News Highlights Tuesday 22 April 2008

Buyers, sellers call off collective sale of Finland Gardens
Both the majority sellers at Finland Gardens in Siglap and the intended buyer, Sing Holdings, agreed yesterday it would be best to just let the deal die. Sing Holdings told the sellers that Sing Holdings no longer wanted them to continue with the court appeal to overturn a Strata Titles Board (STB) decision. It said that the key determining reason is the uncertainty of the timing of the sale and market conditions. The Sing Holdings said it considered uncertainties over the time needed to procure the order for the sale and market conditions, coupled with the rising costs of construction. Meanwhile, Sing Holdings has completed the purchase of two collective sale sites - Bellerive and Hillcourt Apartments. Both are at the demolition stage.

- The Straits Times, H22



Residential sector seen taking hit
Residential markets across Asia are expected to take a hit in the wake of the credit crunch in the US. But the fundamentals of the region - including Singapore - are strong, which means residential markets should not take too hard a beating. Real estate in Asia is one of continuing investment - particularly by foreigners. Occupier demand remains in place, and with limited supply in most developing cities, the future looks fine, said Cushman & Wakefield (C&W) in a recent report. The report notes, however, that Hong Kong and Singapore are expected to be most affected by the credit crunch and global economic slowdown. UBS Investment Research expects prices in prime and mid-range segments to fall 20% and 10% respectively. Mass-market prices are expected to hold steady. Rent increases for private residential property are likely to moderate due to budget constraints and the slower influx of expatriates. Residential investment sales also decreased in Q1 2008, dipping some 35.7% in Q1 2008 to $2.27 billion, said Colliers International. But there is still some optimism - DBS Group Research upgraded its call on the Singapore property sector from 'neutral' to 'overweight'. DBS also believes Singapore's property secular uptrend is still intact, due to its ongoing efforts to transform itself into a globalised city-state. DTZ said that it is still too early to gauge the residential sector performance as this is just the first quarter.

- The Business Times, H34



Act fast or face deep recession: Tony Tan
The global economy will run into even more turbulence if policy makers don't act quickly and decisively to ease the credit crunch spilling over from the US, says the Government of Singapore Investment Corp (GIC). GIC deputy chairman and executive director Tony Tan believes the economic downturn can be mitigated if the authorities in the US and elsewhere take decisive and timely action.

- The Business Times, P1



Mubadala, CapitaLand in property venture
CapitaLand and Abu Dhabi investment agency Mubadala Development Co said that they had set up a US$300 million joint venture to develop property projects. The new venture, in which Mubadala has a 51% stake, will focus on developing projects in the United Arab Emirates (UAE) capital Abu Dhabi. CapitaLand will begin with a US$4 billion mixed-use project in Abu Dhabi. CapitaLand reported a surprise 49% jump in quarterly earnings on strong home sales in February and said that it planed to dig into its $4.4 billion cash pile for expansion in countries such as India and China.

- The Straits Times, H9



K-Reit Q1 distributable income soars 165.9%
K-Reit Asia has reported distributable income of $11.4 million for the quarter ended March 31, a 165.9% increase from the same period in 2007. This was attributed mainly to income from its one-third interest in One Raffles Quay Pte Ltd, the acquisition of which was completed on Dec 10, 2007. Net property income for the quarter was $9.1 million, or 41.5% higher than $6.5 million in the corresponding quarter in 2007. This was underpinned by higher gross rental income from properties. Gross rental income increased 30.2% year on year to $11.2 million in Q1 2008.

- The Business Times, P5



KepLand to develop Vietnam residential project
Keppel Land has secured an option to develop a new residential site in Vietnam's Ho Chi Minh City. The proposed development in the city's District 2 is expected to yield 1,500 apartments with a potential total gross floor area of 244,800 sq m. It will increase the company's portfolio in the district to more than 7,500 homes. Aimed at the upper-middle market, the luxury apartments are expected to be launched in 2009. Total investment for the proposed project, which will be developed in phases according to demand, is estimated at S$528 million. The option a greement was entered into by Keppel Land's wholly-owned subsidiary Earlsbay Investments Pte Ltd with Vietnamese developer Hong Quang Co Ltd.

- The Straits Times, H9



Commercial unit, GCB for sale by tender
A commercial unit at The Riverwalk, Upper Circular Road, is up for sale at an indicative price of $23 million. The unit, which has a strata area of 20,161 sq ft that represents a 12.11% ownership stake, is owned by private investors. The indicative price works out to about $1,140 psf. CBRE, which is marketing the 99-year leasehold property, says rent of $5 to $6 psf is being asked for comparable office space in the area. Assuming rent of $5.50 psf, the $1,140 psf guide price reflects a net yield of about 5.5%. The current lease expires in mid-July this year.

- The Business Times, P35



Chinese developer Shimao's profits rise 80%
Shimao Property Holdings Ltd’s 2007 profit rose 80% as it sold more apartments amid surging home prices in the world's most populous nation. Net income rose to 4.1 billion yuan (S$792 million), or 1.26 yuan a share, from 2.28 billion yuan, or 0.85 yuan, in 2006. Chinese developers may face slowing growth after the government sought to curb home prices by reducing lending. Home sales volumes fell in most Chinese cities in the first quarter. Property prices in 70 major Chinese cities rose 10.9% in February from a year earlier, according to the National Development and Reform Commission.

- The Business Times, P35