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But developers are in no rush to launch condos ahead of Chinese New Year .

A SLEW of projects from various segments - residential, hotels, office and industrial/warehouse - received provisional permission (PP) from Urban Redevelopment Authority in the fourth quarter of last year, based on official data released on Friday.

The private residential projects that bagged PP in Q4 included a 401-unit condo at Upper Thomson Road by UOL Group (on the former Green Meadows site), several strata housing projects at Gilstead Road and Paya Lebar Crescent and the high-profile Marina Bay Suites, whose preview incidentally has been postponed from the end of this month till after the Chinese New Year festivities.

URA data also showed that there are several high-end private residential projects that have secured the pre-requisites for sale - that is, Housing Developer’s Sale Licence and Building Plan Approval - but that had yet to be launched as at Dec 31, 2007.

These include Wing Tai’s 176-unit Belle Vue Residences at Oxley Walk, 45-unit Ardmore Point at Ardmore Park, 100-unit L’VIV at Newton Road, and City Developments’ 228- unit Sentosa Quayside and 77-unit Shelford Suites, among others.

Wing Tai deputy chairman Edmund Cheng said, when contacted by BT, that the group’s three projects are not quite ready for launch yet as the showflats, for one, are not ready. ‘It’s not a good time to launch in any case, as we’re crossing over to the Chinese New Year period,’ he added.

‘With all the global uncertainty, we’ll have to see how things pan out before we launch anything. But I don’t think it’s going to be all gloomy. I’m still quite positive about Singapore’s economic growth and this will provide the fundamentals for the property industry to go forward.

‘The consolidation in property prices we’ve been seeing for the past few months is a positive thing, bringing expectations to a more realistic level. Before that, prices were going up so fast, it was not to anybody’s interest including developers’, because our replacement costs were also so much higher,’ Mr Cheng explained.

Knight Frank executive director (residential) Peter Ow reckons it makes sense for most developers to hold back launching projects for now, because they would find it tough to achieve the kind of prices they may have in mind, in the current market.

‘Developers can afford to wait it out for a few months as most have strong financial muscle - thanks to the supernormal profits they’ve made in the past couple of years on the back of strong price appreciation, especially in the high-end segment,’ Mr Ow added.

Credo Real Estate managing director Karamjit Singh observed that residential developers are going ahead with securing planning approvals, designing their projects and building showflats but not in a rush with marketing them until sentiments become more conducive for launches, perhaps after Chinese New Year.

‘It’s a different story for developers of hotels and offices and to some extent industrial facilities. These sectors are experiencing a space shortage, especially for hotels and offices. So developers will rush to proceed with developing such projects once they receive planning approval,’ he added.

At least four hotel projects received PP in Q4: CityDev’s 257-room property at Sentosa Cove, CGH Group’s 272-room hotel in Tanjong Pagar, Haggai Institute for Advanced Leadership Training’s 180-room facility at Fairy Point Hill in Changi, and Hotel Grand Central’s 328-room hotel in Little India.

Two separate office developments on 99-year sites at Anson Road - by a unit of LaSalle Asia Opportunity Fund III, and by a Mapletree Investments subsidiary - clinched PP in Q4. URA also gave its nod for 144,870 sq metres (gross floor area) of office space and 5,530 sq m of retail space at Marina Bay Financial Centre’s Phase 2.

Also receiving the same approval were two transitional office projects on 15-year leasehold sites next to Newton MRT Station and in Tampines.

Among a string of industrial projects obtaining PP in Q4 were Ascendas Real Estate Investment Trust’s 74,660 sq metre business park project at Changi Business Park Ave 3 and HG Metal Manufacturing’s factory at Jurong Port Road. Jurong Port Pte Ltd also received approval to build a 10,240 sq metre extension to its existing warehouse at Jurong Port Rd and URA gave the green light for StorHub Self Storage to develop a warehouse project at Simei Avenue/Tampines St 92.

Source : Business Times - 29 Jan 2008

The office tower construction deal brings BBR’s order book to $517.9m

BBR Holdings has won a $95.3 million contract from Ascendas (Tuas) to build an office tower at the International Business Park in Jurong East.

Piling works begin next month and the tower is expected to be completed by August next year.

The turnkey design-and-build contract was secured through BBR’s wholly owned subsidiary Singapore Piling & Civil Engineering, the company’s construction arm.

The deal brings BBR’s current order book to $517.9 million, the company said.

BBR’s chief executive officer Andrew Tan said having an in-house specialist engineering division meant the company could execute its own bored piling and post-tensioning work.

‘This means that we will have better control over the construction schedule and will be in a better position to manage our costs,’ he said.

The project features two 12-storey tower blocks linked by a sky bridge. The site area is 17,858 square feet. When completed, the towers will yield 41,970 square metres of gross floor area.

The building has been designed to meet the BCA Green Mark GoldPPLUS rating, said BBR. The BCA Green Mark evaluates a building for its environmental impact and performance.

Recently, BBR won a $189.6 million contract from the Urban Redevelopment Authority to construct a common services tunnel in Singapore’s downtown core.

It has also secured a $6 million contract from the Land Transport Authority to upgrade vehicular bridges at seven locations in Singapore.

BBR has also ventured into property development and is now involved in two condominium projects at Nassim Hill and Holland Hill.

BBR shares closed trading yesterday at seven cents, down half a cent.

Source : Business Times - 29 Jan 2008

It also bags warehouse in CBP, announces completion of HansaPoint.

ASCENDAS Real Estate Investment Trust (A-Reit) has bought the Acer Building at International Business Park in Jurong East for $75 million or $344 per square foot of lettable area.

Market sources say the price reflects an initial yield of 6.5-6.8 per cent.

A-Reit yesterday also announced the purchase of Sim Siang Choon Building, on the fringe of Changi Business Park (CBP), from Sim Siang Choon Hardware for $31.89 million.

This is a four-storey warehouse with a first-storey showroom and a separate single-storey warehouse.

In addition, A-Reit said HansaPoint@CBP received a Temporary Occupation Permit on Jan 22 and has achieved full occupancy.

The $28.6 million project’s major tenants include Rohde & Schwarz Systems & Communications Asia, Credit Suisse and Citco Fund Services (Singapore).

The completion of HansaPoint@CBP and acquisition of the Acer and Sim Siang Choon buildings will have a positive effect on A-Reit’s distribution per unit (DPU).

A-Reit is buying Acer Building from Acer Computer International.

The deal involves Acer’s local subsidiaries Acer Computer (Singapore) and Logistron Services leasing back 23 per cent of the current net lettable area for five years with an option to renew for a further 3+2 years.

The building’s current occupancy is 97 per cent.

Acer Building’s sale was handled by DTZ through an expression of interest exercise that drew five offers.

The other bidders are believed to have been two other Singapore Reits, Frasers Centrepoint and a private fund managed by Mapletree.

The property , a high- tech business park development, was completed in May 1996 on a site leased from JTC Corp for 30 years with an option to renew for a further 30 years. It has a total lettable area of 20,231 sq metres.

A-Reit’s manager says there is potential to create a further 1,200 sq metres of lettable space.

According to a report last year, Acer is paying JTC an annual land rent of $715,469 with escalation of 4 per cent a year as of Q3 2007.

The new owner is expected to pay JTC a slightly higher land rent each year, according to the report.

BT understands that A-Reit should enjoy considerable upside from positive rental reversion, as a number of leases in the building are up for renewal in the next one to two years.

Some of these tenants are paying monthly rent of $2 to $2.60 psf, whereas current rents for similar properties in International Business Park are $3.20 to $3.60 psf.

Besides Acer, other tenants in the building include Jacobs Engineering, Converge Asia and Nortrans Shipping.

Source : Business Times - 29 Jan 2008

Eight saw earnings improve; most of the early birds are trusts and Reits.

THE early birds of the reporting season have delivered a good showing. All 13 companies that have reported their results this month were in the black, and eight of them posted higher earnings.

Only one company, Evergro Properties - a member of the Keppel group - reported lower earnings, due to lower divestment gains.

The 13 companies’ total earnings for the full year ended Dec 31, 2007, totalled $842.8 million.

Of these 13 companies, most are trusts - mainly real estate investment trusts (Reits).

CapitaMall Trust racked up the largest profit number, in absolute terms, among the trusts. The Reit’s net income available for distribution for 2007 came to $211.2 million, up 25 per cent from the $169.4 million posted in 2006.

And the trust’s manager is forecasting a 9.5 per cent growth in distributable income for this year to $231.3 million.

CapitaMall Trust’s portfolio valuation has increased by $200 million in eight months to $5.8 billion and it intends to achieve a local target asset size of $8 billion by 2010.

The $8 billion target size is based on a secured pipeline of malls in parent CapitaLand’s portfolio - Ion Orchard (50 per cent stake), Clarke Quay and the mall in the one-north precinct.

At Ascott Residence Trust, distributable income shot up 83 per cent to $45.1 million for 2007, compared to $24.6 million for the 10 months from March 1, 2006 - the date the trust completed its first acquisitions. The service apartment operator’s takings were boosted by new acquisitions and strong operating performance.

Other trusts, like First Reit and First Ship Lease (FSL) Trust, have no comparative full-year figures. First Reit, Singapore’s first healthcare real estate investment trust, was listed in December 2006. For the whole of 2007, it chalked up distributable income of $18.3 million.

FSL Trust - whose portfolio comprises shipping vessels, container ships, tankers and carriers - reported distributable income of US$34.8 million for the period March 19 to end-December last year. The trust was listed in March.

Of the non-trust companies that reported their earnings this month, Qian Hu Corp and BH Global Marine led the earnings field in percentage terms.

Qian Hu, the ornamental fish breeder, reported net profit growth of 89 per cent to $4.9 million, boosted by a jump in operating profit from its ornamental fish segment, and for its accessories.

At BH Global - a global supply chain management company specialising in supplying equipment to the oil and gas industry - net income rose 56 per cent to $17.5 million, due to strong demand for its products and services.

MobileOne (M1) suffered a tough fourth quarter but managed to stay in the black for the full year, with 2007 net profit increasing 4 per cent to $171.8 million. The company said that it would continue to work at reducing costs this year.

A slew of big cap counters are still due to report their results this month. Expected this week are Keppel Land, Keppel Corp, Fortune Reit and Singapore Petroleum Co.

Source : Business Times - 28 Jan 2008

But small caps, oil and gas stocks fail to make up for lost ground.

AS THE market turbulence of early last week subsided, property stocks and the benchmark Straits Times Index (STI) ended among the winners, while small caps and stocks in the oil and gas sector languished.

The FTSE ST Reit Index was up 5 per cent in just the week to last Friday, while the real estate holding and development index was 3 per cent higher.

Similarly, the financials not only recovered, but were also 3 per cent higher than a week ago.

According to an analyst: ‘In any market rebound, property stocks and banks are usually the first ones to go up.

‘The small caps are more volatile. Investors who are looking to return to the market will be less willing to buy the small caps.’

Another analyst noted: ‘With the Reits sold down, the yields have now become very attractive. With interest rates likely on the downtrend, investors are now looking to Reits to offer better returns.’

CapitaCommercial Trust, which invests in office buildings, ended up 27 cents or 14 per cent last Friday at $2.18, while CapitaMall Trust, which owns malls such as Tampines Mall and Junction 8, recovered 28 cents or nearly 10 per cent to close at $3.18.

Banks also recovered. DBS Group Holdings, which went as low as $16.40 last week, recovered to $18.94. OCBC Bank closed last week 12 cents higher at $7.80, while United Overseas Bank was 50 cents higher on Friday at $18.08.

The large-cap property stocks also made gains, including CapitaLand and Wheelock Properties.

The STI was up 2 per cent over the week. However, showing that nerves were still rattled, more than half the 19 indexes were unchanged or below their week-ago levels.

For example, the China index closed down marginally, falling 1 per cent for the week. While the China stocks received a boost mid-week, from news that the qualified domestic institutional investor (QDII) scheme would be extended to the Singapore market, other concerns over China exports dominated.

The managing director of boutique finance house NRA Capital, Mr Kevin Scully, said: ‘The impact of the QDII scheme is not that significant in the short term. What people may have more concerns about, is that with the slowing economy, exports to the US may slow down. As well, with interest rates being cut, the yuan may soften. This may eat into manufacturers’ margins and hence their profits.’

The sector showing the biggest drop was oil and gas, with the index down about 9 per cent. The index includes stocks such as Aqua-Terra Supply, Chemoil and Singapore Petroleum Company.

One analyst says that he is bearish about such commodity-related stocks. He said: ‘Oil prices have peaked and if there is indeed an impending recession, the commodity stocks will be the first to suffer. There may be a slowdown in the fulfilment of orders.’

Oil closed last week at US$90.71 a barrel, way down from its US$100 levels.

Small-cap stocks have also not managed to make up for lost ground. Mr Scully said: ‘Since the news of the sub-prime crisis in the US took hold in August, smaller- cap stocks have not performed well.’

A dealer with a local house said that the jury was still out.

He said: ‘The next few weeks will give us a better idea of how these smaller stocks will fare. If the stocks can recover over the next few few weeks, then it will show whether the rally is sustainable or not.’

Source : Straits Times - 28 Jan 2008