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Soilbuild Q2 Net Up 3% At $23m

Posted by luxuryasiahome on August 14, 2008

Soilbuild Group’s second-quarter net profit rose 3 per cent to $23.1 million from a year earlier.

Revenue soared to $88 million, compared to just $16.1 million a year earlier, but expenses and finance costs also rose sharply.

The group said it expects to perform better this year with the progressive recognition of revenue from sold residential property units and the full-year rental contribution from leased business space properties, ‘barring unforeseen circumstances’.

Source : Business Times – 14 Aug 2008

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Blackstone eyes four Shanghai buildings

Posted by luxuryasiahome on August 14, 2008

Package of four commercial buildings may go for US$1b

]Global buyout funds and property investors including Blackstone Group are vying to buy up to four commercial buildings in Shanghai for as much as US$1 billion, three sources with direct knowledge of the matter said.

Super Ocean Group, whose chairman is high-profile businessman Ye Lipei, has put a package of four buildings on sale as it seeks cash to support its growth in other sectors, the sources told Reuters yesterday.

The four buildings to be sold by Super Ocean include the Bank of Shanghai Tower in the Lujiazui area of Shanghai’s Pudong financial district; and Southern Securities Mansion, located on Nanjing Road, one of China’s busiest commercial streets, the sources said.

Super Ocean aims to sell the four buildings together but potential bidders have the option to purchase three of the four, said the sources, who did not want to be identified because the deal was not finalised. They put the price tag for the deal at five billion yuan (S$1 billion) to seven billion yuan.

Representatives for US-based Blackstone could not immediately be reached for comment. Super Ocean declined to comment.

Two of the three sources said that no deal had been reached yet and talks between Blackstone and Super Ocean could collapse over valuation of the buildings. The third source said that Super Ocean aimed to complete the deal by the end of this month.

‘It’s not easy for Blackstone and Super Ocean to reach a deal as Super Ocean is probably asking too much for these properties,’ said one of the sources.

‘There are also concerns about the ownership structure, which is a bit complicated for some of the four buildings,’ he added.

The seven billion yuan price tag for the four buildings in the proposed package deal was offered by Super Ocean late last year for bidders’ reference, though the final price could be lowered amid growing concerns about global property investment.

In China, the government has clamped down on bank lending for construction and imposed various measures including taxes and new rules to try to stamp out property speculation.

Although aimed at the residential market, the steps are cooling appetite for land and starving property firms of funding, and could also put downward pressure commercial property prices.

Besides Blackstone, other potential buyers include Ireland’s Treasury Holdings and an Australian asset manager, which the sources declined to name.

Negotiations between Treasury Holdings and Super Ocean stalled over price issues several months ago, said one source.

But Blackstone and the Australian fund are still separately in talks with the Chinese developer, the other sources said.

Treasury Holdings declined to comment. The Dublin-based firm established and owns a 46 per cent stake of China Real Estate Opportunities, listed on the AIM market at London Stock Exchange in July 2007.

In June, Blackstone agreed to pay 1.1 billion yuan for a commercial building in central Shanghai, making it the first foray into China’s property market.

Last week, Blackstone, in which China’s sovereign wealth fund holds a stake, opened a Beijing office and hired a former government official to expand its acquisition business in China.

Earlier this year, Morgan Stanley planned to sell at least two service apartment projects in Shanghai, which are wholly owned by its real estate fund, for several billion yuan, people familiar with the situation told Reuters. That deal has not been completed yet. — Reuters

Source : Business Times – 14 Aug 2008

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InterContinental Q2 profit beats estimates

Posted by luxuryasiahome on August 14, 2008

InterContinental Hotels Group Plc, owner of the Holiday Inn lodging brand, reported second-quarter profit that beat analysts’ estimates as demand in Europe and the Middle East helped to counter a slowdown in the US.

InterContinental rose 3 per cent in London trading after the Denham, England-based company also said it reached a target on room openings six months early. Net income of US$101 million beat the US$74 million average of three analysts’ estimates compiled by Bloomberg.

The company has added 60,490 net rooms since June 2005, beating its three-year goal. Revenue per available room, a gauge known as revpar, rose 4 per cent, driven by the Middle East and Europe, though the hotelier said that the market has ‘become more challenging’ in the US. Rival Marriott International Inc recently forecast lower profit, while Starwood Hotels & Resorts Worldwide Inc has said its earnings may miss estimates.

The ‘more cautious short-term outlook tone is no worse than expected and already well highlighted in advance by US companies,’ Dresdner Kleinwort analysts including Alistair Scobie said in a note. The company’s results provided ‘overall reassurance’, they wrote.

The shares added 22.5 pence to 773 pence in London trading. The stock has dropped 13 per cent this year, better than the 17 per cent decline by the nine-member Bloomberg Europe Lodging Index.

Second-quarter net income fell 21 per cent from the US$128 million year-earlier figure on higher taxes and costs to rebrand the Holiday Inn chain. A year ago, the company had one-time gains of US$9 million from property sales. Revenue climbed 12 per cent to US$504 million.

Europe, Middle East revpar grew 9.9 per cent in Europe, the Middle East and Africa during the second quarter. That included growth of 27 per cent in the Middle East, where its hotels include the 500-room InterContinental Dubai Festival City.

Growth on that basis slowed to 1.6 per cent during the quarter from 2.3 per cent in the previous quarter in the Americas, as a slowing economy and higher fuel prices have hurt demand for business and consumer travel. There was a ‘general softening’ of revpar in the US in the last four to five months, and the second half will be more challenging, chief executive officer Andrew Cosslett said at a press conference.

‘Clearly, gas price rises don’t help,’ the CEO told journalists on a conference call, adding that the slowdown was mainly on weekends, with demand on weekdays ‘pretty strong’. Declining occupancy levels rather than lower room rates prompted the slowdown, he said.

Chinese revpar growth slowed to 0.5 per cent in the second quarter from 3.2 per cent in the prior three months, mainly because of the Sichuan earthquake and new visa restrictions. — Bloomberg

Source : Business Times – 14 Aug 2008

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Japan’s Urban fails with debt of 255b Yen

Posted by luxuryasiahome on August 14, 2008

Property firm cites difficulty in raising finance due to global credit crunch

Japanese property developer Urban Corp yesterday failed with debt of 255.8 billion yen (S$3.3 billion), caught by the global credit crunch in the biggest collapse by a listed Japanese company in six years.

Worsening problem: The failure of apartment and shopping mall developer Urban is certain to turn away investors who have become increasingly fearful about the financial health of the Japanese property sector

The apartment and shopping mall developer was the latest in a string of Japanese real estate firms to fold as banks rein in lending to small and medium-sized developers seen at risk as the the world’s No 2 economy flirts with recession.

Japanese property shares have crunched lower this year as fear of bankruptcy has spread, although the biggest developers with more robust financing have used the tough times as an opportunity to go bargain hunting.

Urban said in a statement that it had had growing difficulty in raising finance since late last year due to the global credit crunch, while a slowing economy saw it struggle to sell properties.

The company said it had sought a new partner to help it through the cash crunch but alliance talks had failed.

Hiroshima-based Urban’s shares have lost 95 per cent of their value this year.

Investors have become increasingly fearful about the financial health of the Japanese property sector since developer Suruga Corp fell into bankruptcy in June after it failed to secure new financing from banks.

Tight financing sent fellow developer Zephyr Co to seek court protection last month with US$893 million in debts, prompting fears the problems were spreading.

On top of the financing squeeze, developers have been caught by soaring energy and raw material costs.

Urban’s collapse, the largest by a listed Japanese company since financial firm First Credit Corp fell in 2002 with 260.5 billion yen in debt, will turn even more investors off the sector, analysts said.

‘Banks seem to be taking a more strict attitude in their lending to property firms. I would not be surprised to see more (collapses),’ said Fumiyuki Nakanishi, head of investment information department at SMBC Friend Securities.

‘Urban has been said to be a winner in the industry. If today’s Wall Street falls, it will be a double whammy to the Tokyo market tomorrow. I think there will be an Urban shock in the market tomorrow,’ Mr Nakanishi said.

Urban’s shares closed down 1.6 per cent at 62 yen ahead of the announcement, giving it a PBR (price-book value ratio) of 0.13 and a market capitalisation of about 14.3 billion yen. — Reuters

Source : Business Times – 14 Aug 2008

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Colliers units merge to boost services as rivals expand

Posted by luxuryasiahome on August 14, 2008

Commercial real estate broker Colliers ABR is combining with three affiliates to expand its services as rivals grow through acquisitions.

Formerly independent Colliers offices in Washington, Baltimore and St Louis will join forces with the New York firm, the companies said in a news release issued on Tuesday.

The consolidation will create the largest independent commercial property brokerage in the United States, Colliers ABR Chairman Mark Boisi said in an interview. It will make Colliers ABR into a stronger competitor in New York, and strengthen the Colliers International brand globally, he said.

Commercial brokers are joining forces to expand their tenant representation business as commissions from property sales may decline in the credit crisis. Jones Lang LaSalle Inc, the world’s second-largest commercial real estate broker, agreed to buy the Staubach Co for US$613 million in June.

‘This will allow us to supercharge our platform in New York and provide us with the opportunity to offer a greater breadth of services,’ Mr Boisi said, particularly in the areas of corporate real estate account services and investment capital formation.

Washington-based Cassidy & Pinkard Colliers, Baltimore-based Colliers Pinkard, and St Louis-based Colliers Turley Martin Tucker will join with Colliers ABR. All four companies are members of Colliers International, a worldwide alliance of independently owned and operated real estate service firms. — Bloomberg

Source : Business Times – 14 Aug 2008

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HPL reports 64% climb in Q2 earnings

Posted by luxuryasiahome on August 14, 2008

Hotel Properties Limited (HPL) on Thursday said that net profit for the three months ended June 30, 2008 rose 64.3 per cent as the group’s hotels and resorts did better.

Net profit rose to S$15.5 million for the second quarter, up from from S$9.4 million in Q2 2007.

Revenue for the three months rose to S$141.6 million, up 28.8 per cent from the S$109.9 million recorded in the corresponding period last year.

The increase was mainly due to higher income from HPL’s The Met condominium in Thailand and stronger contributions from the hotels and resorts in general, the company said.

Earnings per share for the three months rose to 3.07 Singapore cents, from 1.95 Singapore cents a year ago.

Looking ahead, the slow down of world economies, coupled with high inflation, means that businesses are currently facing a challenging environment, HPL noted.

‘Nevertheless, the group will continue to record profit from The Met condominium development as the construction progresses and from its hotel division as travel and accommodation business traditionally perform well in the second half of the year,’ HPL said in a filing to the Singapore Exchange.

HPL shares closed 4 cents down at S$1.96 on Thursday.

Source : Business Times – 14 Aug 2008

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Wheelock Properties profit falls 50%

Posted by luxuryasiahome on August 14, 2008

Wheelock Properties reported on Thursday a net profit of $15 million for Q2 2008, a fall of 50 per cent compared to $30 million in Q2 2007.

Revenue for the quarter was $88 million, a fall of 10 per cent for the same comparative period in 2007.

Wheelock said that revenue decreased as most units in The Sea View and The Cosmopolitan were sold in earlier years and dividend income from the investment in Hotel Properties Limited was lower.

The decrease was partially offset by revenue recognition in respect of units sold in Ardmore II in the current period, it added.

Wheelock said that if the effects of the revaluation surplus (net of tax) of $74 million on Wheelock Place and impairment loss of $85 million on its SC Global investment were excluded, the group’s profit after tax for Q2′08 would have been $27 million, a decrease of 12 per cent when compared to Q2′07.

Earnings per share for the quarter was 1.27 cents per share , down from 2.55 cents per share in the corresponding quarter in 2007.

Source : Business Times – 14 Aug 2008

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BHP Billiton to lease office space at MBFC

Posted by luxuryasiahome on August 14, 2008

Aussie firm will take up 150,000 sq ft at Marina Bay Financial Centre’s Tower 2

Mining and resources giant BHP Billiton of Australia is leasing about 150,000 sq ft at Marina Bay Financial Centre, BT understands.

The space will be in MBFC’s 50-storey Tower 2, under the mega project’s first phase, which is slated for completion in second quarter 2010.

With a view to grow: The space BHP Billiton will be leasing at MBFC is said to be more than twice its existing space in S’pore, suggesting expansion plans here –

BHP Billiton is one of the world’s biggest producers of primary aluminium, copper, lead, zinc, nickel, iron ore and metallurgical coal. It is also a major producer and marketer of export thermal coal and has a significant oil and gas business with production operations in Australia, the UK, Gulf of Mexico, Algeria and Pakistan, according to information on the group’s website.

Singapore is already one of BHP Billiton’s three centralised marketing hubs (the other two are in The Hague in The Netherlands and Antwerp in Belgium) focusing on the Asian energy market, base metals, stainless steel materials and carbon steel-making raw materials. The centre in The Hague focuses on aluminium, petroleum and the European energy coal market, while the Antwerp office serves the group’s diamond customers around the world.

BHP Billiton’s Singapore operations are currently located at Capital Tower and Springleaf Tower, both near Tanjong Pagar MRT Station. Market watchers expect the group to give up its existing premises when it moves to MBFC. The 150,000 sq ft or so it will be leasing at MBFC is said to be more than twice the group’s existing space in Singapore, suggesting expansion plans in Singapore.

BHP Billiton, which is listed on the Australian and London bourses, posted profit after taxation of US$13.5 billion for the year ended June 30, 2007, up 28.2 per cent from the preceding year.

Some property market watchers were pretty impressed with news of BHP Billiton’s leasing deal at MBFC given the slower office leasing market.

MBFC is iconic of Singapore’s ambitions to be a major financial centre. Including the latest leasing deal with BHP Billiton, MBFC’s 2.9 million sq ft total net lettable area of offices is about 60 per cent pre-committed.

Monthly rents in the development are in the region of $16 per sq ft, said Kevin Wong, chief executive of Keppel Land, at a results briefing last month. KepLand is developing MBFC jointly with Hongkong Land and Li Ka-shing’s Cheung Kong Holdings/Hutchison Whampoa.

However, BHP Billiton will probably be paying less than the $16 psf rental being quoted, given the size of space it is leasing, market watchers reckon.

Earlier tenants clinched at MBFC include Standard Chartered, which is taking 508,298 sq ft at the 33-storey Tower 1, also in the project’s first phase. Barclays and American Express International have signed up for Tower 2, also in Phase 1 and where BHP Billiton will be housed.

The second phase of the project, expected to be completed in 2012, will include Tower 3, with about 1.3 million sq ft of offices, of which about 700,000 sq ft have been leased by DBS.

Source : Business Times – 14 Aug 2008

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Office rents to ease soon

Posted by luxuryasiahome on August 14, 2008

With no new major buildings yet completed, supply of office space continues to be tight in the Central Business District (CBD).

In the wake of unceasing uncertainties in the wider economy and high office rentals, more companies are adopting a cautious business approach, gravitating towards cheaper premises like decentralised office buildings, industrial properties, business parks and disused State buildings.

Hence, average occupancy of office space across most areas had dipped slightly in the second quarter of this year. Islandwide average occupancy eased by0.2 percentage points from the previous quarter, to 96.9 per cent. Average occupancy ofoffice buildings in Raffles Place and Marina Centre dropped slightly due mainly to tenants moving out to cheaper locations after lease expiration.

At the same time, supported by comparatively lower rentals, decentralised areas like Novena and HarbourFront have enjoyed modest increases in occupancy.

Growth in office rentals have started to taper off after the meteoric rise last year,reflecting the increased resistance to higher rents.

Apart from Raffles Place, Shenton Way, Robinson Road, Cecil Street and decentralised areas, growth in office rentals in other areas like Marina Centre, Orchard Road, Anson Road and Tanjong Pagar were flat.

The Government’s efforts to create more immediate office space has also eased the supply crunch and pressure on rentals.

Apart from an estimated 1.9 million square feet of office space from transitional offices and disused State properties that were awarded between last year and the first six months of this year, occupiers can find more relief in the coming months.

Two disused State properties – the former Phoenix Park Complex and former Singapore Badminton Hall – were released for tender in thesecond quarter of this year. In addition, two more transitional office sites at Mohamed Sultan Road and Mountbatten Road will be released for tender under the Government Land SalesProgramme for the second half of this year.

Following an earlier announcement to relocate several Government agencies out of the CBD, other Government agencies in the city centre were tasked to streamline their office space utilisation and free up more office space to the private sector in the process.

The supply crunch in the CBD will be eased from 2010 with new office buildings being completed. Potential supply of office space from the second half of the year to 2013 is estimated to be 12.1 million sq ft.

With sufficient office space supply in the pipeline, the number of sites under the Government Land Sales Programme for the second half of the year has been reduced.

Only three commercial sites were added to the confirmed list while the reserve list includes three commercial sites and two white sites.

With the Urban Redevelopment Authority’s ban on the conversion of office buildings in the central area to be lifted at the end of next year, some projects in the pipeline may be delayed or aborted as developers review their plans in light of the huge potential supply and slowing economy.

Going forward, as companies and Government agencies start to move out of the CBD and more new supply comes on stream, office occupancy is likely to ease and limit rental growth in the city centre for the rest of the year.

The writer is senior director of research at DTZ. The opinions expressed are her own.

Source : Today – 14 Aug 2008

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POSB mortgage plan leads market: DBS

Posted by luxuryasiahome on August 14, 2008

It says half the buyers ineligible for HDB loans have Home Ideal package

DBS BANK says it has reached a decisive milestone in its renewed efforts to grab a bigger slice of the Singapore mass mortgage market with its POSB brand.

It adds that it has pulled ahead of rival banks in offering loans to HDB flat dwellers.

The bank says it has captured more than half of the market for loans to Singaporeans who are not eligible to take up a Housing Board concessionary loan.

The HDB currently provides loans for 60 per cent of flat resale transactions, with banks in Singapore offering the remaining 40 per cent. Of this latter group, one in two Singaporeans currently has a POSB Home Ideal mortgage, which offers transparent interest rates.

In 2003, the HDB liberalised the market to allow Singapore banks to serve this customer base. Two years later, there were a handful of players battling neck and neck for customers, including Hong Leong Finance, OCBC Bank and DBS.

In 2006, DBS started to pull ahead after launching its flagship POSB Home Ideal product with interest rates pegged to the Central Providend Fund (CPF) Ordinary Account rate.

This product offered the stability and transparency that appealed to HDB homebuyers and helped POSB to notch up an all-time record of sales during one month in the second quarter of this year, said Mr Koh Kar Siong, DBS’ head of consumer deposits and secured lending, in an interview yesterday.

Over the past three years, POSB has seen a compounded annual growth rate of 20 per cent in its HDB home-loans business.

And growth was still sizzling in the second quarter of this year. POSB saw a 22 per cent rise in the number of new mortgage accounts in this period, compared to the preceding three months. Meanwhile, loan volumes grew by more than a third.

During this period, the total number of resale transactions increased 22 per cent to hit 7,760, compared with the preceding three months.

DBS chief executive Richard Stanley has declared that POSB will be relaunched. It will celebrate its long history by offering better service and more products to Singaporeans, as part of his strategy to aggressively grow the bank’s Singapore and Hong Kong business.

With more than 70 per cent of people in Singapore living in an HDB flat, the Housing Board mortgage market is – not surprisingly – high on POSB’s agenda for aggressive expansion.

Mr Koh acknowledged that loans growth is expected to moderate in the coming months, as buyers and sellers of flats take a ‘more prolonged time’ to negotiate and complete transactions.

But POSB will still be coming up with ways to enhance its Home Ideal mortgage in order to attract ‘even more significant market share’, he said.

The best price in the market is the current 2.6 per cent annual rate for those who qualify for an HDB concessionary loan. This rate is pegged at 0.1 per cent above the prevailing CPF interest rate.

But for those who need to take up a bank loan, the POSB Ideal package’s average annual interest rate over three years is 3.1 per cent.

This is based on the first-year rate of the CPF rate plus 0.25 per cent; the CPF rate plus 0.5 per cent in the second year; and the CPF rate plus 1 per cent in the third.

This compares with 3.5 per cent for the variable-rate loans offered by United Overseas Bank as well as OCBC, and an average of 3.18 per cent over three years for a Hong Leong Finance variable-rate loan.

Source : Straits Times – 14 Aug 2008

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