Friday, October 30, 2009

Business Times: Ascott Reit distribution slips 25%

October 29, 2009
Ascott Reit distribution slips 25%
By UMA SHANKARI 

ASCOTT Residence Trust (Ascott Reit) said that third- quarter unit-holders' distribution fell 25 per cent to $11.8 million from $15.9 million a year ago as it saw weaker demand for its serviced residences in Singapore and China.

Distribution per unit (DPU) was 1.92 cents for the quarter ended Sept 30, 2009, down 26 per cent from 2.61 cents in Q3 2008.

'The lower performance as compared to Q3 2008 was a result of the global economic slowdown, increased competition from new supply in Beijing and Shanghai, and the strong performance in August 2008 due to the Beijing Olympics,' said the real estate investment trust (Reit) in a statement. Revenue per available unit, or RevPAU, fell 24 per cent year-on-year to $124 in Q3 2009. The reduction in RevPAU was due to reduction in both average daily rates as well as occupancies at the group's serviced residences. Revenue for Q3 2009 fell 17 per cent to $44.4 million.

The trust's management said, however, that the challenges posed by the global economic downturn to the hospitality industry eased somewhat in Q3 2009 compared to Q2.

'Our Q3 operating performance has shown further signs of stabilisation in hospitality demand,' said Lim Jit Poh, the trust's chairman. 'While we remain cautious over the pace and extent of recovery, we are confident of the longer-term growth in the markets in which we operate.' On a sequential basis, unit-holders' distribution and DPU were 7 per cent higher than Q2's $11 million and 1.79 cents respectively.

Ascott Reit's portfolio operating performance also improved in Q3 over Q2, led by RevPAU growth in Japan, Singapore and China of 24 per cent, 15 per cent and 7 per cent respectively. 

To ride on the expected upturn in demand as the economy recovers, Ascott Reit has accelerated its asset enhancement initiatives for selected properties. It will also continue to seek yield-accretive acquisitions, it said. The company's shares fell 2 cents, or 1.8 per cent, to $1.07 yesterday.




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Business Times: Trump card for CapitaLand in CMA

October 29, 2009
Trump card for CapitaLand in CMA
By KALPANA RASHIWALA 

CAPITALAND'S third-quarter report card released this week was a marked improvement from its showing in the first two quarters of this year. Still, the $167.2 million net profit that it achieved for the first nine months of this year is a far cry from the $1.18 billion in the same period last year.

However, plans to float a stake in its integrated shopping centre business under CapitaMalls Asia (CMA) by the year-end could add handsomely to CapitaLand's fourth-quarter and full-year bottom lines.

CMA has a net asset value of $5.3 billion but assuming that its assets are valued at 1.5 to two times book value during the initial public offering (IPO), the total market worth of CMA would be about $8-10 billion. If CapitaLand floats a stake of 30 per cent, the pre-tax profit that it stands to book from the IPO could be in the order of $800 million to $1.4 billion.

CapitaLand's management has indicated that the board may consider recommending a special dividend to shareholders following CMA's flotation.

UBS Investment Research, in a recent paper, estimates that assuming an $8 billion valuation for CMA and a 30 per cent free float, the special dividend would work out to 27 cents per CapitaLand share if it decides to pay out 50 per cent of the IPO proceeds, and 54 cents per share assuming a 100 per cent payout.

On a $10 billion valuation for CMA and a 40 per cent free float, the payout could range from 45-90 cents per share.

Since CapitaLand announced its plans earlier this month to float CMA, its share price rallied about 21.5 per cent to a high of $4.46 on Monday, although it has given up much of the gain, ending at $4.15 yesterday.

By UBS's calculations, an $8-10 billion valuation for CMA will add 61 cents to $1.06 to its revalued net asset value (RNAV) per share for CapitaLand, which it estimates at $4.30 based on CMA's $5.3 billion book value. By launching an IPO, a higher value will be placed on the CMA business than if it remained as an unlisted part of CapitaLand. Or as CapitaLand's management has put it, its plans to float CMA will 'unlock shareholder value by crystallising the value of CapitaLand Group's integrated shopping mall business'.

CapitaLand shareholders stand to gain by approving the group's plans to float CMA. No doubt it will also be good for members of its management, whose pay packets should benefit from a stronger bottom line. And not to forget JP Morgan, the sole financial adviser.

However, some CapitaLand shareholders may also hold stakes in CapitaMall Trust (CMT) and CapitaRetail China Trust (CRCT), which many analysts reckon may fare less favourably after CMA is listed.

CMT may face short-term price weakness from asset reallocation to CMA, as UBS says. The process has already begun. CMT's unit price has slipped from $1.82 before the announcement on CMA to yesterday's closing price of $1.60.

CMA, with a portfolio of 86 malls in China, Singapore, Malaysia, Japan and India, may be more appealing to investors than CMT - which has a presence only in Singapore. CMA's free float market cap could rival CMT's. Still, CMA could find it worthwhile to sell assets, such as its 50 per cent stake in ION Orchard, to CMT given the tax transparency that CMT, as a real estate investment trust (Reit), enjoys in Singapore. In other words, if ION remains in CMA, the income from the mall will be taxed at the corporate tax rate (at the vehicle or CMA level). If however, ION is sold to CMT, the mall's income will be exempt from payment of corporate tax at the Reit/vehicle level, under the tax flow-through allowed for Singapore Reits.

So CMA will retain an incentive (from the viewpoint of this tax saving at least) to develop, warehouse and sell assets to CMT - pretty much the arrangement that now exists between CapitaLand and CMT.

However, this may not be the case for CRCT. That's because CRCT does not enjoy tax transparency since its income is derived from the ownership of malls in China, where it has to pay taxes on the income before it can bring it to Singapore.

This being the case, there could be less incentive for CMA to offload its China malls in future to CRCT. In fact, it may diminish or extinguish the raison d'etre of CRCT.

When CapitaLand floated CRCT in December 2006, it had planned to grow its initial $690 million portfolio of seven malls in China to $3 billion by end-2009. So far, it hasn't been very successful. Today, its portfolio comprises eight malls worth $1.2 billion.

Who knows, CapitaLand could eventually privatise CRCT and let its China malls business sit entirely in CMA. This could provide a nice exit for CRCT shareholders.

These are some questions that CapitaLand shareholders who also own units in CMT and CRCT may ponder as they vote tomorrow on CapitaLand's plans to float CMA. 




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Business Times: Sale of new homes falls in Sept

October 29, 2009
LATEST US DATA 
Sale of new homes falls in Sept
Housing recovery may lose steam after government tax credit expires

(WASHINGTON) Sales of new US homes unexpectedly fell in September, a sign the housing recovery may lose momentum after a government tax credit expires. 

Sales decreased 3.6 per cent to a 402,000 annual pace, lower than the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed yesterday in Washington. The median price of a new home dropped 9.1 per cent from September 2008. 

Meanwhile, a measure to extend the soon-to-expire US$8,000 tax credit for first time homebuyers enjoys widespread support in the US Senate, the chamber's top Democrat and top Republican both said on yesterday.

'There has been general agreement by a significant number of senators, Democrats and Republicans, to get this done,' Senate majority leader Harry Reid said in remarks on the Senate floor. The chamber's top Republican, Senator Mitch McConnell, also said that most senators support the measure.

New-home sales were forecast to rise to a 440,000 annual rate, according to the median forecast of 75 economists in the Bloomberg survey.

Estimates ranged from 412,000 to 460,000 after an initially reported 429,000 rate in July. Last month's pace was the lowest since June. 

Meanwhile, new orders for long-lasting US manufactured goods rose one per cent in September, Commerce Department data showed yesterday, suggesting that the economy's wobbling recovery from recession may be steadying. 

The increase met expectations of analysts polled by Reuters and was the second increase in the last three months. It followed an unrevised 2.6 per cent decline in August. 

Compared with a year ago, orders were down 24.1 per cent. 

'In a recovering economy, you'll get three steps forward and then two steps back. That's what you're seeing here,' said David Katz, chief investment officer at Matrix Asset Advisors in New York. 'This data point is positive.'

Durable goods orders are a leading indicator of manufacturing, which in turn provides a good measure of overall business health. 

Non-defence capital goods excluding aircraft, a closely watched proxy for business spending, beat expectations and rose 2 per cent in September after falling 0.8 per cent the month before. Analysts had anticipated they would increase 0.9 per cent. 

Shipments of durable goods rose 0.8 per cent in September and have been up for three of the last four months, while inventories fell for the ninth month in a row, by one per cent. 




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Business Times: Thomson Village strata units, site on collective sale

October 29, 2009
Thomson Village strata units, site on collective sale
Separate Colliers auction sees 2 shop units, 2 houses and 1 apartment sold
By KALPANA RASHIWALA 

(SINGAPORE) The owners of eight freehold strata-titled commercial units and vacant site at Thomson Village, off Upper Thomson Road, have joined forces to sell their properties through a tender. The properties have a combined site area of 13,387 sq ft and an asking price of $24 million.

Under Master Plan 2008, the site is zoned for commercial use. 'The plot ratio is not indicated but the site is under a streetblock plan, which means the potential developer will have to follow an envelope control guideline for the area set by Urban Redevelopment Authority. The properties could be redeveloped into a low-rise specialty retail mall,' said Galven Tan, assistant manager (investment properties) at CB Richard Ellis, which is marketing the site.

'Depending on the design of a new development, a 2.8 plot ratio could be achieved,' according to Mr Tan. Plot ratio is the ratio of maximum gross floor area to land area. Assuming this plot ratio, an estimated development charge (DC) of $5 million would be payable to the state. The $24 million price works out to $774 psf per plot ratio inclusive of DC.

The owners of the strata commercial units and the vacant site have signed a collective sale agreement, which means the sale will not be subject to an application to the Strata Titles Board. The tender closes on Nov 25.

There is adjoining state land of about 6,400 sq ft that could potentially be purchased by the successful bidder, CBRE says.

Separately, at an auction conducted by Colliers International yesterday, five properties were sold - an apartment at The Horizon at Holt Road; two freehold landed houses at Jalan Taman and Lowland Road, both off Upper Serangoon Road; and a shop unit each at Sim Lim Square and Golden Landmark.

The ground floor unit at Sim Lim Square, which involved a liquidator sale, was sold to a private investor for $3.75 million, reflecting $6,970 psf based on the unit's 538 sq ft strata area. The unit faces the main concourse. Last week, Second Chance Properties picked up 22 shop units at Sim Lim Square for $35 million or an average price of $3,644 psf based on their total area of 9,604 sq ft.

Over at Golden Landmark, near Bugis MRT Station, a 355 sq ft corner shop on the third floor with double frontage changed hands at $365,000 or $1,028 psf.

The third-floor freehold apartment at The Horizon was sold for $1.8 million or $1,154 psf. The two-storey intermediate terrace house at Jalan Taman was sold for $1.25 million or $630 psf of land area.

At 74 Lowland Road, which is next to a temple, the three-storey semi-detached house with six bedrooms was sold for $1.72 million or $636 psf of land area. The buyer is understood to be a former Chinese national who is now a Singapore citizen.




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Business Times: Aussie mortgage market stirring after 2-year lull

October 29, 2009
Aussie mortgage market stirring after 2-year lull
Analysts expect more issues of mortgage-backed securities as market sentiment improves

(SYDNEY) Australia's commercial mortgage-backed securities market is coming back to life after a two-year lull thanks to improving investor appetite and because banks are looking to cut their exposure to property borrowers. 

With A$2.4 billion (S$3 billion) of debt maturing next year, analysts expect a sprinkling of issues. 

'I could see around A$2 billion,' said Chad Karpes, head of the Australian dollar bond syndicate at RBS in Sydney.

'If we start to see the market sentiment improve, as it has been, ... we could see A$2 billion-plus from a number of issuers across the commercial spectrum.'

Issuance of commercial mortgage-backed securities, or CMBS, has virtually evaporated since the market peaked in 2007 at US$230 billion globally when the US sub-prime mortgage crisis triggered billions of dollars in loan defaults worldwide. 

Australia's A$6.6 billion market of outstanding CMBS was also brought to a standstill as real estate firms were forced to raise capital elsewhere or sell assets to raise funds. 

In September, shopping centre owner Macquarie Countrywide Trust became the first property borrower to break the spell by selling A$265 million of notes in the first Australian issue backed by commercial mortgages since 2007. 

The offer was also one of the few issues completed globally this year as more US real estate lenders fight for survival.

On Sunday, US real estate company Capmark Financial became the latest casualty and filed for bankruptcy protection. 

Australia has been relatively sheltered thanks to a resilient economy and a restrained jobless rate. 

Still, the commercial property industry was badly hit as asset prices tumbled and shopping mall owner Centro Properties Group became Australia's highest profile casualty. 

As market sentiment improves and liquidity returns, bankers expect more borrowers to test the waters as just over A$1 billion of CMBS notes mature in the first quarter of next year. 

'There is lot of refinancing coming up early next year and there is institutional interest depending on the margin and the pool quality,' said Bob Sahota, head of fixed interest at Challenger Financial Services. 

Mr Sahota, who likes mortgages originated by shopping centres, favours Australian CMBS because they are simply structured - unlike those offered in the United States. 

US commercial mortgage-backed securities have a much more complex structure and often more complex asset pools with multiple small loans and originators, according to Stephen Maher, head of debt markets at Macquarie Bank. 

'It's very messy,' he said. 

At the peak of the crisis, triple A-rated CMBS spreads reached 1,000 basis points over bank bill swap rate from around 20 bps before the meltdown. 

New commercial- backed notes would now pay 300 to 350 bps, according to bankers, a level that may suit property firms, in particular those seeking funding diversification. 

'Real estate firms cannot indefinitely raise equity or sell all their assets or look to bank debt alone,' said Satish Chand, securitisation director at National Australia Bank. 

'They need to access diversified funds.' Mr Chand sees a pipeline of commercial mortgage-backed offers with modest issue sizes of A$250 million to A$300 million compared with up to A$1 billion before the crisis. 

But not all investors are confident of a CMBS revival. John Sorrell, fund manager at Tyndall-Suncorp Investment Management, says he would consider investing in commercial mortgage-backed notes but is not certain about the appetite for the securities in Australia. 

'I just think there is a range of divergent attitudes.' Mr Sorrel is watching Centro's next debt maturity and is mindful of a deterioration of the CMBS market in the United States. 

'If the US gets worse, it will hardly improve sentiment in Australia.' 




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Business Times: US home prices may hit bubble

October 29, 2009
US home prices may hit bubble

(NEW YORK) The gains in US home prices in recent months may not be sustainable and increases in some areas of the country appear to be in 'bubble territory', an economist known for his property market expertise said on Tuesday. 

Robert Shiller, an economics professor at Yale University and co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, told Reuters Television that he does not give quantitative forecasts on where home prices are headed but is concerned about the recent pace of increases. 

Home prices in certain areas, such as Minneapolis and San Francisco, have risen by double digits over a mere four months, and if viewed on an annualised basis, they look like they are in 'bubble territory', Prof Shiller said. 'It is a time of great uncertainty, ' he added. 

US home prices in August rose for the fourth straight month. The Standard & Poor's/Case- Shiller composite index of home prices in 20 metropolitan areas rose 1.2 per cent in August from July, topping the estimate of a 0.7 per cent rise according to in a Reuters poll. 

'The prominent fact that we are seeing with this data is that home prices are just zipping up,' Prof Shiller said. 'It is entirely possible that even with the bad news we are getting, home prices could start a major increase.' Prices in the top 10 US metropolitan areas gained 1.3 per cent in August after a 1.7 per cent rise the previous month, according to the S&P composite index. 




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Business Times: JLL Q3 net income rises on cost cutting

October 29, 2009
JLL Q3 net income rises on cost cutting

(NEW YORK) Jones Lang LaSalle Inc, one of the world's largest real estate service companies, said that third-quarter net income rose 33 per cent, chiefly from cost cutting. 

The company on Tuesday posted a net profit of US$20 million, or 46 US cents per share, compared with US$15 million, or 43 US cents per share, in the year-ago quarter. 

If not for US$4 million of restructuring charges and US$4 million of non-cash co-investment charges, the Chicago-based company would have earned US$27 million, or 61 US cents per share. 

Third-quarter revenue fell 12 per cent US$595 million. 

Analysts had expected the company to post a profit of 59 US cents a share on US$610.56 million of revenue, according to Thomson Reuters. 

Last week, the company issued a report saying that the worst of the global commercial property meltdown was over, although US commercial property continued to struggle under the weight of weak corporate demand, concerns about the size of potential loan losses and worries over the willingness of lenders to recognise asset value declines. Asia's real estate market was leading the rebound. 

'While real estate fundamentals remain generally weak, we see initial signs of recovery in some markets and industry sectors, and our focus remains on growing market share while providing the superior service that our clients have come to expect,' chief executive Colin Dyer said in a statement. 

In its Europe-Middle East-Asia division, revenue fell 26 per cent to US$154 million. It fell 6 per cent in the Americas region to US$239 million, and inched up 2.3 per cent to US$136 million in the Asia-Pacific region. 

The results were issued after the close of the market when Jones Lang LaSalle shares closed up eight US cents, less than one per cent, at US$50.59 on the New York Stock Exchange. They were unchanged in after-hours trade. 




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Business Times: No takers yet for lot beside Obama home

October 29, 2009
No takers yet for lot beside Obama home
Owner inflating asking price to double what was paid 19 months ago

(CHICAGO) A vacant lot next to President Barack Obama's Chicago home is on the market for almost double what the owner paid 19 months ago. 

The land was once owned by the wife of former fundraiser Antoin 'Tony' Rezko, who later was convicted of influence peddling, and was part of a US$1.75 million real estate deal that hurt Mr Obama's election campaign. The 15-by-46-metre lot is being offered for US$1.3 million. 

The opportunity to live next to the president hasn't helped sell the house on the other side of the Obama residence. Those neighbours set a US$1.85 million price this week, seven weeks after putting their home up for bid. 

'The high-end market has taken more of a hit in this downturn,' said Jim Kinney, vice-president of luxury home sales for Baird & Warner real estate in Chicago. 'The whole stimulus package has been aimed at the bottom end of the market.'

Illinois real estate is showing signs of improvement. The Illinois Association of Realtors said last Friday that year-over-year sales increased in September for the first time since March 2006, with first-time buyers driving the rebound. September unemployment in the metropolitan area was 10.5 per cent, more than the national average of 9.8 per cent. 

John Poulos, a lawyer, and his wife, Marjorie, paid US$675,000 for the lot in March last year, when they purchased it from 5050 S Greenwood LLC, property records show. Michael Sreenan, a former attorney for Rezko, said that he wholly owned that corporation. 

'We've gotten some inquiries, but haven't found that perfect buyer,' said Karen Ashley-Bowman, the listing agent for Urban Search Corp of Chicago. The vacant lot is south of the Obama family's red brick mansion in the Kenwood neighbourhood. 

Mr Poulos declined to comment, citing a desire to maintain privacy for himself and the president's family. 

The limited-liability 5050 S Greenwood bought the lot from Rezko's wife, Rita, in December 2006, two months before Mr Obama announced his presidential bid. 

The land earlier was listed as part of the property that the Obamas purchased in 2005, shortly after he was elected to the US Senate. The sellers listed the home and lot separately, asking US$1.95 million for the house and US$625,000 for the landscaped side property. 

The Obamas bought their house for US$1.65 million, and Rita Rezko purchased the lot for US$625,000, its full asking price. She then sold one-sixth of the lot to the Obamas for US$104,500 to help them create a larger buffer for their property. 

Mr Obama said that the deal was 'boneheaded' because Rezko at the time was known to be under federal investigation, the Washington Post reported in December 2006. 

Rezko, a developer and Illinois fundraiser, was convicted in June last year for taking part in a scheme to extract kickbacks in exchange for influencing the award of state business under Governor Rod Blagojevich, who was removed from office earlier this year. Rezko, 54, is awaiting sentencing, while Blagojevich faces trial on corruption charges. 

Hillary Clinton, now Mr Obama's Secretary of State, used his connection to Rezko to criticise him during one of their campaign debates last year. She said that she was fighting Republican proposals while Mr Obama was representing a contributor' s 'slum-landlord business' in Chicago. 

Rezko was among the first three donors to Mr Obama's 1996 run for the Illinois Senate. In 2007, Mr Obama gave to charity more than US$44,000 in campaign donations linked to him. 

The Obamas' home has 6,400 square feet of space. Mr Obama, 48, and his family have spent one weekend there since the president took office on Jan 20. White House spokesman Ben LaBolt declined to comment. 

The Obamas's neighbour to the north, Bill Grimshaw, 71, listed his family's 6,000-square- foot home last month, touting the eight-bedroom home's proximity to the president's house. 

Trish Hoffman, a spokeswoman for Chicago-based Matt Garrison Group, the real estate firm handling the Grimshaw house, said that there have been many inquiries about it. 

Sellers often think a unique location, such as next door to the US president, makes a property worth more than the market price, Mr Kinney said. 

'That will have its pluses, as well as its minuses,' he said. 'The property is going to stand on its own merits, unless you have a true Obama fan.'

A listing for the lot states that access is restricted and a copy of a driver's licence is required prior to a showing. 

Even without such challenges, the market for building homes is probably the slowest part of the high-end market, Mr Kinney said.

'There are just so many choices that people can make a deal on for empty, new construction, ' he said. 

Ms Ashley-Bowman said that the owners purchased it with the intention of building a 10,000-square- foot home but changed their minds. 

Neighbourhood residents often tell her that they think the Obamas should purchase the vacant lot to expand the buffer around their home, she said. 

'I imagine he has more pressing problems right now,' Ms Ashley-Bowman said. 'But it would be nice in terms of finishing off his property.' 




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Straits Times: Far East gears up to go regional

29 Oct, 2009
Far East gears up to go regional 
New Village brand for its mid-range hotels, residences 
By Joyce Teo, Property Correspondent 

PROPERTY giant Far East Organization is spending $25 million to refurbish and re-badge its mid-range hotels and residences into a new brand that can be expanded overseas.

A range of the firm's local properties is being grouped under the name Village Hotels & Residences, which will give the firm a launch pad for expansion.

Three hotels - Albert Court Village Hotel, Changi Village Hotel and Landmark Village Hotel or the former Golden Landmark Hotel - and four residences aimed at long-stay guests make up the new brand so far. 

Far East said the Village brand will offer guests a local experience.

It has commissioned its own Village Walking Guide, which highlights interesting attractions near the hotels, said the firm's director of hospitality operations, Mr Raphael Saw.

The aim is to expand the made-in-Singapore brand to 15 properties around the region over the next five years.

Far East's hospitality unit - it has six hotels and 11 serviced residences - has kept largely to the Singapore market, where branding is not necessarily crucial, market observers reckon. 

But making a mark overseas requires grouping hotels and residences around a brand name that can be promoted. 

Far East, Singapore's largest private property developer, hatched the branding plan about two years ago and has spent about $12.5 million on refurbishing the properties, service training and other operations.

A similar sum will be laid out over the next three years to strengthen the brand's presence, said executive director Chia Boon Kuah.

The Village hotels are mid-range and aimed at business and leisure travellers.

The hotels have average room rates of about $140 to $160 a day but the rates should rise as demand increases, said Mr Chia.

Far East has a serviced residence property in Kuala Lumpur, where it will establish the Village brand next.

Village properties in China, Indonesia and Vietnam are also on the cards.

Mr Chia said the firm will be keen on cities with about three to five million people, which would include Surabaya and Medan in Indonesia.

'There are a lot of opportunities in China and we could go in now if we want to,' he said. 

In going regional, he said its 'first preference is through management contracts'.

'If we are offered an equity stake, we will consider it.'

While it does not rule out new-builds or purchases, these are not part of the plans for now.

Far East also plans to brand its high-end hotels and residences with the same goal of overseas expansion in mind, said Mr Saw.

Its high-end hotels include Orchard Parade Hotel and The Quincy Hotel.




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Straits Times: Scotts Tower units to be downsized

29 Oct, 2009
Scotts Tower units to be downsized 

FAR East Organization is shrinking the units at its luxury Scotts Tower development at the junction of Scotts and Cairnhill roads to make them more affordable.

Architect Ole Scheeren is working with the property firm to reconfigure the units.

Far East executive director Chia Boon Kuah said the eye-catching freehold project will not be launched yet as the firm is 'reviewing the project' with a view to reconfiguring unit sizes.

The 31-storey tower - one of Mr Scheeren's two residential projects in Singapore - features four individual apartment towers suspended from a central core.

The gravity-defying design was commissioned in 2006 when the property market was on the way up. Far East had expected to launch it late in 2007.

Targeted at the global market, Scotts Tower was designed to offer 68 luxury apartments with elevated panoramic views. The smallest was to be a three-bedroom duplex unit.

But the plan now is to offer smaller units, which would lower the absolute price quantum of each apartment.

Far East Organization has also reconfigured the unit sizes of some of its recently launched projects such as Centro Residences, Vista and Waterfront Key.

Mr Scheeren is a partner at Office for Metropolitan Architecture, whose projects include the iconic China Central Television Station in Beijing.




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Straits Times: Wing Tai's first-quarter profit up 42%

29 Oct, 2009
Wing Tai's first-quarter profit up 42% 

THE residential property boom and the robust sales it has delivered gave Wing Tai Holdings plenty to cheer about in the first quarter of its financial year.

Profit and turnover posted healthy growth as buyers snapped up more homes developed by Wing Tai in the three months to Sept 30 than in the whole of last year.

Net profit jumped 42 per cent to $46.33 million, up from $32.59 million the same quarter last year, while revenue surged 106 per cent to $277.18 million, up from $134.3 million.

The group sold about 300 units, with sale proceeds totalling around $650 million from three projects - Belle Vue Residences in Oxley Walk, Ascentia Sky off Alexandra Road and The Floridian in Bukit Timah. Progressive sales were also recognised from The Riverine by the Park.

This compares with sales of 100 residential units worth $208.5 million for the 12 months to June 30, the end of its financial year.

Some developments were also commanding higher prices. In August, the firm noted that the selling price for units in the upmarket Belle Vue Residences rose from an average of $1,700 per sq ft (psf) to $1,900 psf, with some units being sold for as high as $2,400 psf. 

The group told the Singapore Exchange yesterday that it 'will continue to keep a close watch on the market and will release more residential units for sale at the most appropriate time'. 

Earnings per share was 5.96 cents, up from 4.13 cents in the first quarter last year, while net asset value per share stood at $2.07 as at Sept 30, up from $2.03 at June 30.

Wing Tai's share price fell three cents to $1.64 ahead of the earnings announcement yesterday. 

The stock is up 97.6 per cent this year compared with the 50.38 per cent gain in the Straits Times Index.




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Straits Times: Surprise drop in new US home sales

29 Oct, 2009
Surprise drop in new US home sales 

WASHINGTON: Sales of new homes in the United States unexpectedly tumbled last month, their first drop in six months, underscoring the hazards to an economic recovery that businesses appeared to be banking on.

New single-family home sales fell 3.6 per cent to a 402,000-unit annual pace from a downwardly revised 417,000 units in August, the Commerce Department reported yesterday.

Analysts polled by Reuters had expected sales to rise to a 440,000-unit pace from August's previously reported 429,000.

A separate report from the Mortgage Bankers Association showed demand for mortgages has fallen in the past three weeks, as buyers move to the sidelines ahead of the Nov 30 expiration of a popular home-buyers' tax credit.

The housing data represented a road bump in a recovery that otherwise appeared to be widening.

Another report from the Commerce Department showed that new orders for long-lasting US manufactured goods rose 1 per cent last month, as business stepped up investment plans.

'One month is obviously not a trend, and I think there is plenty of evidence that things are turning around. I still believe the economy has hit bottom and is on the way up, but it will be a long, slow process,' said Mr Mark Bonhard, an investment adviser at Dawson Wealth Management in Cleveland, Ohio.

US stock indexes extended losses when the data was released. 

Despite the drop in sales, the number of new homes for sale at the end of the month shrank to its smallest in 27 years, leaving the supply of homes available at 7.5 months' worth.

The median sales price rose last month to US$204,800 (S$286,000) from US$199,900.

The US$8,000 new home-buyers' tax credit, which expires on Nov 30, helped lift the housing market from its deepest downturn since the Great Depression. US lawmakers are considering extending it.

The rise in new orders for long-lasting US manufactured goods met Wall Street expectations and was the second increase in the last three months, offering some hope that the economic recovery would continue.

However, compared with a year ago, orders were down 24.1 per cent.

'In a recovering economy, you'll get three steps forward and then two steps back. That's what you're seeing here,' said Mr David Katz, chief investment officer at Matrix Asset Advisors in New York. 'This data point is positive.'

Durable goods orders are a leading indicator of manufacturing, which in turn provides a good measure of overall business health.




Team Marshe
Martin Koh/ Sherry Tang
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Straits Times Forum: Barring same-agent property brokerage not practical

29 Oct, 2009
Barring same-agent property brokerage not practical 

I REFER to last Saturday's editorial, 'The problem in same-agent property brokerage'.

While I welcome and support the Ministry of National Development' s draft plan to regulate real estate brokerage, including a radical suggestion to prohibit an agent from acting for both seller and buyer in HDB resale transactions, I doubt its effectiveness in practice. 

It may delay resale transactions and result in lost opportunities. Besides, there is no guarantee that co-broking or unethical practice will be completely wiped out.

The trade rigidity will inconvenience both parties - the genuine sellers and buyers - as both sides will have to wait for suitable buyers and sellers to seal a transaction.

However, if win-win solutions can be found to expedite genuine transactions, there is no dispute that the public will favour a separation of agent functions.

The underlying or radical problem emerges from the greed and dishonesty of some agents who think only of securing maximum commission. Hence, if trade accreditation can be set up speedily to enforce stricter rules of licensing and censure, as well as ensuring that all agents pass the standardised examination and accreditation, then the image of the industry will improve. This will definitely boost public confidence and trust in the profession.

Most important, the industry's accreditation board must set high ethical standards in its code of conduct and practice for the profession.

Teo Kueh Liang




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Martin Koh/ Sherry Tang
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Straits Times: How new rules can protect property agents

29 Oct, 2009
How new rules can protect property agents 

I REFER to the letter by Mr Chua Khim Leng, 'New rules should protect property agents' (Oct 19).

As a real estate consultant for the past 20 years and running my agency in a niche market, I fully understand the plight of many real estate agents, who are disadvantaged because of the lack of rules that clients should abide by when they engage agents to handle their properties.

Many clients do not give exclusivity, as by appointing agents without signing a contract, they can take advantage of the agents' advertisements and feedback, and then leverage on the prices received to sell direct to friends or neighbours and so avoid paying commission. These clients will also cut commission at the crucial moment of signing the option, say they will not sell or give the sale to another agent who charges lower commission.

An agent who had refrained from closing a sale quickly as the market was improving rapidly, waited and worked to achieve better offers, but was later disadvantaged because the client paid nothing if the sale was not concluded by that agent. 

Other agents and buyers are allowed to cut in at the 11th hour. This undesirable situation does not support agents who work professionally and diligently in the interest of their clients.

I have some suggestions:

- Make it compulsory for clients to give and honour exclusivity, whether by written or verbal agreement. 

- Appoint one or no more than two agents exclusively for eight weeks, with a termination clause of two weeks' notice if agents do not perform satisfactorily.

- Explore means to prevent agents from being unfairly treated by clients or agencies. 

- Compensate agents who have spent time, produced advertisements and conducted more than a dozen viewings, if soon after their marketing efforts, the sale is concluded through other parties (limit the period of 'soon after').

- Give recourse to aggrieved agents to address their disputes without them having to resort to civil suits that involve time and more opportunity costs. 

Clients play a part to help raise the standard and professionalism of the real estate industry. They must respect and reward agents who are reliable and competent, and appreciate that they work for a living. Of course, there are many honourable and trustworthy clients who become lifelong friends of agents. 

Teresa Yao (Mrs)




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CNA: Far East Organization to add 15 overseas properties under new brand

Far East Organization to add 15 overseas properties under new brand
By Ryan Huang, Channel NewsAsia 28 October 2009 

SINGAPORE : Property developer Far East Organization is banking on local culture to grow its new hospitality brand. 

Under its new concept, Village Hotels & Residences, it aims to provide guests with a taste of the local culture in the surrounding community. 

Far East is hoping to add 15 new overseas properties under the brand in the next five years, in markets such as China, Indonesia, Malaysia and Vietnam. 

An experience that draws on the culture of the local community - that is what Far East aims to offer guests at its Village Hotels & Residences. For example, guests at the Albert Court Village Hotel will be able to learn more about Little India through guided tours or dining options. 

It is one of three hotels, along with four residences in Singapore, that have been selected by Far East to spearhead its new hospitality branding. The other two hotels are Changi Village Hotel, and the Golden Landmark Hotel which will be renamed to Landmark Village Hotel. 

The four residences comprise those in Central Square, Hougang, Robertson Quay, and West Coast Road. 

Chan Iz-Lynn, assistant director (Hospitality Operations and Service Quality), Far East Organization, said: "We work very closely with the community around the precinct. One example we have, we have specially commissioned this local walking guide for our customers so they can actually move around the precinct on their own on feet, and we recommend them places to eat, to visit and to shop." 

The Village brand will be targeting the mid-range segment and is expected to have an equal mix of leisure and business guests. 

Far East aims to have 15 new properties around the region in the next five years - tapping into the strong growth expected in the Asian hospitality market. 

Raphael Saw, director, Hospitality Operations, Far East Organization, said: "We are positive that we are moving into a time whereby the demand is on the upward trend. 

"There are a lot of demand generating activities, and demand generating attractions that are going to come on-stream, some of them we are very familiar - the integrated resorts, and the remaking of Orchard Road... 

"So if we look forward from here, we are optimistic in terms of demand coming to Singapore. Thereby, it will reflect in a positive trend for occupancy." 

A recent study by Pacific Asia Travel Association forecasts that international arrivals will grow to nearly 77 million by 2011, compared to 62.2 million in 2007. For Northeast Asia, international arrivals are expected to hit almost 240 million by 2011. 

Far East has already invested some S$12.5 million since 2005 on areas such as refurbishing its properties, and service training. It plans to pump in about the same amount over the next three years as it continues to build the brand. 

The brand will be officially launched on October 30. Going forward, Far East expects growth for its local properties to be driven by arrivals particularly from Malaysia, Indonesia, and China. 

It said one of its fastest growing segments are visitors froFar East Organization to add 15 overseas properties under new brand

By Ryan Huang, Channel NewsAsia 28 October 2009 

SINGAPORE : Property developer Far East Organization is banking on local culture to grow its new hospitality brand. 

Under its new concept, Village Hotels & Residences, it aims to provide guests with a taste of the local culture in the surrounding community. 

Far East is hoping to add 15 new overseas properties under the brand in the next five years, in markets such as China, Indonesia, Malaysia and Vietnam. 

An experience that draws on the culture of the local community - that is what Far East aims to offer guests at its Village Hotels & Residences. For example, guests at the Albert Court Village Hotel will be able to learn more about Little India through guided tours or dining options. 

It is one of three hotels, along with four residences in Singapore, that have been selected by Far East to spearhead its new hospitality branding. The other two hotels are Changi Village Hotel, and the Golden Landmark Hotel which will be renamed to Landmark Village Hotel. 

The four residences comprise those in Central Square, Hougang, Robertson Quay, and West Coast Road. 

Chan Iz-Lynn, assistant director (Hospitality Operations and Service Quality), Far East Organization, said: "We work very closely with the community around the precinct. One example we have, we have specially commissioned this local walking guide for our customers so they can actually move around the precinct on their own on feet, and we recommend them places to eat, to visit and to shop." 

The Village brand will be targeting the mid-range segment and is expected to have an equal mix of leisure and business guests. 

Far East aims to have 15 new properties around the region in the next five years - tapping into the strong growth expected in the Asian hospitality market. 

Raphael Saw, director, Hospitality Operations, Far East Organization, said: "We are positive that we are moving into a time whereby the demand is on the upward trend. 

"There are a lot of demand generating activities, and demand generating attractions that are going to come on-stream, some of them we are very familiar - the integrated resorts, and the remaking of Orchard Road... 

"So if we look forward from here, we are optimistic in terms of demand coming to Singapore. Thereby, it will reflect in a positive trend for occupancy." 

A recent study by Pacific Asia Travel Association forecasts that international arrivals will grow to nearly 77 million by 2011, compared to 62.2 million in 2007. For Northeast Asia, international arrivals are expected to hit almost 240 million by 2011. 

Far East has already invested some S$12.5 million since 2005 on areas such as refurbishing its properties, and service training. It plans to pump in about the same amount over the next three years as it continues to build the brand. 

The brand will be officially launched on October 30. Going forward, Far East expects growth for its local properties to be driven by arrivals particularly from Malaysia, Indonesia, and China. 

It said one of its fastest growing segments are visitors froFar East Organization to add 15 overseas properties under new brand
By Ryan Huang, Channel NewsAsia 28 October 2009 

SINGAPORE : Property developer Far East Organization is banking on local culture to grow its new hospitality brand. 

Under its new concept, Village Hotels & Residences, it aims to provide guests with a taste of the local culture in the surrounding community. 

Far East is hoping to add 15 new overseas properties under the brand in the next five years, in markets such as China, Indonesia, Malaysia and Vietnam. 

An experience that draws on the culture of the local community - that is what Far East aims to offer guests at its Village Hotels & Residences. For example, guests at the Albert Court Village Hotel will be able to learn more about Little India through guided tours or dining options. 

It is one of three hotels, along with four residences in Singapore, that have been selected by Far East to spearhead its new hospitality branding. The other two hotels are Changi Village Hotel, and the Golden Landmark Hotel which will be renamed to Landmark Village Hotel. 

The four residences comprise those in Central Square, Hougang, Robertson Quay, and West Coast Road. 

Chan Iz-Lynn, assistant director (Hospitality Operations and Service Quality), Far East Organization, said: "We work very closely with the community around the precinct. One example we have, we have specially commissioned this local walking guide for our customers so they can actually move around the precinct on their own on feet, and we recommend them places to eat, to visit and to shop." 

The Village brand will be targeting the mid-range segment and is expected to have an equal mix of leisure and business guests. 

Far East aims to have 15 new properties around the region in the next five years - tapping into the strong growth expected in the Asian hospitality market. 

Raphael Saw, director, Hospitality Operations, Far East Organization, said: "We are positive that we are moving into a time whereby the demand is on the upward trend. 

"There are a lot of demand generating activities, and demand generating attractions that are going to come on-stream, some of them we are very familiar - the integrated resorts, and the remaking of Orchard Road... 

"So if we look forward from here, we are optimistic in terms of demand coming to Singapore. Thereby, it will reflect in a positive trend for occupancy." 

A recent study by Pacific Asia Travel Association forecasts that international arrivals will grow to nearly 77 million by 2011, compared to 62.2 million in 2007. For Northeast Asia, international arrivals are expected to hit almost 240 million by 2011. 

Far East has already invested some S$12.5 million since 2005 on areas such as refurbishing its properties, and service training. It plans to pump in about the same amount over the next three years as it continues to build the brand. 

The brand will be officially launched on October 30. Going forward, Far East expects growth for its local properties to be driven by arrivals particularly from Malaysia, Indonesia, and China. 

It said one of its fastest growing segments are visitors from Malaysia, and it expects that customer base to double by the end of 2010. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400
www.marshe.net
www.smart-home.webs.com