News Highlights Thursday 24 April 2008

Property price data can yield different conclusions
The property price index (PPI) for the first quarter of 2008 will be released soon and is unlikely to differ from an earlier flash estimate of a 4% increase, despite developers starting to cut prices. While the PPI is widely used as the gauge of Singapore's property market, this method is not used universally. Recognising that the property market is becoming more fragmented, with the high-end sector supported by foreigners and speculators, URA has provided separate PPIs for different regions. But for the current PPI to be meaningful there should be some correlation with sales volume. However, after comparing sales volume against the PPI, no strong correlation could be determined. The same figures in flash estimate of property prices can be read very differently, depending on the level of optimism or pessimism.

- The Business Times, P38




Symphony of class and prestige
Waterside living epitomises class and prestige and exudes the special lifestyle appeal to both home-owners and investors. Located just a five-minute drive away from the Central Business District, Keppel Bay has emerged over the past few years as a true waterfront precinct. The 969 units of luxurious Keppel Land's Caribbean have been sold out, with 168 units leased out as corporate residences. Keppel Land's latest project, Reflections, presents a new face to world-class waterfront living. All 620 units in Phase One have been fully sold and the development is scheduled for completion in 2013. In the pipeline within the Keppel Bay precinct are three more sites for future development - two on the mainland and one other plot on Keppel Island.

- The Business Times, P22




China warns of housing price hikes in second quarter
The National Development and Reform Commission said in a quarterly report on China's real estate sector that upward pressure on housing prices in China was mounting again after a slight slowdown in the first three months. Excessive liquidity and the appreciating yuan are driving asset prices including houses higher, while soaring costs of steel and labour are also pushing prices forward, especially in small and medium-sized cities. Huge amounts of funding have fled equity markets after recent slumps and investors are likely to reinvest the money in property instead of bank deposits. The report stressed that the government must keep housing market prices stable, partly through increasing the amount of land available for residential development. Official data said earlier that property prices in 70 major cities across the country rose 10.7% year-on-year in March, down 0.2% from February.

- The Business Times, P37




Temasek comfortable with stake in China property developer
Temasek Holdings, along with Deutsche Bank and Merrill Lynch, are in talks with Guangzhou-based Evergrande Real Estate Group for a private placement reportedly worth US$400 million to US$500 million (S$541 million to S$676 million). The private stake sale came after stock market turmoil and fears over Beijing's efforts to cool China's real estate market sank interest in Evergrande's initial public offering. Mainland developers are facing a tightening financial market as a global credit crunch has made banks less willing to lend to builders. Evergrande was recently ranked as one of China's top 10 real estate companies and is a potential partner of American real estate mogul Donald Trump, who is seeking to enter China's property market. The company has land reserves of 45.8 million sq m in gross floor area in China. Of these, two-thirds are being developed in 33 residential projects in 19 cities.

- The Straits Times, H18




$1bn Sentosa hotels deal goes to S'pore-Japan joint venture
A Singapore-Japan joint venture has been awarded a $1.05 billion contract to build three hotels on Sentosa Island. Kajima-Tiong Seng - a tie-up between Japanese-led Kajima Overseas Asia and local Tiong Seng Contractors - beat several other companies to build the five-star hotels. But the hefty construction contracts could add more pressure to an industry already stretched by a manpower crunch and the rising costs of raw materials, said Knight Frank. Construction overheads are expected to climb another 15 to 20% this year - driven by steep increases in the prices of steel and concrete. Over $24.5 billion in contracts were awarded last year, up 46% from the $16.8 billion awarded in 2006. Economists have forecast that the industry will grow between 10 and 25% this year

- The Straits Times, P1




Keppel Land Q1 net profit down 3.5%
Keppel Land posted net earnings of about $60.3 million for the first quarter ended March 31, 2008, down 3.5% from the corresponding period last year. The results were helped by a $23.1 million writeback of provisions made earlier for properties held for sale, mostly on Park Infinia at Wee Nam condo which received Temporary Occupation Permit at the end of Q1 2008. Keppel Land's Q1 sales slipped 7.6% year-on-year to $273.1 million. The lower turnover was due largely to the completion of Urbana and The Belvedere in Singapore, as well as The Waterfront in China during the last financial year.

- The Business Times, P4




Ascott Trust Q1 payout per unit up 47%
Ascott Residence Trust (ART) achieved a unitholders' distribution of $14.17 million for the first quarter ended March 31 - a 76% rise from a year earlier. And distribution per unit (DPU) rose 47% to 2.33 cents. The trust said its serviced residences continued to benefit from strong demand for accommodation from business travellers in Asia. Serviced residences posted 15% growth in revenue per available unit overall.

- The Business Times, P7




Chongqing wants to learn urban development from S'pore
China's Chongqing government is keen to tap Singapore's expertise in urban planning, public administration and economic development. The Chongqing government has set aside about $40 billion (200 billion yuan) for infrastructure investments in the next five years. It also hopes to raise another $320 billion to invest in industry, housing and other city improvement projects in the same period. Every year, Chongqing needs to build new housing for 500,000 people to cater to an ultimate city population of 10 million. These efforts of remaking the city would mean many opportunities for Singapore companies in urban planning, real estate development, logistics services, education and environmental services.

- The Business Times, P15