Travel agents’ in weekend fairs a big success

Travel agents’ in weekend fairs a big success 

Strong sales raise hope that upcoming Natas fair will give industry a much-needed boost

By Lim Wei Chean 
 
MILLIONS of dollars in year-end holiday packages were sold during fairs held last weekend by three major travel agencies.
The glittering figure has lent some cheer to an industry that was hit hard by a lack of sales in June - traditionally a big holiday month among Singaporeans because of the four-week-long school break.

ASA Holidays said it rang up $6 million in sales over the weekend, while another powerhouse, Chan Brothers, said it had done $3 million worth of business.

A third company, SA Tours, said it was still tallying its receipts, but reported that sales were positive.

The big-sellers were tours to Europe and the United States. Trips to more exotic locales such as Turkey and Egypt did well too.

Some buyers were planning far ahead. ASA Holidays said it received bookings for holidays during Chinese New Year and the March school break next year.

The good showing - an ASA Holidays spokesman described it as ‘overwhelming’ - has left the industry cautiously optimistic that the National Association of Travel Agents Singapore (Natas) fair, to be held at the Singapore Expo from Friday to Sunday, will give it a much-needed shot in the arm.

The Natas event, held twice a year, is the grand-daddy of travel fairs in Singapore, and this weekend’s event is no different.

There will be 1,000 exhibitor booths for the first time, occupying two full halls at Singapore Expo with 20,000 sq m of exhibition space.

The number of exhibitors has also grown from 120 to 160.

Travel agencies had initially feared that the slow sale of holiday packages for the June break meant Singaporeans’ appetite for travel had shrunk as higher prices for food, petrol and other essentials took a toll on spending.

SA, for example, saw sales drop by 10 per cent.

ASA’s spokesman, Ms Eileen Oh, said: ‘We were initially very worried about how the market was going to be.’

But insiders say that even though Singaporeans have tightened their belts by cancelling mid-year holidays, they are still prepared to splash out for an end-of-year getaway.

Natas chief executive officer Robert Khoo agreed.

Noting that ‘June is normally the peak travel season but it was quite quiet this year’, he said that if the cost of living continues to rise, Singaporeans could start taking one big holiday a year instead of multiple trips.

He added, though, that if a global economic slowdown drags on, things could take a turn for the worse.

Already, inflation and the appreciation of the Singapore dollar have taken a toll on the tourism industry here: Year-on-year arrival numbers for June dipped for the first time in 51 months.

Still, Mr Khoo is optimistic that the Natas fair will draw buyers in droves.

He is setting a target of 60,000 visitors to the fair, which would be a new record.

SA Tours spokesman Ruth Lim was also optimistic. She explained: ‘Singapore is a small country so people need to travel out to relax.’

Source : Straits Times - 30 July 2008

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Rents falling at most Singapore condos

Rents falling at most Singapore condos 

New supply of homes and weak demand could mark start of downward trend

By Fiona Chan, Property Reporter 

TENANTS, rejoice: rents have begun to fall at a majority of condominiums in Singapore on the back of fresh home supply and a turnaround in market sentiment.
Two in every three projects with a substantial number of leases saw rents drop in the second quarter from the previous three months, according to the latest data from the Urban Redevelopment Authority (URA).

This marks a reversal from the last two years, when private home rents soared, especially in expatriate-friendly areas, due to an insufficient supply of rental homes and an influx of expat tenants.

Now, rents are dipping in almost every location around the island, but particularly in the two areas most popular with expats - East Coast and the central region around Orchard Road.

This could mark the start of a downtrend that experts say may worsen with more home completions, especially in the prime areas, where rents have reached stratospheric levels.

URA’s data analysed rents in developments with at least 100 units and that have 10 or more leases each in the first and second quarters this year. Of the 124 projects in this category, 80 - or about 64 per cent - saw rents drop between the two quarters.
But URA also has a more comprehensive rental index that covers all rental transactions, including those at projects with fewer than 10 leases. This showed that rents across the country rose 2.5 per cent overall in the second quarter, the smallest rise in three years.

Rents are taking a hit largely because the stock of homes available for rental has risen, property consultants said.

Several major projects have recently been completed that were heavily bought into by investors planning to rent out their units. These include the 640-unit Icon in Tanjong Pagar, a 430-unit tower at Sail @ Marina Bay, the 600-unit Citylights at Lavender, and the 546-unit Sea View in Amber Road.

Ms Tay Huey Ying, director of research and advisory at property firm Colliers International, said the ‘peakish’ rents could also be due to the current run of high inflation, pushing up living costs in general and making expats more resistant to any rental rises.

Another source of rental demand, collective sale sellers, has also dwindled due to the delay in demolishing several en-bloc sale estates amid a slow property sales market, she added.

Colliers’ own research showed that monthly rents of luxury apartments fell 3 per cent in the first six months of this year. A 1,000 sq ft apartment was fetching $6,730 in June, down from $6,930 in December last year.

But Ms Tay said luxury rents are unlikely to fall by more than another 10 per cent in the second half, as Singapore remains attractive to expats.

Mr Colin Tan, head of research and consultancy at Chesterton International, agreed that the rental declines in the prime central districts will be ‘more gradual than elsewhere as their central location means there will be no lack of demand’.

‘At the other end of the rental market, in far-flung locations such as Changi and Pasir Ris, the declines are expected to be more pronounced as they will face the twin problems of weak demand and declining rentals,’ he added.

Source : Straits Times - 30 July 2008

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Park Central @ Ang Mo Kio gets over 1,000 applications so far

Park Central @ Ang Mo Kio gets over 1,000 applications so far

By Wong Siew Ying

SINGAPORE: Some 20,000 people have visited the showflats at Park Central@AMK, Singapore’s third condominium-style public housing development.

The project, launched last week, has received over 1,000 applications so far, marginally lower than City View@Boon Keng, a similar development nearer the city that went on sale earlier this year.

Applications for Park Central units will close on August 5.

David Liew, managing director of United Engineers Developments, said: “The people coming here, they are more cautious, they are more serious. They are asking about the qualifying criteria. What we are seeing is more genuine interest.”

All 578 units at Park Central come with the look and feel of a private residential home but they cost about 40 per cent less, at S$500 per square foot.

The developer says the resale flats around the area will not pose a threat to sales of Park Central. That is because many of the resale units are much older, at between 10 and 20 years old.

The developer believes many home hunters will prefer to buy brand new flats, even though they have to pay about 10 per cent more. The pricing of such projects built by private developers had caused a stir earlier this year.

City View@Boon Keng’s price tag of S$520 per square foot was a record for new public housing flats. Over 3,500 people applied for the 714 units, but only 66 per cent actually bought them.

Six months after its launch, the project’s marketing agent says 20 per cent of the units remain unsold.

Donald Yeo, executive director of HSR International Realtors, said: “If a project has a slower pace to get rid of the units, that does not mean the market cannot sustain the price. It’s still very competitive and I believe the prices are still realistic.”

Industry players expect prices at the next condo-style public housing project in Bishan estate to be even higher, partly due to the spike in construction cost.

- CNA/ir

Source : Channel NewsAsia - 30 July 2008

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Temasek Holdings confirms S$1.2b investment in Merrill Lynch

Temasek Holdings confirms S$1.2b investment in Merrill Lynch

SINGAPORE: Singapore investment firm Temasek Holdings has pumped in an additional US$900 million (S$1.2 billion) in Merrill Lynch as part of the United States broker’s latest capital-raising effort.

Temasek Holdings said in a statement on Tuesday that it has committed US$3.4b in the public offering by Merrill Lynch.

Myrna Thomas, Managing Director, Corporate Affairs, Temasek Holdings, said: “Temasek confirms its commitment of US$3.4 billion in the Public Offering by Merrill Lynch, a portion of which is subject to regulatory approval.

“The commitment includes a sum of US$2.5 billion arising from a reset payment which Merrill Lynch has agreed to pay to Temasek as an adjustment to the price of Temasek’s original investment made in December 2007.”

The announcement came in the wake of Merrill’s July 17 report that it had racked up a net loss of US$4.89 billion for the second quarter, another sign of the devastation of the US real estate crash on financial markets.

The tarnished Wall Street star said on Monday it was selling off a large amount of asset-backed collateralized debt obligations (CDO) - the packaged US mortgage securities which have ravaged bank balance sheets around the world.

The move took US$11.1 billion off of its books, but only after scoring a huge loss on the sale. Merrill said the CDOs had a face value of US$30.6 billion and were sold to Lone Star Funds, a specialist in distressed assets, for just US$6.7 billion.

“The sale of the substantial majority of our CDO positions represents a significant milestone in our risk reduction efforts,” said Merrill chairman and CEO John Thain in a statement.

Thain said the CDO sale and the capital hike will “materially enhance the company’s capital position and financial flexibility going forward.”

The company said on Monday it expects to record a pre-tax write-down in the third quarter of about US$5.7 billion, which includes a US$4.4 billion loss on the CDOs being sold.

Merrill had already raised US$15.3 billion from capital markets earlier this year, including share sales to Temasek.

Temasek’s earlier investment though came with a requirement that if Merrill raised more capital within 12 months at a price lower that the US$48 that the Singapore fund paid, it would be compensated for the difference.

Tuesday’s announcement meant that Merrill has to pay Temasek US$2.5 billion - which Temasek is turning around to put back into Merrill, along with another US$900 million.

Merrill’s new fundraising comes on the heels of announcements earlier in July that it was shedding assets to raise new funds, including its 20 per cent stake in financial news and data group Bloomberg for US$4.4 billion, and its controlling interest in Financial Data Services for at least US$3.5 billion.

In its second-quarter report, it also wrote down over US$9 billion in soured investments, largely linked to bets on US mortgage investments that have been hit by a horrific housing slump after years of sizzling growth.

Merrill’s shares plunged 11.6 per cent Monday ahead of the news, falling US$3.19 to close at US$24.33.

- CNA/AFP/yb

Source : Channel NewsAsia - 30 July 2008

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Singapore JTC sees record take-up of its ready-built space in 2007

Singapore JTC sees record take-up of its ready-built space in 2007

By Timothy Ouyang,

SINGAPORE: JTC Corporation has reported a record take-up of some 246,300 square metres of its ready-built space last year, surpassing the previous record seen in 2005.

The bouyant industrial property market last year helped JTC to book a record surplus of S$1.183 billion, up 50 per cent from 2006. The numbers were also boosted by impairment loss write-backs of nearly S$159.4 million on its properties.

But JTC has hinted that the upward momentum is unlikely to continue this year.

Ow Foong Pheng, CEO of JTC Corporation, said: “We expect that it would follow how the economic projection will be. So FY 08/09, I think growth is expected to be slower and it will probably pan out in our industrial space demand as well.”

JTC saw some 360 hectares of its prepared industrial land taken up last year – the biggest in ten years.

Going forward, JTC said demand for industrial space this year is unlikely to be as strong as 2007. However, it would continue to invest in more research and development projects, and focus on producing more innovative industrial space solutions.

This includes taking on higher-risk projects that require specialised needs and bigger investments.

Mrs Ow said: “With a very vibrant and good group of private industrial developers out there, JTC can step back and allow the private market to play in the provision of more generic industrial space.

“But we will still keep an eye to ensure that there’s sufficient supply of ready-built factories to meet the needs of the industry. This will free JTC to move further upstream towards planning and developing more specialised parts that meet new needs.”

JTC is divesting 62 of its ready-built properties to Mapletree Investments, and the transaction is expected to be completed by the end of the year.

- CNA/so

Source : Channel NewsAsia - 30 July 2008

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Lippo-Mapletree books better-than-expected H1 earnings - Singapore

Lippo-Mapletree books better-than-expected H1 earnings - Singapore

By Pamela Almeda,

SINGAPORE: Lippo-Mapletree Indonesia Retail Trust (LMIR Trust) has posted first half earnings of S$39.3 million, 3 per cent higher than its own forecast. Revenue came in at S$53.8 million, which also exceeded projections.

Lippo-Mapletree said it is on track to pay out 5.84 cents per unit for the whole year, as earlier forecast. The trust said it is less affected by inflationary pressures because it targets the middle and upper-income markets.

Viven Sitiabudi, CEO of LMIR Trust, said: “When you are visiting some of the malls in Indonesia, you will not really feel that pressure. Our target market is middle to upper income… the people that will be really affected (by inflation) are more at the lower level.”

According to the Retailers Association in Indonesia, retailers continue to see double-digit growth and Lippo-Mapletree has noted that its rentals are still very stable.

“In our portfolio, we are still experiencing an increase of rental as per the projection, which is around 10 per cent per annum on reversion. So if it’s a three-year rent, we’re still able to command about a 30 per cent increase in the rent, so that’s still in line with what we’re saying in our prospectus,” Ms Sitiabudi said.

For the second quarter alone, earnings for LMIR Trust came in at S$15.9 million, 3 per cent higher than its forecast. This works out to a distribution of 1.50 cents per unit.

Revenue for the three months ended June was 15 per cent higher than projected, at S$24.5 million.

Lippo-Mapletree is starting to see contributions from its new acquisition, Sun Plaza, which has increased its IPO net lettable area by 20 per cent and has also diversified its property income.

Ms Sitiabudi said: “This is one of the best malls in Medan. The anchor tenant is very strong… we’ve identified certain areas that we can easily turn into a net leasable area to drive the rent up.

“And while Sogo has got a long lease, we’ve also been looking at their traffic and the sales in that particular area, and we believe that we will be able to talk to them and achieve a win-win situation.”

Lippo-Mapletree said the fundamentals of Indonesia’s retail sector remains strong and it is looking at acquiring more malls moving forward.

The trust is the first REIT that provides exposure to Indonesia’s retail sector. Its sponsor, Lippo Karawaci, is still continuously developing malls.

- CNA/so

Source : Business Times - 29 July 2008

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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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