Lushhomemedia

Archive for December 16th, 2008

« Previous Entries

Developer sales perk up with new launches

Posted by luxuryasiahome on December 16, 2008

Launch momentum may continue; price becomes key factor to move sales

The launch of new developments helped pull up developer sales to 192 units in November, up from just 112 units in October.

The number of units launched by developers increased from 159 units in October to 382 units in November.

Urban Redevelopment Authority’s (URA) monthly real estate data also revealed that the number of launch-ready units hit 6,512 units in November, a marginal rise over October but an increase of 3,840 units from a year ago.

Rosewood Suites in Woodlands by EL Development (ELD) sold 42 units in November, the most units sold, followed by Newton Edge (34 units) and RV Suites (19 units).

ELD is a unit of local builder Evan Lim & Co. Managing director Lim Yew Soon said that the pricing – at an average of $580 psf – ‘may be on the low side’ but added, ‘We expect construction costs to come down next year so we took a bit of a risk with a lower margin’.

Still, Mr Lim conceded that, ‘the price may not be sustainable in the long run’, and ELD could begin to raise prices.

He also believes that a price war among developers is not likely because most developers bought sites at about the same price. ‘And unless a developer goes bust, there is no reason for them to sell at a loss,’ he added.

PropNex CEO Mohamed Ismail said that prices for existing developments in the same area such as Casablanca are going for between $500-$550 psf. He said that Rosewood Suites is ‘extremely attractive in today’s market’ especially considering that new public housing flats are about $300 psf with Design, Build and Sell Scheme (DBSS) flats at about $450 psf.

PropNex was the marketing agent for Rosewood Suites and Mr Ismail added that most of the buyers were HDB upgraders.

Both Newton Edge and RV Suites are in the core central region (CCR) and Colliers International director for research and advisory Tay Huey Ying noted that more than half the 382 units launched were in the CCR.

She added: ‘Developers have been stepping up launches of prime properties since August 2008, in a reversal of the first half’s trend where developers tended to hold back launches of prime properties. This could be an indication of weakening holding power amongst smallish and mid-tier developers with prime development sites.’

Ms Tay believes developers are likely to continue with the current launch momentum and could launch some 450-500 new units in December 2008, bringing the total launch volume for 2008 to some 6,500 units, less than half of last year’s launch volume of more than 14,000 units.

Ms Tay expects developers’ sale volume to hover between 150-200 units. This would bring sales volume for the year to less than 4,500 units, or less than a third of last year’s volume of more than 14,000 units.

Other developments that registered better sales in November were Evania at Upper Paya Lebar Road and a landed housing project at Andrews Terrace.

CBRE Research executive director Li Hiaw Ho said: ‘Price remains a critical factor to move sales, as seen by the good response to these projects.’ He also said that prices for units in Evania have apparently been reduced from above $800 psf when it was first launched in March to $610 psf-$650 psf.

Knight Frank director (research and consultancy) Nicholas Mak expects home-buying sentiments and launch activity to remain subdued until after the Chinese New Year in January.

‘Buyers will remain very cautious even if some re-pricing sets in,’ he added. ‘Since the economic drag is expected to persist into 2009, developers may be increasingly open to considering creative marketing tactics and soft discounts to attract buyers,’ he added.

Already, Knight Frank notes that the lowest priced non-landed unit sold in November was in Rosewood Suites at $512 psf while the highest priced non-landed unit is Orchard Scotts, which sold for $2,006 psf (The highest-priced unit sold in Orchard Scotts was $2,407 psf).

DTZ executive director Ong Choon Fah also reckons the market is seeking ‘clarity’ on the economy and could wait for the January Budget measures before moving.

And while some hope for the return of the deferred payment scheme, Mrs Ong believes that if it is brought back, ‘It won’t be in its former form’.

Source : Business Times – 16 Dec 2008

Posted in General, Market Reports, New Launches | Tagged: , , , | Leave a Comment »

New private home sales ‘could fall to 18-year low’

Posted by luxuryasiahome on December 16, 2008

Many of last month’s 192 sales were made at just five developments

ONLY 192 new private homes were sold last month, sparking concerns that total sales this year could plunge to levels not seen since 1990.

CBRE Research tips a total sales figure of around 4,300 units – a striking plunge from the boom last year when a record 14,811 new private homes changed hands.

If the projection pans out, private home transactions this year will be the lowest in 18 years when 2,526 units were sold in 1990.

And there is not much cheer on the horizon either with the ’sluggish sales momentum’ likely to persist as the economy is expected to weaken further, said CBRE Research executive director Li Hiaw Ho.

The Urban Redevelopment Authority (URA) data yesterday showed that last month’s sales were up slightly on the 118 units shifted in October but down from September’s 376.

The latest numbers add up to 4,200 private homes sold in the first 11 months.

Sales at a few projects held up reasonably well, probably due to competitive pricing, say experts. Developers launched 382 units for sale last month – up from 159 in October when the market was in shock – but half the 767 units launched in September. It was also below the 12-month average of 541 units, said Knight Frank.

‘The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote,’ said its director of research and consultancy Nicholas Mak.

Many sales were made at just five developments with many projects not attracting a single buyer. Last month’s top seller was Rosewood Suites in Woodlands, a 99-year leasehold project that moved 42 units at between $512 per sq ft (psf) and $687 psf.

Two prime projects also did relatively well. Newton Edge sold 34 units while 19 went at RV Suites in River Valley Road.

Mr Li said the two have mostly small units, which help contain the absolute price at $550,000 to $900,000 per unit, based on their median prices of $1,201 psf and $1,350 psf respectively.

Buyers snapped up 15 units at Evania in Upper Paya Lebar at between $612 psf and $650 psf after prices were apparently cut from above $800 psf at the launch in March last year, said Mr Li. ‘Price remains a critical factor to move sales, as seen by the good response.’

And 11 houses at Andrews Terrace, a project in a new landed estate called Sembawang Greenvale, sold at prices starting from $1.3 million each.

Suburban homes accounted for 53 per cent of developers’ sales last month, which shows that there is a pool of genuine buyers out there, said Ms Tay Huey Ying, director for research and advisory at Colliers International.

But prime properties dominated last month’s launches. Developers have stepped up releases since August, a reversal of the first-half trend when they held back prime homes, she said. ‘This could be an indication of weakening holding power among smallish and mid-tier developers with prime development sites.’

Homebuying sentiment and launch activity should remain subdued in the month ahead as the economy further contracts and the employment market is anticipated to tighten further, said Mr Mak.

‘Buyers will remain very cautious, even if some re-pricing sets in.’

WEAK SENTIMENTS REMAIN

‘The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote.’ – Knight Frank’s director of research and consultancy Nicholas Mak

Source : Straits Times – 16 Dec 2008

Posted in General, Market Reports, New Launches | Tagged: , , , | Leave a Comment »

Low Keng Huat Q3 profit trebles

Posted by luxuryasiahome on December 16, 2008

PROPERTY and hospitality group Low Keng Huat (Singapore) yesterday reported a net profit of $12.95 million for the third quarter ended Oct 31, 2008 – more than treble the $3.75 million for the previous corresponding quarter.

This drove earnings per share for the quarter to 1.75 cents, up from 0.51 cents in the year-ago period. Higher earnings came on the back of a near doubling in revenue to $52.26 million from $26.45 million.

For the nine months ended Oct 31, Low Keng Huat’s net profit surged 105 per cent from a year ago to $23.36 million.

The higher earnings were mainly due to higher development profit from associated companies. Contributions from projects such as the one-north Residences, Duchess Residences and Regency Suites had increased, while those from Domain 21 had dropped.

Low Keng Huat also benefited from lower construction losses, partly because it managed to recover some cost increases.

Net earnings in the nine months would have been higher if not for lower profits from the hotel and investment segments.

Net profit before tax and minority interests for the hotel business dropped as concessionary income from gaming centre operations fell. Overall hotel revenues were also lower as the weaker Australian dollar shaved revenues from Duxton Hotel Perth.

Investments also booked a lower net profit before tax and minority interest. This was due to the sale of some quoted equities which had to be marked to market.

Group revenue in the nine months soared 66 per cent from a year ago to $148.09 million, driven largely by an increase in construction revenue. There was a higher percentage of completion for ongoing projects and new projects – the Hardrock Hotel at Sentosa and Meritus Mandarin Hotel – had also started.

Low Keng Huat said that it is ‘in a strong financial position’. Its net gearing as at Oct 31 was 15.4 per cent, lower than the 24.2 per cent at end-January.

The group also expects its two hotels in Perth and Ho Chi Minh City to perform well despite more challenging economic conditions in Western Australia and Vietnam.

Low Keng Huat won a $295 million project last month to construct a shopping mall cum bus interchange complex at Serangoon Central. Its order book as at November was $900 million.

The counter gained one cent to close at 13.5 cents yesterday.

Source : Business Times – 16 Dec 2008

Posted in Construction, Developer News, General | Tagged: , , | Leave a Comment »

Legoland M’sia seen tapping govt loan

Posted by luxuryasiahome on December 16, 2008

THE Malaysian government is likely to be tapped for a loan to kick-start the development of the proposed Legoland theme park in south Johor in view of the current credit crunch which has made funding tougher and more expensive to obtain.

A senior government official told BT that the joint venture behind Legoland Malaysia was expected to approach the federal government for a loan not exceeding RM500 million (S$207 million).

‘It is difficult to get loans now, so it will have to be Malaysian government sponsored,’ he said of the park which is scheduled to be completed by the end of 2013.

Should the government agree to a loan of RM500 million, it would provide two-thirds of the project funding – a point critics could conceivably latch on to as evidence that the theme park might not be otherwise commercially feasible.

The Legoland Malaysia project was announced over the weekend, with a planned investment of RM750 million. The theme park in Iskandar Malaysia will be the first of its kind in Asia and will be located about 20 minutes from the Second Link.

The project is to be 80 per cent owned by a consortium led by Iskandar Investment Bhd (IIB) and the balance by Merlin Entertainment, the designer and operator of the park.

Merlin’s shareholders are US private equity firm Blackstone Group, Dubai International Capital and Lego Holding, while state investment agency Khazanah Nasional holds 60 per cent of IIB.

Over time, IIB plans to dispose of part of its equity in the theme park to other interested players – hotels looking to operate in the Legoland theme park, for example – so that investors are motivated to ensure the park’s success.

Besides the entertainment hub where Legoland and possibly two other theme parks would be sited, Iskandar Malaysia has delineated other areas for clusters of commercial activities, including logistics, education, ICT, and banking.

Over time, the government hopes to transform the planned special economic zone – an area about two-and-a-half times Singapore – into an engine of growth.

A multi-phase development, Iskandar Malaysia has reportedly received slightly over RM40 billion in international and domestic investments, or 86 per cent of the RM47 billion targeted in the first phase up to 2010.

Legoland Malaysia, which would incorporate millions of the colourful plastic bricks for which Lego is famous for, would be built on a 145-acre site in Nusajaya and would feature over 40 types of rides and other attractions.

It is expected to generate over 5,000 jobs during its construction as well as upon its completion.

Although Legoland Parks managing director John Jakobsen has projected a million visitors annually to the park, some remain sceptical of the theme park’s future given Malaysia’s hot and humid climate.

Even in the cooler climes of Paris and Hong Kong, Disney theme parks are struggling to meet projected visitor numbers and critics contend that Hong Kong’s problem ought to serve as a warning of the potential pitfalls ahead, given that it borders China’s vastly populated Shenzhen.

Singapore’s upcoming Universal Studios in Sentosa could also prove challenging despite the contentions of Legoland backers that both attractions would be ‘complementary’.

Universal Studios Singapore would have a headstart in that it is scheduled to be completed in 2010 – at about the same time when construction is expected to start on Legoland Malaysia.

Other existing Legoland parks are located in Denmark, Germany, the United States and Britain.

Source : Business Times – 16 Dec 2008

Posted in General, Overseas Property | Tagged: , , , , | Leave a Comment »

S’pore property firms make their mark

Posted by luxuryasiahome on December 16, 2008

KAZAKHSTAN might not be very high up on the list of places for Singaporean property companies to venture into, but some home-grown players in the real estate field – including Jurong International, Surbana Corporation, and CapitaLand and its subsidiary The Ascott Group – have made their mark on the country’s landscape.

‘As the ninth-largest country in the world and ranking 11th with the largest proven reserves of both oil and gas, Kazakhstan certainly cannot be ignored,’ said a spokesperson for Jurong International.

‘Kazakhstan has strong oil and natural resource industries,’ said Tony Soh, deputy chief executive of Ascott Hospitality, Ascott’s hospitality management arm. ‘We remain optimistic on the long term potential of the serviced residence industry in Kazakhstan.’

Jurong International was active in Kazakhstan from 2004-2006, providing consultancy services for an IT Park and the National Centre for Biotechnology in Astana, the capital of Kazakhstan. Right now, the company has no projects on the ground in the country, but is open to doing more work there, it said.

The feather in Jurong International’s cap when it comes to Kazakhstan is the National Centre for Biotechnology in Astana, a world-class research facility. The centre aims to serve as a catalyst for the nation’s foray into the competitive biotechnology industry.

Designed over three phases, the 28,000 sq m centre will house laboratories, offices, R&D facilities, a vivarium, a greenhouse, a conference centre, accommodation and other amenities to promote research and innovation.

Another Singaporean consultancy group, Surbana Corporation, has also done consultancy work in Kazakhstan. And CapitaLand, Singapore’s biggest property developer, last year announced that it was venturing into Kazakhstan as well.

In April 2007, CapitaLand said that it has entered into a Memorandum of Understanding with Eurasia Logistics Limited, a major Russian logistics property developer, to build 16 logistics properties comprising up to a total of five million sq m of space across the key cities of Kazakhstan, Russia and Ukraine.

CapitaLand chief executive Liew Mun Leong said then that the deal was part of his group’s strategy to seek opportunities in fast-growing, oil-rich countries which include Kazakhstan.

CapitaLand’s serviced residence unit Ascott has also secured management contracts for two prime serviced residences in Kazakhstan – one in Astana and the other in Aktau, a city in the oil-rich western region by the Caspian Sea. The contracts were awarded by Tsesna Corporation, a well-established conglomerate in Kazakhstan.

The 200-unit Ascott Astana and the 120-unit Citadines Aktau, which will both be built by Tsesna Corporation, are targeted to open in the second half of 2010.

Doing business in Kazakhstan does not come without its challenges, companies say. Kazakhstan is reputed to be quite tough on its business negotiation stance.

‘Hence for our contract negotiations, we have been extremely careful,’ said the Jurong International spokesperson. ‘But the positive side to this is that the authorities honour their agreements and fulfil their obligations, and because they are very committed to globalisation, they are fast learners and should be making some headway soon. The Kazaks are also warm-natured and hospitable and expect you to down vodkas by the glasses!’

Source : Business Times – 16 Dec 2008

Posted in Developer News, General, Overseas Property | Tagged: , , , , , , , , | Leave a Comment »

US property recovery to start by spring

Posted by luxuryasiahome on December 16, 2008

Mogul Sam Zell also sees demand for houses rising soon

A revival in the US real estate market, key to a recovery in the world economy, should begin by next spring, property mogul Sam Zell told an Israeli business conference on Sunday.

‘I believe that in a country that continues to grow and where the population continues to grow, we will see the first signs of equilibrium in the housing market in the spring of 2009 and I will expect by spring 2010 the housing market in the US will look a lot better,’ Mr Zell said.

Mr Zell is the owner of Tribune Co, publisher of the Chicago Tribune and the Los Angeles Times, which filed for Chapter 11 bankruptcy protection last week. He declined to comment on his plans to sell the Chicago Cubs baseball team and its Wrigley Field stadium.

Mr Zell said that with the US population continuing to grow and with fewer than 600,000 building starts in 2008, over a million fewer than in each of the past 10 years, demand for houses would soon rise.

He added that after the US housing market begins to stabilise over the next 12 months growth would return to other markets, as the balance of supply and demand evened out ‘and the staggering amount of fiscal stimulation that has been enacted around the world will have its impact’.

Mr Zell said he currently saw four global areas with a chance for investments because demand was continuing – Brazil, China, the Middle East, and parts of eastern Europe. ‘They have growth, they have political stability, they have natural resources … and a relatively low cost of entry today,’ he noted.

Source : Business Times – 16 Dec 2008

Posted in General, Overseas Property | Tagged: , , , | Leave a Comment »

Debate over hillslope project revived

Posted by luxuryasiahome on December 16, 2008

KUALA LUMPUR: When retired government servant Peter Raiappan bought his home in a middle-class suburb in 1970, the hillslope overlooking his backyard was filled with trees.

Today, the trees are gone and the slope in the Medan Damansara estate in Kuala Lumpur is being turned into a bungalow retreat for the rich.

‘When we bought the houses, the developer then had showed us a plan of the area. The hill was marked as a green lung and we were assured that it would not be developed,’ the 65-year-old told The Straits Times.

Four of the residents, including Mr Raiappan, are being sued by the developer of the Damansara 21 project for protesting against its planned development.

The issue highlights the current anger against projects built on slopes, following a recent landslide that killed four people and turned life topsy-turvy for thousands of others in the neighbouring state of Selangor.

The 21 bungalows being built in the Damansara 21 project will each come with a swimming pool. Each house costs between RM10 million and RM15 million (S$4.1 million and S$6.2 million).

The project is being developed by SDB Properties; it paid RM50 million for the land.

The developer, in a statement issued in September, said it ‘continues to stand by its commitment to ensure that all works in the project will be carried out in a proper manner, in full compliance with all conditions imposed by the relevant authorities and with the residents’ safety in mind’.

The area’s municipal authority, Kuala Lumpur City Hall, had said that the land was private property and not a designated green lung and all relevant authorities had given the green light for the project to go ahead.

Work started last December.

Earlier this year, nearly 20 residents from Medan Damansara knocked on the doors of the Anti-Corruption Agency in Putrajaya to hand over papers alleging corruption on the part of KL City Hall when it allowed the developer permission to build on the slope.

The developers filed a defamation suit against four of the residents association’s office bearers in their personal capacity at the High Court three months ago.

Besides Mr Raiappan, those sued are association president P. Subhakaran, former association president Abdul Shukor Abdullah and Mr Randhir Singh.

Following the deadly landslide in Bukit Antarabangsa a week ago, the government has halted the Damansara 21 project pending a review.

But Mr Singh said that it is not good enough and they want the government to scrap the development.

‘We will challenge the suit. The project is a monster staring at us. We fear for our safety and we have the right to speak up for it,’ he said.

But many developers felt the Bukit Antarabangsa incident had caused all of them to be painted unfairly.

Mr Eddy Chen, chairman of The Hillslope Development Task Force of the Real Estate and Housing Developers’ Association, said banning all hillslope projects was not the way out.

‘A blanket ban on all hillslope developments is not a sustainable long-term answer,’ he wrote in a column in The Edge, a financial newspaper, yesterday.

He said that more stringent rules for the maintenance of slopes and the holistic involvement of all relevant parties in adhering to a slope-safety management and warning system was more important.

Source : Straits Times – 16 Dec 2008

Posted in General, Overseas Property | Tagged: , , , , , | Leave a Comment »

Developer’s profits up 245% despite gloom

Posted by luxuryasiahome on December 16, 2008

DEVELOPER Low Keng Huat has defied the gloom in corporate Singapore by reporting that its third-quarter net profit surged 245 per cent to $13 million.

Revenue for the three months ended Oct 31 nearly doubled to $52.2 million from $26.4 million last year, the company announced yesterday.

The nine-month numbers were equally impressive, with net profits up from $11.4 million last year to $23.4 million on the back of a 66 per cent jump in revenue to $148.1 million.

Low Keng Huat’s robust bottom line was due to higher development profits from associated companies, lower construction losses that were offset by lower profits from its hotel and investment segments, and a higher taxation charge.

The group’s construction segment, however, was its key driver, with revenue for the nine months hitting $60.6 million.

Gross profit for the same period rose by $9.1 million to $18.3 million, mainly due to ex gratia payments from partners for the Domain 21 condominium development, cost recovery for concrete due to the Indonesian sand ban, and the completion of construction projects like The Chuan, Novena Phase 3, Twin Regency and Domain 21 last year.

Two of its new projects – Meritus Mandarin Hotel and Hard Rock Hotel at Sentosa – have also started to contribute to the group’s performance.

Earnings per share for the quarter rose from 0.51 cent to 1.75 cents, while net asset value per share was at 28 cents as at Oct 31, down from 54 cents as at Jan 31.

No dividend has been declared or recommended for the nine months ended Oct 31.

Managing director Low Keng Boon hinted in the group’s financial statement that harder times are ahead. He said: ‘There is no certainty on how long the recession is going to last.’

The firm secured a $295 million project last month to build a shopping mall with an integrated bus interchange at Serangoon Central. This took its total order book to about $900 million.

Mr Low was also quoted in the statement as saying that the group’s remaining two hotels, in Perth and Ho Chi Minh City, are expected to continue to perform well despite the looming recession.

Low Keng Huat shares closed one cent, or 8 per cent, up at 13.5 cents yesterday.

Source : Straits Times – 16 Dec 2008

Posted in Construction, Developer News, General | Tagged: , , | Leave a Comment »

Private residential launches on the up …

Posted by luxuryasiahome on December 16, 2008

… as prices of high-end private properties move down

PRIVATE home launches and sales were up last month after a dismal October. The number of private residential units launched more than doubled from October’s 159 to 382, and units sold increased from 118 to 192, according to the data released by the Urban Redevelopment Authority (URA) yesterday.

Analysts said the jump in units launched reflects developers clearing stock and testing sentiment.

“I wouldn’t jump to the conclusion that the holding power of developers is beginning to wane,” said Mr Karamjit Singh, managing director of Credo Real Estate. “We have to recognise that it was a very turbulent month in October.”

Given that financial markets were less volatile last month, he said developers could be launching units to “test the waters”, and to see how receptive the buyers are right now.

DTZ executive director, Ms Ong Choon Fah, said some developers could have re-priced their projects and relaunched their units. “It could also be the balance of the previous unsold units of the project and now they are being launched for sale,” she added.

Prices at the top end of the market continued to trend downwards. Four units of Orchard Scotts were sold at about $2,407 per square foot (psf) in October. Last month, one unit was sold at $2,006 psf. At the Floridian along Bukit Timah Road, three units fetched a median price of $1,331 psf last month, compared with the October median of $1,388 psf.

In the suburbs, developers are also chopping prices. Mr Li Hiaw Ho, executive director at CBRE Research, noted that prices for units in Evania at Upper Paya Lebar Road, which is being developed by Novelty Amber, had been reduced from above $800 psf when it was first launched on March to $610-$650 psf in November.

Looking ahead, experts said that activity in the market could be subdued because of uncertainty and the festive season.

“In the next three to four months, if banks are more eager to lend and developers lower their prices psf, this combination could spur the buyers back into the market,” said Mr Ku Swee Yong, director of marketing and business development from Savills Singapore. “December will be rather quiet because banks might want to end their year positively and not hand out more loans which will increase their risks. It is also the end of the year, when buyers usually go for holidays.”

Source : Today – 16 Dec 2008

Posted in General, Market Reports, New Launches | Tagged: , , , , | Leave a Comment »

Just leave me alone!

Posted by luxuryasiahome on December 16, 2008

WILL I ever get to live in peace?

My condominium’s third sales committee disbanded a few months ago. We thought we had seen the last of them due to the tough economic times. But I received a new circular in my mailbox last week, saying yet another sales committee wants to go en bloc. Just as I was heaving a sigh of relief and thinking that I could now renovate my apartment, too.

When will it end? Surely as a condo resident I have the right to peace and quiet in my abode for some length of time? I am past 60 years old, and in my twilight years, the thought of looking for a new environment troubles me greatly.

And if my condo could not go en bloc in good times, why on earth would anyone want to sell in bad times?

Could the authorities please revise the en bloc laws to include a realistic time bar on bothersome, repeated en bloc attempts, and to make it difficult to en bloc during a bad economy? If the price does not meet the desired en bloc price of two years back, no sale should be allowed.

Lee Siew Hua

Source : Today – 16 Dec 2008

Posted in Enbloc, General | Tagged: , | Leave a Comment »

« Previous Entries