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Archive for December 2nd, 2008

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Koh Brothers wins S$582m contract to build Downtown Line 1

Posted by luxuryasiahome on December 2, 2008

Construction and property group, Koh Brothers Group Ltd, has won a contract worth S$582 million from the Land Transport Authority (LTA) to build the Downtown Line 1 Bugis station and its associated tunnels.

Koh Brothers said this is the single largest contract it has ever clinched.

The 4.3-kilometre section of the Downtown Line 1 runs from Bugis station on the East-West Line to Chinatown station on the Northeast Line. It will serve the upcoming developments in the Marina Bay area.

The Downtown Line 1 has six stations – Bugis, Promenade, Bayfront, Landmark, Cross Street and Chinatown. Construction is scheduled to start in the first quarter of next year and complete by 2013.

Koh Brothers said the latest contract is not expected to have any material impact on its earnings for the current financial year ending December 31.

Source : Channel NewsAsia – 2 Dec 2008

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Koh Brothers wins S$582 mln contract

Posted by luxuryasiahome on December 2, 2008

Singapore construction firm Koh Brothers said on Tuesday it won a S$582 million (US$380.1 million) contract to build an underground metro station.

The firm said the contract for the Bugis Station and associated tunnels from Singapore’s Land Transport Authority, won together with its French joint venture partner Soletanche Bachy, was the largest single contract the firm had clinched.

Construction will start in the first quarter of 2009 and is targeted for completion in 2013. The firm said the contract is not expected to have any material impact on its 2008 results.

Source : Business Times – 2 Dec 2008

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Yongnam bags S$88 mln contract

Posted by luxuryasiahome on December 2, 2008

Yongnam Holdings on Tuesday said that it has won a S$88 million contract for the construction of the Integrated Civic, Cultural, Retail and Entertainment Hub at Vista Xchange at one-north.

The a 200-hectare project at Buona Vista is being jointly developed by CapitaLand and New Creation Church’s Rock Productions. The entire hub is expected to cost some $976.3 million.

Yongnam will be involved in the construction of the integrated hub and will supply, fabricate, deliver and erect structural steelworks for the building structure. The project will commence at end of this year and is expected to be completed by January 2011, Yongnam said.

The contract is not expected to have any material impact on the group’s financial performance for the financial year ending December 31, 2008, Yongnam said.

Currently, Yongnam is also engaged in several other local and regional mega projects, including the Marina Bay Sands Integrated Resort, the Dubai Metro and the Delhi International Airport. Adding on Yongnam’s recent contract win from the Marina Bay Sands Integrated Resort, Yongnam has increased its current order book by S$111.8 million, it said.

Yongnam shares gained 0.5 cent to close at 7.5 cents today.

Source : Business Times – 2 Dec 2008

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Yongnam wins S$88m contract for retail, entertainment hub in one-north

Posted by luxuryasiahome on December 2, 2008

Construction group Yongnam Holdings has won an S$88 million contract to build the Integrated Civic, Cultural, Retail and Entertainment Hub at one-north.

The integrated hub is part of a 200-hectare development at Buona Vista known as Vista Xchange.

The area aims to integrate living, working, relaxation and learning facilities when fully operational.

Under the deal, Yongnam will construct the integrated hub and supply its necessary structural steelworks.

Work will start at the end of this year and is expected to be completed by January 2011.

Yongnam said the contract is not expected to have any material impact on its earnings for current financial year ending December.

Source : Channel NewsAsia – 2 Dec 2008

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Lee Tat wins legal battle against Grange Heights residents

Posted by luxuryasiahome on December 2, 2008

A dispute between property developer Lee Tat Development and Grange Heights residents over a strip of land came to an end on Tuesday as the Court of Appeal ruled in favour of Lee Tat, overturning an earlier appeal decision.

It is extremely rare for the Court of Appeal to re-look a case that it has passed judgement on.

Since the 1970s, Lee Tat has been trying to stop the residents from using a pathway, which is surrounded by land owned by the developer, as a shortcut to nearby shopping centres and bus stops.

After four court proceedings over many years, the Court of Appeal has finally given the right of way to Lee Tat.

In the ruling, it is noted that for more than 30 years, residents have not used the pathway often.

Source : Channel NewsAsia – 2 Dec 2008

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SLA says demand for land to build schools remains healthy

Posted by luxuryasiahome on December 2, 2008

The demand for land to build schools has remained healthy, with seven bids received for a piece of land at Upper Bukit Timah.

The Singapore Land Authority (SLA) said that of the seven bids for the former Seh Chuan High School, four were fairly strong bids above the guide rent of S$73,100 per month.

The highest bid was from Dimensions Commercial School Pte Ltd, and some of the other bidders were existing SLA tenants like Etonhouse International Holdings and Chatsworth International School Pte Ltd.

The property on 9-3 Jalan Seh Chuan has a gross floor area of about 4,222 square metres, and was offered for tender in October for use as a commercial or foreign system school on a three-year tenancy, with an option to renew two further terms of three years each.

SLA’s director of Land Operations (Private) Division, Teo Cher Hian, noted that those in the education business take a longer view and react less to short-term fluctuations. He added that this sector has remained active with strong bids.

So far this year, the SLA has awarded 11 properties, with education as one of the approved uses. That is 50 per cent more than the same period last year.

The authority has also launched another former school site at 375 Race Course Road under its “Ideas Tender Scheme”. This means that bidders can suggest other innovative uses for the property which used to house Mee Toh School.

Source : Channel NewsAsia – 2 Dec 2008

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M’sians again in top spot as foreign home buyers

Posted by luxuryasiahome on December 2, 2008

For the second consecutive quarter, Malaysians continued to be the largest group of foreign buyers (including permanent residents or PRs) of private homes here.

They bought 201 private homes, or accounted for 22 per cent of the total 903 caveats lodged for private home purchases by foreigners in Q3, a DTZ caveats analysis shows.

Indonesians bought 170 units, giving them a 19 per cent foreign buying share, followed by mainland Chinese (13 per cent), Indians (12 per cent) and UK citizens (6 per cent).

Projects that drew the largest numbers of foreign buyers in Q3 were Clover by the Park (40 units), Livia (30 units) and Kovan Residences (20).

However, in terms of projects where foreign buyers had the largest share of caveats lodged in Q3, the chart toppers were The Lakeshore in Jurong and Nassim Park Residences.

Foreigners took 55 per cent or 17 of the 31 units that changed hands at The Lakeshore, and accounted for 48 per cent of the 31 caveats also lodged for Nassim Park Residences during the July to Sept quarter of this year.

Non-PR foreigners made up the bulk of the foreign buying at The Lakeshore, Nassim Park Residences, Kovan Residences, Dakota Residences and Park Infinia at Wee Nam in Q3. However, PRs bought more units than non-PR foreigners at Livia (in Pasir Ris), Clover by the Park in (Bishan) and Beacon Heights (at St Michael’s Road).

The total 903 units that foreigners (including PRs) acquired in Q3 was a 6 per cent drop from the previous quarter, and made up 22 per cent of total private home deals in Q3, down from a 25 per cent share in Q2.

DTZ executive director Ong Choon Fah expected foreign investors to continue to be cautious about buying properties in Singapore in the near term. ‘There’s a lot of frightened money around. Some investors have the money but fear that if they buy today, tomorrow it may be cheaper. This is keeping them away. However, foreigners, especially PRs buying for their own occupation, are more likely to adopt a longer term view and make a commitment,’ she added.

PRs bought 53 per cent or 476 of the total 903 private homes picked up by foreigners in Q3, with non-PR foreigners accounting for the remaining 47 per cent. The PR share was similar to the 54 per cent in Q2.

Source : Straits Times – 2 Dec 2008

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Property market now shows classic signs of downturn

Posted by luxuryasiahome on December 2, 2008

Analysis of Q3 caveats by DTZ points to new trends relating to subsales, foreign buying, HDB upgraders

THREE classic signs of a Singapore property downturn have emerged in the third quarter – a slide in subsales and foreign buying, but a bigger share of HDB upgraders in the private home buying pie.

Property consultancy DTZ’s analysis of caveats for private home purchases shows that total subsales of non-landed private homes fell 8 per cent to 473 units in Q3 from the previous quarter. Subsales also accounted for a smaller 13 per cent share of purchases of non-landed private homes in Q3, compared with 16 per cent in Q2.

Subsales of high-end condos/apartments slowed down even more in Q3 2008. The number of subsale purchases involving units priced at least $1,000 psf fell 24.2 per cent quarter-on-quarter to only 213 transactions, accounting for 45 per cent of overall subsales of non-landed private homes in Q3, against 54 per cent in Q2 2008.

The number of foreign buyers (including permanent residents) of private homes (both landed and non-landed) slid 6 per cent quarter-on-quarter to 903 in Q3. Also, these buyers made up 22 per cent of total private home deals in the quarter, down from 25 per cent in Q2.

DTZ senior director (research) Chua Chor Hoon said: ‘A large proportion of foreigners buy for investment. Hence when prices are falling, there is less interest. Furthermore, with economies and property markets slowing down all over the world, many of the foreigners have been affected back home and they may pull out their overseas investments.’

DTZ executive director Ong Choon Fah also points out that attractive property values are emerging in other cities which Singapore will be competing with. ‘Foreign investors have lots more opportunities to consider where to invest,’ she added.

The dip in subsales may be due to the fact that it has become more difficult for ’specuvestors’ and speculators to offload their properties in the current quiet market.

‘For investors who take a long-term view, especially for better assets, the tendency would be to ride out the market,’ says Mrs Ong.

HDB dwellers tend to make up a bigger proportion of private home buyers during a property downturn. ‘Many of them are buying for owner occupation. Some may be sitting pretty on gains on their existing HDB flats which they bought directly from the HDB some years ago. Together with CPF savings, it may be easier for them to cross over to private homes,’ notes Mrs Ong.

Buyers with HDB addresses picked up 1,718 private homes in Q3, up 34 per cent from the previous quarter.

Their share of caveats lodged for private home purchases rose to 41 per cent in Q3, from shares of 34 per cent in Q2 and 28 per cent in Q1 this year. HDB upgraders’ 41 per cent share of private home purchases in the July-Sept quarter was the highest quarterly share in four years.

‘The trend was supported by the narrowing gap between HDB resale flat prices and private home prices in Q3, as HDB resale prices continued to increase while private home prices fell,’

Ms Chua said the latest Q3 jump in private homes bought by HDB dwellers was mainly in the primary market. The number of units these HDB dwellers picked up from developers leapt 89 per cent from Q2.

Livia in Pasir Ris and Clover by the Park in Bishan were the two most popular projects among HDB buyers in Q3, with 192 units and 142 units respectively sold to HDB upgraders.

Analysts say HDB upgraders’ share of total private home purchases may rise further. In Q2 2002, their share surged to 81 per cent and at the trough of the Asian Financial Crisis property slump in Q4 1998, the figure was 68 per cent.

Subsales refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion. This may be anywhere from three to 12 months after the project gets its Temporary Occupation Permit (TOP).

DTZ said that for total subsale deals of non-landed private homes, the median price continued to fall in Q3, easing 11 per cent quarter-on-quarter to $941 psf – the lowest since Q3 2006, according to DTZ. ‘In view of softening market demand, owners are more realistic in asking prices,’ it said.

The Sail @ Marina Bay got the strongest subsale interest in Q3, with 30 deals (compared with 34 in Q2). The median subsale price for the project slid 6 per cent quarter-on-quarter to $1,719 psf, following a 14 per cent slide in Q2.

Median subsale prices also fell 3 per cent for Park Infinia at Wee Nam to $1,380 psf, The Esta (slipping 5 per cent to $910 psf) and City Square Residences (down 6 per cent to $960 psf).

Mrs Ong expects subsales to continue trending downwards although there will be spikes as major projects get their TOP. That’s when there’s usually more sales activity as the finished product can be viewed by potential buyers and the prospects of renting the units would increase the appeal of such homes to potential investors

Source : Business Times – 2 Dec 2008

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Property groups find asset sales tough going

Posted by luxuryasiahome on December 2, 2008

A SERIES of aborted divestments by Singapore property groups lately highlights the challenges of relying on asset sales in the current environment.

Last weekend’s edition of BT featured two stories on the same page, on Singapore’s two biggest listed property groups – CapitaLand and City Developments Ltd (CDL). Both are in the same boat, with their respective planned divestments of overseas assets not completed.

CDL’s London-listed hotel subsidiary Millennium & Copthorne Hotels announced that the agreement for the disposal of Millennium Seoul Hilton hotel to Korean group Kangho AMC Co had been terminated as the buyer was unable to finalise its financing arrangements amid the global financial turmoil.

CapitaLand’s 30 per cent-owned associate Inverfin Sdn Bhd, which owns Menara Citibank tower in KL, reported that the sale-and-purchase agreement for the sale of the office tower had been terminated as the buyer, IOI Corporation Bhd, did not pay the balance purchase price on the completion date.

There have also been instances of transactions of Singapore buildings not being completed. Ho Bee announced last month that its proposed $30 million sale of Frontech Centre, an industrial building in Bukit Merah, had fallen through. The buyer is understood to have been US fund group Angelo Gordon. BT also reported last month that Australian property fund manager Blaxland did not go ahead with completing its planned acquisitions of eSys Technologies’ building in Changi North and SH Cogent Logistics’ warehouse building in Penjuru Close in Jurong.

The pullouts reflect the difficult conditions for property investment sales, caused by several factors. Firstly, funding is tight. But even potential buyers with financial muscle may get cold feet or decide it simply makes more sense to walk away from their purchase now and forfeit the deposit, as sliding property values will present more attractive investment propositions in due time. There may also be other issues at play, such as exchange rate fluctuations. For instance, from a potential buyer’s perspective, the Aussie dollar’s 21 per cent depreciation against the Singapore dollar in the past three months would make purchasing Singapore properties less attractive.

Putting things in perspective, a seasoned property consultant said: ‘The current climate makes asset sales difficult, whether you’re selling an apartment or a shopping centre.’

Property groups will have difficulty selling assets even to their sponsored real estate investment trusts (Reits). With the stockmarket slide, Reits are trading at very high yields, which makes it difficult for them to make yield-accretive acquisitions. And the current tight funding environment affects Reits as well; their priority these days is refinancing existing debt instead of sourcing new debt for further acquisitions.

The situation is likely to continue for at least the new few quarters; that will have implications for Singapore’s property groups. Heavyweight CapitaLand has booked handsome profits from divesting assets in the past few years. In the past two years, the group has divested some $9 billion of assets – an exercise that has generated well over $1 billion in profits.

The group still has other assets that it could potentially divest, such as its industrial property portfolio here and even some of the office blocks held by its sponsored Reit CapitaCommercial Trust.

Prior to the global financial crash, CapitaLand would have had a high chance of success if it had continued on its path of asset disposals. Now, buyers are scarce and even those that are around would demand distressed sale prices (as cushion against further declines in property values after their purchase).

The trying financial climate will affect asset divestment strategies of even a heavyweight like CapitaLand. But at least it has stronger financial muscle to weather this storm even if it can’t make major divestments in the near future.

Smaller players are not in the same boat. Some companies burdened with heavy debt and which had been hoping to unload some of their properties to improve their balance sheets will be caught if they can’t sell their assets.

Hopefully, the malaise in the property investment sales market will not drag on too long.

Source : Business Times – 2 Dec 2008

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Property no longer a safe asset

Posted by luxuryasiahome on December 2, 2008

Real estate used to be the ultimate all- weather asset class, with low correlation to volatile stocks and unexciting bonds. But in today’s debt-starved market, property is not the safe haven it once was.

Trusted property market tenets have been deformed by an acute shortage of debt and a worldwide souring in economic fundamentals, leaving the sector in a deep rut – awash with equity and rich with discounts but bereft of buyers.

Before, property rental income could rise even if values fell and as one regional market sagged, another flourished. But now, property market misery is universal and many of the world’s biggest investors are standing on the sidelines.

‘Things are going to be a difficult for quite a while,’ Robert Houston, chairman and chief executive of of ING Real Estate Investment Management, told Reuters.

‘Everyone wants to know when the bottom of the market is. I have a good record at calling these things and all I’m prepared to say is that we haven’t reached it yet.’

Like the majority of its peers, ING has slowed the pace of its real estate investments in recent months, refusing to gamble capital when the only thing it feels sure of is that property prices worldwide will continue to fall.

The EPRA/NAREIT Global property index has slumped to a lifetime low of 861 points at market close on Nov 21 from an all-time high of 2,897 on Feb 23, 2007, but bargain hunters have yet to be spurred into action.

Source : Business Times – 2 Dec 2008

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