Tag Archives: developers

More foreign developers taking on red-hot S’pore market

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Packed showflats and brisk sales — Japanese developer Sekisui House said the hot demand for property in Singapore has helped to boost its revenue.

It hopes to increase the revenue contribution from its overseas markets to 10 per cent in the short-term. It is currently developing projects in Singapore, China, the United States and Australia.

Kenta Konishi, managing director of Sekisui House Singapore, said: “Why we are focusing on overseas market is that Japan is facing population decline and the economy is stable, but not going up. So we need some opportunity to go overseas to cover the Japanese sales and revenue. We looked at the markets and Singapore was one with good market conditions.”

Sekisui House is jointly developing several projects in Singapore with its partners Frasers Centrepoint and Far East Organization. They include QBay Residences in Tampines, Watertown in Punggol and eCO at Bedok South.

Frasers Centrepoint and Far East Organization said the partnership enabled them to tap into the network and extensive building expertise of Sekisui House. It also provided fresh perspectives which allowed the three developers to introduce more innovative concepts and features to their developments, which will in turn benefit buyers.

Meanwhile, Singapore developer Keppel Land said it has been able to tap best practices from foreign partners in their joint venture projects, such as Bugis Junction and One Raffles Quay.

Recently, it has joined hands with China VANKE, the largest residential property developer in China, to develop a condominium project in Tanah Merah.

Tan Swee Yiow, president (Singapore) at Keppel Land, said: “The collaboration is really an opportunity for us to leverage on their strong local knowledge and extensive network in China and hopefully, that would help us to enhance our presence in high growth cities in China. We would like to learn the best practices in china and hopefully we can also tap on their large customer base, especially for those customers who want to have properties in Singapore.”

China VANKE told Channel NewsAsia that it is drawn to the mature property sector in Singapore and it is keen to learn about project development and management.

In recent years, analysts said there has also been more foreign developers, especially from China, in the mass market and executive condominium segments.

Some analysts said foreign developers have delivered some good quality residential projects over the years, and provided creative ideas in terms of space utilisation, for instance. However, there is also a concern that having too many foreign developers in the market will push up land cost.

Ku Swee Yong, CEO of International Property Advisor, said: “Land is a finite resource. We actually see the more players there are, the more land prices will be ‘bidded’ up. So the basic cost of any projects would go up the more players bid for the projects.”

For instance, China’s Qingjian Realty (South Pacific) Group put up the highest bid of S$216 million for an executive condominium site in Woodlands. That is about nine per cent above the second highest bid by Bellevue Properties, a unit linked to City Development.

Source : Channel NewsAsia – 14 May 2013

Oxley ‘to build hotel’ on Pines land

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The Pines club on Stevens Road is expected to make way soon for a new 735-room hotel housed in two eight-storey blocks, as well as a couple of two-storey commercial buildings, people familiar with the matter told TODAY, following the sale of the property to “shoebox apartment king” Ching Chiat Kwong of Oxley Holdings for S$318 million.

A four-storey clubhouse with a basement will replace the existing 30-year-old clubhouse that currently has about 1,500 members, the sources said. The sale by businessman Peter Kwee’s Exclusiv Resorts to Oxley Holdings’ subsidiary Oxley Gem comes after months of speculation over the future of the club.

Several businessmen were said to have been interested in buying over the premises from Mr Kwee, who bought the club in 2002 for just over S$100 million from developer Chng Heng Tiu, who had defaulted on a debt using the club as a collateral. At one time, there was even talk of the premises — sited on about 18,500 sq m of land — being converted into a condominium development.

As it will be the Oxley group’s first hotel — at present it is involved in residential, industrial and commercial properties — the company will be convening an extraordinary general meeting (EGM) to seek shareholder approval for the proposed development, which has been given provisional approval by the Urban Redevelopment Authority.

Shareholders will be notified later on the date of the EGM.

According to Oxley’s stock exchange filing last Friday, the purchase price was arrived at “after taking into account current market prices of properties in the surrounding area and the company’s assessment of the property’s redevelopment potential”. No full valuation has been carried out.

The company has paid a sum of S$10 million for the option to purchase, according to the filing. Another S$21.8 million will be paid upon exercise of the option, which will be done within a week of getting Oxley’s board approval, while the remainder of the purchase price will be paid on completion of the acquisition that is expected to take place around July 1.

The club’s existing members have been offered the choice of temporarily using the facilities of Mr Kwee’s Laguna National Golf and Country Club as non-golfing members and paying its subscription fees, or keeping their membership on hold for the three years that construction of the development is expected to take, according to a letter to Pines members. Those accepting the latter offer will not have to pay subscriptions for the three years and will have their 30-year membership extended by three years.

The letter to members pointed out that the club had been losing money over the last 10 years amid a dwindling membership. Membership fees for the club have plummeted from a peak of S$40,000 in the 1990s to less than S$6,500 at present, including the S$4,000 transfer fee.

Oxley, which as at the end of June last year had net debt of about S$800 million, added that the purchase would be funded by internal resources, bank borrowings, as well as S$100 million in 6-per-cent guaranteed bonds due in 2015, of which S$50 million will be redeemed after the first year.

For its financial year ended June 30, 2012, Oxley reported a net profit of S$16.9 million on revenue of S$159.4 million. But for the half year ended Dec 31, 2012, it produced S$109.8 million in revenue and profit of S$18 million.

Source : Today – 22 Mar 2013

Ho Bee not ruling out launching REIT in next 2 years

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Luxury property developer Ho Bee Group is not ruling out launching a real estate investment trust (REIT) in the next two years.

These are for its commercial properties, including its latest mixed development The Metropolis.

Ho Bee’s chairman Chua Thian Poh said this on Thursday on the sidelines of the ceremony to mark the completion of structural works for The Metropolis.

Even before the two towers are completed by end-September, some 60 per cent of the 1.1 million square feet of lettable space at The Metropolis has been taken up.

One of its key corporate tenants is Shell, which will converge its offices in Singapore.

The oil giant is leasing some 130,000 square feet of space to house its 1,000-strong office staff in Buona Vista.

Lee Tzu Yang, chairman of Shell Companies in Singapore, said: “We are really looking for a modern Grade A office building that has flexible floor plates that will allow us to be flexible in how we arrange our offices.”

Ho Bee expects The Metropolis to be fully occupied with offices, food and beverage outlets and a gym by the end of 2014, with a steady income stream to be reached by 2015.

Some analysts estimate this steady income to be about S$70 million a year. And this will translate to some S$50 million in profit annually for Ho Bee.

Mr Chua said: “The strategic decision to develop a commercial development for long-term investment is part of our overall plan to grow our recurring income. The Metropolis offers us this opportunity when the towers are fully occupied.”

The Metropolis, together with four other commercial properties owned by Ho Bee, could potentially be converted into a REIT in two years.

Market watchers said that going into commercial properties can help mitigate business risks for the group.

Experts said the leading developer in Sentosa Cove is already seeing dwindling demand for its luxury properties since the introduction of cooling measures in recent years.

Wilson Liew, an analyst at Maybank-Kim Eng, said: “Currently, their residential landbank is confined largely to residential Sentosa Cove. We see that demand has not really picked up compared to 2008, 2009. That may take some time to resume. We think that it may take one or two years before demand picks up again.”

Foreign investors, which typically make up a third of buyers in the luxury property market, have largely stayed away due to the Additional Buyers Stamp Duty (ABSD).

The ABSD for foreigners has been raised from 10 per cent to 15 per cent in the latest round of measures.

Source : Channel NewsAsia – 21 Mar 2013

OUE exploring setting up of REIT

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Property developer Overseas Union Enterprise (OUE) is exploring the establishment of a real estate investment trust (REIT) on the mainboard of the Singapore Exchange (SGX).

In a filing with the SGX on Thursday, OUE confirmed that it is in “preliminary discussions” with banks.

But the property developer added that details such as the properties to be injected into the REIT, the pipeline assets of the REIT, size of the offering and timeframe are under review.

Earlier reports had speculated that OUE, which owns commercial properties and hotels, was planning a listing of a hospitality REIT in the second half of the year.

OUE’s hotel properties include Mandarin Orchard Singapore, Marina Mandarin Singapore, Crowne Plaza Changi Airport Hotel, Meritus Pelangi Beach Resort & Spa Langkawi, Meritus Mandarin Haikou and Meritus Shantou China.

Source : Channel NewsAsia – 21 Mar 2013

Top Global adjusts condo prices in response to cooling measures

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Real estate group Top Global has made a 10 to 15 per cent downward adjustment to the prices of its two soon-to-be-launched condominiums in response to the recent slew of property cooling measures, and further changes may be made according to demand.

The freehold residential developments — R Maison and E Maison — are situated at Braddell Road and Somerville Walk, and are targeted at mid- to high-income earners. After the reductions, the 175 units at the two complexes, which are together called The Maisons, have an anticipated price range of between S$1,350 and S$1,450 per square foot.

“Given that The Maisons are among the first developments rolled out after the recent Additional Buyer’s Stamp Duty (ABSD), our pricing strategy will factor in the additional cost of home purchases,” said Mr Hano Maelo, Chief Executive Officer of Top Global.

The ABSD, which was one of the additional property cooling measures announced by the Government on Jan 11, applies to second homes for Singaporeans and first homes for permanent residents.

Ms Jennifer Chang, Chief Operating Officer and Executive Director of Top Global, added that the company will adapt its pricing and marketing strategy after seeing the response to R Maison, which is due to be launched by the end of the month. E Maison is scheduled to launch early next month.

Top Global is upbeat about prospects for the two developments despite the cooling measures.

“Our main selling points are value and location … as long as interest rates remain low and buyers continue to enjoy ample liquidity, we envisage a healthy demand,” Mr Maelo said.

The full impact of the cooling measures has yet to be seen. The most recent property sales data indicated that demand has stayed robust, but market watchers have cautioned that it might not be until this month or the next before a true picture emerges of how the measures have affected sales and prices.

Deputy Prime Minister Tharman Shanmugaratnam said in an interview with Bloomberg last week that there is still “some ways to go” before property prices are at an acceptable level.

Source : Today – 7 Mar 2013

CDL looks to diversify its assets beyond Singapore

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With an expected slowdown in the property market at home, homegrown developer City Developments (CDL) is now looking to diversify more of its assets beyond Singapore.

While CDL’s mid-priced condominiums like those at the Echelon in Alexandra should continue to see demand, the same cannot be said for its high end properties.

And to push sales in this segment, CDL said it is coming up with new strategies but it is keeping tight lipped on details about the sales strategies.

Given its strong financial position, CDL is able to hold back from launching new high-end projects till market sentiment improves.

The company also has an added advantage as the land that it acquired for high-end properties were bought at lower prices.

CDL’s executive chairman Kwek Leng Beng, said: “Sentosa has no more land for development. Even if demand is so small, my cost is actually based on 2006. If you take into account 2006 and today’s price, how good it is to be able to enjoy such a low price, I keep it.”

The company recently reported that its revenue reached S$3.3 billion, the highest in its 50-year history.

It booked a 53 per cent on year rise in fourth quarter net profit to S$249.35 million while revenue was up 22.8 per cent in the same quarter to S$886.37 million.

However for the full year, net profit fell by 15.1 per cent to S$678 million due to one-off gains made in 2011.

Property development made up 49 per cent of pretax profits while hotel operations made up another 26 per cent.

Property development and hotel operations continued to be the lead contributors to CDL’s earnings. Looking ahead, the group will also be gradually diversifying property investments and look beyond Singapore for more opportunities.

Wilson Liew, investment analyst at Maybank-Kim Eng, said: “Global headwinds will come from their hotel operations, especially in the second half. From the new numbers, some of the gateway cities have experienced a decline in terms of RevPAR (revenue per available room). So we expect that to be a big part of the hotel story for this year.”

One area which CDL may expand into is in the Iskandar region in Johor Bahru.

Mr Kwek said that may take some time as Iskandar, three times the size of Singapore, is only 20 per cent developed.

Mr Kwek said: “Many of you have you have forgotten that CDL in the old days still has some land within the Iskandar Region which were held at a dirt cheap price you can never dream of buying today. We are looking into this. I want Iskandar to be more developed before I capitalize on this land.

To commemorate its 50 year anniversary, CDL proposed a special ordinary dividend of five cents on top of the ordinary dividend of eight cents per share.

This brings total dividend for 2012 to 13 cents a share.

Source : Channel NewsAsia – 28 Feb 2013

Overseas Union Enterprise considering REIT IPO

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Overseas Union Enterprise (OUE) is planning to raise up to S$1 billion from the listing of its hospitality assets in Singapore this year, Dow Jones Newswires reported, citing two people with knowledge of the deal.

OUE could launch an initial public offering for a hospitality-focused real-estate investment trust (REIT) in the third quarter of the year, the sources said, according to the report.

A spokeswoman for Overseas Union confirmed to Dow Jones that the company is considering listing at least two of its Singapore assets through a REIT. The five-star Mandarin Orchard hotel and the adjoining Mandarin Gallery shopping mall are the main candidates for the REIT’s initial portfolio, while the Crowne Plaza Changi Airport hotel could also be added, she said.

“The REIT option is a good way for us to unlock value in those properties while retaining control over the assets,” said the spokeswoman, who declined to be named.

Source : Today – 27 Feb 2013

CapitaLand eyes China after its Q4 profit drops 45%

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CapitaLand Group’s chief executive, Lim Ming Yan, expects further moderation in the Singapore’s real estate market this year, and is targeting China as a key profit centre.

Some analysts, however, warn that economic and political uncertainty in China may limit CapitaLand’s pricing capability.

CapitaLand will be scouring for new projects in China and its home base in Singapore, where a government-driven slowdown has forced discounts on recent residential projects.

Lower fair value gains on its property portfolio and loss provisions on projects in Vietnam, China and Kazakhstan have resulted in a 45 per cent slump in net profit for the fourth quarter of 2012.

CapitaLand attributed the decline in fourth-quarter profits to lower contributions from projects completed in 2011, including in Vietnam and Abu Dhabi.

In addition, it reported a S$57.8 million provision for losses involving projects in Vietnam, China and Kazakhstan.

The company’s net profit fell to S$262.7 million for the three months ending December 2012, from S$476.6 million in the same period a year earlier.

For all of 2012, CapitaLand booked a 12 per cent drop in net profit to S$930 million.

The fourth-quarter decline came despite a 5 per cent increase in revenue to S$1.1 billion.

The company saw steady growth in China where home sales accelerated in the second half and doubled for the full-year.

The property developer said it will channel more investments into its newly redefined core businesses, including CapitaMalls Asia (CMA) and its serviced apartment business, Ascott.

Lim Ming Yan, president and group CEO of CapitaLand Group, said: “If we want to bring up the overall performance of the group, I think it’s important that management focuses on the core businesses of the group.

“In areas that we’ve classified as non-core, it is definitely in management’s KPI to resolve some of these issues before the end of the year or substantially get it done before the end of the year.”

However, some analysts warn that government intervention could hurt its earnings.

Eli Lee, an OCBC Bank analyst, said: “In China, we’ve come to see sales over the last year almost double to 3,000 units sold. We have been hearing chatter and seeing some preliminary signs that the government will cool down the market.

“That is injecting some uncertainty, especially in equity prices, in terms of how onerous these measures will be and what impact they will eventually have. In my view, this being the year of political transition in China, they are unlikely to want to rock the boat excessively.”

Despite the global economic uncertainties, CapitaLand said it is still optimistic about growth opportunities in Asia and will be focussing its resources in Singapore (and) China, as well as regional investments in Japan, Malaysia and India.

As for Singapore’s residential market, the company still aspires to gain 8 to 10 per cent of the market share here.

OCBC Bank’s Eli Lee said: “In Singapore, it’s kind of well-known that CapitaLand is struggling with a lot of inventory in D’Leedon and to a small extent, the InterLace as well.

“After the last cooling measures, I think it’s a good sign that they showed some willingness to put some price incentives to take the bitter medicine, so to speak, to sort of get sales moving again.

“They have two more sites in their land bank that are not launched — one in the East Coast and one in Bishan. And in my view, they’re probably reviewing their residential strategy in Singapore and trying to figure out how they’re going to come up with a product that’s compelling enough.”

This is in spite of the government’s latest round of cooling measures.

CapitaLand’s CEO Lim said: “We expect measures to moderate the volume and selling price. We believe that what we have is realistic pricing that will result in a certain amount of sales, and the outcome is that it has definitely helped in moving sales.”

Mr Lim, who took the helm at CapitaLand in January, said the company will avoid venturing into new emerging markets in 2013.

Going forward, Mr Lim said: “If we talk about a completely new market, we have to be a little bit more measured in our approach as a group. But individual units, in the case of Ascott or CMA, they would be in a better position because the threshold to achieve those economies of scale is much lower.”

CapitaLand has declared a final dividend of 7 cents per share, compared to 6 cents a year ago.

Source : Channel NewsAsia – 21 Feb 2013

Property developers still anxious amid cooling measures: REDAS

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The Real Estate Developers’ Association of Singapore (REDAS) said property developers are feeling anxious as the latest round of cooling measures took effect last month.

Singapore’s top property developers gathered on Friday to celebrate the Lunar New Year.

Newly-elected REDAS president Chia Boon Kuah told a crowd of 500 that property developers will continue taking part in land bids, which form their main source of development content.

Mr Chia said: “We are naturally anxious in the light of recent cooling measures, at a time when the property cycle is maturing amid continued global uncertainties. As a major stakeholder in the well-being of our eco-system, REDAS acknowledges the government’s desire to achieve a soft landing of the property market.”

Mr Chia added that property developers are committed to helping the market stabilize. He is optimistic in the long-term, as housing and population numbers are slated to increase.

Source : Channel NewsAsia – 15 Feb 2013

Far East Organization is best-selling developer again

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Far East Organization has topped the list of property developers in Singapore yet again for best sales figures last year at 2,181 private homes, or around 10 percent of the total number of 22,290 new units sold.

Among its best-selling projects were The Hillier in Hillview Rise and Watertown in Punggol, according to DTZ Research.

In second place is City Developments Limited (CDL) and parent company Hong Leong Group with 1,674 units, mainly accounted for by Bartley Residences and The Palette in Pasir Ris.

Frasers Centrepoint, Qingjian Group and Hoi Hup Realty also placed in the top five.

Of the top 10 developers, two were Chinese firms – Qingjian Group and Hongkong Land. Qingjian landed in the list for the first time, helped by sales from River Isles in Punggol, Nin Residence in Potong Pasir and Riversound Residence in Sengkang; while Hongkong Land was behind the launch of Ripple Bay in Pasir Ris through its subsidiary MCL Land.

According to Lee Lay Keng, Associate Director (Research) at DTZ, majority of the best-selling projects from the top 10 developers came from Government Land Sales (GLS) sites.

Sales of private residential properties were backed by demand in suburban areas, experts said. As a result, developers who focused on luxury homes failed to make it in the top 10.

On the other hand, smaller players like Fragrance Properties and Macly Group made the cut.

Fragrance saw robust sales at its smaller projects with less than 150 units except for its largest project – the 689-unit Parc Rosewood in Woodlands. Macly’s sales activities were also supported by projects with smaller-sized units such as Guillemard Edge, Eon Shenton and Natura@Hillview.

Source : PropertyGuru – 14 Feb 2013