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STB stops Allgreen’s purchase of condo for lack of ‘good faith’

AN APPLICATION for the en bloc sale of Regent Garden has been dismissed by the Strata Titles Board (STB) - much to the delight of the majority owners.

A group of 25 owners at the 31-unit condominium had earlier sued the buyers, Allgreen Properties, for allegedly breaching the sale and purchase agreement by grossly undervaluing the property at West Coast Road. Allgreen has denied the allegations.

While the High Court has yet to hold a hearing on the case, the STB yesterday decided that the $34-million sale was not conducted in “good faith” because the basis for the valuation of the property was wrong.

The majority owners argued that developer Allgreen had overstated the development charge, or DC, thus depressing the sale price.

The DC was initially stated to be $7.6 million, but worked out to be just over $950,800. The STB heard that the sale committee had discovered the shortfall from a letter dated July 23 last year, sent from the Urban Redevelopment Authority to Allgreen’s architects in their proposed redevelopment project.

In explaining the STB’s decision, which also took into account the views of two valuers who had performed valuations of the condominium, deputy president Alfonso Ang said the first calculation of the DC “gave rise to incorrect market value”, thus resulting in “the sale price of $34 million that was well below the market value”.

When the STB announced its decision yesterday, owners who were present were all smiles and congratulated one another.

However, this is just round one of what is to come. There are still two High Court orders on whether the contractual agreement signed between the condominium’s sale committee and Allgreen is valid.

The developer said in a statement it was “surprised” at the STB’s decision to proceed with the hearing despite the pending Court proceedings initiated by both parties.

“The Board’s decision will have no bearing on Allgreen’s case in the High Court, where Allgreen will continue to ask for an order that the majority owners complete the sale and purchase of Regent Garden in accordance with the terms of the sale and purchase agreement,” it said.

Allgreen said that before the agreement was signed, it had offered the option of having a floating sale price that would be subject to the DC. The sale committee, however, rejected this option and decided to fix the sale price at $34 million in order to guarantee itself certainty of sale, the developer added.

Source : Today - 31 Jan 2008

Macquarie MEAG Prime REIT (MMP REIT) has reported a full-year net income of S$76.8 million, boosted by a jump in its fourth-quarter earnings.

The trust, which owns Ngee Ann City and Wisma Atria, said this is due to higher rentals, new leases and revenue from its acquisitions in Japan and China.

Following the strong results, MMP REIT plans to distribute 6.19 cents per unit to its unit holders.

The revamp of the Wisma Atria shopping mall is paying off for MMP REIT.

Despite higher expenses from the installation of new escalators for the mall, net income for MMP REIT still grew to S$76.8 million in 2007.

In the fourth quarter, its net property income rose to S$22.2 million, up about 29 percent on-year.

Franklin Heng, CEO, Macquarie Pacific Star, said, “It’s slightly above our expectations. The most surprising is actually the office sector. Towards the first half of last year, we were only doing an average of 7 to 8 dollars (psf/per month). But towards the last quarter of 2007, we’ve actually done an average of S$12 - slightly above S$12 dollars psf. And in fact, most recently, we’ve done the lease of close to about S$13.50. So going forward, we believe that (the) office (sector) will continue to underpin the strong performance.”

The strong performance is clearly a boon for unit holders, who will receive 6.19 cents per unit.

MMP REIT has about S$60 million to be distributed in 2007, up 7.6 percent over the previous year.

For the fourth quarter, distributable income came in at S$16.2 million or 1.68 cents per unit.

This is 14.3 percent increase from the previous year.

Going forward, MMP REIT expects its major tenant Takashimaya at Ngee Ann City to pay 15 percent to 25 percent more rent in a new contract starting June.

On acquisitions, Macquarie said it is beginning to see good quality assets in Japan, Hong Kong and Singapore, and it is constantly reviewing proposals to find the right fit at the right price.

It is leaning towards retail due to its defensive qualities as office rents tend to be subject to cyclical changes.

Two other REITs also submitted their report cards on Wednesday.

Retail trust Suntec REIT reported a higher distribution income of S$33.5 million for its first quarter.

At 2.279 cents per unit, that is 16.1 percent higher than the previous year.

Fuelled by strong growth in tourism, CDL Hospitality Trust recorded a net income of some S$85.8 million for its first full-year earnings report.

That is 66 percent higher than its own projections.

The trust is distributing S$68.7 million of its income, or 8.98 cents per unit.

Source : ChannelNewsAsia - 30 Jan 2008

Property developer GuocoLand has reported a net profit of S$60.6 million for its half year ended December 31.

That was a 15 percent increase compared to the same period a year ago. Revenue rose 114 percent to S$402 million.

However, net profit in the second quarter actually fell 26 percent to S$33 million. This was due to the absence of an exceptional gain that was booked in the year-ago period.

GuocoLand also reported losses linked to foreign exchange hedging.

Going forward, GuocoLand is looking to develop more residential properties in the prime districts of Singapore. It will build residential properties on the sites of the existing Sophia Court and Leedon Heights.

It is also expanding its footprint in China, Malaysia and Vietnam.

The developer said that although the spectre of a recession is looming over the US economy, China and India are expected to remain resilient.

Barring unforeseen circumstances, GuocoLand expects to report satisfactory results for its third quarter and full year.

Source : ChannelNewsAsia - 30 Jan 2008

KepLand targets after Chinese New Year, but within first quarter.

The launch of Marina Bay Suites has been postponed, with ‘market conditions’ cited as the cause by Keppel Land group chief executive Kevin Wong.

The news comes as a surprise as the consortium developing it - Keppel Land, Cheung Kong Holdings/Hutchinson Whampoa and Hongkong Land, had earlier said that the launch would be around end-January, before the Chinese New Year.

The consortium also said then that over 600 potential buyers, half of them foreigners, had registered their interest in buying into the 221-unit luxury development, priced at around $3,000 psf.

However, at a press conference to announce the company’s full-year financial results yesterday, Mr Wong said that the launch would now be after the Chinese New Year - within the first quarter of 2008. He also said that units would be ‘progressively released in tandem with market conditions’.

Keppel Land’s other launches, including the next phase of Reflections at Keppel Bay, The Tresor and Madison Residences, will all be staggered to follow the launch of Marina Bay Suites to ensure that they do not coincide.

For Reflections at Keppel Bay, which has 400 units remaining, Mr Wong said that its launch would be around mid-2008.

Adopting the cautiously optimistic tone already shared by other developers, he said: ‘If everything picks up in the second half of the year, then we will be back in business.’

His announcement follows Wing Tai deputy chairman Edmund Cheng’s comment on Monday that it would monitor global markets ‘to see how things pan out before we launch anything’. Wing Tai projects that have yet to be launched include Belle Vue Residences and L’Viv.

Earlier this month, City Developments also said that depending on construction schedules, and if the opportunity arose, it could consider short-term leases for Lucky Tower, which it acquired through a collective sale in May 2006.

Keppel Land’s Mr Wong does expect prices in the high-end sector to be affected if a recession takes hold of the United States economy. ‘But we expect mid to mass-market prices to go up steadily,’ he added.

Mr Wong, who said that Keppel Land saw a default rate of about 5 per cent on its projects during the last property slump in the mid-1990s, added: ‘There will be some (if there is a recession in 2008) but the percentage will be fairly low.’

Commenting on the postponement of the Marina Bay Suites launch, Knight Frank director (research and consultancy) Nicholas Mak said that ‘developers are all watching each other now, but someone has to take the plunge first to test the water’.

‘Because of the thin volume at the moment, the market is looking for direction. But we must bear in mind that the volume and price increases in 2007 was out of the ordinary.’

Mr Mak also highlighted that developments with licences to sell will increase as the year progresses. ‘If developers wait for prices to go up, everybody could be launching at the same time.’

Source : Business Times - 30 Jan 2008

THE Housing & Development Board (HDB) has launched the tender for a 99-year-leasehold site at the corner of Yishun avenues 1 and 2 that fronts Lower Seletar Reservoir and is near Singapore Orchid Country Club/Golf Course.

The plot, which is about 10 minutes’ walk from Khatib MRT Station, is expected to fetch bids in the range of $200-$300 per square foot (psf) of potential gross floor area, property consultants say.

The 2.7 hectare site has a 2.1 plot ratio, allowing a maximum gross floor area of 609,163 square feet, enough for a condo with about 500 apartments averaging 1,200 sq ft.

CB Richard Ellis executive director Li Hiaw Ho said that a condominium on this site would be able to enjoy scenic views of the reservoir and golf club.

As the suburban market is expected to strengthen this year, Mr Li expects the site to draw keen interest from developers.

‘Demand is likely to come from Housing & Development Board flat upgraders and people who work in the northern part of Singapore. Units in Orchid Park Condominium nearby are being sold in the secondary market at around $550 psf, while new freehold units in the vicinity such as The Sensoria and Northwood were sold at prices ranging from $600 psf to $650 psf.

‘Based on a selling price of $600 psf to $650 psf, it is expected that the tender bids for the site will range from $200 to $240 psf per plot ratio.’

Credo Real Estate managing director Karamjit Singh places the fair value of the plot even higher, at $280-$300 psf ppr, and reckons that the top bid may surpass that, given the plot’s attractions. Assuming this higher price range, the breakeven cost for a new condo would be around $600-$610 psf and the project is likely to command an average price in the high-$600 psf range, he added.

The tender closes on March 25. It is part of the confirmed list, under which the government launches land parcels for tender according to a pre-stated schedule regardless of demand.

Source : Business Times - 30 Jan 2008