Soilbuild, CSC in $52m business space project

Soilbuild, CSC in $52m business space project

Soilbuild will develop and market for CSC a 322,000 sq ft site in Tuas

By EMILYN YAP

PROPERTY developer Soilbuild Group and engineering firm CSC Holdings are joining hands for a $51.7 million business space project in Tuas.

Soilbuild will develop and market for CSC a 322,000 sq ft site in Tuas South Avenue 2. The site comprises a $2.8 million plot that CSC bought from Tat Hong Holdings yesterday and another parcel that CSC acquired in April 2000.

The 60-year leasehold land has an unexpired lease of 51 years. It can be developed into a mix of 70 single, double and triple-storey terrace factory units, ranging from 3,000 to 6,000 sq ft each.

Development cost could be around $51.7 million. Soilbuild will receive some factory units as payment for design and construction, but the number has not been revealed.

The factories are expected to be ready for launch early next year, and construction could end by the first half of 2011.

According to Colliers International director (industrial) Tan Boon Leong, industrial property prices in the area are fairly stable and in the range of $150-$200 per sq ft.

CSC and Soilbuild spoke yesterday of benefits of their tie-up.

CSC group chief executive See Yen Tarn said it will allow CSC to focus on its core engineering activities. ‘Real estate development is not really our core business,’ he said.

Soilbuild executive director Low Soon Sim said he expects the development to attract small and medium-size enterprises (SMEs) in the equipment maintenance industry. SMEs servicing shipyards and biomedical firms in the area could also require space there.

According to him, demand from SMEs for industrial space has been steady despite the economic slowdown, partly because of help received through the Jobs Credit scheme.

CSC’s stock lost one cent to close at 16 cents yesterday, while Soilbuild’s stock closed two cents down at 89 cents.

In a Dec 2 note, OCBC Investment Research maintained a ‘buy’ call on Soilbuild, assessing its fair value at $1.33.

Source : Business Times - 08 December 2009

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Rich getting richer, but spending less

Rich getting richer, but spending less

Affluent S’poreans have cut down on consumption: survey

By SIOW LI SEN

(SINGAPORE) Affluent Singaporeans are the biggest savers in Asia despite being wealthier than they were six months ago, a survey has found.

They save 33 per cent of their monthly income, up 5 per cent from six months ago, while cutting back on consumption and daily expenses, an HSBC Affluent Asian Tracker survey found.

Compared to the first survey done in April, Singaporeans have cut their consumption by 4 per cent to 21 per cent and trimmed their daily expenses by 3 per cent to 45 per cent. Consumption refers to spending on dining, entertainment, clothing, travel and electronics.

Yet more than half of those surveyed reported a rise in net worth compared to only 23 per cent six months ago. Those who save the least, at 17 per cent, are the Indonesians and Australians.

The survey of more than 1,700 affluent individuals aged 30-55 took place in eight markets with 200 polled in Singapore. The survey gauges the views of people in the top 10 percentile of the population by income or liquid assets. Affluent in Singapore is defined as having a monthly income of at least $6,000 and $200,000 of liquid assets.

On preferred financial investments over the next six months, 68 per cent of Singaporeans surveyed voted for the stock market, followed by local or foreign currency deposits, unit trusts and life insurance.

Asked about the next big splurge, 56 per cent mentioned travel and 30 per cent said property. Buying a car was the least favoured, with only 10 per cent inclined to do so.

Indonesians were the biggest property fans at 56 per cent.

As for the sources of financial information, 47 per cent of Singaporeans said they relied on independent financial advisers, followed by the financial media (39 per cent), banks (32 per cent) and family/relatives (27 per cent).

Taiwanese relied most on the financial media (44 per cent) for financial information but only 8 per cent of Indonesians found it reliable. Indonesians prefer getting financial advice from family/relatives.

A third of affluent Singaporeans have family living abroad and close to half plan to live abroad in the next 10 years, with Australia/New Zealand as the most favoured destination.

About half of respondents in Malaysia and India feel the same way and 62 per cent of mainland Chinese - the highest proportion in the survey - plan to live abroad in the next 10 years.

Sebastian Arcuri, HSBC Singapore head of personal financial services, said the Asian diaspora will evolve into a new movement, led by the affluent who not only work and study abroad, but who now explore new wealth opportunities.

‘We are seeing this with our HSBC Premier clients as we help them to purchase a second home abroad, expand their businesses internationally or invest globally in multiple locations.’

Source : Business Times - 08 December 2009

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Property investment sales tipped to climb again

Property investment sales tipped to climb again

Analysts expect 2010 to be better, with investment sales of $15-$20b

By KALPANA RASHIWALA

(SINGAPORE) After a slow start in the first quarter, investment sales of Singapore real estate gathered pace, with a year-to-date tally of about $9.4 billion, although CB Richard Ellis estimates the full-year figure will come in just above $10 billion when all the caveats for transactions done in November and December have been lodged. Still, that would only be about half of last year’s figure of $17.9 billion.

Property consultants expect 2010 to be a better year, with $15-20 billion worth of investment sales deals struck. These transactions are a gauge of developers and investors’ medium to long-term view of the property market.

CBRE defines investment sales as transactions with a value of at least $5 million, inclusive of apartments and landed residential property, government and private sales of land and buildings, both strata and en bloc. It also includes change of ownership of real estate via share sales.

‘With 2010 expected to be a recovery year for the Singapore economy, investment sales could be in the region of $15 billion, similar to that of 2005. Economic fundamentals should start to catch up with the positive sentiments in the stockmarket and the residential market, with more stability in the financial and business sectors,’ says CB Richard Ellis executive director (investment properties) Jeremy Lake.

Jones Lang LaSalle managing director (South East Asia and Singapore) Chris Fossick says: ‘Investors are starting to focus on the recovery, and whilst still cautious about the short term, they are optimistic about mid and long-term outlook of the Singapore real estate market.’

Most market watchers expect the residential segment to lead the way for investment sales deals next year, with the Government scheduled to restart sale of residential sites through its confirmed list from next month. 2010 is also expected to be a more active year for the collective sales market, after just one major deal in 2009 (the $100.8 million sale of Dragon Mansion).

Investors’ appetite for suburban retail malls continues to be strong, says CBRE’s Mr Lake.

The jury is out on the appeal of the Singapore office market to investors. One camp is still concerned about the substantial supply of office space in the pipeline. ‘But you’ve got a growing number of people who feel the office market has bottomed out and they should be buying now,’ he adds.

‘So the appetite for office, which has been somewhat weak in the past 12 months or so, will pick up again. However, deal flow may be limited as many of the sellers who were keener to sell have probably already sold.’

DTZ senior director for investment advisory services Shaun Poh says there are funds that will be looking for office properties next year but deal sizes will be limited to $200-300 million per building. ‘Office investors are also more stringent, demanding initial property yields of at least 4-5 per cent, compared with 2-3 per cent during the 2007 boom. And they’ll only look at buildings that are substantially leased, given supply overhang issues,’ he added.

Credo Real Estate managing director Karamjit Singh says: ‘The office market would likely see more investment activity next year as the rental slide eases or rents even begin to recover. And with credit loosening further, major institutions like real estate investment trusts could be priming themselves for further acquisitions, having addressed refinancing concerns.’

The biggest transaction so far this year is the $541.9 million acquisition of Clementi Mall by a Singapore Press Holdings-led consortium. The Hong Leong Group (which includes listed City Developments) was the second biggest investor, paying a total $365 million for two residential sites at Serangoon Avenue 3 and Chestnut Avenue at state land tenders.

The residential sector made up 67 per cent of the total $9.43 billion investment sales year to date.

Close to 82 per cent of the $9.43 billion originated in the private sector.

Credo’s Mr Singh points out that despite the market starting 2009 in a ‘frozen state’ with credit being virtually non-existent in the aftermath of last year’s global financial slump, ‘there were very few panic or distressed sales of properties that cash-rich buyers were relishing for, as signs of hope appeared relatively quickly following the collapse of confidence when Lehman Brothers failed’.

Mr Singh tips the office sector as well as the mid-prime and luxury residential markets as next year’s star performers. ‘Owners in many en bloc sale projects have very recently reinitiated the exercise, sensing possibly a new window of opportunity next year. Having missed the boat earlier, some en bloc sellers are prepared to lower price expectations and align them with the market, while others are still pinning their hopes on another runaway in land prices for success.’

CBRE’s Mr Lake says: ‘The majority of collective sales that are coming to the market have fairly hefty price tags as most are revivals and there’s this attachment to previous reserve prices.’ Owners are also unwilling to reduce asking prices given the high cost of finding replacement properties, he added.

‘Perhaps for the next six months, developers will by and large find these en bloc sellers’ asking prices too high,’ Mr Lake suggested.

Source : Business Times - 08 December 2009

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MINDY YONG

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CSC Holdings & Soilbuild Group to develop industrial space in Tuas

CSC Holdings & Soilbuild Group to develop industrial space in Tuas

By Rachel Kelly

SINGAPORE : Foundation and geotechnical engineering specialist CSC Holdings - through its wholly-owned subsidiary Kolette - has appointed mainboard-listed Soilbuild Group, through its wholly-owned subsidiary SB Investment, to develop and market a S$51.7 million industrial space in Tuas South Avenue 2.

The 322,000 square foot area can be developed into a mix of 70 single, double and triple-storey terrace factory units.

Soilbuild said this will allow it to benefit from the resilient demand for terrace factory space by local small- and medium-sized enterprises (SMEs).

Industrial properties are expected to be in high demand from SMEs, according to CSC Holdings and the Soilbuild Group, which have teamed up to develop such an area in Tuas in the west of Singapore.

Integrated property developer Soilbuild said the collaboration is in line with its strategy to become a significant player in the business space market. It will receive units in exchange for marketing and developing the plot owned by CSC.

Low Soon Sim, executive director, Soilbuild Group Holdings, said: “In a development such as this, the development cost of covering design fees… marketing, construction and finance usually makes up 70 per cent to 80 per cent of total development cost. So using that as a benchmark, that is the number of units we will be receiving.”

The units are expected to launched early next year, and be completed in 2011. Experts said that similar units in the same area are priced in the region of S$150 to S$160 per square foot.

Soilbuild expects strong take-up due to demand within the SME market.

Mr Low said: “SMEs have remained very resilient and the underlying demand from such businesses remained fairly stable. Most SMEs prefer to own the properties that they run their businesses from, and arising from this, we see good opportunity.”

See Yen Tarn, group chief executive officer, CSC Holdings, said: “We do see a sign of pick-up, particularly in the side of the SMEs, and we believe that for this development, the target buyer will mainly come from that category of company and we are reasonably hopeful this project will satisfy their needs.”

The industrial site in Tuas has 51 years left of a 60-year lease.

CSC has previously collaborated with Soilbuild on other projects such as The Mezzo condominium development. - CNA/ms

Source : Channel NewsAsia - 08 December 2009

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