Horizon Towers: bid for judicial review fails

Horizon Towers: bid for judicial review fails

This means the dates of the STB hearing will remain on July27 to Aug2

The minority owners of Horizon Towers, which has been pledged to be sold en bloc for $500 million, have failed in their first step to get judicial review of the Strata Titles Boards’ (STB) decision.

This means that the dates of the STB hearing, at which the board will decide whether or not to approve the en bloc sale, will remain on July27 to Aug2.

The hearing was scheduled for September, but STB decided to bring forward the dates.

The minority owners of the condominium then applied to the High Court seeking leave to apply for judicial review of STB’s decision to bring the hearing forward. Their primary complaint is believed to be that they do not have enough time to prepare their case given the earlier dates.

The timing of the STB hearing is crucial as the $500 million deal must be sealed by Aug11, six months after the signing of the agreement on Feb12.

If the deadline is missed, the deal could fall through as the sellers may refuse to extend the deadline.

However, the court yesterday rejected the minority owners’ application for leave.

Horizon Towers, on Leonie Hill, has been pledged to be sold en bloc for $500 million to Hotel Property (HPL), Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar.

The deal was backed by 84 per cent of the owners - above the 80 per cent requirement - but it still needs approval from the STB.

The buyers are represented by senior counsel KShanmugam and William Ong from Allen & Gledhill.

The minorities are represented by Kannan Ramesh and Karam Parmer from Tan Kok Quan Partnership, and Philip Fong from Harry Elias Partnership.

Source : Business Times - 21 Jul 2007

Minority owners’ bid to buy time fails

Minority owners’ bid to buy time fails

In yet another twist to the controversy over the collective sale of the Horizon Towers condominium, a High Court bid by minority owners for more time to present their case to the Strata Titles Board has failed.

The minority owners, who object to the sale, wanted a judicial review of the board’s decision not to postpone a hearing.

They will now have to present their case next week instead of in September as they had wanted.

The $500 million deal for the two blocks at Leonie Hill, which was struck on Feb 12, has to be finalised by Aug 11. If the High Court had ruled in favour of the minority owners, the deal would have been effectively scuttled.

The 99-year leasehold property has been pledged to be sold en bloc to HPL and two others.

The deal was backed by 84 per cent of the owners. This is above the 80 per cent requirement, but it still needs the approval of the Strata Titles Board. Previously, the board set the hearing for September, but later moved it forward.

Through lawyers from Tan Kok Quan Partnership and Harry Elias Partnership, the minority owners sought leave from the High Court for a judicial review of the board’s decision to bring the hearing forward.

But according to court documents filed by the purchasers, the deal would have been scuttled if the objectors’ request had been granted.

The purchasers, who were represented by Senior Counsel K. Shanmugam, argued that if this happened, the majority owners who consented to the sale would be unlikely to extend the deadline for the en bloc deal.

Both majority and minority owners alike do not want the deal to go ahead at $500 million. This is because a rise in market prices after the agreement was reached means that there is every possibility that they can now sell the property to another buyer at a significantly higher price.

The minority owners argued in their submissions that the board’s decision gave them inadequate time to present their case.

But the purchasers countered that the minority owners actually had three months to prepare, citing the lengthy documents the objectors prepared for yesterday’s hearing.

The Straits Times understands that during the High Court chamber hearing, the minority owners failed to convince Justice Tan Lee Meng that they had an arguable case which deserved judicial review.

Source : Straits Times - 21 Jul 2007

Why was market spooked?

Why was market spooked?

Property analysts say announcement affected listed developers, so it should have been re-timed

PROPERTY stocks rebounded slightly on Friday after being spooked two days ago by the Government’s surprise announcement that it was raising development charges by 20 percentage points with immediate effect.

The Wednesday announcement — made in the afternoon and seen then as a clear signal that the Government was out to cool the red-hot property market — led the Singapore Properties Equities Index to drop 2.7 per cent and the ST Index to lose 1.8 per cent at the close of trading that day.

Now that the dust has settled — with dealers saying that property stocks have regained their bearings — one question has emerged: Why did the Government announce such a shocker before the market closed?

The last time such a “shocking announcement” had unleashed havoc on the stock market was in 1996 when the tax in capital gains — also issued to curb skyrocketing property prices — was implemented, recalled Mr Eugene Lim, assistant vice-president at ERA Singapore.

He was one of the many property analysts Today spoke to who voiced surprise at the timing of the announcement. Mr Lim said: “These announcements make quite a big impact on listed developers, so by right, they should wait till the market closes.”

The increase in development charges — from 50 per cent back to the pre-1985 rate of 70 per cent — is widely viewed by analysts as an attempt to slow down the en bloc frenzy as it will now be more expensive for developers to buy land. While he acknowledged that it was not the first time that the Government had released statistics before the market closed, Mr Lim felt none of those announcements were as big as Wednesday’s. “It is quite unlike our Government” not to see the impact of such an announcement on the stock market, he added.

Other analysts felt that it was possible that the Government did not expect the fallout to be quite so big.

Mr Colin Tan, director and head of consultancy & research at Chesterton International, said: “Perhaps, the Urban Redevelopment Authority (URA) thought the market was primed for such a policy announcement … (Or) They must have thought it wasn’t so sensitive because it’s nothing new, as they were just reinstating an old policy (of raising the development charges back to an old, higher rate). ”

But in hindsight, perhaps the announcement could have waited till later in the day, Mr Tan added, to give investors a chance to digest the news.

In any case, Mr Donald Han, managing director at Cushman & Wakefield Singapore, said: “The official line was not directed at cooling the market, but adjusting it to be more equitable, so I think Government didn’t think it was a critical announcement (that) would make much impact.” But it did have a great impact on the stock market, said analysts. “The hours of panic might have been because investors thought it was a sign of tougher measures to come,” said Mr Han.

Economist Chua Hak Bin, however, was among the analysts who did not attach much weight to the timing of the announcement as monetary policies are also released in the morning, at 8am. While he noted that the Government emphasised that the move was not a cooling measure, “it does raise the possibility that the Government is watching the property market closely and more measures are likely”.

In response to Today’s queries, the Ministry of National Development said the announcement — issued at 12.30pm during the mid-day market recess and posted on both the MND and URA websites — was “consistent” with their practice of issuing other announcements like the Government Land Sales (GLS) programme.

Source : Weekend Today - 21 Jul 2007

CapitaCommercial Trust to buy Wilkie Edge from CapitaLand

CapitaCommercial Trust to buy Wilkie Edge from CapitaLand
Proposed acquisition comes as CCT posts 84.7% rise in Q2 income to $29.3m
By KALPANA RASHIWALA

CapitaCommercial Trust (CCT), which yesterday posted an 84.7 per cent jump in Q2 group distributable income to $29.3 million, is buying Wilkie Edge, a mixed development coming up on the former Selegie Complex site, from parent CapitaLand.
Under construction: Wilkie Edge will be a 12-storey mixed development 
And the trust is not ruling out buying over CapitaLand’s stakes in other Singapore office buildings to grow its local portfolio, David Tan, CEO of CapitaCommercial Trust Management Ltd (CCTML), indicated yesterday.

CapitaLand owns 55 per cent of Chevron House (formerly Caltex House), 50 per cent of Hitachi Tower and 50 per cent of 1George Street (the last through the Eureka Office Fund) here.

The proposed acquisition of Wilkie Edge also reflects an extension of CCT’s strategy, from buying only completed buildings to acquiring buildings under development on a pre-commitment basis and taking direct stakes in development projects, both in Singapore and abroad, CCTML chairman Richard Hale said.

But market watchers say that probably the most compelling growth story for the trust, which is one of Singapore’s biggest office landlords, is that it is poised to take advantage of the robust office rental growth over the next two years, with more than half of its office portfolio up for renewal in 2008-2009.
 

CCT owns Capital Tower, 6Battery Road, Raffles City complex (60 per cent), HSBC Building, Robinson Point and StarHub Centre.

The buoyant office market helped the group to chalk up a $730.2 million increase in valuation of its properties in six months, from $3.8 billion as at Dec1, 2006, to $4.6 billion as at June1, 2007. ‘As the prospects of office market rentals in Asia remain positive, CCT will look at acquiring commercial assets in Asia including Vietnam,’ CCT said.

The acquisition of Wilkie Edge, which is under construction, will boost CCT’s portfolio to about $4.8 billion.

The 12-storey development, being built on a 99-year leasehold site, will comprise about 103,200 sq ft net lettable area of offices, 36,500 sq ft of retail space, and 154 serviced apartments when it is completed late next year.

CCT said the purchase consideration for Wilkie Edge is $262 million. CCT is granting CapitaLand and/or its nominee an option to lease the serviced apartments for the remainder of the 99-year leasehold tenure less one day, for a $79.3 million consideration. If the option is exercised, the purchase consideration to CCT will be reduced to $182.7 million or about $1,313 per square foot of net lettable area for the office, and retail components as well as the common areas including car parks.

In September last year, CapitaLand’s serviced residences arm The Ascott Group inked a memorandum of understanding to manage Wilkie Edge’s serviced residences for an initial 10-year term with an option for a further 10 years.

Market watchers say they would not be surprised if either Ascott or its associate Ascott Residence Trust exercises the option to purchase Wilky Edge’s serviced residence component.

The 85 per cent year-on-year rise in the trust’s distributable income for Q2 ended June30, 2007 was due to the yield-accretive acquisition of Raffles City in September 2006 and higher office rents. Renewals and new leases in the group’s office portfolio in the first half of this year were at 99.8 per cent and 124.3 per cent respectively higher than preceding rental rates.

Gross revenue (at group level) for Q2 rose 91.1 per cent from $31.1 million to $59.4 million. Net property income increased 82.7 per cent to $43.5 million. Distribution per unit (DPU) for Q2 was 2.12 cents, up from 1.77 cents in the same year-ago period.

The latest Q2 DPU works out to an annualised figure of 8.50 cents, reflecting an annualised distribution yield of 2.9 per cent based on CCT’s closing price of $2.95 yesterday.

For the first half of this year, DPU was 4.23 cents, reflecting an annualised figure of 8.53 cents, surpassing the 7.60 cents forecast for the whole of 2007 based on CCT’s circular in August last year.

Source : Business Times - 21 Jul 2007

Wheelock Properties gearing up for launch of Scotts Square

Wheelock Properties gearing up for launch of Scotts Square

By UMA SHANKARI

WHEELOCK Properties will launch its upmarket Scotts Square residential project only in September or October, but the developer is already pulling out all the stops now.
 
Getting marketing down to a fine art: Ms Tan with the Moore sculpture that will grace Scotts Square 
To showcase the 338-unit freehold project, the company recently spent over $500,000 to build a ‘corporate gallery’, which is now being used to entertain potential buyers - even as the showflats are being constructed.

Furnished with a fully equipped dry kitchen cum bar complete with champagne and piped-in music, the gallery also comes with a $2.3 million sculpture - British artist and sculptor Henry Moore’s 1971 Working Model for Sheep Piece. The sculpture will be one of the four pieces of art that will grace Scotts Square once it is completed in 2010.

Market watchers said that it is unsurprising that Wheelock is willing to fork out such large sums of money to market Scotts Square ahead of the launch as prices are expected to hit $5,000 per square foot (psf) there.

Last month, SC Global said that a unit at its freehold The Marq On Paterson Hill has been sold for $5,100 psf. In all, a total of 21 apartments were sold at an average $4,137 psf.

Scotts Square is generally considered to be in a better location, market watchers said.

Pre-marketing for the project started two weeks ago, and the response has been ‘very good’ so far, said Tan Bee Kim, an executive director at Wheelock.

‘We don’t price our properties until they are ready for launch,’ said MsTan when asked about Scotts Square’s launch price. ‘But I am optimistic. We are getting a lot of demand.’

There have been offers from both local and foreign funds to buy multiple units in the development for investment, Ms Tan said. But she added that Wheelock will prefer to sell to individual buyers, many of whom are likely to be previous customers of Wheelock.

Typically, about 50 per cent of units in each of its projects are bought by foreigners, but Ms Tan expects the proportion to be higher this time around.

Wheelock will be departing from current market trends in a few ways with Scotts Square. Unlike other upmarket launches of late, all the units will be launched at one go, rather than in phases.

And Scotts Square will offer smaller units than other recent luxury projects - and no penthouses.

The 338 units will consist of one, two and three-

bedroom apartments of 600 sq ft, 900 sq ft and 1,200 sq ft respectively.

Ms Tan said that Scotts Square is the only project the developer intends to launch for the rest of 2007.

Two other upcoming freehold residential developments - Orchard View at Angullia Park and Ardmore Vue at Ardmore Park - are likely to be launched only next year, Ms Tan said.

Wheelock’s shares closed six cents up at $3.40 yesterday.

Source : Business Times - 21 Jul 2007

CapitaLand unit’s first-half income up 87%

CapitaLand unit’s first-half income up 87% 
By Fiona Chan 
NEW ACQUISITION: CapitaCommercial Trust is paying $262 million for Wilkie Edge, an office mall being built along Selegie Road. — PHOTO : CAPITACOMMERCIAL TRUST
 
CAPITALAND’S office trust reported yesterday an 87.3 per cent increase in its distributable income in the first half of the year, on rising office rents and newly acquired properties such as Raffles City.
CapitaCommercial Trust (CCT) said its distributable income rose to $58.5 million from $31.2 million year-on-year, beating forecasts by 11.5 per cent.

Distribution per unit for the six months to June 30 rose 21.2 per cent to 4.23 cents year-on-year. This translates to 8.53 cents annualised, which puts CCT’s distribution yield at 2.9 per cent.

CCT renewed almost 10 per cent of its office leases in the first half and at double the previous rents, the trust said. Over the next two years, about 50 per cent of its leases will be up for renewal, likely at higher rates.

In line with the market boom, rents have jumped at several of CCT’s buildings.

Top monthly rents at 6 Battery Road, for instance, have risen to an average $18.50 per sq ft (psf) this year from $16.80 psf a year earlier. At Robinson Point, rents have risen from $8.20 psf to $11 psf.

CCT, meanwhile, announced that it has acquired Wilkie Edge, an office mall being built along Selegie Road, from CapitaLand.

It will pay $262 million for the property, which will have offices, shops and service apartments.

The apartments may be leased back to CapitaLand or a related party, which may well be CapitaLand’s service residence arm, The Ascott Group.

This purchase marks the first time CCT has acquired a project in Singapore that is still under construction.

Buying uncompleted buildings and taking direct stakes in projects being built will become part of CCT’s core growth strategy, in addition to buying completed blocks, said Mr Richard Hale, chairman of CCT Management.

Source : Straits Times - 21 Jul 2007

HDB rents at 10-year high

HDB rents at 10-year high 
Some flats are fetching monthly rates of above $2,000
Growing demand a spillover from private rental market
 
By Jessica Cheam 
 

Some flats are fetching monthly rates of above $2,000 Growing demand a spillover from private rental market

PUBLIC housing rents have hit a 10-year high as sizzling demand for private property rentals spills over to Housing Board flats.

For the first time in recent memory, monthly rents for some HDB flats have pushed northwards of $2,000 in leases signed in the last couple of months.

These flats are located near the city or MRT stations, but rents for flats in less sought-after areas are rising too, say property consultants.

This growing demand to rent HDB flats is a spillover from the red-hot private rental market, where supply is declining and rents have been escalating, say property experts.

This is partly because of an influx of foreigners on the back of Singapore’s booming economy, they say. Also, there is a squeeze on rental units, given the number of private properties that have been sold in en bloc sales.

Recent transactions released to The Straits Times by several property agencies included one four-room HDB flat at Crawford Lane, not far from Lavender MRT station, renting at an eye-popping $2,800 a month.

Even on Singapore’s outskirts, leases were signed for $2,400 a month for a Bedok North four-room flat and $2,500 for a three-room flat in Jurong East.

Rentals like these have been unheard of since the last property peak in 1996, said Mr Andy Low, marketing director of property agency EM Services, an HDB subsidiary. Rents slid as the Asian financial crisis took hold in 1997.

But flats fetching these high rents are still in the minority. ‘The whole HDB market has not reached that level yet,’ said Mr Low.

Flats in good locations, with good views, or those which have been recently refurbished, will command higher prices, he added.

Average rents islandwide are still below $2,000, but they are climbing steadily, said Mr Eric Cheng, senior division director of PropNex.

If private sector rents keep soaring, more tenants will turn to HDB flats - and this will cause a further supply crunch and lead to higher rents.

Mr Cheng said current HDB rents still have a buffer of 10 per cent to 15 per cent before hitting 1996 peak prices. Back then, a five-room flat averaged $2,200. The present average is about $2,000, he said.

The figure cited by Mr Cheng is above HDB’s average rental rates for each estate published quarterly on its website. For the second quarter, the average monthly rent for five-room flats ranged from $1,100 to $1,700.

Managing director of C&H Realty, Mr Albert Lu, said the rise in rents, coupled with the HDB’s recent relaxation of sub-letting rules, has pushed up rental yields - the annual rent expressed as a percentage of the flat’s value.

Yields for many HDB flats are now 5 per cent to 8 per cent - a return considered by property experts to be strong.

In March, HDB announced that flat owners may rent out their entire unit after living in them for just three or five years, depending on how they bought the unit. This means over two-thirds of all flats may be sub-let.

Rental yields for HDB flats have typically been lower than those of private properties - usually 4.5 per cent to 5 per cent.

For example, an executive flat in Woodlands which cost $330,000 can now fetch a monthly rent of $2,200. This gives it a rental yield of 8 per cent, said Mr Lu.

But buying up large numbers of HDB flats to make a fast buck is not an option, said ERA Singapore’s assistant vice-president Eugene Lim.

Nobody can own more than one flat, and owners are still required to stay for a minimum period of time.

Mr Lim said public housing is still an attractive alternative for tenants to the rising rents in the private sector.

‘In the long run, prices will start to come down when more units come online.’

Rentals above $2,000

RECENT transactions released to The Straits Times by property agencies ERA Singapore, PropNex and C&H Realty show some flats fetching monthly rentals of above $2,000. Some of them are:

5-room HDB flat at Blk 83, Redhill Lane: $2,400

4-room HDB flat at Blk 422, Bedok North Road: $2,400

3-room flat at Blk 253, Jurong East St 24: $2,500

4-room flat at Blk 114, Bukit Merah View: $2,200

4-room flat at Blk 462 Crawford Lane: $2,800

5-room flat at Blk 210 Pasir Ris St 21: $2,000

Executive flat at Blk 510 Woodlands Drive: $2,200

5-room flat at Blk 700A, Ang Mo Kio Ave 6: $2,200

Source : Straits Times - 21 Jul 2007