Singapore Land authority’s sales soar to nine-year high

Singapore Land authority’s sales soar to nine-year high

It chalks up sales revenue of $6.3b on the back of red-hot property market; rental income rises a third
By Tan Hui Yee, Housing Correspondent
THE booming property market sent sales revenue at the Singapore Land Authority (SLA) to a nine-year high of $6.3 billion.
Its bumper result was still well shy of the record return achieved in the 1997 financial year, when the red-hot market pushed sales revenue to $14 billion.

The SLA manages state properties and also sells them to private companies and other government agencies at market value.

Its annual report out yesterday showed that it sold $3.55 billion worth of land to the private sector in the 12 months ended March 31 - about 8 per cent higher than in the previous year.

Some of this land included plots in Lim Chu Kang, which the SLA specially designated for agricultural and entertainment use.

A further $2.75 billion came from land sold to other government agencies, such as the 21ha plot for the Marina Bay integrated resort. This was bought by the Singapore Tourism Board for $1.2 billion and later taken over by developer Las Vegas Sands.

Rental revenue grew 33 per cent to $514 million, bolstered by takings from the booming Tanglin Village food and beverage cluster and the lease of the former Pearl’s Hill Primary School, which is being turned into a boutique hotel.

Tanglin Village, in the Dempsey Hill area, is a thriving development of upmarket restaurants, bars and other businesses that have sprouted on the refurbished former military buildings managed by the SLA.

The authority helped to make the cluster more appealing by adding entrance and building markers, as well as creating an outdoor space for events.

Another state property adapted for new purposes is the former Changi Hospital, which the SLA tendered for use as a spa and resort development. The 7,900 sq m property is undergoing a $20 million makeover.

The authority’s recent business-friendly moves have been noticed by property consultants such as Mr Ku Swee Yong.

The director of marketing and business development at Savills Singapore suggested that the SLA could try extending the leases of its rental properties so that businesses would be more inclined to sink money into refurbishing state real estate.

Many of the SLA’s properties are rented on three-year leases, which can be renewed up to nine years, but this may not be enough for a business to make a profit from its investment, said Mr Ku.

The SLA’s operating surplus grew by 35 per cent to $17.1 million.

Meanwhile, another state agency, the Urban Redevelopment Authority (URA), collected $2.7 billion from land sales in the financial year ended March 31.

Although the URA sold 16 sites in that period, compared with nine the year before, sales revenue dropped by 5 per cent because last year’s takings were bolstered by high-value sites such as the business and financial centre in Marina Bay and the commercial plot at Orchard Turn.

The URA’s operating surplus more than tripled to $14.8 million, helped by higher agency fees from selling sites and income from processing more applications for development.
Source : Business Times - 04 Oct 2007

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S’pore New en bloc rules kick in today

S’pore New en bloc rules kick in today

Changes meant to make sale process more regulated and transparent
By Fiona Chan, Property Reporter

NEW collective sale regulations will kick in today - a few weeks earlier than many in the industry had expected.
The rules, which were passed in Parliament two weeks ago, were expected to take effect this month, but a date had not been specified.

The much-anticipated announcement, which came yesterday, took some en bloc players by surprise.

‘We thought it was going to be later, and expected the Government to give more lead notice as well,’ said Mr Jeremy Lake, executive director of investment properties at property firm CB Richard Ellis (CBRE).

He added that ‘initial indications were that they were likely to kick in only at the end of the month’.

The changes are aimed at making the sale process more regulated and transparent.

They require more conditions to be fulfilled, such as adhering to stricter requirements on setting up a sales committee and providing a five-day cooling-off period for owners to change their minds after signing the collective sale agreement.

The changes will apply to all developments that, as of today, have not obtained consent from enough owners to go en bloc - 80 per cent of owners by share value, or 90 per cent for estates less than 10 years old.

It will be back to the drawing board for the owners of these developments, who will have to start the collective sale process all over again and do so by the new rules.

Most property firms said they each had ‘two or three’ en-bloc estates that will be affected by today’s changes.

But CBRE’s Mr Lake expressed relief that there was clarity on when the rules would finally kick in.

Indeed, for the last few weeks, a few projects had been suspended because no one knew when the changes would take effect, said Mr Tan Hong Boon, executive director of Credo Real Estate.

‘Most lawyers were also not prepared to quote their fees for new en-bloc projects because they didn’t know how much more work they would have to do under the new rules,’ added Mr Tan.

Some consultants scrambled last night to get the last one or two signatures.

Mr Steven Ming, director of investment sales at Savills Singapore, said he had expected to have ‘one or two more weeks to get the last few signatures’.

‘I guess I will have to work overnight,’ he joked.

Other consultants, such as Jones Lang LaSalle’s head of investments, Mr Lui Seng Fatt, said they have been advising would-be en-bloc sellers to follow the new rules since last month.

‘Fortunately, none will have to start all over again,’ he said.
Source : Business Times - 04 Oct 2007

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Hertford Mansion, Singapore Holland Hill Lodge up for en bloc sale

Hertford Mansion, Singapore Holland Hill Lodge up for en bloc sale
HOME owners are going ahead with collective sales, with Colliers International marketing two new freehold sites.

One site, Hertford Mansion, is located at Hertford Road/Bristol Road, near Farrer Park, and the indicative price for the 11,527-square-foot plot is $12 million or $744 per sq foot per plot ratio (psf ppr).

The other site, Holland Hill Lodge, is expected to fetch $16 million. This works out to $1,108 psf ppr for the 9,033-sq-ft site.

Home owners’ price expectations may have been affected by the resent US sub-prime mortgage crisis as well as new requirements for collective sales. Colliers executive director (investment sale) Ho Eng Joo said: ‘Sellers have to be more realistic in the event that the en bloc sales slow down. It’s always a two-way traffic.

‘Every owner would, of course, like to sell their property at a price as high as possible. But, they also need to take into consideration whether developers are willing to pay the price.

‘Developers will be watching very closely the launches of new projects in order to price their costs of acquisition.’

With the process of organising an en bloc sale likely to be slower than before, Mr Ho expects the buying interest of developers could turn towards the city fringe and/or suburban areas where prices are lagging behind the high-end market.

The break-even cost for Hertford Mansion is about $1,100-$1,200 psf.

Mr Ho believes that given the flat contour and the regular shape of this site, the successful bidder could redevelop it into a boutique residential development with a five-storey block accommodating 20 units of 900 sq ft each.

The break-even price for Holland Hill Lodge is approximately $1,500-$1,600 psf. Mr Ho said: ‘Given that all the owners have already consented to proceed with the sale, there is no need for approval from the Strata Titles Board. As such, the legal process of transferring the ownership can be expected to complete within three months.’

There is no development charge payable for either site.
Source : Business Times - 04 Oct 2007

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Singapore Sales of state land fetch $6.3b for year to March

Singapore Sales of state land fetch $6.3b for year to March

Bulk of bumper takings comes from sales to private sector for $3.55b
By KALPANA RASHIWALA

THE government collected $6.3 billion selling state land during the year ended March 31, up from $5.5 billion in the preceding year - but still shy of the record $14 billion for the year ended March 31, 1998.

SLA reported 39% increase in net surplus to $13.67m, on the back of a 9.7% improvement in total income to $88.6m

The bulk of the latest year’s bumper takings came from selling land to the private sector for a total of $3.55 billion, up from the previous year’s $3.3 billion, according to the Singapore Land Authority’s latest annual report.

The SLA also sold $2.75 billion of land to statutory boards such as Singapore Tourism Board, Sentosa Development Corporation and JTC Corp under public sector sales in the latest year, higher than the previous year’s $2.2 billion.

Rental collections for state land and properties (including Temporary Occupation Licence fees) amounted to $514.3 million for the year ended March 31, 2007, up from $387.3 million in the preceding year.

The SLA reported a 39 per cent increase in net surplus to $13.67 million, on the back of a 9.7 per cent improvement in total income to $88.6 million. Operating income from land sales agency fees as well as title registration and related fees went up 10 per cent.

To meet competing demands for space for office, business, educational and commercial uses during the past year, the SLA stepped up to meet increased demand for state properties. In January to September, 13 state properties were turned into dedicated office space to help ease the supply crunch in this market.

The occupancy rate of state properties managed by SLA rose to 86 per cent in the latest year, up from 82 per cent in the preceding year, while the utilisation rate of state land managed by the SLA rose to 77.8 per cent from 76 per cent previously.

As custodian of state land and properties, the SLA manages about 14,000 hectares of state land and about 5,000 state buildings that have been put to use as offices, education centres, restaurants, recreational, retail and hospitality space. Its stock of buildings includes about 700 colonial ‘black and white’ residential bungalows.

Source : Business Times - 04 Oct 2007

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Singapore Banyan Tree to double global assets by 2010

Singapore Banyan Tree to double global assets by 2010

It plans to move into Latin America, the Caribbean, Middle East, Mediterranean
By AGNES WEE

BANYAN Tree, a leading manager and developer of premium resorts, hotels, spas and galleries, is on an aggressive expansion push to more than double its global portfolio by 2010.

Banyan Tree Mauritius: The project is scheduled to be completed in 2010. This Banyan Tree branded residences project is architecturally designed by Fosters & Partners of the UK with the resort villas designed in collaboration with Architrave Design & Planning, Banyan Tree’s in-house design division
Banyan Tree executive chairman Ho Kwon Ping said it is moving into new markets in Latin America, the Caribbean, the Mediterranean and the Middle East, in addition to stepping up its presence in South-east Asia, the Indian Ocean and North-east Asia (China and Korea).

The group’s investments will involve new projects as well as organic growth as it continues to improve and add capacity to existing properties, he said in an interview on the sidelines of celebrations to mark its 20th year in Phuket.

On Phuket island, where the flagship Banyan Tree resort is located, plans are afoot for a new project adjacent to the existing 600-acre Laguna Phuket which houses six properties that are built on land which has been rehabilitated from a polluted abandoned tin mine.

Banyan Tree subsidiary, Laguna Resorts and Hotels, has just concluded a joint-venture agreement with a prominent local Phuket businessman Kanit Yongsakul to develop the 7 million sq ft plot for housing, retail and commercial uses (including office space), plus a hotel.

To be called Laguna Lake, the project is expected to reach the peak of development in three to four years.

The potential revenue contributions from this development could be S$400 million to be realised over a medium-term period, the company said.

The residential portion of the development will offer upscale condominium units, bungalows and townhouses.

Mr Ho also revealed that within Laguna Phuket, the group plans to add a seventh hotel. This one will be under its Angsana brand. Room rates will be the second highest after the flagship Banyan Tree Phuket.

Construction of the 150-room property will start next year and is scheduled to be completed in 2009. It will cost 1.5-2 billion baht (S$70-93.4 million).

The group’s first hotel to open in Laguna Phuket in 1987 was the Dusit Laguna. This was followed by the other five properties, Laguna Beach Resort, Sheraton Grande Laguna Phuket and The Allamanda (all suites), Banyan Tree Phuket and the Laguna Holiday Club (time-share units).

Laguna Phuket has become the reference point for the group’s projects elsewhere, such as Laguna Vietnam whose construction will start early next year near Hue in central Vietnam. Mr Ho hopes this project will replicate the success of Laguna Phuket.

On Banyan Tree’s global expansion plans, Mr Ho said: ‘We want to have strong growth in the next one to three years. Given the strong pipeline of projects that we have - over 40 new hotels (compared with our current existing portfolio of 22) and at least 55 spa projects, we are confident of our growth plan.

‘The key drivers will come from three core segments - hotel investment income, fee-based income (such as hotel, spa and design management fees) and property sales. Based on existing signed and sealed contracts that we have, we would have about 60 hotels and resorts by 2010. This is bearing in mind that we will continue to work on increasing this figure.’

Banyan Tree adopts a practical approach in its quest to spread its roots. Its strategy is to further expand into low-cost locations close to its key customer markets.

Mr Ho elaborated: ‘In some of these so-called ‘low-cost’ regions, such as China and Mexico (Latin America), we have managed to leverage on the growth in the tourism sectors there to accelerate our growth there. These regions account for over 20 existing projects in development and continue to present more opportunities for growth.’

Mr Ho is a firm believer in nurturing a brand instead of relying on cost competitiveness. He said: ‘One prevalent business model in Asia is to use low cost labour - with many companies manufacturing for other people, as opposed to developing their own brand. My view is that this is not a sustainable business model because someday someone cheaper will come along.

‘The key to success is to invest in a brand and build it - like what we have done with Banyan Tree. We need to compete on brand, not cost competitiveness, which takes long-term commitment and mindset, and to be close to the market,’ he said.

‘Banyan Tree is all about creating unforgettable, deeply personal and cherished memories. It is about the romance of travel and connecting people with a ’sense of place’ through the design and architecture of our resorts, that promotes the uniqueness of indigenous cultures of the place. As we have our own full-time in-house design capabilities, we are therefore able to graft the ‘Banyan Tree’ experience onto our real estate offerings from the ground up.’

‘Banyan Tree’s business model is to be in exotic destinations, and places like China and Latin America offer a plethora of such destinations. One of the reasons for Banyan Tree’s success is that we have stayed in our niche. It’s like within this ’sandbox’, as long as we are the King of the hill, we could be No 1.’

He added: ‘In our space, going global is not about having a few hundred hotels and resorts, but a necklace of jewels that span the globe with a representation in every key market. It is not about being everywhere, but being where we need to be to remain among the best of the best.’

Source : Business Times - 04 Oct 2007

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