News Highlights Friday 25 April 2008

Far East Organization headed for rebranding
Far East Organization (FEO), headed by Singapore's richest man, Ng Teng Fong, looks set to undergo a corporate rebranding exercise as it gears up for challenging times ahead. Mr Ng's son, Philip, who is the company's CEO, said that it will be embarking on a formal and articulated programme to circumscribe a more visible corporate brand as well as define new sub-brands for our residential property sales and hospitality operations. FEO sees opportunities for business growth as Singapore transforms into a vibrant, global city that has an international marketplace for real estate and real estate products. Mr Ng revealed that its property sales operations have already been augmented with a network of regional offices and multi-country marketing channels. FEO has already made considerable headway in fashioning new products for the global set, including The Scotts Tower, designed by Pritzker Prize winner Rem Koolhaas's architectural firm, Office for Metropolitan Architecture. Also in the works is the 108-room hotel, Quincy, located off Orchard Road and styled after the trendy hotel chain, W Hotel. To date, FEO has a development landbank of 11 million sq ft in Singapore. In 2007, it invested $1.15 billion to acquire development sites that will yield some 2.7 million sq ft of buildable area.

- The Business Times, P8




Tony Tan's 'worst recession' remark not a forecast
Government of Singapore Investment Corp (GIC) deputy chairman Tony Tan clarified that his remarks earlier this week that the world could be facing its worst recession in 30 years unless policymakers act soon were not meant as a forecast. Instead, they referred to a pessimistic scenario - one of three basic economic scenarios that GIC is working on as part of its risk management. GIC is working on three scenarios - an optimistic scenario in which the economy does not suffer a recession; a pessimistic scenario with a prolonged global recession; and a 'middle' scenario in which the US suffers a mild recession but the global economy avoids a recession. Dr Tan said that in light of the uncertain times, the probability of the pessimistic scenario has risen to a level that warrants consideration by GIC.

- The Business Times, P2



Pender Court en bloc sale fails, owners keep $12m
The sale of Pender Court off West Coast Highway to a unit of Bravo Building Construction has been called off. The buyer failed to complete the transaction by paying the remaining $72 million that it owed the sellers. Owners of the 48 units will keep the $12 million, or an average of $250,000 per unit, they have received from the associated Bravo company, Pender Development Pte Ltd. The group decided to cut its losses on the investment rather than pump in more money as the venture was no longer profitable, given the bad publicity the company had been receiving from the rescission of two other en bloc sales to Bravo units - Tulip Garden and Makeway View. If Bravo had pursued its plan to build a condo on the Pender Court site, the breakeven cost would be about $1,300 to $1,400 psf, which would not be viable in the current market.

- The Business Times, P4




Condo unit to be auctioned off to recover money owed
An auction of an apartment worth over $1 million is scheduled for next Wednesday - after the disappearance of the owners. The three-bedroom unit at King's Mansion off Tanjong Katong Road has been vacant for more than 10 years. Repeated attempts by the condo's management corporation to contact the owners and their lawyers have failed. The four owners, all foreigners (believed to be Malaysians), owe possibly $30,000 or more in maintenance fees. The guide price for the 1,604 sq ft high-floor unit is about $1.1million to $1.2 million. Based on the condo's current fees, it could be up to $35,000 that is owed over 10 years - not counting interest.

- The Straits Times, P1




Transitional office site in Newton draws 8 offers
A prime transitional office site in Newton attracted eight bids by the close of its tender yesterday, a clear reminder that demand for office space remains high. The top bidder was brokerage UOB Kay Hian which offered $34 million, or $242.5 psf of gross floor area. Market watchers said the 15-year leasehold plot's attractive location next to the Newton MRT station fuelled the bullish bidding. Knight Frank said that tight office supply and strong demand have sustained the growth in rentals. For the first quarter this year, average Grade A office rentals in Raffles Place reached $17.63 psf per month - much higher compared with monthly gross rentals of $6 psf to $8 psf in the Scotts Road area.

- The Straits Times, P26




Majority owners at Airview Towers win appeal
The Court of Appeal has overturned the ruling by the High Court and Strata Titles Board (STB) on the collective sale of Airview Towers, paving the way for mainboard-listed Bukit Sembawang Estates to acquire the property for $202 million. The collective sale of the freehold property is expected to rake in about $2 million for each of the 100 owners. Bukit Sembawang Estates plans to build a 36-storey condominium at the site.

- The Business Times, P7




CIMB-Mapletree to set up second property fund
CIMB-Mapletree Management plans to establish a second real estate fund totalling RM1 billion (S$432 million) in committed capital to invest mainly in Malaysian properties. It is planning to raise RM1 billion in committed capital for the second fund sometime this year or the next. Its new fund size would be 2.5 times the first one, and its focus would be more on development projects, including middle-to-high range residential projects.

- The Business Times, P11




200 to attend first Business China forum
Business China, an association set up to bridge China and Singapore culturally and economically, will embark on its first forum next week. Called the Business Exchange Forum, the event will see some 200 entrepreneurs and business executives from the two countries sharing ideas on doing business in the world's most populous economy. There will be discussions on the China economy, business opportunities, and the ever-changing legal and political framework. The club's long-term target is to groom 20,000 to 30,000 bilingual and bicultural Singaporeans to communicate effectively in China.

- The Business Times, P7




Record 908,000 visitors in March
Visitor arrivals reached a record 908,000 in March, up 5.7% from the same month last year. Indonesia (155,000) accounted for the highest number of visitors, while China (98,000), Australia (62,000), the United Kingdom (61,000) and India (58,000) were also among Singapore's top five visitor-generating markets. These countries accounted for almost half of total visitor arrivals for the month. Gazetted hotel room revenue was an estimated $189 million, up 16.8% year on year, while the average room rate climbed 23.8% to $238. The average occupancy rate dipped four percentage points to 87% from last year's 91%.

- The Business Times, P7




CapLand JV buys IT park site near Mumbai
CapitaLand said yesterday that its associate Loma IT Park Developers has bought a 121,450 sq m site at the Trans Thana Creek industrial area in Navi Mumbai, India, for $79 million. The seller is Standard Industries, a company listed on the Bombay Stock Exchange and the National Stock Exchange of India. CapitaLand and its partner plan to build an information technology park and a Grade A office complex on the site, which is in the heart of the Mumbai-Pune 'Knowledge Corridor'. Loma is a wholly owned subsidiary of Arc-CapitaLand India - a joint venture by CapitaLand and Arcapita Bank to develop the site. Completion will be in phases over the next five years.

- The Business Times, P7




Wing Tai JV to buy 43-storey condo in KL
Two listed units of Wing Tai Holdings have agreed to pool synergies in the hospitality and property management sector by forming a joint venture (JV) to acquire a 43-storey condominium in Kuala Lumpur, which will be jointly owned and operated as serviced apartments. The total price of RM139.75 million based on a net floor area of 199,639 square feet was based on a calculation of RM700 per sq ft.

- The Business Times, P7




Plan to lift curbs on insurers could boost property deals
Chinese moves to allow insurance firms to invest in property could unleash billions of dollars in deals for commercial buildings and embolden developers and foreign investors who hanker for a more active market. The China Insurance Regulatory Commission was studying the possibility of allowing insurers to expand investment in infrastructure and property but gave no time frame. Big investment by insurers would benefit developers of commercial properties. It would also encourage foreign investors, who are lured by China's fast economic growth but need to know that domestic funds can buy their buildings when it's time to exit and take profits.

- The Business Times, P12