August 12, 2008
Home sales to hit record this year, says Megaworld
Despite rising prices, Philippine builder says demand is not flagging
(MANILA) Megaworld Corp, the Philippine builder controlled by
billionaire Andrew Tan, says that apartment sales will reach a record
this year as the nation withstands a credit crisis that triggered a
property slump in the US and UK.
'The world may be ending in other parts but not in the Philippines,'
Kingson Sian, executive director of the country's second-biggest
builder by market value, said in an interview. 'This isn't 1997.'
Banks continue to lend and the eight million Filipinos abroad are
sending home cash in record amounts, softening the blows of
commodities prices at records and a weakening of global growth, he
said.
Megaworld shares, which has lost 57 per cent this year, dropped 89
per cent in 1997 when the Asian financial crisis eroded the peso and
raised borrowing costs, hurting property sales.
'It's been a tough environment but the market hasn't dried up,' says
Jonathan Ravelas, a strategist at Manila-based Banco de Oro Unibank
Inc, which manages about US$5.9 billion in trust assets. 'Some home
buyers are just delaying their purchases.'
Philippine consumer prices last month rose a faster-than-estimated
12.2 per cent and the central bank warned of more rate increases
after raising borrowing costs twice since June. Yet Mr Sian said that
demand isn't flagging and Megaworld will probably proceed with its
plan to start a record 17 projects this year.
The Manila-based company booked 11.3 billion pesos (S$358.9 million)
worth of orders from January to May, 71 per cent more than a year
ago.
Mr Sian forecast 24 billion pesos in record reservation sales this
year, 26 per cent more than in 2007.
The company's market value increased more than eightfold in the five
years through 2007 as falling interest rates and record remittances
from overseas Filipinos fuelled a building spree that included
Megaworld transforming a block of warehouses into Eastwood City, an
upscale residential and commercial development in the Manila suburb
of Quezon City.
Projects such as Eastwood and Forbes Town Center in one of the
Philippines' most expensive residential district have made Megaworld
the nation's biggest builder of residential towers.
Still, investors shouldn't be rushing into Megaworld and other
builders because of accelerating and rising interest rates, says Olan
Caperina, who helps manage about US$6.7 billion at BPI Asset
Management Inc in Manila. 'Property stocks are for those with strong
stomachs for high volatility.'
While builders have raised prices by 5 per cent to 15 per cent this
year and more increases may be forthcoming, Mr Sian says that the
orders haven't stopped.
That's partly because of overseas Filipinos, who account for about 15
per cent of Megaworld's home sales. Cash from Filipinos abroad hit a
record 14.4 billion pesos last year, helping boost economic growth to
7.3 per cent, the fastest in 31 years.
The central bank forecasts remittances, which make up a 10th of the
country's economy, will reach US$16.45 billion this year.
Philippine banks are also 'liquid', and some have approached
Megaworld about 'taking on our receivables,' Mr Sian said. 'So
they're still willing to fund home purchases.'
Bank loans will probably grow 10 per cent this year, according to the
central bank.
'There is pressure on banks to increase their loan portfolio if they
want to grow,' said Jody Santiago, strategist at the Manila unit of
UBS. 'The high-yielding government instruments where banks used to
place their funds aren't there anymore.'
Megaworld's apartments, priced from 500,000 pesos to 10 million
pesos, allows it to sell to a broad income group, Mr Sian said.
This 'diversity' allows Megaworld, which sells units in 40 projects,
to sell to buyers scaling back planned purchases, he added.
Ayala Land Inc, the nation's largest builder by market value, has a
portfolio of 21 residential projects.
Most of Megaworld's projects are 'strategically located' in Manila,
says Mr Santiago, who recommends buying the company's
shares. 'Megaworld bought these properties when the market was at a
bottom so it's not faced with inventory constraints in Manila as its
rivals,' he said.
Tuesday, August 12, 2008
Ayala Corp Q2 profit falls 38%
August 12, 2008
Ayala Corp Q2 profit falls 38%
(MANILA) Ayala Corp, the Philippines' most valuable conglomerate,
said that second-quarter net income slid 38 per cent, as bank and
telecoms earnings weakened, and warned that inflationary pressures
would hit its second half.
'We expect operating conditions to remain challenging for the balance
of this year and perhaps into early next year as we continue to feel
the pressure from higher inflation and interest rates,' CEO Jaime
Augusto Zobel de Ayala said in a statement.
Ayala, valued at US$3.5 billion, owns the Philippines' top property
firm, Ayala Land, and water utility Manila Water. It also has
interests in telecoms, banking, car distribution, electronics and
business services such as outsourcing.
For the April-June quarter, unaudited net income was 3.7 billion
pesos (S$117 million).
For January-June, net income dropped 45 per cent to 6.3 billion
pesos, as capital gains fell and key businesses earned less.
Annual inflation hit a near 17-year high of 12.2 per cent in July and
the central bank has raised rates by 75 basis points since June to
prevent it from accelerating further. Borrowing costs are predicted
to rise again, by 25 bps, later this month, raising consumers' debt
repayments and further crimping spending power.
'The pressures of rising oil and commodity prices and tightening
credit globally have created a much more challenging operating
environment,' Chief operating officer Fernando Zobel de Ayala said in
the statement.
The group booked first-half capital gains of 2.7 billion pesos from
the sale of shares in Globe Telecoms but they were way below the 7
billion pesos reported a year ago.
First half earnings from key businesses fell 23 per cent, with net
profit at Globe Telecoms and Bank of the Philippine Islands slipping
from a year ago as the economy slowed.
Shares of Ayala Corp fell 45 per cent in the first half of this year,
underperforming the main stock index, which lost 32 per cent.
Ahead of the earnings yesterday, Ayala Corp closed up 2.4 per cent,
while the main index was up 2.8 per cent.
Ayala Corp Q2 profit falls 38%
(MANILA) Ayala Corp, the Philippines' most valuable conglomerate,
said that second-quarter net income slid 38 per cent, as bank and
telecoms earnings weakened, and warned that inflationary pressures
would hit its second half.
'We expect operating conditions to remain challenging for the balance
of this year and perhaps into early next year as we continue to feel
the pressure from higher inflation and interest rates,' CEO Jaime
Augusto Zobel de Ayala said in a statement.
Ayala, valued at US$3.5 billion, owns the Philippines' top property
firm, Ayala Land, and water utility Manila Water. It also has
interests in telecoms, banking, car distribution, electronics and
business services such as outsourcing.
For the April-June quarter, unaudited net income was 3.7 billion
pesos (S$117 million).
For January-June, net income dropped 45 per cent to 6.3 billion
pesos, as capital gains fell and key businesses earned less.
Annual inflation hit a near 17-year high of 12.2 per cent in July and
the central bank has raised rates by 75 basis points since June to
prevent it from accelerating further. Borrowing costs are predicted
to rise again, by 25 bps, later this month, raising consumers' debt
repayments and further crimping spending power.
'The pressures of rising oil and commodity prices and tightening
credit globally have created a much more challenging operating
environment,' Chief operating officer Fernando Zobel de Ayala said in
the statement.
The group booked first-half capital gains of 2.7 billion pesos from
the sale of shares in Globe Telecoms but they were way below the 7
billion pesos reported a year ago.
First half earnings from key businesses fell 23 per cent, with net
profit at Globe Telecoms and Bank of the Philippine Islands slipping
from a year ago as the economy slowed.
Shares of Ayala Corp fell 45 per cent in the first half of this year,
underperforming the main stock index, which lost 32 per cent.
Ahead of the earnings yesterday, Ayala Corp closed up 2.4 per cent,
while the main index was up 2.8 per cent.
NZ home prices fall for first time since Feb 2005
August 12, 2008
NZ home prices fall for first time since Feb 2005
(WELLINGTON) New Zealand's house prices fell from a year earlier for
the first time in more than three years in July as record-high
interest rates eroded demand for property.
Average prices dropped 2.2 per cent from a year earlier, Quotable
Value New Zealand Ltd, the government valuation agency, said in a
report released in Wellington yesterday.
That's the first decline since the monthly series began in February
2005.
Home-loan interest rates have soared the past year, forcing buyers
out of the market and requiring vendors to accept lower prices.
Reserve Bank of New Zealand governor Alan Bollard said in June that
house prices will fall 7.7 per cent this year and won't start rising
until 2011.
'We expect to see more weakness in house prices over the coming
months,' said Jane Turner, economist at ASB Bank Ltd. in
Auckland. 'Housing turnover has been on a steady decline since mid
last year.'
House sales fell for a fourth straight month in June, reaching a 16-
year low, according to Real Estate Institute figures published last
month.
Home-loan approvals in July fell 27 per cent from a year earlier,
according to the central bank.
'Many sellers are accepting the state of the market and dropping
their expectations accordingly,' said Blue Hancock, a spokeswoman for
the government agency. 'The questions has now changed from when will
prices stop rising to when can we expect to see them stabilise?'
Prices in Auckland, the nation's largest city, fell 3.6 per cent.
Wellington prices dropped 1.6 per cent, the agency said.
Global turmoil in credit markets has prompted lenders to raise
borrowing costs by about one percentage point the past year, even as
the central bank kept its benchmark interest rate unchanged at a
record high.
Mr Bollard cut borrowing costs last month for the first time in five
years and said further declines are possible.
The decline in prices adds to signs Quotable Value's quarterly price
index may fall for the first time in more than seven years.
NZ home prices fall for first time since Feb 2005
(WELLINGTON) New Zealand's house prices fell from a year earlier for
the first time in more than three years in July as record-high
interest rates eroded demand for property.
Average prices dropped 2.2 per cent from a year earlier, Quotable
Value New Zealand Ltd, the government valuation agency, said in a
report released in Wellington yesterday.
That's the first decline since the monthly series began in February
2005.
Home-loan interest rates have soared the past year, forcing buyers
out of the market and requiring vendors to accept lower prices.
Reserve Bank of New Zealand governor Alan Bollard said in June that
house prices will fall 7.7 per cent this year and won't start rising
until 2011.
'We expect to see more weakness in house prices over the coming
months,' said Jane Turner, economist at ASB Bank Ltd. in
Auckland. 'Housing turnover has been on a steady decline since mid
last year.'
House sales fell for a fourth straight month in June, reaching a 16-
year low, according to Real Estate Institute figures published last
month.
Home-loan approvals in July fell 27 per cent from a year earlier,
according to the central bank.
'Many sellers are accepting the state of the market and dropping
their expectations accordingly,' said Blue Hancock, a spokeswoman for
the government agency. 'The questions has now changed from when will
prices stop rising to when can we expect to see them stabilise?'
Prices in Auckland, the nation's largest city, fell 3.6 per cent.
Wellington prices dropped 1.6 per cent, the agency said.
Global turmoil in credit markets has prompted lenders to raise
borrowing costs by about one percentage point the past year, even as
the central bank kept its benchmark interest rate unchanged at a
record high.
Mr Bollard cut borrowing costs last month for the first time in five
years and said further declines are possible.
The decline in prices adds to signs Quotable Value's quarterly price
index may fall for the first time in more than seven years.
Fourth university to open in 2011
Aug 12, 2008
Fourth university to open in 2011
Classes will be held at temporary location till campus is ready in
2013
By Jane Ng
SINGAPORE'S fourth university will open its doors in 2011, and will
admit 500 students in its first batch.
What is not known yet is where classes will be held between then and
2013, when a permanent campus at Changi will be ready.
The fourth university will sit largely on land that had been put
aside for the aborted University of New South Wales Asia project at
Upper Changi Road - a stone's throw from the Singapore Expo.
Two sites across the road, which are now a primary school holding
site and an empty plot of land, will also be used, for a total land
area of 23ha.
Details of the much-discussed project were released by the Education
Ministry (MOE) yesterday at a press conference chaired by Education
Minister Ng Eng Hen.
When it opens, the university will offer only one or two of the three
disciplines identified for it: engineering and applied sciences,
business and IT, and design and architecture.
With a permanent location, opening date and enrolment announced, the
next step for the institution will be finding a president.
A global search will be led by Far East Organization chief executive
Philip Ng, who was tapped yesterday as the chairman of a steering
committee that will be set up to oversee the establishment of the
university.
The panel will comprise leaders from academia, industry and the
public sector.
Its key tasks include facilitating the appointment of the board of
trustees and management team for the new university, overseeing the
development of the permanent campus and guiding the development of
the academic programmes.
Mr Ng, who was previously involved in setting up the Singapore
Management University and Republic Polytechnic, aims to find a
suitable candidate for president by the first half of next year.
The permanent campus' location will offer students several
advantages.
For one thing, it sits right next to Changi Business Park, which is
home to several high technology companies such as IBM, Honeywell and
Credit Suisse.
This means potential industry partners, where undergraduates can
undergo internships, are right next door.
Getting to class will also be a cinch for students. The campus will
be within walking distance of the Expo MRT station, and is accessible
via the Pan Island Expressway and the East Coast Parkway.
It will also be served by the Downtown Line in 2016.
While its initial intake will be only 500 students, the fourth
university will grow to take in 2,000 to 2,500 students a year in
steady state with an enrolment of between 10,000 and 12,000
undergraduates.
It aims to help increase the number of university places here to 30
per cent of each year's cohort by 2015, up from 25 per cent now.
This means another 2,400 places, to be equally divided among
polytechnic graduates and junior college students, will be available.
The new university will emphasise entrepreneurship and
interdisciplinary learning. Engineering undergraduates, for instance,
will be taught design.
This approach, already adopted by top universities like Stanford
University, is aimed at producing more critical thinkers and
innovative graduates.
The cost of building the university is expected to run into the
hundreds of millions of dollars.
Its design has not been finalised yet, but it will have facilities
like hostels.
Touching on the design, the Education Minister said: 'I would
encourage them to find something that's distinctively Singaporean,
which will give students the feeling: 'Oh, I'm going to enjoy my four
years here because this is a place I'd like to study'.'
One other detail of the new institution that remains to be worked out
is its name.
The MOE is opening this to the public, and you can submit ideas at
www.moe.gov.sg/name-the-uni/.
The exercise ends on Nov 30.
Fourth university to open in 2011
Classes will be held at temporary location till campus is ready in
2013
By Jane Ng
SINGAPORE'S fourth university will open its doors in 2011, and will
admit 500 students in its first batch.
What is not known yet is where classes will be held between then and
2013, when a permanent campus at Changi will be ready.
The fourth university will sit largely on land that had been put
aside for the aborted University of New South Wales Asia project at
Upper Changi Road - a stone's throw from the Singapore Expo.
Two sites across the road, which are now a primary school holding
site and an empty plot of land, will also be used, for a total land
area of 23ha.
Details of the much-discussed project were released by the Education
Ministry (MOE) yesterday at a press conference chaired by Education
Minister Ng Eng Hen.
When it opens, the university will offer only one or two of the three
disciplines identified for it: engineering and applied sciences,
business and IT, and design and architecture.
With a permanent location, opening date and enrolment announced, the
next step for the institution will be finding a president.
A global search will be led by Far East Organization chief executive
Philip Ng, who was tapped yesterday as the chairman of a steering
committee that will be set up to oversee the establishment of the
university.
The panel will comprise leaders from academia, industry and the
public sector.
Its key tasks include facilitating the appointment of the board of
trustees and management team for the new university, overseeing the
development of the permanent campus and guiding the development of
the academic programmes.
Mr Ng, who was previously involved in setting up the Singapore
Management University and Republic Polytechnic, aims to find a
suitable candidate for president by the first half of next year.
The permanent campus' location will offer students several
advantages.
For one thing, it sits right next to Changi Business Park, which is
home to several high technology companies such as IBM, Honeywell and
Credit Suisse.
This means potential industry partners, where undergraduates can
undergo internships, are right next door.
Getting to class will also be a cinch for students. The campus will
be within walking distance of the Expo MRT station, and is accessible
via the Pan Island Expressway and the East Coast Parkway.
It will also be served by the Downtown Line in 2016.
While its initial intake will be only 500 students, the fourth
university will grow to take in 2,000 to 2,500 students a year in
steady state with an enrolment of between 10,000 and 12,000
undergraduates.
It aims to help increase the number of university places here to 30
per cent of each year's cohort by 2015, up from 25 per cent now.
This means another 2,400 places, to be equally divided among
polytechnic graduates and junior college students, will be available.
The new university will emphasise entrepreneurship and
interdisciplinary learning. Engineering undergraduates, for instance,
will be taught design.
This approach, already adopted by top universities like Stanford
University, is aimed at producing more critical thinkers and
innovative graduates.
The cost of building the university is expected to run into the
hundreds of millions of dollars.
Its design has not been finalised yet, but it will have facilities
like hostels.
Touching on the design, the Education Minister said: 'I would
encourage them to find something that's distinctively Singaporean,
which will give students the feeling: 'Oh, I'm going to enjoy my four
years here because this is a place I'd like to study'.'
One other detail of the new institution that remains to be worked out
is its name.
The MOE is opening this to the public, and you can submit ideas at
www.moe.gov.sg/name-the-uni/.
The exercise ends on Nov 30.
Ex-Changi military camp now available for hotel use
Aug 12, 2008
Ex-Changi military camp now available for hotel use
By Joyce Teo
PART of the famous Changi military camp has been put up for tender as
a hotel - the latest move to transform the sleepy coastal haven into
a leisure and lifestyle hot spot.
Two of the six camp buildings in Hendon Road can be leased at a guide
rent of $28,500 a month, said the Singapore Land Authority (SLA)
yesterday.
The two three-storey buildings and a covered shed sit on 9,666 sq m
of land, slightly larger than a football field. The buildings have a
gross floor area of 5,097 sq m. The lease is for an initial term of
three years and is renewable up to 2018.
A hotel is appropriate for the site given Changi's charm and
proximity to the sea, but whoever secures the land must offer a
unique concept to differentiate it from nearby competitors, said
Knight Frank's director of research and consultancy, Mr Nicholas Mak.
'It has to be seen as a place for people to get away from it all,' he
added.
Mr Teo Cher Hian, SLA's director of land operations (private)
division, said the hotel will add greater vibrancy to Changi Point,
which the Government envisages as a rustic, seaside destination with
plenty of recreational diversions.
The Changi Point Boardwalk was completed nearly two years ago and it
was announced last year that motor sports will be introduced at the
Changi Beach Park.
The kampung-style buildings at nearby Lorong Bekukong were offered
under similar conditions as the military camp and are now used as a
restaurant.
A site in Turnhouse Road has been taken up but the tenderer has yet
to decide on the use, while the old Changi Hospital in Halton Road is
being turned into a spa resort. The ground-breaking is next month and
the property will be ready by next year.
The SLA also has plans to tender out the remaining four former Changi
Camp buildings for short-term use.
It quoted the Singapore Tourism Board (STB), which has fielded
inquiries from leading hoteliers about the camp.
'With its lush greenery and historical charm which the old military
barracks lend, a hotel development...will provide an ideal
alternative to visitors who prefer staying amidst a rustic
environment,' said STB's director, travel services and hospitality,
Ms Caroline Leong.
The first state property tendered out for hotel use in Singapore is
at No. 175A Chin Swee Road. Called Hotel Re!, the 140-room hotel
officially opened for business in mid-May.
The tender for the former Changi Camp will close on Aug 27.
Ex-Changi military camp now available for hotel use
By Joyce Teo
PART of the famous Changi military camp has been put up for tender as
a hotel - the latest move to transform the sleepy coastal haven into
a leisure and lifestyle hot spot.
Two of the six camp buildings in Hendon Road can be leased at a guide
rent of $28,500 a month, said the Singapore Land Authority (SLA)
yesterday.
The two three-storey buildings and a covered shed sit on 9,666 sq m
of land, slightly larger than a football field. The buildings have a
gross floor area of 5,097 sq m. The lease is for an initial term of
three years and is renewable up to 2018.
A hotel is appropriate for the site given Changi's charm and
proximity to the sea, but whoever secures the land must offer a
unique concept to differentiate it from nearby competitors, said
Knight Frank's director of research and consultancy, Mr Nicholas Mak.
'It has to be seen as a place for people to get away from it all,' he
added.
Mr Teo Cher Hian, SLA's director of land operations (private)
division, said the hotel will add greater vibrancy to Changi Point,
which the Government envisages as a rustic, seaside destination with
plenty of recreational diversions.
The Changi Point Boardwalk was completed nearly two years ago and it
was announced last year that motor sports will be introduced at the
Changi Beach Park.
The kampung-style buildings at nearby Lorong Bekukong were offered
under similar conditions as the military camp and are now used as a
restaurant.
A site in Turnhouse Road has been taken up but the tenderer has yet
to decide on the use, while the old Changi Hospital in Halton Road is
being turned into a spa resort. The ground-breaking is next month and
the property will be ready by next year.
The SLA also has plans to tender out the remaining four former Changi
Camp buildings for short-term use.
It quoted the Singapore Tourism Board (STB), which has fielded
inquiries from leading hoteliers about the camp.
'With its lush greenery and historical charm which the old military
barracks lend, a hotel development...will provide an ideal
alternative to visitors who prefer staying amidst a rustic
environment,' said STB's director, travel services and hospitality,
Ms Caroline Leong.
The first state property tendered out for hotel use in Singapore is
at No. 175A Chin Swee Road. Called Hotel Re!, the 140-room hotel
officially opened for business in mid-May.
The tender for the former Changi Camp will close on Aug 27.
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