New hotel with luxury shopping outlets to replace former Crown Prince Hotel

New hotel with luxury shopping outlets to replace former Crown Prince Hotel

By Ng Baoying,

SINGAPORE : A new five-star hotel with luxury shopping outlets will soon replace the former Crown Prince Hotel along Orchard Road.

Set to open next year, the Grand Park Orchard Hotel and the Knightsbridge retail space linked to it will add to the buzz along the rejuvenated shopping district.

Its retail space will almost double to about 83,000 square feet.

It is part of Park Hotel Group’s plan - which was conceived in 2005 when it first bought the property - for a flagship property in its portfolio.

Allen Law, director, Park Hotel Group, said: “When we evaluate the concept of our mall, we look at our hotel portion as well. We are targeting this property to be our flagship property in our portfolio. We want to have some statement as of how our hotel group can transform an…old hotel into something totally new…So, first of all, that is our consideration.

“And, looking at the retail podium, we want to embark on a concept that is not so conventional in the Singapore context yet. But we do see this concept in places like Hong Kong, Japan, and even London. So, we have a concept that captures all the flagship brands and it is a collection of street front flagship stores…”

Knightsbridge tenants will have a double-storey facade facing Orchard Road.

About 50 per cent of space has been leased out, mainly to fashion brands.

Park Hotel Group said demand is strong despite the poor economic environment, but other challenges persist.

Mr Law said: “In terms of the economic outlook, it does affect the timeline in terms of the decision-making process. Our project has no difficulty in garnering interests from all these international branches.

“However due to their, maybe difficulties in other operations in different parts of the world, it may affect their decision-making in opening a store in Singapore. They are more careful in the sense that they look at their overall portfolio, and have to take a little bit more time…to make the commitment.”

The Knightsbridge stretch of retail outlets will link to the new Grand Park Orchard Hotel. Park Hotel Group is revamping the entire look of the building, noting that the original is almost 20 years old. It added that it sees a lack of rooms along Orchard Road, and expects strong demand when it opens for business. - CNA/ms

Source : Channel NewsAsia - 18 July 2009

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Steven Choo brings a special touch to Redas

Steven Choo brings a special touch to Redas

By KALPANA RASHIWALA

STEVEN CHOO, a former property consultant and university lecturer, will be taking on a new role soon - as chief executive officer of the Real Estate Developers Association of Singapore (Redas).

DR CHOO
Having a respected professional like him as CEO would bolster Redas’s credibility, analysts say
BT understands that his appointment begins on Aug 1.

Dr Choo, 57, will replace retiring Redas executive director Chia Hock Jin.

Market watchers suggest that Dr Choo’s appointment is part of efforts by the Redas council, led by president Simon Cheong, to spruce up the organisation and its image. Having someone who is also a well-respected professional as CEO would also bolster Redas’s credibility.

‘He was well liked by students when he was a university lecturer,’ a former colleague said when told about Dr Choo’s new job. ‘He’s also respected by people in the property industry as well as government officials. He talks sense and doesn’t push it too much.’

An industry observer said: ‘Redas needs someone knowledgeable like Dr Choo, who can hold discussions with the authorities and whom they can take with a certain seriousness. He’s someone more neutral and yet who knows the market. Of course, he’s also very good at doing research.’

The association is also expected to take more interest in training and development in the real estate industry, BT understands.

Analysts say that they would not be surprised if Dr Choo recruits fresh talent to boost the management team at Redas to help achieve these goals.

The former Catholic High School student holds a PhD in urban planning from the University of Washington.

He was a senior lecturer at the National University of Singapore’s School of Building & Estate Management before joining Richard Ellis Property Consultants (now known as CB Richard Ellis) in 1993. Dr Choo left the firm in 1995 to join rival Jones Lang Wootton, which later became Jones Lang LaSalle (JLL). In 2001, he left JLL, where he was last head of research and consultancy and regional research head.

Dr Choo later surfaced at CapitaLand, where the posts he held included senior vice-president of research and corporate development and also SVP of CapitaLand Residential’s Malaysia investment department.

He left the property giant a few years ago and has since been doing property consultancy stints in the Middle East, BT understands. Dr Choo is married and has a grown-up son.

He has also served on the boards of the Singapore Land Authority and JTC Corporation in the past. He was also deputy chairman of the Economic Review Committee’s Land Work Group.

He currently sits on the board of NTUC Choice Homes.

Source : Business Times - 18 July 2009

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ERA issues final warning to agents who pull commission ruse

ERA issues final warning to agents who pull commission ruse

By Ansley Ng

SINGAPORE: For every property deal they close, their agencies would take a cut of their commission, and how much would depend on the productivity and seniority of the real estate agent. But some agents are getting around this commission system — prompting one agency to issue a “final warning” to all its agents on Tuesday.

In an email, ERA said it had discovered that some agents under a “80/20 scheme” — where one has to give a 20-per-cent cut of the commission to the company — have been submitting their transactions under the names of more experienced colleagues who come under a “90/10” scheme.

This lets them keep a bigger share of the money and, according to some housing agents Today spoke to, the senior agent is likely to pocket a cut from his colleague for the help.

Apart from how this “creates unfair competition among associates”, ERA said in the email, it amounts to cheating — and “if caught, the company will not hesitate to terminate” the culprits.

“More importantly, there is the more serious legal implications involved should the transaction go awry,” ERA noted. Both agents involved could face legal action from their clients and, in the case of an HDB transaction, the Housing and Development Board. They would also be liable to indemnify the affected parties.

ERA agents Today contacted were reluctant to discuss the email, but Mr Jeff Foo, president of the Institute of Estate Agents, noted that such a practice was “prevalent” and happened in other agencies too.

In every property sale, he said: “There are a lot of pre-qualifications that agents have to check. If this agent fails to check and if the other agent lends his name to make a quick buck, not only will the agents get involved, the consumer will suffer.”

But the buyer and seller can rest assured that if the papers are in order, the deal can still go through even if the agents in cahoots are exposed.

Punishing the agents responsible would not help because they can always join another agency and carry out the unfair practice, Mr Foo added.

- TODAY/ yt

Source : Channel Newsasia - 17 July 2009

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Frasers launches new service residence brand

Frasers launches new service residence brand

By EMILYN YAP

FRASERS Hospitality yesterday launched Modena - a new line of service residences which cater to a budget-conscious and highly mobile group of business travellers.

Home away from home: The Modena line of service apartments cater to a budget-conscious and highly mobile group of business travellers
Room rates at Modena will be around 20 per cent lower than those at properties under the existing Fraser brands. Some 1,000 apartments across five Modena properties will come on-stream in the next three years.

The launch is timely ‘because companies are really looking at cost-cutting measures’ and Modena will be ‘a lot more palatable’ for them, said Frasers Hospitality CEO Choe Peng Sum, who was in Tianjin, China yesterday to launch the brand. He heads the hospitality arm of Frasers Centrepoint, which is part of local conglomerate Fraser and Neave.

Apartments at Modena will be smaller than those under the Fraser brands. But Modena properties will have various facilities catering to ‘road warriors’ on the go, such as lobbies supplied with food and groceries, and 24-hour play rooms with gymnasiums and electronic game machines.

The first Modena property, with 272 units, will open its doors in Tianjin towards the end of this year or early next year. The second will be in Shanghai and another two will be in Suzhou. Frasers Hospitality will run them through management contracts.

The fifth Modena property - and also the flagship - will be ready in Singapore’s Changi Business Park in Q1 2012. Frasers Hospitality will own and manage the 300-unit Modena Singapore, which is under construction at a cost of $124 million.

Guests could come from the business park, Singapore Expo and the fourth university which is under development at Changi.

Modena Singapore will be part of a 4.7 ha integrated business and lifestyle development - a $500 million joint venture between Frasers Centrepoint and Ascendas.

The economic downturn has not curbed Frasers Hospitality’s ambitions for Modena. Negotiations are underway to expand the brand in Asia and Europe, and countries that it is interested in include India, France, the UK and Qatar.

Frasers Hospitality has also set itself a target of managing around 8,000 service apartments by 2010 and perhaps 10,000 apartments by 2012.

‘In this economic downturn, we have a very contrarian view - we see this as an opportunity for step-up,’ said Mr Choe. Modena for instance, may appeal to companies tightening their budgets, he explained.

Nonetheless, the picture for the service residences industry is not all rosy. In China and Singapore for instance, the economic downturn has pushed rates at Frasers Hospitality’s apartments down by 15-20 per cent. Occupancy rates have remained relatively stable, in the 80-90 per cent range.

Frasers Hospitality has also shelved plans to set up a real estate investment trust for ‘a few years’ until the ‘market is a lot more conducive’, Mr Choe said. For similar reasons, it has postponed plans to set up private equity funds to invest in service residences.

Source : Business Times - 17 July 2009

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CDL launching Balmoral Rd condo project

CDL launching Balmoral Rd condo project

Preview of 437-unit Waterfront Key at Bedok Reservoir likely today

By KALPANA RASHIWALA

AFTER holding on to its Garden Hotel property at Balmoral Road for 10 years, City Developments Ltd (CDL) is finally launching an 85-unit condo project on the site.

Waterfront Key is a 99-year-leasehold condo with 437 units. Prices had not been finalised by last night, but market watchers reckon the cue will be taken from current pricing for Waterfront Waves next door, which they are selling at $680-$700 psf on average.
A preview for staff and directors began yesterday, while sales to invited guests are slated to begin today.

The average price of the 12-storey freehold condo Volari@Balmoral is understood to be about $2,000 per square foot (psf) for early birds. Market watchers say this is about 20-25 per cent below peak 2007 prices in the location.

The condo comprises two, three and four-bedroom units and penthouses. The two-bedders are about 1,325 sq ft, and based on the $2,000 psf average price, the lump sum investment would be about $2.7 million.

At Bedok Reservoir, Far East Organization and Frasers Centrepoint are expected to preview Waterfront Key today to staff, business associates and buyers who have registered interest.

Waterfront Key is a 99-year-leasehold condo with 437 units. Prices had not been finalised by last night, but market watchers reckon the cue will be taken from current pricing for the developers’ Waterfront Waves next door, which they are selling at $680-$700 psf on average.

The 405-unit condo, released early last year, is 78 per cent sold.

Back at Balmoral Road, it has been a decade-long wait for CDL, which bought Garden Hotel in June 1999 for $108 million from Kechapi Pte Ltd, controlled by the Chua family that once controlled Cycle & Carriage - now known as Jardine Cycle & Carriage. Garden Hotel comprises two four-storey wings. The original building was built in the early 1970s and the other wing was completed in 1983. The show suite for the Volari condo that CDL will develop on the site is on the fifth-floor rooftop of Garden Hotel, which is still operating but is likely to shut later this year.

Garden Hotel has a site area of 102,200 sq ft.

Source : Business Times - 17 July 2009

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Horizon brightens for property groups

Horizon brightens for property groups

By KALPANA RASHIWALA

THE outlook is more sanguine, as listed property developers get ready to announce their financial results for the six months ended June 30. The strong pick-up in private home sales in the past five months - and a nascent recovery in prices - is providing cheer, contrasting with the gloom that lasted until the early part of 2009 after the financial meltdown.

ION Orchard: An amendment to FRS 40 requiring investment properties under construction to be valued could have bottomline implications on developers of projects like ION Orchard
JP Morgan analyst Christopher Gee is tracking ‘if developers’ own outlooks and strategies have changed as a result of the upturn in home sales and general economic prospects’.

Against a brighter horizon, some concerns prevalent among property analysts six months ago have lessened. The pressure on developers to write down the values of their Singapore residential sites has abated. So too has the risk of buyers who bought on deferred payment schemes (DPS) not completing their purchases.

‘The secondary market is getting more active, so it should be easier for DPS buyers to sell their properties before the projects receive Temporary Occupation Permit,’ says DMG & Partners Securities analyst Brandon Lee.

Macquarie Securities research head Soong Tuck Yin says an interesting development to watch out for is an amendment to Financial Reporting Standard FRS 40 requiring that investment properties under construction be valued, and the increase or decrease be taken to the income statement.

The change took effect at the start of this year, and with many major listed companies doing valuations at half-year and full-year, there could be bottomline implications for the likes of CapitaLand for its ION Orchard mall and Vista Xchange at one-north for instance; and Keppel Land for its Ocean Financial Centre and Marina Bay Financial Centre projects, Mr Soong suggests.

Before the rule change, these companies were required to state only their completed investment properties at fair value. KPMG Singapore’s head of real estate Yap Chee Meng explains: ‘In the past, investment properties under construction were carried at cost unless there was impairment. Financial Reporting Standards now require these to be fair-valued where the fair-value model is used for investment properties, and where the fair value can be reliably determined.

‘For Singapore, this was effective from Jan 1, 2009. I would expect property companies to start reflecting it in their income statements from this current reporting season (the quarter ended June 30), as property companies normally revalue their investment properties once or twice a year.’

Analysts say City Developments’ bottom line is unlikely to be affected by the change to FRS 40 as it currently accounts for all its investment properties using the cost model.

For other listed developers that use the fair-value model, there is also the issue of how aggressively they will write down valuations of completed investment properties, particularly office blocks. ‘Asset write-downs, especially for commercial assets, have not materialised in a meaningful way,’ says CIMB-GK analyst Donald Chua. ‘With rents and occupancies falling, it will be interesting to see if property groups devalue their assets more aggressively this reporting season.’

Mr Gee, however, notes that the policy of stating investment properties, completed or otherwise, at fair value affects a developer’s accounting bottomline - but does not have any real cashflow impact.

As for profit from residential projects, Mr Soong says that strong home sales by developers lately will translate into profits to be recognised, although for projects in the initial stage of construction, earnings may be booked only in the current second half or next year.

CIMB-GK’s Mr Chua expects developers’ latest report cards to show declines in gearing ratios. Some of the bigger boys have recapitalised through rights issues, he says. Smaller players should also be able to use proceeds from strong home sales recently to pare debt.

A key thing to monitor in H2 is whether residential sales momentum continues. Mr Chua is keeping tabs on ‘prices and take-up rates at the high end and the level of foreign demand, especially as we draw closer to the opening dates of the integrated resorts’. ‘It may be interesting to see if projects on Sentosa Cove are released closer to the end of the year.’

Home buyers defaulting on purchases or returning options issued on high-end projects sold in the past month will also be on his watch-list.

DMG’s Mr Lee expects developers to launch more mid and prime sector projects in H2 and to start buying residential sites again, ‘especially those with drying land banks’.

JP Morgan’s Mr Gee said stockmarket investors are looking out for sustained increases in physical property prices and upgrades in revalued net asset values for listed property groups.

Source : Business Times - 17 July 2009

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