HK’s Hillcrest Capital makes foray into S’pore

HK’s Hillcrest Capital makes foray into S’pore
It is expected to launch luxury project on Anderson Road next month
By UMA SHANKARI
HONG KONG-BASED property developer Hillcrest Capital will make its maiden move into Singapore with 21 Anderson, a luxury residential development on Anderson Road.
21 Anderson : The 34 units in the residential development could go for about $3,000 psf
The project, which is expected to be launched early next month, will have 34 units spread over 10 floors.

‘We are very bullish on the property market in Singapore,’ Hillcrest’s managing director Lyon Lau told BT.

The company bought the Anderson Road site in February this year from Habitat Properties for about $112 million. This is thought to have worked out to $1,519 per square foot (psf) based on a total strata area of about 73,710 square feet.

In an unusual move, Hillcrest decided not to tear down the old apartment block on the site.

Instead, it is keeping the main structure but changing the building’s facade, layout and interior design and increasing the floor area. This means it can have 21 Anderson ready for occupation as soon as mid-2008.

Usually, developers take two or three years to demolish and rebuild a project.

‘We will have a time-to-market advantage,’ Mr Lau said.

He expects the project to attract interest from people who have sold their homes in collective sales and need replacement properties quickly.

Prices at 21 Anderson will be ‘competitive’, Mr Lau said. Units could go for about $3,000 psf, BT understands.

Hillcrest is looking for other projects in Singapore - residential developments in the prime districts and commercial buildings.

At 21 Anderson - designed by local firm Eco.id Architects and Design Consultancy - each unit will have its own balcony and lift and will be equipped with designer furnishing and appliances.
Source :  Business Times - 14 Aug 2007

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Foreign investment in S’pore up 61.3% last year: report

Foreign investment in S’pore up 61.3% last year: report
And investment out of S’pore up 71.3% to US$8.6b
By CHUANG PECK MING
WHILE direct investment flowing into China dipped in 2006, the first time in three years for the emerging economic giant, investments which headed for Singapore soared 61.3 per cent to US$24.2 billion from the year before.
The increase was the highest in Asia after Taiwan (356.9 per cent) and India (152.9 per cent), according to estimates by Japan’s External Trade Organisation.

China, which saw incoming direct investments slide 1.3 per cent to US$78.1 billion - the last time they fell was in 2003, by 4.5 per cent - still captured the biggest chunk of the investments flowing into Asia last year. Hong Kong (US$42.9 billion) had the second biggest share, followed by Singapore.

Investments flowing out of Singapore in 2006 saw an even bigger hike - up 71.3 per cent from the previous year to US$8.6 billion. In comparison, investment flowing out of China rose 57.7 per cent to US$17.8 billion. Outward direct investments for East Asia, excluding Japan, jumped 58.7 per cent to US$91.4 billion last year, from US$57.6 billion in 2005.

Inward direct investments in East Asia were 15.9 per cent higher at US$174.4 billion last year, accounting for 12.3 per cent of global investments. Apart from China, South Korea was the only other Asian country where foreign direct investments (FDI) dropped.

‘Factors behind the decline (in China) included rising labour costs and changes in government policy in favour of foreign capital, such as a reduction in VAT rebates, all of which altered the investment environment,’ Jetro says.

India saw inward direct investments multiplied 2.5 times to US$16.9 billion. Worldwide, the US continued to attract the largest share of FDI in 2006. Direct investments into the US rose sharply by 65.7 per cent to US$180.6 billion.

More striking were the US$235 billion in investments flowing out of the US, a sharp reversal from the negative US$7.7 billion the year before. ‘The American Jobs Creation Act of 2004 spurred companies to repatriate profits in 2005, which resulted in a net minus investment in reinvested earnings,’ the report says. ‘No such special factor was in play in 2006.’

According to Jetro estimates, global foreign direct investments (balance of payments and inward FDI basis) increased 25.8 per cent to US$1,422 billion, topping the US$1 trillion mark for a second straight year. The figure was US$1,130 billion in 2005.
Source :  Business Times - 14 Aug 2007

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Prime office rents in Singapore still competitive

Prime office rents in Singapore still competitive
Corporates still see value in operating out of Singapore, says DTZ
By ARTHUR SIM
(SINGAPORE) Occupancy cost in prime Singapore office locations has risen 54 per cent in the first six months of the year. Though the cost is still lower than in Hong Kong, the increase here is still the fastest in the Asia-Pacific region.
DTZ Debenham Tie Leung defines occupancy cost as the average total cost of leasing prime net usable space of 10,000 sq ft within a prime CBD location. It includes rent and outgoings, such as maintenance costs and property tax, if these are normally payable by the occupier.

And according to DTZ, average occupancy cost has more than doubled from a year ago in the Raffles Place and Marina Centre zones where average rents are now S$13.10 psf per month and S$11.80 psf per month respectively.

However, DTZ’s report does show that Grade A office rents in general are still competitive compared to other regional cities at S$10.89 psf per month.

And although DTZ believes that ‘unrelenting office demand’, will see occupancy cost keep rising, its executive director Ong Choon Fah said: ‘A lot of corporates still see value in operating out of Singapore.’

Demand for office space has been ‘extremely strong’ from the financial sector but Mrs Ong notes that this has also begun to ‘trickle down’ to other support sectors, boosting demand further.

Supporting this is DTZ’s data which shows that Grade A vacancy rates in Singapore is the lowest at 2.6 per cent after Delhi at 0 per cent, followed by Shanghai (2.8 per cent), Tokyo (2.96 per cent) and Hong Kong (3 per cent).

Asked to comment on the figures for occupancy cost in Singapore, a URA spokesman said that the statistics were computed based on DTZ’s knowledge of rental transactions for a selected basket of prime office buildings as well as their estimates of ‘achievable rentals’ where there were no actual transactions done in certain buildings.

URA, which had also consulted DTZ on its figures, added: ‘The inclusion of pre-committed space may result in instances of double-counting of occupied office space, as the tenants may be vacating other office buildings when they shift to their new premises.’

Noting that different methodologies may result in different statistics, URA also noted that DTZ estimates that office occupancy rates for prime office buildings in Raffles Place, Marina Centre and Orchard Road for Q2 2007 were 97.4 per cent, 98.9 per cent and 96.9 per cent respectively.

By comparison, URA’s office occupancy rate figure for Category 1 office buildings in the Downtown Core - which includes Raffles Place and Marina Centre and Orchard Planning Area - was 95 per cent for the same period, and computed based on the physical occupancy of space.

URA also said that based on Iras’ records of rental contracts signed in Q2 2007, the median rental for Category 1 office buildings was S$10.33 psf per month.

DTZ said that although the increase in occupancy cost was the greatest in Singapore, occupancy cost is still the highest in Hong Kong at US$180.27 psf per year where base Grade A rents in the Central and Admiralty areas is S$20.09 psf per month.

This is followed by Tokyo at US$119.30 psf per year with base rent at S$150.55 psf per month, and Singapore at US$102.61 psf per year with a base rent of S$10.89 psf per month.
Source :  Business Times - 14 Aug 2007

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Ho Bee’s quarterly gain jumps 412% on robust home sales

Ho Bee’s quarterly gain jumps 412% on robust home sales
By Fiona Chan, Property Reporter
STRONG home sales and revaluation gains drove second-quarter net profits at boutique developer Ho Bee Group up 412.2 per cent to $125.1 million.
The profit surge at the group, best known for its Sentosa Cove developments, included a $71 million gain from the revaluation of investment properties.

Revenue for the three months ended June 30 rose 31.5 per cent to $160 million, thanks to good take-up of its projects, including Orange Grove Residences in Orange Grove Road and The Coast and Paradise Island at Sentosa Cove.

For the first half of the year, net profit jumped 416.7 per cent to $194.2 million with revenue up 133 per cent to a high of $405.8 million. This is already more than the $393 million revenue for the whole of last year.

Ho Bee has fully sold five of the seven projects it launched recently and is close to selling out the last two. Only one unit remains unsold at Paradise Island and only four are left at Orange Grove Residences.

Ho Bee will launch two more projects in the last quarter of this year: the 91-unit Turquoise in Sentosa Cove, on the Waterfront Collection site, and The Orange Grove, a 72-unit freehold project at the corner of Stevens and Orange Grove roads.

It plans to launch four more condominiums in the first half of next year, including a 151-unit development on the Seaview Collection site at Sentosa Cove and a 150-unit project on the Elmira Heights site in Newton.

Now that Sentosa Cove is almost fully sold, Ho Bee will turn its focus to mainland Singapore, said executive director Ong Chong Hua. But the group is also looking at other countries, including China, India, Vietnam and Australia, he added.

Earnings per share in the quarter jumped from 3.4 cents last year to 17 cents while net asset value per share rose to 98.5 cents as at June 30, from 67.9 cents as at Dec 31.

Ho Bee is recommending an interim cash dividend of one cent per share. Of this, 0.3 cent will be taxed at 18 per cent while the other 0.7 cent will be tax exempt.
Source :  Straits Times - 14 Aug 2007

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F1 race: Up to 30% levy on all hotels

F1 race: Up to 30% levy on all hotels
Trackside hotels to pay top rate; all others to fork out 20% tax during 5-day event
By Lim Wei Chean
FOR five days next year, hotels across Singapore will raise their rates when the F1 comes to town.
Yesterday, the Government announced the specific taxes it will levy on hotels to help defray the cost of bringing the race here from Sept 24 to 28 next year

In a two-tiered system, trackside hotels have to pay a 30 per cent tax on their total room revenue.

But others, even those nowhere near the track in the Marina Bay area - like budget chain Hotel 81, for instance - will have to fork out a 20 per cent tax from their total room revenue.

Singapore got the green light on May 11 to host the F1 for five years. The Government is expected to foot the lion’s share - 60 per cent - of the cost of staging the annual race, a sum which can reach $150 million.

This special tax on hotels is one way to recoup part of the cost.

The race, widely expected to be the first to take place at night, is part of the city-state’s effort to increase the number of tourist arrivals to 17 million, who are expected to spend $30 billion here by 2015.

The event is expected to bring in at least $100 million every year for the hotel, retail, entertainment and service industries.

The rates were keenly anticipated, as it now means hotels will be able to set their specific room rates for the period and accept bookings.

Interest has been keen, said the hoteliers contacted yesterday. Would-be guests have already been calling to try to get rooms.

Even the yet-to-open St Regis has been fielding queries on F1 bookings.

Mr Patrick Fiat, general manager of the Royal Plaza on Scotts, said he expects room rates during F1 to be three to four times the average.

The two-tiered system will mean that 11 hotels like the Raffles Hotel, The Fullerton Hotel and The Oriental Singapore - the so called trackside hotels - will pay the highest levies of 30 per cent on total room and room package revenue for the five nights.

But the Ministry of Trade and Industry said in its press release yesterday that this list of 11 hotels may be revised when approval is given to the final circuit design.

Just two hours after the date of the race was announced, Mr Fiat said Royal Plaza on Scotts received a confirmed booking from a Finnish customer for a four-night stay, priced at $850 a night - a far cry from the usual $220 to $250 rates for weekends.

Some hotels are also considering imposing a three- to four-day minimum booking period.

There is some concern that the high costs will put off regular corporate and leisure guests but Grand Mercure Roxy Hotel’s general manager Kevin Bossino said he expected the high room rates to make up for any fallout.

Hoteliers said that they expect their rooms to be ’snapped up fast’.

Source :  Straits Times - 14 Aug 2007

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