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Archive for November 4th, 2008

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Parkway Life REIT to distribute 1.71 Singapore cents per unit in Q3

Posted by luxuryasiahome on November 4, 2008

Parkway Life Real Estate Investment Trust (PREIT) said it will distribute 1.71 Singapore cents per unit for its third quarter.

The total distribution of about S$10.3 million is some 10 per cent higher than forecast.

The announcement came as the trust posted strong third quarter results for the year.

Its total net property income came to some S$12.5 million, more than 15 per cent higher than forecast.

PREIT said the better showing was due to improved performances from its current assets and acquisition activities which have yielded positive returns.

In the third quarter, the trust acquired another seven nursing homes in various parts of Japan in the Hyogo, Chiba, Kanagawa, Saitama and Tokyo prefectures for about S$106 million.

PREIT said despite challenging market conditions, it remains optimistic about its medium and long-term prospects.

It is citing factors such as its rental lease structures which protect against downside risk, its low gearing, and full occupancy across its portfolio of properties.

Source : Channel NewsAsia – 4 Nov 2008

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Cleantech Park to be built in Jalan Bahar by 2010

Posted by luxuryasiahome on November 4, 2008

Singapore is developing a new “Cleantech Park” in Jalan Bahar for clean technology research, prototyping and light manufacturing.

It will be sited next to the Nanyang Technological University, in northwest Singapore.

Deputy Prime Minister and Co-ordinating Minister for National Security, S Jayakumar, gave these details at the opening of the 2nd Singapore Energy Conference on Tuesday morning.

The first building there is expected to be up in 2010, and it aims to have low resource consumption, low waste and emissions through having green buildings.

The park will be a place to test-bed clean energy products and solutions, which can be marketed globally.

It was proposed by a panel of global experts in June, to help Singapore build up its capabilities as a global clean energy hub.

Separately, there are plans for an Eco-Park at the Semakau landfill, and a Danish company is investing half a million dollars on studying wind energy here.

The National Research Foundation has set aside S$170 million to facilitate energy research and testing.

Source : Channel NewsAsia – 4 Nov 2008

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Tuan Sing’s Q3 sinks 94% on exceptional loss

Posted by luxuryasiahome on November 4, 2008

Tuan Sing Group on Tuesday reported that its net profit for the third quarter ended September 30, 2008 sank 94 per cent compared to a year ago to S$814,000.

Earnings per share (EPS) was 0.1 cent for 3Q2008 as compared to 1.3 cents for 3Q2007.

This was because its results was dragged down by its share of S$6.9 million from an exceptional loss in its jointly-controlled company in Australia, the Grand Hotel Group (GHG).

GHG had marked down to zero market value the interest hedge instrument it entered into last year.

Revenue for the quarter slipped 1 per cent to S$80.33 million.

Tuan Sing also confirmed that it had, in accordance with the sales agreements, billed to and received from buyers of up to 60 per cent of the sales value of its Botanika Project.

In view of this relatively high proportion of the sales values having been paid, no major default on future payments by buyers is expected. The Botanika Project is expected to receive its Temporary Occupation Permit in November.

Overall, the group said it would not achieve the same level of profit as in last year, but expects to deliver satisfactory results at the operating level barring unforeseen circumstances.

Source : Business Times – 4 Nov 2008

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MND’s move to cut land sales will not derail rejuvenation plans

Posted by luxuryasiahome on November 4, 2008

The Singapore government’s move to cut the number of land sites it is putting up for sale will affect plans to redevelop certain parts of the country.

But analysts say it will not slow efforts to rejuvenate the overall landscape as there are many other projects underway.

In fact, the move was praised as a prudent one, given the difficult economic environment.

Last Friday, the Ministry of National Development said no sites will be released under the confirmed list in the first half of next year.

It also cut down the sites for sale in 2008 from seven to just one. Five sites were moved to a reserve list, while one was taken off entirely.

“In view of the current market, even if tenders were to carry on, market forces will result in either no bids or bids being received at not acceptable levels,” said the director of research and advisory at Colliers International, Tan Huey Ying.

CEO and regional economist of CIMB-GK Research, Song Seng Wun, said: “In the current environment where there is a crunch as far as global credit is concerned, and a downside of global growth, from the government’s standpoint, it doesn’t make sense to proceed with selling valuable assets when they may receive less than they normally do in an upcycle.”

The cutback may also help to prevent a potential supply glut and help keep property prices firm.

The last time the government cut back on land sales was exactly seven years ago – a month after the September 11 terror attack in the United States. The global economy was then facing uncertainty and volatility similar to the current environment.

But the move means that plans to develop areas such as the Ophir-Rochor Corridor will be interrupted. The Ophir-Rochor site was one of those removed from the confirmed list.

The development of this site would have doubled the size of Singapore’s financial district to match that of Hong Kong’s, at about 2.82 million square metres of office space.

But observers say this will not have a major impact on Singapore’s overall development.

Tan said: “I think Singapore’s progress (as) a nation is in no way pivotal on the development on these sites being taken off right now. Singapore also has a lot underway in terms of physical makeover.

“For example, we already have the two IRs, the Marina Bay Financial Centre, the three retail malls in Orchard Road and a host of other luxurious residential developments coming on… (at) Sentosa Cove, Marina Bay, Orchard Road.

“Singapore’s competitive edge will in no way be compromised by the slight delay in the development of these projects.”

Source : Channel NewsAsia – 3 Nov 2008

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VLFS can help increase storage capacity

Posted by luxuryasiahome on November 4, 2008

WATERFRONT properties are usually popular with homeowners – many are willing to pay a premium just to enjoy the view of the sea, lake or river right from the comfort of their own homes. But waterfront land is also valued by industries, especially those involved in marine and offshore engineering work. This has little to do with the view of course. For these heavy industries, having facilities by the water is essential for the movement of goods and for the building of ships and oil equipment.

In land-scarce Singapore, the shortage of industrial waterfront land is keenly felt and this is something to which JTC Corporation is paying full attention.

‘JTC is aware that there is a high demand for waterfront land by small and medium-sized enterprises for the loading and unloading of goods, and by the marine and offshore engineering companies for their manufacturing operations,’ a spokesman said in June.

And as the key driver of the country’s industrial growth, it comes as no surprise to know that JTC has been hard at work to resolve this issue. Celebrating its 40th anniversary this year, JTC has played a pivotal role in introducing innovative space solutions to anchor important activities critical for economic development.

Thinking out of the box, JTC is exploring the concept of a shared waterfront facility to optimise the use of waterfront land. The idea originated from Brisbane, Australia, which has a common jetty facility for its leisure marine industry, and JTC is looking at adapting the model for industrial use.

The agency is still in the preliminary stages of a feasibility study, which could lead to a shared waterfront facility taking shape at Tuas View. Many industrial firms located on waterfront land at Tuas today already have their own facilities. But with the growth of the marine and oil and gas industries, demand for more of such land looks set to outstrip supply, even with the higher price tag that comes along with it.

For land in the Tuas region, JTC charges a land rent of $10.01 to $16.93 per square metre (psm) per annum, or an upfront premium of $164 to $345 psm on a 30-year lease. Waterfront sites in Jurong command an additional waterfrontage fee of $594 to $891 per metre run per annum.

Therefore, beyond optimising usage, JTC is also looking at creating more usable industrial waterfront land. This could involve increasing the depth of waters around Tuas View.

As Prime Minister Lee Hsien Loong said at JTC’s 40th anniversary dinner in June: ‘Land will always be scarce in Singapore, but with human creativity and ingenuity, we can find new ways to do more with the limited amount we have.’

Indeed, land is a much sought-after resource in Singapore. It houses facilities not just for the manufacturing of products but for the storage of goods as well.

In a bold attempt to overcome land limitations, JTC is extending its cutting-edge innovations to the sea through Very Large Floating Structures (VLFS). Offering more space for oil product and petrochemical storage, the VLFS will help bolster the country’s standing in the oil trading and bunkering industry.

The project makes huge business sense given the strong demand for storage and logistics terminals in the industry.

According to JTC, several companies have indicated their interests in setting up such terminals here. Oil traders have said that they would like Singapore to have additional storage capacity for refined oil products. Such capacity would also serve oil majors’ storage needs during plant shutdown and maintenance periods.

Singapore currently has 4.6 million cubic metres of independent petroleum storage and the private sector is constructing another 3.5 million cubic metres. Even with the additional capacity however, industry feedback indicates a shortage of at least three million cubic metres of oil storage, which would require more than 100 hectares of land to accommodate.

Adding to demand for storage, oil-rich countries such as Brazil and UAE have been scouting for overseas facilities to house their reserves.

‘This augurs well for Singapore and countries in Asia if we are able to meet their demand,’ said JTC’s assistant chief executive Philip Su at an oil storage conference StocExpo Asia last year. ‘We will continue to build on our capabilities and expand our storage capacity in recognition of the potential economic benefits to all our partners.’

Feasibility studies for the VLFS, co-funded by JTC, the National University of Singapore (NUS) and the Maritime and Port Authority (MPA) of Singapore have started. The first phase lasted 12 months and when completed in June 2007, concluded that the VLFS would be technically feasible in Singapore waters.

The VLFS is designed as a collection of large floating platforms which can either be moored to land or operated as standalone units out in the sea. Operations for a VLFS attached to land will be supported by existing land facilities. A standalone VLFS, on the other hand, will be self-sufficient and come with facilities to support its own operations.

For flexibility in determining the amount of storage capacity needed, the floating platforms can be dismantled, removed or even relocated elsewhere.

Each platform is made up of two rectangular modules. Matching the size of two football fields, the two modules measure 180m x 80m x 15m with a capacity of about 150,000 cubic metres.

The VLFS is likely to have an initial minimum storage capacity of 300,000 cubic metres, which is equivalent to the size of a very large crude carrier.

The amount of land saved is significant. For 300,000 cubic metres, the VLFS only needs five hectares of foreshore area. A land storage facility of the same storage capacity would require at least 20 hectares of land area.

The VLFS is also designed to store any type of oil and petrochemical products. To be constructed out of concrete, the structure will be durable, fire-resistant and relatively easy to maintain. The VLFS will meet the exacting needs of oil traders and bunkers given its capacity for high product turnover and top grade oil products.

Construction time is also short, ranging from 18 to 24 months for 300,000 cubic metres of storage. Early indications show that the cost of the VLFS will be comparable to that of land-based oil storage structures.

Even though details are still in the works, the project has shown business potential. ‘JTC is already in talks with several oil trading companies who have expressed strong interest in the VLFS,’ said Mr Su at the conference.

But development should not come at the expense of the environment and JTC is conscious of this. The VLFS, being afloat in the sea, will allow sea water to flow underneath the floating modules and will not cause any irreversible damage to the marine ecosystem.

Moving forward, JTC will be inviting local and foreign specialists to conduct detailed feasibility studies on the best location for the VLFS, assess its environmental impact, carry out basic engineering design and evaluate the best business model for it.

‘If everything goes according to plan, Singapore will be the first nation in the world to have a floating oil storage structure made of concrete,’ said JTC chief executive Ow Foong Pheng in the agency’s 2007 annual report.

Source : Business Times – 4 Nov 2008

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Take-up of JTC factory space falls

Posted by luxuryasiahome on November 4, 2008

Leasing of ready-built factories turns negative for first time in 4 years

INDUSTRIAL landlord JTC Corp has reported the first slide in four years in the take-up of its ready-built factories by manufacturers and other firms. This was the result of a more cautious business environment.

Many companies pulling out of these factories cite operational consolidation as a key reason for downsizing, it said.

JTC also said the allocation of prepared industrial land slumped 38.5per cent in the third quarter year-on-year, although it was flat compared to the second quarter.

This is land rented to companies by JTC that comes complete with road access, as well as water and sewer mains, to allow these businesses to develop their facilities.

JTC’s stock of ready-built factories is now somewhat smaller after it sold $1.7 billion worth of high-rise ready-built properties to Mapletree Investments on July1, reducing its portfolio from 4.45 million sq m to 3.4 million sq m.

In the third quarter, the overall leasing of these factories, which takes into account terminated leases, fell into negative territory of -500 sq m. This is the first negative figure registered since 2004 and is significantly weaker than the net 70,800 sq m level in the second quarter.

The level of space terminated by companies in the quarter ended Sept 30 rose 26 per cent to 30,300 sq m. These companies were mostly from the service, precision engineering and electronics sectors, said JTC, releasing the figures yesterday.

Firms mostly cited ‘consolidation of operations’ for the terminations, JTC said. But occupancy of ready-built facilities remained steady at a high 95.6 per cent in the third quarter.

Manufacturing-related and supporting sectors accounted for 53 per cent of the gross take-up of prepared industrial land.

The performance in this segment typically does not show extreme swings as it involves a sizeable investment on the part of the company leasing the land.

JTC’s figures are consistent with recent Urban Redevelopment Authority data that showed that rents and capital values for most industrial properties grew at a slower pace in the third quarter, compared with the second quarter.

Occupancy of factory space in the public sector reached a high 97.2 per cent in the third quarter, the data showed.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, said the continued rise in occupancy levels for industrial space was partly caused by an office space crunch and the resulting high office space rentals.

Some businesses have sought alternative office space at industrial properties, but the office crunch has been easing as rents fall.

While the industrial sector is seeing slower growth, its performance has remained better than other property sectors here, such as residential, Mr Mak said.

‘However, going forward, the industrial property market does face some challenges, arising from either economic and financial concerns affecting manufacturers, or competition from emerging manufacturing hot spots in the region such as China, India and Malaysia.’

Mr Tan Boon Leong, Colliers International’s director of industrial sales, said: ‘If multinational companies are not too sure of what’s in store next year, they will likely put expansion plans on hold and not commit to extra space.’

He added: ‘With the contraction in the manufacturing industry, more companies are likely to terminate space.’

Industrial rents range from $1.30 to $1.60 per sq ft (psf) for factories in far-out areas, to between $4 and $5 psf for business park space, according to Mr Tan.

While industrial rents and prices will show a rise for the whole year, next year they may fall by 7 to 12 per cent, and 10 to 15 per cent respectively, said Mr Mak.

Source : Straits Times – 4 Nov 2008

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Crunch bites, more quit JTC facilities

Posted by luxuryasiahome on November 4, 2008

Many pull out of factories as they merge operations

The economic slowdown is making its mark again, this time in numbers from JTC Corporation’s quarterly facilities report for Q3 2008.

More manufacturing and related businesses returned industrial space to JTC as many merged their operations. Termination at ready-built facilities (RBF) in Q3 2008 jumped 25.7 per cent quarter-on-quarter and a sharper 45 per cent year-on-year.

Flatted factories, standard factories and business parks saw termination hit 30,300 sq m. The services and precision engineering sectors were responsible for most of the pullback, each accounting for 30 per cent of termination.

Electronics was the third largest sector behind the termination, making up another 18 per cent.

Most of the termination occurred because businesses were consolidating their operations. Around 67 per cent of termination in Q3 was the result of this – 20 percentage points higher compared with the preceding quarter.

Industries also cited poor business as a reason, which accounted for around 12 per cent of termination. In sharp contrast, no termination was caused by the same factor in Q2.

Despite the higher termination level, ‘the occupancy rate for RBF was sustained at a very healthy level of 95.6 per cent for this quarter,’ said JTC in its report. This is a slight improvement over Q2’s occupancy rate of 95.5 per cent.

The amount of RBF space which JTC leased or rented to industries also dropped in Q3. Gross allocation fell 68.6 per cent from the previous quarter to 29,800 sq m.

Lower gross allocation and higher termination shaved the net allocation of RBF from 70,800 sq m in Q2 to -500 sq m in Q3. This is the first negative net allocation figure since 2004. (Net allocation is defined as gross allocation less termination of land or space.)

Having sold $1.7 billion worth of high-rise ready- built properties to Mapletree Investments on July 1, JTC’s total RBF space in Q3 was 3.4 million sq m, down from 4.5 million sq m before the divestment.

JTC’s prepared industrial land (PIL) space appeared more resilient against the cooling economy. Termination actually dropped 26.2 per cent to 22.2 ha in Q3. Services, general manufacturing and electronics were the top three sectors behind the terminations.

Nonetheless, gross allocation for PIL did fall 11.5 per cent to 56.7 ha in Q3. The manufacturing sector only took up 47 per cent of the allocated land in Q3, with manufacturing-related and supporting sectors making up the remaining 53 per cent.

Lower termination helped mitigate the effects of lower gross allocation, allowing Q3 net allocation for PIL to remain relatively stable at 34.5 ha compared with the previous quarter.

Source : Business Times – 4 Nov 2008

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Resorts World’s West Zone likely to open later

Posted by luxuryasiahome on November 4, 2008

RESORTS World Sentosa (RWS) is in talks with government agencies including the Singapore Tourism Board, Urban Redevelopment Authority and Ministry of Trade and Industry to start work on the project’s West Zone only when its Central and East Zones are well under way.

The West Zone of the $6 billion integrated resort (IR) on Sentosa will include a Marine Life Park, a Marine Xperiential Museum, an Equarius Water Park and two hotels.

RWS executive vice-president (projects) Michael Chin said that the area to be occupied by the West Zone is needed to facilitate construction of the East Zone, which will be occupied by Universal Studios Singapore.

Mr Chin said the logistics of creating just one of the theme park’s attractions – Revenge of the Mummy – will require 150-200 container loads of material, equipment and paraphernalia.

And this requires space for ‘container parking’ and ’staging’.

RWS has never given firm opening dates for any of its attractions. But Mr Chin said that the pace of construction is ‘aggressive’.

‘It will be faster to stage in the West Zone and supply to the East Zone,’ he said. ‘We are trying to talk to the authorities and tell them this is the most sensible, logical plan that we can work on.’

With this plan in place, RWS intends to ’soft launch’ Universal Studios Singapore and four hotels in the Central Zone by the first quarter of 2010. This will include 21 theme park attractions and 1,400 hotel rooms.

At present, 2,000 people are working on-site 24 hours a day. In the East Zone, the steel structure for the Revenge of the Mummy ride is being put up. But the all-suite, 12-storey Maxims Residence – which houses the casino – appears to be the fastest-rising structure, with the lift core built up to the seventh floor.

The significance of this is that RWS will want its key revenue generator – the casino – open to gamblers as soon as possible.

And it looks like nothing will stand in the way of the casino being the first attraction to open for business.

Even if the West Zone is not completed by 2010, the government has already said that the casino licence can be awarded when at least 50 per cent of the investment capital has been spent and 50 per cent of the overall gross floor area has been built.

Mr Chin confirmed that about $3 billion of construction contracts have been awarded, more recently to local companies like Cityneon Holdings and Pico Art.

And according to RWS head of communications Krist Boo, the IR will be ‘quite ample as a destination’, even without the West Zone.

Source : Business Times – 4 Nov 2008

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Sentosa IR 60% ready by 2010

Posted by luxuryasiahome on November 4, 2008

Casino, four hotels and many attractions will be up by then; hiring starts next year

THE steel frame for the first ride at the Universal Studios theme park in Sentosa, the Revenge of the Mummy, was winched into place last week.

It is one of the 21 attractions that will be ready to roll when the 49ha Resorts World at Sentosa has its soft opening in the first quarter of 2010. The theme park is part of the Resorts World integrated resort (IR).

Three other rides, including the Transformer one, will be added later.

The picture is much the same in the rest of the resort: About 60 per cent of it will be ready for visitors when it debuts in March 2010.

Of the six hotels, four will be opening then. Maxims Residences, Festive Hotel, Hotel Michael and Hard Rock Hotel will make available 1,400 rooms.

Also slated to open then are the casino and the half-kilometre-long Festive Walk with its shops and restaurants.

Resorts World’s head of communications Krist Boo said negotiations with the Government to fix the opening dates for the remaining 40 per cent of the resort are ongoing. These include its Marine Life Park, the Maritime Xperiential Museum and the remaining two hotels.

Giving an update on the construction yesterday, Ms Boo and executive vice-president of projects Michael Chin said more than 2,000 people are working round the clock on the project.

Construction cannot begin on the western end of the project because the area is now being used as a staging ground to hold the containers of equipment coming in for the construction and fitting-out of the theme park.

Before The Revenge of the Mummy ride could be assembled on site, for example, space was needed to store, lay out and put together the 20 container-loads of equipment making up the ride.

Resorts World had not reckoned on needing this much space.

Mr Chin said that the original plan was to manage the staging within the Universal Studios’ site, but because the park and other properties had to be at least mostly ready by March 2010, this was not possible.

The west end of the resort thus came to be where the theme park attractions were laid out and assembled.

After construction of the four hotels is completed by March next year, their interiors will be fitted out, said Mr Chin.

In the theme park itself, work has also begun on the other attractions such as Jurassic Park and Waterworld. Mr Chin said that by the middle of next year, the exterior of the attractions will be completed, leaving six to eight months to fit out the rides and test them.

Hiring of the 10,000 staff for the resort will also begin then.

Ms Boo also said application for the casino licence should take place ’some time next year’ once half the gross floor area and half the $6 billion budget have been committed.

She said: ‘By late 2009, we should be very comfortably ready for our soft opening in 2010.’

Source : Straits Times – 4 Nov 2008

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Don’t support name change for MPReit

Posted by luxuryasiahome on November 4, 2008

I REFER to the report, ‘Grabbing opportunities in uncertain times’ (BT, Nov 1).

YTL has just bought 26 per cent of MPReit at a hefty 49.5 discount to the NTA from the majority owners.

Why did it not give shareholders other than Macquarie the same opportunity to exit at 82 cents when the market price is just 52 cents?

Their action leaves a bitter taste in the mouths of Singaporean shareholders especially given it is a foreign company with a huge cash hoard which walks into Singapore and buys a chunk of valuable Orchard Road properties on the cheap from another foreign company.

YTL proposes to rename the MPReit to reflect the new owner. Singaporean shareholders should attend the EGM in full force and should withhold their support for this move.

Denis Distant

Source : Business Times – 4 Nov 2008

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