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Archive for November 12th, 2008

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Redas offers more insights after bleak reports

Posted by luxuryasiahome on November 12, 2008

It calls meeting to advise analysts that URA data may not give full picture

The recent string of negative reports on the property market has prompted the Real Estate Developers’ Association of Singapore (Redas) to engage analysts and offer them alternative sources of market data.

This came as analysts have drawn very bearish conclusions in recent weeks, based on official supply numbers from the Urban Redevelopment Authority (URA).

These included a string of research notes from firms such as Morgan Stanley, Deutsche Bank and Goldman Sachs which have projected significant falls in mass-market, mid-tier and high-end private home prices.

Redas’ position is that URA’s numbers are general in nature. On certain specific issues, they feel it is better to check with property consultants who can provide more detailed data.

Sources say the industry body met property analysts from local and foreign research firms last Friday. The meeting was chaired by Redas president Simon Cheong, who is also chief executive of upscale residential developer SC Global Developments.

Analysts from several foreign banks – including Goldman Sachs, JPMorgan, Morgan Stanley, Merrill Lynch, Nomura and UBS – attended the meeting, together with those from key local research firms such as DBS Vickers and CIMB-GK.

Also present were members of Redas’ management committee including representatives from CapitaLand, City Developments, Keppel Land and Far East Organization.

Sources say consultants from all the major property firms in Singapore – CB Richard Ellis, Colliers, DTZ, Jones Lang LaSalle, Knight Frank and Savills – as well as a legal advisor close to Redas also lent their weight.

Redas held the meeting to give equity analysts a more in-depth understanding of property issues in the light of the difficult economic environment, BT understands.

The perception is that while there are seasoned analysts who know the market well, there are others who are either new to the area of property research and lack historical perspective, or too young to fully understand the workings of the market.

The major property consultancies were there to offer help to analysts, and the legal advisor was present to explain technical issues including those involving the rights of buyers and sellers in property transactions.

Sources say one analyst present at the meeting suggested that the large developers could release their own data regularly to further improve clarity.

This is the first time Redas had organised such a briefing but based on the response, more such dialogues may be organised in the future. Views were freely exchanged, sources who were present told BT. Analysts also said they would take Redas’ points into consideration.

Source : Business Times – 12 Nov 2008

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Second Chance Pty’s Q109 net profit slips 2.8%

Posted by luxuryasiahome on November 12, 2008

Second Chance Properties Limited said net profit for the fiscal first quarter ended September 30, 2008 slipped 2.8 per cent to S$5.36 million due to the unrealised gains recognized on fair valuation of the marketable securities a year ago.

Revenue grew 22.43 per cent to S$19.18 million.

The total bank borrowings amounted to S$51.6 million as at 30 September 2008 as compared to S$35.1 million as at 30 June 2008. The capital gearing increased from 0.34 at end June 2008 to 0.50 at end September 2008.

The group is proposing a dividend payout of 2.5 cents a share.

Its board of directors has studied and will be proposing a share buy-back scheme. The company will be seeking approval from the relevant authorities and shareholders at an Extraordinary General Meeting.

Source : Business Times – 12 Nov 2008

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Singapore government will not bail out Las Vegas Sands

Posted by luxuryasiahome on November 12, 2008

The Singapore government said Wednesday it will not bail out the troubled US gaming firm Las Vegas Sands should it fail to fund the Marina Bay integrated resort.

Senior Minister of State for Trade and Industry S Iswaran, speaking on the sidelines of an industry conference, said there has been no request from Sands for a bailout so far.

Sands has been working to avoid defaulting on bank covenants and announced on Tuesday that it was raising some US$2 billion in capital.

There have been concerns about whether Sands has the financial ability to finish the resort at Marina Bay, after it ran into financial difficulties.

Las Vegas Sands won the bid two years ago to build the Marina Bay integrated resort, one of Singapore’s tourist magnets. The S$5.4 billion project, to be ready next year, is a commercial one from the start. That’s why Singapore authorities will not bail it out should it fail.

There has been speculation, though, that government-linked companies may be interested. But Mr Iswaran made it clear that it is something for the companies themselves to decide.

“Government-linked companies are commercial enterprises. They have to make their own decisions on whether an investment makes sense for them or not. It’s not for the government to tell them what to do,” he said.

For now, construction work continues at the integrated resort. Sands says it has the money to see the project through, after raising over US$2 billion in capital.

“This fund-raising that Sands has done is an example of what they need to do in this environment in order to strengthen their balance sheet and be able to fund the relevant project. They have to do some prioritisation and that is what I think they are doing and that is the right thing,” said Mr Iswaran.

On the jobs front, Mr Iswaran said Marina Bay Sands has already started recruitment and there is no reason to think that a substantive portion of those jobs will be lost. However, some of them could be deferred due to delays in some elements of the project.

Mr Iswaran revealed that Sands has asked the Singapore Tourism Board to adjust the time-line for the construction of the resort. The request is being reviewed.

The government and Sands have a development agreement which sets out clear rights for both parties, including penalties for delays. But Mr Iswaran said the government will monitor the situation closely before deciding on exercising those rights.

Source : Channel NewsAsia – 12 Nov 2008

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SC Global’s Q3 net profit up 121%

Posted by luxuryasiahome on November 12, 2008

SC Global Developments Ltd on Wednesday reported net profit for the third quarter ended September 30, 2008 more than doubled from a year ago to S$9.60 million.

Revenue, however, fell 15 per cent to S$25.51 million.

Revenue was contributed mainly from revenue recognition of units sold in its development projects, namely The Marq on Paterson Hill, Hilltops and Kairong International Gardens in Shenyang, China. It recognises revenue based on progress of construction.

Contribution from an associate company in Australia, AVJennings Limited, was S$1.5 million as compared to S$2.5 million in the same corresponding period last year.

Baring unforeseen circumstances, it expects to remain profitable for the year ending 31 December 2008.

Source : Business Times – 12 Nov 2008

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Allgreen’s Q3 net profit slips 11%

Posted by luxuryasiahome on November 12, 2008

Allgreen Properties’ third quarter net earnings slipped 10.9 per cent to S$31.2 million.

Revenue fell 8.2 per cent to S$113.4 million.

For the first nine months of this year, Allgreen’s net earnings were down 41 per cent from the same year-ago period to $65.8 million, while revenue eased 35 per cent to $275.4 million.

Source : Business Times – 12 Nov 2008

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Parkway earnings fall 95% without property disposal gains

Posted by luxuryasiahome on November 12, 2008

Healthcare group Parkway Holdings on Wednesday reported a sharp year-on-year drop in earnings for the third quarter.

Net profit fell 95 per cent to S$10.2 million, from S$224.6 million a year ago. This is because in Q3 2007, the company’s earnings were bolstered by gains from spinning its local hospital properties into a real estate investment trust (Reit).

Revenue for the three months ended September 30, 2008 rose 7 per cent to S$239.4 million, from S$222.8 million a year ago.

Growth was driven by revenue of the Singapore Healthcare segment, where turnover rose 24 per cent in Q3 2008. The strong double digit growth is mainly attributed to Parkway Shenton’s increased patient volume.

Parkway Shenton opened four new clinics in 2008 and secured new corporate contracts. Revenue growth was also driven by higher utilisation of outpatient diagnostic imaging and laboratory services.

Earnings per share for Q3 2008 fell to 1.31 Singapore cents, from 2.61 Singapore cents a year ago.

Parkway declared an interim dividend of 0.75 Singapore cents per ordinary share for the quarter. In Q3 2007, Parkway declared an interim dividend of 2.00 cents per ordinary share and a special dividend of 13.45 cents per ordinary share.

With the onset of the global economic slowdown, the operating environment for the fourth quarter of 2008 and the next twelve months is expected to remain challenging, Parkway said.

The group has stepped-up its marketing efforts to diversify into non-traditional sources of foreign patients, it said. At the same time, it has embarked on initiatives to improve service quality, obtain higher yields, faster throughput and minimise waste.

‘Notwithstanding the current economic slowdown, the group remains committed to its major projects including the 350-bed hospital in Novena,’ Parkway said.

Source : Business Times – 12 Nov 2008

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SC Global’s net profit rises 121% to S$9.6m in third quarter

Posted by luxuryasiahome on November 12, 2008

Singapore mainboard-listed property developer SC Global Developments reported a 121 per cent rise in third quarter net earnings, compared to a year ago.

Net profit for the three months ended September amounted to S$9.6 million. Revenue came in at S$25.5 million, down by 15 per cent on-year.

For the first nine months of the year, net profit increased by 96 per cent to S$40.3 million. However, revenue dropped 14 per cent to S$101 million.

Given the current volatile financial markets, the group said it has decided to increase its liquidity by holding a greater amount of cash.

It has recently drawn S$100 million as part of its available reserve facilities to hold as additional cash.

Source : Business Times – 12 Nov 2008

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A Boon Lay for everyone?

Posted by luxuryasiahome on November 12, 2008

Young and old, local and foreign, the vision includes all

SOME 100,000 plants will be introduced. The neighbourhood park will be transformed into a theme park for both young and old. Boon Lay Shopping Centre will be revamped.

The vision is to transform Boon Lay into a tranquil suburban residential enclave with a distinctive identity, and it’s not just to cater to the district’s aging population.

By rejuvenating the estate with upgraded facilities, this will also hopefully attract younger families to live in Boon Lay, said Madam Ho Geok Choo, Member of Parliament for West Coast GRC, at a briefing on plans for the estate.

The WellnessCentre@BoonLay, which provides healthcare services to the elderly, will partner Alexandra Hospital to provide step-down care at affordable rates for elderly residents discharged after a hospital stay.

Also to be launched is an e-Learning Lab, set up by the Boon Lay Youth Executive Committee to provide computer facilities and Internet access to underprivileged students. Certified instructors will conduct computer courses.

Would the large number of foreign workers in Boon Lay, however, affect the estate’s image and younger families’ decisions to move into the estate?

Said Mdm Ho: “Boon Lay residents have learnt to accept the foreign workers, although the challenge remains how to assure the younger ones who want to set up homes in Boon Lay that the issue is not something to be worried about.”

Indeed, Boon Lay could become an example for a more tolerant nation, she said. “Perhaps Boon Lay can be the first constituency that will demonstrate that, despite the big proportion of foreign workers in the estate, we still have the young flocking to live here because we have got our fundamentals right.”

Citing examples of how foreign workers are included in community events in Boon Lay, Mdm Ho said the grassroots leaders have invited these workers to the community visit by Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports on Nov 23.

On the economic crisis, she said more residents have been coming to her for financial help.

“I use to see about 60 people or so, but in recent weeks, the number has grown to around 80 … They mainly come because they are laid off or they can’t afford to pay for their utilities. Some cannot even find enough money to pay for their transportation to school and their workplaces.”

Mdm Ho hopes to raise $1 million for community development in Boon Lay by end-January.

The fund-raising activities include a charity dinner at which a new cookbook with residents’ recipes will be auctioned off.

Source : Today – 12 Nov 2008

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No takers for Punggol EC site

Posted by luxuryasiahome on November 12, 2008

IN THE latest sign of a weakening property market, a tender for an executive condominium (EC) site in Punggol closed yesterday with no bids received.

Property consultants attributed the dearth of interest in the entry-level condo site to still-high construction costs and a lacklustre property market which is expected to trend lower.

This is the fourth EC site the Government has put on the market this year and the only one it kept for confirmed sale for the rest of this year.

Due to the poorer outlook for Singapore’s economy and property market, the Government recently transferred all remaining confirmed sites for sale – apart from the Punggol EC site – onto a ‘reserve list’ where sites are put up for sale only if there is interest.

The 242,159 sq ft Punggol site can accommodate a development of about 16 storeys housing about 600 units.

It is a 99-year leasehold site at the junction of Punggol Field and Punggol Road and near the Punggol MRT station.

While property consultants consider the location to be fairly attractive, they also say the market is not.

They said that high construction costs are probably a key factor deterring developers from bidding.

‘Right now, construction costs have not come down yet so developers will still have to build at high construction costs. As a result, they do not have a lot of price flexibility,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘They will end up with a case where some resale 99-year leasehold condo units cost the same or less than EC units,’ he said.

‘With construction costs still high, the numbers are just not attractive. If you’re going into a market that is trending down, there’s no point taking this risk,’ Savills Singapore’s director of marketing and business development Ku Swee Yong said of developers.

Besides, not all developers can get attractive financing terms in today’s market. The weaker ones have trouble raising any funds at all, he said.

Mr Ku also thinks the demand for an EC in Punggol may not be strong. ‘The market is not big in Punggol as many had bought in 2000 when prices were quite high so they haven’t made a profit yet.’

Applicants for EC homes are subject to a household income ceiling of $10,000.

Upgrading may not be a top priority for residents in Punggol as it is a fairly new town, he added.

According to the Housing Board, the fate of the site will be known by next month, when the National Development Ministry puts out its land sales list for the first half of next year.

Source : Straits Times – 12 Nov 2008

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Punggol EC site fails to draw any bid

Posted by luxuryasiahome on November 12, 2008

NO bid was received for an executive condominium housing site – despite its being attractively located in Punggol – by the time the tender closed yesterday.

The 99-year leasehold site at the junction of Punggol Field and Punggol Road was launched for sale by the Housing & Development Board (HDB) on Sept 17.

Property analysts had said then that they expect lukewarm response from developers despite its location near Punggol MRT Station and the future Punggol Town Centre.

Nicholas Mak, director of research and consultancy at Knight Frank, predicted fewer than five bids.

When the tender closed at noon yesterday, there wasn’t a single taker.

‘The lack of interest in the site reflects the cautious sentiment in the market,’ said Eugene Lim, assistant vice-president of property firm ERA.

There is also now a problem in deciding how to price executive condominium (EC) flats, he said.

EC flats are thought to be a cut above HDB’s Design, Build and Sell Scheme (DBSS) apartments. With the DBSS scheme, developers have flexibility in designing and pricing the flats – but the homes are still public HDB flats in nature.

EC flats, on the other hand, are just a step away from private apartments as they come with condo-like facilities and land rights.

With DBSS flats now mostly going for $500,000-$750,000 each and mass market private homes selling for just a bit more than that, it is hard to find a pricing range for EC flats where they will be attractive to homebuyers, Mr Lim said. ‘EC flats target the same market as the DBSS flats – first-time homeowners and HDB upgraders.’

The 242,159 sq ft site is the fourth EC site the government put on the market this year.

Unlike the private residential property market, the HDB market is still going strong.

HDB’s resale price index rose 4.2 per cent in the third quarter. This means that in the first nine months of 2008, HDB resale prices climbed 12.4 per cent. The number of transactions also rose in Q3 to 8,110, from 7,760 in Q2.

Source : Business Times – 12 Nov 2008

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