News Highlights Tuesday 13 May 2008

Luxury home prices down 2.1%, says report
Prices of luxury developments dipped in the first three months of this year. Savills Singapore said that prices of expensive homes fell 2.1% in the first quarter. Foreigners also began switching from the prime central districts to suburban areas. Average price of luxury developments in districts 1, 4, 9, 10 and 11 fell to $2,360 psf in the period from January to March, from $2,410 psf in the previous three months. At the very top end, the priciest condominiums registered a 2.9% dip in prices to $3,577 psf in the first quarter, from $3,683 psf in the previous quarter. Foreign buying islandwide stayed strong with foreign buyers taking up 28% of private homes in the first quarter, up from 25.9% for the whole of last year. Rentals are still holding up at high levels. Savills expects private home prices to grow a moderate 5-10% this year.


- The Straits Times, H22





Orchard Parade’s profit soars
Orchard Parade Holdings reported a net profit of $16.65 million for its first quarter, up more than 3 times from $5.12 million a year ago. Turnover fell 44.5% to $17.16 million as there was no revenue from property sales in the three months ended Mar 31. Orchard Parade said the company would continue to drive sales at Floridian condominium.


- The Straits Times, H20





First-quarter profit growth slows to 11%
First-quarter results of locally listed companies showed a rise in profits of just 11.2%. Slower home sales and the lack of a one-off valuation gain sent CapitaLand's profits down 59.3%. However, MCL Land and Singapore Land both reported higher profits of $6.9 million and $33.7 million, respectively. UOB Kay Hian upgraded the local property sector from 'market weight' to 'overweight' earlier this month, noting that it saw investment opportunities from the recent rout in stocks.

- The Straits Times, H20




CapLand JV unveils 1st Abu Dhabi devt
Capitala, an Abu Dhabi-based real estate company, yesterday launched an integrated development combining residential, leisure, sports and retail. Capitala is a joint venture firm by CapitaLand - which owns 49% - and Mubadala, which owns the remaining 51%. The company aims to design, build, manage and maintain integrated communities in Abu Dhabi. Its maiden project, Arzanah, is located on a 1.4 million sq m site in the Grand Mosque District, minutes away from Abu Dhabi city centre, the Abu Dhabi International Exhibition Centre and the central business district. Capitala estimates that there will be 9,000 residences with about 18,000 residents. The first phase of the development will be completed in 2011.

- The Business Times, P4




Japan's housing glut adding to growth fears
A growing backlog of unsold apartments threatens to dent Japan’s economic growth. Developers found it hard to sell completed apartments to consumers, worried by stagnant wages and worsening business prospects. The central bank said issues such as a rising inventory of unsold condominiums and stalling investment in rental homes by real estate funds facing a less favourable financial environment would allow only a modest recovery.

- The Business Times, P34




China tells banks to set aside larger reserves
China has ordered banks to set aside larger reserves for the fourth time this year after inflation accelerated. Consumer prices rose 8.5% in April from a year earlier. The requirement will rise to a record 16.5% of deposits from 16%. The increase may curb bank lending, helping to cool China’s economy. The benchmark one-year lending rate is at a nine-year high of 7.47% after six increases last year. The yuan has climbed about 0.4% versus the dollar since March 31 after a 4.2% in the first quarter.

- The Business Ti mes, P17




SWFs to reveal investment size and formation
Sovereign wealth funds may agree to reveal the size and composition of their investments though not their strategies as part of a voluntary code being developed with the International Monetary Fund. The six oil-producing Gulf Cooperation Council states, including Saudi Arabia and the United Arab Emirates, control as much as US$1.5 trillion of assets through their sovereign funds, around half the US$2.9 trillion global total.
- The Business Times, P21
S Korea's 2008 growth forecast cut
The Korea Development Institute (KDI) forecast 2008 growth at 4.8% from its previous forecast of 5.0%. It slashed expectations for private consumption by a third to 3.0% from a forecast in October of 4.5%. South Korea's central bank held its key interest rate steady at 5%, citing concerns about inflation - currently close to its highest in four years at 4.1%.

- The Business Times, P15




Wing Tai Q3 net profit drops 49% to $27.7m
Wing Tai Holdings posted a 49% year-on-year drop in third-quarter net earnings to $27.7 million on a 63% slide in revenue to $109.99 million. The group attributed the smaller bottom line for the nine months to lower revenue and operating profit from property development.

- The Business Times, P4




Worldly pursuits in Dubai
Mega-resort Atlantis will open at the 560ha Palm Jumeirah in September. On the Palm, there are waterfront condos and double-storey villas. A 1,184 sq ft one-bedroom seaview apartment is priced at 3 million dirhams, while a four-bedroom garden villa, spanning 5,000 sq ft, costs 15 million dirhams. So far, more than 4,000 properties have been snapped up.

- The Straits Times, L2