Work to transform the sleepy surroundings of Seletar Airport into the high-tech Seletar Aerospace Park (SAP) is coming along quickly. The first phase of industrial landlord JTC's landmark 300 hectare redevelopment was completed earlier this year. And SAP - which aims to achieve annual value-add of $3.3 billion by 2018 - is beginning to take off. It has got away to a flying start, sealing partnerships with aerospace big wigs such as Rolls-Royce, Eurocopter, and ST Aerospace. Some of the groundbreaking projects within the park include Rolls-Royce's integrated campus - the largest expansion investment in the company's history. The development of SAP stalled last year because of the recession. But now, work is picking up speed again and some key projects are slated for completion this year. British engine giant Rolls-Royce, a key tenant, has said a factory to make engine fan blades for large aircraft - its first such plant outside England - should be completed by December. And two of its other facilities - a regional training centre and a plant to assemble and test engines - will come up in the middle of next year. Helicopter manufacturer Eurocopter's facility will also be ready by end-2010, the company has said. Eurocopter is owned by the European Aeronautic Defence and Space Company, which is the parent of aeroplane maker Airbus. Besides these private sector projects, JTC has started on other projects.
Component manufacturing and maintenance, repair and overhaul facilities
Business Aviation Complex
Innovative industrial solutions
- The Business Times, P34
S'pore not likely to see HK-style property curbs
The new cooling measures aimed at taking the heat out of Hong Kong's sizzling property market are unlikely to be inflicted on Singapore any time soon, according to industry experts.
They believe Singapore's market is not at the same frenzied level as in Hong Kong while recent steps brought in by the Government here need time to take effect.
The Hong Kong measures have targeted speculators with a sliding scale of new stamp duties.
While both Singapore and Hong Kong have similar characteristics - they are dynamic avenues for foreign investment, have scarce land and compete to attract rich investors - analysts say such steps are not likely to be on the cards here.
'It's unlikely the Government will simply follow what other governments are doing,' said Ms Tay Huey Ying, director of research and advisory at Colliers International.
'Singapore's Government has shown itself to be very measured in introducing cooling measures; the steps taken have been trying to temper exuberance without countering demand.'
The Government imposed cooling steps in August that tightened ownership rules for HDB buyers, set new loan limits and increased the amount of time a home buyer must hold on to his property before reselling it if he wants to avoid paying sellers' stamp duty.
Dr Chua Yang Liang, research head at Jones Lang LaSalle, said Singapore is still a way off from needing Hong Kong-style measures.
He said several factors, including transaction volume and the rate of increase in prices, would have to undergo an 'unusual spike in demand' before the Government decides to turn the screw a little tighter. Even if this happens, any further cooling measures that Singapore is likely to take will probably differ from Hong Kong's, he said.
Mr Mohamed Ismail, chief executive of property agency PropNex, said the policies introduced in August should be given time to take effect before the Government decides to act again.
He also believes that incremental changes to property policies are not the way to go.
'It creates instability in the minds of investors and destabilises the local market. Buyers will be kept guessing how often or how soon the policies will change...they will be more detrimental if they come in small doses. 'Keeping this in mind, the Government must strike a fair balance if and when it acts, Mr Ismail said. 'You don't want speculators to drive up prices, but you have to keep the property market exciting enough for investors to bring in the money.'
However, Ms Tay believes that introducing new cooling measures is unlikely to change the mindsets of Asian investors who have traditionally looked at property as investments.
'With attractive low interest rates, buyers are finding (buying property) more worth their while than parking money in the bank...unless cooling measures really impact affordability, property will continue to remain as an alternative investment.'
Data released by the URA earlier this month showed that developers had sold 1,058 private homes last month, excluding executive condominiums, an increase of 16.1% from September.
- The Straits Times, B24
Foreigners invest $1.5 billion in Singapore over three years
Nearly 1,000 investors, mainly from North-east and South-east Asia, have invested over $1.5 billion here over the past three years under the Global Investor Programme. Trade and Industry Minister Lim Hng Kiang said this in a written reply to Member of Parliament Ho Geok Choo (West Coast). Close to 100 of them have invested directly in businesses ranging from engineering, R&D, shipping, asset management and services and trading. This has created some 1,500 jobs under the scheme designed to attract entrepreneurs to make Singapore their home.
From next year, a minimum investment of $2.5 million is required to qualify for the programme. This is higher than the quantum required under similar programmes in countries such as Australia and the United States, which are in the $1.1-million to $2.1-million range. Entrepreneurs here previously needed to invest between $1 million and $2 million.
- Today
Business confidence rises in Q3
Business sentiment among small and medium-sized enterprises (SMEs) has continued to improve, even though profit margins are expected to become thinner over the coming six months across many of the industries surveyed by the Singapore Business Federation (SBF) and DP Information Group. The quarterly study, which measures SMEs' business outlook for the next six months, revealed a four-point rise in confidence in the third quarter from Q2. With the increase, the SBF-DP SME Index now has a score of 60. A reading above 50 indicates that companies expect business to improve, while a reading below 50 indicates business activity is likely to be lower. The results are derived from interviews with 1,400 SME owners and management and the financial performance reported by 3,000 companies.
- The Business Times, P16
- Also quoted in The Straits Times, B22: “SMEs upbeat about outlook: Survey.”
Sabana Reit to snap up 3 properties soon
SABANA real estate investment trust (Reit) - the first syariah-compliant Reit here - expects to buy at least three more industrial properties in Singapore from its sponsor Freight Links Express Holdings to boost its portfolio. The Reit will raise $664 million from its listing at $1.05 per share - against its indicative price range of $1-$1.10 - and offer a distribution yield of about 8.22 per cent for its forecast year 2011, its prospectus showed yesterday. By comparison, recent listing Mapletree Industrial Trust forecast a yield of 7.6 per cent for its fiscal 2010.
- The Business Times, P6
- Also quoted in The Straits Times, B18: “IPO for S’pore’s first syariah-compliant Reit.”
Ascendas Reit looks for assets beyond S'pore
Ascendas Real Estate Investment Trust (A-Reit), which at present owns industrial properties only in Singapore, is looking to acquire assets in the rest of Asia. Its manager has set up a representative office in Shanghai, China, and is also 'actively exploring' investment opportunities in the mainland. Deals may materialise in the next year or so.
As at Sept 30, A-Reit had 92 properties in Singapore worth around $4.8 billion. They include business and science parks, hi-tech industrial properties, logistics and distribution centres and warehouse retail facilities.
- The Business Times, P6
Prime retail rents here 14th highest globally
Prime retail rents in Singapore dipped slightly in the third quarter but were still ranked the 14th most expensive in the world, up from 18th last year. According to CB Richard Ellis, the average prime retail rent here was US$473 psf per year ($51.80 psf per month) in Q3. This reflected a 1.4%drop from last year, and a 0.5% fall from Q2.
'Prime Orchard Road rents have become more competitive,' said CBRE Singapore retail services director Letty Lee. 'Landlords, aware that the third quarter was generally quieter post-Great Singapore Sale, have been more responsive and creative in supporting tenant businesses.'
Nevertheless, Singapore climbed four notches from a year ago to become the 14th most costly place for prime retail shops in the world. New York retained top spot with an annual prime retail rent of US$1,800 psf. Sydney was second with US$1,218 psf and Hong Kong ranked third with US$1,113 psf. Other Asia-Pacific markets ranked ahead of Singapore include Tokyo, Melbourne, and Guangzhou. The average prime rent has stabilised or even risen slightly in some Asian markets such as Shanghai, Beijing, Tokyo, Taipei, and Hong Kong, CBRE said.
But it pointed out that in a number of cities in China and India, the threat of excess new retail space in the pipeline remains.
In Singapore, retailers are gearing up for the year- end festivities. 'Encouraged by an astounding 15% GDP growth forecast, higher tourist arrival estimates for 2010 as well as healthy spending due to projected wage growth, retailers are generally more optimistic about operating conditions for the rest of 2010,' Ms Lee said.
- The Business Times, P35
- Also quoted in The Straits Times, B23: “S’pore tops in office rental growth.”
Another big M'sian property merger in the works
Another merger between two property groups looks to be in the works after Malaysian Resources Corporation Bhd (MRCB) and IJM Land asked for share trading suspensions yesterday pending a material announcement. Should market speculation be true, it will be the second such proposal in a fortnight, as Malaysia's property companies seek partners to add muscle so they can take advantage of more opportunities and grow faster. Property consultants say MRCB is looking to leverage on IJM Land's expertise in residential development given the government's plan to unlock the value of a 1,335 hectare plot at Sungei Buloh, Selangor, previously occupied by the Rubber Research Institute. With both companies' market capitalisation around RM3 billion - IJM Land being worth some RM300 million more than MRCB because of the recent uptrend - analysts say it is a question of pricing and how the deal will be structured.
- The Business Times, P23
HK hints at more property cooling moves
Financial Secretary John Tsang has hinted at further measures to cool the red-hot property market, as real estate agents reported a drop-off in sales after tough new rules were unveiled last week. The measures appeared to have an immediate impact, with secondary residential home sales dropping off over the weekend. Ricacorp, one of Hong Kong's largest real estate agents, said that sales had plunged by 70 per cent on Saturday and Sunday, compared to the previous weekend. ‘Clients are postponing signing contracts,' managing director Willy Liu told AFP. 'I suppose they're taking their time or looking for better deals before committing themselves.' Raymond Chan, regional sales director of Midland Realty, told AFP that sales of newly built properties had also dipped. 'We expected a blow-out sale for a property launch last Friday, but it only sold around two-thirds, far short of our expectations,' he said. -- AFP
- The Business Times, P4
- Also quoted in The Straits Times, B24: “HK may cool property sector further.”
HK property sales slide as tax deters buyers
(HK) William Yue was ready last week to pay about HK$11 million (S$1.83 million) for an apartment in HK's Kowloon Tong district. Now, he's reconsidering. Li Ka-shing's Cheung Kong (Holdings) Ltd fell the most in six months, and Midland Holdings Ltd, the city's largest realtor, plunged the most in a decade.
'The down payment we need to pay would probably be a bit out of our budget,' the 58-year-old Yue said on Sunday. 'We need to negotiate with the seller again and see if he'd bring down the price. Imposing the extra stamp duty should've been enough to curb speculation. All it does is hurt real users like us.' Weekend sales of used homes fell 83 per cent from the previous week, according to data from Centaline Property Agency Ltd.
- The Business Times, P33
China's trust firms halt property loans: sources
(Beijing) Some of China's top trust companies have halted property-related lending and investment following a regulatory order, four sources told Reuters yesterday. Seeing risks in rapid credit expansion to real estate projects, the China Banking Regulatory Commission (CBRC) last week instructed trust firms to assess the risks posed by their portfolios in a fresh move to rein in the red-hot property market.
- The Business Times, P35
China's luxury home prices to overtake HK's
(Shanghai) Shanghai and Beijing's luxury home prices may increase 15% each year to overtake Hong Kong in the next five to 10 years, said Joe Zhang, deputy head of China investment banking at UBS AG. China's tightening measures won't stop prices from rising and may only 'delay' the gains, he said. Monetary policies may also be eased over time to avoid a rise in unemployment, said Mr Zhang, who worked at a property development company in Shenzhen for three years. The economy expanded 9.6% in the third quarter, three times the pace of growth in the US and more than Hong Kong's 6.8% gain. Prices of luxury homes in the Chinese capital and the financial hub, or the top 5% to 10% of each market, will continue to climb as values of mid- and low-end real estate are also rising, Mr Zhang said. China's home price rose for a 17th month in October from a year earlier, gaining 8.6%, the government said. China is unlikely to introduce further property-specific measures as the government shifts its policy focus to controlling inflation, Citigroup Inc said in a report last week. More than one trillion yuan (S$195 billion) would likely go into other areas if the government screens out property investment and speculation demand, Citigroup forecast. There are signs the government measures are starting to have an effect. The increase in October home prices was the slowest in 10 months, government data showed. Sales volume dropped 11% in October from the previous month, while the value of transactions fell 7.7%.
- The Business Times, P35
CapitaLand rolls out 1,715-unit D'Leedon on Farrer Rd
Capitaland has started marketing D'Leedon, the 1,715-unit, 99-year leasehold residential project it will build on the site of the former Farrer Court. Units in the District 10 project on Farrer Road will mostly be priced upwards of $1,600 psf for the most part, BT understands. CapitaLand is expected to roll out the project only in phases. The developer paid a record $1.3 billion for Farrer Court in a collective sale in June 2007 at the peak of the property boom. That worked out to as much as $783 psf of potential GFA. Patricia Chia, who was then head of CapitaLand's residential arm, pegged the project's breakeven cost at around $1,350 psf to $1,450 psf. D'Leedon will comprise seven high-end residential towers and 12 villas. The smallest condominium units will be about 900 sq ft, while some villas will be larger than 4,000 sq ft. Zaha Hadid Architects' design for D'Leedon consists of seven 36-storey, 150-metre towers that will appear to 'grow' from sunken private gardens in the project's landscape. Singaporean architecture and engineering firm RSP has also been involved in D'Leedon's design.
- The Business Times, P35
- Also quoted in The Straits Times, B23: “1,715 units coming up at Farrer Court.”
Exchange Rates (extracted from xe.com)
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ST Index change: 3,179.61 (-11.31) *As at Tue 23 Nov 2010 09:24 AM
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