CCT posts 20.8% rise in Q3 distributable income

CCT posts 20.8% rise in Q3 distributable income

Boost from positive rent reversions and cost savings

By KALPANA RASHIWALA

CAPITACOMMERCIAL Trust (CCT) has posted a 20.8 per cent year-on-year increase in distributable income for the third quarter to $52.14 million.

‘The negative demand that we’d seen in the office market has been capped.’

- CapitaCommercial Trust Management Ltd CEO Lynette Leong

Net property income rose by 15.5 per cent to $77.1 million on the back of positive rent reversions as well as cost savings from lower property taxes.

In addition, CCT’s distributable income for Q3 was boosted by lower interest expense arising from the prepayment in July of a $664 million debt from proceeds from the trust’s rights issue in June.

CCT’s distribution per unit (DPU) for Q3 ended Sept 30, 2009, was 1.85 cents, down from 3.10 cents in Q3 last year.

After adjusting for the issued rights units, the DPU rose from 1.54 cents to 1.85 cents, the trust manager said. Unitholders will not receive any distribution for Q3 as the trust distributes semi-annually.

The trust’s distributable income for the first nine months of this year rose 26.5 per cent to $145.6 million. Net property income improved 31.2 per cent to $220.2 million.

Given the positive rental reversions, the average monthly office rent for CCT’s portfolio has improved about 18 per cent over the past year, from $7.20 per square foot per month as at end-Q3 2008 to $8.49 psf as at end-Q3 2009.

CapitaCommercial Trust Management Ltd (CCTML) chief executive Lynette Leong is upbeat about Singapore office demand returning to positive territory and rental rates stabilising.

‘From our experience of recent increased office leasing enquires, our tenants’ feedback on better business prospects and, to some extent, a few tenants even asking for more space, I think that these are positive signs of demand returning,’ she said.

‘The recent better GDP figures also support the more upbeat economic environment, and we are comforted that the worst is behind us. What it also means is that the negative demand that we’d seen in the office market has been capped, and to what extent the ‘needle’ moves to positive will depend on the rate of economic recovery,’ she added.

CCT, with a total asset size of $6.3 billion as at Sept 30, 2009, has 11 properties in Singapore and holds investments in Malaysia. Among CCT’s Singapore properties that saw significant improvements in net property income between Q3 last year and Q3 2009 were Capital Tower, Six Battery Road and Raffles City.

While the rate of decline in office rents eased and leasing activity improved in Q3, uncertainties still loom over the office market, with pressure from secondary supply and new office supply that will be added to the market, CCTML acknowledged.

The trust owns 60 per cent of Raffles City, with the other 40 per cent held by CapitaMall Trust. The duo will begin reconfiguring basement 1 space in the mall this quarter.

The total capital expenditure for the initiative is about $33.2 million with an expected 8 per cent return on investment. The works will, among other things, connect the current City Hall MRT Station to the new Esplanade Station through Raffles City’s basements 1 and 2.

The Esplanade Station is expected to open by Q3 2010. ‘With this latest link to the Circle Line, there will be three train lines bringing shoppers to Raffles City,’ CCTML said.

Source : Business Times - 22 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

KepLand Q3 profit jumps 70%; revenue up 23%

KepLand Q3 profit jumps 70%; revenue up 23%

Company says it is well-placed to grow through acquisitions with recent cash call

By UMA SHANKARI

KEPPEL Land yesterday said that third-quarter net profit rose 70 per cent to $78.5 million, from $46.2 million a year ago, as it booked more revenue from its projects and also saw greater contributions from associated companies.

Revenue climbed 23 per cent to $227.8 million from $185.8 million in Q3 2008. The increase was due mainly to progressive revenue recognition from a fully sold project in Singapore, The Sixth Avenue Residences, which obtained its temporary occupancy permit in August 2009.

Higher revenue was also recognised for several overseas projects in China and The Estella in Ho Chi Minh City, Vietnam.

Earnings per share for Q3 2009 rose to 6.8 cents, from a restated 4.6 cents.

‘Market confidence strengthened further in Q3 2009 as the Singapore economy emerged out of recession,’ KepLand said in a statement.

Capitalising on demand for mid- and higher-end homes, KepLand launched Madison Residences and Caribbean Residences as well as soft-launched The Promont in Q3 2009, all of which enjoyed strong take-up. The developer has sold 240 homes in Singapore so far this year.

Buying sentiment in the company’s key Asian markets also strengthened. KepLand sold more than 2,600 homes overseas by end-September 2009, mostly in China.

For the nine months ended ended September 30, 2009, KepLand saw net profit of $173.6 million, up 9 per cent from $159.1 million last year. Revenue for the first three quarters fell slightly by 3 per cent to $623.4 million compared with $644.8 million in 2008. The decrease was due largely to the completion of a few projects during the last financial year.

KepLand’s net debt decreased by $765 million over the first nine months of the year. The debt-to-equity ratio was 0.19 at end-September 2009, compared with 0.52 at end-December 2008. The decrease in net debts was mostly due to proceeds from the rights issue received in June 2009.

The company is upbeat about its prospects: ‘With a strengthened balance sheet after its rights issue raised proceeds of about $700 million, Keppel Land is well-positioned to capitalise on opportunities to grow through acquisitions.’

In Singapore, the group will continue to focus on developing residential and commercial developments. Overseas, it will focus on developing residential, township and selective gateway city office projects in high growth markets such as China, Vietnam and India.

The group’s fund management vehicles, K-Reit Asia and Alpha Investment Partners, are also pursuing opportunities for growth, KepLand said.

KepLand shares closed unchanged at $2.72 yesterday.

Source : Business Times - 22 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

HDB issues $500m worth of 3-year notes

HDB issues $500m worth of 3-year notes

THE Housing and Development Board (HDB) has launched a new issuance of notes under its $7 billion medium-term note programme.

The issuance comprises $500 million worth of three-year fixed rate notes, with a coupon of 1.55 per cent a year payable semi- annually in arrears.

HDB is issuing the notes in denominations of $250,000. It is applying to list the notes on the Singapore Exchange.

The issue size was initially $400 million, but was subsequently raised to $500 million due to strong investor demand.

The joint lead managers of the deal are Citicorp Investment Bank (Singapore) and the Hongkong and Shanghai Banking Corporation, Singapore branch.

Under its medium-term note programme, HDB may from time to time issue bonds or notes to finance its development programme and working capital requirements.

Source : Business Times - 22 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Large freehold condo site sold for $158m

Large freehold condo site sold for $158m

Buyers Hoi Hup and Sunway to build 400-unit condo on land off Sims Ave

By KALPANA RASHIWALA

(SINGAPORE) In what is one of the biggest freehold condo site deals in the last 12 months, Lee Tat Development has sold a 207,000 sq ft plot at the end of Jalan Senang and Lengkong Tujoh, off Sims Avenue, for $158 million.

The buyer is a joint venture involving Hoi Hup and Malaysia’s Sunway group.

The purchase price works out to about $445 per square foot of potential gross floor area, including an estimated development charge of about $36 million.

The vacant plot is zoned for residential use with a 2.1 plot ratio (ratio of maximum potential gross floor area to land area) and a 12-storey maximum height under Master Plan 2008.

Credo Real Estate brokered the sale through a private treaty deal.

‘According to our records, this sale could mark the first large-scale freehold condominium site sold in almost two years, that is, since the tail-end of the active en bloc sale market of 2007,’ Credo’s managing director Karamjit Singh said.

‘Transactions of large private residential redevelopment sites belonging to a single owner are very rare,’ he added.

The last known sale of a site of this scale was that of No 97 Meyer Road, with a land area of 115,303 sq ft. It was sold by Della Lee to the Hong Leong Group in 2007 for about $201 million.

The buyer of the Jalan Senang site is looking to build a condo with a total of about 400 to 500 units.

‘At their purchase price, their break-even is expected to be around $800 psf, while they could expect to sell at about $900 psf on average,’ according to Mr Singh.

A spokesperson for Hoi Hup told BT that most units in the proposed condo will be two-bedroom apartments and two-bedroom- plus-study units.

‘Studios will form only about 10 per cent of units. We’ll also have three-bedroom apartments. Jalan Senang is a family-type area and the development will be more suitable for upgraders, rather than investors,’ she added.

The proposed condo is expected to be launch ready in six to nine months.

Hoi Hup and Sunway group have also teamed up to develop two Design Build and Sell Scheme (DBSS) projects for the Housing & Development Board - The Peak at Toa Payoh and City View @ Boon Keng.

The Peak, with a total 1,203 units, is about 85 per cent sold while City View, which has 714 units, is 95 per cent sold.

Lee Tat is said to have owned the Jalan Senang site since the 1970s and has been trying to sell the land for at least 10 years.

It was put up for tender in 1999 but is said to have failed to fetch an asking price of about $150 million.

Lee Tat is controlled by Ching Mun Fong, who has been a developer and property investor for more than five decades.

Source : Business Times - 22 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Prime retail rents on Orchard Road drop 2.8% to S$38.17 psf in Q3

Prime retail rents on Orchard Road drop 2.8% to S$38.17 psf in Q3

By Irene Chan, 938LIVE

SINGAPORE: Prime retail rents on Orchard Road declined by 2.8 per cent to S$38.17 per square foot in the third quarter from the previous three months.

That is smaller than the 3.7 per cent fall in the second quarter and the 4.4 per cent drop in the first, according to a report by Colliers International.

Meanwhile, the average monthly retail rents in prime malls in the Tampines, Woodlands and Jurong areas posted an on-quarter increase of 1.3 per cent to S$32.75 per square foot per month, ending two straight quarters of decline.

Moving ahead, Colliers said while the worst may be over, the retail industry is not completely out of the woods yet.

The property consultancy said amidst mixed views on global and local economic prospects, there is also underlying caution.

With some four million square feet of retail space anticipated over the next three years, it expects landlords to remain flexible during rental negotiations and tenants to remain rental-sensitive.

However, it said consumer spending could strengthen over the next few months as the year-end festive and holiday season approaches.

Colliers expects prime retail rents on Orchard Road and the Regional Centres to continue to firm in the last quarter of this year. - 938LIVE/vm

Source : Channel NewsAsia - 22 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com