CDL gain jumps 333% to $194m in second quarter

CDL gain jumps 333% to $194m in second quarter
Developer sold 1,315 new homes at half-time from only 386 last year
By Fiona Chan, Property Reporter
POSSIBLE BENEFITS: Mr Kwek says more dividends may ‘come down the road’ for CDL’s shareholders. — BT FILE PHOTO

A LARGE jump in the number of homes City Developments (CDL) sold in the second quarter led to a quadrupling of its net profit.
The developer, Singapore’s second largest, yesterday posted a 333.2 per cent surge in net profit to $194.4 million for the three months ended June 30.

Revenue grew 28.8 per cent to $775.2 million, from $601.9 million previously.

For the first half of the year, net profit rose 272.3 per cent to a record $320.5 million, while revenue climbed 35.1 per cent to $1.54 billion, also a historic high.

This strong performance was mainly due to a much higher take-up of CDL projects this year, said group general manager Chia Ngiang Hong. From January to June this year, CDL sold 1,315 homes worth a total of $2.39 billion. In the same period last year, it sold only 386 homes worth $815.1 million in all.

CDL was quick to note that it had not included in its profit statement gains from revaluing its properties at fair value. Other property firms have recently adopted this practice, boosting their bottom lines, but CDL said it wished to retain a ‘conservative’ accounting policy on this issue.

If CDL had counted revaluation gains for the first half, its net profit would have been lifted by about $1.5 billion to $1.8 billion, estimated chief financial officer Goh Ann Nee.

CDL also declared a special interim cash dividend of 10 cents per share, taxed at 18 per cent. Ms Goh added that the group’s current tax credits stand at $360 million.

‘Our intention is to try to benefit all shareholders as a whole,’ CDL executive chairman Kwek Leng Beng said when asked how CDL intends to use its remaining credits.

‘As a first sign, we are paying a special dividend, and there may be more to come down the road.’

CDL’s earnings per share jumped to 20.7 cents for the second quarter, from 4.2 cents a year ago. Net asset value per share rose to $5.44 as at June 30, from $5.21 as at Dec 31.

CDL said it is confident of remaining profitable for the rest of the year.

Apart from its property development unit, which made up 57 per cent of pre-tax profits in the first half, CDL also has a strong office portfolio.

Mr Chia revealed that Republic Plaza has achieved record rentals of $17.50 per sq ft per month, and that more than the usual number of CDL’s office leases are up for renewal next year.
Source :  Straits Times - 15 Aug 2007

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Mt Faber foothills slated to be next lifestyle hot spot

Mt Faber foothills slated to be next lifestyle hot spot
Recreational, dining facilities and tourist attractions are in the works
By Jeanette Wang & Lim Wei Chean
THE sleepy foothills of Mount Faber are set to come alive.
The Sentosa Development Corporation (SDC) has been tasked with turning it into the next lifestyle-cum-entertainment hot spot in Singapore.

This was revealed by SDC chairman Loo Choon Yong at the official opening of golf’s Asian Tour headquarters at Sentosa yesterday.

He said: ‘The Singapore Tourism Board and Ministry of Trade and Industry (MTI) have asked us to prepare a master plan to look at how we can develop the foothills at Mount Faber, and how we can incorporate it into the whole neighbourhood.’

He did not elaborate on what the master plan would contain, but said recreational activities, accommodation, tourist attractions and dining facilities are in the works.

He explained that Mount Faber was being tapped because the 500-ha Sentosa island was ‘quickly running out of room’.
But The Straits Times understands that while plans are only in the preliminary stage, the bottom half of the 106-m-high Mount Faber has been earmarked for development.

No forest reserves will be touched. Only the foothills accessible by roads, such as Keppel Hill and Temenggong Road, will be revamped.

Dr Loo said that since the 10-year master plan for Sentosa is already in place, the next step is for what he dubbed a ‘Greater Sentosa’.

‘Together with Resorts World at Sentosa, VivoCity, St James Power Station and Mount Faber, Sentosa will form a vital part of this world-class environment to live, work and play in Singapore,’ he explained.

‘Plans to include Faber foothills in this vision are currently being explored, with more details to be announced in due course.’

He added: ‘Now, Sentosa is an exciting place, and so are VivoCity and St James Power Station. There are residents, activity and nightlife. So, I think the Faber foothills present an opportunity.’

He declined to reveal the costs involved, the exact location or the expected completion date of the project.

The idea to develop the area has surfaced in the past - in 2002, when the Urban Redevelopment Authority launched an Identity Plan, which combined ideas and proposals on how to keep and enhance the special character of 15 areas in Singapore.

One of the suggestions was the creation of ‘hillside villages’, with shops and activities, at Mount Faber’s foothills. It was also proposed that the old black-and-white bungalows along the foothills be converted into culinary schools, bed-and-breakfast lodgings, restaurants or museums.

Miss Susan Teh, chief executive officer of the Mount Faber Leisure Group, which owns The Jewel Box, a leisure and dining complex housed in the revamped Mount Faber Cable Car station, said it was ‘too preliminary’ to comment on the area’s development plans.

‘However, we have been in talks with the relevant authorities in exploiting this strategic location,’ she added.
Source :  Straits Times - 15 Aug 2007

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HDB boosts first-timers’ chances of getting a flat

HDB boosts first-timers’ chances of getting a flat
90% of flats offered in build-to-order, balloting exercises reserved for them
By Jessica Cheam
THE Housing Board has tweaked its priority scheme to greatly increase the chances of first-time buyers and newly-weds getting sought-after new flats.
From now on, 90 per cent of all new flats offered in the HDB’s build-to-order (BTO) and balloting exercises will be reserved for such applicants.

In the HDB computer ballot, only 10 per cent of the homes on offer will go to second-time applicants.

Once this level has been reached, all other applicants from this segment will be withdrawn.

It effectively leaves the field clear for those who have never bought a new HDB flat.

For newly-weds who want a flat nearer a set of parents, their chances are further boosted.

Such couples already have a helping hand under the Married Child Priority Scheme (MCPS), which gives them double the chance during the balloting. This will improve since 90 per cent of flats are now set aside for first-timers.

Under the old system, there was no quota, so first-timers were in the mix along with everyone else.

If there are not enough second-timer applicants to take up the 10 per cent allocation, the leftover flats will also be freed up for first-timers.

The revised scheme also gives a leg-up to applicants who have tried and failed in four or more ballots.

On your fifth attempt, for example, you will be accorded one extra chance. This means your name goes into the ballot one more time.

For your sixth try, you get entered two more times, and so on.

An HDB spokesman said about 380 applicants were unsuccessful for four or more times in BTO and balloting exercises under the priority scheme run from January 2002 to March this year.

Balloting is used when the number of applicants outstrips available flats in an estate. It often occurs when new flats, or those in popular, mature estates are up for grabs.

The move follows a recent announcement by the Minister of State for National Development, Ms Grace Fu, that the HDB would refine the priority scheme for home-seekers with greater needs.

This was one of the central issues raised during several dialogues with residents, called Forum on HDB Heartware, that started last November.

The forum set out to find ways of boosting community ties and giving residents more say in how estates are run.

The HDB said yesterday that under the old scheme, 80 per cent of flat supply generally goes to first-timers. It also added that ‘the improvement in chances will depend on flat supply and the number of applicants’.

The new priority scheme gets its first tryout at Punggol Vista, a BTO project launched yesterday.

Located at the junction of Punggol Central and Punggol Road, the project has 628 units ranging from two-room to four-room flats. Applications close on Sept 3.

First-timer Leonard Tan, 27, who has been unsuccessful in balloting for an HDB flat, welcomed the change.

The air force regular and his wife qualified as a newly-wed couple who wanted to live near their parents, but they were assigned a queue number in excess of 2,000 in a balloting exercise for 465 flats.

‘I’m more confident now of my chances, although with so many first-timers in the market, I know competition will still be tough,’ he said yesterday.

Source :  Straits Times - 15 Aug 2007

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Sentosa to develop Mount Faber ahead of IR: report

Sentosa to develop Mount Faber ahead of IR: report
THE Mount Faber area is to be rejuvenated before the planned integrated resort opens at Sentosa, Channel News Asia reports.
The announcement came yesterday from Loo Choon Yong, chairman of Sentosa Development Corporation at the opening of the island’s latest attraction, the Asian Tour headquarters.

The Asian Tour is the official regional sanctioning body for professional golf in Asia, which aims to expand tournament golf.

The Asian Tour now includes 27 events offering a total of US$27 million in prizes.

Dr Loo was reported as saying that the tourism board and the ministry of trade and industry were ‘asking us to prepare a master plan to look at how we can develop the foothills in Mount Faber; how we can incorporate it into the whole neighbourhood’.

He said: ‘Sentosa is an exciting place, so is VivoCity and St James Power Station. There is residence, there is activity and nightlife, so I think the Faber foothills present opportunities.’

Options being looked at for Mount Faber include recreational activities, dining outlets and accommodation, the report said.

Source :  Business Times - 15 Aug 2007

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Soleil @ Sinaran condo units 37% sold

Soleil @ Sinaran condo units 37% sold
The average price is understood to be around the $1,400 to $1,500 psf range
By KALPANA RASHIWALA
FRASERS Centrepoint says it has sold 37 per cent of the 417-unit condo, Soleil @ Sinaran near Novena MRT Station, at staff and VIP previews last week.

Luxury: The condos will feature spa cabanas as well as entertainment pavilions where parties can be held
The average price for the 99-year leasehold project is understood to be somewhere in the $1,400 psf to $1,500 psf range.

Frasers Centrepoint declined to comment on the pricing yesterday, ahead of a soft launch tomorrow for those who have indicated interest in the project.

BT understands the project is being marketed by Savills Singapore and Knight Frank.

The condo has two 36-storey blocks including units with one, two, three and four bedrooms. Some of the two-bedders come with lofts.

The project’s four penthouses will each have five bedrooms.

‘Soleil @ Sinaran will feature a flagship partnership with Aramsa Spas under which residents will be able to enjoy private spa treatments at their doorstep,’ Frasers Centrepoint announced.

The condos, designed by Architects 61, will feature spa cabanas as well as entertainment pavilions where parties can be held in a poolside setting.

The entire 20th floor will be dedicated to a sky terrace with an outdoor and indoor gym and a sky garden.

Soleil is being developed on a site that Frasers Centrepoint clinched at a state tender that closed in July last year.

Its top bid of $238 million worked out to a unit land price of $507 per square foot of potential gross floor area.
Source :  Business Times - 15 Aug 2007

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Still plenty of liquidity, says CDL’s Kwek

Still plenty of liquidity, says CDL’s Kwek
But foreign funds seeking investment property are likely to proceed more carefully
By ARTHUR SIM
‘THERE is still plenty of liquidity around,’ City Developments’ executive chairman Kwek Leng Beng said yesterday. But foreign funds seeking investment property are likely to proceed more carefully given the escalation of the US sub-prime woes, he noted.
Mr Kwek: CDL is considering, but not in a hurry, to sell its office buildings or launch an office real estate investment trust
Mr Kwek was speaking at a press conference to announce CDL’s 2007 second-quarter results, which saw revenue rising 28.8 per cent year-on-year to $775.2 million and net profit up more than four-fold from $44.9 million to $194.4 million.

On a half-year basis, revenue soared 35.1 per cent to $1.54 billion, an all-time high for the property developer. Six-month net profit jumped 272.3 per cent to $320.5 million.

Unlike most property companies, CDL did not factor investment property revaluation gains.

Speaking for the first time on the impact of the US sub-prime crisis and the ensuing credit squeeze, Mr Kwek said that he has seen fewer funds making enquiries about CDL’s burgeoning investment property portfolio. ‘Before, they would come knocking everyday,’ he said.

This interest in office buildings has been boosted by rising rental returns and CDL revealed yesterday that its Republic Plaza had recently achieved a new record rent of $17.50 psf per month and is now asking for over $18 psf per month.

For H1 2007, profit before tax for the rental properties segment, which includes office space, was $27 million, a year-on-year increase of 800 per cent.

Mr Kwek also said that CDL was considering but not in a hurry to sell its office buildings, or for that matter, launch an office real estate investment trust (Reit) of its own.

For the same period, profit before tax for its property development segment was $238 million, a rise of 266 per cent.

Interestingly, CDL is not rushing to sell off Cliveden at Grange either, its latest luxury condominium offering.

Saying that prices for luxury condos are not likely to keep increasing on the same steep curve it has been charting for the last 12 months, Mr Kwek revealed that he was considering retaining two blocks of Cliveden for rental purposes and long-term investments.

He added: ‘(Luxury prices) won’t be going up in a straight line anymore until things stabilise.’

The luxury end of the market has been largely driven by foreigners. Mr Kwek said that he had spoken to some of his foreign high net worth clients and they have told him the sub-prime crisis is not a ‘big issue’ for them. ‘They feel it will affect the private equity firms more,’ he said. However, he added: ‘It is fair to say some will be cautious and may defer their decision to buy now.’

Mr Kwek was much more bullish on the mid-tier residential segment in which he still sees upside. ‘It has not reached the previous peak yet,’ he said.

CDL is planning to launch four developments in the second half of the year including the 40-unit Wilkie Studio in the Mount Sophia area; a 77-unit project at Shelford Road; the 228-unit Quayside Collection at Sentosa Cove; and a 336-unit project at Thomson Road.

CDL also spent about $1 billion in the first half of the year increasing its landbank, and is consequently raising its gearing ratio to 56 per cent, up from 54 per cent in 2006.

Its residential landbank is now at about 3.5 million sq ft while its total landbank is close to 4.5 million sq ft.

Of the potential gross floor area of 8.9 million sq ft, about 80 per cent can be for residential development.

The positive outlook, boosted by earnings, has prompted CDL to declare a special interim dividend of 10 cents per ordinary share. The payment date will be released at a later date.

CDL closed yesterday at $14.60 per share, down 10 cents.
Source :  Business Times - 15 Aug 2007

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Hitachi Tower, Chevron House attract record bids

Hitachi Tower, Chevron House attract record bids
Offer of over $3,200 psf for Hitachi Tower will mark new high: sources
By KALPANA RASHIWALA
(SINGAPORE) The office market continues to sizzle, with an expression of interest for Hitachi Tower at Collyer Quay said to have resulted in a top indicative bid of over $3,200 per sq ft based on existing net lettable area, sources say.
Hot properties: The spread in top bids between Chevron House and Hitachi Tower is due to the difference in tenure and orientation. Also, some leases at Chevron House are believed to have caps on rental increases
The figure is a record for office space, surpassing the figure of about $2,650 psf set earlier this year for 1 Finlayson Green.

Shortlisted bidders for the 999-year leasehold Hitachi Tower are now likely to conduct due diligence before finalising their offers, observers reckon.

Bids are believed to have been received mostly from overseas parties. The 37-storey building has about 280,000 sq ft net lettable area. So assuming a top bid of say $3,200 psf, the price would work out to around $900 million.

CapitaLand owns 50 per cent of Hitachi Tower and National University of Singapore the other half.

A similar exercise is said to be going on for Chevron House next door, which is believed to have attracted a top bid of about $2,800 psf.

The 99-year leasehold Chevron House - formerly known as Caltex House - is owned by CapitaLand (50 per cent), IP Property Fund Asia (25 per cent) and NTUC Income Insurance Co-operative (25 per cent).

The former Pidemco, now part of Capitaland, bought the two buildings from entities linked to Ong Beng Seng in 1999.

The spread in top bids between Chevron House and Hitachi Tower is due to the difference in tenure and the orientation of the properties. Also, some leases at Chevron House are believed to have caps on rental increases, which limits the ability of the building’s owner to take advantage of booming office rentals.

More office blocks continue to be offered for sale. Colliers International yesterday launched a tender for The Globe at Cecil Street, with an indicative price of $100 million.

The property, being offered for sale by owner Prosper Realty, is being pitched for its redevelopment potential. The $100 million price tag reflects a unit land price of $1,178 psf of potential gross floor area, including two payments the buyer will have to make to the state - an estimated $12.5 million differential premium to build a bigger project on the site and a premium of $9.6 million to top up the 9,080 sq ft site’s lease to 99 years from the remaining 75 years.

Under Master Plan 2003, the site is zoned for commercial use with an 11.2-plus plot ratio. Colliers says the successful buyer can apply for additional gross floor area (GFA) of up to 2 per cent. This will boost the plot ratio to around 11.42, allowing a 30-storey office block with 103,694 sq ft of GFA.

Colliers has also been marketing Keck Seng Tower in Cecil Street. The tender closed last week, attracting three bids above $200 million or $1,700 psf based on the existing net lettable area. The property is on a 17,322 sq ft site with a lease balance of 72 years.

Yesterday Colliers launched a tender exercise for Cassia View, a 20-storey freehold apartment block in Guillemard Road completed about eight years ago.

Owner Melody Development is offering the property - comprising 68 apartments and four penthouses - with vacant possession. The indicative pricing is $80 million or close to $900 psf based on the total strata floor area of 89,361 sq ft. ‘The buyer could refurbish the property into a serviced residence or hostel. The location is popular among expats and travellers looking for affordable accommodation,’ Colliers executive director (investment sales) Ho Eng Joo says. The tenders for Cassia View and The Globe close on Sept 12.
Source :  Business Times - 15 Aug 2007

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