Complete Property Market Updates of Singapore

July 24, 2008

Viet market seen hurting S’pore firms

Filed under: Developer News,General,Vietnam — Propertymarketupdates @ 2:46 am

Analysts say they may end up with unsold homes given slowing sales of late

SINGAPORE developers in Vietnam are likely to be affected by a cooling residential property market and tighter government regulations, research houses say.

Keppel Land, CapitaLand, Guocoland, Fraser & Neave, Allgreen and Chip Eng Seng are six developers with residential projects in Vietnam, said BNP Paribas, and Keppel Land has the largest exposure with about US$7 billion of project value.


Safe as houses? Keppel Land’s new Dong Nai township project; the company has the largest exposure, about US$7 billion of project value, among Singapore players

While margins may exceed 30 per cent, development risks are high as well.

‘Sales have slowed down in the past few months. Selling prices have also become more realistic and some speculators are leaving their deposits forfeited,’ BNP Paribas said in a report.

According to BNP Paribas, the first phase of Keppel Land’s The Estella fetched an average selling price of about US$2,200 per square metre (psm) early this year. This is around 30 per cent lower than the highest price of US$3,200 psm at end-2007 by CapitaLand’s The Vista, which is across the road.

In the same vein, Morgan Stanley said last week that developers may end up with unsold inventory, should speculators forgo their options to purchase units.

‘While developers have been announcing strong buying interest for their projects for some time, most buyers have only paid the respective deposits for registered papers – that is, the options to purchase units,’ Morgan Stanley said in a report. At The Estella, for instance, sale-and-purchase agreements have been signed for only 200 of the 650 units launched.

Morgan Stanley also projected a 38 per cent devaluation of the Vietnamese dong against the US dollar from current spot levels over the next 12 months. A weaker dong would make residential property less affordable, since rents and prices are pegged to the US dollar.

Morgan Stanley said that it foresees developers delaying launches amid poor sentiment. And it is bearish on prospects for Keppel Land – ‘the most vulnerable, with NAV (net asset value) potentially declining by seven cents a share to $7.18 a share’. For CapitaLand and Allgreen, however, Morgan Stanley analysts believed that the impact on NAV would be negligible.

BNP Paribas remained neutral overall on Singapore developers in Vietnam. ‘Long-term fundamentals remain favourable with a high urbanisation rate, rising incomes and affluence, returning overseas Vietnamese and an influx of expatriates,’ it said.

Both research houses also highlighted regulatory risks in Vietnam. Morgan Stanley, for instance, said that the residential property market could cool further when a 25 per cent capital gains tax on property transactions takes effect in January 2009.

‘The Vietnamese government is taking pro-active measures to address economic challenges facing the country,’ Keppel Land was quoted as saying in a Bloomberg report last week. ‘Foreign investors are still confident of the long-term growth potential of Vietnam. Fundamentals in the property market remain strong.’

Source : Business Times – 10 Jun 2008

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June 11, 2008

DP Architects wins Viet design contest

Filed under: General,Vietnam — Propertymarketupdates @ 5:09 am

DP Architects has beaten nine Vietnamese and international architectural firms to win a design competition for the Sabeco World Trade Centre in Ho Chi Minh City. This follows its winning design for the Bank for Investment and Development of Vietnam last year. The WTC design complies with current Singapore standards, regulations and codes of practice where applicable.

Source : Business Times – 21 May 2008

February 28, 2008

Growth in S-E Asia property market sustainable: DTZ

Filed under: Agency News,Commercial,Indonesia,Malaysia,Rental News,Vietnam — Propertymarketupdates @ 4:16 pm

THE property markets of South-east Asia are expected to sustain the buoyant growth seen in 2007, says DTZ Debenham Tie Leung.

DTZ said that residential markets in the region are expected to continue to grow, ‘driven by steady economic expansion, increasing affluence and increasingly attractive projects as developers strive to refine concepts’.

In Vietnam, DTZ noted that demand for residential properties, which was already growing fast, was bolstered by the recent relaxation in rules for housing ownership, allowing foreign land ownership terms to increase from 50 to 70 years. DTZ said this also encouraged foreign developers to build residential properties there.

In Malaysia, DTZ said take-up was encouraging for high-end condominiums in Kuala Lumpur, with a complete sell-out for several luxury projects. This was supported by the relaxation of rules for foreigners to buy residential properties and the waiver of real property gains tax last April. While monthly average gross rents remained unchanged at RM4 (S$1.25) per square foot, average capital values increased 3 per cent year-on-year to an average RM500 (US$152) psf.

The residential market in Thailand is also expected to recover, as the political situation improves and developers are encouraged to launch projects which have been withheld.

In the office sector, DTZ says demand for office space in Vietnam is expected to continue to be underpinned by limited potential supply. It said that in Vietnam, most potential supply comprises non-prime office buildings, ‘which will lead to greater competition for prime office space’. Occupancy remains high, at above 95 per cent, while Grade A rents average US$3.70 psf per month in Hanoi and US$4.37 psf per month in Ho Chi Minh City.

The office market in Kuala Lumpur was also active, with increasing demand by the services, oil and gas, information technology and financial sectors. Together with limited new supply, prime office rents rose 7.8 per cent year-on-year to RM62.65 (US$18.16) psm.

Jakarta also saw office occupancy rates of over 90 per cent. Rents did, however, remain at about US$0.76 psf per month amid fluctuations in exchange rates.

The Bangkok office market was the only one that was subdued, with a negative net absorption for H1 2007. DTZ said this was due to a less favourable operating environment which affected investors’ confidence.

Source : Business Times – 5 Feb 2008

December 20, 2007

CapitaLand to expand into offices in Vietnam

Filed under: Developer News,Vietnam — Propertymarketupdates @ 11:06 am

CAPITALAND could double the number of homes it is building in Vietnam to about 6,000 units in the next three years – from about 2,800 homes now – chief executive Liew Mun Leong told reporters in Vietnam yesterday.

The Vietnam market also presents opportunities for CapitaLand to expand beyond its present service apartment and residential portfolio to include offices, retail and integrated leisure, entertainment and conventions projects, Mr Liew said.

For offices, CapitaLand is looking to build the equivalent of its Capital Tower and Raffles City projects in Vietnam as well – provided it can find suitable sites. And as for retail, there are opportunities to grow the business segment as there is a lack of an organised retail scene in Vietnam, Mr Liew said.

For CapitaLand’s fledgling integrated leisure, entertainment and conventions business segment, the developer is now prospecting for sites in Vietnam. When the opportunity arises, CapitaLand will also look into setting up private real estate funds for its businesses in Vietnam.

‘Overall, as a long-term player, CapitaLand sees tremendous growth potential in Vietnam as it is one of the fastest growing economies in Asia,’ the company said.

Channel News Asia, reporting from Vietnam, said that CapitaLand is exploring the idea of creating a US$300 million development fund which could invest in a range of Vietnamese properties. It also reported Mr Liew as saying that the US sub-prime woes may not have a huge impact on the Singapore property market.

Source : Business Times – 5 Dec 2007

November 30, 2007

GuocoLand to develop 1st project in Vietnam

Filed under: Developer News,Vietnam — Propertymarketupdates @ 8:58 pm

GUOCOLAND yesterday broke ground on a US$58 million development in Vietnam – its first project in the country.

The 17.5 ha site will be home to The Canary – an integrated development which will house some 1,200 residential apartments, a hotel, a trendy retail mall and an international school.

GuocoLand said that the first phase of the residential apartments will be launched soon. This will be followed by the development of the first phase of the retail mall.

The entire development is scheduled to be completed in five to six years’ time, the developer said. ‘However, the actual progress will depend on market conditions in Vietnam,’ said Lawrence Peh, GuocoLand’s general manager for Vietnam.

The Canary is located near the Vietnam-Singapore Industrial Park, near Ho Chi Minh City. The project will be the first fully integrated development in Vietnam’s Binh Duong Province, GuocoLand said.

‘When The Canary is completed, it will add vibrancy to Binh Duong Province, which is a leading recipient of foreign direct investment among Vietnam’s provinces,’ said GuocoLand in a statement.

Besides GuocoLand, many other Singaporean developers – including Keppel Land, CapitaLand, Frasers Centrepoint and Allgreen Properties – have of late made forays into Vietnam’s booming property market.

GuocoLand’s shares closed five cents down at $5.20 yesterday. The company’s stock has climbed 128.5 per cent since the start of the year.

Source : Business Times – 21 Nov 2007

GuocoLand looking out for more project sites in Vietnam

Filed under: Developer News,Vietnam — Propertymarketupdates @ 8:58 pm

SINGAPORE developer GuocoLand Group yesterday broke ground on its maiden development in Vietnam – The Canary – and says it is already on the lookout for further development sites.

The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy, said a Singapore agency official at the ground-breaking ceremony yesterday.

The 17.5ha development will boast residential, commercial, hotel and educational facilities. It is the first integrated project to be built by a foreign investor in Vietnam, outside the commercial centre Ho Chi Minh City and the capital Hanoi.

It is being built in affluent Binh Duong province, 17km north of Ho Chi Minh City, near the Vietnam- Singapore Industrial Park (VSIP).

The flagship industrial zone was started in 1996 by a consortium of five Singapore firms led by SembCorp Parks, in a venture with Vietnamese state-owned Becamex IDC.

With a gross floor area of 290,000 sq m, The Canary is expected to yield 1,200 homes, in addition to a shopping mall with 85,000 sq m of retail space, a hotel, an international school and a sports complex. Homes will also face the popular 27-hole Song Be golf course.

Centre director Chiong Woan Shin of IE Singapore’s Ho Chi Minh City office told The Straits Times that the project reflects the level of confidence of Singapore companies.

Construction of the residential area’s first phase is under way and due for completion in 2009.

The two- to four-bedroom apartments, ranging from 85 sq m to 160 sq m, will be targeted at locals and expatriates alike, said Mr Lawrence Peh, general manager of Guoco- Land Vietnam.

GuocoLand’s international investment general manager Ho Sing added that the group is looking for more locations in Vietnam for further projects.

CBRE Vietnam’s managing director, Mr Marc Townsend, said he expected the project to be well-received. ‘With so many people working at the VSIP, it will be time- and cost-efficient to live there,’ he said.

The project will be launched for sale next year. He estimates that the homes will be priced at a premium above US$800 per sq m, or S$108 per sq ft – a price fetched by a residential project nearby.

IE Singapore’s Ms Chiong added that more Singapore companies were venturing into Vietnam.

But fast-rising home prices are also proving to be the bane of ordinary Vietnamese and even some expatriates. This is exacerbated by speculators flipping properties for a quick profit.

Property prices have jumped 50 per cent in Vietnam since the start of this year, and in Hanoi and Ho Chi Minh City, they have tripled.

The result is that owning homes in the cities is far beyond the means of most ordinary Vietnamese. The issue is a hot topic in the country’s legislature.

Source : Straits Times – 21 Nov 2007

August 27, 2007

CapitaLand unveils another Viet project

Filed under: Developer News,Vietnam — Propertymarketupdates @ 3:57 pm

CAPITALAND has signed a conditional joint venture (JV) agreement with Azure City Co to develop a 1,200-unit high-rise condominium project in Ho Chi Minh City, Vietnam.

This brings CapitaLand’s pipeline of residential units in Vietnam to 2,800 homes, after venturing there in 2006.

CapitaLand will take a 75 per cent stake in the JV for $48.8 million.

Azure City Co, a local Vietnamese company involved in infrastructure and property, will hold the remaining 25 per cent.

The site is located in Ho Chi Minh City’s District 9 and CapitaLand said it will develop the project over the next three to four years.

CapitaLand Residential CEO Lui Chong Chee said: ‘With the country’s strong economic growth fuelling rapid urbanisation, we see demand for well-built and well-designed homes rising in both metropolitan cities like Ho Chi Minh City and Hanoi, as well as the other major cities in the country.’

This will be CapitaLand’s fourth residential development in Vietnam.

All four are in Ho Chi Minh City. The first is the 750-unit Vista in District 2 and CapitaLand says that the first phase, which was launched in June, has been fully taken up.

A 600-unit development in District 7 will be launched by end-2007.

CapitaLand also announced earlier this month that it will develop a 300-unit landed-housing develop with Azure City Co.

Source : Business Times – 23 Aug 2007

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