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Archive for January 29th, 2009

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CapitaLand to give back S$41.5m in rental rebates to existing mall tenants

Posted by luxuryasiahome on January 29, 2009

Property developer CapitaLand has said it will give back S$41.5 million in rental rebates to existing retail, commercial and industrial tenants.

This will effectively mean a 4 per cent reduction in rentals on average.

The developer is passing on the savings it received from the government’s Budget announcement last week.

Finance Minister Tharman Shanmugaratnam had said the government is giving a 40 per cent property tax rebate for industrial and commercial properties in 2009.

It also urged landlords to pass on the benefits of the rebate to tenants.

Liew Mun Leong, president and CEO, CapitaLand Group, said: “CapitaLand will pass through 100 per cent of the rebate to the retailers…if the retailers do not survive, we also cannot survive.”

CapitaLand’s retail tenants currently pay rents ranging from S$5 to over S$30 per square foot, depending on location and size of units.

The company declined to say how much commercial rents are, but it is understood these could be up to some S$18 per square foot a month, depending on location, grade of office space and the time at which the lease was signed.

CapitaLand owns or manages close to 6 million square feet of commercial and industrial floor space in Singapore.

It also operates 18 malls in Singapore, including ION Orchard, Raffles City, Bugis Junction, Tampines Mall and Plaza Singapura.

Retailers have welcomed the move.

Daniel Yeo, managing director, Comics Connection, said: “What is very important is the cash flow, I can use it for the cash flow. I can use part of it to send my staff for training.”

CapitaLand has spent at least S$600 million since 2002 to develop its malls to utilise space.

It said it will continue to focus on enhancing its assets.

CapitaLand plans to concentrate on the Plaza Singapura and Atrium@Orchard developments along the prime Orchard Road shopping belt next.

Source : Channel NewsAsia – 29 Jan 2009

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Ascendas India Trust sees Q3 distributable income climb 36%

Posted by luxuryasiahome on January 29, 2009

Ascendas India Trust on Thursday said that distributable income for its third quarter ended December 31, 2008 rose 36 per cent to S$15.3 million.

Distribution per unit (DPU) for Q3 FY 2008/09 rose 35 per cent to 2.02 Singapore cents. Distribution is semi-annual, hence the third quarter’s distribution will be made with that of next quarter.

Including the 3.47 Singapore cents already distributed for first half FY 2008/09, the 9-month DPU would be 5.49 Singapore cents.

Total property income for Q3 was S$28.8 million – 7 per cent higher than the corresponding quarter last year – while net property income grew by 9 per cent to S$17.0 million.

Income grew on the back of higher occupancy rates and resilient rental rates. Expenses, on the other hand, grew at a slower pace – mainly due to the fall in oil price. As a result, net property income rose.

‘Notwithstanding the current weak overall global economic conditions, a-iTrust’s portfolio occupancy edged up further to 99 per cent from an already high level. The average portfolio rentals also improved since our last results announcement. These results demonstrated the portfolio’s resilience and appropriateness of its positioning vis-a-vis the target customers,’ said Jonathan Yap, chief executive of the trust’s manager.

The trust closed unchanged at 50 Singapore cents yesterday.

Source : Business Times – 29 Jan 2009

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Parkway Life REIT to pay unitholders 1.84 cents per share for Q4

Posted by luxuryasiahome on January 29, 2009

Parkway Life REIT (PREIT) will pay 1.84 cents per unit for its fiscal fourth quarter.

This is nearly 18 per cent higher than its forecast.

For the full year, unitholders can expect a payout of 6.83 cents per unit – about 9 per cent higher than forecast.

All in for the full year, PREIT had S$41.2 million to distribute to unitholders, exceeding its forecast by 9.4 per cent.

PREIT said its total net property income in financial year 2008 was 16.3 per cent over forecast at S$50.4 million.

The trust also posted gross revenues that were 17.4 per cent above forecast at S$53.9 million.

Despite the economic downturn, PREIT said it remains optimistic about its mid- to long-term prospects, with continued demand for quality services in the healthcare sector.

Going forward, it will look at diversifying its financial source, tenant mix and identify a pipeline of yield-accretive projects.

Source : Channel NewsAsia – 29 Jan 2009

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ParkwayLife Reit Q4 DPU up

Posted by luxuryasiahome on January 29, 2009

ParkwayLife Reit on Thursday reported distribution per unit for Q4 2008 of 1.84 Singapore cents, an increase of 17.9 per cent over forecast for the period and 15.9 per cent over the Q4 2007 actual performance.

Distribution payment date is expected on 27 February 2009.

PREIT posted gross revenues of S$16.2 million in Q4 2008, reflecting increases of 41.0 per cent over forecast and 36.4 per cent over the previous corresponding period of Q4 2007.

Total net property income surpassed forecast by 39.2 per cent to reach S$15.1 million, a 35.7 per cent rise over Q4 2007 figures.

Source : Business Times – 29 Jan 2009

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ParkwayLife Reit manager appoints CEO, CFO

Posted by luxuryasiahome on January 29, 2009

Parkway Trust Management Limited, manager for Parkway Life Reit, on Thursday appointed Yong Yean Chau as CEO and executive director.

Mr Yong had been named acting CEO on Dec 23 last year.

He joined PTML as Chief Financial Officer on Feb 1, 2008. Mr Yong was previously the CFO of Singapore Tourism Board.

With his latest role, Mr Yong relinquishes his appointment as the CFO of PTML, and replacing him in that post is Loo Hock Leong, the company’s vice-president, corporate finance.

Source : Business Times – 29 Jan 2009

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Fortune Reit’s CEO resigns

Posted by luxuryasiahome on January 29, 2009

ARA Asset Management (Singapore) Limited, the manager of Fortune Real Estate Investment Trust (Fortune Reit), said on Thursday that Stephen Chu has resigned as its chief executive officer to take up other responsibilities within the ARA Asset Management group (of which the manager is a subsidiary).

Following Mr Chu’s resignation, Chiu Yu Justina, the manager’s current chief operating officer, will be responsible for the overall management and operations of Fortune Reit until a new chief executive is appointed.

Source : Business Times – 29 Jan 2009

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Idle offices

Posted by luxuryasiahome on January 29, 2009

Analysts expect more ’shadow space’ ahead

Even as office rentals are tumbling fast, more space is lying idle at vacancy levels approaching those seen just before the recent boom years.

As at the end of last month, the island-wide vacancy rate ofoffice space stood at 8.8 per cent,up from the third quarter’s rate of8.2 per cent, according to data released last week by the Urban Redevelopment Authority (URA).

A big reason was a sudden year-end exodus: Occupied office space dropped by 34,000 sq m in the fourth quarter, an about-turn from the increase of 16,000 sq m in the previous quarter.

The negative take-up in the last quarter “effectively wiped out the take-up in the first six months of 2008″, said Mr Li Hiaw Ho, executive director of CBRE Research.

Mr Donald Han, managing director of consultancy Cushman and Wakefield, pins it down to the rocky banking sector, where financial institutions have been releasing excess space into the market. When tenants lease, or sub-let their premises, the excess space added to market supply is known as “shadow space” in industry terminology.

“In months to come, as companies downsize, we might see more supply coming from shadow space,” Mr Han told Today. “The current problem is lack of demand.”

For now, he isn’t too worried about the vacancy rates creeping up. “As long as it’s a single digit, it’s okay,” he said.

But a touch away from double digits are Category 2 office space, which refers to areas outside of the central business district and Orchard. The vacancy rate for Category 2, which accounts for about 80 per cent of all office space in Singapore, was 9.8 per cent at end-December; it was 15.1 per cent in early 2005, the year before the global economy started its three-year upswing.

Undoubtedly, the market has turned in favour of tenants. The decline in office rentals is accelerating, as they slipped6.5 per cent in the fourth quarter from the third quarter, a quicker pace than the 0.8-per-centdecline in the preceding quarter, according to URA statistics.

But present rentals remain dramatically higher than four years ago. URA said tenants who signed their leases in the fourth quarter typically agreed to$5.94 per square foot per month (psf pm) for Category 2 office space. That is little changed from the median rentals of $6.01 psf pm and $6.43 psf pm for leases that took effect in the fourth and third quarters respectively.

It is also a far cry from Category 2’s median rental of about $3.10 psf pm for leases inked in 2005.

There is much more room to go down south. Said CBRE’s Mr Li: “The office leasing environment will be highly competitive as rents continue to fall through 2009.”

Source : Today – 29 Jan 2009

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Koh Brothers wins $145m HDB contract

Posted by luxuryasiahome on January 29, 2009

The Housing and Development Board (HDB) said yesterday that it has awarded a $144.6 million contract to build the first part of Punggol Waterway to Koh Brothers. The win brings the value of contracts Koh Brothers has on hand to over $690 million.

Construction of the waterway is scheduled to start next month and will be completed by the fourth quarter of 2010. The waterway is part of the government’s plan to make Punggol a ‘waterfront town’.

Koh Brothers expects the contract win to have a material impact on its financial performance for the year ending Dec 31, 2009. Chief executive Francis Koh said he is confident the company’s track record and ability to innovate will serve it well as it continues to tender for higher-value projects.

The contract, awarded to Koh Brothers’ fully-owned subsidiary Koh Brothers Building & Civil Engineering Contractor, includes construction of the 2.4km waterway and related engineering works in Punggol Town. This 2.4km stretch is the first part of a planned 4.2km waterway connected to Sungei Punggol.

‘Residents can look forward to enjoying various recreational activities ranging from water sports to a leisurely walk along a landscaped promenade on both banks of the waterway,’ HDB said.

HDB launched more than 4,000 flats in Punggol last year. The agency also plans to launch the first site at Punggol’s town centre for a mixed commercial and private residential development by 2010/2011.

By end-2011, there will be about 23,000 completed flats in Punggol. In the longer term, another 21,000 public and private homes will be built along the waterway, HDB said.

Koh Brothers shares closed unchanged at 13 cents last Friday, the last day the stock was traded.

Source : Business Times – 29 Jan 2009

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Rush for URA approvals before window closed

Posted by luxuryasiahome on January 29, 2009

All’s quiet on the property front but developers secured a raft of approvals (provisional permission) for private residential projects from the Urban Redevelopment Authority in the last quarter of 2008.

The key reason for this is that developers rushed to make their submissions for provisional permission (PP) before a new ruling that scraps the exemption of bay windows and planter boxes from gross floor area (GFA) took effect on Jan 1, noted Credo Real Estate MD Karamjit Singh.

He said: ‘With effect from Jan 1, 2009, for any submission for PP, URA will consider bay windows and planter boxes as part of GFA, and that brings down the total saleable area in a project by about 5-12 per cent. So developers were making submissions to secure PP before the change in ruling kicked in – even if they didn’t intend to develop or launch their projects in the near future, given the current downturn.’

Agreeing, DTZ executive director Ong Choon Fah said: ‘Bay windows and planter boxes are an important contributor to developers’ profit margins. In the past when they bought land, they would have assumed these would be exempt from GFA.’

Hong Realty (part of the Hong Leong Group) received PP in Q4 2008 for a 1,517-unit condo project at Pasir Ris Drive 8, while Far East Organization unit Arts Associate Co secured URA’s approval for a 234-unit condo at Jalan Datoh/Jalan Dusun in the Balestier area. And Bukit Sembawang bagged PP for a 200-unit condo at St Thomas Walk.

Horizon Partners Pte Ltd – whose shareholders are Hotel Properties, Morgan Stanley Real Estate and Qatar Investment Authority – picked up URA’s consent to develop a 253-unit condo and eight detached houses on the Horizon Towers site at Leonie Hill Road.

URA also granted PP between October and December to NTUC Choice Homes unit Choice Homes Gamma for a 571-unit condo at Lor 2/3 Toa Payoh; to TID Pte Ltd for a 282-unit condo at New Upper Changi Road/ Tanah Merah Kechil Ave; and to an MCL Land unit for a 520-unit condo at Yishun Ave 1/2 fronting Lower Seletar Reservoir. The three proposed developments are on 99-year leasehold sites sold through the Government Land Sales Programme last year.

Casuarina Properties, controlled by the Lee Foundation and members of the Lee family, received URA’s permission for a cluster housing development at Mount Rosie comprising 191 terrace homes and two semi-detached units.

The proposed Pasir Ris condo project by Hong Realty is on a massive 2.1 million square feet plot that Hong Leong Group owns in Pasir Ris – which the 1,822-unit Livia condo launched last year is part of. City Developments has a 51 per cent stake in the site. Sources say the site was bought for just $10 million decades ago, was originally treated as land for rural or agricultural use and had restrictions on its title.

In the commercial property segment, Hotel 81-linked Citywide Land secured PP to develop a 902-room hotel at Kallang Road in Q4. The project will also have about 4,090 sq ft gross floor area of shop space.

At Jalan Besar/Laven- der Street, Prominent Plaza Investments/Prominent Site Pte Ltd secured URA’s consent to develop about 133,800 sq ft of offices and 13,500 sq ft of shop space. Over at Changi Business Park Ave 1, United Engineers Developments picked up URA’s consent for a project comprising a 301-room hotel and 59,740 sq ft of shop space.

URA also approved several industrial property projects in Q4. Keppel Shipyard received PP for additions and alterations to its existing factory at Pioneer Sector 1, as did Yamazaki Mazak Singapore for its existing plant at Joo Koon Circle.

URA also granted PP for factory developments to General Magnetics (at Lorong 4 Toa Payoh), Index-Cool Furniture Design & Construction’s (Eunos Avenue 3) and Oxley Opportunity #9 Pte Ltd (Pioneer Crescent).

Source : Business Times – 29 Jan 2009

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Tougher rules cut queue for new HDB flats

Posted by luxuryasiahome on January 29, 2009

THE queue of buyers for new Housing Board flats has become shorter and it is moving faster too.

Serious house-buyers are getting the flats they want sooner because a group of ‘frivolous’ buyers, who used to clog up the queue and waste everyone’s time by rejecting flats offered to them, appear to have dropped out.

The change has followed new HDB rules introduced last May to deter time-wasters from applying for flats they are not really keen to buy.

The HDB says that since the change, the number of applications has dropped. It now gets two to three times the number of applications than flats available; previously, the number received could be 5.6 times the number of flats.

Fewer are also turning down the flats offered to them. The rejection rate used to be between 22 and 77 per cent; now it is between 14 and 50 per cent.

The changed behaviour of applicants is seen as a vindication of the HDB’s ‘two strikes and you’re out’ approach to discourage frivolous applications. People appear to be more selective when applying and more likely to say yes when offered a flat.

The rule change meant that a first-time buyer who rejects an offer to buy a flat twice or more in any HDB sales exercise, loses his first-timer priority for a year. That effectively moves him to the back of the queue with second-timers.

Mr Mark Zhou, 26, a first-time home buyer working in the financial industry, said the change made him think twice before applying. ‘I think the new rules have changed the behaviour of home buyers for the better,’ he said. ‘It makes getting a flat more efficient, and people give it more serious thought before applying.’

Chesterton Suntec International head of research and consultancy Colin Tan said the change has likely ’shortened the whole booking process’.

Property agency ERA Asia-Pacific’s associate director Eugene Lim said latest data has proved that the new rules do work. ‘Demand has stabilised due to the tweaking of rules, and also due to market sentiment. First-timers are shown to be taking their applications seriously,’ he said.

The changes have also reduced the HDB’s administrative load considerably.

Previously, a new HDB project would see many more applicants than units, but the high rejection rate would see many flats still available for sale in the end.

After the rule change, projects such as Compassvale Pearl in Sengkang last May saw no units left over.

The tougher HDB regime was put in place to allay growing concern that the thousands of applications for HDB’s build-to-order (BTO) projects bore little relation to the actual take-up rate.

Demand for new flats picked up at the end of 2007 and shot up last year after young couples priced out of the resale market swamped the HDB with applications for new homes.

Such homes are only built when a set demand level is reached, take up to three years to complete, and are typically cheaper than flats in the resale market.

Source : Straits Times – 29 Jan 2009

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