All retail sectors post higher profitability ratios in ‘06

All retail sectors post higher profitability ratios in ‘06

By NISHA RAMCHANDANI
ALL sectors in Singapore’s retail industry achieved higher profitability ratios in 2006 over 2005, the Retail Trade Survey 2006 revealed.
The survey, which aims to provide an in-depth perspective of Singapore’s retail trade, was carried out in 2007 by the Department of Statistics (DOS) for reference year 2006.

In 2006, the retail trade industry was made up of 19,969 establishments, of which retailers of personal goods accounted for the largest sector with 8,287 establishments as well as the largest number of workers.

The industry employed some 107,000 workers in total, an increase of 2.6 per cent. The majority (90.8 per cent) of firms in the retail trade had less than 10 workers, although those who had between 10-99 workers accounted for about a third of operating receipts while large firms with 100 workers or more scored the highest profitability ratio of 6.4 per cent.

Total operating receipts registered $37.3 billion, up 3.6 per cent on the $36 billion chalked up in 2005. Transport equipment brought in the biggest chunk of revenue for total operating receipts, with $15.2 billion or 40.7 per cent.

However, total operating expenditure was also higher by $1.1 billion, coming in at $35.4 billion. Total operating surplus also expanded by 9.4 per cent to $2.2 billion, up from $2 billion previously.
 
Retailers of personal goods had the highest profitability ratio at 7.1 per cent, followed by the general merchandise sector at 6.5 per cent.

Total value added was up 8.8 per cent from $4.2 billion in 2005 to $4.6 billion in 2006. The personal goods retail sector was the largest contributor, generating $1.4 billion in 2006. Value added per worker rose to $43,100 for the overall industry, up 5.9 per cent.

Average annual remuneration for each employee went up from $24,500 in 2005 to $25,300 in 2006.

 
Source : Straits Times - 19 July 2008

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Mindy Yong

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Singapore UE’s Park Central @ AMK to sell for $490-500 psf

Singapore UE’s Park Central @ AMK to sell for $490-500 psf

It has ‘condo-style’ fittings and finishes, & expects a sell-out
By ARTHUR SIM
UNITED Engineers (UE) has priced its Design, Build and Sell Scheme (DBSS) project Park Central @ AMK at an appealing $490-$500 psf - in an apparent bid to move units fast.
UE acquired the Housing and Development Board site in November 2007 and based on the $212.40 per sq ft per plot ratio (psf ppr) it paid, property consultants estimated the launch price could be around $580 psf.

The actual price, revealed yesterday by UE, is lower than the reported average price of $520 psf for another DBSS project, City View @ Boon Keng, launched earlier this year.

UE did not comment on its pricing strategy but said Park Central @ AMK will comprise four 30-storey towers with a total of 578 four and five-room units.

With ‘condominium-style’ fittings and finishes, four-room units are not expected to cost more than $400,000, while five-room units will be under $600,000.

PropNex CEO Mohamed Ismail said the project is, ‘competitively priced’. ‘I am glad the developer has priced it sensitively.’

Mr Ismail said that when City View @ Boon Keng was launched there was, ’some resistance’ to the pricing.

 
 
Savills Singapore director (marketing and business development) Ku Swee Yong agrees that Central Park @ AMK is attractively priced. He believes UE could be looking at a slim profit margin, given a breakeven price of around $400 psf.

Increasing construction costs, which he estimates at between $200-$250 psf, could also weigh in.

Still, a sell-out development would be good for overall market sentiment, he said.

Comparing the pricing of Central Park @ AMK with the prices of HDB resale flats in the area, ERA Asia-Pacific assistant vice-president Eugene Lim said UE’s project looks like good value.

Mr Lim said that five-room flats in the area, which are at least five years old, are going for around $400,000.

That UE aims to sell Central Park @ AMK seems clear.

Still, the response from buyers is unlikely to reach the fever pitch experienced at the launch of the first DBSS development in late 2006. Then, almost 6,000 people applied for 616 units at Premiere @ Tampines. But those units were going for around $300 psf.

Source : Straits Times - 19 July 2008

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Mindy Yong

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A-Reit: Q1 distributable income of $52m

A-Reit: Q1 distributable income of $52m

By EMILYN YAP
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported net distributable income of $51.8 million for the first quarter ended June 30, 2008 - 15.9 per cent higher than for the corresponding period last year.
This follows a 19.6 per cent growth in gross revenue from the year-ago period to $92.5 million. The increase was due mainly to additional rental income from completed acquisitions and a development project.

The distribution per unit (DPU) for the quarter is 3.89 cents, up 15.4 per cent from the year-ago period. The DPU, to be paid out on Aug 27, represents an annualised yield of 7 per cent based on the closing price of $2.21 per A-Reit unit on June 30.

A-Reit had 86 properties with a total book value of around $4.5 billion as at June 30. Acquisitions in Q1 comprised 8 Loyang Way 1 for $25 million and 31 International Business Park for $246.8 million.

The portfolio’s overall occupancy rate stood at 98.6 per cent, against 97.2 per cent a year ago. For the business and science park and hi-tech industrial properties, renewal rates rose 63.9 per cent and 44.4 per cent respectively versus preceding contract rates.

This is due to ‘the continued healthy demand for quality suburban industrial and business space as well as the active leasing and investment activities conducted by the manager and its property management team’, said A-Reit manager Ascendas Funds Management (S)’s CEO and executive director Tan Ser Ping.

A-Reit’s weighted average borrowing cost for the portfolio was 3.16 per cent. To diversify funding sources, it recently took on a three-year committed revolving credit facility for $200 million, and is also incorporating a medium-term notes issuance facility.

Citing a CB Richard Ellis study, A-Reit said yesterday that rents and occupancy rates for hi-tech and business park space could continue to increase, but at a slower pace.

A-Reit also mentioned that it is difficult to gauge how much the Asian economy could be hit by the possible US recession and global inflationary pressure.

‘Despite the cautious outlook for the economy and barring any unforeseen events, the manager expects to be able to deliver, for the coming year, a DPU that is in line with its recent performance,’ A-Reit’s release stated.

The release also said that the A-Reit manager remains committed to pursuing quality and sustainable yield accretive investments, and expects results from asset management and investment strategies to underpin steady performance.

A-Reit’s units closed trading yesterday at $2.10, down one cent.

Source : Straits Times - 19 July 2008

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Mindy Yong

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SINGAPORE Condo-like flats for less than $700,000

SINGAPORE Condo-like flats for less than $700,000 

Four 30-storey blocks under the design, build and sell scheme for Ang Mo Kio

By Joyce Teo 
LIVING IN STYLE: The Park Central development will boast amenities like barbecue pits and jogging path on the roof-top garden above the carpark. — ARTIST’S IMPRESSION: COURTESY OF UNITED ENGINEERS
 
SINGAPORE’S third condo-style public housing project is about to go on sale, this time in the heart of bustling Ang Mo Kio.
The project is located at Ang Mo Kio Street 52, which is flanked by Ang Mo Kio Avenue 3 and Avenue 5 and within walking distance of the Ang Mo Kio MRT station.

The prices for Park Central @AMK are about 10 per cent below the last such project, City View@Boon Keng, launched early this year. Sales there were slow amid some concerns that prices were too high.

Developer United Engineers (UE), through its unit Greatearth Developments, is launching the 578-unit Park Central project for sale on Wednesday.

It aims to take advantage of the small window before the Hungry Ghost month starts in early August when some home hunters are wary of buying.

The project, comprising four 30-storey towers, will feature only four- and five-room flats. The average price will be about $490 to $500 per sq ft, with the four-room units going for about $400,000 to $500,000. The five-room units will cost about $600,000 to $670,000.

Park Central also has 20 ‘loft units’, which have higher ceilings of 3.6m, compared with the typical flat height of 2.6m. They will cost $580,000 to just below $700,000.

These high-end HDB flats will boast condo-style fittings such as built-in wardrobes, kitchen cabinets, air-conditioning systems, timber flooring and planter boxes.

The developer will also put in barbecue pits and a 400m jogging path on the roof-top garden above the carpark, allowing for more privacy, though these are public areas.

PropNex chief executive Mohamed Ismail expects strong demand as the prices are very fair, particularly considering the significant run-up in construction costs, he said.

UE chief executive Jackson Yap said he priced the units slightly above resale flat prices. He is optimistic as resale prices are still rising.

UE won the Park Central site in a tender last November at $212 per sq ft of potential gross floor area. It is the third project under under the Housing Board’s Design, Build and Sell Scheme (DBSS).

In such projects, private developers set the price of the flats but are bound by general public housing rules. For instance, they can sell their flats only to households earning not more than $8,000 a month.

Because of this restriction, the project’s price seems a little high, said Chesterton International’s head of research and consultancy, Mr Colin Tan. ‘But the interest will be strong as Ang Mo Kio is one of Singapore’s largest housing estates.

‘People tend to buy in areas they know or have lived in. With a little clever marketing, enough people may be persuaded to really stretch themselves and part with their hard-earned money.’

The first DBSS project, The Premiere@Tampines, met with an overwhelming response when it was launched at the end of 2006. But demand at City View@Boon Keng, which was priced over 50 per cent more than The Premiere, was slower. Some buyers felt the prices - the five-room units cost $536,000 to $727,000 - were too high.

The fourth DBSS project, in Bishan, could come to market at the end of the year.

 
Source : Straits Times - 19 July 2008

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Mindy Yong

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