Lushhomemedia

Archive for January 7th, 2009

« Previous Entries

Luxury residential sales market moved at slower pace last year

Posted by luxuryasiahome on January 7, 2009

2008 saw a drastic fall in sales of luxury apartments in Singapore. Property consultancy CB Richard Ellis said 1,096 caveats were lodged in 2008 – a fifth of the sales volume in 2007.

In 2007, the average launch price of luxury projects ranged from S$2,000 to S$4,000 per square foot. But by the end of 2008, the average launch price of such homes had fallen to a range of between S$2,000 and S$2,600 per square foot.

To date, only 45 per cent of the luxury units launched in the second half of 2007 have been sold.

Looking forward, CBRE expects prices of luxury apartments to fall by about 10 to 15 per cent this year. It added that activity in the luxury residential market is likely to be lukewarm due to the current financial crisis.

For good class bungalows, fewer were sold last year compared to 2007. But those that were sold achieved higher transaction prices.

CB Richard Ellis said 49 good class bungalows, worth S$785 million, were sold last year, compared to 87 in 2007.

The bungalows were sold for an average price of S$822 per square foot in 2008, up 21 per cent from S$681 per square foot in 2007.

Source : Channel NewsAsia – 7 Jan 2009

Posted in General, Landed Property, Luxury Property, Market Reports | Tagged: , , , , , | Leave a Comment »

More REITs, developers expected to put projects on hold

Posted by luxuryasiahome on January 7, 2009

Shares of CapitaCommercial Trust (CCT) rallied to a two-month high on Wednesday following an announcement that it would refinance as much as S$580 million of mortgage-backed securities. The counter was up 7 per cent to S$1.00.

Analysts are also cheering the company’s decision to scrap a billion-dollar redevelopment plan in Singapore’s business district as more developers are expected to hold back development plans in the months ahead, due to weak rentals.

Construction costs may be moderating but not at a satisfactory rate, according to market-watchers. There is also a weak property market and an increasingly tight credit environment.

All these make it difficult for REITs to justify pursuing aggressive growth strategies.

Brandon Lee, investment analyst, DMG & Partners, said: “Capital preservation right now really ranks on top of most REITs radar. If the REITs have any additional cash position or capital, they would actually try to reserve it for any near-term refinancing issues instead.”

Therefore, analysts said it is no surprise that CCT chose to scrap plans to transform the Market Street car park in Singapore’s business district into a Grade-A commercial building, which would have cost S$1.5 billion.

The Market Street car park project was first announced in January last year. However, in April, CCT decided to delay the project and to make a decision after mid-2009. Since then, it has decided to work on improving tenant mix and extending longer term leases.

Analysts said this piece of news brings relief not only to the tight car park situation in the central business district, but also to tenants who have shops in the building.

Donald Han, managing director, Cushman & Wakefield, said: “In the past, one of the issues for the Market Street car park was the uncertainty in time frame. There are tenants operating who are unsure of whether their leases can be renewed.

“Some of them have packed in fairly high renovation costs. To be given notice to quit or to amortize all the expensive fit over a shorter period is an expensive affair for tenants.

“So now the deferment or non-development position by the owners would create certainty, not only for existing tenants but also new tenants who are looking into potentially taking a position in the Market Street retail component.”

Other REITs apart from CCT have also found it sensible to hold back development or acquisition projects for now. Among them are CapitaMall Trust, Suntec REIT and Saizen REIT.

Mr Lee said: “Since the third quarter last year, I think there are a handful of REITs which have put on hold their plans, such as CapitaMall Trust. They have actually deferred the asset enhancement plans for three assets, as well as Suntec REIT which put on hold its further acquisition of more strata title spaces in Suntec City.”

This conservative stance is one that even large developers are taking.

Mr Han said: “Owners of Marina House for instance have backed out from wanting to develop. UIC announced last year they’re not going to redevelop UIC building into a residential building and they are continuing longer term leases for office tenants.

“Of late, you’ve got the South Beach project delayed by virtue of high construction costs and there’s also the Funan Digital Mall (project) which has been deferred.”

Analysts said the situation will only improve by end-2010 or 2011 – a year or so after the economy picks up when the credit situation improves.

Source : Channel NewsAsia – 7 Jan 2009

Posted in Developer News, General, Market Reports, REITS | Tagged: , , , , | Leave a Comment »

Fewer Good Class Bungalows sold last year

Posted by luxuryasiahome on January 7, 2009

A total 49 Good Class Bungalows changed hands in Singapore for a total $785 million (US$532 million) last year, down from the 87 transactions worth $1.15 billion in 2007 and 119 deals at $1.23 billion in 2006, according to latest figures from property consultancy CB Richard Ellis.

On a dollar per square foot (psf) value based on land area, the average price of GCBs rose to $822 psf last year, from $681 psf in 2007 and $501 psf in 2006.

These figures reflect a 64 per cent increase in GCB prices in the two years.

Source : Business Times – 7 Jan 2009

Posted in General, Landed Property, Luxury Property, Market Reports | Tagged: , , , , | Leave a Comment »

CapitaLand declines to comment on rights issue rumours

Posted by luxuryasiahome on January 7, 2009

CapitaLand Limited on Wednesday said it will not comment on market rumour and queries that the property group is planning a rights issue.

‘In response to various media and analyst queries that CapitaLand is planning a rights issue, CapitaLand wishes to state that we will not comment on such market rumour or speculation,’ it said.

CapitaLand said it regularly receives and reviews various proposals of a business, financing or other nature.

‘It is CapitaLand’s disclosure policy to make the appropriate announcements if and when required, in accordance with the SGX-ST Listing Rules.’

Market speculation was rife on Wednesday that the property developer is planning a rights issue to raise capital.

A media report quoted a source saying that while there is ‘no definite decision, but a rights issue is being considered.

If the issue takes place shortly, it would be the second major Singapore company to raise money through a rights issue in less than a month.

In late December, DBS Group Holdings Ltd. said it planned to raise about S$4 billion to bulk up its capital base.

CapitaLand had S$4.2 billion in cash and cash equivalents as of Sept. 30, 2008.

The property market in Singapore and the region has cooled since last year.

Chief Executive Liew Mun Leong has said the company could consider acquiring some distressed real estate companies in Asia, including China and Australia.

The shares hit an intraday high of S$3.61 on Wednesday before ending at S$3.12, down 28 cents from Tuesday.

Kim Eng Securities has called a buy on the shares, with a target price of $4.18 a share.

Analyst Winston Liew said the Chinese government has in Dec 2008 cut its key 1-year lending rate to 5.31%, compared to a high of about 7.5% at the beginning of the year. It also unrolled a slew of measures aimed at the flagging real estate market.

‘These measures could underpin a recovery in the Chinese property market possibly in 2H09, which will be positive for CapitaLand,’ Mr Liew wrote.

‘We think that CapitaLand is in a pole position for recovery in its key markets like Singapore and China, and is still sitting comfortably on its cash hoard of S$4.2 billion. Its diversification into the GCC is also thriving. Reiterating our BUY recommendation, our target price is raised to $4.18, based on a 10%-discount to RNAV.’

Source : Business Times – 7 Jan 2009

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

Research house upbeat on property stocks

Posted by luxuryasiahome on January 7, 2009

It cites falling interest rates and possible favourable Budget measures

INVESTORS can re-visit property stocks as falling interest rates and possible Budget measures improve the operating environment for real estate companies this year, said Kim Eng Research in a report yesterday.

The report came on a day when property stocks retreated after a rally in earlier sessions. CapitaLand, one of Kim Eng’s top picks within the sector, ended a five-day rally with a 19-cent fall to $3.40. City Developments also shed 10 cents to close at $7.15.

In its report, Kim Eng said that transactions across all property asset classes are likely to remain at a standstill at least until mid-2009. But ‘we think that there are opportunities for an increased risk appetite . . . the share prices seem to suggest that investors have been overly risk-averse’, it said.

‘When economies emerge from the recession and market confidence returns, the property markets will be quick to react, possibly re-emerging as the sector to watch from as early as 2H09.’

The research house believes that property companies can benefit as economies cut interest rates to battle recession. It noted that the three-month Libor is now at its lowest level since June 2004.

‘These measures will lower the developers’ interest payments for loans taken up for land acquisitions and construction. Furthermore, when sufficient risk appetite has returned, the developers may also find it easier to access credit for new investments,’ it explained.

Banks may also introduce more attractive mortgage packages in the low interest rate environment, encouraging genuine homebuyers to enter the market, said Kim Eng.

This year’s Budget may also contain help measures for the property sector – for instance, the government could reinstate the deferment of stamp duties until projects are complete, said Kim Eng.

And compared with the days of the Asian financial crisis, many property developers today have healthier balance sheets, it added. ‘Overall, our picks for the property sector are City Developments and CapitaLand.’

But another research house OCBC Investment Research downgraded its rating for CapitaLand from ‘buy’ to ‘hold’ on Monday. Valuing the counter at $3.27, analyst Foo Sze Ming said that ‘we see little upside to its share price at the moment’.

Source : Business Times – 7 Jan 2009

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

Mapletree Business City snaps up big-name tenants

Posted by luxuryasiahome on January 7, 2009

HSBC, Unilever, SAP and Amex sign leases before park’s completion in 2010

The business park space at Mapletree Business City coming up in the Alexandra Road area has been substantially pre-leased ahead of its expected completion in second half 2010.

Developer Mapletree Investments, a fully-owned unit of Temasek Holdings, is said to have secured big-name tenants for a total of about 570,000 sq ft – including HSBC (190,000 sq ft), Amex (100,000 sq ft), consumer products giant Unilever (150,000 sq ft) and German software major SAP (around 120,000 to 130,000 sq ft).

CB Richard Ellis is understood to have brokered the leasing deals for the first three tenants, but it declined to comment on specific commercial terms of the leases.

However, BT understands that monthly rents signed for the deals are in the single-digit range and the lease durations are longer than normal.

In contrast, the average monthly rental value for Grade A office stood at about about $15 psf at the end of last year, after a 20 per cent slide from Q3 2008.

‘Mapletree Business City offers high-quality commercial space in a lower-cost location. In these austere times, that resonates with many occupiers,’ CBRE executive director Moray Armstrong said.

In addition, the attraction of Mapletree Business City is the access tenants will have to a host of facilities – including an air-conditioned food court, child care centre, gym, swimming pool, a 350-seat auditorium and meeting rooms.

Industry observers suggest the space taken by the first four tenants signed up at Mapletree Business City could stem from a combination of expansion of existing space requirements and consolidation from some existing locations.

‘Mapletree Business City will have large floor plates, so it makes sense for big users to relocate to a single venue like this to optimise their space requirements, rather than be in different buildings with smaller floor plates. At the same time, they would be reducing occupancy costs by moving out of the CBD,’ said Cushman and Wakefield Singapore managing director Donald Han.

HSBC’s current locations include HSBC Building at Collyer Quay, Singapore Post Centre in Paya Lebar, Comtech (next to Mapletree Business City) and the Claymore area. Amex, which has leased space at Marina Bay Financial Centre, has operations in Hitachi Tower in Collyer Quay and The Concourse at Beach Road. Unilever’s business locations in Singapore include UE Square at Clemenceau Avenue and along Vision Crest in Penang Road. SAP is at Goldbell Tower at Scotts Road and 63 Market Street.

BT understands that Mapletree Investments is in talks with other potential tenants to take up business park space at Mapletree Business City. The development will have about 1.7 million sq ft net lettable area – of which nearly 1.3 million sq ft will be for business park space in three blocks and about 400,000 sq ft will be offices in an 18-storey block. The business park blocks comprise a 17-storey tower and two 14-storey blocks joined at the upper levels.

Mapletree Investments is developing the project on the site of the former Alexandra Distripark (Blocks 1-3) and on an adjacent plot at Alexandra Terrace.

The development will be integrated with Mapletree’s adjacent properties – The Comtech and PSA Building – to form the group’s Alexandra Precinct assets. PSA Building will be directly connected to Labrador MRT Station under the Circle Line opening in 2010.

Source : Business Times – 7 Jan 2009

Posted in Developer News, General, Office / Retail Space | Tagged: , , , , , | Leave a Comment »

It’s not arbitary

Posted by luxuryasiahome on January 7, 2009

Court said temple’s acquisition based on planning factors

AN APPEAL by three devotees to get back the site of their 66-year-old temple off Bartley Road has been dismissed. In an 18-page judgment released on Monday, the Court of Appeal rejected the trio’s contention that the Government’s acquisition of the land had violated the Republic’s Constitution.

The three devotees of Jin Long Si Temple – Ms Eng Foong Ho, Mr Hue Guan Koon and Ms Ang Beng Woon – alleged that they had not been treated on par with other worshippers. They said only the temple site was being acquired though other religious institutions – the Ramakrishna Mission and Bartley Christian Church – were also located in the residential area.

Justice Andrew Phang said an executive act “may be unconstitutional if it amounts to intentional and arbitrary discrimination”. But, he pointed out, the devotees had not alleged any arbitrary action on the part of the Government; they had also conceded that the acquisition had proceeded in good faith.

The Jin Long Si Temple site was acquired by the Government in January 2003 for comprehensive redevelopment in conjunction with the construction of the new Bartley MRT station along the Circle Line.

The temple site and the adjoining State land – the former Millenia Institute site – are slated for high-density residential use. The temple was given five years, until Jan 31 last year, to relocate.

Justice Phang said the temple property, which lies at a corner, would help make up a substantial plot of State land. “Its amalgamation with the State land would not only appear reasonable but would also enable the entire plot of land to be developed in as optimal a fashion as possible,” he said.

The judge said “it is clear” the Collector of Land Revenue had arrived at his decision to acquire the temple property “based solely on planning considerations”.

Over the years, several places of worship have been relocated to make way for redevelopment, including the Sri Marathadi Muneeswarar at Upper Changi Road North, the Velmurugan Temple along Bukit Merah and Sri Mariamman Muneeswarar Temple at Jalan Kayu.

A MinLaw spokes woman said: “The Singapore Land Authority will discuss with the temple trustees on the relocation of the temple to their earlier preferred site at Tai Seng Avenue. The schedule for the move will be discussed with the temple trustees as there is a need to prepare the site for sale.”.

The Government also said it would take steps to preserve the temple’s 100-year-old Bodhi Tree. Tender conditions for the site’s redevelopment will require the developer ensure the tree’s retention.

Source : Today – 7 Jan 2009

Posted in General, Legal Issues & News | Tagged: , , , | Leave a Comment »

Ex-committee chairman charged

Posted by luxuryasiahome on January 7, 2009

Businessman accused of vandalising property at East Coast estate

WHEN the possibility of a collective sale for Laguna Park was announced in December 2007, some residents held back, hoping this would drive up the estate’s value.

But things turned ugly later at the East Coast area condominium, which was hit by a spate of vandalism cases after several residents opposed the sale. Cars belonging to residents known to have been against the sale were splashed with paint or scratched, while mailboxes were found with glue in their keyholes.

Still, many residents of the 667,000 square-foot estate were shocked to learn that their estate management committee chairman, Mr Lee Kok Leong, had been arrested last August on suspicion of perpetrating these acts.

During a brief appearance in court yesterday, the 62-year-old businessman, dressed in a white long-sleeved shirt and black jeans, stood emotionless as he was charged with two counts of mischief.

According to court documents, Mr Lee is accused of inserting glue into the padlock, rear gate keyholes and main wooden door of a flat at Block 5000E of Laguna Park at 12.44am on Aug 25 last year.

He also allegedly vandalised the front and rear wooden door keyholes of another flat on the same floor.

The damages amounted to $590.

The case was adjourned after defence lawyer Ramesh Tiwary said he needed time to make representations. Mr Lee will reappear in court again on Feb 3.

If convicted, he could be jailed for up to one year or fined, or sentenced to both on each charge.

Mr Lee made a quick exit after the hearing, avoiding the handful of residents who had turned up to witness the proceedings. The businessman also declined attempts to be interviewed, getting into a waiting car to avoid photographers.

A spokesperson for the management committee told Today that new chairman Reggie Chew took over last October following Mr Lee’s resignation in August.

While they declined to comment on the matter as the trial is still in progress, the spokesperson said they have increased patrols around the estate and are looking into installing closed-circuit television cameras.

Since Mr Lee’s arrest, three other vandalism cases have been reported in the estate said the spokesperson.

Despite the gloomy economic outlook, the 528-unit condominium crossed the 80 per cent threshold last month, enabling the en bloc sale process to proceed to the marketing stage.

Residents of the 30-year-old estate can expect to pocket between $1.8 million to $2.3 million for each of their units, down from the over $3 million some were hoping for last year. Most of the units are between 1,500 and 1,700sqf in size.

Source : Today – 7 Jan 2009

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

Market Street car park to stay

Posted by luxuryasiahome on January 7, 2009

CAPITACOMMERCIAL Trust (CCT) has scrapped plans to redevelop the Market Street car park into a grade A office building, which could have cost up to $1.5 billion.

“The manager, after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, has decided to abort the project immediately,” the Singapore-listed real estate investment trust, which has a portfolio of 11 commercial properties here, said yesterday.

The statement also said that CCT had secured the refinancing for $580 million in debt maturing in March.

CCT had initially planned to make a decision on the redevelopment after this mid-year.

The latest move is “in line with our prudent approach to capital management and the need to conserve cash in such turbulent economic times”, said Ms Lynette Leong, chief executive of CCT’s manager.

“This decision provides certainty to our investors in removing any overhang in capital requirement. It will also give assurance and security of tenure to our car park users as well as retail tenants,” she said. “CCT can move on to enter into longer-term leases and adopt longer-term plans through repositioning the retail tenant mix and other promotional events or activities to inject vibrancy into the area.”

The new financing arrangements also provide “financial flexibility in managing our capital and balance sheet”, said CCT.

It entered into a secured three-year term loan for up to $580 million with DBS Bank, Standard Chartered Bank, United Overseas Bank and The Bank of Tokyo-Mitsubishi UFJ.

The new facility is secured by a mortgage and other securities of one property, while the maturing debt was secured by seven properties.

Source : Today – 7 Jan 2009

Posted in General, Office / Retail Space, REITS | Tagged: , , , , | Leave a Comment »

En-bloc row official on mischief rap

Posted by luxuryasiahome on January 7, 2009

He is accused of stuffing glue into padlocks and keyholes of residents

THE former chairman of the Laguna Park management committee was charged yesterday with mischief over incidents during the housing estate’s acrimonious drive to secure a collective sale.

Lee Kok Leong, a 62-year-old businessman, allegedly put glue into the padlock and keyholes in the front and rear entrances of the flats belonging to two residents last August.

At the time he headed the estate’s management committee and is understood to have been in the camp pushing for the collective sale of the sprawling 530-unit estate along Marine Parade Road.

His alleged acts of mischief cost one resident $410 to fix, and the other, $180.

Yesterday, Lee, wearing a long-sleeved white shirt and black jeans and clutching a small brown bag, listened attentively as the charges were read to him.

His lawyer, Mr Ramesh Tiwary, said he had just taken on the case and asked the court for time to make his representations.

If convicted, Lee could be jailed up to a year or fined, or both jailed and fined on each charge.

In the courtroom’s public gallery yesterday were two of the estate’s many residents who had filed police reports that their cars, mailboxes or doors had been vandalised.

The two men said they were among the residents affected by the dispute within the estate over the collective sale.

The Straits Times reported last July that at least eight cars, including a Lexus and Toyota, had been vandalised. They were all splashed with corrosive liquid or paint or had been scratched.

Mailboxes had glue jammed into their keyholes to make it impossible for residents to collect their letters.

The war that has split residents of the 30-year-old estate into two camps is not yet over.

Last month, the estate managed to surpass the 80-per-cent threshold for the sale to go through, so it now remains for an interested developer to step forward.

The asking price of $1.2 billion will mean payouts of $1.8 million to $2.3 million per unit, sharply lower than sums in excess of $3 million some owners had hoped for in 2007.

Lee’s next court date is on Feb 3.

Source : Straits Times – 7 Jan 2009

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

« Previous Entries