Property Market Updates (23 Nov 2010)

Flying start for Seletar Aerospace Park

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)

1.00 SGD = 0.771 USD

1.00 SGD = 5.131 CNY

1.00 SGD = 2.395 MYR

1.00 SGD = 0.482 GBP

1.00 SGD = 870.319 KRW

1.00 SGD = 35.225 INR

1.00 SGD = 6,962.554 IDR

ST Index change: 3,179.61 (-11.31) *As at Tue 23 Nov 2010 09:24 AM
SIBOR (3 mths): 0.43751 (S$)

SWAP (3 mths): 0.26170 (S$)

Property Market Updates (22 Nov 2010)

New high of $2,515 psf at Icon

Prices at the 646-unit Icon on Gopeng Street reached a new high of $2,515 psf on Oct 15, when a 1,119 sq ft penthouse on the 46th floor was sold for $2.8 million. This breaks the previous record of $2,457 psf in November 2007, when another similar-sized unit on the same floor went for $2.75 million. The new high set at the four-year-old, 46-storey condominium was for a prime unit sold by developer Far East Organization (FEO). FEO sold two other 1,119 sq ft units last month, on the 45th floor, for $2.49 million ($2,224 psf) and $2.42 million ($2,168 psf). Meanwhile, lower-floor units are also seeing a surge in prices, increasingly crossing $1,700 psf. Kelvin Lau, an agent with Propnex, says he sold a few one- and two-bedroom units last month at $1,600 to $1,800 psf, adding that most sellers are now asking for $1,800 psf and above. At the 62-storey, 280-unit Altez, also by FEO and located on Enggor Street adjacent to Icon, an 861 sq ft unit on the 38th floor most recently went for $2.2 million ($2,605 psf) in August. Altez is expected to be completed in 2015. Meanwhile, at the newly completed 168-unit Lumiere by BS Capital along Mistri Road, adjacent to Anson Centre, a 505 sq ft unit on the 20th floor sold for $930,000 ($1,838 psf) on Oct 25. Lau adds that Icon is popular with local and overseas investors, as the project comprises mostly small units and enjoys a high rental yield. According to him, owners are asking for $4,000 a month and above for a one-bedroom unit. The 99-year leasehold condo was, in fact, the first inner-city residential project to be launched in the heart of the CBD six years ago, and units are highly sought after owing to its proximity to offices in the Tanjong Pagar district and the short walking distance to the Tanjong Pagar MRT station. Restaurants, pubs and supermarkets are also within walking distance, while there are cafés, restaurants and shops at Icon Village. Interest could also grow thanks to the redevelopment of plots in the Malaysian railway station and the port area into a new waterfront district and a desirable work-live-play neighbourhood. It is evident that owners at the Icon enjoy good rental demand and capital gains as the neighbourhood is revitalised.

- The Edge


Not yet sold out

Many high-end condominium units are sitting unsold even after completion, as the luxury home market remains quieter than in previous years. 12 developments have been completed this year, each with more than 10 units unsold as of last month, according to new data released by CB Richard Ellis (CBRE). Of these, 10 are in prime areas, with a total of 384 unsold units. Wing Tai's Belle Vue Residences in Oxley Walk, which obtained its TOP in the second quarter, has not found buyers for 61 of its 176 units as of last month. Paterson Suites, which had its TOP in the third quarter, has 79 units out of 102 yet to be taken up. Another eight projects are expected to receive TOP soon, each with at least 10 unsold units, added CBRE. Seven of these are also in prime locations: Districts 9, 10 and 11 - which cover Orchard, Holland, Newton and Bukit Timah - and the Sentosa and Tanjong Pagar areas. In all, buyers are still needed for more than 1,000 posh homes in projects already completed or expected to be ready by early next year. Experts say that some developers have yet to launch their remaining units as prices are still below their previous peak. Colliers International's director of research and advisory Tay Huey Ying said that luxury home prices are now just 5.4% shy of their peak in 2007. While volumes are still thin, prices are gradually creeping up, she added. Some luxury home buyers are also keen to 'feel and touch' their homes and the quality of the finishes before making such pricey purchases. This might give completed projects at least some kind of an edge over new launches.

- The Straits Times, B20


Citi's co-CEO for Asia-Pac moving here

CITI'S co-chief executive for Asia-Pacific, Mr Shirish Apte, will be relocating to Singapore from Hong Kong. This is a move that underlines Citi's commitment to Singapore and signals the country's importance as a financial hub, the bank said. Mr Apte has direct responsibility for South Asia, including Australia, India and the Asean countries. Mr Apte's move is a coup for Singapore because this essentially affirms that the Asia-Pacific region will be jointly managed by Citi from Singapore and Hong Kong. The other foreign bank that arguably houses top senior talent in Singapore is Standard Chartered Bank (Stanchart). Out of its five group executive directors, one is based in Singapore. Many of its wholesale banking global heads are based in Singapore as well.

- The Straits Times, B18
- Also quoted in The Business Time, P3, “Citi stations Asia-Pac CEO Apte in S'pore”.


Exchange Rates (extracted from xe.com)

1.00 SGD = 0.77 USD
1.00 SGD = 5.12 CNY
1.00 SGD = 2.40 MYR
1.00 SGD = 0.48 GBP
1.00 SGD = 868.49 KRW
1.00 SGD = 35.06 INR
1.00 SGD = 6,894.09 IDR

ST Index change: 3,195.59 (-1.78) *As at Mon 22 Nov 2010 09:18 AM
SIBOR (3 mths): 0.43751 (S$)
SWAP (3 mths): 0.26388 (S$)

New EC @ SengKang East Avenue

Property Market Updates (16 Nov 2010)

After blip, property is hot again
After Sept's slump came Oct's rebound. This turnaround, reflected in the latest developer sales figures revealed yesterday, has prompted some industry observers to say that another round of demand-cooling measures may follow, as those announced on Aug 30 do not seem to have had a strong or lasting impact. Developers sold 1,058 private homes excluding (EC) units in Oct, up 16.1% from Sept's sales volume of 911 units, according to primary-market sales data released by the URA yesterday. In addition, developers sold 529 ECs in Oct (no ECs were sold in Sept), taking total developer sales (including ECs) for Oct to 1,587 units. The number of private homes sold in the $2,000 to $2,500 psf price band in Oct was 207 units, or about eight times the 26 units developers sold in Sept. The increase was partly due to the release of The Glyndebourne (along Dunearn Road) and Suites at Orchard (at Handy Road). Excluding ECs, developers had sold 1,259 units in Aug before the cooling measures pushed this number down to 911 in Sept. It climbed back to 1,058 in Oct.

- The Business Times, P1
- Also quoted in The Straits Times, B26: “October private home sales beat forecast.”

Serene House and Serene Centre up for sale
Serene House and Serene Centre, both off Bukit Timah Road, have been put up for sale through property firm Colliers International. Colliers said yesterday that Serene House, a freehold residential site, will be offered via tender with an indicative price of $95 million to $98 million, or about $1,500 psf ppr. This assumes that no development charge is payable and includes the alienation of a neighbouring government-owned site. Serene House is a four- storey walk-up residential block comprising 24 apartments. The land area is 39,828 sq ft. Under the 2008 Master Plan, the rectangular site is zoned for residential use and has a gross plot ratio of 1.4.Colliers said the successful buyer can increase the total land area to 49,020 sq ft by amalgamating the neighbouring state land of 9,192 sq ft. The combined site can accommodate a new residential development comprising a four-storey block with 80 units of 850 sq ft each. The tender for Serene House closes on Dec 14.

Serene Centre
Serene Centre, a commercial / residential development, is being put up for sale through expression of interest. The indicative price is $120 million to $130 million, which works out to $1,500 per sq ft per plot ratio, based on a proposed plot ratio of three. The four-storey development comprises shop units on the first and second storeys, and 10 apartments on the third and fourth storeys. Serene Centre is on a 32,225 sq ft corner land plot fronting Farrer and Bukit Timah roads. Under the 2008 Master Plan, the site is zoned for commercial / residential use. The buyer can either refurbish the property to enhance the lettable area or redevelop the site into a new commercial / residential development. Expressions of interest must be submitted by Dec 14.

- The Business Times, P33
- Also quoted in The Straits Times, B24: “Serene Centre up for collective sale.”

Fragrance Properties to buy S$28m site
Fragrance Properties, the property development unit of Fragrance Group, is acquiring a site at Upper Paya Lebar Road for S$28 million. Known as MK23 Lot 03331T, the site currently houses a block of old apartments. The freehold site is zoned for residential development. It has a total land area of 3,173.6 sqm and has a maximum gross plot ratio of 1.4. The land can yield a max GFA of 4.887.34 sqm, including an additional 10% balcony space. Pending approval, Fragrance Properties intends to develop a residential apartment building on the site.

- CNA

More reclaimed land for new industries on Jurong Island
More land is being reclaimed off Ayer Merbau on Jurong Island to accommodate new investors like soap and detergent makers at a new value-add petrochemicals corridor shaping up there, as well as other potential downstream parties, BT has learnt. Shell just last week said it was ramping production of high-purity ethylene oxide (HPEO) needed by investors at the new corridor there. And sources said that JTC Corporation is reclaiming about 18 hectares off Ayer Merbau, starting with some 7-8 ha in the south and another 5 ha in the north of the area. Ayer Merbau is where Shell's mono-ethylene glycol (MEG) plant - part of its new US$3 billion petrochemical complex - and it’s now wholly-owned Ethylene Glycols Singapore plant, is sited.

- The Business Times, P4

HDB launches Lakeside site for 580 DBSS flats
HDB is launching a public housing site at Lakeside for sale, which can potentially yield 580 flats. The 2.1 hectare plot comes under HDB's design, build and sell scheme (DBSS). It is at Yuan Ching Road, near open spaces such as Jurong Lake and the Jurong Country Club golf course, and education institutions such as Jurong Secondary School. The site is also near the upcoming Jurong Lake District, which the government is developing as a major regional centre. However, the plot is some distance away from an MRT station. Both the Lakeside and Boon Lay stations are several bus stops away. The land parcel has a maximum allowable gross floor area of 684,574 sq ft and carries a lease term of 103 years (including a four-year construction period). The tender will close on Jan 5. SLP International Property Consultants' research executive director Nicholas Mak believes that the top bid for the site could range from $133.5-147 million, translating to $195-215 psf ppr. There might be four to six bidders, most of whom would be contractors- cum-developers, he added.

- The Business Times, P32

Global business confidence is down, but S'pore is upbeat
Uncertainty over economic recovery continues to plague investment and business confidence, according to a third-quarter global economic conditions survey by the Association of Chartered Certified Accountants (ACCA). But Singapore, notably, remained optimistic and was the only major ACCA market to report accelerating gains in business confidence in the three months. The picture was a lot brighter in Singapore, with 72% of the 109 respondents here saying they believe the global economy is either recovering or about to. 51% said they are more confident about their organisations' prospects than they were three months earlier. ACCA noted that satisfaction with government policies since the beginning of the crisis is much higher in Singapore than in any other market.

- The Business Times, P4

Understanding property developers
Anyone gathering case studies of the management principle 'vertical integration' need look no further than Singapore's property development industry. Several small to mid-size developers here started out as construction or engineering firms, building homes or offices for other developers. With bigger margins to be made down the value chain, these firms later decided to go into property development themselves. Tee International is one such example. It began operations in the 1980s as an electrical and mechanical engineer. In 2007, it started to acquire properties for redevelopment into new homes, sometimes with joint venture partners. Tee International's projects include Thomson Duplex and Cantiz @ Rambai. It will be co-developing a condominium project at Cairnhill Circle with another partner. Teambuild Construction Pte Ltd is another example. It started out in 1992 handling small sub-contracting jobs for Housing and Development Board projects, and later moved on to doing full construction and upgrading works. Today, the firm is also a private property developer, with residential projects such as Casa Aerata, D'Casita and Blissville under its belt.

- The Business Times, P

Top banker joins Threadneedle
One of Asia's top bankers, Mr Raymundo Yu, is coming out of retirement to spearhead British-headquartered asset manager Threadneedle's bid to become a force in this part of the world. Mr Yu, former Merrill Lynch chairman for Asia-Pacific, told The Straits Times that the chance to build Threadneedle's Asian franchise, virtually from scratch, was extremely compelling. He aims to make it one of the leading providers of fund management services in Asia. 'I like to build,' says the 55-year old Singaporean banker, who retired in 2008 after 27 years with Merrill. 'If you follow my career, it's always restructure and build'. At least (for) this one I don't have to go through the pain of restructuring.' Threadneedle manages about US$102.1 billion (S$133 billion) in assets and is the international investment arm of United States- listed financial service firm Ameriprise Financial. He plans to more than double the firm's Asia headcount to more than 30 staff in the next year, with the majority of the hires to be based here. The rest will work in Taipei, Hong Kong and Tokyo. Mr Yu also wants to diversify the business beyond its mainly institutional customers, such as government entities, to include the 'mass affluent' space and wealthy families. To do this, he will rely on his network and make new senior appointments, mostly in marketing and distribution. He will also work closely with Asia's leading banks.

- The Straits Times, B25

India to enjoy decades of high growth: minister
(New Delhi) India's Finance Minister Pranab Mukherjee held out the prospect of decades of 'high growth' as he sought to woo investors to Asia's third-largest economy. 'In the short term, it is reasonable to expect that the economy will go back to the robust growth path of 9% average that it was on before the global crisis slowed it down,' Mr Mukherjee told the India Economic Summit in New Delhi on Sunday. 'We are in a position to sustain high economic growth in the coming decades.' India needs US$1 trillion of investment in infrastructure including roads and ports between 2012 and 2017, double the estimated spending in the previous five years, to narrow the gap with China, Prime Minister Manmohan Singh's government says. China's economy, which was about the same size as India's US$183 billion in 1980, has swelled to close to US$5 trillion, four times that of India, after it boosted public spending. Mr Singh wants to boost economic expansion to a 9% pace for at least three decades, which he says is needed to pull the 828 million people living on less than US$2 a day out of poverty. – Bloomberg

- The Business Times, P19

Sunshine 100 plans US$1b HK IPO in H1 2011
(Beijing/Hong Kong) Chinese property developer Sunshine 100 aims to launch an initial public offering (IPO) in HK in the first half of next year, after a delay from this year over policy uncertainties. In June, the Beijing- based developer said it aimed to list in HK this year, but its plans did not materialise with concern among developers about central government tightening measures to cool the property market. 'We must choose a good time to list, and we are not so desperate for money. We think the early half of next year should be a good time,' Sunshine 100 Real Estate Group vice-president Fan Xiaochong told Reuters Insider TV. Sunshine 100, which focuses on second- and third- tier cities in which there is relatively less speculation, said it had sufficient cash to buy land next year totalling about three million square metres.

- The Business Times, P32

China steps up ownership curbs for foreign homebuyers
(Shanghai) China ordered first-time foreign homebuyers to show proof they don't own other properties in the country as it steps up measures to curb gains in the real estate market, the housing ministry and currency regulator said. Foreigners will have to provide home ownership statements before their purchases, along with proof of at least a year's employment in China, the State Administration of Foreign exchange and the Ministry of Housing and Urban-Rural Development said. Overseas companies are only allowed to buy offices in cities where they are registered, it said.

- The Business Times, P33

Tasweek scopes out opportunities in region
(Dubai) Abu Dhabi-based Tasweek Real Estate Development and Marketing recently explored the property and financial markets of Malaysia and Singapore to assess business opportunities and local market trends. According to the adviser and solutions provider serving the Middle East real estate markets, the trip affirmed the sustainable growth of the property sectors of both Malaysia and Singapore. With regard to Malaysia, the firm said the Malaysian market has been experiencing a property upsurge particularly in its high-end residential segment due to the availability of cheap financing, new launches, favourable regulations, and enticing promotions. Tasweek chief executive Masood Al Awar said the Asian discussions and observations proved that cheap financing was vital to ensuring the availability and sustainability of property returns and opportunities. He observed that Singapore and Malaysia both had various channels to fund property, allowing their real estate sector to continue to be productive despite the global crisis. 'We intend to adopt elements of the financing strategies we have witnessed in both countries to secure even better business for our company in 2011,' said Mr Al Awar who met with Malaysian and Singaporean banks and finance houses involved in real estate to gain more insights on their financing schemes. The financing model employed by Tasweek aims to achieve a combination of timeliness and speed, cost, and quality, the company said in a statement. Its mortgage financing options are aimed at leveraging the United Arab Emirates' lucrative mortgage market which is currently valued at around 50 billion dirhams (S$17.6 billion). Tasweek's business activities include the purchase and sale of strategic assets, asset management, joint ventures, and strategic alliances as well as marketing consultancy. -- Bernama

- The Business Times, P32

Exchange Rates (extracted from xe.com)

1.00 SGD = 0.776 USD

1.00 SGD = 5.151 CNY

1.00 SGD = 2.401 MYR

1.00 SGD = 0.481 GBP

1.00 SGD = 862.342 KRW

1.00 SGD = 34.695 INR

1.00 SGD = 6,994.292 IDR

ST Index change: 3,243.96 (+7.16) *As at Tue 16 Nov 2010 09:22 AM
SIBOR (3 mths): 0.43890 (S$)

SWAP (3 mths): 0.27009 (S$)

Property Market Updates (15 Nov 2010)

Northern connector links towns to nature
Cycling enthusiasts at park connectors usually make their way round winding trails through nature reserves and forested areas, but the Northern Explorer Park Connector Network (PCN) will have them pedalling through urban landscapes as well. The 25km loop links not only 11 nature sites and parks such as Admiralty Park, Yishun Park and Lower Seletar Reservoir Park, but also heartland towns in the northern part of Singapore. At the launch of the northern network, Home Affairs and Law Minister K. Shanmugam noted that besides recreational uses, park connectors also helped facilitate inter-town commuting. The $19 million Northern Explorer PCN passes alongside six MRT stations and about half of the stretch runs along train viaducts. The connector also showcases Singapore's biodiversity. A wide variety of birds such as woodpeckers and kingfishers as well as different species of butterflies and dragonflies can be spotted along the way. The Northern Explorer is the third loop of park connectors developed by the National Parks Board (NParks) - coming after the Eastern Coastal PCN, which opened in 2007, and the Western Adventure PCN, which opened last year. Together, they make up 150km of cycling paths. NParks aims to complete 300km of an islandwide grid linking major parks, nature sites and housing estates by 2015. A fourth loop in the north-eastern part of Singapore is expected to be unveiled next year.
- The Straits Times, B4

80% of Lakefront Residences sold
Some 70 units of The Lakefront Residences were sold over the weekend, bringing its total sales since Friday's preview to 320 units. The 320 units were sold at an average price of $1,020 psf. The 99-year leasehold condo is next to Lakeside MRT station and near Jurong Lake, with unit sizes ranging from 484 sq ft for a one-bedder to about 3,000 sq ft for a penthouse. The project includes 69 one-bedders, 158 two-bedders, 255 three-bedders, and 98 three-bedroom- plus-study units. There were also 32 four-bedroom apartments and 17 penthouses up for sale.
- The Business Times, P11

Getting burnt over high-end homes
However, 90% of sub-sale transactions still turned a profit. A Savills analysis of caveats captured by the URA’s Realis as at Oct 19 showed that 9 units bought in 2007 were sold in 2010 at a loss in the sub-sale market. But the bulk of homes bought from 2006 to 2009 - 78 out of 87 - were sold for a profit, the analysis found. The fact that all 9 losses were on units bought in 2007, and it may be due to the high prices the owners paid when the residential market reached its peak in 2007. In contrast, units bought in 2006, 2008 and 2009 were re-sold at a profit in 2010. As of now, the number of loss-making transactions remains very low. 90% of sub-sale transactions this year still made profits, ranging from $3,620 to $1.92 million. At the low point of the market in Q1 2009, only 67.5% of sub-sales of private apartments and condos yielded a profit. That proportion grew to 95.1% in Q1 2010.
- The Business Times, P1

Asia-Pacific free trade area set to expand
Asia-Pacific economies have taken a major step towards turning the entire region into a free trade area, with five more members seeking to join the Trans-Pacific Partnership (TPP). Now made up of Singapore, Brunei, Chile and New Zealand, the TPP is a multilateral free trade agreement that aims to eventually integrate economies in the Asia-Pacific region, scrapping tariffs and other trade barriers between members. Over the weekend, the leaders of the United States, Peru, Australia, Vietnam and Malaysia showed their keenness in joining the pact, as a summit gathering of the 21 member economies of the Asia-Pacific Economic Cooperation (Apec) in Yokohama. Prime Minister Lee Hsien Loong hailed this interest in TPP membership as the 'most significant' outcome of the two-day annual summit.
- The Straits Times, P1
- Also quoted in The Business Time, P2, “Apec leaders agree to work on regional free trade pact”.

CHINA - 4 China state banks halt new credit to developers
China's four biggest state banks have used up their full-year credit quotas for property developers and will stop extending new loans to them for the rest of the year, an official newspaper reported yesterday. China Real Estate Business, run under the Ministry of Housing and Urban-Rural Development, said the four banks had halted approval of new loans since the end of last month. It quoted several unnamed executives from the lenders. Chinese banks typically frontload a large part of their loan quotas in the first quarters of the year to reap more gains from interest. Beijing has taken steps to tame the property market since April, including raising down payments and mortgage rates and tightening control in financing and lending to developers. China's four biggest state banks are the ICBC, China Construction Bank, Bank of China and Agricultural Bank of China.
- The Straits Times, B24

Exchange Rates (extracted from xe.com)

1.00 SGD = 0.77 USD
1.00 SGD = 5.11 CNY
1.00 SGD = 2.39 MYR
1.00 SGD = 0.47 GBP
1.00 SGD = 868.05 KRW
1.00 SGD = 34.40 INR
1.00 SGD = 6,873.83 IDR


ST Index change: 3,253.75 (+1.75) *As at Mon 15 Nov 2010 09:09 AM
SIBOR (3 mths): 0.43751 (S$)
SWAP (3 mths): 0.26769 (S$)