Horizon owners have 2 weeks to decide their fate

Majority sellers seek individual legal advice in face of potential lawsuit.

(SINGAPORE) Two weeks – that’s all the time the majority sellers of Horizon Towers now have to find a way to salvage the botched collective sale of their development.

If they fail to do so – by the ominous deadline of Sept 11 – each of the 255 owners who signed off on the en bloc sale, along with the sales committee members, will be sued for some $4 million each.

Faced with such a prospect, each majority seller is now understood to be seeking individual legal advice as to how to defend himself against the lawsuit.

Collectively, the sellers also need to decide if and how they should revive the agreement inked with the intended buyers – Hotel Properties (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority – for the sale of Horizon Towers.

This comes as HPL and its partners make good on their threat to sue the majority sellers for failing to hold up their end of the deal.

Documents obtained by The Business Times show that the majority sellers, represented by Tan Rajah & Cheah, had received a letter last Thursday from HPL’s lawyers, Allen & Gledhill (A&G). The letter alleged that the sellers are in breach of their agreement, for failing to ‘do everything in their power’ to obtain a collective sales order from the Strata Titles Board (STB) approving the sale of Horizon Towers.

STB had on Aug 3 thrown out the sellers’ application for a collective sales order, on the grounds that it was defective. STB said the sellers had failed to include certain documents in their application and, hence, failed to comply with requirements laid out by the law. The board’s decision meant the en bloc sale of Horizon Towers could not be completed by the agreement deadline of Aug 11.

HPL and its partners then asked the sellers to extend the en bloc sale completion deadline by four months – to Dec 11 – during which time, they wanted the sellers to appeal the STB’s decision and file a fresh application for a new sales order, if necessary.

The sellers said they needed time to consider what steps they should take – but have not reverted since.

The lack of response has now prompted HPL and its partners to take action. ‘Our client is not prepared to wait indefinitely for (you) to extend the (deadline),’ A&G’s letter to the sellers said.

HPL and its partners commenced proceedings in the High Court on Thursday, declaring that the majority sellers are in ‘repudiatory breach of contract’. The buyers are demanding that the sellers extend the original deadline and ‘do everything necessary to obtain the collective sales order’.

HPL and its partners have given the sellers until Sept 11 to do so – failing which, they would sue each of the sellers, for a total of between $800 million and $1 billion. With more than 255 owners – of 173 units who agreed to the sale – being named as defendants, it means each of them could be sued for up to $4 million each.

But should the sellers do as demanded – and a collective sales order is eventually obtained – HPL and its partners will honour their end of the bargain, that is, they will buy the 99-year leasehold Horizon Towers for a total of $500 million.

For their part, the majority sellers have denied allegations that they breached the sales agreement. They have also refused to extend the deadline by four months. But, they have appealed to the High Court to review the STB’s decision.

The sellers, however, declined to say what their next move would be.

Some sellers whom BT spoke to said they would now be reviewing the various options ahead of them, and seeking legal advice as to how to defend themselves against the lawsuits they each face. They will meet on Sept 7 to discuss their fate.

The majority sellers – who make up some 84 per cent of the owners of Horizon Towers – had in February agreed to sell the development en bloc to HPL and its partners.

The $500 million price tag would have meant that the owners of the 199 apartments would have pocketed about $2.3 million each and the owners of the 11 penthouses at least $4 million each.

Still, it’s believed some of the sellers later regretted agreeing to the en bloc sale, when the likes of The Grangeford estate nearby sold subsequently for more than double the Horizon Towers price, on a per sq ft basis.

Some minority sellers – those who didn’t agree to the sale – also filed their objections to the sale, on various grounds.

It was after listening to some of the objections filed that the STB decided not to grant the collective sales order.

The minority sellers are not being sued, since they did not ink the sales agreement with HPL and its partners.

Source : Business Times – 27 Aug 2007

ST Index expected to keep up recovery

Dow’s Friday rise should give enough fuel to spark mini revival in S’pore By Alvin Foo

IS THE worst over? That must be the top question on every investor’s mind following a nerve-racking fortnight of stock-market roller-coaster rides.

But there were plenty of relieved faces on the Singapore bourse last week. That is because the Straits Times Index (STI) managed a rebound after the market fallout the previous Friday.

The STI scored its second-highest one-day gain of 192 points on Monday before posting its best back-to-back jump – last Wednesday and Thursday – since 2002. It soared 238.74 points for the week, or 7.63 per cent, to finish at 3,369.45 on Friday.

Still, there was a dip in the average daily volume, with 2.19 billion shares valued at $2.54 billion traded, compared with the previous week’s 2.67 billion shares worth $2.79 billion.

But there is enough fuel to spark another mini revival on the Singapore bourse this week, given the Dow’s 1.1 per cent surge last Friday.

As with recent times, all eyes will be on the United States, and the STI is likely to mirror Wall Street’s performance.

Which is why news of better-than-forecast new home sales and durable goods orders in the US is music to the Singapore investor’s ears.

Some market experts believe the worst could be over regarding the fallout from the troubled US sub-prime mortgage market.

Societe Generale Asia Pacific chief economist Glenn Maguire said: ‘We’ve clearly moved through the worst in terms of the sub-prime stresses… Most of the process of deleveraging is now behind us. The bulk of it has already occurred.

‘Markets are going to remain volatile till year-end. But in 2008, there’s going to be more certainty. With liquidity returning to market, this uncertainty will fade away, starting in the fourth quarter.’

Investor sentiment has been boosted by a partial thawing in frozen credit markets, easing fears of a money squeeze that could spill over to corporate and consumer borrowing and put a drag on economic activity.

And an expected interest rate cut by the Federal Reserve next month looks set to keep credit flowing in the US economy, thus giving more assurance to worried investors.

In Singapore, optimistic analysts and investors point to the Republic’s sound long-term economic fundamentals and the healthy spate of corporate results recently as signs that the bull run will continue.

However, market uncertainty lingers. As Lehman Brothers analyst Paul Sheard told Agence France-Presse: ‘The sub-prime mortgage meltdown has triggered a broad sell-off across capital markets. Questions remain. Do these shocks presage a serious and prolonged downturn in the US economy that will spill over to the rest of the global economy?’

‘We’ve clearly moved through the worst in terms of the sub-prime stresses.’

MR MAGUIRE, who is among experts who believe the worst could be over regarding the fallout from US sub-prime crisis

Source : Straits Times – 27 Aug 2007

Exposure to US sub-prime loans negligible, says DBS

DBS Group has reiterated that its exposure to the United States sub-prime market is ‘negligible’.

Only US$188 million (S$286.7 million) of the bank’s collateralised debt obligations (CDOs) ‘directly reference some exposure’ to US sub-prime mortgages, said DBS group chief financial officer Jeanette Wong.

This makes up just 12 per cent of the bank’s total $2.4 billion holdings of CDOs.

‘There has been no change’ from what was disclosed earlier in terms of DBS’ exposure to the sub-prime market, she noted in an e-mail response to The Straits Times.

CDOs are debt instruments backed by assets. These assets can be made up of bonds, loans and their derivatives, and can include corporate loans and home loans, such as sub-prime mortgages.

DBS’ total exposure to CDOs makes up only 1 per cent of the bank’s overall assets, added Ms Wong.

She noted that more than 70 per cent of the CDOs are concentrated in high-quality financial instruments with AAA or AA+ ratings.

Ms Wong’s remarks came one day after DBS’ shares fell 30 cents last Friday to close at $20.30. This followed a Reuters report that highlighted DBS’ exposure to CDOs via its special-purpose vehicle or conduit called Red Orchid.

In total, Red Orchid has issued $1.4 billion worth of commercial paper, of which $1.1 billion is backed by CDOs.

Usually, third-party investors who buy commercial paper roll it over when it matures. If they no longer want to do so, DBS must provide back-up funding for the commercial paper.

In this case, DBS’ total direct exposure to CDOs would increase to $2.4 billion, Reuters cited a CLSA report as saying.

Investors’ appetite for the estimated more than US$510 billion of commercial paper worldwide has shrunk, after it emerged in Britain recently that some assets put up as collateral for debt may have a whiff of sub-prime mortgages.

Ms Wong clarified that the CDOs held in Red Orchid are ‘not exposed to the US sub-prime mortgage market at all’ and DBS ‘can fully fund any drawdown of the liquidity facility provided to the conduit’.

‘Red Orchid’s assets are mostly backed by AAA CDO assets as well as other bonds and loans. We do not expect these assets to default,’ said a bank spokesman.

Apart from Red Orchid, DBS does not have any other asset- backed commercial paper conduit which invests in CDOs.

Ms Wong noted: ‘DBS has one of the strongest capital positions of banks operating in Asia… We are comfortable with our present position and as always will monitor our risks closely.’

Source : Straits Times – 27 Aug 2007

What’s in a condo name? More than you can imagine

Faced with an increasingly strict set of naming rules, developers are forced to get creative with foreign terms, coined-up words By Fiona Chan, Property Reporter

IF PROPERTY developer Lippo Group had its way, the condominium it is building in Kim Seng Road would be called Trinity rather than Trillium.

But the group’s original application for ‘Trinity Towers’ was deemed too ‘religious’ by the authorities, revealed Lippo’s executive director Thio Gim Hock.

‘It was rejected because it had religious connotations. They even said not to bother to appeal,’ he said. The three-tower project was renamed Trillium, after the name of a three-petal flower.

Now, as Lippo and other developers gear up to launch a slew of new condos, they are cracking their heads over what to name them. It may seem like a small problem, but unexpected rejections such as the one Lippo received can make the task surprisingly knotty.

Indeed, the name game is so important that Mr Simon Cheong, head of luxury developer SC Global, personally names each of his projects – from the iconic The Boulevard Residence to the latest Marq on Paterson Hill.

Larger developers, such as Frasers Centrepoint and City Developments (CDL), pick names from proposals that sometimes number in the hundreds.

At CDL, the final say for condo names lies with executive chairman Kwek Leng Beng. But suggestions are pooled from all sources, including an occasional staff competition. Even Mrs Kwek reportedly put in her two cents’ worth for CDL’s latest project, Cliveden at Grange.

The main reason naming a condo is not as easy as just calling it The ABC lies in a surprisingly strict set of rules for building and estate names, outlined by the Street and Building Names Board (SBNB).

For instance, condo names, according to a fairly recent rule change by SBNB, must not end with ‘park’ – in case the project is mistaken for an actual park.

But more than 100 condos already have that word in their names, including older estates Bedok Park and Clementi Park. To get around the rule, developers have recently taken to using the French word ‘parc’ instead and putting it in front of the name, such as in Parc Emily.

SBNB also advises against using ‘place’ and ‘link’ because the terms are also used for road names. ‘Tower’ can be used only for buildings of at least 30 storeys, and ‘villa’ only for landed houses. And ‘city’ – such as in the 910-unit City Square Residences or the 600-unit Citylights – is applicable only for developments ‘on a grand scale’, says SBNB.

With more and more words struck out over the years, it is no wonder many developers now find it easier to come up with a whole new one.

This has led to the latest rage in condo-naming: coined words, such as in The Lumos in Leonie Hill and The Marq.

‘It’s partly because developers are running out of names, and partly because of the new guidelines on naming projects,’ said Ms Diana Kuik, executive director of Sim Lian Land. ‘It is now a very ‘in’ thing to do as it gives the project a modern feel.’

Sim Lian’s Viz at Holland is a good example. ‘The condo is near Holland Village, and there’s a lot of buzz and activity in the area,’ said Ms Kuik.

‘So we combined ‘village’ and ‘buzz’ to get ‘Viz’. It’s short, easy to remember, and hip-sounding.’

But newly coined names are only one of the current trends in a market where condo names appear to come and go in waves of fashion.

In fact, Ms Kuik said it is often possible to distinguish a condo’s age from its name.

‘If you look at a name, you can tell which era the development was built in,’ she noted. ‘Anything with ‘garden’ or ‘view’ is likely to be in the 1980s. If it’s ‘vale’, probably the 1990s, and if it starts with ‘The’, it’s after 2000.’

Other current naming fads include the almost ubiquitous ‘@’ sign – officially known as the ‘commercial at’ and unofficially used in every attempt to be trendy. At least 30 condos in Singapore boast this symbol. Almost all are new projects that surfaced after the dot.com boom.

Property watchers have also observed that the recent boom in high-end condos has led to a proliferation of names using ‘residences’. Indeed, about half the 50-odd condos in this category – including Marina Bay Residences and The Orchard Residences – are located downtown or in the prime districts of 9 to 11.

A more longstanding trend is foreign words. These have long been de rigueur among developers, who seem to think they add a certain je ne sais quoi (meaning ‘an indescribable attribute’) to a moniker.

For instance, there are 34 condos here with names that start with ‘Casa’, the Spanish word for ‘house’. Another 21 begin with ‘Le’ or ‘La’, the French words for ‘the’.

Some projects are named after actual foreign locations, such as Cote d’Azur in Marine Parade, which sits uncomfortably on the tongues of most Singaporeans.

But while foreign names might sound more chi-chi, they are also more chancy.

One developer related the story of how SBNB once rejected a French name for a condo because the word sounded like ‘danger’ in English.

‘We wanted to name the condo ‘Perle’, which means ‘Pearl’ in French,’ the developer said. ‘But the board said it sounded too much like ‘peril’, so we had to change it.’

Interestingly, while SBNB is sticky on grammatical accuracy in the use of ‘Le’ and ‘La’ – they refer to male and female nouns respectively in French – it appears unconcerned about condo names that begin with ‘De’ or ‘D’.

‘De’ is a French proposition that usually means ‘of’ or ‘for’. It is used as ‘D’ only if followed by a word starting with a vowel.

But Singapore’s condos include such grammatical eyesores as D’Dalvey and D’Hillside Loft. The Straits Times understands that these are considered to be coined words, rather than foreign derivatives, and thus allowable.

As developers try to stay on SBNB’s good side, straightforward combinations of road names and numbers are also getting popular. The latest trend is names beginning with ‘One’, such as One Shenton, which 14 condos have adopted.

But this does not mean developers have no room for creativity, as shown by the unusual 2 rvg and 66 OGR, which stand for River Valley Grove and Orange Grove Road, respectively.

Even if a name does not meet with contention by SBNB, other unexpected circumstances may force it to be changed at the last minute.

Industry insiders, for instance, know that Pharos on the Waterfront was the original name for the CDL condo near the Singapore River that is now called Tribeca. But what they might not know is that the name was changed mere weeks before the condo’s launch because CDL discovered that Pharos referred to a lighthouse that had been destroyed by an earthquake.

‘We didn’t want anyone to make the association,’ said CDL general manager Chia Ngiang Hong with a laugh.

At the end of the day, however, a project’s name is probably one of the lowest factors on a buyer’s list of priorities, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. ‘The product quality and returns potential are the top things people look at. In the final evaluation, buyers almost never consider names.’

Source : Straits Times – 27 Aug 2007

Floating condo takes opulence to high seas

S’pore buyers can preview luxury liner as marketing drive makes stop here By Joyce Teo, Property Correspondent

DO YOU feel like you have been living too long in one place and are now longing and pining for life on the high seas? Then try splurging some of that hard-earned money on a plush home onboard a luxury liner.

It is a simple – albeit opulence-laden – concept. Your multimillion-dollar home is part of a lavish vessel that plies the world’s oceans, calling at exotic ports along the way.

As the shipboard homes are mega-pricey, there is no chance of being stuck at sea with any of the great unwashed with their sub-prime mortgages – and you can always count on a great ocean view.

Singaporeans can check out the concept next month, when Savills International unveils The Four Seasons Ocean Residences – 112 private residences on a 219m luxury vessel with staff and high-end services – at the Four Seasons Hotel here.

The homes range in size from 797 sq ft to nearly 8,000 sq ft. Most are two- and three-bedders, with features that include floor-to-ceiling windows, living room areas, master bedroom suites with walk-in dressing rooms and bathrooms en suite, kitchens, and staff entrances.

Prices range from 2.885 million euros (S$5.97 million), or about 3,500 euros per sq ft, for a 797 sq ft one- bedder to 30 million euros for a 7,860 sq ft four-bedroom, three-storey penthouse.

The liner – due for completion in 2010 – will offer plenty of entertainment, including four restaurants, an 11,000 sq ft spa, a style casino, a supermarket, a wine cellar and a driving range.

There will also be concierge service and an excursion coordinator to arrange for those exotic and expensive tours. Yearly service charges start from 72,000 euros.

The liner will average about 250 days in port a year and sail to places like Antarctica and events such as the 2012 Olympics in London and the F1 Grand Prix in Monaco.

Developer BV International Ocean Holdings, a joint venture between Bayview Financial and Ocean Development Group, picked Singapore as one of the centres to promote the floating condo.

‘We are focusing on a very select group of people at the highest socio-economic level,’ said Mr Danny Warman, vice-president of Bayview Financial, a privately held United States-based real estate investment and mortgage finance company.

‘Singapore definitely has a significant amount of wealth. It’s one of the most important financial centres in the world,’ he said.

The marketing campaign started in London in May and then moved to New York and South Africa. Singapore will be the first Asian stop.

However, keen buyers can select units only at four global sales events, starting in Hong Kong on Sept 11 to 12. The other ones will be in a city in Europe, the Bahamas and the US.

‘The beauty of it is that owners of the residences would be able to travel and explore the world without having ever to leave their home,’ said Mr Warman.

Because the developer wants to have ‘global diversity’ on board, it will also be marketed in places such as Tokyo, Moscow and Mumbai.

There is only one other floating condo liner – The World of ResidenSea, which set sail from Oslo in 2002 with about 70 residents on board. There were reports at the time that it had trouble selling its residences.

More than a decade later, the market has changed, and more of these floating residences are likely to come. Mr Warman said they are selling a new product with strong branding. ‘As soon as we sell out this one, we will do another one,’ he said.

Source : Straits Times – 27 Aug 2007

Complaints against unethical housing agents on the rise

AN OFFER of $438,000 for his HDB maisonette looked like a pretty good deal to Mr Simon Huin – until he found out his property agent had pulled a fast one.

The agent had kept a higher offer from Mr Huin – one that would have given him $7,000 more for his Geylang East home.

That offer had come from another agent but doing this deal – it is called co-broking – would have required Mr Huin’s agent to share the 3 per cent commission.

Mr Huin, a 55-year-old project coordinator, was furious and reported the agent to the Consumers Association of Singapore (Case).

It is becoming a familiar story with the number of complaints against errant agents shooting up amid a hot property market. Case received 57 complaints from January to July this year, compared with 32 in the same period last year.

The Singapore Accredited Estate Agencies (SAEA), received 46 complaints against agents in the same period this year, up from 31 cases last year.

Most gripes are about agents offering poor service or misrepresenting facts.

‘These unethical agents who work for their own interests shouldn’t be tolerated,’ said Mr Huin, whose case is being investigated by Case and the Institute of Estate Agents (IEA).

If the IEA finds that the agent had behaved unethically, it will strengthen Mr Huin’s case should he decide to sue for damages.

Agents who want to pocket both the seller’s commission and the buyer’s fee may refuse to co-broke but that usually greatly reduces the number of buyers viewing a home.

It also goes against industry guidelines, which state that agents should always co-broke to safeguard a client’s interest.

But when The Sunday Times – posing as a buyer – called 10 agents listed in the Classifieds, four flatly refused to co-broke.

There are 18,500 agents in Singapore registered with the IEA. Between April and June this year, 12,897 transactions were made in the private residential market – more than double the 5,767 in the same period last year.

Experts believe some agents are rushing to seal deals and cutting corners.

Tenants face the same problems. Expatriate Laura Thornton-Olivry, in her 30s, has thrice failed to get a rental home because agents upped the price even after she had signed letters of intent and handed over cheques.

The housewife is one of 13 frustrated people who have written to The Straits Times’ Forum page in the past eight months, calling for agents to be licensed, to curb unethical practices.

Property agencies agree. Although anyone can become an agent now by completing an agency’s in-house training, the SAEA aims to have all agents accredited by 2009. Those found to be unethical can then be expelled or suspended.

But there is no regulatory body to enforce accreditation. As PropNex’s chief executive Mohamed Ismail pointed out: ‘As long as there’s no central regulatory body, there will be unethical agents who simply move on to another agency when fired.’ Like most estate agencies, he wants the Government to step in.

The SAEA advises people to use only the 6,000 accredited agents listed on its website. At least they can be held accountable.

Source : Sunday Times – 26 Aug 2007

Reits a safe choice in roily market: Goldman

SINGAPORE’S real estate investment trust (S-Reit) market could be just the place to park your funds while weathering the storm in the equity markets, says Goldman Sachs executive director (Asia-Pacific Investment Research) Leslie Yee.

In a report on S-Reits, Mr Yee said: ‘We reiterate our positive view on S-Reits and recommend investors to buy in the prevailing choppy equity markets.’

S-Reits were sold down recently but Mr Yee believes the market is ‘under-appreciating the defensive qualities and overstating risks’.

Goldman Sachs highlighted four attributes that make Reits ‘defensive’. These are: low gearing, typically about 40 per cent; income payout which is often 100 per cent; secured leases, usually for three years; and limited development risk.

The report said that the current market volatility will affect the near-term ability of Reits to access capital market funding, but Goldman Sachs believes Reits have the necessary debt capacity and expect that equity markets will be willing to fund good acquisitions.

Goldman Sachs S-Reit Index has fallen by 11.8 per cent since July, which is slightly less than the decline in the Singapore property stock index of 15.3 per cent.

It has also lowered its target price for the nine S-Reits it covers by 0.5-10 per cent. Based on revised target prices, these S-Reits offer an upside of 7-37 per cent.

In particular, Goldman Sachs has added CapitaMall Trust to its ‘Conviction Buy’ list. It has upgraded Suntec Reit to ‘Buy’ from ‘Neutral’, and reiterates ‘Buy’ on K-Reit.

Goldman Sachs also likes sponsored Reits. And it does not matter if a Reit does not pay top dollar for a sponsor’s asset. ‘Our analysis on the sale of a completed asset shows the net benefit to a developer is roughly the same from selling to a Reit or from selling to a third party at a price that is nearly 20 per cent more,’ explained Mr Yee.

He said: ‘We see the current market providing a good entry point into Reits’, noting the sector leader’s – CapitaMall Trust – pull-back of 20 per cent from its share price two months ago.

In the near term, it does see cost of funding for acquisitions like the one-third stakes in One Raffles Quay by K-Reit and Suntec-Reit as a major risk.

But in the long term, it sees potential for growth through acquisition and argues that ‘win-wins’ can be created when a developer sponsor sells assets to Reits.

Goldman Sachs launched its Reit coverage in January when it also forecast the nine S-Reits would make $15 billion in acquisitions within a three-year period, boosting portfolio sizes by 75 per cent.

Based on announced acquisitions to date, the nine Reits have made $3.9 billion worth of acquisitions, which is 27 per cent of the target.

Source : Business Times – 25 Aug 2007

Up to $10m more a year for private estates’ upgrading

CHANGES to the seven-year-old Estate Upgrading Programme (EUP) for private estates will further improve the living environment for private estate residents.

New measures announced yesterday by National Development Minister Mah Bow Tan and Minister of State for Finance and Transport Lim Hwee Hua will see private housing estates get better coordination in major upgrading works as well as access to extra funding.

The scope of the Estate Upgrading Committee, which currently manages projects in private estates, will be widened to oversee and coordinate all major upgrading works across the different public agencies.

The committee, which is chaired by Parliamentary Secretary for National Development Mohamad Maliki Osman, will also see senior representatives from public agencies such as the National Parks Board and the Land Transport Authority on it.

These will help tackle the problem of a lack of coordination – a complaint residents from private estates have raised.

Another change will give private estates access to the Community Improvement Project Committee (CIPC) funds, something which only HDB estates are allowed to touch at the moment.

These funds can be used for minor improvement projects such as a playground, ramp or barbecue pit, or for maintenance works.

‘When we did the survey, not many private estate residents wanted big upgrading plans,’ said Mrs Lim, referring to studies done by the Committee on Private Estates, which she headed. ‘They just wanted things to work.’

Soon, newer private estates will be able to tap on these funds without having to wait for the EUP, which is typically open to estates aged at least 30 years.

A $700,000 pilot programme will be initiated in three GRCs: Aljunied, Holland-Bukit Timah and Tanjong Pagar to test out the effectiveness of these changes.

Since the EUP started in 2000, about 23,000 homes in 30 private estates – out of more than 200,000 private homes – have been upgraded. These include Serangoon Gardens, Hoover Park and Opera Estate.

The Government sets aside about $20 million each year for EUP projects. Mr Mah, who was given a tour of Braddell Heights, said it will bump up the EUP budget by $5 million to $10 million each year. This amount will come from CIPC funds.

Braddell Heights is one of five estates in the latest batch chosen for EUP. It will undergo a $5.5 million upgrading over a two-year period starting early next year.

Source : Sunday Times – 26 Aug 2007

CapLand finalising buy of Eureka Office Fund stake

CAPITALAND said yesterday it is finalising the purchase of its partner’s 50 per cent stake in Eureka Office Fund, which owns One George Street and 163 strata-titled units in The Adelphi.

CapitaLand and Eureka GmbH, part of Munich Re Group, have equal stakes in the fund.

CapitaLand, which was responding to a BT report yesterday saying it was eyeing full control of One George Street, did not give further information. But it is widely known in property circles that a collective sale of The Adelphi, a 999-year leasehold property in the City Hall area, is being explored.

When Eureka Office Fund was created in 2001, it controlled 100 per cent of the offices and 38 per cent of the retail units in The Adelphi, had a 19.92 per cent stake in Temasek Tower and 100 per cent of Pidemco Centre in South Bridge Road.

The Pidemco Centre was later redeveloped into One George Street.

Earlier this year, the fund and CapitaLand sold their entire stakes in Temasek Tower for $1.04 billion.

Source : Business Times – 24 Aug 2007

Majority owners of Horizon Towers sued

The Hotel Properties-led consortium yesterday filed a suit in the High Court against the majority owners of Horizon Towers for allegedly breaching the option to purchase agreement for the $500 million collective sale of the Leonie Hill property.

The proceedings that HPL instituted in the High Court also seek to get an order that the vendors of Horizon Towers ‘do everything in their power to obtain a collective sale order from the Strata Titles Board’, it was mentioned in a statement to the Singapore Exchange yesterday evening.

In addition, HPL could seek damages for breach of contract.

The lawsuit came about after the Strata Titles Board dismissed on Aug 3 an application by Horizon Towers’ majority owners seeking STB’s order for the collective sale. Earlier, the HPL-led consortium, which also includes Morgan Stanley Real Estate and Qatar Investment Authority, had exercised their option to purchase.

The STB’s dismissal of the application was greeted with jubilation by some of Horizon Towers’ owners, given the steep rise in prime district residential values since the deal with the HPL-consortium was sealed.

Following STB’s decision, the sales committee representing Horizon Towers majority owners chose not to extend the sale agreement with the HPL consortium when it expired on Aug 11.

The HPL-consortium had earlier threatened to sue the majority owners for lost profits – estimated at $800 million to $1 billion – from a redevelopment of the site. They also wanted the sale deadline extended by four months and the STB decision appealed.

Source : Business Times – 24 Aug 2007