead, CapitaCommercial Trust Management Limited’s (CTML) CEO Lynette Leong said that ‘We are open to all options.’ She pointed out that the development premium required remained uncertain, and construction costs have been increasing.

‘If it makes sense to sell it, why not? We will not rule out that option,’ said Ms Leong. — Emilyn Yap, BT Newsroom

Source : Business Times – 23 Jul 2008

Posted in General, Office / Retail Space, REITS | Tagged: , , , , , | 1 Comment »

CCT achieves 22.7% H1 DPU growth

Posted by luxuryasiahome on July 23, 2008

CapitaCommercial Trust Management Limited, the manager of CapitaCommercial Trust (CCT), on Wednesday reported that CCT has achieved a distributable income of S$71.9 million for the six months ended June 30, 2008.

This translates to a distribution per unit (DPU) of 5.19 cents, outperforming H1 2007 DPU of 4.23 cents by 22.7 per cent. The results were underpinned by Singapore’s steady office demand, and exceeds the manager’s forecast by 4.2 per cent.

The annualised H1 2008 DPU of 10.44 cents would provide a distribution yield of 5.5 per cent based on the closing price of S$1.91 per unit on July 22, 2008.

CCT’s distributable income for the H1 2008 of S$71.9 million is S$2.9 million or 4.3 per cent higher than the forecast distributable income for the same period.

The books closure date to determine the entitlement to the H1 2008 DPU of 5.19 cents is Aug 1, 2008 and unitholders of CCT can expect to receive their distribution payment by Aug 28, 2008.

‘Given Singapore’s attractiveness as a global city and tight office supply, we are confident of exceeding our forecast distribution per unit of 10.61 cents for the financial year ending 2008.’ Richard Hale, Chairman of the manager said. — BT Newsroom

Source : Business Times – 23 Jul 2008

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CapitaComm Trust announces DPU of 5.19 cents, up 23% on year

Posted by luxuryasiahome on July 23, 2008

CapitaCommercial Trust (CCT) will distribute 5.19 Singapore cents per unit for the first half of this year.

This is about 23% higher than the same period last year. It also exceeds the trust manager’s forecast by 4.2 per cent.

The annualised distribution per unit (DPU) of 10.44 cents would provide a distribution yield of 5.5 per cent based on CCT’s closing price on Tuesday.

CCT, Singapore’s largest commercial trust by asset size, recorded a distributable income of S$71.9 million in the first half. This was largely driven by strong organic growth, with average office rental rates jumping 193 per cent, while retail space rentals grew 52 per cent in the first half, compared to the last contracted rental rate.

The current tight supply in Singapore’s office market helped boost revenues for CapitaCommercial Trust, and it expects this to continue beyond 2010.

“One of the key reasons that’s driving growth is the fact that our underlying leases had contract rents that were significantly below market. And as a result of the renewals, reviewing them to market, it has caused a very substantial growth this half year,” said Lynette Leong, CEO of CapitaCommercial Trust Management.

Going forward, the trust said it is confident of exceeding its forecast distribution of 10.61 cents per unit this year. It is citing continued strong demand for Grade A office space in Singapore.

The trust has S$7 billion worth of assets in its portfolio. – CNA /ls

Source : Channel NewsAsia – 23 Jul 2008

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Ascott Residence Trust to have emerging markets form 70% of its portfolio

Posted by luxuryasiahome on July 23, 2008

Ascott Residence Trust is setting itself a mid-term target of having emerging markets form 70 per cent of its portfolio.

The trust’s current holdings of S$1.5 billion are split 50-50 between what it terms stable economies like Japan, and emerging ones like Vietnam.

It made the comment when announcing its first half earnings on Wednesday.

Emerging markets are proving to be a lucrative proposition for Ascott Residence Trust, especially in an environment of high inflation and economic uncertainty.

Chong Kee Hiong, CEO, Ascott Residence Trust, said: “The emerging markets we focus on would be like China, Vietnam and India. These are the markets with potential. Even though they may be facing different issues, in the medium term, they will be good.”

The plan is to grow the overall pie, with emerging markets portfolio accounting for about 70 per cent of the total portfolio. Ascott Residence said it will do this through acquisitions and organic growth.

It said Singapore remains a strong market, comprising 27 per cent of its total portfolio. The REIT also has room to borrow to fund its ventures into new and growing markets.

Mr Chong continued: “Our gearing is 34.5 per cent which is quite low – lower than the property fund guidelines allowable of 60 per cent. But our target is to maintain it between 40 and 45 per cent, from 34.5 to 45 per cent – we are talking about S$300 million.”

For its fiscal first half, Ascott is planning to distribute 4.52 Singapore cents per unit, up 26 per cent on year.

The trust reported a total distributable income of S$27.5 million, which is 36 per cent higher than the year-ago period.

It believes its extended stay business model and geographical diversity will continue to provide income stability to the portfolio. – CNA/vm

Source : Channel NewsAsia – 23 Jul 2008

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Thousands throng showflats at Park Central@AMK

Posted by luxuryasiahome on July 23, 2008

Some 1,200 home hunters thronged showflats at Park Central@AMK on the first day of its launch on Wednesday.

Of these, 130 have already applied for the flats, which will be ready in 2011.

The project is Singapore’s third condominium-style public housing, and a queue to view the showflats started forming at 5am.

All 578 units at Park Central@AMK come with fittings like built-in wardrobes, air-conditioners and parquet flooring.

The four 30-storey blocks will house four- and four-room units priced between S$433,000 and S$689,000 or about S$500 per square foot.

Real estate agents said the prices are comparable to those for resale public housing in the neighbourhood.

These are about S$400,000 for a four-room flat and up to S$550,000 for a five-room unit.

Despite a slight cooling off in the property sector, its developer expects a good take-up rate.

Jackson Yap, CEO, United Engineers Limited, said, “This is the mass market, the demand is always there. The interest rate in Singapore is still relatively low so to speak, and the other one is cash flow. If you do your sums right, the net cash flow for buying these units are not that high if you include your CPF contributions.”

Park Central@AMK is the third project under the Housing Board’s ‘Design, Build and Sell Scheme’, where the private sector is involved in the building and marketing of public housing.

While prices at Park Central@AMK are nearly 10 per cent lower than the previous condo-style development – City View@Boon Keng – it is still too much for some, especially younger couples who have just joined the workforce.

Kevin Kwan said, “Maybe you have to forfeit your car, not get it so fast; and for daily expenses, you have to be more meticulous.”

Others are worried about falling value of their asset and tough times ahead.

Lean Guan Hock said, “Now due to the soaring oil prices, I think everybody must be very concerned.”

Even though many have put in an application for the flats, not all will end up buying one.

Some applicants said their final purchase decision will depend on how the global economy and the property market perform in the next few months.

Applications must be submitted by August 5, and sales will be done via a balloting system. – CNA/ms

Source : Channel NewsAsia – 23 Jul 2008

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PropNex to fire non-performing agents this week

Posted by luxuryasiahome on July 23, 2008

One of Singapore’s biggest real estate agencies, PropNex Realty, is firing more than one-third of its agents.

According to its CEO, the move is aimed at cleaning up the profession.

PropNex is firing those who have been with them for over a year, but have yet to submit a single transaction. About 2,800 agents currently on its list will be affected.

The agents were first given a choice to remain as PropNex agents by signing up for Professional Indemnity Insurance as well as a refresher course.

This group is seen as the riskiest for consumers as they may not be as updated on industry changes. There is also the possibility that this group may not be declaring their transactions, which poses a problem when consumers consult the agencies and find that there are no records of the deal.

Said Mohamed Ismail, CEO of Propex Realty: “Consumers are not protected in terms of professional standards provided by agent. There’s a lot of concern and a call for industry to be regulated. This did not happen in the last couple of years, so now the initiative should be for big players to self-regulate and move forward.”

A lack of direct and stiff regulation for housing agents has allowed the existence of what some industry players call “cowboy” agents who profit by flouting rules, and leaving customers and their agencies to deal with lapses.

So industry players said it is time the agencies do something about it.

“It would be forward-looking for any agency (to) ensure that their agents are properly trained, … professional, ethical and exercise some kind of control,” said Low Swee Kim, Vice President at the Institute of Estate Agents.

The industry first tried to regulate agents with a qualification exam called the Common Examination for House Agents. But since it was not mandatory, it did not have the desired impact of setting a minimun standard for housing agents.

Currently, only a multiple choice exam is required.

The Institute of Estate Agents (IEA) has also been pushing for second tier licensing, but to no avail. Currently, only agencies are licensed.

A housing agent database pioneered by the IEA has also fallen short so far, because not all real estate agents have opted in.

Industry players compare this situation to that of the insurance industry, where agents are guided by tough regulations by the Monetary Authority of Singapore.

It is estimated that only one third of real estate agents are properly qualified.

“There’s no educational barrier to entry, so anyone can join the industry. Typically, training is only provided if the agent joins a relatively big company where there is some structure in place,” said Eugene Lim, Associate Director of ERA Asia Pacific.

As a major realty agency, ERA said it has training systems in place for its agents.

PropNex’s CEO said this is just the start of an entire overhaul.

Said Ismail: “At the moment, PropNex is at the drawing board working out some policies and programme. If the authorities are not prepared to regulate the industry, some of the big players (like) ourselves, we would like to self-regulate. We have to just move and take the lead role to make a difference. And doing that, I think (others) will follow.

“We are in the planning stage and (soon),… we should be able to reveal some of our new policies and procedures that will put a check on all our agents, in terms of their conduct and responsibility.”

PropNex is also looking at creating avenues to give redress to consumers who have problems with their agents. – CNA /ls

Source : Channel NewsAsia – 23 Jul 2008

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More public sector projects put on hold to ease squeeze

Posted by luxuryasiahome on July 23, 2008

Move will free up resources for integrated resorts, other key projects

The government will postpone construction of another $1.7 billion worth of public sector projects – on top of some $3 billion worth that have already been put off – as it looks to manage rising construction costs.

With this move, the government is deferring a total of $4.7 billion worth of public sector construction projects to 2010 and beyond.

‘The additional deferment will allow the existing construction capacity and resources to be channelled towards the timely delivery of some big projects such as the integrated resorts, Marina Business Financial Centre and the downtown MRT line,’ said regulatory body Building and Construction Authority (BCA) in a statement yesterday.

Most of these projects are expected to be completed around end-2009. The construction resources freed up at that time would then be available for the deferred public sector projects, therefore achieving a better spread of construction resources and activities beyond 2009, BCA said.

Projects postponed in this round include the main building of the proposed Jurong General Hospital and upgrading works at schools.

Developers and analysts BT spoke to were hopeful that the government’s response could help to slow down the increase in construction costs.

Construction costs shot up some 20 to 30 per cent in 2007. And in the first quarter of this year, building costs rose by another 3-5 per cent, Minister for National Development Mah Bow Tan said in a statement.

The building boom also means that contractors were in short supply, with some private developers here reporting difficulties in hiring contractors and sub-contractors.

The new postponements could therefore be helpful in keeping the sector on a more sustainable growth path, said Citigroup economist Kit Wei Zheng.

‘Anecdotal evidence suggests that some contractors may have even refused to take up contracts, because of concerns that rising costs would wipe out initially projected profits or even result in losses,’ he said.

However, there were some concerns that the reduction in government spending was coming at a time when the sector, and the overall economy, is seeing a slowdown.

‘To some extent, given the downside risks to growth, one would have thought that perhaps the government may have contemplated boosting construction demand to shore up growth,’ said Mr Kit.

But he added that with the sector suffering from capacity constraints, it is not clear that GDP growth would have received a significant boost even if the government had increased construction demand.

Chua Hak Bin, chief Asian strategist at Deutsche Bank Private Wealth Management, similarly pointed out that the outlook for the construction sector is ‘not as rosy as it was a year ago’.

Growth in the construction sector is tapering off. Growth slowed to 16.9 per cent in Q1 2008 and then to 15.2 per cent in Q2 2008. By contrast, in Q4 2007, the sector grew by 24.3 per cent.

Dr Chua, however, said that the new deferments could help reduce current supply bottlenecks.

Before yesterday’s move, the government had announced two rounds of construction postponements for public sector projects, in November 2007 and February 2008. Projects put off included the Ministry of Health’s National Addiction Management Centre and part of the Changi Prison Complex.

For the whole of this year, construction demand is likely to come in within current estimates of $23-$27 billion, BCA said.

Source : Business Times – 23 Jul 2008

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Positive signs for ION

Posted by luxuryasiahome on July 23, 2008

With half its shopping space snapped up, it is on track to reach target for launch

RETAILERS have already bagged 50 per cent of shopping space at ION Orchard, a highly-anticipated development slated to open beside Orchard MRT station next year.

As for the remaining half of the 663,000 square foot of new retail space, landlord Orchard Turn Developments says it is “in negotiations”.

Secured tenants include Marc Jacobs, Fossil and Armani Xchange.

“In full recognition of our excellent location and landmark status, we are pleased to say that more than 30 per cent of retailers who have signed up will be setting up their flagships at ION Orchard,” said Ms Soon Su Lin, chief executive of Orchard Turn, which is a joint venture between Singapore’s CapitaLand and Hong Kong’s Sun Hung Kai Properties.

This includes popular brands such as Max Mara and Topshop and Topman, which will relocate two of its existing stores at Wisma Atria and Isetan Scotts to the new shopping mall.

ION Orchard has previously announced that Louis Vuitton, Cartier, Prada, Christian Dior, Dolce and Gabbana and Giorgio Armani as the six mega brands that will front its two-storey duplex stores.

The mall, which sits at the junction between Orchard and Paterson Roads, has also clinched 45 new-to-market brands and newly-created concept stores by established operators, said Ms Soon yesterday.

“With less than a year to go until our opening, we are definitely on track to achieving our target,” she added, referring to an aim to lease 60 per cent of the space to flagship shops, new brands and concept stores.

As a show of an ongoing commitment to integrate art into the shopping experience, the mall will feature sculptures and media installations. There will also be a 5,600-square-feet art gallery in the complex.

To attract more quality tenants, the mall yesterday unveiled a first-of-its kind retail showroom that promises to reflect the “multi-sensory experience, spatial quality and positioning” that it aspires to offer visitors.

The 8,000-square-feet showroom features LED floor-to-ceiling panels and specially-produced videos introducing visitors to the ION Orchard brand.

Source : Today – 23 Jul 2008

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