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Archive for November 26th, 2008

S’pore govt will not implement measures to stimulate property sector

Posted by luxuryasiahome on November 26, 2008

The Singapore government will not introduce measures to stimulate demand or prop up prices artificially in the property sector.

Speaking at an industry event on Wednesday, National Development Minister Mah Bow Tan said such efforts are not sustainable.

However, the government will study suggestions by market players on how to help the property sector.

Developers are feeling the heat from the economic downturn, credit crunch and poor consumer confidence, and many new project launches have been shelved.

To boost property demand, some developers hope the government could relax some of its policies, such as reviving the Deferred Payment Scheme, reducing the development charge rate and introducing property tax exemptions.

But the national development minister said there are limits to what the government can and should do.

Mr Mah said: “We cannot dictate to banks that they should extend loans to companies or individuals with weak financial standing. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further. It is in our interest to ensure that the property prices move in line with economic fundamentals, as it affects home ownership, asset values, retirement savings and other sectors of the economy.”

Mr Mah said the government will not hesitate to act if needed.

It could roll out public sector projects which have been deferred to boost the industry when construction costs come down, and the pressure on manpower and building materials ease.

The deferred projects are worth some S$4.7 billion. They include the construction and upgrading of schools, civic and community institutions as well as other public infrastructure.

Mr Mah said a number of major projects secured in past years will also create jobs and sustain capital spending in the economy.

Together, the real estate services and construction sectors accounted for about 9.6 per cent of overall GDP and 13 per cent of total employment in Singapore in 2007.

The Real Estate Developers’ Association (REDAS) said market stability and restoring confidence are important in helping the sector weather the economic storm.

REDAS added that developers should take this opportunity to improve its product and get ready for the next upturn.

“Pricing alone does not lead to sales volume; sentiment and confidence leads to sales volume. A tripatite plan of action is needed between developers, financiers and the government through moderating new supply, shoring demand and introducing fiscal measures to help ease funding for the industry,” said Simon Cheong, president of REDAS.

The association said it will work closely with the government to provide timely market feedback.

Despite the tough times, REDAS also hopes developers will continue to drive sustainable development.

Source : Channel NewsAsia – 26 Nov 2008

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Gov’t has important role in property market: Mah

Posted by luxuryasiahome on November 26, 2008

The Government has an important role in ensuring the long-term stability and smooth functioning of the property market, said Minister for National Development Mah Bow Tan at the Real Estate Developers’ Association of Singapore’s (Redas) anniversary dinner tonight.

‘Let me first highlight why the real estate sector is important to us,’ Mr Mah said.

Mr Mah’s comments comes in the wake of public queries over the government’s role in the property market, with some wondering if the land prices should be left to market forces.

Mr Mah said there are mainly 3 key reasons.

‘First, it is a major economic sector in Singapore. The real estate services and construction sectors together accounted for about 9.6 per cent of overall GDP and 13 per cent of total employment in Singapore in 2007. Second, the health of the property market affects other major sectors of the economy. Third, as a country with the highest rate of home-ownership of more than 90 per cent, the property sector is where most of us have invested our hard-earned lifelong savings.’

The Government will do whatever is within its means to help all the various economic sectors in Singapore cope with the current crisis and mitigate the impact on businesses, Mr Mah said.

For the property market specifically, the Government will ensure that the supply of land released for development is well calibrated and sufficient to meet demand over the medium to long term. It will also give developers the flexibility to activate Government Land Sales supply according to market demand by using a pre-dominantly market-led approach through the use of the Reserve List.

The authorities will also provide detailed real estate information to enhance market transparency and allow informed decision-making by market players, and will put in place policies that ensure that systemic risks to both the demand and supply sides are minimised, thus safeguarding the overall health of the property market, Mr Mah added.

Finally, the Government will also guard against irrational market behaviour such as excessive speculation that is not in sync with economic fundamentals, Mr Mah said.

Source : Business Times – 26 Nov 2008

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Gov’t could restart S$4.7b worth of public sector projects: Mah

Posted by luxuryasiahome on November 26, 2008

The Government will not hesitate to reactivate some of S$4.7 billion worth of deferred public sector projects, at an appropriate time, if necessary to boost the industry, Minister for National Development Mah Bow Tan said on Wednesday.

Mr Mah was speaking at the Real Estate Developers’ Association of Singapore’s (Redas) anniversary dinner.

The Government had earlier deferred some S$4.7 billion worth of public sector projects over the past year or so. These include the construction and upgrading of schools, civic and community institutions, and other public infrastructure.

These projects could be restarted when construction costs come down and manpower and materials shortages are less serious, Mr Mah said.

‘Not only will these projects help to sustain capital spending and provide some cushion in this downturn, they will also help to enhance Singapore’s attractiveness to talent and investments in the long term,’ he said.

The Government will also continue with several key infrastructure and housing projects to support Singapore’s medium to long term economic growth and social needs, as well as rejuvenate older estates, Mr Mah added.

Source : Business Times – 26 Nov 2008

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Moody’s cuts MI-Reit’s ratings; review for possible downgrade

Posted by luxuryasiahome on November 26, 2008

Moody’s Investors Service has on Wednesday downgraded Macarthurcook Industrial REIT’s (‘MI-REIT’) corporate family rating (‘CFR’) to Ba2. The rating remains on review for possible downgrade.

‘The downgrade reflects Moody’s views that MI-REIT is not likely to meet the scale and diversity targets that were built into its original rating when it was first assigned ‘, says Kathleen Lee, Moody’s lead analyst for the trust.

‘As a result MI-REIT shows high levels of asset and tenant concentration, more consistent with a Ba2 rating,’ adds Lee.

‘In addition, the trust has an outstanding sale & lease-back arrangement with a call and put option in respect of 4A International Business Park (entered into since August 2007) which if completed by end-December 2009, on fully-debt financed terms, would result in a material weakening of its credit metrics’, continues Lee.

‘There also remains considerable uncertainty as to how this acquisition will be funded if the put option is exercised by the vendor,’ she added.

‘The rating remains on review for downgrade primarily reflecting ongoing concerns surrounding MI-REIT’s significant refinancing risk with 91% of its total debts, or S$201 million, falling due in April 2009, amid very challenging credit markets conditions’, says Ms Lee.

‘The absence of available committed facilities and the REIT’s lack of extensive relationships with banks have significantly constrained MI-REIT’s liquidity profile and increase the risk of further downgrades’ adds Ms Lee.

Moody’s acknowledges that MI-REIT’s rating continues to be supported by its steady revenue streams supported by a relatively long lease maturity profile and adequate lease deposits that partially mitigates the trust’s low asset diversification and moderate tenant concentration.

The review will continue to focus on:

1) MI-REIT’s progress in securing committed financing to meet its debt maturities in April 2009 as well as the final contracted terms & conditions once refinancing is raised, and

2) the funding plan for the committed acquisition. The ratings could decline rapidly if material progress on securing committed financing for its April 2009 debt maturities is not made over the course of the next 2 months.

Headquartered in Singapore, MI-REIT is a real estate unit trust that was formed primarily to own and invest in a diversified portfolio of industrial properties. The company reported total assets of approximately S$568 million and gross revenue of $12.4 million for the first quarter ended 30 September 2008.

Source : Business Times – 26 Nov 2008

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Serangoon Central to get mega shopping mall

Posted by luxuryasiahome on November 26, 2008

$1.3b centre, about twice the size of suburban malls here, is expected to be completed by 2010

IT IS full steam ahead for a $1.3 billion mega shopping mall being built at Serangoon Central – in defiance of the current gloomy times

Designed as an eco-friendly mall, the yet-to-be-named mall will be set amidst lush garden enclaves and landscaped sky terraces. — PHOTO: GOLD RIDGE

Construction firm Low Keng Huat was yesterday awarded a $295 million contract to build the mall and the firm is grabbing the contract with both hands.

Its chief financial officer, Mr Chin Yeok Yuen, said private contracts of such a scale are ‘hard to come by’ these days as many developers have delayed projects in light of the slowdown.

Developer Gold Ridge, a special purpose vehicle made up of mainly institutional investors from the United States and Europe, is confident of the project’s long-term success.

Ms Victoria Sharpe, the chief executive of Pramerica Real Estate Investors (Asia) which is advising the investors, said the mall has tremendous potential to be developed into an iconic retail centre serving Singapore’s north-east.

It is also strategically located in the heart of Serangoon with its large residential population and numerous schools.

The yet-to-be-named six-storey mall – which sits above Serangoon MRT station and the upcoming Serangoon Circle Line station – will be integrated with the stations and a new bus interchange.

It will boast a 24-hour zone with shops, food and beverage outlets, a 10-screen cineplex, a 60,000 sq ft hypermarket and a 10,000 sq ft gourmet supermarket. Also, SAA Architects has conceptualised a ‘green necklace’ along the exterior of the eco-friendly building. This involves a series of lush green spaces. There will also be a landscaped sky terrace and an internal roof garden.

A new 16-bay bus interchange will take up part of the mall’s ground floor. The mall will have a total net lettable area of slightly more than 618,000 sq ft. That will make it bigger than Ang Mo Kio Hub, a suburban mall that is also linked to a bus interchange and an MRT station.

‘Suburban malls are usually about 300,000 to 400,000 sq ft in size. This one is big and will be more exciting as it can accommodate more concepts, activities and experiences,’ said property consultancy Knight Frank’s head of retail, Ms Sherene Sng.

Gold Ridge plans to include a department store that may occupy up to 60,000 sq ft, as well as a 500-seat food court. There will be more than 400 specialty shops. The firm is investing $1.3 billion, including land cost, in the project. It had successfully tendered for the site in March this year, with a bid of $800.9 million or $850 per sq ft per plot ratio.

The existing shopping centre portfolio of Pramerica Real Estate Investors (Asia) includes Tiong Bahru Plaza, Century Square and upcoming Tampines 1.

The weak economic outlook is expected to hit retail sales but suburban malls with high traffic may fare better than some prime downtown malls. Said Ms Sng: ‘Suburban mall rents will remain fairly resilient, going ahead. If they were to fall, the decline will not be as great as the fall in rents in prime areas.’

Builder Low Keng Huat yesterday said it had been awarded the construction contract for Serangoon Central Mall, which comprises the mall and bus interchange. The project is expected to be completed by October 2010.

The total value of the firm’s ongoing construction projects, including Serangoon Central mall, is about $900 million as of yesterday, it said in its statement.

Guthrie Consultancy Services is the project manager, retail consultant and marketing manager for the mall. The mall will eventually be held by two or possibly several funds managed by Pramerica.

Coming up

WHAT’S planned for the mall:

More than 400 specialty shops
A 10-screen cineplex A hypermarket, a gourmet supermarket and a department store
A 500-seat food court
A 24-hour zone with shops as well as food and beverage outlets
A new 16-bay bus interchange will take up a portion of the ground floor of the shopping centre

Source : Straits Times – 26 Nov 2008

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Low Keng Huat wins $295m mall contract

Posted by luxuryasiahome on November 26, 2008

Mall aims to fully let out space up to 9 months ahead of completion in 2010

ENTITIES linked to Prudential Financial Inc of the US yesterday broke ground for their $1.3 billion mall at Serangoon Central.

Low Keng Huat has clinched the $295 million main construction contract, which works out to almost $320 per sq ft of gross floor area.

The as-yet-unnamed project will have about 400 parking lots, which BT understands is double the 206 maximum stipulated for the site based on government guidelines. The developers are said to have sacrificed commercial gross floor area to provide extra parking spaces.

Amid the current weak economic climate, the target is to get the mall’s 600,000 sq ft of net lettable area (NLA) fully leased six to nine months ahead of completion in late 2010.

This is a shorter time span than the recent industry norm of achieving full letting at least a year before completion, says Michael Leong, executive director of Guthrie Consultancy Services, which is project manager, retail consultant and marketing manager for the mall.

Mr Leong hopes to sign key anchor tenants by the end of next month for the mall’s hypermarket, 10-screen cinema complex, gourmet supermarket, department store and 500- seat food court. Tenants of these five spaces will take up about 30-35 per cent of total NLA. ‘Discussions are at pretty advanced stage,’ Mr Leong said.

Asking base monthly rents range from $5 to $35 psf, plus one to 3 per cent of their turnover.

The mall is being built on a 99-year leasehold site sold by Land Transport Authority through a tender that closed in March.

Gold Ridge was the top bidder at $800.9 million or $850 psf of potential gross floor area. The mall will be integrated at basement 2 with a new bus interchange, the existing Serangoon North East Line MRT Station and the Serangoon Circle Line station slated to open in 2010.

There will also be a 24-hour retail and food & beverage zone on the same level. ‘We’ll cater to early risers who want to grab an early bite before heading off for work, as well as insomniacs,’ said Mr Leong.

‘We’re also trying to push the hypermarket and cinema tenants to operate for extended hours – if not 24 hours. It’s a way of making the real estate work harder. We will also not preclude allowing other tenants to ’share’ units, with separate operators running two or three shifts. But this may be more suitable for F&B outlets than fashion/ apparel retailers.’

Gold Ridge is 50 per cent owned by Asia Property Fund II, with the other 50 per cent warehoused by Prudential Investment Management, a subsidiary of Prudential Financial.

Prudential’s Singapore- based Asian arm Pramerica Real Estate Investors (Asia) Pte Ltd is investment manager for the mall.

The development will have two basements and four levels above ground. The roof terrace will have a pet section, F&B outlets and tenants in the spa/beauty trade. The rest of the roof terrace will be landscaped. There will also be a double-storey indoor roof garden on the fourth level.

SAA Architects conceptualised a ‘green necklace’ along the building’s exterior. An open-air sunken courtyard at basement one will also be surrounded by greenery and water features.

Source : Business Times – 26 Nov 2008

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LTA awards S$634.8 million deal on Marina Coastal Expressway to Samsung C&T

Posted by luxuryasiahome on November 26, 2008

Land Transport Authority (LTA) on Wednesday awarded a S$634.8 million contract to Samsung C&T Corporation for the construction of the Marina East section of the Marina Coastal Expressway (MCE).

This is the fifth contract awarded out of six major civil contracts called for the construction of the MCE.

The latest contract entails the design, construction and completion of approximately 800 m of twin-cell box vehicular tunnel structure and slip tunnel connection stubs for future entrance/exit ramps, LTA said in a news release.

Works under this contract, dubbed Contract 486, also include the construction of a ventilation building, trunk link sewers with associated manholes and land reclamation works at Marina East area.

On Nov 3, 2008, Samsung C&T Corporation was appointed the civil contractor for Contract 483 (Marina South II). Samsung C&T Corporation is currently also involved in the design and construction of the Cross Street Station as part of Downtown Line Stage 1.

LTA said construction works for the MCE are expected to commence in the first quarter of 2009 and slated for completion by 2013.

The MCE will be the tenth expressway in Singapore, a major part of the strategic island-wide road network to support the long-term growth of Singapore.

Source : Business Times – 26 Nov 2008

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