CapitaLand gains approval to list integrated shopping mall business

CapitaLand gains approval to list integrated shopping mall business

By Ng Baoying,

A man walks past a CapitaLand advertisement in Singapore. (file pic)

SINGAPORE : CapitaLand has gained shareholder approval for plans to list its integrated shopping mall business CapitaMalls Asia, paving the way for its listing by the end of the year.

The new unit will have a portfolio of 86 retail properties valued at S$20.3 billion located across five countries in Asia.

CapitaLand shareholders took time out on Friday morning for an extraordinary general meeting on the group’s plans to list its integrated shopping mall business.

While it was clear that the management enjoyed a nice rapport with investors, there were still some concerns to address.

During the hour-long meeting, shareholders raised questions ranging from the exact dividend payout resulting from the sale, to concerns over a possible conflict of interest between the businesses.

Most shareholders Channel NewsAsia spoke to said they were very satisfied with the responses they received.

“We are glad that as a shareholder, we are given overall view of it (and have) better understanding after the meeting. Things like what will CapitaLand be left with after listing the CapitaMalls Asia… (were) addressed,” said Michael Khoo, a CapitaLand shareholder.

“I’m here to hear about the future prospects, how is it going to be. I think this listing is good, because by having capital, they can make purchases,” said CapitaLand shareholder Teong Chin Poh.

On the special dividend payout, CapitaLand said it would depend on several factors, including the proceeds from the listing and the performance of the CapitaLand Group.

The company also said there would be no impact on the existing trusts that it owns because CapitaMalls Asia is just the new name for an existing retail subsidiary, CapitaLand Retail.

CapitaLand currently also operates CapitaMall Trust (CMT), whose portfolio includes Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura and The Atrium@Orchard.

CMT also owns a 20 per cent stake in CapitaRetail China Trust (CRCT), the first pure-play China retail REIT listed on the Singapore Exchange. - CNA /ls

Source : Channel NewsAsia - 31 October 2009

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Condo’s clerk ordered to return $2.2m

Condo’s clerk ordered to return $2.2m
Man in civil claim also under criminal probe for reported fraud
By K. C. Vijayan, Law Correspondent

Mr Chew is said to have taken West Bay’s management and sinking funds meant for upgrading and other works. — ST PHOTO: SHAHRIYA YAHAYA

AN ACCOUNTS clerk was ordered to return some $2.2 million that he took over 18 months from a condominium management office, where he had worked since May 2003.

Mr Chew Swee Siong, 30, did not show up in court to contest the High Court claim brought by the West Bay Condominium management committee. He was served with court papers last month.

The police told The Straits Times yesterday that Mr Chew is also under criminal investigation for the reported fraud.

On Thursday, Assistant Registrar Leong Weng Tat ordered Mr Chew to pay up after having heard earlier from West Bay’s lawyer, Mr Leslie Netto, in the condo’s civil claim.

Mr Chew was also ordered to pay damages and costs to be assessed later. It is believed he had gambling debts.

According to court documents filed, Mr Chew’s duties at the condo included taking charge of all cheque books, fixed deposit receipts and other documents such as bank statements, payment vouchers and correspondence files in relation to the accounts of the condo management.

As the sole employee in charge of the condo’s finance accounts, he was also responsible for collecting, recording and banking all funds received by the condo.

He had the task of preparing the accounts in the annual audits for the annual general meetings, as well as updating and maintaining accounting records.

The 15-year-old condo in West Coast Crescent, in Pasir Panjang, has 318 units. According to the management committee chairman, Mr Chew had cleaned out the condo’s management and sinking funds meant for upgrading, repair and maintenance, and paying contractors for work done.

The matter came to light in December 2007 after a new management committee took over. The chairman, Mr Jaffar Hassan, said yesterday: ‘When we took over, there was just $1,200 left in the bank account for the condominium’s upkeep.’

Mr Jaffar’s team hired forensic accountants to trace how the money was taken in the 18-month period from June 2006. A police report was also lodged.

Among other things, it emerged that Mr Chew opened an additional bank account in the condo’s name without getting authorisation from the committee.

According to court documents filed, he forged signatures to make cheque payments to himself. Cheques were meant to be signed by two office-bearers of the management committee.

Mr Jaffar said the committee was saddled with unpaid bills for cleaners, security guards and other contractors amounting to about $300,000.

There was also an unusable lift that needed $21,000 to repair.

Mr Jaffar said a general meeting was called and residents agreed to each contribute six instalments totalling $2,400. The contributions allowed the condo to continue with its upkeep.

He said: ‘We had to move this at a very difficult time as there was a turnaround with an economic downturn.

‘I hope the lessons learnt at West Bay will serve to make others more aware in the management of their estates.’

How condos protect their funds
SOME managing agents of condominiums here are not allowed to sign on cheques to make payments on behalf of the estates they run. Such duties are usually entrusted to the estate’s management councils. Usually, at least two signatures - that of the chairman and treasurer or secretary - are needed for cheque payments.

It is a safeguard against possible misappropriation of funds by managing agents, said Mr Vijayen Nair, a property manager from Philip Motha Property Management, which runs about 30 condominiums and commercial buildings here.

The 52-year-old, who manages The 101 complex - a residential and commercial building in Beach Road, keeps the cheque books to the estate’s funds under lock and key. His employees have to present invoices and purchase orders for him to verify before he writes the cheques. They will then get the necessary signatures from the estate’s council members. ‘If any money goes missing, I become personally liable,’ he told The Straits Times.

Mr Chan Kok Hong, managing director of CKH Strata Management which looks after 95 condominiums, said his firm has become increasingly reliant on Internet banking to keep tabs on the money that goes in and out of an estate’s fund. ‘It’s faster to track this way. With Internet banking, I can verify almost immediately that the money has been deposited, rather than wait for the bank slip at the end of the month.’

Both he and Mr Nair stressed the importance of dilligence when documenting evidence of transactions. Mr Chan said council treasurers should ’scrutinise the accounts, ask a lot of questions and sign off on all documents’ to avoid fraud being committed.

KIMBERLY SPYKERMAN

Source : Straits Times - 31 October 2009

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URA to launch tender for Pioneer Road North industrial site

URA to launch tender for Pioneer Road North industrial site

By Jonathan Peeris

SINGAPORE: The Urban Redevelopment Authority (URA) will launch a tender for an industrial site at Pioneer Road North and Soon Lee Drive.

The land parcel, which has an area of 1.9 hectares and a lease period of 30 years, was previously placed under the reserve list system.

Under the system, a site would be released for sale only if it receives a bid with a minimum price that is acceptable to the government.

An unnamed developer has made an application to bid at a price of not less than S$8.2 million for the site.

The public tender for the site will be launched in about two weeks.

- CNA/so

Source : Channel NewsAsia - 30 October 2009

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Flat valuation reflects state of property market

Flat valuation reflects state of property market

I REFER to Mr Daniel Choy’s letter on Tuesday, ‘Curbing price hikes’.

His assertion that valuation chases after cash over valuation (COV) is incorrect. Rather the valuation process reflects the state of the property market. If there are sufficient buyers who are prepared to pay a higher price than valuation, this should result in a higher valuation.

As Mr Choy rightly pointed out, ‘buyers are generally prepared to fork out between $50,000 and $100,000 for a good location’. This would be an indication of the market demand for properties in good locations, which will result in a higher valuation of such properties.

His suggestion to base ‘a typical flat’s valuation on the average price for the whole of Singapore’ is not valuation, but rather an administrative decision or policy which will be difficult to implement as it would mean that ‘better properties’ would be sold at a lower price and ‘poorer properties’ at a higher one.

In valuation, we need to consider unique characteristics such as location, size, age and condition of the property concerned, and not based on the average prices of all properties.

Janet Han (Ms)
Secretariat
Singapore Institute of Surveyors and Valuers

Source : Business Times - 30 October 2009

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Developers building on upbeat mood

Developers building on upbeat mood

By Bruce Gale, Senior Writer

Property advertisements and housing exhibitions are springing up all over Jakarta as the Indonesian economy picks up and foreign investors move beyond the start-up phase and begin bringing in the specialists and technical advisers they need to implement their business plans. — PHOTO: AGENCE FRANCE-PRESSE

IMMUNE may not be quite the right word to describe the response of Indonesia’s property market to the global downturn and its more recent tentative recovery.

But overall, the sector does seem to have taken the events of the wider world in its stride. There was no crash in property prices when the crisis hit late last year, and unlike places such as Singapore, Hong Kong and South Korea, there has been little talk of a property bubble as the global economy recovers.

Supply and demand mechanisms are very local. Stability in the Indonesian property market has also been enhanced by the fact that the wider economy has weathered the crisis well, thanks to a stable financial system and low dependence on exports.

Stability, however, is not the same as stagnation. Indeed, there has been huge growth in the sector in recent years, with strong domestic demand and a growing middle class encouraging the construction of numerous shopping centres, condominiums and office buildings in the capital Jakarta.

Property consultants also point to the untapped demand in secondary cities such as Bandung, Semarang and Makassar as evidence of the likelihood that the trend will continue.

Tracking trends in Indonesia’s property market offers a revealing window into the changing attitudes of foreign investors. Take the pattern of demand for residential property.

Ten years ago, notes Ms Vivin Harsanto of property consultants Jones Lang LaSalle in Jakarta, most expatriates arriving in the capital were Westerners looking for luxury apartments. Today, however, potential tenants tend to be middle management employees seeking more modestly priced residences. There has also been a marked increase in the number of Koreans, Indians and Filipinos looking for accommodation.

The implication is that large numbers of foreign investors have moved beyond the start-up phase and are now beginning to bring in the specialists and technical advisers they need to implement their business plans. Indonesia also appears to have become an attractive location for a wider range of foreign investors.

The continuing interest of local corporations in property development also attests to an optimistic mood among local investors. Large property developers such as Lippo Karawaci, Agung Podomore and Duta Pertiwi do not have the field to themselves. Rather they must share the pie with local conglomerates whose expertise often lies in quite different industries.

The Dua Mutiara Group, originally specialising in chemicals and agriculture, for example, is part of the consortium that owns Jakarta’s JW Marriott and Ritz Carlton hotels in the upmarket Kuningan district. Cigarette maker Jarum is also heavily involved in the refurbishment of the Hotel Indonesia in Jalan M.H. Thamrin and the construction of associated apartment, commercial and office buildings.

Foreigners who want a piece of the action are limited by laws preventing non-citizens from acquiring land. Manufacturers are usually able to get around this by taking advantage of government regulations that allow them to build factories on land with long-term leases. Foreign residents in Bali have also resorted to using local proxies to acquire ownership of residential properties. But the contracts involved are of dubious legality. The practice is also rare in Jakarta, where the vast majority of foreigners have no intention of taking up long-term residence.

One of the key characteristics of Jakarta’s rental market over the last 10 years has been the lack of volatility. Before the 1998 Asian financial crisis, rentals on three-bedroom luxury apartments were going for around US$4,000 to US$5,000 a month. Today, such prices are still the norm at the upper end of the market.

But there is now far greater variety, and average apartment rentals are closer to US$3,000 to US$4,000 (S$4,200 to S$5,600) in buildings such as Plaza Senayan and the Ritz Carlton. For those on tighter budgets, it is even possible to rent a studio apartment in a reasonably central location from as little as US$500 a month.

The steady prices are not the result of persistently low demand. Instead, according to Jones Lang LaSalle, they are the result of the increasing supply and growing competition. Whether such competition will help dismantle long-standing market practices that foreigners find annoying, such as the demand that tenants pay the equivalent of one year’s rental in advance, is difficult to say.

But some companies managing purpose-built condominiums have recently become more flexible, allowing tenants to pay only six months in advance. According to Ms Harsanto, however, many foreign start-ups find this demand still too high and prefer that their employees stay in more expensive serviced apartments that can be rented on a monthly basis.

Overall, however, there is an optimism in the Indonesian property market that is hard to miss. Many players are betting that, with the recent inauguration of President Susilo Bambang Yudhoyono for a second term, the foreign investors that have avoided the country in the past will soon be taking another look. They may well be right.

Source : Business Times - 30 October 2009

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Home sales: Boom with a difference

Home sales: Boom with a difference

Number of new private homes sold may hit 2007 record but value only half

By Joyce Teo, Property Correspondent

PROPERTY developers here appear set to sell at least as many new homes this year as in the record year of 2007.

But the total value of these new private homes is on track to be only about half of that two years ago, underlining how different the two property booms have been.

This shift is partly thanks to a dramatic rise in sales of smaller, mass market units, says a new analysis by CBRE Research.

The running total for units sold in the first three quarters of this year is 12,828 compared to 2007’s 14,811 - so even average sales for the final three months will take this year’s total close to that of 2007.

The total value of new homes sold two years ago was $23.04 billion, based on caveats lodged. In comparison, the total from January to the first week of October this year was $11.2 billion - just 48.6 per cent of 2007’s record.

This is because back in 2007, the luxury end of the residential market achieved top-line record prices with units that were usually large in size, said CBRE Research executive director Li Hiaw Ho.

‘Unit sizes were often greater than 2,000 sq ft,’ he said, adding that much of the demand came from the luxury segment where overall prices were high.

This year, mass market homes positioned to attract HDB upgraders accounted for most of the demand, Mr Li pointed out. In addition, the proliferation of smaller homes of less than 500 sq ft - which have a lower total price - also helped to bring down the overall value.

Developers were keen to ensure affordability this year as they scrambled to reconfigure their unit sizes to allow for smaller apartments.

‘Our high-end market has not started to move. It’s the reverse of Hong Kong, where the property market picked up with the high-end segment,’ said Mr Donald Han, managing director of Cushman & Wakefield. ‘Luxury prices are generally 25 per cent below the peak of the market in the first quarter of 2008.’

Another key difference between the previous boom year and this year is the number of foreigners buying into Singapore’s private housing market, said CBRE Research.

Two years ago, about 1,736 foreigners bought new homes in the primary market. A fair number were speculators who were not based here but were attracted to the Singapore growth story and the gains to be made in real estate.

‘Developers were doing a lot of road shows overseas then. We had buyers from Europe, Japan looking at huge penthouses, and the funds were buying,’ said Mr Han.

But, so far this year, only 651 foreigners have bought new homes, just a third or so of 2007’s figure, said CBRE’s Mr Li.

Knight Frank executive director (residential) Peter Ow said that for much of this year, prices have been generally lower, which was why many buyers jumped in to buy.

‘The market in 2007 was also more speculative. In the first half-year of 2009, buyers were mostly owner-occupiers.’

Although some speculators have returned to the market since then, this year’s market is generally a lot more stable compared with 2007’s, said Mr Ow.

A total of 2,780 units was traded in the sub-sale market in the first three quarters of this year, compared with 4,193 units done in the first three quarters of 2007, according to data from the Urban Redevelopment Authority (URA).

Price rises earlier in the year were fast and furious but the increases cooled somewhat after the Government’s market-calming measures were introduced in mid-September, said Mr Ow.

Some new private home prices are now high enough to cause buyers to think twice, he said.

The breather is thus good as buyers need time to accept current prices and the fact that the low prices of the earlier part of this year are likely gone forever, he said.

‘Developers are not in a hurry to launch in view of rising land prices. There isn’t a lot of supply coming up. While the land sales programme will have more land, it will take time for it to roll out,’ said Mr Ow.

Next year, gradual price rises are likely with the high-end market set to improve, said Mr Han.

Source : Business Times - 30 October 2009

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BCA giving Green Mark awards for cluster devts

BCA giving Green Mark awards for cluster devts

By UMA SHANKARI

THE Building and Construction Authority (BCA) has added another category to its Green Mark certification - it is now giving Green Mark awards for cluster developments.

The first two projects certified under the new BCA Green Mark for Districts scheme - Resorts World Sentosa and NUS University Town - have been lauded for maximising sustainability by integrating green concepts into their master planning and building design.

NUS University Town and Resorts World Sentosa have achieved the second-highest Green Mark rating of GoldPlus.

Resorts World Sentosa will feature Singapore’s largest solar power installation, capable of generating more than 500,000 kWh of energy a year - equivalent to the power consumption of 108 typical four-room flats. Other green features include an eco-lagoon and underground tanks to collect and store stormwater to irrigate landscaped areas.

NUS University Town, being built on rolling terrain with lush natural greenery, was lauded for adopting sustainable design principles that preserve the existing habitat.

‘The BCA Green Mark for Districts is a pilot scheme to promote and recognise environmentally friendly and sustainable practices in the design and implementation of precinct or district developments,’ BCA said.

Earlier this year, it expanded the Green Mark scheme to offer certifications in three more categories - infrastructure, office interiors and landed houses. Previously, the scheme was only offered to buildings.

Source : Business Times - 30 October 2009

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Industrial site in Jurong West for sale

Industrial site in Jurong West for sale

By EMILYN YAP

THE Urban Redevelopment Authority (URA) will put a 30-year leasehold industrial site in Jurong West up for tender.

The plot is at Pioneer Road North and Soon Lee Drive, near Pioneer MRT station. It became available for sale through the reserve list on Oct 30 last year.

URA said yesterday it has received an application from a developer for the 18,958.8 sq m site, which has a maximum gross plot ratio of two.

The unnamed developer committed to bid at least $8.2 million or about $20 per sq ft per plot ratio (psf ppr).

The site is zoned for Business 2 development - a range of clean, light and general industrial uses.

There has been healthy demand for recent industrial sites triggered for sale. For instance, a plot in Kaki Bukit Road 2 attracted 18 bids when the tender closed in August, while one at Woodlands drew eight bids when its tender closed in July.

Going by these results, Colliers International director (industrial) Tan Boon Leong expects ‘a handful’ of bids for the Pioneer Road North site.

This is because the absolute price is unlikely to be high and there is a shortage of good industrial sites, he said. But he does not expect competition for it to be as stiff as that for the more centrally located Kaki Bukit site.

Mr Tan reckons bids for the Pioneer Road North site are unlikely to go beyond $22.4 million or $50-55 psf ppr.

URA will launch the public tender for the site in about two weeks.

Source : Business Times - 30 October 2009

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Aspial buys another residential site

Aspial buys another residential site

ASPIAL Corporation said yesterday that it has agreed to buy a property at 26C Lorong Marzuki for $2.5 million.

The freehold site has an area of 281.1 square metres and is zoned for residential use with a 1.4 plot ratio.

Aspial previously bought two properties at 29 and 31 Lorong Melayu for $5.6 million in all.

Based on the combined maximum permissible area of around 1,795 sq m, the average purchase price for the three properties works out to about $459 per sq ft per plot ratio, inclusive of development charges.

Aspial intends to amalgamate the three plots to develop a 40-unit residential project.

The cost of the latest acquisition and development will be funded internally and through bank borrowings, Aspial said.

The transaction is not expected to have a material impact on the earnings or net tangible assets of the company in FY2009.

Source : Business Times - 30 October 2009

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‘Modern services’ primed to lead S’pore’s charge

‘Modern services’ primed to lead S’pore’s charge

By ANNA TEO
(SINGAPORE) Singapore’s services sector has been more resilient in the current downturn than the export of goods and trade-related services.
And given the services sector’s potential as a growth engine, and its resilience, there’s great scope to grow Singapore’s global share of ‘modern services’, says the Monetary Authority of Singapore (MAS).

These ‘modern services’ - including financial intermediation, business services and information & communications - drive a global second wave of services growth apparent among countries that shift from middle to high income levels.

According to a recent study cited in the MAS’s latest macroeconomic review, the share of modern services grows rapidly at high incomes, indicating large income elasticities of demand and an increased capacity to supply these services. In comparison, the share of traditional services - such as wholesale trade and transport & storage - falls as countries progress to higher income levels.

Singapore has managed to carve out a niche as a regional financial hub without sacrificing its traditional services. It has a strong foothold in the traditional services of transport and wholesale activities but a relatively small global share of modern services.

 
Hence the scope for further expansion in the medium term, says the MAS, adding that the Economic Strategies Committee is working on identifying growth opportunities in modern services. The central bank sees the services taking over the mantle from manufacturing as Singapore’s growth engine as it moves into its post-recession gears.

‘While exports of manufactured goods will remain a key pillar of Singapore’s future economic growth, there are other sources of growth that could be further tapped, notably in services. Such diversification would help reduce the vulnerability of growth to large swings during crises and minimise the economy’s dependence on a few correlated sectors.’

Not least, in Singapore and globally, the services sector has weathered the current crisis better.

Both manufacturing and services are still below their pre-recession peaks after the last two resurgent quarters. But the manufacturing sector was 8.5 per cent below its Q1 2008 peak in Q3 2009, while the services sector was not as far off - 2.7 per cent away from fully recouping its output loss.

‘Notably, within the services sector, business services had bounced back to above its pre-recession peak by Q2 2009,’ the MAS notes.

The MAS review cites a few reasons for the relative buoyancy of the service trade: A large part of services demand, such as for accounting and legal services, is less discretionary than the demand for goods like PCs and handsets. Plus, services cannot be stored and aren’t affected by inventory changes, which greatly exacerbated the decline in goods trade in this downturn. And the production and export of services does not hinge as much on external finance, which was severely curtailed during the recent credit crunch.

Source : Business Times - 30 October 2009

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