Singapore Heeton project getting the Starck treatment

Singapore Heeton project getting the Starck treatment

His firm will design interiors of Grange Rd property

By ARTHUR SIM

HEETON Holdings and its joint venture partner JPMorgan Global Special Opportunities Group will build the world’s first Philippe Starck-branded housing in Singapore.

Mr Starck: His company yoo will not have an equity stake in 74 Grange Road
The project will be built on a site that the partners acquired last year at 74 Grange Road for $72.8 million.

The development, expected to be launched around year-end, will now come under the design, marketing and branding direction of Starck’s yoo Inspired by Starck, a company co-founded with UK developer John Hitchcock in 1999.

While yoo has about 25,000 units of branded housing worldwide, it will not have an equity stake in 74 Grange Road. Nor will it be the architect.

Instead, it will provide interior design services and specifications for the interior finishes and fittings of the proposed 28-unit project.

It may provide landscape design, and buyers of the units may be offered furniture design packages for their homes.

The JV partners also hope to ride on yoo’s marketing and public relations expertise, as well as draw on its pool of high net worth clients.

Heeton chief operating officer and executive director Danny Low said that yoo’s services will cost about US$2 million, including the use of the ‘yoo Inspired by Starck’ brand.

The named of the development is yet to be finalised.

Mr Low added: ‘This will be yoo’s first residential design project in Singapore, and yoo’s design services for the Singapore market will be exclusive to this project until mid-2009.’

Chris Boulton, CEO of yoo, said that it expects to announce more projects in the region soon. There are already yoo projects in Hong Kong and Phuket, Thailand.

Mr Boulton said that based on earlier projects, yoo developments can fetch 10-30 per cent more than market prices. According to him, yoo branding can help generate faster sales ‘and sell in tough times’.

Prices for units at 74 Grange Road have not been confirmed. The break-even price was previously reported to be about $2,500 per square foot.

Source : Business Times - 29 July 2008

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Lum Chang gets $65m from selling Singapore 2 Belmont

Lum Chang gets $65m from selling Singapore 2 Belmont

3 Singapore firms controlled by Indian investors are the buyers

By KALPANA RASHIWALA

LUM Chang Holdings has sold all 16 units of its newly refurbished 2 Belmont for a total sum of about $65 million, BT understands.

Refurbished: The price for the freehold property is said to be in the $1,600-$1,700 per square foot range
The price is said to be in the $1,600 to $1,700 per square foot range.

Lum Chang bought the property, formerly known as Belmont Gardens, in 2006 for $22 million and has refurbished the apartments. At the time, the asset comprised 15 apartments but Lum Chang had said that it would convert a penthouse into two separate units.

Now, the 16 units in the four-storey freehold property are being purchased by three Singapore-registered companies controlled by Indian investors. Eight units (on the first and fourth levels) were bought for a total $36.36 million by a company controlled jointly by Govind Sahai Gupta of Kolkata and Amit Gupta, a Singapore permanent resident.

Another company controlled solely by Ashok Gupta bought four units on the third floor for a total $14.33 million, while the third company, owned solely by Asha Khatoria of Jaipur - the Indian city famous for gemstones - bought all four units on the second floor of 2 Belmont for a total $14.31 million.

BT understands that 2 Belmont’s sale has been inked but has yet to be completed.

CB Richard Ellis is understood to have brokered the deal.

2 Belmont has a site area of about 54,800 sq ft, and is located in a designated Good Class Bungalow (GCB) Area. This means that if the property is completely torn down and the site redeveloped, it can be redeveloped only into GCBs, accommodating perhaps three bungalows at most given the minimum GCB plot size of 1,400 sq m (15,069 sq ft).

‘So it made more sense for Lum Chang to refurbish the asset instead of redeveloping it,’ an industry observer suggested.

The sellers are entities controlled by Lum Chang.

According to Lum Chang’s 2007 annual report, three Lum Chang subsidiaries inked deals in 2006 to sell four units at 2 Belmont to a director of Lum Chang.

‘These sales are expected to be completed at any time before June 30, 2008, after the completion of the redevelopment of 2 Belmont. Full consideration for the sale of these four apartment units has been received,’ Lum Chang’s 2007 annual report said.

Back in May 2006, when Lum Chang bought Belmont Gardens, the company had said that managing director David Lum would buy four units.

Source : Business Times - 29 July 2008

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Lian Beng’s full year earnings treble to $11.9m

Lian Beng’s full year earnings treble to $11.9m

Revenue jumps 40% to $194.8m, boosted by buoyant construction market

By EMILYN YAP

CONSTRUCTION company Lian Beng Group yesterday reported net earnings of $11.9 million for the full year ended May 31, 2008 - more than three times the year-ago period’s $3.5 million.

Mr Ong: Lian Beng is in a good position since it’s one of the few contractors with A1 grading
This came on the back of a 40 per cent increase in revenue from the same period last year to $194.8 million.

The construction division was the key growth driver, contributing about 98.7 per cent of the group’s total revenue. Rising construction activity and higher revenue recognition from the progressive completion of projects led to an increase in construction revenue.

The buoyant construction market helped Lian Beng win a number of building contracts in FY2008. These include the construction of the hotel substructure of the Marina Bay Sands Integrated Resort, several private residential developments, and a seven-storey industrial building at Paya Lebar iPark.

The remaining 1.3 per cent of Lian Beng’s revenue came from the engineering and leasing and property development divisions.

In line with the group’s performance, Lian Beng declared a first and final dividend of 0.472 cents per share compared to 0.22 cents per share a year ago.

Going forward, Lian Beng said it expects to be busy fulfilling existing contracts and tendering for more business in the current financial year. The group has an outstanding order book of about $647 million.

Lian Beng maintains a bright outlook, even as the government postponed some $4.7 billion worth of public sector projects to 2010 and beyond to ease the pressure on construction resources.

‘There are many more projects out there for tender,’ said Lian Beng’s managing director Ong Pang Aik. ‘As one of the few building contractors with A1 grading, we are in a good position to capitalise on the opportunities that present themselves.’

Lian Beng shares closed at 22.5 cents yesterday, half a cent down.

Source : Business Times - 29 July 2008

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Singapore K-Reit’s distributable income up 173% to $14.2m in Q2

Singapore K-Reit’s distributable income up 173% to $14.2m in Q2

By UMA SHANKARI

K-REIT Asia said yesterday its second-quarter distributable income rose 173 per cent to $14.2 million, from $5.2 million a year ago.

Major boost: K-Reit’s better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007
The better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007. Distribution per unit rose 1.9 per cent to 2.18 cents, from 2.14 cents in Q2 2007.

Net property income for the three months ended June 30, 2008 rose 26 per cent to $9.2 million, from $7.3 million the year before.

K-Reit also saw better rental income, with higher rents achieved for new and renewed leases, as well as improved occupancy. The average gross rental rate for investment property held directly by K-Reit rose to $5.66 per sq ft in June 2008, from $4.28 psf a year earlier.

For the first half of 2008, distributable income rose 169.8 per cent to $25.6 million, from $9.5 million in 2007. DPU for the first six months of the year rose 0.8 per cent to 3.94 cents, from 3.91 cents in 2007.

The trust also reduced its leverage to 27.7 per cent at June 30, 2008, from 53.9 per cent at Dec 31, 2007. Based on a 60 per cent aggregate leverage limit, this provides K-Reit with an additional debt headroom of $680 million to fund acquisitions and for working capital. Based on K-Reit’s existing portfolio, there will be no debt re-financing requirement until 2011, the trust said.

For the longer term, the trust’s manager is establishing a medium-term note programme to allow the Reit to swiftly tap the debt capital market.

K-Reit is upbeat about its prospects, even though the global economy is slowing. Some 35.4 per cent of its tenants are from the banking, insurance and financial services sectors. Most of these tenants have lease terms of six years or more, and ‘provide very stable income going forward’, said Tan Swee Yiow, chief executive of the trust’s manager.

Mr Tan pointed out that despite the weaker external environment, Singapore’s office rents rose slightly in Q2 2008, reflecting the tight supply of space.

‘Office rents will be supported by continued demand for prime office space as Singapore transforms itself into a global city and with spin-off multiplier effects from the two integrated resorts currently under construction,’ K-Reit said in a filing to the Singapore Exchange.

K-Reit’s stock closed unchanged at $1.40 yesterday. The stock has shed 29.6 per cent since the start of the year.

Source : Business Times - 29 July 2008

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US investment growth in Singapore lags Asia

US investment growth in Singapore lags Asia

By CHUANG PECK MING

(SINGAPORE) There were some surprises on the US-Singapore foreign direct investment scene in 2007. Unlike in past years, US investment in Singapore in 2007 grew more slowly than that in China, India and Thailand - though Singapore remained the second-largest Asian destination behind Japan.

The reverse was true for investment in the opposite direction - Singapore’s cumulative investment in the US doubled last year to more than US$10 billion in book value, according to the latest figures from the US Department of Commerce.

Cumulative US investment in Singapore still dwarfed Singapore’s investment in the US. But in 2007, US investment in Singapore rose only 11 per cent to US$82.62 billion from 2006 - lower than the average 12 per cent for Asian countries as a whole.

Most US investment in Singapore - US$51.69 billion - was tied up in holding companies. The next biggest chunk - 16.6 per cent - went into manufacturing.

US multinationals seemed more eager last year to pump money into countries with bigger markets - such as Malaysia. They boosted investment across the Causeway by 25 per cent - the third-largest increase in the region - to a cumulative US$15.69 billion.

The biggest jump in US investment in Asia last year was in India. Driven mainly by acquisitions in the information sector, US investment in the rising economic giant surged 48 per cent from a year earlier.

US investment in Asia’s other emerging giant, China, rose 21 per cent, thanks to re-invested earnings in manufacturing, especially computers and electronic products and chemicals. US investment in Thailand soared 37 per cent, largely in petroleum refining, banking and mining.

US investment in Japan - the largest destination in Asia - grew 10 per cent from 2006 to US$101.61 billion last year.

Cumulative US investment in the Asia-Pacific region increased US$48.5 billion in 2007 to US$453.96 billion.

According to the Department of Commerce, the increase was spread over several industries, with the biggest jumps in holding companies, manufacturing - especially, computers and electronic products - and information.

At 12 per cent, the growth of US investment in Asia lagged the global average of 14 per cent last year, which was significantly more than the 10 per cent hike in 2006 and the biggest increase since 1999.

Europe, which attracts most US investment, experienced the fastest growth in regional terms last year - up 16 per cent to a cumulative US$1.55 trillion.

Fuelled by reconstruction work in Iraq, US investment in the Middle East jumped 15 per cent to US$29.37 billion.

Foreign investment in the US rose 14 per cent to a cumulative US$2.09 trillion, against US investment of US$2.79 trillion abroad, according to the Department of Commerce.

‘The pick-up in growth (from 13 per cent in 2006) in inward direct investment reflected both larger net equity capital flows into the US and a shift from negative to positive valuation adjustments,’ the department says in a report.

Singapore’s investment in the US surged 90 per cent last year, far higher than the global average and the overall increase for Asian investment, which expanded 18 per cent to a cumulative US$319.83 billion.

‘In percentage terms, there was a large increase in the position of Singapore, which was largely attributable to acquisitions and establishments of affiliates,’ the Department of Commerce says.

Among Asian nations, Singapore was the fourth- largest investor in the US in 2007 - after Japan, Australia and South Korea.

Source : Business Times - 29 July 2008

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Singapore Government does the math on green push

Singapore Government does the math on green push

Panel looks at incentives for developers, makes plans for long haul

By LEE U-WEN AND JAMIE LEE

(SINGAPORE) By the time the government unveils the next Budget in February, it should be much clearer as to where Singapore’s sustainable development journey is headed over the next 10 to 15 years.

The government is trying to balance the costs and benefits of going green, in a manner that will not upset economic development, said the Inter-Ministerial Committee on Sustainable Development at a press conference yesterday that was fronted by five ministers.

One question raised during earlier dialogue sessions with property developers is whether current incentives are enough to encourage developers to go green, noted the committee that was set up five months ago.

‘We have been giving incentives for developers to adopt a green mark,’ said Mah Bow Tan, committee co-chairman and Minister for National Development, referring to programmes such as the Green Mark incentive scheme under the Building and Construction Authority (BCA), which pays out cash grants of up to $3 million to developers that construct buildings of high environmental standards.

‘We are now discussing, are these incentives enough?’ added Mr Mah.

A City Developments spokesperson told BT that the company now invests up to 5 per cent of the construction cost of a property development to incorporate green design and features.

BCA Green Mark cash incentives ‘did not have a material impact’ in cost savings for green buildings but such financial incentives would push its peers to go green, the spokesperson added.

While all options are still on the table, the government said that it would be more cautious over implementing any legislation.

The other committee co-chairman Yaacob Ibrahim, who is also the Environment and Water Resources Minister, said: ‘We have to study very carefully whether we want to move towards the area of legislation. Some countries have gone ahead of the curve, at a great cost sometimes to businesses and the community.’

This caution also applies to subsidising solar energy production through feed-in tariffs that have been implemented in other countries such as Germany.

‘Our position has been that we should avoid subsidies because that tends to create an artificial demand,’ said Senior Minister of State for Trade and Industry S Iswaran.

‘The right thing to do is to price in the (carbon) emissions, not to subsidise solar,’ adding that Singapore would continue to focus on its R&D efforts in this renewable energy sector.

Finance Minister Tharman Shanmugaratnam called for a ‘pragmatic and measured’ approach to going green, even as he highlighted the fact that some initiatives could mean having to fork out more in the short term but reaping greater cost savings over time.

‘We will avoid extremes such as going green regardless of costs,’ said Mr Shanmugaratnam. ‘The idea is to weigh these costs against the short and long-term benefits. There will be no sudden increase in costs.’

Following its dialogue sessions with the private sector, the committee now plans to widen the ‘national conversation’ by gathering feedback from the public through means such as a new website (www.sustainablesingapore.gov.sg).

The government will compile the feedback at the end of two months and prepare a framework that will be ready by next year’s Budget, said Mr Mah.

Source : Business Times - 29 July 2008

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Builder has designs on posh Singapore condo market

Builder has designs on posh Singapore condo market

Heeton recruits style-setting design firm yoo for Grange Road apartments

By Joyce Teo

STARCK SIMPLICITY: A showroom designed by yoo, the ‘Prada of the property industry’, inspired by its co-founder Philippe Starck. The firm was behind Hong Kong’s JIA hotel and has other residential projects in Thailand and Taiwan.

A COMPANY once famed for its wet markets is now rubbing shoulders with one of the world’s trendiest firms in a bid to build Singapore’s most chic condos.
Heeton Holdings has roped in yoo - a design-focused property firm co-founded by French style-setter Philippe Starck and British developer John Hitchcox - for its 74 Grange Road project.

It has also recruited investment bank JP Morgan, which will take a 45 per cent stake in the 28-unit condo.

But yoo does not come cheap. The ‘Prada of the property industry’ designed Hong Kong’s JIA hotel and has hooked up with designers like Jade Jagger, daughter of Rolling Stone Mick.

Heeton is paying a flat fee of around $2 million, well over double the standard design fee, for the interior design of the units and the show suite, plus an undisclosed incentive bonus if yoo sells the units.

In return, yoo is offering a cutting-edge concept intended to draw buyers worldwide. ‘This will undoubtedly set a new standard here. Our focus is to help developers achieve higher prices,’ said yoo’s London-based chief executive Chris Boulton. ‘We do add value and ensure they sell in tough markets.’

Mr Boulton said that the firm’s projects had achieved a premium of 10 to 30 per cent above market value by capitalising on innovative design and the yoo brand to drive more traffic towards the project.

‘It’s also about making more noise about the project’ to raise its profile, he added.

Heeton’s chief operating officer Danny Low said it recruited yoo to give the freehold condo an edge over others.

‘The Singapore market is very competitive and buyers have become increasingly sophisticated. That is why we have to present a highly differentiated product for our targeted buyers, who are high-net-worth individuals and couples.’

These are the buyers who like spacious two-bedroom units of 1,600 to 1,800 sq ft or the two penthouses of 3,600 sq ft and 4,000 sq ft.

Heeton will meet yoo next week to discuss the design for the project.

This is yoo’s first residential design job here and its services will be exclusive to Heeton until the middle of next year. It also has residential projects in Thailand and Taiwan.

The project will be launched late this year or early next year. Construction should start by the first quarter of next year.

Heeton declined to give a break-even price as it has yet to appoint a contractor. It bought Grange Court for $72.8 million or $1,706 psf per plot ratio, excluding development charge, in a collective sale last August.

Knight Frank, the sole marketing agent, helped introduce yoo to Heeton. Yoo’s managing director for Asia, Mr Andrew Pang, used to work for Knight Frank.

Source : Straits Times - 29 July 2008

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Wanted: Public’s ideas for a greener Singapore

Wanted: Public’s ideas for a greener Singapore

Feedback from the ground to shape 10-year programme

By Tania Tan

SINGAPORE is embarking on a 10-year journey to build a greener future - and the first steps start with you.
Views from individuals, businesses and interests group are being sought in a ground-up approach to drafting government policy that will shape how Singaporeans live, work, play and commute for years to come.

The goal - to create a ‘liveable, lively home, with a vibrant economy’, said Minister for National Development Mah Bow Tan. He co-chairs a high-powered inter-ministry committee appointed by the Prime Minister in February to spearhead the green push.

Over the next three months, the public can give feedback on topics like transport, housing and industry at a dedicated website.

Public forums will also be held, and there will be consultations with volunteer groups, grassroots, and companies to involve as many people as possible.

Suggestions on everything from improving public transport to boosting recycling in homes will be woven into the committee’s report to be tabled at next year’s Budget.

Five ministers representing Environment, Transport, Trade and Industry, National Development and Finance came together yesterday to unveil this initiative, a sign of the far-reaching impact the committee’s work will have.

‘Energy is our biggest concern right now’, said Environment and Water Resources Minister Yaacob Ibrahim, who co-chairs the committee.

Rising fuel prices and an affluent growing population are putting immense strain on already limited resources, he explained.

The hope - to find a Newater solution for the energy sector.

Investing in home-grown R&D will help make clean energy a viable alternative to fossil fuels, said Senior Minister of State for Trade and Industry S. Iswaran.

But do not expect solutions to come quickly or without sacrifice, cautioned the ministers.

Using raised road tolls as an example, Transport Minister Raymond Lim said that unrestrained driving was ‘not possible’ as it undermined the urban environment by creating pollution and gridlock.

The benefits will come with time when the $40 billion being invested in new rail lines and road projects take shape.

What will not be compromised is economic growth, said Finance Minister Tharman Shanmugaratnam.

‘We will balance the costs and benefits,’ he added.

To achieve that, solutions should be ‘pragmatic and result- oriented’ but at the same time ‘bold’.

The committee will tread carefully with top-down mandates.

Other countries have gone ahead of the curve by legislating green policies but at great cost to the people and companies, said Mr Mah.

Endorsing the ground-up approach being taken, Dr Amy Khor, chairman of Reach, the Government’s feedback unit, said: ‘This is especially important for such a topic which the ground may not find easy to relate to since some policies implemented in the immediate future may not directly benefit them now, but (will)ensure that future generations will continue to have a high quality living environment’.

Source : Straits Times - 29 July 2008

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