Total land sales revenue drops 41% to S$7.3b in FY2008-2009

Total land sales revenue drops 41% to S$7.3b in FY2008-2009

By Yasmine Yahya/ Wong Siew Ying

SINGAPORE: Revenue from government land sales fell 41 per cent to S$7.3 billion in the last fiscal year ended March 2009.

But analysts said despite the decline for the full year, land prices have actually risen 30 per cent in the past six months and there are some concerns that this could lead to another property bubble.

Showflats have been packing in the crowds for many months now. Demand for land has also picked up, with more plots released for tender since April this year.

Analysts expect demand for land to grow in 2010 on the back of more positive market sentiment and developers looking to beef up their land bank.

In the first quarter next year, observers said the government could release more strategic sites at Jurong Lake District, Kallang Waterfront and Rochor/Ophir Road.

And when the government brings back the Confirmed List of sites in the first half of next year, more land will be on the market.

According to market watchers, the net effect is that revenues from such sales are likely to stay around S$7 billion in the current fiscal year to March 2010, similar to last year. Observers said increasing land prices will also boost revenues.

Recently, a residential site at Serangoon Avenue 3 was sold for S$221 million.

Donald Han, managing director, Cushman & Wakefield, said: “I was a bit surprised at the bidding for Serangoon. I think the top bid was 10 to 11 per cent higher than the second bidder.

“One would expect more cautious bidding in view of the current market and stock market conditions have started to come down. But I think by and large, it is a vouch of confidence in the Singapore residential market.”

Some analysts said more measures may be needed to rein in the property market.

Colin Tan, director, Head of Research & Consultancy, Chesterton Suntec International, said: “I think the set of measures they announced recently were to curb speculation but this excess liquidity is not speculation. It is investment, so this is lots of money trying to find a more productive use. So maybe a different set of measures may need to combat this excess liquidity.”

Observers said the situation should also be closely watched to ensure excess supply does not build up. - CNA/vm

Source : Channel Newsasia - 09 October 2009

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CapitaLand to hold EOGM on listing shopping mall business

CapitaLand to hold EOGM on listing shopping mall business

By Mok Fei Fei, 938LIVE

SINGAPORE: Property developer CapitaLand said on Thursday that it will hold an extraordinary general meeting or EOGM on its plan to list its shopping mall business.

It is seeking approval for the proposed public offering of shares in CapitaMalls Asia.

On Monday, CapitaLand announced that it is re-organising its retail unit by having CapitaMalls Asia hold its shopping mall business, including the retail real estate fund and REIT management business.

CapitaMalls Asia will have a portfolio of 86 retail properties valued at S$20.3 billion spread across five countries in Asia.

The EOGM will be held on October 30. - 938LIVE/vm

Source : Channel Newsasia - 09 October 2009

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Property investment sales triple in Q3 on-quarter to S$2.3b

Property investment sales triple in Q3 on-quarter to S$2.3b

By Mok Fei Fei, 938LIVE

Swissotel Merchant Court (file pic)

SINGAPORE: Property consultancy DTZ said on Thursday investment sales here tripled in the third quarter of this year.

Total property investment value in the July to September period jumped 200 per cent on-quarter to S$2.3 billion.

Historically though, the figure is still below the S$4 billion to S$12 billion mark achieved quarterly between 2005 and 2008.

DTZ attributed the increase in investment sales in the third quarter to a buoyant residential market and improving investor sentiment.

About 92 per cent of the investments were below S$100 million each, and they contributed 49 per cent of total transaction value.

Six deals of between S$100 million and S$500 million made up S$1.2 billion, or 51 per cent, of total sales.

DTZ said investment purchases continued to be driven by mainly private domestic buyers, who accounted for 72 per cent of deals above S$50 million.

Excluding Government Land Sales, the largest transaction so far this year was the sale of Swissotel Merchant Court at S$260 million in August.

- 938LIVE/so

Source : Channel Newsasia - 09 October 2009

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Warehouse rent here exits global top 10

Warehouse rent here exits global top 10

Colliers expects most Asia-Pacific warehouse markets to firm up in H2

By EMILYN YAP

PRIME warehouse rents slipped in the first half of the year to push Singapore out of the 10 most expensive prime warehouse markets in the world.

According to a Colliers International study, Singapore is now No 14, six rungs down from No 8 in a previous ranking covering the second half of 2008.

Prime warehouses here offering space of 20,000 square feet or more fetched an average rent of US$12.38 per square foot per year in first-half 2009.

Tokyo retained top spot with an average prime warehouse rent of US$22.18 psf per year - 79 per cent higher than in Singapore.

London Heathrow remained second with an average prime warehouse rent of US$20.64 psf per year.

Across the Asia-Pacific, Singapore is the fourth most expensive place to rent prime warehouse space - down one notch from the second half of 2008.

Tokyo, Hong Kong and Seoul occupied the top three spots.

As for bulk warehouses with space of 100,000 sq ft or more, Singapore is in 13th position, with rents averaging US$9.90 psf per year.

It edged up one spot from six months earlier.

Industrial rents fell in almost all markets in the first half of 2009 because of the economic downturn, Colliers said.

Tokyo retained top spot with an average prime warehouse rent of US$22.18 psf per year.

But it believes that the decline is likely to moderate.

‘With the global economy showing signs of life and global trade on the upswing, most of the warehouse markets in Asia-Pacific are expected to firm up in the second half of 2009,’ it said.

The slide in industrial rents in Singapore slowed in the third quarter this year.

‘Improving confidence in the economy and the better-than-expected performance of the manufacturing sector have facilitated a moderate rental fall and stabilised capital values,’ said Colliers research and advisory director Tay Huey Ying.

For instance, the average capital values of prime freehold upper floor factory and warehouse space rose 1.1 per cent and 1.8 per cent to $376 and $344 psf respectively at the end of the third quarter.

And sales transaction volumes involving strata industrial space grew by more than 50 per cent from the second quarter to the third quarter.

The volume even surpassed that in the third quarter 2008 before Lehman Brothers collapsed.

Source : Business Times - 09 October 2009

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Gold rises to record levels for third day

Gold rises to record levels for third day

Demand up due to weakening US dollar and concern of rising inflation

(LONDON) Gold gained to a record for a third day in London and New York as demand increased on a weakening US dollar and concern that inflation will accelerate.

All that glitters: The printing of money and abandonment of the US dollar have taken the smart people over to precious metals, says an analyst
Bullion will probably top US$2,000 an ounce in the next decade, according to investor Jim Rogers. The US Dollar Index, a six- currency gauge of the greenback’s value, slipped to a two-week low as signs of a global economic recovery boosted demand for higher-yielding assets. The measure has shed 6.5 per cent this year as bullion heads for a ninth annual gain. Silver and palladium rose to the highest prices in more than a year.

‘More and more people are concerned that there’s more risk of inflation, rather than deflation,’ Jesper Dannesboe, a senior commodity strategist at Societe Generale SA here, said. ‘That’s one of the main drivers. Of course, there’s the risk that the dollar will keep falling.’

Immediate-delivery bullion advanced as much as US$14.28, or 1.4 per cent, to US$1,058.48 an ounce, and was at US$1,054.45 by 9.35 am in London. December gold futures were one per cent higher at US$1,055.10 an ounce on the New York Mercantile Exchange’s Comex division after climbing as high as US$1,059.60.

‘People are printing money, gold is going up,’ Mr Rogers said in an interview on Bloomberg Television, adding that he may increase his holdings. ‘There are plenty of reasons to buy gold when the time is right.’

President Barack Obama has increased US marketable debt to a record as he borrows to reignite growth in the world’s biggest economy. That has boosted speculation that the increased money supply may debase the currency and spur inflation. The printing of money and ‘abandonment of the dollar have taken the smart people over to precious metals’, according to Philip Gotthelf, president of Equidex Brokerage Group Inc.

Spot gold’s 14-day relative strength index, a gauge of whether a commodity or security is overbought or oversold, has increased to 74.41. That is above the level of 70 viewed by some investors as an indication of an impending decline.

‘Gold may be temporarily overbought,’ Peter Richardson, Morgan Stanley’s chief metals economist in Melbourne, said yesterday in a report.

Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, increased 8.8 tonnes to 1,109.31 tonnes as at Oct 7, according to figures on the company’s website. The fund’s holdings reached an all-time high of 1,134 tonnes on June 1.

The metal ‘has moved higher on safe-haven buying’, said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. ‘A lot seems to do with fund activity, but there is definitely downside possibility to gold ahead.’

Surging gold prices are a signal that investors are buying metals to hedge against declining currencies, according to former Federal Reserve chairman Alan Greenspan. Gains for commodities demonstrate a ‘move away from paper currencies’, he said last month.

To be sure, gold’s allure may decline as investors’ appetite for risk rises, said Mr Westmore. The metal may also drop because the US dollar might not have ‘too much more downside’ and inflation may not be a ‘big issue’, he said.

Among other precious metals, silver climbed as much as 1.9 per cent to a 14-month high of US$17.905 an ounce, and was last at US$17.77. Palladium, the best-performing precious metal this year, added 0.4 per cent to US$314 an ounce after earlier reaching US$317.75, the highest in almost 14 months. Platinum rose one per cent to US$1,340 an ounce. Silver held in ETF Securities Ltd’s exchange- traded products fell 2.4 per cent to 20.467 million ounces on Wednesday, according to the company’s website. Platinum holdings added 0.6 per cent to 370,573 ounces, while gold and palladium assets were little changed. — Bloomberg

Source : Business Times - 09 October 2009

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Fatter year ahead after blip in govt land sales

Fatter year ahead after blip in govt land sales

Analysts expect higher sales proceeds for current financial year as activity in property market picks up

By UMA SHANKARI AND TEH SHI NING

(SINGAPORE) The government collected $7.3 billion from sales of state land in the year ended March 2009, $5.1 billion lower than the record $12.4 billion raked in the year before.

The figures were released yesterday in the Singapore Land Authority’s latest annual report.

Analysts expect to see higher sales proceeds for the current financial year compared to the last as activity in the property market picks up. But proceeds are not expected to hit the record $12.4 billion collected in FY07/08 during the property boom.

‘There is a good chance that we can surpass the numbers seen during the last financial year,’ said Colliers International’s director Tay Huey Ying, citing the increased demand for government land in recent months.

Chesterton Suntec International’s research and consultancy director Colin Tan said that with improved sentiment and with developers now ‘hungry for land’, land sales revenue should rise this year as more sites are sold at higher prices.

Last year, the fall in overall sales revenue was due to lower proceeds from sites sold to the private sector. This fell to $4.7 billion in FY08/09 from $10.4 billion the year before. Land sold to the public sector rose slightly to $2.6 billion, from $2 billion in FY07/08.

The largest deal of the year was the sale of Atrium@Orchard, a Grade A office building, to CapitaMall Trust, which netted the state $840 million.

Other large sales of government land sites to the private sector included the land parcels for the condominium projects Trevista and The Peak at Toa Payoh, and Mi Casa at Choa Chu Kang.

SLA’s chairman and chief executive said in their joint message that ‘the slowdown in business was particularly felt in the second half of the financial year’.

Hence, while demand for state land and properties was relatively strong in the first half of the financial year, SLA’s focus in the next six months was on ‘facilitating the land needs for infrastructural developments, and implementing the government’s economic relief measures for business’.

The agency’s operating income fell 8 per cent to $92.5 million, from $100.9 million a year ago.

SLA said that the utilisation rate of state land rose to 79 per cent, from the previous year’s 77.8 per cent. But occupancy rate for state properties was 86 per cent, one percentage point down from a year ago. SLA managed an estimated total gross floor area of 4.03 million square metres of state properties as of March 31, 2009.

The agency also reported that fewer instruments and caveats were lodged for HDB and private property transactions. Only 342,624 registrations were recorded in FY08/09, down from 537,629 the previous year.

Looking ahead, analysts said demand for residential land sites is expected to be strong. The last four tenders for government residential land sites drew 12 to 15 bids each.

The latest, a 99-year- leasehold land parcel in Serangoon Avenue 3 for which the tender closed on Wednesday, received 15 bids. The highest bid was $221.2 million or $529 per square foot of gross floor area.

Colliers’ database, which tracks only sales of land plots (which would exclude the sale of the Atrium@Orchard building, for example) showed that $1.5 billion of government land sales were seen from April 2008 to March 2009.

However, from April 2009 to yesterday, sales of government land have already hit $1 billion, said Ms Tay. She therefore expects state proceeds in this financial year to exceed last year’s.

In addition to residential land, demand is also expected to be healthy for small hotel sites and industrial plots. However, the commercial market is expected to see little to no interest, Ms Tay said.

To cope with the demand, Mr Tan suggested that more agencies release sites simultaneously.

‘When demand builds up, as is the case now, it would be good to have more than one agency selling sites, to ensure sufficient supply to release the pressure from demand,’ he said.

Source : Straits Times - 09 October 2009

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