News Highlights Monday 5th May 2008

Small firms bought bulk of en bloc sale sites
BNP Paribas said that given the current turmoil in the financial market, some of the small property developers that swooped in on the collective sale boom in the second half of last year might face financing problems as they move to finalise deals struck in the property market heyday last year. Some may be forced to cancel the deals and walk away. The French bank said that most of the collective sales done in the second half of last year were by small private developers, contractor- cum-developers and non-core developers. A property consultant said the smaller buyers last year were mostly listed firms and thus unlikely to renege on their deals. Knight Frank said the last time developers defaulted on deals was when there was a prolonged downturn but we have yet to enter a price decline situation.

- The Straits Times, H18




En bloc uproar at Bayshore Park, Mandarin Gardens
Sales committees pushing for the collective sales of Mandarin Gardens and Bayshore Park have been accused of trying to control the management councils running these estates and voting down proposals to upgrade estate facilities. The committees, made up of residents who are pro-en bloc, have denied the charges. On the en bloc sale potential, Savills Singapore noted that at least $2 billion each would be needed to buy each estate and with the current market, the sale is impossible.

- The Straits Times, P4




Demand for lower to mid-end homes set to soar in India
Indian property investors are targeting lower to mid-end houseowners in the booming economy now that sales of plush apartments have slowed. With the number of families earning more than US$5,000 a year set to double to around 20 million in the next two years, demand for small and simple apartments is set to mushroom. Developers had piled into the top-end of the housing market where profit margins are highest, but they are now targeting the young workforce. Analysts say the strong supply of high-end apartments in many areas is likely to hit prices. Land prices have quadrupled in many areas over the last three years, but many in the industry expect prices to drop anywhere between 15-50% in the coming year. Developers are talking about low-cost housing because there is demand there, but there's a need to reduce land costs and build infrastructure first, said managing director of CBRE in India.

- The Business Times, P20




Middle East investors 'looking to S-E Asia'
Middle Eastern investors are increasingly looking to Singapore and other South-east Asian nations for deals as financial ties grow between the two regions, said Standard Chartered (Stanchart) Bank. Stanchart is well-positioned to become a leading player in this area. In the past year, it has advised on more than 40% of the deal flow from Middle East to this region, which totalled US$8 billion (S$10.9 billion). Stanchart began boosting its presence in the Middle East three years ago and now has a team of 50 corporate advisers there, putting the bank in an enviable position as Singapore's business with the Gulf looks set to soar. The oil-generated capital and liquidity in the Middle East are fuelling a search for investments with high returns. A recent report by McKinsey estimated that Gulf countries would have US$9 trillion to invest by 2020.

- The Straits Times, H18




Queen Margaret University starts classes in Singapore
Students began classes for the first time at Scotland's Queen Margaret University (QMU) in Singapore today - the first full-fledged overseas site by a British institution to open in Singapore. Home to QMU's Asia campus is an 18,000 sq m site at Ah Hood Road, off Balestier Road. QMU's lease for the land will see it pay $38 million in rent over the next 15 years. QMU said it has arguably, the most multi-national student population, with about 70% of them coming from China, India, Vietnam and some 15 other countries from the Asia-Pacific region.

- The Business Times, P12




Inflation pressures ease, but target still elusive
The slowing growth of China's main inflation indicator is set to continue in April, thanks to falling farm produce prices. The consumer price index (CPI), which hit 8.7% for February and 8.3% for March, would probably be around 8% for April over the same month last year. The annual goal of 4.8%, however, remained a difficult target to hit, said chief economist with the National Bureau of Statistics (NBS).

- The Business Times, P19




Mapletree assets to hit $15b-20b in a yr
Mapletree Investments' total asset size has nearly doubled to around $10.5 billion from $5.6 billion a year ago. The increase in future assets size will come largely from new private funds the fully-owned unit of Temasek Holdings is starting, including the US$1.5-2.0 billion Mapletree India-China Fund (MICF) focusing on development and redevelopment of real estate in the two markets. This fund will invest in office, retail and residential property. MICF has two seed investments in China. One is a residential and retail development named Future City in Xi'an. The second seed investment is an existing office block in Beijing's Central Business District. As for India, the fund has identified two investments in Bangalore - an office and residential project, and a pure office development.

- The Business Times, P1