Complete Property Market Updates of Singapore

January 31, 2008

Carlton now part of Worldhotels network

Filed under: General — Propertymarketupdates @ 6:37 pm

It is the third S’pore hotel to do so, after Goodwood and York

From tomorrow, Carlton Hotel Singapore will join the prestigious Worldhotels ‘First Class Collection’ marketing network.

Worldhotels is a European-based global hotels group bringing together individual and independent hotels and regional hotel brands. With an existing base of about 500 hotels worldwide, this partnership with Carlton adds a landmark property in Singapore to Worldhotels’ 78 other members in the Asia-Pacific region.

This is the group’s third tie-up with a Singapore hotel, with Goodwood Park Hotel and York Hotel already on board as members.

Carlton Hotel Singapore’s general manager, Ronald Loges, said yesterday that the hotel was entering into the partnership at a time when Singapore was expecting a big influx of visitors.

He said: ‘The sophisticated needs of travellers within Asia-Pacific today and the latest developments in Singapore, ranging from the Singapore Flyer to the integrated resorts and Sports Hub, creates tremendous energy that will draw unprecedented numbers of visitors to this island.’

He said the partnership would enable Carlton, as an independent hotel, to compete with top international hotel organisations like the Hilton and Hyatt groups.

Apart from the Worldhotels partnership, Carlton is also developing a new Tower Wing at the corner of Bras Basah and North Bridge Road, scheduled for completion in late 2009.

The new wing will add 285 rooms to the current total of 630. The hotel also has 880 square metres of function space in a pillarless grand ballroom, and function rooms designed by the Hirsh Bedner & Associates interior design firm.

News of the expansion comes just less than a year after the Carlton group, in May 2007, emerged as the top bidder for a 99-year hotel site at Gopeng Street next to the Amara Hotel in the Tanjong Pagar area, where it intends to develop a new hotel.

Worldhotels (Asia-Pacific) vice-president Roland Jegge said that Carlton was strategically located, with the Suntec Singapore International Convention & Exhibition Centre just down one road, and the busy financial district minutes down another. The hotel is also just a five-minute walk from CityLink mall – Singapore’s largest underground shopping mall – and the City Hall MRT station, he added.

Meanwhile, Worldhotels is also understood to be in talks with Singapore Airlines regarding a frequent flyer partnership programme.

Source : Business Times – 31 Jan 2008

Singapore’s Q4 jobless rate falls to 1.6%

Filed under: General — Propertymarketupdates @ 6:36 pm

Singapore’s unemployment rate fell to a seasonally adjusted 1.6 per cent in the fourth quarter, which was the lowest in a decade, Ministry of Manpower preliminary data showed on Thursday, helped by job gains in the services and construction sectors.

Employment rose by 64,200 new jobs in the three months to the end of December, the ministry said, bringing jobs creation for the whole year to 236,600.

The services sector created the most number of jobs in the fourth quarter, adding 39,500 positions. The construction sector added 13,200 jobs, and the manufacturing sector created 11,000 positions.

The share of new jobs going to local Singaporeans dropped to 39 percent in 2007, from 52 per cent the previous year, the data showed, reflecting the country’s aggressive immigration policy that aims for a third increase in population.

Foreigners made up one-third of Singapore’s workforce last year and the jobless rate eased to a 10-year low in the fourth quarter.

Foreign employment rose by a new high of 144,500 last year and as of December there were 900,800 workers from overseas, accounting for 33 per cent of the 2.73 million people employed, the Ministry of Manpower said in a press release.

Singapore’s export-driven economy unexpectedly shrank in the fourth quarter – the first time since 2003 – as manufacturing weakened on the back of slowing economic growth in the United States, the country’s top export market by country, preliminary estimates from the government showed.

The Singapore government expects economic growth to slow to 4.5-6.5 per cent this year from last year’s estimated 7.5 per cent.

Singapore reports unemployment on a quarterly basis. — REUTERS, AFP

Source : Business Times – 31 Jan 2008

Jones Lang Q4 profit jumps 31% to US$105.4m

Filed under: General — Propertymarketupdates @ 6:36 pm

European markets lead operating income, rising 58%

Jones Lang LaSalle, the world’s second-largest commercial real estate broker, has reported that fourth-quarter profit gained 31 per cent on investment fees and property sales and management in Europe.

Net income climbed to US$105.4 million, or US$3.16 a share, from US$80.9 million, or US$2.37, a year earlier, the Chicago-based company said yesterday. Revenue rose 22 per cent to US$861.8 million for the three months ended Dec 31.

Investment fees and revenue from property management and real estate sales in Europe and Asia ‘more than offset the impact to our clients of disruptions in the debt markets’, chief executive Colin Dyer said.

Jones Lang shares have dropped 30 per cent over the past 12 months as competitor CB Richard Ellis, the largest commercial broker, fell 50 per cent. Borrowing costs for apartment buildings, offices, retail properties and hotels have risen as much as 1.25 percentage points in the past three months.

‘We continue to feel that JLL’s brand and reputation stand out,’ JMP Securities analyst William Marks said in a Jan 7 note to investors. ‘Its diversified business model (by service line and geography) is second to none.’

Jones Lang was projected to have net income of US$2.85 a share, according to the average estimate of three analysts in a Bloomberg survey. The shares rose US$1.31, or 1.9 per cent, to US$69.80 in New York Stock Exchange composite trading.

European markets led Jones Lang’s operating income for the quarter, climbing 58 per cent to US$47.3 million from a year earlier. Operating income from the Asia-Pacific region gained 20 per cent to almost US$22 million. The US fell 18 per cent to US$34.7 million for the quarter, the company said.

For the full year, net income rose to a record US$257.8 million, up 46 per cent from 2006. — Bloomberg

Source : Business Times – 31 Jan 2008

Wee Hur’s strong debut

Filed under: General — Propertymarketupdates @ 6:34 pm

SHARES of construction company Wee Hur Holdings yesterday posted a strong debut on the local market’s main board, closing at a 24 per cent premium to their offer price, despite a weak day throughout the broad market.

Wee Hur, which had offered about 83.65 million shares (including 4.74 million vendor shares) at 25 cents each, saw its shares trade between 30 and 33 cents before closing at 31 cents, with 29 million units changing hands for the day. In a news release, the firm said its offer exercise had been 1.4 times subscribed and that despite the poor market conditions, it had attracted institutional interest from AIG Investment Corporation, Merrill Lynch, JL Capital and UOB Asset Management.

Overall market sentiment was weak yesterday ahead of a key US interest rate meeting, with the Straits Times Index reversing a 20-point rise to close 49.87 points lower for the day at 3,000.03.

Source : Business Times – 31 Jan 2008

CDLHT Q4 distributable income up 83.4%

Filed under: General — Propertymarketupdates @ 6:33 pm

Trust hopes to add Copthorne Orchid to portfolio this year

CDL Hospitality Trusts (CDLHT), the biggest owner of hotel rooms in Singapore, yesterday posted strong Q4 and full-year results.

Distributable income for the quarter ended Dec 31, rose 83.4 per cent from a year before to $22.7 million. CDLHT, a stapled entity, is hoping to acquire this year Copthorne Orchid in the Bukit Timah area from parent Millennium & Copthorne Hotels, the London-listed hotel arm of Singapore property giant City Developments.

CDLHT’s plan is to build up its assets over three to five years from about $1.6 billion as at the end of last year to around $3 billion, with increasingly more overseas acquisitions.

‘My favourite acquisition markets at the moment are Singapore, Vietnam and India. These are high-octane growth markets,’ said Vincent Yeo, CEO of M&C Reit Management.

The company is the manager of CDL Hospitality Real Estate Investment Trust, which is stapled to CDL Hospitality Business Trust to form CDLHT.

With CDLHT’s current gearing ratio (debts-to-assets) only at about 19 per cent, it has debt headroom of $792 million to fund acquisitions before it reaches its self-imposed gearing threshold of 45 per cent.

‘Given our strong balance sheet position, we’re well placed to seize acquisition opportunities as they present themselves,’ Mr Yeo said.

CDLHT has a right of first refusal to buy parent M&C’s Singapore hotels. M&C owns the 445-unit Copthorne Orchid at Dunearn Road, as well as a 370-room new hotel being built in the Mohamed Sultan Road vicinity slated for opening in the first quarter of next year.

Mr Yeo indicated that CDLHT would like to acquire Copthorne Orchid this year ‘if it’s possible’. He reckons the property is worth over $200 million. ‘The ball is in M&C’s court … We’re waiting to hear from them,’ he added.

The trust would acquire the Mohamed Sultan hotel only after it has opened and even then, this is likely to include initial income support if necessary, he said.

Copthorne Orchid had once been earmarked for development into a condo but it now continues to operate as a hotel as there is a shortage of hotel rooms in Singapore.

When CDLHT launched its initial public offer in July 2006, it had four hotels Singapore in its portfolio – Orchard, Grand Copthorne Waterfront, Copthorne King’s and M. In June last year, it acquired Novotel Clarke Quay.

Revenue per available room for the four IPO hotels rose 33.5 per cent year-on-year to $195 in Q4 2007. That together with a full quarter’s contribution from Rendezvous Hotel Auckland (acquired in December 2006), and the contribution from Novotel Clarke Quay provided the fillip to CDLHT’s Q4 distributable income in the fourth quarter. Gross revenue jumped 65.2 per cent to $27.96 million in Q4 last year.

Unit holders will receive a total distribution per unit of 4.61 cents for the July 19-Dec 31 period, which works out to 10.14 cents on an annualised basis, reflecting a distribution yield of 4.97 per cent based on CDLHT’s $2.04 closing price yesterday, when the shares ended 8 cents lower.

For the year ended Dec 31, distributable income was $68.7 million, or 75.7 per cent above the trust’s forecast. Gross revenue of $90.65 million was also 61.1 per cent ahead of forecast.

Source : Business Times – 31 Jan 2008

GuocoLand posts 26% drop in Q2 earnings

Filed under: General — Propertymarketupdates @ 6:33 pm

QUEK Leng Chan’s Singapore-listed property arm GuocoLand yesterday posted a 26 per cent year-on-year slide in group net profit to $32.95 million for the second quarter ended Dec 31, 2007. This was due largely to a 26 per cent drop in other income, from $39.4 million to $29.3 million largely because of a non-recurring profit of $19.3 million that arose from GuocoLand selling its stake in BIL in the year-ago corresponding period.

However, gross profit for Q2 rose 145 per cent, from $16.38 million to $40.21 million on the back of contributions from the group’s development projects in Singapore (including The Stellar, Quartz, Le Crescendo and The View @ Meyer condos) as well as the West End Point project in Beijing.

The decrease in other income was mitigated by higher net foreign exchange gains of $11.3 million from revaluation of US dollar bank loans.

Revenue for Q2 more than doubled from $99.6 million to $211.1 million. For the half year ended Dec 31, 2007, revenue also more than doubled from $187.8 million to $402.1 million. Net earnings for the half year rose 15 per cent to $60.6 million.

GuocoLand’s results statement also showed it has withheld payment of 2.58 billion yuan (S$509.2 million) out of the total 5.8 billion yuan purchase price for the acquisition of a 90 per cent stake in Beijing Cheng Jian Dong Hua Real Estate Development Company (CJDH) and a 100 per cent stake in CJDH’s holding company, Hainan Jing Hao Asset Limited, to cover potential liability relating to separate lawsuits involving guarantees and loans given by Beijing Dong Hua Guang Chang Zhi Ye Co Ltd, formerly a related company of CDJH.

One law suit, for 1.5 billion yuan, has been lodged by Shenzhen Development Bank against CJDH and the other, by Agricultural Bank of China, has been lodged against CJDH and Hainan for a loan of about two billion yuan given to Zhiye. GuocoLand said in its statement it will vigorously contest both suits and give further updates when appropriate.

CJDH owns the land use and development rights to a prime plot of land along Dongzhimen Road on the East Second Ring Road in Beijing’s Dong Cheng District.

Source : Business Times – 31 Jan 2008

Tough figuring out what STC is worth

Filed under: General — Propertymarketupdates @ 6:22 pm

LESS than a month ago, hardly anyone paid attention to The Straits Trading Company (STC), a stock traded so thinly that despite being a billion-dollar company involved in the hot mining sector, no analysts covered it.

Now that blood is in the water, so to speak, the sharks are circling. Speculation or otherwise has driven STC’s share price up to $6.75 as at yesterday’s close, even though the latest counter-offer, made on Monday by the Tan Chin Tuan family-linked Tecity Group, was $6.50 a share.

So what exactly are these people buying?

STC has four core segments: tin mining and smelting, hotels, property , and financial investments. Let’s take it one segment at a time.

The tin business is run through the KL-listed Malaysia Smelting Corp (MSC), of which STC owns 73 per cent, according to its 2006 annual report.

MSC produced about a fifth of the world’s tin output in 2005, or more than 58,000 tonnes, from mining and smelting operations in Malaysia and on the Indonesian island of Bangka. Bangka is one of the world’s largest tin mining areas. But in recent years the Indonesian police have clamped down on illegal mining there, disrupting business.

Of MSC’s two subsidiaries there, 75 per cent-owned PT Koba Tin has been dogged by investigations, causing MSC’s output to fall by a quarter in 2006.

The problems continue. Last June, three executive directors were accused of getting ore from small-scale miners operating outside a licensed area. They were fully acquitted. However, the issue surfaced again on Tuesday, when Koba Tin was ordered to stop smelting to facilitate investigations because its suppliers were alleged to have mined in a forest area.

Hotel arm

STC’s hotel arm is run through Rendezvous Hotels & Resorts International, which operates 14 four or five-star hotels and has a further five under construction. The bulk are in Australia and New Zealand, with one each in Singapore, Malaysia and the UAE, and three in China.

The group also owns commercial and residential properties , the latter mainly freehold land, for rental and sale. A handful are in Singapore while the bulk are in Malaysia. The segment also includes Straits Media, a billboard advertising unit.

In its report, STC said it planned to have minimal equity in development, focusing instead on growing fee-based property and hotel management services.

Next, let’s try to estimate how Tecity’s latest offer – which prices the group at $2.1 billion – implicitly values the component businesses.

Assuming MSC’s market price is fair, we can estimate its value. Translated to Sing dollars, its market cap is $254 million. STC’s 73 per cent stake is worth $185 million.

Next, we estimate the value of STC’s financial investments from its balance sheet as at Sept 30, 2007, the most recent publicly available. At the time, marketable securities stood at $90 million and long-term investments at $385.7 million. STC also held $346.5 million in cash or deposits and had $164 million in short and long- term borrowings. We make the large assumption that these values have not changed.

Subtracting these from Tecity’s offer value leaves a residual of about $1.27 billion, attached to the hotel and property business.

It also includes STC’s mining ventures in China, Australia and Africa and other non-core businesses, but we assume these are negligible.

Again from the balance sheet, STC’s investment properties and properties held for sale were worth about $710 million in total.

We assume these include the hotels, as there are no other large items listed under assets, except for plant, property and equipment, which we assume refer to mining assets.

So Tecity’s offer values the hotel and property business at about 1.8 times its core assets. We haven’t included the segment’s liabilities, so we make a rough guess that it’s valued at twice book value.

To be sure, the above analysis is highly back-of-the-envelope in nature and, published as an analyst’s report, might be sufficient to see this writer out of the door. Nonetheless, let’s see what we can observe.

First, two times book might be expensive now, given faltering interest in real estate. However, many of Rendezvous’ hotel assets are in Australia and China, which are possibly more bullish markets.

Long-term investments

Second, MSC is going through a bad patch but could soar if legal matters clear up. World demand for tin – used not only in plating but also in chemical processes – is growing. China, the world’s largest producer, is also a net importer.

Third, assets may be worth more than recorded. Last year, STC booked a once-off gain of more than $220 million because it revalued its Malaysian properties .

Its long-term investments – which are undisclosed – may also be worth much more. The acquirers, which are major shareholders, almost surely have detailed data on these holdings, which the public does not.

So really, who knows what STC is worth?

Source : Business Times – 31 Jan 2008

Corrupt land sale: Recovered $1.1m back with Taoist group

Filed under: General — Propertymarketupdates @ 6:21 pm

Money placed in the care of Taoist Federation as a charity fund.

A 15-YEAR-OLD saga of a corrupt land sale that sent three Taoist devotees to prison and bankrupted one family has come to a close.

Yesterday, in a room above the watchful gods of the San Qing Gong temple in Bedok, members of the Taoist Federation said the money recovered from the lawbreakers – about $1.1 million – has been placed in its care as a charity fund.

The money, said the federation’s chairman Tan Thiam Lye, will be used to help underprivileged Singaporeans pay for school expenses, medical treatment and other welfare services. Applicants for the fund need not be followers of the Taoist faith.

The return of this money to the charge of Singapore’s Taoist community has been a long time coming.

In 1991, the land on which sat the 100-year-old Kew Thian Neo Neo Temple in Balestier Road was sold for a tenth of its value – $132,000 – after three of its four property trustees accepted nearly $1 million in bribes from its buyers.

It was torn down soon after.

Two years later, the three trustees were found out, charged, and sent to jail.

The buyers, a businessman and his son, were spared jail time for their testimony, but were slapped with $6.3 million in fines.

More than 10 years later, the Attorney-General’s Chambers has decided to stop waiting for them to pay up the fine.

The businessman died in 2004, the same year his building supplies company closed down. His son declared himself bankrupt a year later.

Of the fine, father and son coughed up $952,000. Another $147,000 was recovered from the corrupt trio, rounding up the sum to $1.1 million.

The federation has appointed three new trustees to manage the money.

Unlike their predecessors, Mr Lim Chwee Kim, Mr Tan Tee San and Madam Maih Lan Ying hold respected positions in the Chinese community. They also come with years of experience in charity work.

Said Madam Maih, who has given away millions privately in the last 60 years: ‘This is the public’s money now. There will be strict controls and checks to ensure that every cent will go to a good and deserving cause.’

The Taoist Federation is not new to managing large amounts of money.

In 2004, it was appointed by the courts to handle $250,000 that came out of a legal tussle between the trustees of another temple – the Kew Ong Yah Temple in Upper Serangoon Road.

Currently, another $1.2 million of the temple’s funds is being held by the Public Trustee. That money is expected to be handed to the Taoist Federation for safekeeping, too.

Source : Straits Times – 31 Jan 2008

State properties for office use see healthy take-up

Filed under: General — Propertymarketupdates @ 6:20 pm

SLA to release more sites this quarter to further ease office space crunch.

Offices in state-owned properties seem to be catching on. After a quick turnaround time of about six months and about $2 million spent, Phillip Securities has opened its new Phillip Investor Hub at the former Moulmein Community Centre this week.

And following the healthy take-up of state-owned properties – 12 out of 15 properties put up for dedicated office use were awarded in 2007 – the Singapore Land Authority says it expects to release another 32,300 square feet of space for potential office use in the current quarter. Properties that have been earmarked include the former Siglap-Changi Community Centre.

SLA says that of the 12 properties , which have a total of over 1.1 million sq ft of floor area, half have achieved full occupancy.

Foster Wheeler, a US engineering and construction services consultancy, is another company that will move to the former ITE Pasir Panjang site, taking up 70,000 sq ft. SLA believes the company’s move will free up 50,000 sq ft in the central business district or CBD.

SLA director of land operations Simon Ong said: ‘More importantly, the relief supply met the immediate need of tenants decanting from prime locations.’

The new Phillip Investor Hub was leased to Phillip Securities after it emerged as the top bidder in a public tender with a bid of $35,000 a month for the 22,593 sq ft gross floor area (GFA) building, or just $1.55 psf per month.

Phillip Securities will still maintain its corporate offices in the CBD, but it is quite happy to expand part of its operations to SLA properties . Phillip Securities business development director for consumer services Lisa Lee said: ‘Since we have spent close to $2 million to renovate the place, we intend to lease the state property from SLA for as long as we can.’

While the new Phillip Investor Hub will occupy 100 per cent of its leased premises, ERC Holdings, which was awarded the former River Valley Primary School property , plans to sub-let part of the property to other companies to cover some of its costs.

ERC chief executive Andy Ong said that it would have spent between $3.5 million and $5 million when the refurbishment is completed.

Already, it has signed tenants including luxury watch maker Audemars Piguet, which will set up a service centre, and restaurant group Senso Holdings.

While occupying old buildings does come with certain challenges – power supply and plumbing being the main issues – ERC has nevertheless decided to move a substantial part of its offices out. Mr Ong said that ERC would give up three-quarters of its 20,000 sq ft office in Robinson Road ‘after the rent was increased by 350 per cent’.

Knight Frank director of business space Agnes Tay said that push factors notwithstanding, these state properties may not be for everyone. ‘Most of these tenants are very clear about what sort of location they want,’ she added.

Knight Frank is the leasing agent for the former ITE Pasir Panjang site, which has a GFA of 218,891 sq ft, at Alexandra Road. The site was awarded to master tenant RichZone Properties for $288,999 a month or $1.30 psf per month.

Ms Tay said that leasing operations began in Q4 last year. About 40 per cent of the property has been leased out so far. Apart from Foster Wheeler, other tenants include electronics giant LG.

Early-bird tenants were also offered rents at about $4 psf per month but potential interest has bolstered rents and Ms Tay said that the asking rent has now gone up to $5-5.50 psf per month.

But because of the capital investment involved in undertaking such a large site, Ms Tay notes that there is little ‘immediate profit’ for the master tenant. ‘This is not a yield-type play,’ she said.

Hean Nerng Investments, which is in the business of managing properties , has leased the former Gan Eng Seng School at Raeburn Park – with a GFA of 160,000 sq ft – for about $200,000 per month or $1.25 psf per month. It is sub-letting the property at about $5 psf per month and sub-tenants include a government agency.

The property is already 60 per cent leased. Refurbishment of the property will be completed by end-February and Hean Nerng expects to have no problem filling it up. Hean Nerng managing director Kelvin Lim noted that his potential tenants are either escaping high CBD rents or looking for space to expand.

And CBD rents are expected to continue rising this year. Ms Tay said that asking rents for some prime Raffles Place office space is now as high as $19-20 psf per month, ensuring that at least a few more old state buildings are likely to get a new lease of life.

Source : Business Times – 31 Jan 2008

Door shuts on flat applicant of ‘Other’ race

Filed under: General — Propertymarketupdates @ 6:19 pm

Author: John Mc, Henderson Lackey Bangalore, India

I FORMALLY made Singapore my adopted home and took up citizenship in 2006. I believe that my family and I will make many contributions. We are currently posted overseas and look forward to returning home in March.

Like all Singaporeans, we spent a considerable amount of time and money looking for the ideal place to call home, and found such a place in Pasir Ris. When we executed the purchase agreement late last month, there were no restrictions for the ‘Other’ racial group. However, to our dismay, when we went to register the sale with HDB early this month, we were rejected as applications under the ‘Other’ category had closed.

I broadly understand the aim of the national housing policy and the desire to ensure a good racial mix in an estate. However, one needs to look no farther than my family for an example of racial/ethnic diversity. I am a Caucasian who has lived in Asia for the past 12 years. My wife is Malaysian of Indian descent and we have a two-year-old daughter who was born in Hong Kong. I have two older children whose mother is Chinese.

We don’t fit a cookie-cutter definition of race and to simply categorise us as ‘Other’ overlooks our unique blend of race and culture.

I am proud to call Singapore my home but feel it is time for Singapore to recognise that in today’s world the traditional definitions of race/ethnicity no longer exist.

Source : Straits Times – 31 Jan 2008

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