DAILY MARKET UPDATES 18th September 2008

Orchard Central over 50% Leased
Rents at the mall, which has a net lettable area of 250,000 square feet, range from $20 per sq ft per month (psf pm) to more than $70 psf pm. In July, Ion Orchard said that it is 50 per cent leased. Tenants are paying base rent of up to $80 psf pm. The upcoming 313@Somerset has yet give any details on leasing or tenant mix. Unlike Ion Orchard, Orchard Central is looking for mid-range tenants because it is aimed at young working professionals. The level, with lettable area of 14,370 sq ft, is expected to see high footfall because of its links to Somerset MRT station and shopping centres Centrepoint, Specialist Centre and 313@Somerset.
- The Business Times, P32
Sino Land Full-Year Profit Rises 32%
Sino Land Co, Hong Kong's fifth-biggest developer by market value, said full-year profit rose 23 per cent on apartment sales. Net income in the year ended June rose to HK$7.72 billion (S$1.42 billion) from HK$6.27 billion a year earlier. Sino Land's property sales in the city accounted for 70 per cent of 2007 revenue, the highest among the city's top five developers. Between 2003 and 2007 Sino Land benefited from a surge in property prices and commercial rents in Hong Kong. The company will pay a final dividend of 30 Hong Kong cents a share, unchanged from last year.
- The Business Times, P32
Strong Demand cut’s HDB stock of unsold units
Reflecting the boom, bookings for new flats rose 49 per cent year on year to 12,580 in the financial year ended March 31. The Housing Board now holds about 1,500 completed units, compared with 3,500 last year, and 8,400 new Build-To-Order (BTO) flats - 40 per cent higher than the 6,000 last year and more than three times the 2,400 in 2006. Of this year's planned supply, about 5,000 new flats have already been launched, leaving more than 3,000 for the remaining months of 2008. About 2,500 units are in Punggol, while the other new flats will be spread across various towns including Yishun, Woodlands and Bukit Panjang. According to HDB, a new four-room flat can cost about $300,000, higher than the subsidized price of a four-room flat sold by HDB at $200,000 to $260,000.
- The Business Times, P9
OUE exploring setting up Listed Property Trust
OVERSEAS Union Enterprise (OUE) is looking at setting up a listed property trust into which it will inject 'certain hospitality properties'. DBS Vickers DBS Vickers Research said this month the share prices of S-Reits have fallen since the start of the Q2 2008 reporting season in July, in tandem with the decline in broader Singapore market. But the Reit index has done better than developers, the research unit said in a report.
- The Business Times, P5
Lehman’s Fall Markets Office Rental Peak here
'Rents have peaked and with the collapse of Lehman and the further shakeout in financial markets, this is going to accelerate,' said Ong Choon Fah, regional head of research at DTZ Debenham. Lehman occupies office space in Suntec Real Estate Investment Trust's Suntec development. Suntec Reit has slumped 36 per cent during the period. Rents may fall further to S$10 in 2010, when the first phase of the 2.6 million-square-foot Marina Bay Financial Centre is scheduled to be completed, and to S$8 by 2011. Still, supply of prime office space is likely to remain tight until 2010 and any office space vacated by Lehman will probably be filled quickly said managing director of Cushman & Wakefield.
- The Business Times, P31
CapitaLand’s Retail Chief Resigns
CAPITALAND mall master Pua Seck Guan is resigning as chief executive of its retail unit to pursue personal interests. A prominent figure on the local mall scene, he also kick-started the real estate investment trust (Reit) market here with the creation of Singapore's first and still largest Reit, the $7.2 billion CapitaMall Trust. Mr Pua, who steps down on Nov 1, will be replaced by CapitaLand Retail's deputy chief executive, Mr Lim Beng Chee. Mr Lim, 40, is also chief executive of CapitaLand's China mall Reit, CapitaRetail China Trust (CRCT).
- The Straits Times, B20
SIM offers Rental Apts for Student’s Parents
Singapore Institute of Management's (SIM) new campus in Ulu Pandan now has four studio apartments that parents of foreign students can stay in, so that they can be close to their children and help them adjust during their first few days in Singapore. The $150-a-night apartments, which have themes such as Balinese and modern contemporary, are fully furnished with a pantry and balcony area. To date, seven sets of parents have stayed at the apartments since the 4.5-hectare SIM Global Education campus - built on the former army camp for the School of Military Medicine - opened in July. It is SIM's third campus, after its headquarters in Clementi and another site at Namly Avenue. There are also plans to allow visiting faculty or mature students enrolling in short executive education programmes to use the studio apartments as well. Air-conditioned student hostels are also a first for SIM, and can house some 428 students, ranging from $500 to $900 a month. Already, 20 per cent of the rooms have been taken up and SIM expects full occupancy by year's end. SIM moves ahead to double its existing cohort of 10,000 full-time students by 2013. Currently, about a quarter of this cohort is from overseas and continues to actively recruit students from countries in Asia such as China, India and Indonesia.
- The Business Times, P11
Lessons from HK’s Rental Housing System
Senior Minister of State (National Development and Education) Grace Fu, who is leading a Singapore delegation to the territory, said about a third of Hong Kong's population lives in 670,000 rental flats. These comprise a wide range of homes catering to different family sizes and circumstances. The Hong Kong Housing Authority (HKHA), which administers rental housing, provides flats at subsidised rates for as long as 10 years. It also has 'interim' and 'transit' housing for families waiting to move into rental flats or those rendered homeless temporarily. The HDB is currently reviewing the eligibility criteria for rental flats. Another area that the HDB is also studying is housing for the elderly.
- The Straits Times, B4
Australia seen Luring Global Property Funds
Australia is becoming a prime target for global funds keen to snap up bargains offloaded by troubled property trusts with US$12 billion of commercial buildings and its currency weakening. A lot of investors want to invest in Asia Pacific for allocation reasons but they're scared of China, and there are limited opportunities in other markets. ‘So Australia has emerged as a very attractive market for Germans, for Middle East investors.' says Robert White, president of New York-based research firm Real Capital Analytics. Abu Dhabi Investment Authority, the world's largest sovereign wealth fund, wants to expand its property portfolio in Australia. About A$15 billion worth of assets are up for sale in Australia. Australian property firms, which have traditionally relied on superannuation pension funds, are also looking to partner foreign funds to broaden their capital base. In 2007, overseas investors spent about A$15 billion on Australian commercial property - half of total transactions - with a slew of highly leveraged deals before the credit crunch hit. Office yields are also high at 7 per cent in the first half of 2008, compared with 6.7 per cent in the United States, 5.2 per cent in Singapore and 4.7 per cent in Japan. Australia, where nearly 70 per cent of investment-grade buildings are securitized, ranks second in the world for property market transparency, behind Canada, according to a Jones Lang LaSalle index. Japan comes in at 26 on the list, with China's main cities at 49 and India at 50.
- The Business Times, P30
2,000 more Rental Flats to be Built
HDB will build another 2,000 rental flats, to cater to rising demand from needy families. As at the end of last month, the HDB was managing about 43,000 one- and two-room rental flats for the Public Rental Scheme. It has set a goal of expanding this to 50,000 in three years. Demand for rental flats has been on the rise. HDB increased the supply by converting 1,000 existing flats into rental flats and resuming the building of new rental flats. Conversion works at another two blocks in Redhill are also under way and, when completed, would add another 350 units of one- and two-room rental flats for allocation from early next year In its financial year 2006, the HDB received 5,643 applications to rent flats. The following year, that number rose to 5,970.
- The Straits Times, B4
S’pore Export Hit the Skids in August
Singapore's non-oil domestic exports (NODX) worsened last month, sinking 14 per cent from a year ago - the fourth straight monthly drop and the biggest decline since December 2006. Non-electronic shipments slipped 9.6 per cent in August, reversing a marginal 0.3 per cent gain the previous month. 'The weakening of non-electronic NODX was contributed by lower domestic exports of pharmaceuticals, petrochemicals and disk media products,' IE Singapore said. Domestic exports to the EU, Singapore's largest market, tumbled 27 per cent last month - the same amount as in July. Shipments to the US went down 30 per cent, after a 33 per cent drop the previous month.
- The Business Times, P2
Russian Market Plunge triggers Trading Halt
Trading in shares, bonds and mutual funds on Russia's MICEX and RTS exchanges were suspended for at least five hours until further notice from the markets watchdog. The Russian RTS index is currently almost 60 per cent down from its peak of nearly 2,500 points reached in May. A government source told Reuters on Tuesday that the situation in brokerages, which do not have direct access to the central bank's refinancing, is worse than in commercial banks. Top officials, who had for months insisted that Russia was a safe haven, started to announce emergency measures to restore confidence.
- The Business Times, P4

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