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INVESTORS might be tempted at first to blame a slowing housing market for a 25 per cent slide in GuocoLand’s second-quarter earnings.

A closer scrutiny of the property developer’s accounts, however, shows that for the quarter ended Dec 31, it actually reaped higher revenue from its property development projects in Singapore and China.

In fact, the explanation for the profit slump was the sale of its long-term investment in BIL International in the second quarter ended Dec 31, 2006, which boosted its bottom line in the earlier period to the tune of a $19.3 million one-off gain.

GuocoLand’s net profit for the second quarter ended Dec 31 plunged to $33.9 million, from $45.4 million a year earlier. With the one-off gain stripped out, net profits were well up this year.

Revenue soared 112 per cent to $211.1 million, up from $99.6 million in the previous period.

Gross profit rose from $16.4 million to $40.2 million, with contribution from its West End Point project in Beijing.

West End Point, an 810-unit development in the Xicheng District of Beijing, is almost fully sold, GuocoLand said yesterday.

In Singapore, GuocoLand has three launched developments on the market: Le Crescendo, The View@Meyer and The Quartz.

As at this month, it achieved sales of about 90 per cent for Le Crescendo, The View@Meyer and the launched units in The Quartz.

GuocoLand said it has, in the pipeline, ‘prestigious’ residential developments in prime districts which will be built on the sites of the existing Sophia Court and Leedon Heights.

Earnings per share for the quarter fell from 7.31 cents to 4.02 cents, while net asset value per share remained unchanged at $2.30.

Source : Straits Times - 31 Jan 2008

MACQUARIE Meag Prime real estate investment trust (MMP Reit) yesterday reported a distributable income per unit of 1.68 cents for the fourth quarter, up 14.3 per cent from a year earlier.

This took its full-year distributable income per unit to 6.19 cents, up from 5.79 cents the previous year. The annualised yield is at 6.06 per cent.

Distributable income was at $16.2 million for the Reit, which owns about 74 per cent of Wisma Atria and 27 per cent of Ngee Ann City.

These favourable results were, in part, helped by Singapore’s strong office market.

Average office rents at the two buildings rose from $7 to $8 per sq ft (psf) in the first half to slightly above $12 psf at the end of last year, said Mr Franklin Heng, chief executive of the Reit’s manager.

Their asking rents are now $16 psf. They will be able to take advantage of the strong market in the next two years, he said.

The Reit’s performance was also boosted by income from newly acquired properties in Japan and China.

MMP Reit’s portfolio valuation increased 18.1 per cent to $2.2 billion in the fourth quarter, while net asset value per unit rose 27.8 per cent to $1.61 at the end of last year.

The Reit is set to benefit from the reconfiguration of the Ngee Ann city space occupied previously by the National Library. They are carving out at least eight new stores and will get average rents of $16.50 psf, up from $7.10 psf.

However, the big uplift this year will come from the June rent review of Toshin Development, which holds a master lease in Ngee Ann City, said Mr Heng.

Acquisitions are also on the cards.

Source : Straits Times - 31 Jan 2008

NEW property acquisitions and asset revaluations last year helped push up income for City Developments’ (CDL) hotel trust.

CDL Hospitality Trusts (H-Trust) yesterday said revenue for its fourth quarter was $28 million, 65 per cent more than a year ago. Revenue per available room for all its Singapore hotels went up 34.5 per cent to $191 for the three months ended Dec 31.

Net property income rose 73 per cent over the same period to $26.9 million. The trust also recorded a net surplus of $239.4 million for the quarter on the revaluation of its investment properties .

Distribution per unit for the quarter was 2.76 cents, up 57 per cent from the previous year.

This brings distribution per unit to 4.61 cents for the period from July 19 to Dec 31, of which 4.22 cents is taxable and the rest is tax-exempt. This will be paid out on Feb 29.

The trust had earlier distributed income for the period up to July 18, ahead of issuing new units in an equity fund-raising exercise on July 19.

Earnings per unit for the fourth quarter came to 31.53 cents, up from 20.55 cents the previous year.

Net asset value per unit was $1.61 as at Dec 31, from $1.03 a year ago.

For the full year, gross revenue was $90.7 million, almost 60 per cent over pro-forma revenue for the previous year. CDL H-Trust was listed only in July 2006.

Net property income for the year was $85.8 million, 62.9 per cent over the pro-forma figure in 2006.

CDL H-Trust’s distributable income will be $68.7 million for the full year, which works out to 8.98 cents per unit.

The annualised distribution yield is 4.12 per cent as at last Friday’s closing price of $2.18, the trust said.

CDL H-Trust now owns seven hotels, including recent additions Novotel Clarke Quay and Rendezvous Hotel Auckland.

Occupancy rate for all of CDL H-Trust’s hotels stood at an average of 89 per cent in the fourth quarter. The average daily rate for the quarter rose 32 per cent to $216.

In general, Singapore hotels also did well. A record 10.3 million visitors visited Singapore last year, 5.4 per cent more than in 2006.

Upcoming attractions this year, such as the Formula One Grand Prix and the opening of the Singapore Flyer, are expected to keep Singapore’s tourism industry buoyant.

This year, CDL H-Trust will also launch 24 new extended-stay rooms at the Grand Copthorne Waterfront Hotel, which are to be ready between next month and April.

Source : Straits Times - 31 Jan 2008

Author: John Mc, Henderson Lackey Bangalore, India

I FORMALLY made Singapore my adopted home and took up citizenship in 2006. I believe that my family and I will make many contributions. We are currently posted overseas and look forward to returning home in March.

Like all Singaporeans, we spent a considerable amount of time and money looking for the ideal place to call home, and found such a place in Pasir Ris. When we executed the purchase agreement late last month, there were no restrictions for the ‘Other’ racial group. However, to our dismay, when we went to register the sale with HDB early this month, we were rejected as applications under the ‘Other’ category had closed.

I broadly understand the aim of the national housing policy and the desire to ensure a good racial mix in an estate. However, one needs to look no farther than my family for an example of racial/ethnic diversity. I am a Caucasian who has lived in Asia for the past 12 years. My wife is Malaysian of Indian descent and we have a two-year-old daughter who was born in Hong Kong. I have two older children whose mother is Chinese.

We don’t fit a cookie-cutter definition of race and to simply categorise us as ‘Other’ overlooks our unique blend of race and culture.

I am proud to call Singapore my home but feel it is time for Singapore to recognise that in today’s world the traditional definitions of race/ethnicity no longer exist.

Source : Straits Times - 31 Jan 2008

Companies wary of acquisitions amid market uncertainty

EVEN as property prices come off their peaks, sector participants are keeping cautious, with Macquarie MEAG Prime Reit’s manager becoming the latest to say it will hold off making acquisitions for now.

The uncertain mood brought on by turbulence and volatility in financial markets is curbing enthusiasm for property around the world.

“We have been shy of making acquisitions at the wrong price. So far, we have been prudent in terms of looking at what’s a good buy for us,” said Mr Franklin Heng, chief executive officer of Macquarie Pacific Star, the manager of the Macquarie MEAG Prime Reit. The Reit has interests in properties such as Wisma Atria and Ngee Ann City.

He announced at a briefing that for the three months ended Dec 31, the Reit had a distributable net income of $16.2 million, which means a distribution per unit of 1.68 cents.

On Tuesday, Keppel Land CEO Kevin Wong said he will “selectively acquire commercial and residential sites”, while Mapletree Logistics trust said last week it “will continue with its yield plus growth strategy, but in the current environment, it will focus on optimising yield from its existing portfolio”.

This strategy to look to organic growth to drive earnings contrasts with that of last year, when property trusts derived a large part of their profits from acquisitions.

“Most Reits still have balance sheets to take on acquisitions. But for major acquisitions, perhaps not this year, especially if that requires equity fund-raising,” said Mr David Lum, an analyst from Daiwa Securities. “I don’t think any Reit wants to be forced into any equity fund raising.”

“We are starting to see some sellers coming out of the sub-prime crisis. They may have to sell their assets very quickly, particularly those who are heavily-geared. So, getting financing is very challenging now,” said Mr Heng.

Macquarie’s “balance sheet is very healthy, so, it’s much easier for us to gear up, to make those acquisitions. Especially towards the second half of this year, there should be some quality assets from Singapore, Japan and Hong Kong up for sale”.

Source : Today - 31 Jan 2008