Complete Property Market Updates of Singapore

May 30, 2007

Wing Tai in JV for US$1b China property deal

Filed under: Developer News — Propertymarketupdates @ 9:02 pm

Wing Tai Holdings will lead a multinational consortium to invest in and develop real estate in China worth approximately US$1 billion.In a statement yesterday, Wing Tai said it had entered into a strategic relationship with Germany’s SEB Immobilien-Investment, Forum Partners of the United States, and Israel’s Eilam Group to create a real estate development and investment platform in China. The consortium will inject a total of US$450 million equity into this venture.

Wing Tai will be leading the consortium in identifying business opportunities and managing the venture and its assets. It also said that the venture with the three investors is in line with its strategy to embark on a Pan-Asian drive to increase its overseas earnings.

In April, Wing Tai consolidated its presence in the Hong Kong property market through a share swap that made associate company USI Holdings its flagship company there.

USI has also been developing housing projects in Hong Kong using the Wing Tai Asia brand name.In March, it acquired three million shares of DNP Holdings Berhad in Malaysia, taking its shareholding to 55 per cent.

On its latest venture, Wing Tai chairman Cheng Wai Keung added: ‘We are excited and looking forward to work with these global players in this strategic partnership to enhance value for the respective stakeholders.’

SEB Immobilien-Investment is the real estate and securities investment house of the SEB Group. With fund assets of over 6.9 billion euros (S$14.2 billion) in three mutual funds, it is the fifth-largest provider of open-ended real estate mutual funds in Germany.

Choy-Soon Chua, managing director of SEB Immobilien-Investment, said: ‘Joint venture structures with experienced market players such as Wing Tai give SEB optimum access to new and attractive markets and help us achieve diversification in our investments.‘

Forum Partners is a global real estate investment management firm with US$2 billion of capital under management on behalf of institutional and individual investors, while the Eilam Group is an Israeli investment company with investments in real estate, infrastructure, finance, capital markets and health care.

Source: The Business Times, 29 May 2007

Chinese developer Longhu plans US$1b HK IPO

Filed under: China — Propertymarketupdates @ 9:02 pm

China’s Longhu Real Estate hopes to raise US$1 billion in a Hong Kong initial public offering, probably next year, a bank source said, at a time when loans are drying up for land-hungry developers as the government tries to cool the building sector.

The source told Reuters that the Chongqing-based firm would probably sell around a 25 per cent stake, and was now looking to hire investment banks to handle the initial public offering.

‘It’s still early days,’ the source said, adding that the IPO would probably be launched in 2008. A report in the South China Morning Post newspaper yesterday said that UBS, JPMorgan, Morgan Stanley and Merrill Lynch were vying for the deal.

With the Chinese government trying to cool the booming construction sector, and banks no longer giving loans for land purchases, property firms have been keen to sell shares and issue convertible bonds in recent months.

And deals are getting bigger.

Guangzhou-based Country Garden Holdings Co raised US$1.66 billion last month in the biggest ever IPO in Hong Kong by a Chinese property firm. The stock jumped 35 per cent on its debut and is now 26 per cent above its IPO price. That IPO has sparked speculation that a raft of Chinese property developers will follow suit as they gather funds to buy land in a rush to break out of regional strong-holds and become national players.

Chinese industrial conglomerate VcanLand Group, for example, told Reuters this month it was planning a Hong Kong IPO of at least US$1.3 billion.

Longhu was founded in 1995, according to the firm’s website, and has built a villa, apartment and shopping centre projects in the western Chinese city of Chongqing.It also plans to build a 1 million sq m residential project with high-rise apartments and villas.

Source: The Business Times, 29 May 2007

Shui On, partners to invest 3b yuan in China venture

Filed under: China — Propertymarketupdates @ 9:01 pm

Shui On Land Ltd, a Shanghai-based real estate developer, and its partners in a venture will spend more than 3 billion yuan (S$599 million) on a software park in the north-eastern Chinese city of Dalian.

The venture will pay Yida Group, a local developer, 936 million yuan for a 78 per cent stake in the project, Shui On Land said in a statement to the Hong Kong Stock Exchange yesterday. The venture, which includes Yida and Shui On Construction & Materials Ltd, will also pay Yida 2.14 billion yuan for the land and other related costs in the project.

Shui On Land, which first sold shares to the public in a Hong Kong share sale in October, has been expanding. The company and Shui On Construction, both controlled by billionaire Vincent Lo, in November bought developer Sheng Jin Real Estate Co, which owns an office and commercial building site in Shanghai.

After the transaction, Shui On Land will own 61.5 per cent of the venture, Dalian Software Park Phase 2. Yida will own 10.3 per cent while Shui On Construction will own the rest. The project has an area of about 4 million square metres.

The software park’s first phase opened in 1998, has a gross floor area of 1.6 million sq m and has attracted more than 340 software companies, Shui On said in March.

Source: The Business Times, 29 May 2007

UK May house price growth eased slightly

Filed under: UK — Propertymarketupdates @ 9:00 pm

British house price inflation eased slightly in May, according to property researchers Hometrack, suggesting higher interest rates may be starting to cool demand in the housing market. Hometrack said yesterday that house prices rose 6.7 per cent on the year this month, cooling a touch from 6.8 per cent in April.

‘The steady ratcheting up of interest rates was bound to take its toll eventually,’ said Richard Donnell, director of research at Hometrack.

‘We expect the headline rate of growth to slow relatively quickly over the rest of the year towards 4 per cent as affordability pressures put a continued squeeze on purchasing power and more supply comes to the market.’ he added.

The housing market has remained robust in spite of four interest rate hikes since August, but some economists forecast that rates could rise as high as 6 per cent and significantly cool house price growth. ‘The expected slowdown will be exacerbated by any further increases in interest rates above the (current) 5.5 per cent,’ Mr Donnell said.

Source: The Business Times, 29 May 2007

Condo on Hotel Asia site to boast parking in each unit

Filed under: Property Trends — Propertymarketupdates @ 8:59 pm

Let it not be said that Singapore is behind on any of the latest property trends.

Hotel Asia, which will be redeveloped into a 30-storey luxury condominium, will have private car-parking in each unit, the most recent fad in luxury high-rise homes. The price is around $4,000 psf.

A new entrant to the Singapore market, Hayden Properties, bought Hotel Asia from the Ascott Group only in February for $147 million.

Ascott in turn bought Hotel Asia in July 2005 for $108 million, including $4.3 million for the hotel management company.

Hayden Properties is a joint venture set up in October 2006 between Singapore-based KOP Capital Pte Ltd (previously known as Koh Ong & Partners Management Services) and Emirates Tarian Pte Ltd.

Hayden Properties will also redevelop Horizon View in Cairnhill. Horizon View was acquired through a collective sale for $113 million in October 2006. Details are expected soon.

There is no name yet for the Hotel Asia project, although the development could be launched as early as the end of this year.

Hayden Properties director Leny Suparman said that the project would be the world’s tallest development with integral car porches. The property will have 54 condominium units and two penthouses. Units will have an average of two car porches and additional basement car park space.

The architect for the new development is Singapore firm Eco.id Architect and Design Consultancy which recently won the Best Design and Architecture Award 2007 for Starwood Group’s W Retreat & Spa on Fesdu Island in the Maldives.

Emirates Tarian is a subsidiary investment company of the Emirates Investment Group (EIG) which has other real estate investments including Palazzo Versace Gold Coast, Palazzo Versace Dubai and Emirates Financial Towers.

In an interview late last year, EIG chairman Sheikh Tariq bin Faisal Al Qassimi said that it was at a ‘crucial stage’ of discussions to conclude an investment here, estimated to be in the region of at least $1 billion. Sources had said then that it could be an ultra-luxurious Versace hotel.

Source: The Business Times, 29 May 2007

Horizon Towers dispute goes before strata board for mediation today

Filed under: Legal Ground — Propertymarketupdates @ 8:57 pm

A mediation hearing before the Strata Titles Board opens today, with the task of trying to bring together warring neighbours who have sold their apartments at Horizon Towers on Leonie Hill en bloc for $500 million.

Far from coming together, the various sides have hired top-notch lawyers to fight for them. The mediation is set to last for two days, and if there is no agreement possible, the case will go for a full hearing before the Strata Titles Board.

The dispute goes back to January, when almost 84 per cent of owners signed the agreement to sell Horizon Towers to Hotel Properties and two foreign funds for $500 million. That meets the legal requirement of more than 80 per cent of owners assenting to a sale in the case of properties more than 10 years old.

It means each owner of the condo’s 199 units will get about $2.3 million, and the 11 penthouse owners will receive sums of at least $4 million, rising to $6.28 million for the largest unit, of 890 sq m.

A group of 42 unhappy owners who had consented to the sale has called for an extraordinary general meeting (EGM) to remove the sales committee which negotiated and finalised the collective sale. The 42 are calling for a new sales committee to be elected, and they have hired the Wong Partnership law firm to advise them.

A Wong Partnership spokesman confirmed to BT that ‘it is advising some of the subsidiary owners who would like the sales committee changed’.

The 42 say they are not satisfied with the sales committee’s performance, and complain about the committee not canvassing the views of the rest of the owners prior to the sale, despite the improved market conditions. The unhappy group members pointed out that nine months had passed from the time the sales committee had been elected to negotiate the sale and its eventual agreement.

‘Before signing the option, it would be in their (sales committee) interests as well, and since there was a window of opportunity, they could have held a meeting with the owners again and see if we could have concluded a better agreement,’ said one of the 42 owners.

But law firm Drew & Napier, which is handling the collective sale of Horizon Towers, has written a letter to advise the owners that an EGM would not have the power to remove the current sales committee.

And even if a new sales committee is appointed, nothing significant can be or needs to be done by the new sales committee which will have a bearing on the proceedings before the Strata Title Board, the lawyers’ letter said.

Jimmy Yim, senior counsel at Drew & Napier, told BT that in his opinion, an EGM does not have the power to remove the sales committee and since it is now at an advanced stage, there is ‘little more the sales committee can do’.

It is not these two sides alone which need mediation. There are those who have always stood out against the sale, and three of them, including one penthouse owner, have hired Tan Kok Quan Partnership to represent them at the hearing.

Another penthouse owner, Wong Siew Fang, who has been bitterly opposed to the sale from the very beginning, is doing without lawyers and will be presenting her own case at the hearing.

Ms Wong said she will argue that the apportionment of the sales proceeds was not equitable.

‘When you buy property, you pay according to area,’ said Ms Wong who bought her home in 1983. She will get $4 million for her 493 sq m penthouse while those owning 220 sq m will get $2.3 million.

Many of the penthouse owners are resigned to their plight being disregarded just because they are seen as millionaires.

But one question has been answered already. One bit of legal advice sought was whether going against an en bloc sale would somehow be construed as being ‘anti Singapore’ which could in some way see some of those involved lose their permanent residence status.

They have been instructed that in Singapore, ‘you’re entitled to exercise your commercial rights’.

Source: The Business Times, 29 May 2007

MCL Land is top bidder for Nob Hill Condo, 2 bungalows

Filed under: Property Deal — Propertymarketupdates @ 8:26 pm

MCL Land has emerged as the top bidder for Nob Hill Condominium and two adjoining bungalows on Ewe Boon Road, at a price of $95 million or $1,100 per square foot of potential gross floor area, including an estimated $17 million development charge, according to industry sources.

The properties, located at a cul-de-sac, have a combined freehold land area of 63,572 sq ft. They are zoned for residential use with a 1.6 plot ratio (ratio of maximum potential gross floor area to land area) and a 12-storey height limit. The plot can be redeveloped into a new project with about 65 units averaging 1,500 sq ft. The tender for the properties closed last week. It was handled by Credo Real Estate, which has declined to confirm the outcome of the tender.

Other recent benchmarks in the area include Eden Spring at Balmoral Road sold at $1,004 psf per plot ratio last month to TG Development, and One Balmoral, sold to Hong Leong Group in March for $1,188 psf ppr.

In its news release last month when launching Nob Hill Condominium and the two adjoining bungalows, Credo had said that since the condo belongs to an investment company, no Strata Titles Board application is necessary.

On the stock market yesterday, MCL ended two cents higher at $2.82.

Source: The Business Times, 29 May 2007

Carlton group tops bids for hotel site

Filed under: Hotel — Propertymarketupdates @ 8:26 pm

Hong Kong tycoon Li Dak-sum’s Carlton group yesterday emerged as the top bidder for a 99-year hotel site at Gopeng Street next to the Amara Hotel in the Tanjong Pagar area. Carlton put in a $123 million bid.

The only other offer for the site came from Republic Hotels and Resorts, part of Millennium & Copthorne Hotels plc, which bid $118.21 million.

Carlton’s bid works out to $573 psf per plot ratio, which market watchers say is the highest for a 99-year hotel site in recent years.

In November last year, Hong Leong Group bagged a site at Mohamed Sultan Road for $518 psf per plot ratio.

In January this year, Far East Organization paid $501 psf ppr for a hotel plot next to Novena MRT Station.

Mr Li’s son, Richard, who is managing director of Carlton Hotel (S) Pte Ltd, yesterday evening told BT that the group expects to pump a further sum of $140 million in construction costs and fees for its proposed hotel development at Gopeng Street, bringing the all-in cost to around $263 million.

‘We are looking at two scenarios - a limited service hotel with about 400 rooms or a more up-market, hip hotel, with about 380 rooms,’ Richard Li said, indicating that for now, the group is more inclined towards the former option as ‘there are not many of this type of hotels’.

If the group goes for a 400-room hotel, the break-even cost would be $657,000 per room, which hotel analysts say is one of the highest for a hotel development or transaction in Singapore in recent years. ‘For instance, the Intercontinental Singapore last year changed hands for $611,000 per room, and the recent sale of Novotel Clarke Quay was reported at $552,000 per room,’ HVS International Singapore managing director David Ling observes.

Carlton’s bid reflects its confidence in the Singapore tourism sector, he said.

‘The market is conducive for new hotel developments now that we have concrete plans going ahead - two integrated resorts with casinos, Formula 1. These are all positive demand generators coming on line,’ Mr Ling reckons.

Mr Li of Carlton Singapore acknowledges that his group’s bid at yesterday’s state tender was high but ‘we wanted to get the site’, he said.

‘We basically want to do another hotel in Singapore,’ he said. ‘Of course, based on today’s room rates, the venture is not very profitable. But we expect demand to be higher in the years to come.’

Mr Li indicated the group does not have plans for further hotels in Singapore for the time being.

In early 2005, Carlton clinched a plot next to its Carlton Hotel at Bras Basah Road for $55.6 million. It recently began construction on the site for a 300-room extension to the existing hotel.

The total cost for developing the new wing (inclusive of the land price) is about $175 million, reflecting a cost per room of about $583,000. The extension is expected to be ready around 2009.

The 25,543 sq ft site site at Gopeng Street can be developed up to 30 storeys high.

It could be completed around 2010.

Source: The Business Times, 29 May 2007

Expression-of-interest may get Tulip Garden higher sale price

Filed under: Property Deal — Propertymarketupdates @ 8:25 pm

Collective sale via the ‘expression-of-interest’ route can help owners seek better prices for their homes as evidenced by an almost 40 per cent increase in the asking price for Tulip Garden.

The condominium, which is at the junction of Holland Road and Farrer Road, was put on the market through an expression-of-interest exercise in January with an indicative price of $900 per square foot per plot ratio (psf ppr), including development charge.

The 316,709 sq ft site was, however, relaunched yesterday with the new indicative price of $1,250 psf ppr, including development charge.

Based on a plot ratio of 1.6 and a maximum gross floor area of 506,734.4 sq ft, the site could fetch over $633 million.

Steven Ming, director of investment sales at Savills Singapore, which is marketing the site, said: ‘We received pretty attractive offers - what would had been benchmark prices for the location. Unfortunately, we were not able to consider them further as we did not have the requisite 80 per cent mandate to do so.’

Heartened by earlier expressions of interest though, 80 per cent of owners at Tulip Garden have now agreed to proceed with a collective sale if its target price is met.

Savills also remains confident that the new, higher, indicative prices could be met. This, despite some developers becoming increasingly wary of owners’ price expectations.

‘It’s a different Singapore today and developers still remain bullish about prospects for the upper end residential sector. For as long as they continue to sell and get good prices for their products, it is unlikely that they will find prices getting too high,’ said Mr Ming.

Last month, Guocoland bought neighbouring Leedon Heights for $835 million or about $1,062 psf ppr, including a development charge.

Next door, Farrer Court was put on the market this month for about $1.5 billion. Including development charge and topping up the 99-year lease, the price works out to be around $850 psf ppr.

It was also reported this month that the asking price for Farrer Court was $900 million three months earlier.

There appears to be sufficient demand for prime sites. BT understands that as many as five developers had earlier expressed interest in Tulip Garden.

Source: The Business Times, 29 May 2007

Family lives being wrecked by en bloc deals

Filed under: Community Voices — Propertymarketupdates @ 8:24 pm

As a boy, I used to watch movies of the old wild lawless West where the theme typically centres on decent simple homesteaders being forced out of their homes and land by big cattle ranchers or crooked town planners bent on furthering personal wealth.

Of course, basic human decency almost always prevails in such movies in the form of a drifter cowboy who comes to the aid of these simple folks.

Fast forward to the 21st century in Singapore today where hot property prices have culminated in en bloc deal after deal.

It is not difficult to draw a parallel of the home-losing scenario between then and now. Except that now the process is legalised.

Dissenters of en bloc deals are reportedly subject to alienation by former neighbours, and the last man standing in one particular case had the book thrown at him in a court of law.

Alas, has Singapore come so far to reach the status of a near developed society but at the same time relegated back to a state where defending one’s home could be illegal?

Is it morally right that the en bloc majority law that was meant to facilitate renewal of very old properties is now used to dismantle relatively new properties, and worse still, family lives?

To borrow a phrase from Charles Dickens: ‘A Tale of 2 Cities’ … perhaps one day we’ll look back and say: ‘It was the best of times, it was the worst of times.’

Teo Hoon Seng

Source: The Straits Times, 29 May 2007

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