August 16, 2008
Ghost Month sneaks up on slow market
Home sales volume in July down 35% year-on-year, but does better
month-on-month with 12% rise
By ARTHUR SIM
(SINGAPORE) One year after the onslaught of the US sub-prime mortgage
crisis, the Singapore property market is still looking weak. And
property consultants are expecting sales to slow further, exacerbated
by the start of the Chinese Hungry Ghost Month.
According to developer sales figures from the Urban Redevelopment
Authority (URA), new home sales fell about 35 per cent in July to 897
units on a year- on-year basis. This is also sharper than the 30 per
cent year-on-year fall in June.
However, on a month- on-month basis, the July volume increased 12 per
cent, largely attributed to the 1,322 new home units launched in the
month - the highest since August 2007, when 1,885 units were launched.
The number of units launched in July was also 1.4 per cent higher
compared to a year ago and about 20 per cent higher compared to the
previous month.
But Knight Frank director of research and development Nicholas Mak
notes that the ratio of new home sales to newly launched units
increased to 1:1.47 compared to 1:0.9 a year ago and 1:1.33 in the
previous month. He said: 'As a result, the stock of unsold homes in
the developers' inventory will gradually increase.'
That the 897 new homes sold in July exceed the 10-year monthly
average of about 680 units should bode well for the market. But Mr
Mak says the ratio of new home sales to newly launched units suggests
that take-up is not that healthy. 'It's like whether you choose to
judge someone's health by his blood pressure or his temperature,' he
added.
At end-December 2007, there were about 4,000 units of new homes ready
for sale that had not been launched. This increased to more than
6,500 units in March and about 7,000 at end-July.
Still, Mr Mak points out that the healthy sales volume for July does
suggest that 'there is underlying demand from owner-occupiers'.
This demand came for the Outside Central Region (OCR). Knight Frank
notes that the 636 units launched in the OCR accounted for 48.1 per
cent of launches in July.
The Core Central Region (CCR), in comparison, saw launches fall 40.7
per cent month-on-month and accounted for 9.9 per cent of all
launches in the month.
Jones Lang LaSalle local director and head of research (South East
Asia) Chua Yang Liang believes that looking at the islandwide take-up
may not be an accurate reflection of the market.
Looking at the lowest price band of reported monthly median prices -
'because it is more reflective of the underlying market sentiment' -
Dr Chua noted that in July, the CCR and OCR registered declines of 7
per cent and 23 per cent respectively (excluding projects with single
transactions).
Dr Chua said the Rest of Central Region (RCR) appeared stable,
registering a marginal increase of 2 per cent month-on-month in July
to $560 per square foot.
The major launches in OCR include Livia, which sold at a median price
of $671 psf while Kovan Residences sold at a median price of $882
psf. 'We reckon the price of $650-$850 psf is what the market is
comfortable with at this point,' added Dr Chua.
CB Richard Ellis Research executive director Li Hiaw Ho reckons
prices are still holding in some areas. 'In suburban areas such as
Serangoon, Sengkang and Jurong, prices are observed to be holding at
$800-$950 psf at The Florentine, Kovan Residences, Woodsville 28,
$700-$800 psf at The Quartz, and $800-$900 psf at The Lakeshore,' he
added.
Mr Li also noted that five units in The Hamilton Scotts transacted at
$3,000-$3,676 psf and seven units in Nassim Park Residences were done
at $2,600-$3,650 psf. Mr Li said: 'This shows that there are people
who are willing to pay a premium for projects in very good locations
and/or with strong attributes.'
Savills Singapore director of marketing and business development Ku
Swee Yong believes that developers are also likely to continue with
a 'wait and see' strategy regarding launches. 'Every month that a
developer waits, there are new buyers entering the market,' he said.
Mr Ku was pleasantly surprised by the take-up in July too. He
said: 'I think developers launching a total of between 1,000 and
1,500 units per month is sustainable.'
Saturday, August 16, 2008
Home sales up, but pace slowing
Aug 16, 2008
Home sales up, but pace slowing
Prices slip in July though sales up for 3rd straight month; high-end
hard hit
By Fiona Chan, Property Reporter
NEW home sales rose last month for the third month in a row, but the
pace of growth braked sharply and the prices of sold homes slipped.
Developers sold 897 new private homes in July, 12 per cent more than
in June and the highest number since last August, according to data
released by the Urban Redevelopment Authority yesterday.
Close to nine out of every 10 homes sold last month were suburban
units that cost $1,000 per sq ft (psf) or less. No homes were sold
above $4,000 psf for the second consecutive month.
This trend is likely to continue, property consultants said, as
persistent caution in the high-end market is causing developers to
delay expensive launches.
Even then, developers continued to launch more units across the board
than they were able to sell last month, adding to the inventory of
unsold homes, observed Mr Nicholas Mak, director of research and
consultancy at Knight Frank.
Consultants also predicted that the pattern of rising sales will be
reversed this month.
Launches and transactions will probably fall thanks to the perceived
unlucky 'Hungry Ghost' period, while market sentiment is expected to
remain negative amid more dismal global economic news coming out of
the United States and Europe.
Already, last month's sales growth was a far cry from the 77 per cent
jump in sales between May and June, consultants said.
Last month's figures were boosted by sales from four large-scale
suburban projects that together accounted for almost two-thirds of
the whole month's deals. Livia in Pasir Ris saw 301 apartments taken
up, at a median price of $671 psf. Of these, four crossed the $750
psf mark, but the rest were well within the $500 to $750 psf range.
Clover by the Park in Bishan sold 100 units at a median price of $753
psf, down slightly from the median $765 psf it had fetched in June.
And Kovan Residences in Kovan Road sold 87 units at a median price of
$882 psf - just below its $887 psf in June - while Beacon Heights in
St Michael's Road sold 61 units at a median price of $865 psf.
In the mid-tier segment, Parc Sophia in Dhoby Ghaut was the best
performer, selling 25 units at a median price of $1,503 psf.
CapitaLand's Wharf Residences near Robertson Quay sold 23 units at a
median price of $1,506.
Generally, prices have come under pressure from the gloom in the
market and are starting to dip, consultants said.
The lowest transacted price in the suburban region fell 23 per cent
last month from June, while the lowest price in the central region
fell 7 per cent, noted Dr Chua Yang Liang, Jones Lang LaSalle's head
of South-east Asia research.
He said buyers of suburban projects are probably comfortable with
paying $650 to $850 psf right now, while those looking for well-
located city-fringe homes have budgets of $850 to $1,000 psf.
Sales were dismal in the high-end segment, with only eight units -
less than 1 per cent of total sales - transacted above $3,000 psf. At
the height of the property fever in July last year, 217 units fetched
more than $3,000 psf, accounting for more than 15 per cent of the
total units sold then.
But there are still some buyers willing to pay a premium for prime
projects, said Mr Li Hiaw Ho, executive director of CB Richard Ellis
Research.
He noted that five units were sold at The Hamilton Scotts in Scotts
Road, for between $3,000 and $3,676 psf.
Home sales up, but pace slowing
Prices slip in July though sales up for 3rd straight month; high-end
hard hit
By Fiona Chan, Property Reporter
NEW home sales rose last month for the third month in a row, but the
pace of growth braked sharply and the prices of sold homes slipped.
Developers sold 897 new private homes in July, 12 per cent more than
in June and the highest number since last August, according to data
released by the Urban Redevelopment Authority yesterday.
Close to nine out of every 10 homes sold last month were suburban
units that cost $1,000 per sq ft (psf) or less. No homes were sold
above $4,000 psf for the second consecutive month.
This trend is likely to continue, property consultants said, as
persistent caution in the high-end market is causing developers to
delay expensive launches.
Even then, developers continued to launch more units across the board
than they were able to sell last month, adding to the inventory of
unsold homes, observed Mr Nicholas Mak, director of research and
consultancy at Knight Frank.
Consultants also predicted that the pattern of rising sales will be
reversed this month.
Launches and transactions will probably fall thanks to the perceived
unlucky 'Hungry Ghost' period, while market sentiment is expected to
remain negative amid more dismal global economic news coming out of
the United States and Europe.
Already, last month's sales growth was a far cry from the 77 per cent
jump in sales between May and June, consultants said.
Last month's figures were boosted by sales from four large-scale
suburban projects that together accounted for almost two-thirds of
the whole month's deals. Livia in Pasir Ris saw 301 apartments taken
up, at a median price of $671 psf. Of these, four crossed the $750
psf mark, but the rest were well within the $500 to $750 psf range.
Clover by the Park in Bishan sold 100 units at a median price of $753
psf, down slightly from the median $765 psf it had fetched in June.
And Kovan Residences in Kovan Road sold 87 units at a median price of
$882 psf - just below its $887 psf in June - while Beacon Heights in
St Michael's Road sold 61 units at a median price of $865 psf.
In the mid-tier segment, Parc Sophia in Dhoby Ghaut was the best
performer, selling 25 units at a median price of $1,503 psf.
CapitaLand's Wharf Residences near Robertson Quay sold 23 units at a
median price of $1,506.
Generally, prices have come under pressure from the gloom in the
market and are starting to dip, consultants said.
The lowest transacted price in the suburban region fell 23 per cent
last month from June, while the lowest price in the central region
fell 7 per cent, noted Dr Chua Yang Liang, Jones Lang LaSalle's head
of South-east Asia research.
He said buyers of suburban projects are probably comfortable with
paying $650 to $850 psf right now, while those looking for well-
located city-fringe homes have budgets of $850 to $1,000 psf.
Sales were dismal in the high-end segment, with only eight units -
less than 1 per cent of total sales - transacted above $3,000 psf. At
the height of the property fever in July last year, 217 units fetched
more than $3,000 psf, accounting for more than 15 per cent of the
total units sold then.
But there are still some buyers willing to pay a premium for prime
projects, said Mr Li Hiaw Ho, executive director of CB Richard Ellis
Research.
He noted that five units were sold at The Hamilton Scotts in Scotts
Road, for between $3,000 and $3,676 psf.
US now a nation of half-home owners
Aug 16, 2008
US now a nation of half-home owners
Banks' ad blitz gave a positive spin to second mortgages, bringing
about current crisis
NEW YORK: Banks in the United States marketed them as easy 'home
equity loans', and Americans went for them in droves, resorting to
what was essentially a second mortgage.
The result? For the first time since World War II, Americans own less
than half their homes. In the 1980s, that figure was 70 per cent.
Citibank's home equity ads in the mid-1980s, for example, portrayed
housing as a revolving account similar to a credit card: 'Now, when
the value of your home goes up, you can take credit for it.'
In 1999, its 'Live Richly' slogan helped persuade hundreds of
thousands of Citi customers to take out home equity loans - that is,
to borrow against their homes. As one of the ads proclaimed: 'There's
got to be at least $25,000 hidden in your house. We can help you find
it.'
Not long ago, such loans, which used to be known as second mortgages,
were considered the borrowing of last resort, to be avoided by all
but people in dire financial straits. Then, the loans became
universally accepted, their image transformed by ubiquitous ad
campaigns from banks.
Since the early 1980s, the value of home equity loans outstanding has
ballooned to more than US$1 trillion (S$1.4 trillion) from US$1
billion, and nearly a quarter of Americans with first mortgages have
them.
That explosive growth has been a boon for banks. Banks' returns on
fixed-rate home equity loans and lines of credit, which are the most
popular, are 25 per cent to 50 per cent higher than returns on
consumer loans overall, with much of that premium coming from
relatively high fees.
However, what has been a highly lucrative business for banks has
become a disaster for many borrowers, who are falling behind on their
payments at near-record levels and could lose their homes.
The portion of people who have home equity lines more than 30 days
past due stands at 55 per cent above its average since the American
Bankers Association began tracking it around 1990; delinquencies on
home equity loans are 45 per cent higher. Hundreds of thousands are
delinquent, owing banks more than US$10 billion on these loans, often
on top of their first mortgages.
'Calling it a 'second mortgage', that's like hocking your house,'
said Mr Pei-yuan Chia, a former vice-chairman at Citi who oversaw the
bank's consumer business in the 1980s and 1990s. 'But call it 'equity
access', and it sounds more innocent.'
Citi was far from alone with its simple but enticing ad slogans.
Ads for banks and their home equity loans often portrayed borrowing
against the roof over your head as an act of empowerment and
entitlement. An ad in 2002 from Fleet, now a part of Bank of America,
asked: 'Is your mortgage squeezing your wallet? Squeeze back.' One in
2006 from PNC Bank pictured a wheelbarrow and the line, the 'easiest
way to haul money out of your house'.
With such ads, banks encouraged home owners to keep borrowing. Little
by little, millions of Americans surrendered equity in their homes in
recent years as home prices seemed to rise inexorably from one peak
to the next.
Today, the US has become a nation of half-home owners. Professor
Elizabeth Warren of Harvard Law School said financial companies used
advertising to foster the idea that it was good, even smart, to
borrow money.
US now a nation of half-home owners
Banks' ad blitz gave a positive spin to second mortgages, bringing
about current crisis
NEW YORK: Banks in the United States marketed them as easy 'home
equity loans', and Americans went for them in droves, resorting to
what was essentially a second mortgage.
The result? For the first time since World War II, Americans own less
than half their homes. In the 1980s, that figure was 70 per cent.
Citibank's home equity ads in the mid-1980s, for example, portrayed
housing as a revolving account similar to a credit card: 'Now, when
the value of your home goes up, you can take credit for it.'
In 1999, its 'Live Richly' slogan helped persuade hundreds of
thousands of Citi customers to take out home equity loans - that is,
to borrow against their homes. As one of the ads proclaimed: 'There's
got to be at least $25,000 hidden in your house. We can help you find
it.'
Not long ago, such loans, which used to be known as second mortgages,
were considered the borrowing of last resort, to be avoided by all
but people in dire financial straits. Then, the loans became
universally accepted, their image transformed by ubiquitous ad
campaigns from banks.
Since the early 1980s, the value of home equity loans outstanding has
ballooned to more than US$1 trillion (S$1.4 trillion) from US$1
billion, and nearly a quarter of Americans with first mortgages have
them.
That explosive growth has been a boon for banks. Banks' returns on
fixed-rate home equity loans and lines of credit, which are the most
popular, are 25 per cent to 50 per cent higher than returns on
consumer loans overall, with much of that premium coming from
relatively high fees.
However, what has been a highly lucrative business for banks has
become a disaster for many borrowers, who are falling behind on their
payments at near-record levels and could lose their homes.
The portion of people who have home equity lines more than 30 days
past due stands at 55 per cent above its average since the American
Bankers Association began tracking it around 1990; delinquencies on
home equity loans are 45 per cent higher. Hundreds of thousands are
delinquent, owing banks more than US$10 billion on these loans, often
on top of their first mortgages.
'Calling it a 'second mortgage', that's like hocking your house,'
said Mr Pei-yuan Chia, a former vice-chairman at Citi who oversaw the
bank's consumer business in the 1980s and 1990s. 'But call it 'equity
access', and it sounds more innocent.'
Citi was far from alone with its simple but enticing ad slogans.
Ads for banks and their home equity loans often portrayed borrowing
against the roof over your head as an act of empowerment and
entitlement. An ad in 2002 from Fleet, now a part of Bank of America,
asked: 'Is your mortgage squeezing your wallet? Squeeze back.' One in
2006 from PNC Bank pictured a wheelbarrow and the line, the 'easiest
way to haul money out of your house'.
With such ads, banks encouraged home owners to keep borrowing. Little
by little, millions of Americans surrendered equity in their homes in
recent years as home prices seemed to rise inexorably from one peak
to the next.
Today, the US has become a nation of half-home owners. Professor
Elizabeth Warren of Harvard Law School said financial companies used
advertising to foster the idea that it was good, even smart, to
borrow money.
CBD-style office space coming up in suburbs
Aug 16, 2008
CBD-style office space coming up in suburbs
Soilbuild to provide alternative to increasingly pricey downtown
space
By Bonnie Oeni
DEVELOPER Soilbuild Group Holdings is not overly fussed about current
weak residential property market sentiment.
While residential property remains Soilbuild's core business, the
firm is seizing the moment to beef up its business space development -
as downtown office rents and other commercial rents are still
relatively high.
Soilbuild says it is creating Central Business District-style
commercial space in the suburbs as an alternative to the increasingly
pricey CBD.
The company has been developing properties custom-built for business
use since 2005, but it has recently moved to improve its business
space portfolio significantly.
Soilbuild let a total of 321,500 sq ft of commercial space last year,
but this is slated to increase to 3,740,000 sq ft in the near future.
By comparison, only 232,500 sq ft of new residential space will be
launched in the second half.
It has acquired four new projects related to leasing and selling
space to companies, to be completed by 2010. This is compared to only
three new projects slated for future residential development.
The firm's executive director Low Soon Sim said: 'Sentiment in the
residential market is weak. But on the business space side, there's
still room for growth.
'If you look at the investments last year, which were $16 billion or
$17 billion in commitments, the Economic Development Board thinks
we're going to continue attracting them here. (Industrial landlord)
JTC's take-up rates have still been fairly firm in the first half.'
Soilbuild's new commercial projects include Solaris in Ayer Rajah
Avenue, a business park for multinational companies in infocomms,
science and engineering research and development industries.
It is also developing Tanjong Kling in the Jurong Industrial Estate,
which supports the petrochemical and marine engineering industries,
as well as SME- related business areas, Woodlands Industrial Park and
Goodvine at Changi.
'Changi Business Park gives us average rentals of about $3.70 per sq
ft,' Mr Low said.
'We're essentially taking industrial land and recreating a CBD
environment out of it. Even at $4, $5 psf, compared to Raffles Place,
the value for most of these MNCs is still very attractive, especially
those with fixed investments and which want to stay three to five
years, not just six months to a year.'
Firms such as Citibank are already shifting their back-end offices to
suburban office areas, to cut costs.
CBD-style office space coming up in suburbs
Soilbuild to provide alternative to increasingly pricey downtown
space
By Bonnie Oeni
DEVELOPER Soilbuild Group Holdings is not overly fussed about current
weak residential property market sentiment.
While residential property remains Soilbuild's core business, the
firm is seizing the moment to beef up its business space development -
as downtown office rents and other commercial rents are still
relatively high.
Soilbuild says it is creating Central Business District-style
commercial space in the suburbs as an alternative to the increasingly
pricey CBD.
The company has been developing properties custom-built for business
use since 2005, but it has recently moved to improve its business
space portfolio significantly.
Soilbuild let a total of 321,500 sq ft of commercial space last year,
but this is slated to increase to 3,740,000 sq ft in the near future.
By comparison, only 232,500 sq ft of new residential space will be
launched in the second half.
It has acquired four new projects related to leasing and selling
space to companies, to be completed by 2010. This is compared to only
three new projects slated for future residential development.
The firm's executive director Low Soon Sim said: 'Sentiment in the
residential market is weak. But on the business space side, there's
still room for growth.
'If you look at the investments last year, which were $16 billion or
$17 billion in commitments, the Economic Development Board thinks
we're going to continue attracting them here. (Industrial landlord)
JTC's take-up rates have still been fairly firm in the first half.'
Soilbuild's new commercial projects include Solaris in Ayer Rajah
Avenue, a business park for multinational companies in infocomms,
science and engineering research and development industries.
It is also developing Tanjong Kling in the Jurong Industrial Estate,
which supports the petrochemical and marine engineering industries,
as well as SME- related business areas, Woodlands Industrial Park and
Goodvine at Changi.
'Changi Business Park gives us average rentals of about $3.70 per sq
ft,' Mr Low said.
'We're essentially taking industrial land and recreating a CBD
environment out of it. Even at $4, $5 psf, compared to Raffles Place,
the value for most of these MNCs is still very attractive, especially
those with fixed investments and which want to stay three to five
years, not just six months to a year.'
Firms such as Citibank are already shifting their back-end offices to
suburban office areas, to cut costs.
HDB resale net services open to abuse
Aug 16, 2008
HDB resale net services open to abuse
HOUSING agents under the accreditation scheme are allowed use of HDB
resale application via net services. Only agents with Common
Examination for Housing Agents (CEHA) are allowed to enjoy the resale
net service. However, there are too many loopholes.
Currently, even agents without CEHA use the system by keying in the
names of CEHA agents. Under the accreditation scheme endorsed by HDB
three years ago, all agents must pass CEHA by the end of this year.
However in April, the accreditation body reduced CEHA requirements to
a multiple-choice exam with 50 per cent pass standard known as Common
Examination for Salespersons (CES). Does HDB endorse the CES, a
scaled-down course so agents can be accredited?
How will this multiple-choice exam help HDB's requirement for resale
net services? Is HDB rescinding on the standard from CEHA-qualified
agents?
In the first place, the resale net system helps HDB with the enormous
amount of paperwork as agencies undertake to key in data. Even
consumers registering the resale application can do so via the
Internet.
In an unregulated industry, many real estate agencies and private
training companies take advantage by conducting courses in the CES
and charging up to $600 (plus another $200 for the exam) to prepare
agents for the multiple-choice exam. Three years ago when the
accreditation scheme was introduced, agents had to pay close to
$1,000 for Pre-CEHA for those without three O levels in order to take
the CEHA exam. Today for the CES, there is no entry barrier until the
year end. Anyone with no formal education can attend the multiple-
choice exam and score 50 per cent to be accredited.
Under the new requirement with effect from next year, two O levels is
the standard stipulated by the accreditation body for anyone to sit
for the CES. Can HDB confirm that it verifies the CES for use of the
resale net?
Why drop the standard from CEHA to a 50 per cent multiple-choice
exam? How does a 50 per cent-pass CES course and exam ensure HDB
regulations on resale net and consumer protection?
I hope HDB will clarify the matter soonest before more rogue agents
are accredited.
Steven Lau
HDB resale net services open to abuse
HOUSING agents under the accreditation scheme are allowed use of HDB
resale application via net services. Only agents with Common
Examination for Housing Agents (CEHA) are allowed to enjoy the resale
net service. However, there are too many loopholes.
Currently, even agents without CEHA use the system by keying in the
names of CEHA agents. Under the accreditation scheme endorsed by HDB
three years ago, all agents must pass CEHA by the end of this year.
However in April, the accreditation body reduced CEHA requirements to
a multiple-choice exam with 50 per cent pass standard known as Common
Examination for Salespersons (CES). Does HDB endorse the CES, a
scaled-down course so agents can be accredited?
How will this multiple-choice exam help HDB's requirement for resale
net services? Is HDB rescinding on the standard from CEHA-qualified
agents?
In the first place, the resale net system helps HDB with the enormous
amount of paperwork as agencies undertake to key in data. Even
consumers registering the resale application can do so via the
Internet.
In an unregulated industry, many real estate agencies and private
training companies take advantage by conducting courses in the CES
and charging up to $600 (plus another $200 for the exam) to prepare
agents for the multiple-choice exam. Three years ago when the
accreditation scheme was introduced, agents had to pay close to
$1,000 for Pre-CEHA for those without three O levels in order to take
the CEHA exam. Today for the CES, there is no entry barrier until the
year end. Anyone with no formal education can attend the multiple-
choice exam and score 50 per cent to be accredited.
Under the new requirement with effect from next year, two O levels is
the standard stipulated by the accreditation body for anyone to sit
for the CES. Can HDB confirm that it verifies the CES for use of the
resale net?
Why drop the standard from CEHA to a 50 per cent multiple-choice
exam? How does a 50 per cent-pass CES course and exam ensure HDB
regulations on resale net and consumer protection?
I hope HDB will clarify the matter soonest before more rogue agents
are accredited.
Steven Lau
The ball is in his courtyard
Aug 16, 2008
The ball is in his courtyard
Michael Ngu's home has all his favourite features, because he built
it himself
By Tay Suan Chiang, DESIGN CORRESPONDENT
Architect Michael Ngu is known for designing high-end condominiums
such as Scotts 28 in Scotts Road, Cuscaden Residences in Cuscaden
Road and the Cosmopolitan in Kim Seng Road.
But when it comes to private homes, the president and chief executive
officer of local firm Architects 61 has done only one - his own.
That home is a two-storey plus attic semi-detached house in Tanjong
Katong built 10 years ago, which he and his family still live in
today.
The 52-year-old describes it as 'not outlandish, but real and
practical'. It incorporates features you would normally find only in
a commercial building - as befits a commercial architect - along with
some distinctly personal touches.
One such personal quirk includes having a living room with a glass
floor through which Mr Ngu, from the comfort of his sofa, watches koi
fish in a pond.
On the other hand, he has done away with curtains in the home, the
way that commercial buildings also do not have them. Roller blinds
are used instead to keep out the sun.
The five bedrooms have bay windows which look out onto the
neighbourhood - an idea he says he took from the design of Scotts 28,
which has the same feature and was completed in 1998.
The Kuching-born, Singapore permanent resident lives there with his
homemaker wife Mei and their three daughters, aged 13 to 25.
Although the home is 10 years old, it does not look dated. The family
keeps up with times by simply updating the furnishings instead of
changing the structure.
Building the home involved tearing down an old house on the site and
constructing the new one from scratch for $650,000 inclusive of
fittings, which he says was a big amount even then.
There was just one 'hitch' in the design process: His wife dislikes
big spaces. 'But I'm a modern architect and I like bigger spaces,' he
says.
* Koi pond is indoors
Visitors will note that the result is a compromise. The 3,200 sq ft
home is spacious, yet has intimate spaces.
For example, the living room is split into two areas: A bigger one
just by the entrance of the home allows guests to mingle. Slightly
off to this, left and up a few steps is a smaller, cosier living
area.
While most owners have endless wishlists of what they want in their
home, there were just two features Mr Ngu had to have: a courtyard
and a koi pond.
He says he likes how some old homes have a courtyard and incorporated
one in his that is the central attraction, separating the dining and
living rooms.
A 8m-tall water feature stands on one side, flanked by creepers and
plants that are lovingly cared for by his wife.
'The 'waterfall' not only cools the air, but the sound of water is
relaxing too,' he says.
He designed the bedrooms on the second floor and attic to look into
the courtyard. A piece of glass covers its top to keep out the rain,
but this has been designed to allow hot air to escape, keeping the
home ventilated.
As for the koi pond, most owners would site theirs outdoors in the
garden but not Mr Ngu.
He says he seldom goes outdoors, so he built his pond indoors. Part
of it is under a small section of the home, where the smaller living
area is, with its distinctive glass viewing floor.
To give the house a more homely touch, he used timber
throughout. 'Timber is seldom used in commercial residential
projects,' he notes.
He adds that the wood is no ordinary wood but 'selangan batu', a type
of heavy hardwood that was brought in from his late father's
timberyard in Kuching. His second brother, Stephen, 53, now runs the
company.
Ten containers of timber were shipped in. 'This timber is dense,
doesn't shrink much and is good for both outdoors and indoors,' he
explains.
While he loves his home, there are still some niggling complaints for
this perfectionist: for example, the dining room.
Although the room looks out onto the courtyard, it tends to be
dim. 'I would have liked to add another window but couldn't because
the maid's room is behind,' he explains.
The family is very attached to the house, especially youngest
daughter Francesca, 13. She once told Mr Ngu that if they ever had to
move, the house should be torn down so no one else could live in it.
'I told her she cannot be so selfish,' he says with a laugh. The
family, who moved to Singapore 18 years ago, are staying put.
The ball is in his courtyard
Michael Ngu's home has all his favourite features, because he built
it himself
By Tay Suan Chiang, DESIGN CORRESPONDENT
Architect Michael Ngu is known for designing high-end condominiums
such as Scotts 28 in Scotts Road, Cuscaden Residences in Cuscaden
Road and the Cosmopolitan in Kim Seng Road.
But when it comes to private homes, the president and chief executive
officer of local firm Architects 61 has done only one - his own.
That home is a two-storey plus attic semi-detached house in Tanjong
Katong built 10 years ago, which he and his family still live in
today.
The 52-year-old describes it as 'not outlandish, but real and
practical'. It incorporates features you would normally find only in
a commercial building - as befits a commercial architect - along with
some distinctly personal touches.
One such personal quirk includes having a living room with a glass
floor through which Mr Ngu, from the comfort of his sofa, watches koi
fish in a pond.
On the other hand, he has done away with curtains in the home, the
way that commercial buildings also do not have them. Roller blinds
are used instead to keep out the sun.
The five bedrooms have bay windows which look out onto the
neighbourhood - an idea he says he took from the design of Scotts 28,
which has the same feature and was completed in 1998.
The Kuching-born, Singapore permanent resident lives there with his
homemaker wife Mei and their three daughters, aged 13 to 25.
Although the home is 10 years old, it does not look dated. The family
keeps up with times by simply updating the furnishings instead of
changing the structure.
Building the home involved tearing down an old house on the site and
constructing the new one from scratch for $650,000 inclusive of
fittings, which he says was a big amount even then.
There was just one 'hitch' in the design process: His wife dislikes
big spaces. 'But I'm a modern architect and I like bigger spaces,' he
says.
* Koi pond is indoors
Visitors will note that the result is a compromise. The 3,200 sq ft
home is spacious, yet has intimate spaces.
For example, the living room is split into two areas: A bigger one
just by the entrance of the home allows guests to mingle. Slightly
off to this, left and up a few steps is a smaller, cosier living
area.
While most owners have endless wishlists of what they want in their
home, there were just two features Mr Ngu had to have: a courtyard
and a koi pond.
He says he likes how some old homes have a courtyard and incorporated
one in his that is the central attraction, separating the dining and
living rooms.
A 8m-tall water feature stands on one side, flanked by creepers and
plants that are lovingly cared for by his wife.
'The 'waterfall' not only cools the air, but the sound of water is
relaxing too,' he says.
He designed the bedrooms on the second floor and attic to look into
the courtyard. A piece of glass covers its top to keep out the rain,
but this has been designed to allow hot air to escape, keeping the
home ventilated.
As for the koi pond, most owners would site theirs outdoors in the
garden but not Mr Ngu.
He says he seldom goes outdoors, so he built his pond indoors. Part
of it is under a small section of the home, where the smaller living
area is, with its distinctive glass viewing floor.
To give the house a more homely touch, he used timber
throughout. 'Timber is seldom used in commercial residential
projects,' he notes.
He adds that the wood is no ordinary wood but 'selangan batu', a type
of heavy hardwood that was brought in from his late father's
timberyard in Kuching. His second brother, Stephen, 53, now runs the
company.
Ten containers of timber were shipped in. 'This timber is dense,
doesn't shrink much and is good for both outdoors and indoors,' he
explains.
While he loves his home, there are still some niggling complaints for
this perfectionist: for example, the dining room.
Although the room looks out onto the courtyard, it tends to be
dim. 'I would have liked to add another window but couldn't because
the maid's room is behind,' he explains.
The family is very attached to the house, especially youngest
daughter Francesca, 13. She once told Mr Ngu that if they ever had to
move, the house should be torn down so no one else could live in it.
'I told her she cannot be so selfish,' he says with a laugh. The
family, who moved to Singapore 18 years ago, are staying put.
Friday, August 15, 2008
IMF in two minds about Sing$ stance
Aug 15, 2008
IMF in two minds about Sing$ stance
June report called for tightening but focus now is on economic growth
By Bryan Lee
DOES the Singapore dollar need to appreciate faster or is the current currency stance enough to fight off the threat of spiralling prices?
The answer appears anything but clear if the International Monetary Fund's (IMF's) latest assessment of the local economy is anything to go by.
In June, an annual report by IMF staff urged that monetary policy be tightened to fend off the threat of inflation. But since then, many board directors, reflecting on the report, have backed away, citing downside risks to economic growth.
Published on Wednesday on the IMF's website, the report and the board's reactions are less a sign of internal bickering than a reflection of the pace at which conditions are changing for many economies.
In the first half of the year, a relentless surge in oil and commodity prices clearly made inflation the No. 1 threat to economies outside the United States. But the prices of these natural resources have eased since hitting record highs in the past two months, while signs of a wider global slowdown are on the rise.
Singapore is no exception, with the Government downgrading economic forecasts over the past week.
'This reflects how fast things are changing and how reports are being made irrelevant so quickly,' said United Overseas Bank economist Jimmy Koh. 'Given the situation now, the focus is on growth concerns far more than on inflation.'
Singapore sets monetary policy by managing the value of its currency via an undisclosed basket of the currencies of its largest trading partners.
A stronger Singdollar helps alleviate inflation by making imports such as oil cheaper. But it also makes Singapore's exports less competitive, so some local economists have called for monetary easing to help exporters, who are bearing the brunt of the world economy's swift decline.
The IMF report, dated June 30, said a faster appreciation of the Singdollar would be desirable. The investigating team - which met senior local officials, including Finance Minister Tharman Shanmugaratnam, in May - said the currency seemed undervalued when viewed against longer-term fundamentals.
The report noted that this view was disputed by the local authorities, which said strengthening the Singdollar could amplify downside risks when it was unclear where the economy was headed.
The IMF's executive board, in a July 13 statement, mostly concurred with the Government, saying many of its members favoured maintaining the current policy mix in the short term, though some stuck with the report's recommendations.
In the statement, the board said: 'Given monetary policy lags, it would be sensible to assess the impact of the monetary tightening already in the pipeline before adjusting the stance.'
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
IMF in two minds about Sing$ stance
June report called for tightening but focus now is on economic growth
By Bryan Lee
DOES the Singapore dollar need to appreciate faster or is the current currency stance enough to fight off the threat of spiralling prices?
The answer appears anything but clear if the International Monetary Fund's (IMF's) latest assessment of the local economy is anything to go by.
In June, an annual report by IMF staff urged that monetary policy be tightened to fend off the threat of inflation. But since then, many board directors, reflecting on the report, have backed away, citing downside risks to economic growth.
Published on Wednesday on the IMF's website, the report and the board's reactions are less a sign of internal bickering than a reflection of the pace at which conditions are changing for many economies.
In the first half of the year, a relentless surge in oil and commodity prices clearly made inflation the No. 1 threat to economies outside the United States. But the prices of these natural resources have eased since hitting record highs in the past two months, while signs of a wider global slowdown are on the rise.
Singapore is no exception, with the Government downgrading economic forecasts over the past week.
'This reflects how fast things are changing and how reports are being made irrelevant so quickly,' said United Overseas Bank economist Jimmy Koh. 'Given the situation now, the focus is on growth concerns far more than on inflation.'
Singapore sets monetary policy by managing the value of its currency via an undisclosed basket of the currencies of its largest trading partners.
A stronger Singdollar helps alleviate inflation by making imports such as oil cheaper. But it also makes Singapore's exports less competitive, so some local economists have called for monetary easing to help exporters, who are bearing the brunt of the world economy's swift decline.
The IMF report, dated June 30, said a faster appreciation of the Singdollar would be desirable. The investigating team - which met senior local officials, including Finance Minister Tharman Shanmugaratnam, in May - said the currency seemed undervalued when viewed against longer-term fundamentals.
The report noted that this view was disputed by the local authorities, which said strengthening the Singdollar could amplify downside risks when it was unclear where the economy was headed.
The IMF's executive board, in a July 13 statement, mostly concurred with the Government, saying many of its members favoured maintaining the current policy mix in the short term, though some stuck with the report's recommendations.
In the statement, the board said: 'Given monetary policy lags, it would be sensible to assess the impact of the monetary tightening already in the pipeline before adjusting the stance.'
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
IMF in two minds about Sing$ stance
Aug 15, 2008
IMF in two minds about Sing$ stance
June report called for tightening but focus now is on economic growth
By Bryan Lee
DOES the Singapore dollar need to appreciate faster or is the current currency stance enough to fight off the threat of spiralling prices?
The answer appears anything but clear if the International Monetary Fund's (IMF's) latest assessment of the local economy is anything to go by.
In June, an annual report by IMF staff urged that monetary policy be tightened to fend off the threat of inflation. But since then, many board directors, reflecting on the report, have backed away, citing downside risks to economic growth.
Published on Wednesday on the IMF's website, the report and the board's reactions are less a sign of internal bickering than a reflection of the pace at which conditions are changing for many economies.
In the first half of the year, a relentless surge in oil and commodity prices clearly made inflation the No. 1 threat to economies outside the United States. But the prices of these natural resources have eased since hitting record highs in the past two months, while signs of a wider global slowdown are on the rise.
Singapore is no exception, with the Government downgrading economic forecasts over the past week.
'This reflects how fast things are changing and how reports are being made irrelevant so quickly,' said United Overseas Bank economist Jimmy Koh. 'Given the situation now, the focus is on growth concerns far more than on inflation.'
Singapore sets monetary policy by managing the value of its currency via an undisclosed basket of the currencies of its largest trading partners.
A stronger Singdollar helps alleviate inflation by making imports such as oil cheaper. But it also makes Singapore's exports less competitive, so some local economists have called for monetary easing to help exporters, who are bearing the brunt of the world economy's swift decline.
The IMF report, dated June 30, said a faster appreciation of the Singdollar would be desirable. The investigating team - which met senior local officials, including Finance Minister Tharman Shanmugaratnam, in May - said the currency seemed undervalued when viewed against longer-term fundamentals.
The report noted that this view was disputed by the local authorities, which said strengthening the Singdollar could amplify downside risks when it was unclear where the economy was headed.
The IMF's executive board, in a July 13 statement, mostly concurred with the Government, saying many of its members favoured maintaining the current policy mix in the short term, though some stuck with the report's recommendations.
In the statement, the board said: 'Given monetary policy lags, it would be sensible to assess the impact of the monetary tightening already in the pipeline before adjusting the stance.'
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
IMF in two minds about Sing$ stance
June report called for tightening but focus now is on economic growth
By Bryan Lee
DOES the Singapore dollar need to appreciate faster or is the current currency stance enough to fight off the threat of spiralling prices?
The answer appears anything but clear if the International Monetary Fund's (IMF's) latest assessment of the local economy is anything to go by.
In June, an annual report by IMF staff urged that monetary policy be tightened to fend off the threat of inflation. But since then, many board directors, reflecting on the report, have backed away, citing downside risks to economic growth.
Published on Wednesday on the IMF's website, the report and the board's reactions are less a sign of internal bickering than a reflection of the pace at which conditions are changing for many economies.
In the first half of the year, a relentless surge in oil and commodity prices clearly made inflation the No. 1 threat to economies outside the United States. But the prices of these natural resources have eased since hitting record highs in the past two months, while signs of a wider global slowdown are on the rise.
Singapore is no exception, with the Government downgrading economic forecasts over the past week.
'This reflects how fast things are changing and how reports are being made irrelevant so quickly,' said United Overseas Bank economist Jimmy Koh. 'Given the situation now, the focus is on growth concerns far more than on inflation.'
Singapore sets monetary policy by managing the value of its currency via an undisclosed basket of the currencies of its largest trading partners.
A stronger Singdollar helps alleviate inflation by making imports such as oil cheaper. But it also makes Singapore's exports less competitive, so some local economists have called for monetary easing to help exporters, who are bearing the brunt of the world economy's swift decline.
The IMF report, dated June 30, said a faster appreciation of the Singdollar would be desirable. The investigating team - which met senior local officials, including Finance Minister Tharman Shanmugaratnam, in May - said the currency seemed undervalued when viewed against longer-term fundamentals.
The report noted that this view was disputed by the local authorities, which said strengthening the Singdollar could amplify downside risks when it was unclear where the economy was headed.
The IMF's executive board, in a July 13 statement, mostly concurred with the Government, saying many of its members favoured maintaining the current policy mix in the short term, though some stuck with the report's recommendations.
In the statement, the board said: 'Given monetary policy lags, it would be sensible to assess the impact of the monetary tightening already in the pipeline before adjusting the stance.'
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Some frightened investors selling homes cheap: Developer
Time for bargains?
Some frightened investors selling homes cheap: Developer
Friday • August 15, 2008
ESTHER FUNG
esther@mediacorp.com.sg
AS HIGH-END home prices fall, Mr Kwek Leng Beng says there are now some bargains available for smart investors.
“What has gone up very high in a straight line will also come down,” said the executive chairman of one of Singapore’s biggest developers, CityDevelopments (CDL).
And as prices fall, Mr Kwek said there will be some desperate sellers. “There are some projects launched at $2,200 per square foot (psf) that went up to $3,400-$3,500psf. Today, there are some people who are so frightened, they would sell at $1,700psf.”
If you’re clever enough, Mr Kwek said: “You pick up when some people want to commit suicide. Pick up cheap. Keep it. Rent it. Stay.”
However, he added that buyers would need stamina to service the instalments.
Mr Kwek expects the high-end housing market to recover when sub-prime-related problems ease and when Singapore’s two integrated resorts open in the next two years.
As for CDL’s own strategy during the downturn, it has the ability to hold off from launching new developments if market sentiments are weak.
That’s because it is not under financial pressure to launch projects, as the group bought land cheaply, offsetting higher construction costs.
“It’s a question of how much profit you want to make. It’s a question of when we want to recognise the profit,” Mr Kwek said. “I can book in 30 per cent instead of 20 per cent. Launching at the right time will give you maximum profit.”
The CDL group, whose core businesses are property and hotels, said that its profit for the first half ended June 30 rose 3 per cent to $330 million, dragged down by slower home sales early this year. It also enjoyed a tax credit this time a year ago.
Its second quarter profit dropped 15 per cent to $165.2 million, its first quarterly decline in three years.
First-half revenue declined 0.3 per cent to $1.54 billion in the corresponding period.
About 30 per cent of CDL’s revenue comes from local housing sales.
Overall transactions in the property market here have cooled considerably, with 2,147 units sold in the first half of this year, compared to 9,385 this time last year.
According to the Urban Redevelopment Authority, home prices rose 0.2 per cent in the second quarter, the slowest growth in more than four years.
CDL doesn’t want to “cannibalise” its profit margins by rushing new development launches. Mr Kwek said his firm had enough credit lines and no problem borrowing from banks. “We have different ways of raising money, including issuing convertible bonds,” he added.
Last month, CDL launched Livia, a condominium at Pasir Ris, which saw a good response from the mass market. The average selling price was $650 to $670 psf.
Despite high construction costs, CDL said that it could price the project competitively due to its low land cost.
“In two weeks, we had 3,000 people visiting,” said Mr Kwek.
Construction costs have gone up 50 per cent over the past two years and may not fall for another three to four years, he said. Defaults by home buyers were low, he added.
CDL is planning three residential project launches in the second half of the year, subject to market conditions.
Contributions from CDL’s hotels division declined after being repatriated due to the stronger Singapore dollar. CDL has a 53-per-cent stake in Millennium and Copthorne Hotels.
“The hotel segment has slowed, but it’s not so material, you won’t fall off the cliff,” said Mr Kwek, who added that with oil prices falling air travel should pick up again.
“We’ve benefited from customers from financial institutions who used to stay in five-star hotels, now they have financial constraints, they come to us.”
Copyright MediaCorp Press Ltd. All rights reserved.
Some frightened investors selling homes cheap: Developer
Friday • August 15, 2008
ESTHER FUNG
esther@mediacorp.com.sg
AS HIGH-END home prices fall, Mr Kwek Leng Beng says there are now some bargains available for smart investors.
“What has gone up very high in a straight line will also come down,” said the executive chairman of one of Singapore’s biggest developers, CityDevelopments (CDL).
And as prices fall, Mr Kwek said there will be some desperate sellers. “There are some projects launched at $2,200 per square foot (psf) that went up to $3,400-$3,500psf. Today, there are some people who are so frightened, they would sell at $1,700psf.”
If you’re clever enough, Mr Kwek said: “You pick up when some people want to commit suicide. Pick up cheap. Keep it. Rent it. Stay.”
However, he added that buyers would need stamina to service the instalments.
Mr Kwek expects the high-end housing market to recover when sub-prime-related problems ease and when Singapore’s two integrated resorts open in the next two years.
As for CDL’s own strategy during the downturn, it has the ability to hold off from launching new developments if market sentiments are weak.
That’s because it is not under financial pressure to launch projects, as the group bought land cheaply, offsetting higher construction costs.
“It’s a question of how much profit you want to make. It’s a question of when we want to recognise the profit,” Mr Kwek said. “I can book in 30 per cent instead of 20 per cent. Launching at the right time will give you maximum profit.”
The CDL group, whose core businesses are property and hotels, said that its profit for the first half ended June 30 rose 3 per cent to $330 million, dragged down by slower home sales early this year. It also enjoyed a tax credit this time a year ago.
Its second quarter profit dropped 15 per cent to $165.2 million, its first quarterly decline in three years.
First-half revenue declined 0.3 per cent to $1.54 billion in the corresponding period.
About 30 per cent of CDL’s revenue comes from local housing sales.
Overall transactions in the property market here have cooled considerably, with 2,147 units sold in the first half of this year, compared to 9,385 this time last year.
According to the Urban Redevelopment Authority, home prices rose 0.2 per cent in the second quarter, the slowest growth in more than four years.
CDL doesn’t want to “cannibalise” its profit margins by rushing new development launches. Mr Kwek said his firm had enough credit lines and no problem borrowing from banks. “We have different ways of raising money, including issuing convertible bonds,” he added.
Last month, CDL launched Livia, a condominium at Pasir Ris, which saw a good response from the mass market. The average selling price was $650 to $670 psf.
Despite high construction costs, CDL said that it could price the project competitively due to its low land cost.
“In two weeks, we had 3,000 people visiting,” said Mr Kwek.
Construction costs have gone up 50 per cent over the past two years and may not fall for another three to four years, he said. Defaults by home buyers were low, he added.
CDL is planning three residential project launches in the second half of the year, subject to market conditions.
Contributions from CDL’s hotels division declined after being repatriated due to the stronger Singapore dollar. CDL has a 53-per-cent stake in Millennium and Copthorne Hotels.
“The hotel segment has slowed, but it’s not so material, you won’t fall off the cliff,” said Mr Kwek, who added that with oil prices falling air travel should pick up again.
“We’ve benefited from customers from financial institutions who used to stay in five-star hotels, now they have financial constraints, they come to us.”
Copyright MediaCorp Press Ltd. All rights reserved.
After rule change, consider plight of estate agents
Aug 15, 2008
After rule change, consider plight of estate agents
THE announcement on removal of estate agent's commission has left
agents to the mercy of the public. It encouraged the public to view
agents' services as a commodity to be bargained over and not see
agents as human beings performing an uncertain job with no fixed pay,
no CPF and no Medisave.
The statement has resulted in ridiculous requests by owners who
deliberately ignore the hard work and costs put in by agents. For
example, I now have a case where I am marketing a property with
construction sites right, left and centre for a month. Costs are high
because lag time is longer with market slowdown and after a long
time, there is only one offer. Despite this, the owner wants to offer
50 per cent discount because I had a direct buyer.
Does anyone stop to think agents we have no CPF and no Medisave? And
if I don't do any deals in the seventh month, I need to use my
savings to pay my expenses. No, they don't. Agents and buyers are two
parts of one equation. If only one side is protected, the other side
will be victimised. A few hundred thousand ricebowls are at stake. We
have families too. Please consider us too.
Lynette Choy
After rule change, consider plight of estate agents
THE announcement on removal of estate agent's commission has left
agents to the mercy of the public. It encouraged the public to view
agents' services as a commodity to be bargained over and not see
agents as human beings performing an uncertain job with no fixed pay,
no CPF and no Medisave.
The statement has resulted in ridiculous requests by owners who
deliberately ignore the hard work and costs put in by agents. For
example, I now have a case where I am marketing a property with
construction sites right, left and centre for a month. Costs are high
because lag time is longer with market slowdown and after a long
time, there is only one offer. Despite this, the owner wants to offer
50 per cent discount because I had a direct buyer.
Does anyone stop to think agents we have no CPF and no Medisave? And
if I don't do any deals in the seventh month, I need to use my
savings to pay my expenses. No, they don't. Agents and buyers are two
parts of one equation. If only one side is protected, the other side
will be victimised. A few hundred thousand ricebowls are at stake. We
have families too. Please consider us too.
Lynette Choy
CDL's new debt issue to tap Islamic sources
Aug 15, 2008
CDL's new debt issue to tap Islamic sources
CITY Developments (CDL) is planning to raise funds through what will be
Singapore's first Islamic unsecured financing arrangement.
The developer said it will issue a $1 billion Islamic multi-currency
medium-term notes programme. This will allow CDL to tap new markets and
investors, including Islamic sources, for possible acquisitions in a
slowing economy.
'It is to keep ourselves liquid so we are ready to bottom-fish at any
time,' said CDL executive chairman Kwek Leng Beng.
The group said in a statement it is 'optimistic that under this
challenging economic situation lies tremendous opportunities'. This
deal will give it a 'diversified, alternative and non-traditional
financing stream to further enhance its war chest.'
CDL's new debt issue to tap Islamic sources
CITY Developments (CDL) is planning to raise funds through what will be
Singapore's first Islamic unsecured financing arrangement.
The developer said it will issue a $1 billion Islamic multi-currency
medium-term notes programme. This will allow CDL to tap new markets and
investors, including Islamic sources, for possible acquisitions in a
slowing economy.
'It is to keep ourselves liquid so we are ready to bottom-fish at any
time,' said CDL executive chairman Kwek Leng Beng.
The group said in a statement it is 'optimistic that under this
challenging economic situation lies tremendous opportunities'. This
deal will give it a 'diversified, alternative and non-traditional
financing stream to further enhance its war chest.'
Most firms in the black, but it's paler now
August 15, 2008
Most firms in the black, but it's paler now
Many saw profits dip in H1; outlook not bright
By EMILYN YAP
(SINGAPORE) Singapore-listed companies had mixed financial fortunes
in the first half of the year, and market watchers warn of tougher
economic conditions ahead which could shave earnings for some
sectors.
Of the 441 listed firms which had reported their results as of
yesterday evening, 376, or 85 per cent, raked in profits for 1H08.
Within this majority however, 159, or 42 per cent, earned less
compared with a year ago.
'So far, 1H08 results have been largely mixed,' said Christopher
Wong, investment manager at Aberdeen Asset Management Asia.
Some sectors have taken a bigger hit from the recent economic
downturn. For most property firms, sterling results from last year's
booming real estate market were hard to beat. CapitaLand, for
instance, saw net profit drop 49.8 per cent to $762.7 million in the
first half of the year.
Results diverged when it came to the banking sector. UOB and DBS
withstood financial market headwinds and beat expectations to achieve
higher net earnings in the first half.
OCBC Bank, however, surprised the market with an 11.2 per cent fall
in net profit to $1.05 billion. Volatile markets lowered trading
income and reduced contributions from insurance subsidiary Great
Eastern Holdings. The bank also set aside more allowances for its
collateralised debt obligations portfolio in the second quarter.
There were sectors which scored better in the first half of the year.
Earnings for offshore and marine firms 'met our expectations', said
Kim Eng's senior analyst Rohan Suppiah. The sector held up relatively
well against rising costs and order books remain strong, analysts
told BT.
Many real estate investment trusts (Reits) also reported higher
distributable income and strong distribution yields in the first half.
The commodity sector put up a particularly strong showing. Boosted by
higher crude palm oil prices, increased sales volume and improved
margins, Wilmar International yesterday reported a 346 per cent leap
in first-half net earnings to US$674.8 million. Profits for Noble
Group also more than doubled to US$289.6 million in the same period.
As dark clouds gather over the global economy, market observers
believe that companies will need to buckle up for a rougher ride
ahead. 'Previous bear markets of this depth and duration ... are
followed by recessions or economic downturns. Economic data will
likely get worse before it gets better,' predicted Citi researchers
Chua Hak Bin and Tan Chun Keong in a report on Wednesday.
The government recently trimmed growth forecast for the full year
from 4-6 per cent to 4-5 per cent as the weakening US economy dampens
growth in Asia and Singapore.
Reflecting sentiments, DBS Vickers' research head Janice Chua
said: 'We've cut our earnings growth (estimates) for this year
already.'
Of course, some sectors could turn out to be more resilient. 'We
recommend ... high dividend yield plays, particularly Reits and
telcos,' said Citi's report.
Analysts also found the offshore and marine sector a relatively safe
bet. While concerns over rising steel costs and possible order
slowdowns remain, large firms such as Keppel Corporation should be
able to withstand these pressures, they said.
According to market consensus, the property and banking sectors are
likely to remain vulnerable in the second half. 'All banks guided
that loan growth would taper down in 2H08 to low double digits,' said
a DBS Vickers report on Monday.
And, as UOB's deputy chairman and CEO Wee Ee Cheong said: 'The past
six months have been challenging, and it's not going to be any easier
as global institutions seek ways to rebuild their balance sheet and
economies cope with slowdown and inflation.'
Those fishing for good investments in today's market will have to
start doing some good old-fashioned groundwork. 'It comes back to ...
looking at the balance sheets of companies and their ability to
generate cash flows,' said Aberdeen's Mr Wong.
Most firms in the black, but it's paler now
Many saw profits dip in H1; outlook not bright
By EMILYN YAP
(SINGAPORE) Singapore-listed companies had mixed financial fortunes
in the first half of the year, and market watchers warn of tougher
economic conditions ahead which could shave earnings for some
sectors.
Of the 441 listed firms which had reported their results as of
yesterday evening, 376, or 85 per cent, raked in profits for 1H08.
Within this majority however, 159, or 42 per cent, earned less
compared with a year ago.
'So far, 1H08 results have been largely mixed,' said Christopher
Wong, investment manager at Aberdeen Asset Management Asia.
Some sectors have taken a bigger hit from the recent economic
downturn. For most property firms, sterling results from last year's
booming real estate market were hard to beat. CapitaLand, for
instance, saw net profit drop 49.8 per cent to $762.7 million in the
first half of the year.
Results diverged when it came to the banking sector. UOB and DBS
withstood financial market headwinds and beat expectations to achieve
higher net earnings in the first half.
OCBC Bank, however, surprised the market with an 11.2 per cent fall
in net profit to $1.05 billion. Volatile markets lowered trading
income and reduced contributions from insurance subsidiary Great
Eastern Holdings. The bank also set aside more allowances for its
collateralised debt obligations portfolio in the second quarter.
There were sectors which scored better in the first half of the year.
Earnings for offshore and marine firms 'met our expectations', said
Kim Eng's senior analyst Rohan Suppiah. The sector held up relatively
well against rising costs and order books remain strong, analysts
told BT.
Many real estate investment trusts (Reits) also reported higher
distributable income and strong distribution yields in the first half.
The commodity sector put up a particularly strong showing. Boosted by
higher crude palm oil prices, increased sales volume and improved
margins, Wilmar International yesterday reported a 346 per cent leap
in first-half net earnings to US$674.8 million. Profits for Noble
Group also more than doubled to US$289.6 million in the same period.
As dark clouds gather over the global economy, market observers
believe that companies will need to buckle up for a rougher ride
ahead. 'Previous bear markets of this depth and duration ... are
followed by recessions or economic downturns. Economic data will
likely get worse before it gets better,' predicted Citi researchers
Chua Hak Bin and Tan Chun Keong in a report on Wednesday.
The government recently trimmed growth forecast for the full year
from 4-6 per cent to 4-5 per cent as the weakening US economy dampens
growth in Asia and Singapore.
Reflecting sentiments, DBS Vickers' research head Janice Chua
said: 'We've cut our earnings growth (estimates) for this year
already.'
Of course, some sectors could turn out to be more resilient. 'We
recommend ... high dividend yield plays, particularly Reits and
telcos,' said Citi's report.
Analysts also found the offshore and marine sector a relatively safe
bet. While concerns over rising steel costs and possible order
slowdowns remain, large firms such as Keppel Corporation should be
able to withstand these pressures, they said.
According to market consensus, the property and banking sectors are
likely to remain vulnerable in the second half. 'All banks guided
that loan growth would taper down in 2H08 to low double digits,' said
a DBS Vickers report on Monday.
And, as UOB's deputy chairman and CEO Wee Ee Cheong said: 'The past
six months have been challenging, and it's not going to be any easier
as global institutions seek ways to rebuild their balance sheet and
economies cope with slowdown and inflation.'
Those fishing for good investments in today's market will have to
start doing some good old-fashioned groundwork. 'It comes back to ...
looking at the balance sheets of companies and their ability to
generate cash flows,' said Aberdeen's Mr Wong.
Weak £, absence of tax credits pull down CDL Q2 profit 15.1%
August 15, 2008
Weak £, absence of tax credits pull down CDL Q2 profit 15.1%
Group posts higher profit from property development, rental
properties in Q2, H1
By KALPANA RASHIWALA
AMID a quieter property market, City Developments (CDL) yesterday
posted a higher profit from property development and rental
properties in second quarter and first half.
But the translation of earnings by its London-listed Millennium &
Copthorne Hotels (M&C) at a weakening exchange rate of the pound
against the Singapore dollar, plus the absence of substantial one-off
tax credits enjoyed by M&C in Q2 last year, resulted in a 15.1 per
cent year-on-year drop in Q2 net earnings to $165.2 million.
For the first half, CDL managed a 3 per cent year-on-year increase in
net earnings to $330.1 million.
The first-half performance was 'better than the competition if you
strip off their divestment gains and fair-value gains on investment
properties', CDL managing director Kwek Leng Joo said at a results
briefing yesterday.
CDL's bottom line is not affected by fair-value gains - or losses -
on investment properties, since after adopting Financial Reporting
Standard (FRS) 40, the group has continued to state these assets at
cost less accumulated depreciation and impairment losses. Most other
Singapore-listed property groups state investment properties at fair
value, as allowed under FRS 40.
CDL also said yesterday it will enter into Singapore's first Islamic
Sukuk-Ijarah unsecured financing arrangement, through a proposed $1
billion Islamic multi-currency medium-term notes programme, to tap
new markets and investors. This product will provide the group with
a 'diversified, alternative and non-traditional financing stream to
further enhance its war chest', CDL said.
CIMB is arranging the facility.
CDL executive chairman Kwek Leng Beng told reporters: 'I have been
approached by a lot of people in the Middle East to do an Islamic
fund.'
On the Singapore residential front, CDL said it plans to launch 400
private homes here in H2 this year, subject to market conditions.
These homes comprise 200 units in the second phase of Livia, a 99-
year leasehold condo at Pasir Ris, and 100 units each at The Arte at
Thomson and The Quayside Collection at Sentosa Cove.
The group said it has achieved average prices of $1,500 to $1,600 per
sq ft (psf) for Shelford Suites and $650-$670 psf for the first phase
of Livia.
It also said its diversified land bank - comprising mass-market, mid-
tier and high-end sites, amassed over the years at relatively low
cost - allows it tailor launches to meet changes in market demands
and conditions.
'Despite today's high development cost, the group has the option to
price its launches competitively while maintaining healthy profit
margins, or the option of waiting for the appropriate time to launch
so as to maximise profits,' CDL said.
It also said it has begun construction of the hotel and residential
components of The Quayside Collection at Sentosa Cove. However, it is
under no pressure to launch the project, especially since its land
cost was low.
'When the group decides to launch, it can book in more profits based
on the stage of construction at the time of sales,' it said.
On the South Beach project being developed by a CDL-led consortium,
Mr Kwek said: 'We already have people knocking on our door. Some of
them are interested to buy one block, some are interested to buy one
hotel, some interested to manage. We are in no hurry. Our priority is
to look at the design and define it much better, and to how to value-
engineer to bring the cost down.'
The group said it is confident of remaining profitable in the next 12
months.
Pre-tax profit from property development rose 10.5 per cent year on
year for Q2 ended June 30 to $147.8 million. For the first half, it
increased 27.4 per cent to $302.9 million.
Pre-tax earnings from rental properties - the group is a major office
landlord and owns several malls - rose 76 per cent to $24.5 million
in Q2 and 85 per cent to $49.6 million in H1.
However, pre-tax earnings from hotel operations dipped 15.4 per cent
to $74 million in Q2 and 2.6 per cent to $126.1 million in H1, due
mainly to the weakening of the pound and US dollar against the
Singapore dollar.
Group revenue edged up 0.7 per cent to $780.8 million in Q2 but
dipped 0.3 per cent to $1.5 billion in H1.
Weak £, absence of tax credits pull down CDL Q2 profit 15.1%
Group posts higher profit from property development, rental
properties in Q2, H1
By KALPANA RASHIWALA
AMID a quieter property market, City Developments (CDL) yesterday
posted a higher profit from property development and rental
properties in second quarter and first half.
But the translation of earnings by its London-listed Millennium &
Copthorne Hotels (M&C) at a weakening exchange rate of the pound
against the Singapore dollar, plus the absence of substantial one-off
tax credits enjoyed by M&C in Q2 last year, resulted in a 15.1 per
cent year-on-year drop in Q2 net earnings to $165.2 million.
For the first half, CDL managed a 3 per cent year-on-year increase in
net earnings to $330.1 million.
The first-half performance was 'better than the competition if you
strip off their divestment gains and fair-value gains on investment
properties', CDL managing director Kwek Leng Joo said at a results
briefing yesterday.
CDL's bottom line is not affected by fair-value gains - or losses -
on investment properties, since after adopting Financial Reporting
Standard (FRS) 40, the group has continued to state these assets at
cost less accumulated depreciation and impairment losses. Most other
Singapore-listed property groups state investment properties at fair
value, as allowed under FRS 40.
CDL also said yesterday it will enter into Singapore's first Islamic
Sukuk-Ijarah unsecured financing arrangement, through a proposed $1
billion Islamic multi-currency medium-term notes programme, to tap
new markets and investors. This product will provide the group with
a 'diversified, alternative and non-traditional financing stream to
further enhance its war chest', CDL said.
CIMB is arranging the facility.
CDL executive chairman Kwek Leng Beng told reporters: 'I have been
approached by a lot of people in the Middle East to do an Islamic
fund.'
On the Singapore residential front, CDL said it plans to launch 400
private homes here in H2 this year, subject to market conditions.
These homes comprise 200 units in the second phase of Livia, a 99-
year leasehold condo at Pasir Ris, and 100 units each at The Arte at
Thomson and The Quayside Collection at Sentosa Cove.
The group said it has achieved average prices of $1,500 to $1,600 per
sq ft (psf) for Shelford Suites and $650-$670 psf for the first phase
of Livia.
It also said its diversified land bank - comprising mass-market, mid-
tier and high-end sites, amassed over the years at relatively low
cost - allows it tailor launches to meet changes in market demands
and conditions.
'Despite today's high development cost, the group has the option to
price its launches competitively while maintaining healthy profit
margins, or the option of waiting for the appropriate time to launch
so as to maximise profits,' CDL said.
It also said it has begun construction of the hotel and residential
components of The Quayside Collection at Sentosa Cove. However, it is
under no pressure to launch the project, especially since its land
cost was low.
'When the group decides to launch, it can book in more profits based
on the stage of construction at the time of sales,' it said.
On the South Beach project being developed by a CDL-led consortium,
Mr Kwek said: 'We already have people knocking on our door. Some of
them are interested to buy one block, some are interested to buy one
hotel, some interested to manage. We are in no hurry. Our priority is
to look at the design and define it much better, and to how to value-
engineer to bring the cost down.'
The group said it is confident of remaining profitable in the next 12
months.
Pre-tax profit from property development rose 10.5 per cent year on
year for Q2 ended June 30 to $147.8 million. For the first half, it
increased 27.4 per cent to $302.9 million.
Pre-tax earnings from rental properties - the group is a major office
landlord and owns several malls - rose 76 per cent to $24.5 million
in Q2 and 85 per cent to $49.6 million in H1.
However, pre-tax earnings from hotel operations dipped 15.4 per cent
to $74 million in Q2 and 2.6 per cent to $126.1 million in H1, due
mainly to the weakening of the pound and US dollar against the
Singapore dollar.
Group revenue edged up 0.7 per cent to $780.8 million in Q2 but
dipped 0.3 per cent to $1.5 billion in H1.
5 licences may go to foreign law firms
Aug 15, 2008
5 licences may go to foreign law firms
Final number to be handed out depends on quality of applicants
By Selina Lum & K.C. Vijayan
THE Law Ministry yesterday started accepting applications from
foreign law firms to practise Singapore law using Singapore-qualified
lawyers.
The ministry expects to give out about five licences, each valid for
five years, although the final number will depend on the
applications' quality, it said in a statement yesterday.
These foreign firms will likely do high-end legal work in sectors
like corporate, banking and maritime law, but they will be barred
from domestic areas such as criminal and civil litigation, family
law, conveyancing, and administrative law.
Foreign law firms have been based in Singapore for a while, but they
have so far done only offshore work or set up joint ventures with
local firms.
This opening of the door to let them practise Singapore law, which
will liberalise the tightly regulated legal sector, was announced by
the Government eight months ago.
Foreign law firms have up to 4pm on Oct 9 to submit their
applications.
If they are granted a licence, they will have up to six months to set
up their practices here.
Last year, a committee headed by Justice V. K. Rajah recommended
measures to open up the legal services sector. Among other things, it
suggested allowing up to five qualifying foreign law firms to
practise Singapore law by hiring Singapore-qualified lawyers.
The Government accepted the proposals. A Second Reading of changes to
the Legal Profession Act to effect the moves is due in Parliament
later this month.
In December, then-law minister S. Jayakumar said the legal services
sector had to keep pace with the explosive growth of sectors like
banking, noting that the Monetary Authority of Singapore had drawn
attention to a 'dire need' for legal services.
He added that liberalising the sector would attract foreign talent
and retain bright local lawyers who might otherwise be tempted to
work overseas.
The Law Ministry explained yesterday that applications would be
considered by an evaluation committee chaired by Mr Teo Ming Kian,
the Permanent Secretary at the Finance Ministry.
The committee will advise the Attorney-General on the applications.
A selection committee chaired by Law Minister and Second Minister for
Home Affairs K. Shanmugam will decide the firms to be awarded a
licence, taking into account the Attorney-General's recommendations.
Factors will include the number of lawyers to be based in the firm's
office here, the extent to which this office will function as
headquarters for the region, and the firm's track record.
Meanwhile, prominent lawyers in Singapore have weighed in with their
views on the matter in the current issue of Inter Se, a Singapore
Academy of Law publication.
Singapore-qualified lawyers have been moving to Singapore-based
foreign law firms at a 'fast-increasing pace' - from 15 in 2000 to
119 last year, it was noted.
Senior Counsel Sundaresh Menon and Mr Paul Tan, who were on the V. K.
Rajah committee, said the move would benefit Singapore lawyers by
widening their choice of employers. It would also reduce the need to
work abroad.
Senior Counsel Davinder Singh acknowledged that talented lawyers
would be drawn to practise in foreign firms for better salaries as an
alternative to working overseas.
The best lawyers in the region will be attracted to work here. These
firms also stand a better chance of clinching regional jobs, by dint
of their reputation, he added.
He, however, voiced concern that if the best graduates were drawn to
foreign firms, the quality of Singapore's Bench and Bar would suffer
in the long term.
Noting that judges here are largely appointed from the Bar, he
said: 'We have one of the best judiciaries in the world. If we weaken
our Bar, we will ultimately weaken our Bench.'
Stamford Law Corporation director Lee Suet Fern viewed the move as an
interim step to full liberalisation, so she did not expect it to make
a significant impact on the current legal market.
Foreign firms will seek to come in because of the prospects they see
in the regional market, she argued, which will count for more than
the opportunity to hire Singapore lawyers and practise Singapore law.
She also said she did not think the move to grant licences to foreign
firms would significantly worsen the shortage of lawyers in
Singapore.
5 licences may go to foreign law firms
Final number to be handed out depends on quality of applicants
By Selina Lum & K.C. Vijayan
THE Law Ministry yesterday started accepting applications from
foreign law firms to practise Singapore law using Singapore-qualified
lawyers.
The ministry expects to give out about five licences, each valid for
five years, although the final number will depend on the
applications' quality, it said in a statement yesterday.
These foreign firms will likely do high-end legal work in sectors
like corporate, banking and maritime law, but they will be barred
from domestic areas such as criminal and civil litigation, family
law, conveyancing, and administrative law.
Foreign law firms have been based in Singapore for a while, but they
have so far done only offshore work or set up joint ventures with
local firms.
This opening of the door to let them practise Singapore law, which
will liberalise the tightly regulated legal sector, was announced by
the Government eight months ago.
Foreign law firms have up to 4pm on Oct 9 to submit their
applications.
If they are granted a licence, they will have up to six months to set
up their practices here.
Last year, a committee headed by Justice V. K. Rajah recommended
measures to open up the legal services sector. Among other things, it
suggested allowing up to five qualifying foreign law firms to
practise Singapore law by hiring Singapore-qualified lawyers.
The Government accepted the proposals. A Second Reading of changes to
the Legal Profession Act to effect the moves is due in Parliament
later this month.
In December, then-law minister S. Jayakumar said the legal services
sector had to keep pace with the explosive growth of sectors like
banking, noting that the Monetary Authority of Singapore had drawn
attention to a 'dire need' for legal services.
He added that liberalising the sector would attract foreign talent
and retain bright local lawyers who might otherwise be tempted to
work overseas.
The Law Ministry explained yesterday that applications would be
considered by an evaluation committee chaired by Mr Teo Ming Kian,
the Permanent Secretary at the Finance Ministry.
The committee will advise the Attorney-General on the applications.
A selection committee chaired by Law Minister and Second Minister for
Home Affairs K. Shanmugam will decide the firms to be awarded a
licence, taking into account the Attorney-General's recommendations.
Factors will include the number of lawyers to be based in the firm's
office here, the extent to which this office will function as
headquarters for the region, and the firm's track record.
Meanwhile, prominent lawyers in Singapore have weighed in with their
views on the matter in the current issue of Inter Se, a Singapore
Academy of Law publication.
Singapore-qualified lawyers have been moving to Singapore-based
foreign law firms at a 'fast-increasing pace' - from 15 in 2000 to
119 last year, it was noted.
Senior Counsel Sundaresh Menon and Mr Paul Tan, who were on the V. K.
Rajah committee, said the move would benefit Singapore lawyers by
widening their choice of employers. It would also reduce the need to
work abroad.
Senior Counsel Davinder Singh acknowledged that talented lawyers
would be drawn to practise in foreign firms for better salaries as an
alternative to working overseas.
The best lawyers in the region will be attracted to work here. These
firms also stand a better chance of clinching regional jobs, by dint
of their reputation, he added.
He, however, voiced concern that if the best graduates were drawn to
foreign firms, the quality of Singapore's Bench and Bar would suffer
in the long term.
Noting that judges here are largely appointed from the Bar, he
said: 'We have one of the best judiciaries in the world. If we weaken
our Bar, we will ultimately weaken our Bench.'
Stamford Law Corporation director Lee Suet Fern viewed the move as an
interim step to full liberalisation, so she did not expect it to make
a significant impact on the current legal market.
Foreign firms will seek to come in because of the prospects they see
in the regional market, she argued, which will count for more than
the opportunity to hire Singapore lawyers and practise Singapore law.
She also said she did not think the move to grant licences to foreign
firms would significantly worsen the shortage of lawyers in
Singapore.
Economic chill spreads in Europe, while US housing woes deepen
Aug 15, 2008
RECESSION REPORT
Global gloom
Economic chill spreads in Europe, while US housing woes deepen
BRUSSELS: The German, French and other Eurozone economies braked
sharply in the second quarter, shrinking for the first time in more
than a decade.
The data, coupled with a report from the United States that home
foreclosure notices jumped by half last month, creates a worrying
picture of a global economy on the brink of recession.
Singapore is also feeling the pinch, with the Government calling on
Singaporeans last week to brace themselves for a bumpy year ahead.
The growth forecast for the full year has been revised down to
between 4 and 5per cent, from an earlier projection of 4 to 6per
cent.
With high fuel and food prices holding back consumer spending, growth
in the 15 economies that share the euro currency contracted by 0.2per
cent from the first quarter, expanding just 1.5per cent from the same
period a year ago, the European Union's statistics office, Eurostat,
said.
Eurostat said the quarterly decline was the first since its data
series for the euro zone started in 1995.
A second successive quarterly drop in growth will officially put the
eurozone into recession.
'There is a good chance that the economy is already in recession, but
even if it isn't, the outlook remains for subdued growth in the
quarters to come,' said Mr Stuart Bennett, senior forex strategist at
Calyon.
The world's second biggest economy, Japan, is also flirting with
recession, having shrunk 0.6per cent in April-June, but the United
States grew by 0.5per cent.
The eurozone fall was driven by Europe's two largest economies,
Germany and France.
The German economy, the world's biggest exporter, contracted by
0.5per cent in the second quarter from a 1.3per cent rise in the
first quarter.
While the fall was smaller-than-expected, it was the first fall in
almost four years, driven by a slump in the construction sector, hurt
by the credit crunch.
The stronger euro and weakening global growth have also dampened
demand for German exports while higher inflation has curbed domestic
spending.
France, Europe's second biggest economy, suffered a sharper 0.3per
cent drop in second quarter growth. In another blow, the expansion
previously reported in the first three months of the year was also
trimmed.
In Spain, a country whose economy looks especially vulnerable because
of its boom-to-bust housing market, the economy eked out growth of
0.1per cent in the second quarter, a figure greeted with scepticism
by some analysts.
Only one EU country is now in recession: the small Baltic economy of
Estonia.
Eurostat did not give a figure for Ireland, once a booming tiger
economy, but which contracted in the first quarter.
France's Economy Minister, Ms Christine Lagarde, pointed out that
France was suffering along with other European countries from an
unfavourable global environment, but said the fundamentals of the
French economy were sound.
She noted easing crude oil prices and signs that inflation had
stabilised, and said the situation should begin to improve at the end
of the year and the start of next year.
'There is no question of a recession,' she said on radio.
But some economists were less optimistic.
Business and consumer confidence in the euro area plunged to the
lowest level in more than five years in July.
The euro jobless rate also started to climb in April from the all-
time low it reached in December.
Meanwhile, in the US, more than 272,000 homes received notice of a
mortgage default, forced sale or bank repossession last month, up
55per cent from the same month last year, according to RealtyTrac,
which records property in various stages of foreclosure.
That means one in every 464 US households received a foreclosure
filing last month.
The combination of weak housing sales, falling home values, tighter
mortgage lending criteria and a slowing US economy has left
financially strapped homeowners with few options to avoid
foreclosure.
Many cannot find buyers or owe more than their home is worth and thus
cannot refinance into an affordable loan.
Even with more government help on the way, nearly 2.8million US
households will either face foreclosure, turn over their homes to
their lender or sell the properties for less than their mortgage's
value by the end of next year, predicts Moody's Economy.com.
RECESSION REPORT
Global gloom
Economic chill spreads in Europe, while US housing woes deepen
BRUSSELS: The German, French and other Eurozone economies braked
sharply in the second quarter, shrinking for the first time in more
than a decade.
The data, coupled with a report from the United States that home
foreclosure notices jumped by half last month, creates a worrying
picture of a global economy on the brink of recession.
Singapore is also feeling the pinch, with the Government calling on
Singaporeans last week to brace themselves for a bumpy year ahead.
The growth forecast for the full year has been revised down to
between 4 and 5per cent, from an earlier projection of 4 to 6per
cent.
With high fuel and food prices holding back consumer spending, growth
in the 15 economies that share the euro currency contracted by 0.2per
cent from the first quarter, expanding just 1.5per cent from the same
period a year ago, the European Union's statistics office, Eurostat,
said.
Eurostat said the quarterly decline was the first since its data
series for the euro zone started in 1995.
A second successive quarterly drop in growth will officially put the
eurozone into recession.
'There is a good chance that the economy is already in recession, but
even if it isn't, the outlook remains for subdued growth in the
quarters to come,' said Mr Stuart Bennett, senior forex strategist at
Calyon.
The world's second biggest economy, Japan, is also flirting with
recession, having shrunk 0.6per cent in April-June, but the United
States grew by 0.5per cent.
The eurozone fall was driven by Europe's two largest economies,
Germany and France.
The German economy, the world's biggest exporter, contracted by
0.5per cent in the second quarter from a 1.3per cent rise in the
first quarter.
While the fall was smaller-than-expected, it was the first fall in
almost four years, driven by a slump in the construction sector, hurt
by the credit crunch.
The stronger euro and weakening global growth have also dampened
demand for German exports while higher inflation has curbed domestic
spending.
France, Europe's second biggest economy, suffered a sharper 0.3per
cent drop in second quarter growth. In another blow, the expansion
previously reported in the first three months of the year was also
trimmed.
In Spain, a country whose economy looks especially vulnerable because
of its boom-to-bust housing market, the economy eked out growth of
0.1per cent in the second quarter, a figure greeted with scepticism
by some analysts.
Only one EU country is now in recession: the small Baltic economy of
Estonia.
Eurostat did not give a figure for Ireland, once a booming tiger
economy, but which contracted in the first quarter.
France's Economy Minister, Ms Christine Lagarde, pointed out that
France was suffering along with other European countries from an
unfavourable global environment, but said the fundamentals of the
French economy were sound.
She noted easing crude oil prices and signs that inflation had
stabilised, and said the situation should begin to improve at the end
of the year and the start of next year.
'There is no question of a recession,' she said on radio.
But some economists were less optimistic.
Business and consumer confidence in the euro area plunged to the
lowest level in more than five years in July.
The euro jobless rate also started to climb in April from the all-
time low it reached in December.
Meanwhile, in the US, more than 272,000 homes received notice of a
mortgage default, forced sale or bank repossession last month, up
55per cent from the same month last year, according to RealtyTrac,
which records property in various stages of foreclosure.
That means one in every 464 US households received a foreclosure
filing last month.
The combination of weak housing sales, falling home values, tighter
mortgage lending criteria and a slowing US economy has left
financially strapped homeowners with few options to avoid
foreclosure.
Many cannot find buyers or owe more than their home is worth and thus
cannot refinance into an affordable loan.
Even with more government help on the way, nearly 2.8million US
households will either face foreclosure, turn over their homes to
their lender or sell the properties for less than their mortgage's
value by the end of next year, predicts Moody's Economy.com.
Rising building costs stall Mitsui's decision on plant
Aug 15, 2008
Rising building costs stall Mitsui's decision on plant
By Bryan Lee
JAPAN'S Mitsui Chemicals is considering sinking a few hundred million
dollars into a new major manufacturing plant in Singapore, but
surging construction costs are complicating the decision.
The company, which was presented yesterday with Singapore's top
corporate accolade, said a 20 to 30 per cent hike in costs is
weighing heavily on its final decision, which it hopes to make in the
next few months.
But it is going ahead with expansion plans for its research and
development (R&D) centre here, as well as internship and scholarship
programmes for Singaporean students.
Mitsui, which has invested more than $1 billion in Singapore over the
past 42 years, is considering building a second phenol plant that
will be at least as big as an existing one it opened in 1998.
It announced this as it received the Distinguished Partner in
Progress Award, which recognises leading firms for their significant
contributions to Singapore.
The proposed factory is slated to have an annual capacity of 250,000
to 300,000 tonnes and may create 160 jobs - about the same as the
number of jobs at the existing plant.
And, like the $540 million plant on Jurong Island, it will make the
key intermediate chemical needed to produce plastic resins used to
make CDs and DVDs.
'We are making an all-out effort to realise the establishment of a
new-generation phenol plant,' said president and chief executive
Kenji Fujiyoshi at an award presentation lunch at the Raffles Hotel.
But 'construction costs have risen very rapidly so we are now
reviewing these factors', he said later.
But it is full steam ahead for plans to beef up its R&D operations.
It is moving into a 1,200sqm space in a new research facility in
Science Park III at the end of next year. The move will accommodate a
trebling of researchers, from fewer than 10 to at least 30.
Mitsui announced yesterday that a joint effort with the Agency for
Science, Technology and Research (A*Star) has yielded a new catalyst
for the production of benzene from methane, the main component of
natural gas, instead of crude oil.
It is also starting a scholarship programme that will sponsor at
least two local students for studies in Japan. The scheme is aimed at
helping the company secure talent for further expansion here.
Rising building costs stall Mitsui's decision on plant
By Bryan Lee
JAPAN'S Mitsui Chemicals is considering sinking a few hundred million
dollars into a new major manufacturing plant in Singapore, but
surging construction costs are complicating the decision.
The company, which was presented yesterday with Singapore's top
corporate accolade, said a 20 to 30 per cent hike in costs is
weighing heavily on its final decision, which it hopes to make in the
next few months.
But it is going ahead with expansion plans for its research and
development (R&D) centre here, as well as internship and scholarship
programmes for Singaporean students.
Mitsui, which has invested more than $1 billion in Singapore over the
past 42 years, is considering building a second phenol plant that
will be at least as big as an existing one it opened in 1998.
It announced this as it received the Distinguished Partner in
Progress Award, which recognises leading firms for their significant
contributions to Singapore.
The proposed factory is slated to have an annual capacity of 250,000
to 300,000 tonnes and may create 160 jobs - about the same as the
number of jobs at the existing plant.
And, like the $540 million plant on Jurong Island, it will make the
key intermediate chemical needed to produce plastic resins used to
make CDs and DVDs.
'We are making an all-out effort to realise the establishment of a
new-generation phenol plant,' said president and chief executive
Kenji Fujiyoshi at an award presentation lunch at the Raffles Hotel.
But 'construction costs have risen very rapidly so we are now
reviewing these factors', he said later.
But it is full steam ahead for plans to beef up its R&D operations.
It is moving into a 1,200sqm space in a new research facility in
Science Park III at the end of next year. The move will accommodate a
trebling of researchers, from fewer than 10 to at least 30.
Mitsui announced yesterday that a joint effort with the Agency for
Science, Technology and Research (A*Star) has yielded a new catalyst
for the production of benzene from methane, the main component of
natural gas, instead of crude oil.
It is also starting a scholarship programme that will sponsor at
least two local students for studies in Japan. The scheme is aimed at
helping the company secure talent for further expansion here.
Kwek Leng Beng: Property slowdown not widespread
Aug 15, 2008
Kwek Leng Beng: Property slowdown not widespread
Lower prices may be due to panic-selling by a few owners, says CDL
chief
By Fiona Chan PROPERTY REPORTER
CITY Developments (CDL) chief Kwek Leng Beng is not convinced that
the property market slowdown is as widespread as it seems, despite
the recent easing in home sales and prices.
The executive chairman of Singapore's second-largest developer said
the lower prices may just be the result of 'panic-selling' by a few
owners who had bought their high-end homes cheap.
'There is a bit of panic in the market, and what has gone up very
high in a straight line will also come down,' Mr Kwek said, referring
to how property prices have soared in the last few years. But he
added that a few lower-priced sales may not be representative of the
overall high-end market.
'Bear in mind, just because of a couple of low transactions, one
swallow doesn't make a summer,' he said yesterday at the release of
CDL's second-quarter financial results. He added that few buyers so
far have defaulted on their purchases.
Mr Kwek also brushed aside concerns about a looming oversupply of
homes in the market. He cited higher land and building costs,
pressure on the construction sector that may result in completion
delays, as well as possible financing difficulties faced by
developers who want to build new homes.
CDL yesterday posted a 15 per cent drop in net profit to $165.2
million for the three months to June 30. It said this was due to the
absence of a one-off tax credit given last year, without which net
profit would actually have risen 0.6 per cent. Revenue inched up 0.7
per cent to $780.8 million.
But Mr Kwek stressed that the current slowdown is 'different from the
Asian financial crisis of 1997', saying CDL has 'very little unsold
residential stock, a healthy balance sheet and locked-in profits yet
to be recognised from its pre-sold residential units'.
Between now and December, the group plans to launch phase 2 of Livia
in Pasir Ris, as well as two new projects: The Arte in Thomson Road
and The Quayside Collection at Sentosa Cove.
Earnings per share dropped to 17.5 cents in the second quarter, from
20.7 cents a year ago, CDL said. But group net asset value rose to
$5.77 as at June 30, from $5.72 as at Dec 31 last year.
The group also said it has signed up all the anchor tenants for its
City Square mall in Kitchener Road and is filling up the rest of the
space steadily.
Kwek Leng Beng: Property slowdown not widespread
Lower prices may be due to panic-selling by a few owners, says CDL
chief
By Fiona Chan PROPERTY REPORTER
CITY Developments (CDL) chief Kwek Leng Beng is not convinced that
the property market slowdown is as widespread as it seems, despite
the recent easing in home sales and prices.
The executive chairman of Singapore's second-largest developer said
the lower prices may just be the result of 'panic-selling' by a few
owners who had bought their high-end homes cheap.
'There is a bit of panic in the market, and what has gone up very
high in a straight line will also come down,' Mr Kwek said, referring
to how property prices have soared in the last few years. But he
added that a few lower-priced sales may not be representative of the
overall high-end market.
'Bear in mind, just because of a couple of low transactions, one
swallow doesn't make a summer,' he said yesterday at the release of
CDL's second-quarter financial results. He added that few buyers so
far have defaulted on their purchases.
Mr Kwek also brushed aside concerns about a looming oversupply of
homes in the market. He cited higher land and building costs,
pressure on the construction sector that may result in completion
delays, as well as possible financing difficulties faced by
developers who want to build new homes.
CDL yesterday posted a 15 per cent drop in net profit to $165.2
million for the three months to June 30. It said this was due to the
absence of a one-off tax credit given last year, without which net
profit would actually have risen 0.6 per cent. Revenue inched up 0.7
per cent to $780.8 million.
But Mr Kwek stressed that the current slowdown is 'different from the
Asian financial crisis of 1997', saying CDL has 'very little unsold
residential stock, a healthy balance sheet and locked-in profits yet
to be recognised from its pre-sold residential units'.
Between now and December, the group plans to launch phase 2 of Livia
in Pasir Ris, as well as two new projects: The Arte in Thomson Road
and The Quayside Collection at Sentosa Cove.
Earnings per share dropped to 17.5 cents in the second quarter, from
20.7 cents a year ago, CDL said. But group net asset value rose to
$5.77 as at June 30, from $5.72 as at Dec 31 last year.
The group also said it has signed up all the anchor tenants for its
City Square mall in Kitchener Road and is filling up the rest of the
space steadily.
Property firms report weak set of Q2 numbers
August 15, 2008
Property firms report weak set of Q2 numbers
Most developers see their business hit in 3rd and 4th quarters
By UMA SHANKARI
HIT by fewer home sales, lower revaluation gains from investment
properties, drops in divestment gains - and even the stronger
Singapore dollar - property companies largely reported weak results
for the second quarter.
And the future doesn't look rosy either.
Most listed developers have warned that the global slowdown and
weakening market could hit their business in the third and fourth
quarters. Even the most upbeat are only 'cautiously optimistic'.
The big three developers - CapitaLand, City Developments and Keppel
Land - all posted lower profits for Q2.
CapitaLand, Singapore's and South-east Asia's largest developer, said
its Q2 profit fell 43.5 per cent to $515.2 million, partly due to
lower revaluation gains from investment properties, lower portfolio
gains and development profits, and the absence of previous write-back
provisions. Analysts called the results disappointing.
City Developments saw Q2 net profit drop 15.1 per cent to $165.2
million. Among other factors, CityDev was hurt by the translation of
its overseas hotels earnings at weakening exchange rates due to the
strengthening Singapore dollar.
Keppel Land reported that Q2 profit fell 16.4 per cent to $52.7
million as it sold fewer homes in Singapore and abroad.
'I think the mood is generally very cautious, and this has hurt the
developers,' said an analyst. 'The trend is likely to continue for
the rest of the year.'
Right now, the fear is that sectors that are currently contributing
strongly to top lines, such as hospitality, may soon start to weaken.
The Ministry of Trade and Industry's latest quarterly economic survey
showed there are increasing signs that segments within services -
including the retail trade and hotels - are showing slower growth.
Property stocks with exposure to those sectors - such as CapitaLand,
CityDev and UOL Group, to name just a few - could see contributions
from those divisions drop.
For UOL, for example, a 4 per cent increase in Q2 in revenue was due
largely to hotel operations, with its hotels in Singapore, Australia
and Vietnam performing better.
As for the residential market here, Citigroup has said prices of
luxury homes could correct sharply, which could have a negative
impact on some developers.
'Scrapping of the deferred payment scheme and tighter bank financing
for investment properties may have also hurt property transactions,
which are off some 70 per cent from recent highs,' Citi noted in a
recent report. 'Some developers may have also over-committed in terms
of land purchases during the boom periods.'
Citi analyst Wendy Koh expects a 20-30 per cent price correction for
high-end properties from their recent peak, and reckons the mid-tier
is likely to decline 10-20 per cent.
Property firms report weak set of Q2 numbers
Most developers see their business hit in 3rd and 4th quarters
By UMA SHANKARI
HIT by fewer home sales, lower revaluation gains from investment
properties, drops in divestment gains - and even the stronger
Singapore dollar - property companies largely reported weak results
for the second quarter.
And the future doesn't look rosy either.
Most listed developers have warned that the global slowdown and
weakening market could hit their business in the third and fourth
quarters. Even the most upbeat are only 'cautiously optimistic'.
The big three developers - CapitaLand, City Developments and Keppel
Land - all posted lower profits for Q2.
CapitaLand, Singapore's and South-east Asia's largest developer, said
its Q2 profit fell 43.5 per cent to $515.2 million, partly due to
lower revaluation gains from investment properties, lower portfolio
gains and development profits, and the absence of previous write-back
provisions. Analysts called the results disappointing.
City Developments saw Q2 net profit drop 15.1 per cent to $165.2
million. Among other factors, CityDev was hurt by the translation of
its overseas hotels earnings at weakening exchange rates due to the
strengthening Singapore dollar.
Keppel Land reported that Q2 profit fell 16.4 per cent to $52.7
million as it sold fewer homes in Singapore and abroad.
'I think the mood is generally very cautious, and this has hurt the
developers,' said an analyst. 'The trend is likely to continue for
the rest of the year.'
Right now, the fear is that sectors that are currently contributing
strongly to top lines, such as hospitality, may soon start to weaken.
The Ministry of Trade and Industry's latest quarterly economic survey
showed there are increasing signs that segments within services -
including the retail trade and hotels - are showing slower growth.
Property stocks with exposure to those sectors - such as CapitaLand,
CityDev and UOL Group, to name just a few - could see contributions
from those divisions drop.
For UOL, for example, a 4 per cent increase in Q2 in revenue was due
largely to hotel operations, with its hotels in Singapore, Australia
and Vietnam performing better.
As for the residential market here, Citigroup has said prices of
luxury homes could correct sharply, which could have a negative
impact on some developers.
'Scrapping of the deferred payment scheme and tighter bank financing
for investment properties may have also hurt property transactions,
which are off some 70 per cent from recent highs,' Citi noted in a
recent report. 'Some developers may have also over-committed in terms
of land purchases during the boom periods.'
Citi analyst Wendy Koh expects a 20-30 per cent price correction for
high-end properties from their recent peak, and reckons the mid-tier
is likely to decline 10-20 per cent.
URA index reflects overall price trends
August 15, 2008
LETTER TO THE EDITOR
URA index reflects overall price trends
WE refer to the letter 'URA private home index an anomaly' by Kenneth
Pang Cheow Jow (BT, Aug 5).
The writer asked why URA's Private Residential Property Price Index
(PPI) for second-quarter 2008 was still lower than its 1996 peak,
when private residential property prices in Singapore were
anecdotally at, or near, their highest.
We wish to inform your readers that the prices highlighted by Mr Pang
pertain to selected uncompleted properties which recorded relatively
higher prices. These were not representative of the entire private
residential market.
For example, in June 2008, a number of uncompleted properties in the
Core Central Region (CCR), where most high-end properties are
located, recorded median prices of around $1,300-1,800 psf and prices
as low as $1,100 psf. Similarly, a number of uncompleted properties
in the Rest of Central Region (RCR), generally equated with mid-range
properties, recorded median prices of around $800-1,300 psf and
prices as low as $700 psf. In the Outside Central Region (OCR), which
generally caters to the mass market, a number of uncompleted
properties saw median prices of around $700-800 psf, with some prices
as low as $600 psf.
Moreover, the anecdotes given by Mr Pang refer mainly to the prices
for new sales of non-landed properties. In contrast, URA's PPI takes
into account both primary and secondary market transactions of all
types of properties. Generally, the median prices of transactions in
the secondary market as a whole, which represent about 50-60 per cent
of all transactions, are lower than those found in the primary
market.
As for landed properties, the prices in Q2 2008 in several areas were
still lower than their peak in 1996. These include postal districts
14, 16, 17, 19, 21 and 28.
URA's PPI for private residential properties, both island-wide and
for the different market segments (that is, CCR, RCR and OCR), is
compiled based on both primary and secondary market transactions for
all types of properties. Hence the index gives a balanced picture of
overall price trends in the private housing market.
To compute the PPI, transactions are first grouped by characteristics
of the properties, including property type and locality, and the
median price in each group is used to compute a sub-index. A system
of weights based on the historical share of each group of the total
transactions is then applied to the various sub-indices to compute
the overall index.
We thank Mr Pang for his feedback.
Choy Chan Pong
Director
(Land Administration)
Urban Redevelopment Authority
LETTER TO THE EDITOR
URA index reflects overall price trends
WE refer to the letter 'URA private home index an anomaly' by Kenneth
Pang Cheow Jow (BT, Aug 5).
The writer asked why URA's Private Residential Property Price Index
(PPI) for second-quarter 2008 was still lower than its 1996 peak,
when private residential property prices in Singapore were
anecdotally at, or near, their highest.
We wish to inform your readers that the prices highlighted by Mr Pang
pertain to selected uncompleted properties which recorded relatively
higher prices. These were not representative of the entire private
residential market.
For example, in June 2008, a number of uncompleted properties in the
Core Central Region (CCR), where most high-end properties are
located, recorded median prices of around $1,300-1,800 psf and prices
as low as $1,100 psf. Similarly, a number of uncompleted properties
in the Rest of Central Region (RCR), generally equated with mid-range
properties, recorded median prices of around $800-1,300 psf and
prices as low as $700 psf. In the Outside Central Region (OCR), which
generally caters to the mass market, a number of uncompleted
properties saw median prices of around $700-800 psf, with some prices
as low as $600 psf.
Moreover, the anecdotes given by Mr Pang refer mainly to the prices
for new sales of non-landed properties. In contrast, URA's PPI takes
into account both primary and secondary market transactions of all
types of properties. Generally, the median prices of transactions in
the secondary market as a whole, which represent about 50-60 per cent
of all transactions, are lower than those found in the primary
market.
As for landed properties, the prices in Q2 2008 in several areas were
still lower than their peak in 1996. These include postal districts
14, 16, 17, 19, 21 and 28.
URA's PPI for private residential properties, both island-wide and
for the different market segments (that is, CCR, RCR and OCR), is
compiled based on both primary and secondary market transactions for
all types of properties. Hence the index gives a balanced picture of
overall price trends in the private housing market.
To compute the PPI, transactions are first grouped by characteristics
of the properties, including property type and locality, and the
median price in each group is used to compute a sub-index. A system
of weights based on the historical share of each group of the total
transactions is then applied to the various sub-indices to compute
the overall index.
We thank Mr Pang for his feedback.
Choy Chan Pong
Director
(Land Administration)
Urban Redevelopment Authority
Frasers opens US$135m Beijing service residence
August 15, 2008
Frasers opens US$135m Beijing service residence
By CHEW XIANG IN BEIJING
FRASERS Hospitality, a unit of Frasers Centrepoint, the property arm
of listed conglomerate F&N, yesterday officially opened a 23-storey
service residence in Beijing, the sixth of up to 20 it hopes to open
in China. The company owns or operates service residences in more
than 14 cities in Asia and Europe and is targeting 8,500 apartments
by 2010.
The latest US$135 million project has 357 apartments and has already
housed celebrities such as S.H.E and Wang Lee Hom. It was completed
earlier this year ahead of the Olympic Games and is the first in
China to be wholly-owned by the company.
But a long-mooted real estate investment trust holding the company's
hospitality assets is likely to be delayed for at least a year or
two, said its chief executive officer Choe Peng Sum.
'Everyone knows right now is not the time to do a Reit,' said Mr
Choe. 'We are quite ready but it's a weak market. People are saying
at least another year, if anything, after 2009.'
He said that the company preferred to manage properties on behalf of
owners as it seeks to expand rapidly while remaining asset-
light. 'But we would like to own properties if they are in super-
prime locations,' said Mr Choe. Its newest residence is in the heart
of Beijing's central business district and is already seeing 80 per
cent occupancy. Mr Choe called the Beijing project's timing 'just
right', as it came ahead of recent attempts by the country's central
government to tighten bank lending and property development. For
instance, it was able to secure a 50 per cent loan in US dollars from
foreign banks, just before the government stipulated that loans
should be denominated in yuan.
'The difference in spread could be as much as 5 percentage points,'
Mr Choe said. As well, the price of land has been booming and would
have risen to about 50 per cent of total cost if the project was done
today, he added, which would make ownership unfeasible.
'China is the world's biggest growth engine and Beijing is at the
heart of this ... China would be the biggest market for us,' he said,
though the company is also expanding into India, the Middle East and
Vietnam.
President SR Nathan, in the city attending the Beijing Olympic games,
was the guest of honour at the opening ceremony.
Frasers opens US$135m Beijing service residence
By CHEW XIANG IN BEIJING
FRASERS Hospitality, a unit of Frasers Centrepoint, the property arm
of listed conglomerate F&N, yesterday officially opened a 23-storey
service residence in Beijing, the sixth of up to 20 it hopes to open
in China. The company owns or operates service residences in more
than 14 cities in Asia and Europe and is targeting 8,500 apartments
by 2010.
The latest US$135 million project has 357 apartments and has already
housed celebrities such as S.H.E and Wang Lee Hom. It was completed
earlier this year ahead of the Olympic Games and is the first in
China to be wholly-owned by the company.
But a long-mooted real estate investment trust holding the company's
hospitality assets is likely to be delayed for at least a year or
two, said its chief executive officer Choe Peng Sum.
'Everyone knows right now is not the time to do a Reit,' said Mr
Choe. 'We are quite ready but it's a weak market. People are saying
at least another year, if anything, after 2009.'
He said that the company preferred to manage properties on behalf of
owners as it seeks to expand rapidly while remaining asset-
light. 'But we would like to own properties if they are in super-
prime locations,' said Mr Choe. Its newest residence is in the heart
of Beijing's central business district and is already seeing 80 per
cent occupancy. Mr Choe called the Beijing project's timing 'just
right', as it came ahead of recent attempts by the country's central
government to tighten bank lending and property development. For
instance, it was able to secure a 50 per cent loan in US dollars from
foreign banks, just before the government stipulated that loans
should be denominated in yuan.
'The difference in spread could be as much as 5 percentage points,'
Mr Choe said. As well, the price of land has been booming and would
have risen to about 50 per cent of total cost if the project was done
today, he added, which would make ownership unfeasible.
'China is the world's biggest growth engine and Beijing is at the
heart of this ... China would be the biggest market for us,' he said,
though the company is also expanding into India, the Middle East and
Vietnam.
President SR Nathan, in the city attending the Beijing Olympic games,
was the guest of honour at the opening ceremony.
One man's panic is another's bargain...
August 15, 2008
One man's panic is another's bargain...
CDL chief points to some good buys as panic-sellers offload, but he's
not alarmed
By KALPANA RASHIWALA
(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng
Beng yesterday acknowledged that there have been some cases of high-
end property buyers resorting to panic-selling in the secondary
market. These are people who'd bought their units during the early
stages of the property boom
'It is not as alarming as what some people think. Just bear in mind,
because of a couple of transactions, these few swallows do not make a
summer,' he told analysts and journalists at a briefing to announce
CDL's second quarter results.
In some cases, these desperate sellers are offloading their units at
prices that may be 20-30 per cent below current market values,
providing attractive bargains for astute property investors, Mr Kwek
said.
'There are what I call bargains because some buyers, towards
Temporary Occupation Permit or even before TOP, just want to get out
as long as they make $100 psf profit.
'As an example, there were some projects launched at $2,200 psf. Then
(the price) went up to $3,400-3,500 psf. Today there are some people
who have gotten so frightened, they will sell off at $1,700 psf. That
is the time, if you are smart enough, you can pick up (a bargain)!
Buying property is not short term. Buying property is medium to
longer term.'
High-end home prices are in a period of consolidation after a sharp
escalation. 'What has gone up in a straight line will also come
down,' as Mr Kwek put it.
'My key advice to you is as long as you can service your instalment
and with the (current) cost of construction so high, how can you be
worse off than during the bad times in '96 and '97? If you are smart
enough to pick up (a property) when some people want to commit
suicide, you just pick (it) up cheap - keep it, rent it, stay -
there's your chance.'
Saying he was not too worried about the current consolidation, he
added: 'This is the time you should buy. This is not the time you
should get out, unless of course circumstances dictate that you
should get out.'
Regaling his audience with an anecdote, Mr Kwek said: 'For example,
The Sail @ Marina Bay, we started selling at $900 psf, and the price
went up to $3,000 psf-plus. The other day, somebody told me that his
friend, a broker, said there's one unit, ninth floor, $1,800 psf. He
asked me: 'Do you want to buy?' I said: 'Which unit? I want to check.
I am going for a meeting. When I come back, we'll talk about it.' By
the time I came back, the whole thing was gone.'
The high-end residential sector will recover 'when the sub-prime
crisis is over and the integrated resorts are in operation', Mr Kwek
said. 'You'll have a lot of high rollers coming in. They come in,
they like Singapore - very clean, things get done. We have a lot of
(positive) attributes but we're always taking them for granted.'
Mr Kwek, who is also chairman and managing director of Hong Leong
Finance, said that although 'we don't have Freddie Mac and Frannie
Mae' here, Asia will be hit to some extent by the sub-prime
crisis. 'However, our banks are well capitalised. Monetary Authority
of Singapore is monitoring closely.'
He also recalled Minister for National Development Mah Bow Tan's
comments that 'they don't want to see property prices going (up) in a
straight line nor do they want to see it going down in a straight
line. So I am confident they are monitoring the whole situation'.
Much of CDL's land bank, even in the high-end, was acquired at
relatively cheap cost. 'As an example, for the Lucky Tower site (at
Grange Road), if I were to launch my project tomorrow at $2,500-
$2,600 psf, I can still make very healthy profit compared to Cliveden
(nearby) which we sold at $3,750 psf. It's a question of whether I
want to let go at $2,500 psf or whether I should keep it.
'Don't forget if you go ahead and construct, you incur two sets of
interest costs - on land and construction. By the time the market
improves, the (unit) sizes and the design may be outdated, so you
cannot maximise the profit from that. It's better to keep the land
and wait for a better opportunity before you sell.
'I'm sure some (other) developers feel the same way. I will guarantee
you many of these people will not go ahead with construction,' Mr
Kwek said.
CDL, in its results statement, also cited other reasons why a feared
oversupply of new private home completions may not materialise. Tight
bank financing is making developers more cautious in their land
purchases. The sharp hike in construction costs means developers who
delay their launches may hold back their construction plans as well.
Given tight construction resources, contractors may continue to find
it hard to complete projects on schedule.
One man's panic is another's bargain...
CDL chief points to some good buys as panic-sellers offload, but he's
not alarmed
By KALPANA RASHIWALA
(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng
Beng yesterday acknowledged that there have been some cases of high-
end property buyers resorting to panic-selling in the secondary
market. These are people who'd bought their units during the early
stages of the property boom
'It is not as alarming as what some people think. Just bear in mind,
because of a couple of transactions, these few swallows do not make a
summer,' he told analysts and journalists at a briefing to announce
CDL's second quarter results.
In some cases, these desperate sellers are offloading their units at
prices that may be 20-30 per cent below current market values,
providing attractive bargains for astute property investors, Mr Kwek
said.
'There are what I call bargains because some buyers, towards
Temporary Occupation Permit or even before TOP, just want to get out
as long as they make $100 psf profit.
'As an example, there were some projects launched at $2,200 psf. Then
(the price) went up to $3,400-3,500 psf. Today there are some people
who have gotten so frightened, they will sell off at $1,700 psf. That
is the time, if you are smart enough, you can pick up (a bargain)!
Buying property is not short term. Buying property is medium to
longer term.'
High-end home prices are in a period of consolidation after a sharp
escalation. 'What has gone up in a straight line will also come
down,' as Mr Kwek put it.
'My key advice to you is as long as you can service your instalment
and with the (current) cost of construction so high, how can you be
worse off than during the bad times in '96 and '97? If you are smart
enough to pick up (a property) when some people want to commit
suicide, you just pick (it) up cheap - keep it, rent it, stay -
there's your chance.'
Saying he was not too worried about the current consolidation, he
added: 'This is the time you should buy. This is not the time you
should get out, unless of course circumstances dictate that you
should get out.'
Regaling his audience with an anecdote, Mr Kwek said: 'For example,
The Sail @ Marina Bay, we started selling at $900 psf, and the price
went up to $3,000 psf-plus. The other day, somebody told me that his
friend, a broker, said there's one unit, ninth floor, $1,800 psf. He
asked me: 'Do you want to buy?' I said: 'Which unit? I want to check.
I am going for a meeting. When I come back, we'll talk about it.' By
the time I came back, the whole thing was gone.'
The high-end residential sector will recover 'when the sub-prime
crisis is over and the integrated resorts are in operation', Mr Kwek
said. 'You'll have a lot of high rollers coming in. They come in,
they like Singapore - very clean, things get done. We have a lot of
(positive) attributes but we're always taking them for granted.'
Mr Kwek, who is also chairman and managing director of Hong Leong
Finance, said that although 'we don't have Freddie Mac and Frannie
Mae' here, Asia will be hit to some extent by the sub-prime
crisis. 'However, our banks are well capitalised. Monetary Authority
of Singapore is monitoring closely.'
He also recalled Minister for National Development Mah Bow Tan's
comments that 'they don't want to see property prices going (up) in a
straight line nor do they want to see it going down in a straight
line. So I am confident they are monitoring the whole situation'.
Much of CDL's land bank, even in the high-end, was acquired at
relatively cheap cost. 'As an example, for the Lucky Tower site (at
Grange Road), if I were to launch my project tomorrow at $2,500-
$2,600 psf, I can still make very healthy profit compared to Cliveden
(nearby) which we sold at $3,750 psf. It's a question of whether I
want to let go at $2,500 psf or whether I should keep it.
'Don't forget if you go ahead and construct, you incur two sets of
interest costs - on land and construction. By the time the market
improves, the (unit) sizes and the design may be outdated, so you
cannot maximise the profit from that. It's better to keep the land
and wait for a better opportunity before you sell.
'I'm sure some (other) developers feel the same way. I will guarantee
you many of these people will not go ahead with construction,' Mr
Kwek said.
CDL, in its results statement, also cited other reasons why a feared
oversupply of new private home completions may not materialise. Tight
bank financing is making developers more cautious in their land
purchases. The sharp hike in construction costs means developers who
delay their launches may hold back their construction plans as well.
Given tight construction resources, contractors may continue to find
it hard to complete projects on schedule.
One man's panic is another's bargain...
August 15, 2008
One man's panic is another's bargain...
CDL chief points to some good buys as panic-sellers offload, but he's
not alarmed
By KALPANA RASHIWALA
(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng
Beng yesterday acknowledged that there have been some cases of high-
end property buyers resorting to panic-selling in the secondary
market. These are people who'd bought their units during the early
stages of the property boom
'It is not as alarming as what some people think. Just bear in mind,
because of a couple of transactions, these few swallows do not make a
summer,' he told analysts and journalists at a briefing to announce
CDL's second quarter results.
In some cases, these desperate sellers are offloading their units at
prices that may be 20-30 per cent below current market values,
providing attractive bargains for astute property investors, Mr Kwek
said.
'There are what I call bargains because some buyers, towards
Temporary Occupation Permit or even before TOP, just want to get out
as long as they make $100 psf profit.
'As an example, there were some projects launched at $2,200 psf. Then
(the price) went up to $3,400-3,500 psf. Today there are some people
who have gotten so frightened, they will sell off at $1,700 psf. That
is the time, if you are smart enough, you can pick up (a bargain)!
Buying property is not short term. Buying property is medium to
longer term.'
High-end home prices are in a period of consolidation after a sharp
escalation. 'What has gone up in a straight line will also come
down,' as Mr Kwek put it.
'My key advice to you is as long as you can service your instalment
and with the (current) cost of construction so high, how can you be
worse off than during the bad times in '96 and '97? If you are smart
enough to pick up (a property) when some people want to commit
suicide, you just pick (it) up cheap - keep it, rent it, stay -
there's your chance.'
Saying he was not too worried about the current consolidation, he
added: 'This is the time you should buy. This is not the time you
should get out, unless of course circumstances dictate that you
should get out.'
Regaling his audience with an anecdote, Mr Kwek said: 'For example,
The Sail @ Marina Bay, we started selling at $900 psf, and the price
went up to $3,000 psf-plus. The other day, somebody told me that his
friend, a broker, said there's one unit, ninth floor, $1,800 psf. He
asked me: 'Do you want to buy?' I said: 'Which unit? I want to check.
I am going for a meeting. When I come back, we'll talk about it.' By
the time I came back, the whole thing was gone.'
The high-end residential sector will recover 'when the sub-prime
crisis is over and the integrated resorts are in operation', Mr Kwek
said. 'You'll have a lot of high rollers coming in. They come in,
they like Singapore - very clean, things get done. We have a lot of
(positive) attributes but we're always taking them for granted.'
Mr Kwek, who is also chairman and managing director of Hong Leong
Finance, said that although 'we don't have Freddie Mac and Frannie
Mae' here, Asia will be hit to some extent by the sub-prime
crisis. 'However, our banks are well capitalised. Monetary Authority
of Singapore is monitoring closely.'
He also recalled Minister for National Development Mah Bow Tan's
comments that 'they don't want to see property prices going (up) in a
straight line nor do they want to see it going down in a straight
line. So I am confident they are monitoring the whole situation'.
Much of CDL's land bank, even in the high-end, was acquired at
relatively cheap cost. 'As an example, for the Lucky Tower site (at
Grange Road), if I were to launch my project tomorrow at $2,500-
$2,600 psf, I can still make very healthy profit compared to Cliveden
(nearby) which we sold at $3,750 psf. It's a question of whether I
want to let go at $2,500 psf or whether I should keep it.
'Don't forget if you go ahead and construct, you incur two sets of
interest costs - on land and construction. By the time the market
improves, the (unit) sizes and the design may be outdated, so you
cannot maximise the profit from that. It's better to keep the land
and wait for a better opportunity before you sell.
'I'm sure some (other) developers feel the same way. I will guarantee
you many of these people will not go ahead with construction,' Mr
Kwek said.
CDL, in its results statement, also cited other reasons why a feared
oversupply of new private home completions may not materialise. Tight
bank financing is making developers more cautious in their land
purchases. The sharp hike in construction costs means developers who
delay their launches may hold back their construction plans as well.
Given tight construction resources, contractors may continue to find
it hard to complete projects on schedule.
One man's panic is another's bargain...
CDL chief points to some good buys as panic-sellers offload, but he's
not alarmed
By KALPANA RASHIWALA
(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng
Beng yesterday acknowledged that there have been some cases of high-
end property buyers resorting to panic-selling in the secondary
market. These are people who'd bought their units during the early
stages of the property boom
'It is not as alarming as what some people think. Just bear in mind,
because of a couple of transactions, these few swallows do not make a
summer,' he told analysts and journalists at a briefing to announce
CDL's second quarter results.
In some cases, these desperate sellers are offloading their units at
prices that may be 20-30 per cent below current market values,
providing attractive bargains for astute property investors, Mr Kwek
said.
'There are what I call bargains because some buyers, towards
Temporary Occupation Permit or even before TOP, just want to get out
as long as they make $100 psf profit.
'As an example, there were some projects launched at $2,200 psf. Then
(the price) went up to $3,400-3,500 psf. Today there are some people
who have gotten so frightened, they will sell off at $1,700 psf. That
is the time, if you are smart enough, you can pick up (a bargain)!
Buying property is not short term. Buying property is medium to
longer term.'
High-end home prices are in a period of consolidation after a sharp
escalation. 'What has gone up in a straight line will also come
down,' as Mr Kwek put it.
'My key advice to you is as long as you can service your instalment
and with the (current) cost of construction so high, how can you be
worse off than during the bad times in '96 and '97? If you are smart
enough to pick up (a property) when some people want to commit
suicide, you just pick (it) up cheap - keep it, rent it, stay -
there's your chance.'
Saying he was not too worried about the current consolidation, he
added: 'This is the time you should buy. This is not the time you
should get out, unless of course circumstances dictate that you
should get out.'
Regaling his audience with an anecdote, Mr Kwek said: 'For example,
The Sail @ Marina Bay, we started selling at $900 psf, and the price
went up to $3,000 psf-plus. The other day, somebody told me that his
friend, a broker, said there's one unit, ninth floor, $1,800 psf. He
asked me: 'Do you want to buy?' I said: 'Which unit? I want to check.
I am going for a meeting. When I come back, we'll talk about it.' By
the time I came back, the whole thing was gone.'
The high-end residential sector will recover 'when the sub-prime
crisis is over and the integrated resorts are in operation', Mr Kwek
said. 'You'll have a lot of high rollers coming in. They come in,
they like Singapore - very clean, things get done. We have a lot of
(positive) attributes but we're always taking them for granted.'
Mr Kwek, who is also chairman and managing director of Hong Leong
Finance, said that although 'we don't have Freddie Mac and Frannie
Mae' here, Asia will be hit to some extent by the sub-prime
crisis. 'However, our banks are well capitalised. Monetary Authority
of Singapore is monitoring closely.'
He also recalled Minister for National Development Mah Bow Tan's
comments that 'they don't want to see property prices going (up) in a
straight line nor do they want to see it going down in a straight
line. So I am confident they are monitoring the whole situation'.
Much of CDL's land bank, even in the high-end, was acquired at
relatively cheap cost. 'As an example, for the Lucky Tower site (at
Grange Road), if I were to launch my project tomorrow at $2,500-
$2,600 psf, I can still make very healthy profit compared to Cliveden
(nearby) which we sold at $3,750 psf. It's a question of whether I
want to let go at $2,500 psf or whether I should keep it.
'Don't forget if you go ahead and construct, you incur two sets of
interest costs - on land and construction. By the time the market
improves, the (unit) sizes and the design may be outdated, so you
cannot maximise the profit from that. It's better to keep the land
and wait for a better opportunity before you sell.
'I'm sure some (other) developers feel the same way. I will guarantee
you many of these people will not go ahead with construction,' Mr
Kwek said.
CDL, in its results statement, also cited other reasons why a feared
oversupply of new private home completions may not materialise. Tight
bank financing is making developers more cautious in their land
purchases. The sharp hike in construction costs means developers who
delay their launches may hold back their construction plans as well.
Given tight construction resources, contractors may continue to find
it hard to complete projects on schedule.
Thursday, August 14, 2008
Downside of a strong Sing dollar
Business Times - 14 Aug 2008
Downside of a strong Sing dollar
THE stronger Singapore dollar may be helping to keep high inflation at bay - but it is also hurting the earnings of Singapore companies. The movements in the Sing dollar affect the competitiveness of local goods and services abroad as well as profits when foreign earnings are translated back into local currency.
Nothing illustrates this better than the results reported this week by some of Singapore's biggest companies. On Tuesday, Singapore Telecom, the largest listed firm here, said profit took a hit as the Sing dollar strengthened against regional currencies, shrinking earnings from its regional associates which have now become a key source of SingTel's profits. Net income for the three months ended June 30 fell 5.3 per cent to a two-year low of $878 million, missing market forecasts.
Another blue chip, Singapore Technologies Engineering (STE), also cited the strength of the Sing dollar as one of the key factors affecting its earnings, particularly at its aerospace arm - its biggest business unit. STE reported net earnings of $119.9 million for the quarter ended June 30, a 2.3 per cent dip from a year ago. A slew of smaller companies have issued profit warnings, with the strong currency a common refrain.
Last week, a report by a Ministry of Trade and Industry (MTI) researcher argued that the stronger Sing dollar has had a smaller-than-expected impact on manufacturers' profit margins, as the rising price of exports can be cushioned by the cheaper imported material. Nevertheless, there is no denying the strong dollar's impact on companies.
This should be one major consideration for the Monetary Authority of Singapore (MAS) as it reviews its monetary policy stance in its upcoming October meeting. While the Sing dollar exchange rate is the MAS's main tool in the fight against inflation as Singapore imports most of its essentials, the circumstances now are very different from what they were six months ago.
For one, the prices of oil and commodities are retreating, addressing one of the key causes for the surge in inflation worldwide. Oil steadied above US$113 yesterday, after falling a day ago to its lowest since May 2 in the wake of official data showing US oil use in its steepest dive in 26 years.
On the home front, the Singapore economy is also slowing, and growth has become as big an issue as inflation for policymakers. Concern here over price pressures will likely take a back seat to growth risks in the months ahead.
The Singapore economy grew just 2.1 per cent in the second quarter, while the official growth forecast for 2008 has been narrowed to 4-5 per cent from an earlier estimate of 4-6 per cent. Singapore companies will be hoping that these conditions will lead the MAS to consider slowing the appreciation of the Singapore dollar, at the very least, in the near future.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Downside of a strong Sing dollar
THE stronger Singapore dollar may be helping to keep high inflation at bay - but it is also hurting the earnings of Singapore companies. The movements in the Sing dollar affect the competitiveness of local goods and services abroad as well as profits when foreign earnings are translated back into local currency.
Nothing illustrates this better than the results reported this week by some of Singapore's biggest companies. On Tuesday, Singapore Telecom, the largest listed firm here, said profit took a hit as the Sing dollar strengthened against regional currencies, shrinking earnings from its regional associates which have now become a key source of SingTel's profits. Net income for the three months ended June 30 fell 5.3 per cent to a two-year low of $878 million, missing market forecasts.
Another blue chip, Singapore Technologies Engineering (STE), also cited the strength of the Sing dollar as one of the key factors affecting its earnings, particularly at its aerospace arm - its biggest business unit. STE reported net earnings of $119.9 million for the quarter ended June 30, a 2.3 per cent dip from a year ago. A slew of smaller companies have issued profit warnings, with the strong currency a common refrain.
Last week, a report by a Ministry of Trade and Industry (MTI) researcher argued that the stronger Sing dollar has had a smaller-than-expected impact on manufacturers' profit margins, as the rising price of exports can be cushioned by the cheaper imported material. Nevertheless, there is no denying the strong dollar's impact on companies.
This should be one major consideration for the Monetary Authority of Singapore (MAS) as it reviews its monetary policy stance in its upcoming October meeting. While the Sing dollar exchange rate is the MAS's main tool in the fight against inflation as Singapore imports most of its essentials, the circumstances now are very different from what they were six months ago.
For one, the prices of oil and commodities are retreating, addressing one of the key causes for the surge in inflation worldwide. Oil steadied above US$113 yesterday, after falling a day ago to its lowest since May 2 in the wake of official data showing US oil use in its steepest dive in 26 years.
On the home front, the Singapore economy is also slowing, and growth has become as big an issue as inflation for policymakers. Concern here over price pressures will likely take a back seat to growth risks in the months ahead.
The Singapore economy grew just 2.1 per cent in the second quarter, while the official growth forecast for 2008 has been narrowed to 4-5 per cent from an earlier estimate of 4-6 per cent. Singapore companies will be hoping that these conditions will lead the MAS to consider slowing the appreciation of the Singapore dollar, at the very least, in the near future.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Who’s hardest hit in heartlands?
Who’s hardest hit in heartlands?
Thursday • August 14, 2008
WHEN it comes to money woes, the hardest hit are those living in four-room HDB flats.
These homeowners form a disproportionately large number of the hardship cases that MPs come across during their meet-the-people sessions, according to the latest issue of Petir,the People’s Action Party (PAP)magazine.
The financial problems raised during these sessions include jobs, welfare and assistance issues, and difficulty in paying utility bills, said Dr Beng Teck Liang, a member of the PAP’s Policy forum’s council. Its “preliminary” findings are based on data collected from the sessions held all over Singapore over the past five years or so.
Dr Beng said the forum would ask National Development Minister Mah Bow Tan at aforthcoming dialogue if applicants for four-room flats should be screened to see if they could afford to buy the flats in order to prevent “sub-prime” problems from cropping up.
Senior Minster of State for Trade and Industry, Mr S Iswaran, noted that the Housing Development Board now conducts credit assessments, “something we should have done from the start”.
“What’s sub-prime? It’s lending to people who maybe shouldn’t be borrowing so much,” said Mr Iswaran, who was asked about the problem during a dialogue session with the forum.
“The reality is there are some people who want to buy four-room flats but they don’t qualify for the loan for that amount, but if they want to buy a three-room flat, they can.
“So, this is really at the front end — trying to start moderating people’s expectations.”
He suggested that those facing problems servicing their home loans should cut their losses by selling their flats and downgrading to a smaller one or renting instead.
Copyright MediaCorp Press Ltd. All rights reserved.
Thursday • August 14, 2008
WHEN it comes to money woes, the hardest hit are those living in four-room HDB flats.
These homeowners form a disproportionately large number of the hardship cases that MPs come across during their meet-the-people sessions, according to the latest issue of Petir,the People’s Action Party (PAP)magazine.
The financial problems raised during these sessions include jobs, welfare and assistance issues, and difficulty in paying utility bills, said Dr Beng Teck Liang, a member of the PAP’s Policy forum’s council. Its “preliminary” findings are based on data collected from the sessions held all over Singapore over the past five years or so.
Dr Beng said the forum would ask National Development Minister Mah Bow Tan at aforthcoming dialogue if applicants for four-room flats should be screened to see if they could afford to buy the flats in order to prevent “sub-prime” problems from cropping up.
Senior Minster of State for Trade and Industry, Mr S Iswaran, noted that the Housing Development Board now conducts credit assessments, “something we should have done from the start”.
“What’s sub-prime? It’s lending to people who maybe shouldn’t be borrowing so much,” said Mr Iswaran, who was asked about the problem during a dialogue session with the forum.
“The reality is there are some people who want to buy four-room flats but they don’t qualify for the loan for that amount, but if they want to buy a three-room flat, they can.
“So, this is really at the front end — trying to start moderating people’s expectations.”
He suggested that those facing problems servicing their home loans should cut their losses by selling their flats and downgrading to a smaller one or renting instead.
Copyright MediaCorp Press Ltd. All rights reserved.
Office rents to ease SOON
Office rents to ease SOON
Thursday • August 14, 2008
Chua Chor Hoon
WITH no new major buildings yet completed, supply of office space continues to be tight in the Central Business District (CBD).
In the wake of unceasing uncertainties in the wider economy and high office rentals, more companies are adopting a cautious business approach, gravitating towards cheaper premises like decentralised office buildings, industrial properties, business parks and disused State buildings.
Hence, average occupancy of office space across most areas had dipped slightly in the second quarter of this year. Islandwide average occupancy eased by0.2 percentage points from the previous quarter, to 96.9 per cent. Average occupancy ofoffice buildings in Raffles Place and Marina Centre dropped slightly due mainly to tenants moving out to cheaper locations after lease expiration.
At the same time, supported by comparatively lower rentals, decentralised areas like Novena and HarbourFront have enjoyed modest increases in occupancy.
Growth in office rentals have started to taper off after the meteoric rise last year,reflecting the increased resistance to higher rents.
Apart from Raffles Place, Shenton Way, Robinson Road, Cecil Street and decentralised areas, growth in office rentals in other areas like Marina Centre, Orchard Road, Anson Road and Tanjong Pagar were flat.
The Government’s efforts to create more immediate office space has also eased the supply crunch and pressure on rentals.
Apart from an estimated 1.9 million square feet of office space from transitional offices and disused State properties that were awarded between last year and the first six months of this year, occupiers can find more relief in the coming months.
Two disused State properties — the former Phoenix Park Complex and former Singapore Badminton Hall — were released for tender in thesecond quarter of this year. In addition, two more transitional office sites at Mohamed Sultan Road and Mountbatten Road will be released for tender under the Government Land SalesProgramme for the second half of this year.
Following an earlier announcement to relocate several Government agencies out of the CBD, other Government agencies in the city centre were tasked to streamline their office space utilisation and free up more office space to the private sector in the process.
The supply crunch in the CBD will be eased from 2010 with new office buildings being completed. Potential supply of office space from the second half of the year to 2013 is estimated to be 12.1 million sq ft.
With sufficient office space supply in the pipeline, the number of sites under the Government Land Sales Programme for the second half of the year has been reduced.
Only three commercial sites were added to the confirmed list while the reserve list includes three commercial sites and two white sites.
With the Urban Redevelopment Authority’s ban on the conversion of office buildings in the central area to be lifted at the end of next year, some projects in the pipeline may be delayed or aborted as developers review their plans in light of the huge potential supply and slowing economy.
Going forward, as companies and Government agencies start to move out of the CBD and more new supply comes on stream, office occupancy is likely to ease and limit rental growth in the city centre for the rest of the year.
The writer is senior director of research at DTZ. The opinions expressed are her own.
Copyright MediaCorp Press Ltd. All rights reserved.
Thursday • August 14, 2008
Chua Chor Hoon
WITH no new major buildings yet completed, supply of office space continues to be tight in the Central Business District (CBD).
In the wake of unceasing uncertainties in the wider economy and high office rentals, more companies are adopting a cautious business approach, gravitating towards cheaper premises like decentralised office buildings, industrial properties, business parks and disused State buildings.
Hence, average occupancy of office space across most areas had dipped slightly in the second quarter of this year. Islandwide average occupancy eased by0.2 percentage points from the previous quarter, to 96.9 per cent. Average occupancy ofoffice buildings in Raffles Place and Marina Centre dropped slightly due mainly to tenants moving out to cheaper locations after lease expiration.
At the same time, supported by comparatively lower rentals, decentralised areas like Novena and HarbourFront have enjoyed modest increases in occupancy.
Growth in office rentals have started to taper off after the meteoric rise last year,reflecting the increased resistance to higher rents.
Apart from Raffles Place, Shenton Way, Robinson Road, Cecil Street and decentralised areas, growth in office rentals in other areas like Marina Centre, Orchard Road, Anson Road and Tanjong Pagar were flat.
The Government’s efforts to create more immediate office space has also eased the supply crunch and pressure on rentals.
Apart from an estimated 1.9 million square feet of office space from transitional offices and disused State properties that were awarded between last year and the first six months of this year, occupiers can find more relief in the coming months.
Two disused State properties — the former Phoenix Park Complex and former Singapore Badminton Hall — were released for tender in thesecond quarter of this year. In addition, two more transitional office sites at Mohamed Sultan Road and Mountbatten Road will be released for tender under the Government Land SalesProgramme for the second half of this year.
Following an earlier announcement to relocate several Government agencies out of the CBD, other Government agencies in the city centre were tasked to streamline their office space utilisation and free up more office space to the private sector in the process.
The supply crunch in the CBD will be eased from 2010 with new office buildings being completed. Potential supply of office space from the second half of the year to 2013 is estimated to be 12.1 million sq ft.
With sufficient office space supply in the pipeline, the number of sites under the Government Land Sales Programme for the second half of the year has been reduced.
Only three commercial sites were added to the confirmed list while the reserve list includes three commercial sites and two white sites.
With the Urban Redevelopment Authority’s ban on the conversion of office buildings in the central area to be lifted at the end of next year, some projects in the pipeline may be delayed or aborted as developers review their plans in light of the huge potential supply and slowing economy.
Going forward, as companies and Government agencies start to move out of the CBD and more new supply comes on stream, office occupancy is likely to ease and limit rental growth in the city centre for the rest of the year.
The writer is senior director of research at DTZ. The opinions expressed are her own.
Copyright MediaCorp Press Ltd. All rights reserved.
SC Global's Q2 net rises 117% to $11.47m
August 14, 2008
SC Global's Q2 net rises 117% to $11.47m
By ARTHUR SIM
SC Global Developments has reported a net profit of $11.47 million
for Q2 2008, up 117 per cent from the $5.28 million in the year-ago
period.
Revenue for the quarter was $32.4 million, marginally lower by 5 per
cent compared with $34 million in Q2 2007.
The group saw revenue recognition from residential units sold in its
Singapore development projects, namely, The Marq on Paterson Hill and
Hilltops. This was also the first quarter of revenue recognition for
Hilltops.
SC Global said that its development project under its Kairong brand
in Shenyang, China, called Kairong International Gardens, also made a
positive contribution for the quarter as construction progressed.
Gross profit for the quarter increased 116 per cent to $16.5 million
compared with $7.7 million in the same period last year. Gross
margins were also higher at 51 per cent for the quarter versus 23 per
cent in 2007.
On a half year basis, gross profit for 1H 2008 was $41.6 million, up
48 per cent compared with $28.1 million a year ago.
SC Global said that higher selling prices achieved for the projects
coupled with management of construction costs enabled the group to
attain a high gross margin of 55 per cent for 1H 2008 against 32 per
cent recorded in the year-ago period.
The group's associate company in Australia, AVJennings Ltd (AVJ),
reported that its pre-tax profit for the full year ended 30 June 2008
was A$15.5 million (S$18.8 million) compared with A$17.8 million for
the 15-month period ended 30 June 2007 (A$14.2 million annualised).
In Q208, the group increased its investment in AVJ through the
subscription of its full entitlement under a rights issue undertaken
by AVJ and acquired 32.6 million new shares at an issue price of
A$0.67 each, increasing its shareholding from some 43 per cent to
about 49 per cent.
Earnings per ordinary share for the quarter period was 2.9 cents
compared with 1.65 cents (adjusted) a year ago.
At the close of trading, SC Global shares ended at $1.10 per share,
down one cent.
SC Global added that operationally, its developments under
construction are proceeding as planned and new projects in Ardmore
Park and Sentosa Cove are continuing to progress in the planning
stage.
SC Global's Q2 net rises 117% to $11.47m
By ARTHUR SIM
SC Global Developments has reported a net profit of $11.47 million
for Q2 2008, up 117 per cent from the $5.28 million in the year-ago
period.
Revenue for the quarter was $32.4 million, marginally lower by 5 per
cent compared with $34 million in Q2 2007.
The group saw revenue recognition from residential units sold in its
Singapore development projects, namely, The Marq on Paterson Hill and
Hilltops. This was also the first quarter of revenue recognition for
Hilltops.
SC Global said that its development project under its Kairong brand
in Shenyang, China, called Kairong International Gardens, also made a
positive contribution for the quarter as construction progressed.
Gross profit for the quarter increased 116 per cent to $16.5 million
compared with $7.7 million in the same period last year. Gross
margins were also higher at 51 per cent for the quarter versus 23 per
cent in 2007.
On a half year basis, gross profit for 1H 2008 was $41.6 million, up
48 per cent compared with $28.1 million a year ago.
SC Global said that higher selling prices achieved for the projects
coupled with management of construction costs enabled the group to
attain a high gross margin of 55 per cent for 1H 2008 against 32 per
cent recorded in the year-ago period.
The group's associate company in Australia, AVJennings Ltd (AVJ),
reported that its pre-tax profit for the full year ended 30 June 2008
was A$15.5 million (S$18.8 million) compared with A$17.8 million for
the 15-month period ended 30 June 2007 (A$14.2 million annualised).
In Q208, the group increased its investment in AVJ through the
subscription of its full entitlement under a rights issue undertaken
by AVJ and acquired 32.6 million new shares at an issue price of
A$0.67 each, increasing its shareholding from some 43 per cent to
about 49 per cent.
Earnings per ordinary share for the quarter period was 2.9 cents
compared with 1.65 cents (adjusted) a year ago.
At the close of trading, SC Global shares ended at $1.10 per share,
down one cent.
SC Global added that operationally, its developments under
construction are proceeding as planned and new projects in Ardmore
Park and Sentosa Cove are continuing to progress in the planning
stage.
CPF keeps OA interest rate at 2.5%
August 14, 2008
CPF keeps OA interest rate at 2.5%
Concessionary rate for HDB mortgage loans remains 2.6%
THE Central Provident Fund Board (CPF) will continue to pay 2.5 per
cent interest per annum for members' savings in their Ordinary
Account (OA) from Oct 1 to Dec 31.
CPF said that although its computed interest rate derived from the
rates of major local banks for the period May 1 to July 31 works out
to be 0.74 per cent per annum, the higher rate of 2.5 per cent will
be paid because that is the minimum specified under the CPF Act.
The Housing and Development Board (HDB), meanwhile, has announced
that the concessionary interest rate for HDB mortgage loans, pegged
at 0.1 of a percentage point above the CPF interest rate for the OA,
will remain unchanged at 2.6 per cent per annum from Oct 1 to Dec 31.
The interest rate for Special, Medisave, and Retirement accounts
(SMRA) for October to December will be announced next month.
The prevailing CPF interest rate for SMRA is 4 per cent, based on the
12-month average yield of the 10-year Singapore Government Security
plus one per cent.
To help members adjust to this floating rate, the 4 per cent floor
for the SMRA rate will be maintained for the first two years, as
earlier announced.
An extra one per cent interest will continue to be paid on the first
$60,000 of a member's combined balances, with up to $20,000 from the
OA.
The extra interest from the OA will go into members' Special or
Retirement accounts to enhance their retirement savings.
CPF keeps OA interest rate at 2.5%
Concessionary rate for HDB mortgage loans remains 2.6%
THE Central Provident Fund Board (CPF) will continue to pay 2.5 per
cent interest per annum for members' savings in their Ordinary
Account (OA) from Oct 1 to Dec 31.
CPF said that although its computed interest rate derived from the
rates of major local banks for the period May 1 to July 31 works out
to be 0.74 per cent per annum, the higher rate of 2.5 per cent will
be paid because that is the minimum specified under the CPF Act.
The Housing and Development Board (HDB), meanwhile, has announced
that the concessionary interest rate for HDB mortgage loans, pegged
at 0.1 of a percentage point above the CPF interest rate for the OA,
will remain unchanged at 2.6 per cent per annum from Oct 1 to Dec 31.
The interest rate for Special, Medisave, and Retirement accounts
(SMRA) for October to December will be announced next month.
The prevailing CPF interest rate for SMRA is 4 per cent, based on the
12-month average yield of the 10-year Singapore Government Security
plus one per cent.
To help members adjust to this floating rate, the 4 per cent floor
for the SMRA rate will be maintained for the first two years, as
earlier announced.
An extra one per cent interest will continue to be paid on the first
$60,000 of a member's combined balances, with up to $20,000 from the
OA.
The extra interest from the OA will go into members' Special or
Retirement accounts to enhance their retirement savings.
Sub-prime losses incurred by banks top US$500b
August 14, 2008
Sub-prime losses incurred by banks top US$500b
(NEW YORK) Banks' losses from the US sub-prime crisis and the ensuing
credit crunch crossed the US$500-billion mark as writedowns spread to
more asset types.
The writedowns and credit losses at more than 100 of the world's
biggest banks and securities firms rose after UBS AG reported second-
quarter earnings on Tuesday, which included US$6 billion of charges
on sub-prime related assets.
The International Monetary Fund in an April report estimated banks'
losses at US$510 billion, about half its forecast of US$1 trillion
for all companies. Predictions have crept up since then, with New
York University economist Nouriel Roubini predicting losses to reach
US$2 trillion.
'It just keeps spreading from one asset to another, so it's hard to
know when these writedowns will stop,' said Makeem Asif, an analyst
at KBC Financial Products in London. 'The US economy needs to
stabilise first. But even then, Europe could lag and recover later.
There's still a lot more downside.'
Auction-rate securities have begun adding to the losses as regulators
and prosecutors force banks to buy back bonds they had sold as safe
investments. UBS set aside US$900 million to cover potential losses
from repurchasing the securities, while Citigroup Inc and Wachovia
Corp estimated losses at US$500 million each.
The collapse of the US sub-prime mortgage market last year has
saddled banks worldwide with US$501 billion of losses from declining
values of securities tied to all types of home loans and commercial
mortgages as well as leveraged loan commitments.
Banks and brokers have raised US$353 billion of capital to cope with
the writedowns, according to data compiled by Bloomberg. The gap
between losses and capital infusions, which now stands at US$148
billion, has regularly narrowed to about US$80 billion as capital
raising follows writedown announcements.
Sub-prime losses incurred by banks top US$500b
(NEW YORK) Banks' losses from the US sub-prime crisis and the ensuing
credit crunch crossed the US$500-billion mark as writedowns spread to
more asset types.
The writedowns and credit losses at more than 100 of the world's
biggest banks and securities firms rose after UBS AG reported second-
quarter earnings on Tuesday, which included US$6 billion of charges
on sub-prime related assets.
The International Monetary Fund in an April report estimated banks'
losses at US$510 billion, about half its forecast of US$1 trillion
for all companies. Predictions have crept up since then, with New
York University economist Nouriel Roubini predicting losses to reach
US$2 trillion.
'It just keeps spreading from one asset to another, so it's hard to
know when these writedowns will stop,' said Makeem Asif, an analyst
at KBC Financial Products in London. 'The US economy needs to
stabilise first. But even then, Europe could lag and recover later.
There's still a lot more downside.'
Auction-rate securities have begun adding to the losses as regulators
and prosecutors force banks to buy back bonds they had sold as safe
investments. UBS set aside US$900 million to cover potential losses
from repurchasing the securities, while Citigroup Inc and Wachovia
Corp estimated losses at US$500 million each.
The collapse of the US sub-prime mortgage market last year has
saddled banks worldwide with US$501 billion of losses from declining
values of securities tied to all types of home loans and commercial
mortgages as well as leveraged loan commitments.
Banks and brokers have raised US$353 billion of capital to cope with
the writedowns, according to data compiled by Bloomberg. The gap
between losses and capital infusions, which now stands at US$148
billion, has regularly narrowed to about US$80 billion as capital
raising follows writedown announcements.
China a key contributor to Keppel Land's profits
August 14, 2008
China a key contributor to Keppel Land's profits
Its main focus there is on building premier residential properties
and townships
By CHUANG PECK MING
OVERSEAS operations account for about half of Keppel Land's profits -
and China is the main contributor.
The property arm of Singapore-based Keppel Group, Keppel Land, first
ventured into China in the 1990s as part of its regionalisation drive
which also covered Vietnam and Indonesia. There, it has focused on
developing premier residential properties, townships and waterfront
lifestyle projects. Evergo, Keppel's China-focused subsidiary, has a
land bank of 4.5 million square metres in Chinese second-tier cities.
'At present, we have more than 60,000 residential and township homes
spread across Asia,' a Keppel spokeswoman says. 'Our current focus is
on the key regional economies of China, Vietnam, India and Indonesia
as we believe these markets have substantial growth potential, with
sustainable demand for quality housing underpinned by strong economic
fundamentals, urbanisation and favourable demographic trends.'
Keppel Land, which posted sales turnover of $459 million in the first
half of this year, has operations in the northern Chinese cities of
Beijing, Tianjin and Shenyang.
'We entered these markets in 2002, 2005 and 2007 respectively,' the
spokeswoman says. 'Beijing is the capital of China and a key gateway
city. We began our northern operations here to bring the Keppel
hallmark of quality and innovation to the Beijing market.'
She notes that Tianjin, China's third largest city, is one of the
four autonomous municipalities along with Beijing, Shanghai and
Chongqing. 'Under China's national strategic development plan,
Tianjin is poised to become the centre of the Huan Bohai Economic Rim
and serve as the next engine of growth.'
Shenyang, the capital city of Liaoning Province, is an important
economic, industrial, commerce and transportation centre in north-
east China. 'As the Chinese government implements its plan to
revitalise the north-east, the fast track economic and income growth
in Shenyang will continue to spur housing demand,' the spokeswoman
says.
She says the city offers a good market not just because of its
healthy economic growth, but also its business-friendly
environment. 'More importantly, we believe we have a competitive edge
in this market.'
The Chinese market is challenging - and it requires some good local
insights and understanding, especially for north China, according to
her.
'Relationships are also very important,' she says. 'A successful
business deal here is highly dependent on good connections between
transacting parties.'
On Keppel's venture into Shenyang last year, the spokeswoman
says: 'We need to quickly understand it and incorporate requirements
which are different from those in our current projects in Beijing,
Shanghai, etc. We are doing so by localising our management and
operational team with staff that are familiar with such extreme cold
weather environment as well as the unique local industry practices.'
Being a newcomer, Keppel Land has to build up connections and
experience from scratch. But the spokeswoman adds: 'We are (also)
leveraging on the good brand equity of Singapore and Keppel Group's
network with the local government authorities and business community.'
Keppel currently has a staff of about 50 on its payroll in Beijing,
where the company has sold out 1,859 residential units in a housing
project. It has around 40 employees in Tianjin where Sembcorp is
developing its first 168-unit villa project. More than half of the
units launched has been sold, according to the Keppel Land
spokeswoman.
As for Shenyang, the company has begun assembling a core team. Its
present staff is about 30-strong. 'Piling work has just started last
month and we are looking forward to clinching more projects in
Shenyang,' the spokeswoman says.
Keppel will continue to explore new opportunities in north China,
especially in key cities and growth zones in the Huan Bohai region,
according to her. The company will focus on 'city in-fill' and
township developments.
Keppel is also gearing up for the Eco-City project in Tianjin. In
November 2007, Singapore and China inked a framework agreement to
build an Eco-City in Tianjin. The project covers 30 sq km within a
designated resort and recreation zone in Tianjin Binhai New Area. The
latest green technology and environmentally friendly systems in water
recycling and waste treatment will be used in constructing Eco-City.
Upon completion in 10-15 years, Eco-City will be a showcase for
sustainable development and a model for other Chinese cities striving
to balance rapid economic growth and environmental protection.
'The Eco-City will be developed by consortia from Singapore and
China, with Keppel Corporation playing a lead role,' the spokeswoman
says. 'Keppel Land, as part of the Keppel Group, will be involved in
the development of this Eco-City.'
China a key contributor to Keppel Land's profits
Its main focus there is on building premier residential properties
and townships
By CHUANG PECK MING
OVERSEAS operations account for about half of Keppel Land's profits -
and China is the main contributor.
The property arm of Singapore-based Keppel Group, Keppel Land, first
ventured into China in the 1990s as part of its regionalisation drive
which also covered Vietnam and Indonesia. There, it has focused on
developing premier residential properties, townships and waterfront
lifestyle projects. Evergo, Keppel's China-focused subsidiary, has a
land bank of 4.5 million square metres in Chinese second-tier cities.
'At present, we have more than 60,000 residential and township homes
spread across Asia,' a Keppel spokeswoman says. 'Our current focus is
on the key regional economies of China, Vietnam, India and Indonesia
as we believe these markets have substantial growth potential, with
sustainable demand for quality housing underpinned by strong economic
fundamentals, urbanisation and favourable demographic trends.'
Keppel Land, which posted sales turnover of $459 million in the first
half of this year, has operations in the northern Chinese cities of
Beijing, Tianjin and Shenyang.
'We entered these markets in 2002, 2005 and 2007 respectively,' the
spokeswoman says. 'Beijing is the capital of China and a key gateway
city. We began our northern operations here to bring the Keppel
hallmark of quality and innovation to the Beijing market.'
She notes that Tianjin, China's third largest city, is one of the
four autonomous municipalities along with Beijing, Shanghai and
Chongqing. 'Under China's national strategic development plan,
Tianjin is poised to become the centre of the Huan Bohai Economic Rim
and serve as the next engine of growth.'
Shenyang, the capital city of Liaoning Province, is an important
economic, industrial, commerce and transportation centre in north-
east China. 'As the Chinese government implements its plan to
revitalise the north-east, the fast track economic and income growth
in Shenyang will continue to spur housing demand,' the spokeswoman
says.
She says the city offers a good market not just because of its
healthy economic growth, but also its business-friendly
environment. 'More importantly, we believe we have a competitive edge
in this market.'
The Chinese market is challenging - and it requires some good local
insights and understanding, especially for north China, according to
her.
'Relationships are also very important,' she says. 'A successful
business deal here is highly dependent on good connections between
transacting parties.'
On Keppel's venture into Shenyang last year, the spokeswoman
says: 'We need to quickly understand it and incorporate requirements
which are different from those in our current projects in Beijing,
Shanghai, etc. We are doing so by localising our management and
operational team with staff that are familiar with such extreme cold
weather environment as well as the unique local industry practices.'
Being a newcomer, Keppel Land has to build up connections and
experience from scratch. But the spokeswoman adds: 'We are (also)
leveraging on the good brand equity of Singapore and Keppel Group's
network with the local government authorities and business community.'
Keppel currently has a staff of about 50 on its payroll in Beijing,
where the company has sold out 1,859 residential units in a housing
project. It has around 40 employees in Tianjin where Sembcorp is
developing its first 168-unit villa project. More than half of the
units launched has been sold, according to the Keppel Land
spokeswoman.
As for Shenyang, the company has begun assembling a core team. Its
present staff is about 30-strong. 'Piling work has just started last
month and we are looking forward to clinching more projects in
Shenyang,' the spokeswoman says.
Keppel will continue to explore new opportunities in north China,
especially in key cities and growth zones in the Huan Bohai region,
according to her. The company will focus on 'city in-fill' and
township developments.
Keppel is also gearing up for the Eco-City project in Tianjin. In
November 2007, Singapore and China inked a framework agreement to
build an Eco-City in Tianjin. The project covers 30 sq km within a
designated resort and recreation zone in Tianjin Binhai New Area. The
latest green technology and environmentally friendly systems in water
recycling and waste treatment will be used in constructing Eco-City.
Upon completion in 10-15 years, Eco-City will be a showcase for
sustainable development and a model for other Chinese cities striving
to balance rapid economic growth and environmental protection.
'The Eco-City will be developed by consortia from Singapore and
China, with Keppel Corporation playing a lead role,' the spokeswoman
says. 'Keppel Land, as part of the Keppel Group, will be involved in
the development of this Eco-City.'
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