Auction sales surge in first half to $72m

Auction sales surge in first half to $72m

Figures show uplift in property market over the past few months

By Joyce Teo, Property Correspondent

AUCTION sales have surged in the first half of this year, with the number of transactions dramatically higher than what was clocked up last year.

The numbers tell a story of a property market rapidly gaining in confidence, especially in recent months, according to consultancy Colliers International yesterday.

Sales in the first half reached $72.39 million. That is 61 per cent up on the $45 million recorded in the second half of last year, and 87 per cent higher than the $38.64 million racked up in the same period a year ago.

Much of the pickup happened in the second quarter, after the stock market rallied and sentiment improved. This month has seen strong sales of $24.7 million, compared with the miserable $3.6 million sales in January and $1.4 million in February.

Jones Lang LaSalle, which conducted the last auction for this month yesterday, said it sold four properties worth $11.29 million, including a $3.45 million Leonie Towers apartment.

Sales were lacklustre in the first quarter because buyers had bid very low and opportunistic prices, said Ms Grace Ng, Colliers’ deputy managing director (agency and business services) and auctioneer.

The mood in auction rooms now is decidedly more upbeat, with sellers keen on repricing properties about 5 per cent to 10 per cent higher, said Knight Frank auctioneer Mary Sai.

But the increased expectations do not signal a clear price rise yet. ‘Prices were lagging behind the market so the sellers were moving up to match the market,’ Ms Sai said. ‘Those that we sold were mostly the $800,000 to $1 million types. These are the safe buys as mass market homes aren’t likely to retreat much.’

The buying mood has even carried over from mass market homes to some landed and high-end property, said Ms Ng. These include two apartments at The Clift worth $605,000 and $1.047 million.

Few mortgagee sales have occurred this year despite the weak economic climate. The 103 repossessed units on the block represented only about 23 per cent of total properties put up for auction in the first half. This compares with 28 per cent last year, 44 per cent in 2007 and 50 per cent in 1998.

The number is about half of what was put up during the Asian financial crisis in 1998.

In all, there were 54 homes sold through auction in the first half.

‘The continued low number of mortgagee sales could be partly attributed to financial institutions attempting to manage their distressed asset portfolio by giving property owners the opportunity to dispose of the property of their own accord,’ said Ms Ng. ‘There will be less contention over the sale price, as the price is determined through a consultation process with the owner.’

Ms Ng expects to see more mortgagee sales in the second half of the year due to the general lag time of approximately six months or more.

Ms Ng also expects the buying momentum to persist in the next few months, possibly leading average monthly auction sales to surpass $30 million in some months. That could send auction sales over $160 million for the year, almost twice the $83.67 million achieved last year, she said.

Source : Business Times - 27 June 2009

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Marina Bay Sands’ 55 floors all built

Marina Bay Sands’ 55 floors all built

The sky park atop the towers will go up next.

ALL 55 floors of the Marina Bay Sands integrated resort overlooking Marina Bay have been built.

Next up: Putting the one-hectare sky park in place atop the three hotel towers, 200m off the ground.

This update came yesterday from the resort.

Meanwhile, parts of the sky park are being fabricated off-site. It will take 14 lifts to get all the pieces of it up there.

Mr Sheldon Adelson, chairman and chief executive officer of parent firm Las Vegas Sands, will be in town on July 8 for a ceremony to mark the milestone completion of the three hotel towers.

Source : Business Times - 27 June 2009

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Property investors eye China, Australia

Property investors eye China, Australia

By UMA SHANKARI

CHINA and Australia are seen as good bets in the Asia-Pacific for real estate investments, according to two recent reports.

A survey of 73 investors, fund managers and fund of funds managers showed that they rank China, Australia and Japan as the three most appealing locations.

Singapore, on the other hand, was ranked last among seven places in terms of preferred location - after China, Australia, Japan, South Korea, Hong Kong and India. The survey was conducted by the Asian Real Estate Association (AREA) together with its partners.

Investors were especially bullish on the residential and retail sectors in China, as well as the Australian office market.

In the same vein, property firm DTZ said in a report that it expects continued weakness in property markets across the region through 2009 and into 2010, but a divergent profile of recovery - with Australia and China ahead of other key markets.

While total returns are forecast to be negative in 2009 across the region, China and Australia will be back in positive territory in 2010, ahead of Japan, Hong Kong and Singapore, DTZ’s June 24 report predicted.

‘2009 will continue to be a difficult year for investor and occupier markets,’ said David Green-Morgan, head of Asia-Pacific research at DTZ. ‘We see fair-value opportunities emerging in Australia and China towards the end of 2009 and 2010 as the two economies embark on a period of recovery.’

In 2008, the Asia-Pacific felt the full effects of the global downturn - and property markets were not spared.

‘The value of the invested real estate stock in the Asia-Pacific declined in 2008, for the first time since 2001,’ DTZ said. The fall in value amounted to 8 per cent in local currency terms, but a more moderate one per cent in US dollar terms.

Transaction volumes almost halved in 2008 from 2007.

AREA’s survey, conducted in April this year, also showed a downturn in sentiment over the past 12 months. In the 2008 survey, all respondents - institutional investors, fund managers and fund of funds managers - indicated that they wanted to increase their activity in Asian non-listed real estate.

Since then, there has been a big drop in the number of investors who intend to allocate funds to Asian non-listed real estate in the short term. The percentage has fallen from 88 per cent of respondents in 2008 to just 24 per cent in the latest survey.

However, the respondents are more upbeat about mid-term prospects for Asian real estate. Twice as many intend to increase allocations to non-listed real estate over the medium term - three to five years - versus the short term. This is consistent with most investors’ expectations of a market recovery in 2010.

DTZ reckons that things are beginning to look up for the key property markets in the Asia-Pacific. Opportunistic deals are continuing to occur across the region and a broad ‘hunting season’ should emerge over the next 12-18 months. Looking at specific markets, Sydney is expected to reach ‘fair value’ in the second half of 2009, followed by Shanghai in early 2010.

However, some concerns remain. ‘While we will start to see value returning to markets in the Asia-Pacific, funding remains a concern, and may become a bottleneck for the recovery of activity in the commercial property markets both in Asia-Pacific and worldwide,’ said DTZ’s Mr Green-Morgan.

Investors should not lose sight of the fact that economic growth across the region is expected to be lower in 2009 and still below trend growth in 2010, DTZ warned. ‘The implications for property markets, through below-trend occupational demand and, in some cases, the required clearing of excess supply, will translate into continued weakness in the near-term,’ it said.

Likewise, in the AREA survey, respondents said that obstacles remain when it comes to investing in Asian non-listed real estate funds. Market conditions were identified as the top challenge faced. This was followed by ‘transparency and market information on non-listed vehicles’ and ‘availability of suitable products’.

DTZ also said that it may be too soon to call a bottom as research shows that the historic series is volatile. ‘We need to see a few more quarters of data before we can call the bottom of the market,’ Mr Green-Morgan said.

Source : Business Times - 27 June 2009

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First-half auction sales top $72m

First-half auction sales top $72m

Small investors have been active at recent sessions, with savvy bidders also making counter offers

By KALPANA RASHIWALA

A STRONG showing at auctions this week raised the tally for properties sold under the hammer in the first half-year to $72.4 million - just 13 per cent shy of the $83.7 million for the whole of last year, based on figures compiled by Colliers International. The second quarter of 2009 saw a total $54.5 million of auction deals after a quiet Q1, with $17.9 million.

The momentum is expected to continue. Colliers’ deputy managing director and auctioneer Grace Ng predicts that full-year 2009 auction sales could exceed $160 million - almost twice the figure in 2008.

Jones Lang LaSalle, which yesterday conducted its last scheduled auction for Q2, saw four properties change hands for a total of $11.3 million. One was a 7,232 square foot vacant freehold plot in Fernhill Road that was sold for $6.4 million, working out to $632 per square foot (psf) of potential gross floor area. The Singaporean buyer is expected to develop the residential site, which can be built up to five storeys, for his family’s use, according to JLL’s head of auctions, Mok Sze Sze.

Another big-ticket item sold was a 12th floor unit in Leonie Towers, a freehold condo that is more than 30 years old. The 2,906 sq ft maisonette sold for $3.45 million or $1,187 psf of strata area. ‘The buyer is a company. We held two viewings for the property over the past week, and it attracted around 70-80 parties,’ Ms Mok said. The sheriff’s sale was held to recover a debt owed by the owner to two individuals. There is also an oustanding mortgage on the asset.

Residential properties accounted for almost half of the $72.4 million of auction sales in the first half, followed by industrial properties, with a 19 per cent share, Colliers’ analysis shows.

It noted that activity in the auction market picked up dramatically from late March, when the stock market rallied. ‘Based on historical observations, property auctions have always been an accurate barometer of market confidence, and are usually swift in reflecting any changes in market sentiments,’ the firm said.

Colliers also noted that 77 per cent of the 440 properties put up for auction in the first half were offered by their owners, leaving only a 23 per cent share for mortgagee sales. ‘Historically, from 1998 to 2006, the number of mortgagee properties always tended to be higher than the number of properties put up by owners. The trend started to reverse in 2007,’ said Colliers’ Ms Ng.

DTZ senior director and auctioneer Shaun Poh has noticed keen participation by property investors at his firm’s recent auctions. ‘Small investors are particularly aggressive in bidding for smallish apartments in the central area, for example, Icon, The Clift, even an old development like International Plaza,’ he said. ‘Generally, properties priced between $700,000 and $1.3 million tend to move very fast.’

Knight Frank executive director Mary Sai, another veteran auctioneer, said that attendances, as well as success rates, at auctions have gone up markedly since April.

‘However, there is a sense of caution among bidders. They don’t want to be overly financially stretched,’ she said. ‘A clever move by some bidders now is to make a counter offer to the auctioneer’s opening price. So they start within their comfort zone. Eventually, however, the bidding competition will draw out the true price level, often surpassing the opening price.’

Source : Business Times - 27 June 2009

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Singapore a model of sustainable growth

Singapore a model of sustainable growth

SINGAPORE has been named by the World Bank as one of four cities with best practices in the area of sustainable development. The bank yesterday launched a new urban development programme that aims to help cities in developing countries move towards greater sustainability.

Called Eco2 Cities - Ecological Cities as Economic Cities - the programme recognises that successful cities create economic value and opportunities for their citizens in an inclusive, sustainable and resource efficient way.

‘Eco2 is being launched at a critical juncture - urbanisation in developing countries is a defining feature of the 21st century,’ said Jim Adams, vice-president for the World Bank’s East Asia and Pacific region - which has a fair share of the developing countries expected to treble their built-up urban areas by 2030.

Singapore was lauded for its efforts in integrated land use and transport planning, and effective measures to relieve road congestion and water resource management.

The cities of Curitiba, Stockholm and Yokohoma were similarly praised for environmentally conscious practices, and the World Bank aims to model features of the programme after the systems of these places.

Eco2 Cities co-team leader Arish Dastur said the World Bank should realise that ‘infrastructure finance alone is not the answer, and should take a cue from countries like Stockholm and Singapore in this new initiative’.

Source : Business Times - 27 June 2009

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ICON central lab gets a bigger home

ICON central lab gets a bigger home

By MICHELLE YEO

ICON, a worldwide provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries, has moved its Singapore central laboratory to a new home at Loyang Way - 10 times larger than the old one at the Synergy Building.

OFFICIAL OPENING
(From left) Richard O’Brien, Irish Ambassador to Singapore, Mr Scott-Edwards, Ms Chan, Mr Gray and Daniel Shields, Charge d’Affaires of the United States Embassy in Singapore, at the ICON central lab’s new facility
The company says the new 9,000 sq ft lab, costing $3 million, will meet growing demand for its services in Singapore, which has increased by 149 per cent in the past six months.

The outsourcing of clinical trials by pharmaceutical companies is expected to rise from 35 per cent to 60 per cent in the near future, ICON’s chief executive Peter Gray said yesterday. This will drive the company’s growth.

The larger facility will also serve other Asia-Pacific countries and complement services provided by ICON’s three other laboratories in Dublin, Bangalore and New York.

ICON’s FY2008 revenue was US$865 million, with Asia contributing US$50 million. The company’s stock is traded on the Nasdaq and Irish exchanges.

ICON Central Laboratories chose Singapore as its Asia-Pacific hub because the city’s efficient logistics chain and easy accessibility to the region means fast turnaround time for the transport of lab samples.

The new location - just five minutes from Changi Airport’s cargo area - will also make visiting the lab easier for clients.

Robert Scott-Edwards, president of ICON Central Laboratories, said: ‘We also discovered that Singapore has a good talent pool for technical staff, and we are very impressed by the local business climate here. It is efficient, responsible and flexible, enabling us to set up our new facility in less than three months.’

ICON is celebrating its tenth anniversary in Singapore with the expanded central lab.

EDB assistant managing director Anna Chan said at the official opening of the lab yesterday: ‘ICON’s decision to use its expanded facility in Singapore to meet Asia’s growing demand reinforces Singapore’s position as a preferred location to tap into Asia’s growth.’

Source : Business Times - 27 June 2009

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Twinity set to launch virtual Orchard Road

Twinity set to launch virtual Orchard Road

FANCY walking down Orchard Road in a fully air-conditioned atmosphere? Soon you will be able to - online.

Virtual Singapore can help promote the Republic as a global city and also boost business for hotels, travel, airlines, tour guides and attractions
Twinity, a 3D online world that meshes the real with the virtual, will launch virtual Orchard Road and Marina Bay in the third quarter of 2009.

And that means anyone, anywhere will be able to explore the Singapore cityscape.

Twinity, engineered by German company Metaversum, already provides a virtual replica of Berlin.

‘Virtual Singapore can assist in the promotion of Singapore as a global city based on innovation,’ said Jeremy Snyder, managing director of Metaversum Asia.

Virtual Singapore was developed in consultation with the Media Development Authority (MDA) and Infocomm Development Authority of Singapore (IDA).

One aim is to boost business for hotels, travel, airlines, tour guides and attractions.

The project has plenty of advertising potential.

Twinity is tying up with AsiaOne - the interactive arm of Singapore Press Holdings - to seek retailers, brands and firms interested in promoting their products or space on the virtual ‘Orchard Road’.

Partners to promote Singapore’s history, rich culture and nightlife are also encouraged to join in.

‘We will work closely with Twinity to look for guest sponsors and partners for the upcoming launch, as well as to get users for the site,’ said Raymond Teo, assistant vice-president of AsiaOne’s interactive business unit.

‘We see this partnership as a key strategy to associate the AsiaOne name with a new, cutting-edge online platform like Twinity.’

As for other parts of virtual Singapore, Mr Snyder would only say the development and roll-out time-line is ‘dependent on partner relations and other external factors’.

But one thing is certain - you can look forward to sipping virtual coffee in Ngee Ann City come September.

Source : Business Times - 27 June 2009

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CIMB sends 40 more remisiers home

CIMB sends 40 more remisiers home

Companies implement business continuity plans that were put together during the Sars outbreak in 2003

By UMA SHANKARI

ANOTHER trading room was closed at CIMB-GK Securities’ Raffles Place office yesterday and an additional 40 remisiers were sent home, after a second remisier from the company was diagnosed with the H1N1 virus.

On Thursday, 50 remisiers from one trading floor at CIMB-GK were put on home quarantine after one of them caught the H1N1 virus from his son. Both infected remisiers are stable condition, the firm said yesterday.

‘We have activated our business continuity plan and are monitoring the developments closely,’ said a spokesman. ‘CIMB-GK expects minimum disruption to our business operations.’

The move underscores how serious companies and ordinary Singaporeans are when it comes to tackling the H1N1 virus, even as the number of confirmed cases here climbed to 365.

Parents here are in favour of keeping their children home from school and companies are asking employees to stay away even on the slightest chance that they could be infected.

And community organisations such as churches are now actively practising contact tracing - and even suspending services in some cases.

Companies here, most of whom have business continuity plans that were knocked together during the Sars outbreak in 2003, said that they are taking every precaution when it comes to tackling the H1N1 virus.

SingTel, for one, has in place a slew of measures such as working from home and the formation of special support teams.

Businesses are also making sure that face masks and hand sanitisers are readily available. A Hong Leong Group spokesman said that all City Developments and Hong Leong Holdings office buildings have hand sanitiser dispensers located at high traffic areas such as lift lobbies.

The most common practice appears to be quarantining staff who return to work after trips or vacations to H1NI-stricken areas, and BT understands that many companies here are encouraging even employees with the common flu to work from home or take medical leave. But some employees whom BT spoke to said that this means that the workload for the remaining workers has increased.

‘The office is very empty because people returning from holidays are staying at home for a few extra days, and there are also people who are just sick, not from H1N1 but just from normal flu, who are also staying at home. The rest of us are working until very late every day,’ said an operations executive at a bank.

Singaporeans would also rather be safe than sorry when it comes to their school-going kids. An MSN poll of 4,400 people found that 72 per cent of respondents strongly suggested that students should not have to go to school once the current school holidays end next week.

RiverLife Church, which was identified as one of the clusters where H1N1 cases were spread, said that all church-based meetings and programmes will be suspended with immediate effect until July 4. The church had previously suspended all children and youth-related programmes.

‘We continue to pray for God’s protection over Singapore during this time,’ said the church in a statement.

Source : Business Times - 27 June 2009

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5 strategies to develop financial sector: SM

5 strategies to develop financial sector: SM

Focus is on attracting investors, wealth protection, maintaining order, improving risk management and building talent

By OH BOON PING

INFRASTRUCTURE investments in Asia is set to grow by leaps and bounds in the coming years and Singapore aims to be at the forefront of financing those projects.

And this is just one of five strategies to develop the financial sector which Senior Minister Goh Chok Tong unveiled at the annual dinner of the Association of Banks (ABS) last night.

“Asia needs to spend about US$8 trillion on transport, power and communications infrastructure over the next ten years for Asia to emerge as a viably connected, integrated and competitive region. Such infrastructure investment will spur the region’s growth, and will potentially add US$1.6 trillion or 10 per cent to developing Asia’s GDP by 2020,” he said.

To tap on that, the government is now working with multilateral agencies to attract more private sector investments into viable infrastructure projects, while encouraging ABS members to undertake more Asian infrastructure financing out of Singapore. Last year, the government launched the Asia Infrastructure Project Development to assist municipal governments in sourcing for funds, from commercial banks and private investors, for commercially viable public private partnership infrastructure projects.

Secondly, Singapore will seek to tap on the growing wealth in Asia as investors now pay more attention to wealth protection besides growth.

“We have a reputation for a sound regulatory regime and a trusted legal and governance framework. We should build on this foundation to facilitate the growth of a trusted ecosystem for the asset management industry, encompassing high standards of risk management, transparency and industry competencies.”

He noted that the asset management industry here had grown by an average of 20 per cent per annum over the seven years before the present crisis, thus illustrating the growth potential of the fund management sector. Also, the landscape has become more diverse, and “most of the fund management firms here are from countries in Japan, Europe and the US and, reflecting the international character of our asset management industry”.

Thirdly, he said that Singapore needs to maintain a sound and progressive regulatory regime to restore confidence in the sector. The government is also open to raising the regulatory bar further, in keeping with changes in global regulatory standards.

For this reason, the Monetary Authority of Singapore (MAS) recently carried out a consultation on proposed changes to the regulatory framework on the sales and marketing of structured products to retail investors. Also, it found that financial institutions need fundamental changes in both business models and mindsets to win back the trust and confidence of consumers.

Therefore, the central bank will fine-tune its approach to supervision of market conduct of financial institutions, including greater probing of the boards and senior management of the steps they are taking to embed fair dealing outcomes in all their processes, from product approval to staff incentive structures.

In his speech, Mr Goh disclosed that the three banks and one finance company have offered settlements of $105 million on a “no-admission-of-liability” basis to over 3,600 investors, who were mis-sold the Lehman-linked structured products.

Fourthly, the government will try to enhance the risk management capabilities and market infrastructure here through initiatives to mitigate counterparty risks.

Another initiative which will strengthen Singapore’s market infrastructure is the ongoing industry effort to enhance the framework for the fixing of the Singapore interbank offer rate (Sibor) and the Swap offer rate (SOR).

“In Singapore, the ABS has conducted a review of Sibor and SOR fixings and found the methodologies and processes to be sound. Nevertheless, governance of the fixings can be strengthened by expanding the resources and scope of the oversight committee. These proposals will be circulated to members for comments shortly.”

Finally, Mr Goh emphasised the importance of building a talent pool and intellectual capacity during the downturn, which is why the government has agreed to cofund up to 90 per cent for training schemes supported by the Financial Sector Development Fund.

Meanwhile, United Overseas Bank head Wee Ee Cheong has taken over from OCBC chief executive David Conner as the new chairman of ABS.

Source : Business Times - 27 June 2009

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