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Archive for January 21st, 2009

Singaporeans less likely to cut spending on property and renovations: survey

Posted by luxuryasiahome on January 21, 2009

SINGAPOREANS are less likely than most of their Asia-Pacific neighbours to cut spending on property and renovations, according to a MasterCard survey.

The MasterCard Worldwide Index of Consumer Purchasing Resilience measures the resilience of planned expenditure categories to cutbacks, with zero the most vulnerable and 100 the most resilient.

In the property and renovation category, Singapore had a resilience score of 77.

The index looked at the categories of goods and services that consumers will spend on in the next six months, their importance to consumers and whether consumers will cut discretionary spending.

In Singapore, the fitness and wellness segment had the second-highest resilience index score of 73, followed by personal travel at 59. Dining and entertainment had a score of 54, while fashion and accessories rated 49.

Like most of the markets, Singapore failed to register a score in the consumer electronics category, since a market response of less than 30 per cent was not counted. Of the 14 markets surveyed, only Indonesia at 59.9 and Vietnam at 58.2 generated resilience index scores for consumer electronics.

‘There is a high rate of home ownership in Singapore and house-proud consumers here will continue to spend on renovations and property category, to finance their mortgages and spruce up their homes,’ said Yuwa Hedrick-Wong, MasterCard’s economic adviser (Asia-Pacific).

‘Spending on fitness and wellness has become increasingly important, especially for younger and better educated consumers and, therefore, it is not surprising that this category has emerged with a high resilience score,’ he said.

As far as general purchasing is concerned, Singapore’s average resilience index score of 62 trailed the Asia-Pacific average of 67. In comparison, China’s score of 81 was the highest, while Japan was second with 76. Indonesia and India tied for third with 74.

Across the region, China had the highest resilience scores in two categories – personal travel at 75 and property and renovations at 85. Japan had the highest resilience score for dining and entertainment at 81, while India was top for fitness and wellness with 90. Indonesia had the highest score for fashion and accessories at 76.

‘In general, the spending priorities of Chinese and Indian middle-class consumers are relatively resilient, showing their disposable income has so far remained healthy,’ Dr Hedrick-Wong said.

The survey polled 6,000 consumers, about 400 of whom were from Singapore.

Source : Business Times – 21 Jan 2009

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Keppel Land Q4 earnings fall 88%

Posted by luxuryasiahome on January 21, 2009

Keppel Land on Wednesday reported an 88 per cent plunge in quarterly net profit as sales plunged.

The company – a unit of Keppel Corp – earned $68.5 million compared with $572.3 million a year ago. Revenue was almost halved to $197 million from $371 million in 2007.

Full-year earnings slumped 70.8 per cent to $228 million from $780 million.

It has proposed a final dividend of 8 cents per share.

Source : Business Times – 21 Jan 2009

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Fortune Reit’s Q408 net income up 6.8%

Posted by luxuryasiahome on January 21, 2009

Fortune Reit has reported a net property income of HK$121.34 million (US$15.64 million) for the fourth quarter ended 31 December 2008, representing an increase of 6.8 per cent compared to the same period a year ago.

Income available for distribution for the quarter was HK$80.78 million, up 4.1 per cent year-on-year (yoy).

Distribution per unit was HK$0.099, up 3.1 per cent yoy. As at end-December 2008, the portfolio occupancy was 96 per cent, up from 92.1 per cent yoy. Rental reversion of 18.8 per cent was achieved for renewals in 2008.

Source : Business Times – 21 Jan 2009

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CCT has no plans in pipeline to raise equity

Posted by luxuryasiahome on January 21, 2009

CAPITACOMMERCIAL Trust (CCT), Singapore’s largest office trust, has no immediate plans to raise equity.

‘We don’t intend to increase debt in any significant way,’ said Lynette Leong, chief executive of CCT’s manager, at the trust’s Q4 results briefing yesterday. ‘If we are not making any acquisitions, we have no need to do that (raise equity).’

CCT shares gained 1.5 cents, or 1.7 per cent, on the news to close at 87.5 cents yesterday, even as the benchmark Straits Times Index fell. Some industry players have said that CCT could issue equity to reduce its gearing ahead of expected falls in asset values during upcoming revaluation exercises.

‘CCT has unequivocally stated that it is not planning to raise equity. That provides a lot of differentiation with the other Reits (real estate investment trusts) in the market,’ said UOB- Kay Hian analyst Jonathan Koh.

The trust’s gearing now stands at 37.6 per cent, and will be maintained at around that level, Ms Leong said. Total debt as at end-December 2008 was about $2.6 billion. By contrast, gearing was 23.9 per cent as at end-December 2007, while total debt then stood at about $1.26 billion.

For the short-term, CCT has some $116 million of debt due in June 2009, but the trust remains confident that it will be able to secure refinancing as it has some eight unencumbered assets worth $2.7 billion in its portfolio. The Reit on Jan 6 announced that it had secured refinancing for $580 million of loans due in March 2009.

CCT also recently abandoned a plan to redevelop the Market Street Car Park, citing the uncertain market outlook and tight credit conditions.

In Q4 2008, CCT saw its distributable income rise 17.4 per cent to $38 million – from $32.3 million a year ago – on higher rental income.

Distribution per unit (DPU) for the three months ended Dec 31, 2008 rose to 2.71 cents, from 2.33 cents for the same three months in 2007. Net property income also rose 47.8 per cent to $65.6 million, from $44.4 million previously.

Revenue in Q4 2008 was boosted by the acquisition of 1 George Street, a 23-storey office block, as well as higher rental income from other properties.

For the full 2008 financial year, CCT’s distributable income rose 27.1 per cent to $153 million, from $120.4 million in 2007. DPU climbed from 8.7 cents to 11 cents, while net property income rose 34.2 per cent to $233.5 million.

CCT also wrote down about 3 per cent of its portfolio value to $6.7 billion, from June 2008’s $6.9 billion. This translated into a 1.3 percentage point increase in gearing. The lower valuation assumes a fall of about 10 per cent in rentals this year, CCT said.

Analysts said that the results were within expectations and reiterated their positive calls on the stock. ABN Amro and Citigroup issued fresh ‘buy’ calls, while Macquarie Research rated the stock as an ‘outperform’. ‘We believe CCT remains a deep value play on the office sector,’ said Macquarie analysts Tuck Yin Soong and Elaine Cheong.

Looking ahead, CCT expects to face challenging times due to the adverse economic climate, said Richard Hale, chairman of the trust’s manager. ‘Our focus continues to be on retaining our tenants and on being proactive in cost containment,’ he said.

CCT is forecasting a DPU of 12.34 cents for 2009. The trust’s manager is actively engaging tenants for forward lease planning and 79 per cent of the 2009 forecast gross rental income has been locked in with committed leases.

Source : Business Times – 21 Jan 2009

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Japanese firm wants apartment block near MRT

Posted by luxuryasiahome on January 21, 2009

A JAPANESE firm operating here is trying to take advantage of a weakening property market by offering to buy an entire block of flats next to an MRT station – and it has up to $100 million to spend.

Tokio Property Services, which usually finds flats for Japanese expats here, is working for a Japanese client that thinks fire-sale bargains will soon be hitting the market. The strong yen also makes it a good time for bargain hunters from Japan.

Mr Toru Takano, who set up Tokio Property Services seven years ago after living here for about eight years, told The Straits Times: ‘Prices are going down and some small developers may need to sell their assets.’ He added that it would be pointless to wait two to three years for prices to drop if the yen were also to decrease.

Mr Takano placed an advertisement in The Business Times yesterday asking for a block of apartments, as it would be too much trouble calling up the many developers here to locate a seller.

He is looking for a high-yield residential property for investment returns, rather than capital gains for his Japanese client – a well-known firm.

It is possible to find high-yield properties with returns of more than 5 per cent to as much as 8 per cent in a downturn, he said. ‘Instead of freehold, I will get a 99-year leasehold (property) that is near an MRT station.’ The MRT location will make the flats attractive to tenants who do not drive.

Mr Takano is confident that he will find Japanese tenants easily enough, as there is a large group here. ‘Japanese companies do not lay off so many people…even in recession times,’ he said.

His plan is to fill the property with Japanese tenants who are happy to pay a premium. He said most rental units here are owned by individual owners and there are many unreasonable landlords who do not take care of their units. ‘If the owner is a famous Japanese company, the tenants will feel relaxed and they will not mind paying a little bit more, maybe 10 per cent to 20 per cent higher than the market rate,’ added Mr Takano.

His advertisement has attracted a few responses from sellers such as small developers and building owners but none of the offers stood out, he said.

Source : Straits Times – 21 Jan 2009

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Mandarin Oriental sells Macau hotel stake for HK$1.6 billion

Posted by luxuryasiahome on January 21, 2009

MANDARIN Oriental International, a member of the Jardine Matheson Group, said yesterday that it has agreed to sell its 50 per cent interest in the 416-room Mandarin Oriental in Macau for HK$1.6 billion (S$307 million).

The company will sell its stake to Sociedade de Turismo e Diversoes de Macau (STDM). Mandarin Oriental’s partner in the hotel, Shun Tak Holdings, will also sell its 50 per cent stake to STDM.

The carrying value of the group’s 50 per cent stake in the hotel as at Dec 31, 2007 was US$15.7 million and its contribution to the group’s Ebitda (earnings before interest, tax, depreciation and amortisation) in 2007 was US$10.2 million, the company said.

On the sale’s completion, Mandarin Oriental will receive proceeds of about US$90 million with a post-tax gain of about US$75 million, which will be recognised in 2009. The proceeds will be used for the group’s general corporate purposes, it said.

Completion of the sale is expected by the end of May 2009. The sale is conditional upon approval of the arrangements by Shun Tak’s and STDM’s respective shareholders as well as other regulatory formalities.

As part of the agreement to sell, Mandarin Oriental and Shun Tak also have the right to participate equally in any increase in the hotel site’s value – over and above the agreed value of HK$1.6 billion – which might arise if the property were to be redeveloped or sold to a third party in the future.

The property will be rebranded by STDM. However, under a short-term management arrangement, Mandarin Oriental will continue to manage the hotel for up to two years to ensure a smooth transition.

‘The dynamic city of Macau remains an important destination for the Group. We will work closely with the new owner to ensure a successful transition for this property. At the same time, the group will manage a new 213-room Mandarin Oriental hotel on the waterfront of Macau, when it opens in early 2010,’ said Edouard Ettedgui, group chief executive of Mandarin Oriental Hotel Group.

Source : Business Times – 21 Jan 2009

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Singapore gets a young, new chief planner

Posted by luxuryasiahome on January 21, 2009

Singapore has a new chief planner. From the beginning of this year, Lim Eng Hwee took over the reins from Koh Wen Gin, who retired from the Urban Redevelopment Authority at the end of 2008. Mr Lim, 44, is also one of two deputy chief executive officers at URA, as was Mrs Koh.

Choy Chan Pong, 60, a veteran at URA and an established name in the Singapore real estate industry circle, has been promoted to senior group director, retaining his portfolio of land sales and administration. Mr Choy reports directly to URA CEO Cheong Koon Hean.

Wong Kai Yeng, who used to be director, planning services, now heads a new unit, URA Consulting. This will be the external consulting arm of URA and is expected to provide consultancy and training services, primarily to overseas clients.

URA is master planner of the Singapore Tianjin Eco-city project in China. Last year, URA won an Award for Excellence for Asia-Pacific from the US-based Urban Land Institute (ULI) for its work in the Bras Basah-Bugis area.

ULI also awarded URA a Global Award for Excellence in 2006 for its conservation programme.

URA Consulting and the corporate development group come under URA’s other deputy CEO, Tan Siong Leng.

Loh Teck Hee is now Controller of Housing (COH), in addition to being deputy director of property research. Marc Boey, who was COH till Dec 31, 2008, is now acting group director, land sales and administration

Mr Lim was formerly assistant chief planner and director (physical planning) before his recent promotion. As deputy CEO now, he is in charge of planning matters – covering the physical planning, conservation and urban design, and development control groups. The physical planning group is headed by two acting group directors – Richard Hoo, who is in charge of strategic planning, and Hwang Yu-Ning, who is expected to focus more on the island’s physical planning when she returns to URA from the Ministry of National Development next month.

Mr Lim holds a Bachelor of Planning from University of Auckland and a Master in Public Administration from Harvard. He joined URA as a planner in 1990.

Source : Business Times – 21 Jan 2009

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