Top Stories New technologies to boost building productivity: Khaw Construction sector to get much-needed push via series of govt incentives Source: Business Times / Singapore SINGAPORE'S government is giving the adoption of productivity-boosting building technologies a further push through a series of initiatives targeted at the laggard construction sector. These include workshops to build up expertise in these technologies and the development of codes and guidelines for these new methods, National Development Minister Khaw Boon Wan announced in a blog post yesterday.
The Ministry of Trade and Industry's second-quarter economic survey showed that although site productivity has been improving more quickly, with growth escalating from 0.2 per cent in 2010 to 1.5 per cent in 2013, the sector still lags others. -By Lee Meixian Push for cleaner, quieter and faster building methods Developers of selected govt plots face new rules Source: Straits Times / Singapore DEVELOPERS who successfully bid for projects on selected government plots will have to adopt more productive construction methods by the end of this year. Compared with conventional methods, these techniques can yield manpower and time savings of up to 50 per cent, said National Development Minister Khaw Boon Wan in a blog post yesterday. "We need game-changing construction technologies to boost our construction productivity and reduce our reliance on construction workers," he said. The new rules, which were announced in March, are part of a concerted drive by the Government to raise productivity growth in the sector. Yesterday, Mr Khaw said that some private developers were already adopting the new productivity tools. OUE, for example, is developing a 10-storey extension of the Crowne Plaza Changi Airport hotel, which will be made from prefabricated modules with multiple units, complete with internal fixtures. They will later be assembled on site like Lego blocks. "(This) relies on building components which are manufactured in a factory, thus reducing the need for workers, and cutting down on noise and dust at the construction site," said Mr Khaw. Another method involves the use of cross laminated timber, a multi-layered wood commonly used in Europe, which meets the same fire safety requirements as concrete and steel. Such technologies will be employed for some public sector projects, said Mr Khaw. Successful bidders of selected government land sale sites will have to use them as well. To facilitate these moves, the Building and Construction Authority will provide funding support to those who adopt these methods and training to build up expertise in the area. This comes amid other moves made by the Government to raise construction productivity. For instance, new projects must use precast components and have standardised floor heights by the end of this year. Currently, up to 70 per cent of the Housing Board's building components are precast. In the private sector, it is about 10 to 25 per cent. "The desired outcome of these efforts is for our construction industry to be cleaner, quieter and faster, without compromising on safety and quality," said Mr Khaw.
While developers cheered the push for productivity, some said the new compulsory methods might constrain their designs. Said EL Development managing director Lim Yew Soon: "Prefabricated moulds are good for hotels and hostels, but not for condominiums, which require a greater variety of unit types." -By Yeo Sam Jo Khaw: 5 steps to promote adoption of smarter technology in construction sector Developers of selected Government land sale sites will be required to use such innovative methods, which save time and labour costs, National Development Minister Khaw Boon Wan wrote in a blogpost. Source: Channel News Asia / Singapore SINGAPORE: Minister for National Development Khaw Boon Wan spelt out five steps that the authorities are taking to speed up the adoption of intelligent, more productive technology in the construction sector. Such "game-changing construction technologies ... will boost our construction productivity and reduce our reliance on construction workers", he wrote in a blogpost on Thursday (Aug 14). "The desired outcome of these efforts is for our construction industry to be cleaner, quieter and faster, without compromising on safety and quality." The five steps outlined by Mr Khaw are: 1. The Government will deploy such technologies in selected public sector projects. 2. It will be a requirement for successful bidders of selected Government land sales sites to adopt productive technologies like Prefabricated Pre-finished Volumetric Construction (PPVC) and Cross Laminated Timber (CLT). 3. The Building and Construction Authority (BCA) will provide funding support to adopters of such technologies. 4. The BCA, SPRING Singapore and industry players are working closely to develop Singapore Standards on the codes and guidelines for these new technologies. 5. The BCA Academy will roll out a series of workshops and seminars on new technologies to build up expertise in the industry. SAVING MANPOWER AND TIME Mr Khaw cited an extension to the Crowne Plaza Changi Airport Hotel and an upcoming sports hall at the Nanyang Technological University (NTU) as examples of how such new technology can speed up construction projects. A 10-storey building extension to the Crowne Plaza Changi Airport Hotel, owned by OUE Limited, will be constructed using the PPVC method, which will see complete flats or modules manufactured in factories, then transported to the site for installation and stacked to join "in a lego-like manner", according to an MND factsheet. As PPVC relies on building components manufactured in a factory, it reduces the need for workers, and cuts down on noise and dust at construction sites. “As a developer, we are constantly looking for innovation and more efficient ways of building our properties, especially in land and labour-scarce Singapore,” said Mr Thio Gim Hock, Chief Executive Officer and Group Managing Director of OUE, the first property developer to adopt this method of construction. The NTU will be constructing its sports hall using CLT - timber manufactured from wood harvested from sustainably managed forests, and fabricated by binding layers of timber at 90 degrees with structural adhesives to produce a solid timber panel, according to the MND. "CLT is a new construction material which is safe and is commonly used in Europe. CLT meets the same fire safety requirements as concrete and steel. Our Singapore Civil Defence Force has assessed the material and is allowing the use of CLT for buildings up to 24 metres," Mr Khaw wrote. He noted that PPVC and CLT enable manpower and time savings of up to 50 and 35 per cent, respectively, compared to conventional construction methods. Added BCA Chief Executive Officer Dr John Keung: “I am glad that more of our developers such as OUE are coming on board to adopt such game-changing construction technologies. This signals the transformation of the industry towards higher productivity, minimising construction work on-site. "The Government will continue to push for technological advancements in the built environment sector through generating lead demand, funding support as well as building up the ecosystem and expertise for these technologies."
- CNA/es http://www.channelnewsasia.com/news/singapore/khaw-5-steps-to-promote/1312252.html Singapore Real Estate CDL steps up diversification plan Q2 profit falls 33% to S$137.9m due to absence of divestment gains Source: Business Times / Top Stories [SINGAPORE] Faced with challenging headwinds in the Singapore property landscape, City Developments Ltd (CDL) will focus on new geographies and products. It is actively looking at Japan and Australia and hopes to establish platforms in these markets by year end. In addition, CDL is seeking to develop fund management products, its top brass said yesterday as the group posted a 32.8 per cent drop in second-quarter net earnings to S$137.86 million. First-half net profit also fell 24.9 per cent to S$257.53 million. On fund management, where the group lags behind its Singapore peers such as CapitaLand and Keppel Land, CDL's strategy will be to initially monetise some of its existing assets. This would build a track record, giving for instance fixed returns to investors while providing long-term capital appreciation. In the longer run, CDL will not rule out a "discretionary" model, as is adopted by many private-equity outfits, of raising cash from investors first before purchasing assets. "If you look at our competitors, many of them have multi-billion-dollar funds management businesses. Subject to market conditions, I don't see a reason why at some point, a five to 10-year horizon, we would not be targeting that type of business," said Grant Kelley, who was appointed CEO of the company earlier this year. He was formerly from Apollo Global Management and Colony Capital. Kwek Leng Beng, CDL's executive chairman, said the group has not taken full advantage of its hotel portfolio, held under its London-listed subsidiary Millennium & Copthorne Hotels (M&C). He floated some possibilities. "One day if it is prudent and viable, why don't we throw all our hotels into a Reit (real estate investment trust) and make this the biggest Reit ever in Singapore? As another example, why don't we get all our provincial hotels in the US plus UK, put them into a Reit? That is another model." As for expanding Down Under and in Japan, CDL's strategy is likely to be dominated by hotels, commercial and residential - the three asset classes it is best at in the Singapore market. "We are actively looking at a number of opportunities currently ... In the next 12 months, we hope we'll have some concrete and exciting investments that will be consummated," said Mr Kelley, declining to give details. Late last month, Australian Financial Review reported that CDL and Australia's Stockland Group are considering bidding for Leighton Holdings' US$7 billion residential and commercial property portfolio. The Leighton Properties business is expected to fetch up to A$500 million (S$580 million), according to the report. At yesterday's briefing, CDL also gave an update of the headway it has made in other overseas markets: China and UK. It has picked up six freehold properties in UK since last year for £157 million (S$326 million): two in Knightsbridge and one each in Chelsea, Belgravia, Croydon and Reading. The intention is to reposition them predominantly as residential projects to tap the undersupply in the London housing market. Said Mr Kwek: "I personally believe that now with Middle East in bad shape, more and more funds and rich individuals will park their money and buy something" in London. Later this year, the group could launch its first major China project - Eling Residences in Chongqing. In Singapore. the group may release a 124-unit freehold condo, New Futura, on Leonie Hill Road in Singapore in the second half of this year, subject to market conditions. One-fifth of the 500,000 sq ft of offices at its South Beach Tower in Singapore has been committed. Besides Rabobank, tenants clinched include De Lage Landen, TMF Group and Bain & Company; advanced negotiations are going on with a few more major potential tenants. The 34-storey tower is expected to be completed by year-end and CDL hopes to pace out leasing activity to ride on rising office rents. The drop in CDL's Q2 and H1 bottom lines was due to the absence of significant divestment gains which had boosted the same year-ago periods. In Q2 2013, CDL sold 100G Pasir Panjang, after selling strata units in Citimac Industrial Complex, Elite Industrial Buildings 1 and II in Q1 2013. CDL's revenue rose 5.9 per cent to S$861.15 million in Q2 and edged up 0.4 per cent in H1 to S$1.595 billion. Shareholders will receive a special interim dividend of four cents per share, down from eight cents in H1 last year.
Earnings per share fell to 14.5 Singapore cents in Q2 2014 from 21.8 cents in Q2 last year. The counter ended 27 cents lower at S$9.78 yesterday. CDL released its results before the stock market opened. -By Kalpana Rashiwala CDL to step up the pace as it expands overseas Developer eyeing markets such as Japan, Australia Source: Straits Times / Money PROPERTY developers in Singapore continue to head overseas and City Developments (CDL) is no exception. Executive chairman Kwek Leng Beng said yesterday that CDL will speed up its expansion abroad and is on the lookout in countries such as Japan and Australia. It might then move into fund management and spin off more hotels into a real estate investment trust (Reit), he said at a second-quarter results briefing. "First, we develop properties overseas; fund management will come later," he said. "One day, if it is prudent and viable, why not throw all our hotels into a Reit? Make it the biggest Reit ever in Singapore," he added. "As another example, why don't we get all the provincial hotels in the United States and Britain, and put them in a Reit? That would be another model for fund management." For the three months to June, the company saw net profit drop 32.8 per cent from levels in the previous year to $137.9 million. Previously, it had enjoyed one-off gains from the sale of an industrial property at Pasir Panjang Road, CDL said. With the one-time gains stripped out, "core" net profit would have registered an increase of 89.7 per cent for the period, the company said. Revenue rose 5.9 per cent to $861.1 million for the second quarter. Most of CDL's profits came from property development, followed by hotels. It owns 60 per cent of hotel chain Millennium & Copthorne Hotels. Chief executive Grant Kelley said yesterday that CDL would focus on growing its property business overseas, particularly in Britain, China, Japan and Australia. In China, it is developing a project called Hong Leong City Centre in Suzhou, he said. It also has two projects in Chongqing - Eling Residences, a 126-unit, high-end residential project, and Huang Huayuan, a mixed-use development. As for Japan, the Millennium Mitsui Garden Hotel Tokyo in the upscale Ginza district is expected to open in December. Mr Kwek said yesterday that "the world is short of hotels", and that hotels are more profitable than serviced apartments, even though serviced apartments might require less manpower. He added that CDL would like to convert some of its luxury residential developments in Singapore into serviced apartments, but suggested that the proposal had encountered roadblocks. "In the old days, it was very easy to convert apartments into serviced apartments, but currently, it's not so easy... we're talking to the Government." CDL said yesterday that it plans to launch the high-end New Futura condominium at Leonie Hill Road by the end of this year. The office component of its South Beach integrated development near City Hall is expected to be completed by the year end as well. So far, about 20 per cent of the office space has secured committed leases. The group's earnings per share for the second quarter stood at 14.5 cents, down from a restated 21.8 cents the previous year. Net asset value per share rose from $8.50 as at Dec 31 last year to $8.67 as at June 30 this year.
CDL shares fell 27 cents, or 2.7 per cent, to $9.78 yesterday. -By Melissa Tan http://www.businesstimes.com.sg/premium/top-stories/cdl-steps-diversification-plan-20140815
http://www.straitstimes.com/premium/money/story/cdl-step-the-pace-it-expands-overseas-20140815 UOL makes UK debut with £97m purchase in heart of London Group hopes to operate a hotel on the site under its Pan Pacific brand Source: Business Times / Top Stories [SINGAPORE] In what appears to be a surge of interest among Singapore developers for overseas ventures, UOL Group is making its debut in the UK with a £97 million (S$201.6 million) acquisition of prime freehold land in the heart of London. UOL Group said yesterday that it has agreed to acquire a 3,200 square metre site in Bishopsgate, in the City of London, from Heron International, a European property investment and development company controlled by property tycoon Gerald Ronson. The group hopes to operate a hotel on the mixed- use site under its hotel flagship brand "Pan Pacific", which will also mark Pan Pacific's foray into the UK. Heron International was earlier said to be seeking a joint venture partner but put the site up for sale following a corporate restructuring and after receiving several offers for the project. Its earlier plans for a Four Seasons hotel and residential complex on the site did not materialise. "We acquired the site through an expression of interest process conducted by CBRE/Savills UK," a UOL spokesman said. "This site presents a strategic opportunity for our long-term hotel investment as well as brand expansion for Pan Pacific." The vacant site is located in London's central financial district, near the Liverpool Street Station. It is also near the future Crossrail station, part of the East-West railway linking the whole of Greater London. UOL said it intends to review the configuration of the approved planning scheme, which allows for a 43-storey tower with 52,255 sq m of gross floor area comprising 109 residential units, a 190-room hotel and a retail component. Its wholly owned subsidiary, Pan Pacific Holdings Group, owns and manages over 30 hotels in Asia, Oceania and North America under the "Pan Pacific" and "Parkroyal" brands. Other Singapore developers have also made waves in London, snapping up historic or iconic sites in some cases. Ho Bee Land, for instance, made a second office purchase in London in March, paying £171 million for a prime Grade-A office property at 1 St Martin's Le Grand, which served as the General Post Office of London in the late 19th century. It snapped up Rose Court, which overlooks the River Thames and houses the famous Rose Theatre owned by a heritage group, for £67.2 million last year. KOP - which runs a boutique hotel in London's Kensington - in 2010 tied up with Thailand's Reignwood Group to restore a historic building, 10 Trinity Square, in London's CBD into a mixed development comprising a hotel, luxury residences and an exclusive members' club. Oxley Holdings also launched its first project in London this year in a tie-up with London developer Ballymore in Royal Wharf, a mixed development in East London. Other Singapore players have ventured into the United States and Australia too. They include Keppel Land's maiden US$70 million investment in a Manhattan residential project this month, as well as Pontiac Land's US$200 million investment to revive a residential tower adjacent to the Museum of Modern Art in midtown Manhattan last October. In Australia, Far East Organization spent A$753.4 million (S$874.1 million) in the past year across eight projects, including Clocktower Square complex, a mixed development in Sydney's Central Business District that it bought for A$72 million. "This is part of an emerging trend where Asian investors and owners are looking to acquire assets across the world in order to be in key gateway cities and markets to diversify the portfolio as much as possible," said Akshay Kulkarni, regional director for hospitality at Cushman & Wakefield.
Mr Kulkarni said he expects compressed values and potential upside in market performance to drive yields higher in the Western markets in the medium term. -By Lynette Khoo UOL buys prime London site for $202 million Source: Straits Times / Money UOL is the latest established property developer in Singapore to join the ranks of those venturing abroad with a £97 million (S$202 million) purchase of a site in London. It has bought Heron Plaza, a freehold development site in the city's central financial district, from British property tycoon Gerald Ronson, it said in a statement yesterday. Heron Plaza will be UOL's first major development in London, and also its first in Europe. The site is next to the completed Heron Tower, one of the tallest skyscrapers in the city at 242m. Mr Ronson got the green light in 2011 to build a 43-storey Four Seasons hotel and residential complex on the Heron Plaza site, with a development cost estimated to be at least £500 million. His firm, Heron International, had been looking for a joint venture partner to develop the plot but later put the site up for sale after a restructuring at the company, according to reports. UOL said in a statement yesterday that it "intends to review" the development plans for the site. It will operate the luxury hotel that will be built on the site,under its flagship Pan Pacific hotel brand, it added. The Singapore-listed group already owns, manages and markets more than 30 hotels in the Asia Pacific region and North America under its Pan Pacific and Parkroyal brands.
UOL shares closed three cents down at $6.33 yesterday. -By Melissa Tan The Singapore-listed developer bought Heron Plaza, a prime development site in London’s Bishopsgate.Source: Channel News Asia / Business SINGAPORE: Property group UOL will embark on its first major
development project in London following the purchase of a prime development
site in Bishopsgate for £97 million (S$201.9 million). The Singapore-listed developer bought Heron Plaza, seller Heron International said in a statement on Thursday (Aug 14). UOL has consent to build a five-star hotel, residential and retail development that is up to 43 stories high and comprising about 562,000sqft of gross floor area (or 340,000sqft net floor area) on the site, the statement said. UOL will operate the hotel under its flagship Pan Pacific hotel brand. UOL, whose chairman is prominent banker Wee Cho Yaw, is a diversified property group with interests in residential development, offices, malls, spas and restaurants. The group also owns or manages hotels in the Pan Pacific and PARKROYAL chains. - CNA/cy http://www.straitstimes.com/premium/money/story/uol-buys-prime-london-site-202-million-20140815
http://www.channelnewsasia.com/news/business/singapore/uol-buys-prime-london/1312256.html Brazil denies links with property firm EcoHouse Up to 1,500 investors in Singapore have reportedly poured S$70 million into projects linked to the UK-based company. Source: Channel News Asia / Singapore SINGAPORE: Hundreds of investors here, who ploughed millions of dollars into the hands of a developer claiming to be working with the Brazilian government on a social housing programme, were left fearing the worst after the Brazilian Embassy said on Thursday (Aug 14) that its government had no dealings with the company. In fact, it was not even aware until recently, when complaints from Singapore investors mounted, that the United Kingdom-based company operated in Brazil. EcoHouse, which has abruptly shut down its Suntec offices, is neither affiliated with the Brazilian national housing programme nor registered as a partner of its state-owned bank. “In view of allegations by Singapore investors regarding EcoHouse Group, a company linked to executives in the UK, the Embassy of Brazil would like to state that the Embassy had no prior knowledge of the existence of EcoHouse’s operations in Brazil,” the embassy said in response to TODAY’s queries. Some of the investors had approached the embassy. After contacting several agencies within the Brazilian government, the embassy found that there was “no record of any agreement with any company bearing the name ‘EcoHouse’ related to ‘Minha Casa, Minha Vida’ (Brazil’s national housing programme), or any other federal programme”. The embassy added that “Bosque Residencial” in Natal, State of Rio Grande do Norte – one of the housing developments offered by EcoHouse for investment – is not listed in the records of Brazil’s state-owned bank, Caixa Economica Federal. COMPANY ON MAS' ALERT LIST On its website, EcoHouse claims that it was chosen by the Brazilian government as “the only UK company to date officially authorised to build developments under Minha Casa, Minha Vida”, which aims to provide three million homes for the country’s growing middle class. The company was founded in 2009 by Mr Anthony Armstrong Emery. Various media reports have put the number of Singapore investors in EcoHouse projects at between 800 and 1,500. Up to S$70 million had reportedly been ploughed into three housing projects. Some investors have begun legal action against EcoHouse to recover their capital investments, which amounted to a minimum of £23,000 (S$47,810) per unit. EcoHouse had promised a 20 per cent fixed rate of return for a 12-month investment contract, but many investors said they have not received their returns or their capital despite their contracts reaching maturity. The company was recently put on the Monetary Authority of Singapore’s (MAS) Investor Alert List, which lists unregulated companies that may have been wrongly perceived as being licensed or authorised by the MAS. Reports have been filed against the company with the police and the Commercial Affairs Department (CAD). On whether EcoHouse is under probe, a CAD spokesman would only say: “It is inappropriate to comment on police investigations, if any.” In response to TODAY’s queries sent on Tuesday, EcoHouse chief operations officer Deen Bissessar said on Thursday that the closure of its offices in Suntec Tower 2 was part of measures to “consolidate into our Brazil operation and managing global affairs from our global headquarters in London”. He added that “the position remains unchanged” and the company is trying to “improve the situation with regard to construction and payments”. “We absolutely remain committed to our clients and if that was not the case, we would simply shut all doors – which is something we have no intention of doing,” added Mr Bissessar. The company was unable to respond to queries about the Brazilian Embassy’s comments on Thursday by press time. The developer’s registered address with the Accounting and Corporate Regulatory Authority is in Cecil Street. When TODAY visited the premises, it was occupied by a company called MC Corporate Services. EMBASSY ADVISES DUE DILIGENCE For companies regulated by the MAS, investors could seek redress at the Financial Industry Disputes Resolution Centre. However, such a recourse is not available for EcoHouse investors. The Brazilian Embassy has urged potential investors considering putting their money in Brazil’s property market to carry out due diligence when they encounter any developers claiming to have projects supported by the Brazilian government. Consumer watchdog CASE advised consumers to be mindful of the high risk involved when investing in overseas properties. CASE executive director Seah Seng Choon pointed out that the laws in other countries are different from Singapore’s and investors may not enjoy the same degree of protection. “Seeking redress in the event of dispute can be cumbersome and in most cases consumers are not able to get their money back,” he said. -TODAY/cy Brazil denies links with property firm EcoHouseSource: Today Online / Singapore SINGAPORE — Hundreds of investors here, who ploughed millions of dollars into the hands of a developer claiming to be working with the Brazilian government on a social housing programme, were left fearing the worst after the Brazilian Embassy said yesterday that its government had no dealings with the company. In fact, it was not even aware until recently, when complaints from Singapore investors mounted, that the United Kingdom-based company operated in Brazil. EcoHouse, which has abruptly shut down its Suntec offices, is neither affiliated with the Brazilian national housing programme nor registered as a partner of its state-owned bank. “In view of allegations by Singapore investors regarding EcoHouse Group, a company linked to executives in the UK, the Embassy of Brazil would like to state that the Embassy had no prior knowledge of the existence of EcoHouse’s operations in Brazil,” the embassy said in response to TODAY’s queries. Some of the investors had approached the embassy. After contacting several agencies within the Brazilian government, the embassy found that there was “no record of any agreement with any company bearing the name ‘EcoHouse’ related to ‘Minha Casa, Minha Vida’ (Brazil’s national housing programme), or any other federal programme”. The embassy added that “Bosque Residencial” in Natal, State of Rio Grande do Norte — one of the housing developments offered by EcoHouse for investment — is not listed in the records of Brazil’s state-owned bank, Caixa Economica Federal. On its website, EcoHouse claims that it was chosen by the Brazilian government as “the only UK company to date officially authorised to build developments under Minha Casa, Minha Vida”, which aims to provide three million homes for the country’s growing middle class. The company was founded in 2009 by Mr Anthony Armstrong Emery. Various media reports have put the number of Singapore investors in EcoHouse projects at between 800 and 1,500. Up to S$70 million had reportedly been ploughed into three housing projects. Some investors have begun legal action against EcoHouse to recover their capital investments, which amounted to a minimum of £23,000 (S$47,810) per unit. EcoHouse had promised a 20 per cent fixed rate of return for a 12-month investment contract, but many investors said they have not received their returns or their capital despite their contracts reaching maturity. The company was recently put on the Monetary Authority of Singapore’s (MAS) Investor Alert List, which lists unregulated companies that may have been wrongly perceived as being licensed or authorised by the MAS. Reports have been filed against the company with the police and the Commercial Affairs Department (CAD). On whether EcoHouse is under probe, a CAD spokesman would only say: “It is inappropriate to comment on police investigations, if any.” In response to TODAY’s queries sent on Tuesday, EcoHouse chief operations officer Deen Bissessar said yesterday that the closure of its offices in Suntec Tower 2 was part of measures to “consolidate into our Brazil operation and managing global affairs from our global headquarters in London”. He added that “the position remains unchanged” and the company is trying to “improve the situation with regard to construction and payments”. “We absolutely remain committed to our clients and if that was not the case, we would simply shut all doors — which is something we have no intention of doing,” added Mr Bissessar. The company was unable to respond to queries about the Brazilian Embassy’s comments yesterday by press time. The developer’s registered address with the Accounting and Corporate Regulatory Authority is in Cecil Street. When TODAY visited the premises, it was occupied by MC Corporate Services Private Limited. For companies regulated by the MAS, investors could seek redress at the Financial Industry Disputes Resolution Centre. However, such a recourse is not available for EcoHouse investors. The Brazilian Embassy has urged potential investors considering putting their money in Brazil’s property market to carry out due diligence when they encounter any developers claiming to have projects supported by the Brazilian government. Consumer watchdog CASE advised consumers to be mindful of the high risk involved when investing in overseas properties. CASE executive director Seah Seng Choon pointed out that the laws in other countries are different from Singapore’s and investors may not enjoy the same degree of protection. “Seeking redress in the event of dispute can be cumbersome and in most cases consumers are not able to get their money back,” he said. ADDITIONAL REPORTING BY PAUL LIM -By Tan Weizhen & Lee Yen Nee http://www.channelnewsasia.com/news/singapore/brazil-denies-links-with/1313584.html
http://www.todayonline.com/singapore/brazil-denies-links-property-firm-ecohouse Six new precincts among plans to enhance Sentosa’s appeal The planning directives for each of the precincts were detailed in an Expression of Interest document posted on the government procurement website GeBIZ. Source: Channel News Asia / Singapore SINGAPORE: Sentosa is calling for ideas to boost its appeal to visitors and its plans include creating six precincts, which will have distinct offerings that cater for different groups, out of its existing clusters. For example, the Palawan Beach precinct will be dedicated to family-centric activities, while the Siloso Beach stretch will feature “thrilling and adventurous recreational activities for the young and energetic”. The Imbiah Lookout precinct will feature nature and heritage, and the Fort Siloso and Siloso Point area, which includes the preserved coastal fort and the Underwater World Singapore attractions, will offer visitors a “learning journey”. The two other precincts singled out for enhancement are the North-South Link cluster, which connects Resorts World Sentosa and the beaches, and the Siloso Beach area. The planning directives for each of the precincts were detailed in an Expression of Interest document (EOI) Sentosa Development Corporation (SDC) posted last month on the government procurement website GeBIZ, which was first reported in Chinese newspaper Lianhe Zaobao on Thursday (Aug 14). SDC divisional director for property Benjamin Chia said the company is seeking consultancy services to “map its near- and mid-term development plans for the different precincts”. “The outcome of the consultation process would be a suite of localised development projects within these precincts for SDC to evaluate and decide whether to embark on,” Mr Chia added. Other plans include a “well-choreographed and comfortable” walking experience along the North-South link precinct. The consultant will also need to come up with proposals to enhance connectivity on the island, between the precincts as well as within them “to entice guests to walk and enjoy the island”. The project will be carried out in three phases and a different firm will be appointed as the consultant for each phase. Subsequently, these firms may form strategic partnerships with SDC to support precinct-planning over the next five years. Submissions will be evaluated based on a firm’s financial standing, resources and expertise, as well as track record. The EOI closes on Friday and shortlisted firms will be called to tender their proposals after evaluation. Sentosa has surpassed the 20-million mark in terms of annual visitors, its latest figures showed. Between April 1, 2012, and March 31 last year, a total of 20.5 million people visited the island. New attractions include a new night show called Wings of Time, which debuted at Siloso Beach in June. Other offerings in the pipeline include Singapore’s first Madame Tussauds wax museum, which is slated to open later this year. Next year, visitors can look forward to KidZania, an indoor theme park for children, and the world’s first double swing bungy. - CNA/cy Six new precincts among plans to enhance Sentosa’s appealSource: Today Online / Singapore SINGAPORE — Sentosa is calling for ideas to boost its appeal to visitors and its plans include creating six precincts, which will have distinct offerings that cater for different groups, out of its existing clusters. For example, the Palawan Beach precinct will be dedicated to family-centric activities, while the Siloso Beach stretch will feature “thrilling and adventurous recreational activities for the young and energetic”. The Imbiah Lookout precinct will feature nature and heritage, and the Fort Siloso and Siloso Point area, which includes the preserved coastal fort and the Underwater World Singapore attractions, will offer visitors a “learning journey”. The two other precincts singled out for enhancement are the North-South Link cluster, which connects Resorts World Sentosa and the beaches, and the Tanjong Beach area. The planning directives for each of the precincts were detailed in an Expression of Interest document (EOI) Sentosa Development Corporation (SDC) posted last month on the government procurement website GeBIZ, which was first reported in Chinese newspaper Lianhe Zaobao yesterday. SDC divisional director for property Benjamin Chia said the company is seeking consultancy services to “map its near- and mid-term development plans for the different precincts”. “The outcome of the consultation process would be a suite of localised development projects within these precincts for SDC to evaluate and decide on whether to embark on,” Mr Chia added. Other plans include a “well-choreographed and comfortable” walking experience along the North-South link precinct. The consultant will also need to come up with proposals to enhance connectivity on the island, between the precincts as well as within them “to entice guests to walk and enjoy the island”. The project will be carried out in three phases and a different firm will be appointed as the consultant for each phase. Subsequently, these firms may form strategic partnerships with SDC to support precinct-planning over the next five years. Submissions will be evaluated based on a firm’s financial standing, resources and expertise, as well as track record. The EOI closes today and shortlisted firms will be called to tender their proposals after evaluation. Sentosa has surpassed the 20-million mark in terms of annual visitors, its latest figures showed. Between April 1, 2012, and March 31 last year, a total of 20.5 million people visited the island. New attractions include a new night show called Wings of Time, which debuted at Siloso Beach in June. Other offerings in the pipeline include Singapore’s first Madame Tussauds wax museum, which is slated to open later this year. Next year, visitors can look forward to KidZania, an indoor theme park for children, and the world’s first double swing bungy. -By Kelly Ng http://www.channelnewsasia.com/news/singapore/six-new-precincts-among/1313598.html
http://www.todayonline.com/singapore/six-new-precincts-among-plans-enhance-sentosas-appeal Unlocking the value of homes for the elderly Close to 800 elderly households unlocked value of their homes after they sold part of their flat lease back to the Government under the Lease Buyback Scheme. More could benefit, as the Government is studying how to make it more convenient for retirees to get cash out of their flats. Source: Channel News Asia / Singapore SINGAPORE: 71-year-old Ahmad Parti is worried about being asset-rich but cash-poor. He is suffering from hypertension and gut problems, but is still working as a part-time gardener thrice a week. An HDB scheme provided some relief for Mr Ahmad. Under the Enhanced Lease Buyback Scheme, he and his wife were among the 300 households that unlocked S$44 million from their flats. At the time of the sale in June this year, their flat at Bedok North Street 3 was valued at S$320,000. The couple retained a 30-year lease on their flat, and sold the remaining lease back to HDB. They got S$134,000 and that was used to top-up their CPF Retirement Accounts. The couple then used the amount in their Retirement Accounts to buy a CPF annuity plan, which gives them S$790 cash per month. For participating in the scheme for lower-income households, the couple received a cash bonus of S$20,000. "I can use the money for needs like medicine and also for
daily use, as my pay is not enough for my daily expenditure and if there is
still balance, I will save it for use in the future when I get older and for my
medicine," said Mr Ahmad. Currently, only those who own three-room and smaller flats can
qualify for the scheme. But some say retirees could be concerned about
outliving the 30-year lease said MP for Chua Chu Kang GRC, Mr Zaqy
Mohamad. According to HDB, such cases will be dealt with individually. Appropriate housing arrangements will also be provided to those who are not able to pay for the lease extension. And for those willing to move to a smaller unit, there is also the Silver Housing Bonus. Retired nurse Choy Mui Leng tapped on the scheme by selling her four-room flat in Sengkang and buying a three-room in Punggol instead. Said the 66-year-old: "When you are getting old, it is very comfortable to stay in a small apartment, easy to manage." Taking S$68,000 from the proceeds, she topped up the CPF Retirement Accounts for her husband and herself. She gets to keep the remainder - about S$200,000 in cash. Lower-income elderly can receive up to S$20,000 cash bonus per household if they use some of their net sale proceeds to top up their CPF Retirement Account to receive a monthly income for life. The Chairman of the Government Parliamentary Committee for National Development and Environment, MP Lee Bee Wah thinks that the CPF component of these schemes may make it less attractive to some elderly as they will have to use part of their earnings to top up their CPF Retirement Accounts to meet the Minimum Sum. "Most of the Singaporeans I still find that, they would
rather change a bigger flat to a studio apartment and they want to take the one
big lump sum, so that they can keep the money," said Ms Lee. The HDB said 92 households have benefitted from the Silver Housing Bonus scheme since it was implemented in February last year. Earlier this year, the Government said it was studying the reverse mortgage scheme as an additional option to help the elderly in Singapore monetise their flat. The scheme allows the flat owner to borrow money using his home as a collateral, and still retain full lease of the flat. The loan is then repaid with interest upon termination of the loan, or death, typically from the sales proceeds of the house. - CNA/ly http://www.channelnewsasia.com/news/singapore/unlocking-the-value-of/1313110.html Real Estate Companies' Brief Absence of fair-value gain hits Centurion Q2 profit Q2 earnings down 86% despite surge in revenue, higher gross profit margin Source: Business Times / Companies CENTURION Corp's second-quarter net profit plunged 86 per cent to S$7.69 million from the year-ago period's S$56 million, which included a fair-value gain on investment properties of S$36.43 million. Earnings per share fell to 1.02 Singapore cents from 7.41 Singapore cents. Revenue for the April-June quarter surged 41 per cent to S$19.88 million, as its accommodation business reported healthy revenue growth.
But cost of sales rose just 9 per cent to S$6.87 million resulting in gross profit jumping 66 per cent to S$13.01 million. -By Nisha Ramchandani Views, Reviews & Forum Punggol residents can look forward to more facilities Source: Straits Times / Forum Letters WE THANK Mr Lee Kok Lin for his letter ("Punggol sorely lacking in basic amenities"; July 30). Amenities in HDB towns are planned comprehensively from the onset and developed progressively as the towns grow. In the case of Punggol, residents can look forward to more amenities and facilities within their town. Over the next few years, Punggol Town Centre will be transformed into a vibrant hub. A major retail mall, Waterway Point, will be completed by the end of next year. This will be followed by the Punggol Town Square, a community gathering space located next to Waterway Point. There are also plans for other facilities within the town centre, including a community club, regional library and hawker centre. A new food and beverage development at Punggol Point, The Punggol Settlement, has recently been completed and some stalls have commenced operations. A commercial centre and a primary care facility along Punggol Drive, near Oasis LRT station, will also be up and running within the next few years. As for sports and recreational facilities, residents can look forward to the Safra Punggol clubhouse, targeted for completion by 2016. A new Regional Sports Centre, catering to a wide range of competitive sports and events, will also be integrated with Punggol's waterways and adjoin the Safra Punggol clubhouse. We will continue to provide well-placed and comprehensive amenities to better serve the needs of residents. Chong Fook Loong Director (Urban Design Department 1) Housing & Development Board Mark Goh Director (Physical Planning, North East)
Urban Redevelopment Authority Global Economy & Global Real Estate London property boom losing momentum Buyer enquiries in biggest fall since 2008, says chartered surveyors body Source: Business Times / World [LONDON] Momentum behind London's property boom appears to be fading, according to a survey yesterday that added to signs that rapid house price growth in Britain is starting to moderate. The Royal Institution of Chartered Surveyors' monthly house price balance eased to 49 last month, its weakest reading since February, slightly below forecasts in a Reuters poll of economists. June was revised downwards slightly to 52. Weakness centred on London, the survey showed.
Sales and new buyer enquiries in the capital fell more sharply than elsewhere in the country, with a net balance of just 10 per cent of London respondents reporting rising prices - down from 30 per cent in June. -From London, UK http://www.businesstimes.com.sg/premium/world/london-property-boom-losing-momentum-20140815 Modular home builder in Brooklyn hard-pressed to find new home Location is main edge because transportation is costly in this business Source: Business Times / Property [NEW YORK] Across from the Barclays Center sit hundreds of apartments built at a factory in the Brooklyn Navy Yard. They are not part of the Atlantic Yards development, where Bruce Ratner is assembling a 32-storey tower, which will be the tallest factory-made building in the world. Instead, the apartments are inside 32 red brick, three-storey rowhouses and were built by a company called Capsys. Each home uses three modules, one per storey.
The homes look a century old but opened in 2002, a decade before Mr Ratner decided to try to build the first of his Atlantic Yards towers through modular construction. -From New York, US HK-listed firm plans casino in Saipan Source: Business Times / Property [HONG KONG] An investor in one of Macau's largest junket operators plans to build a US$3 billion casino resort complex in the western pacific island of Saipan amid sluggish growth at home, the world's biggest gambling market. Hong Kong-listed Imperial Pacific International Holdings Limited, which invests in the Hengsheng Group junket, said yesterday that it was looking for a property in Saipan to build the integrated resort after being granted a 25-year casino licence by the government of the Commonwealth of the Northern Mariana Islands. The casino would be the first large-scale integrated resort on Saipan, the largest island in the US commonwealth that is a five-hour flight from Shanghai.
Like other junket operators, Hengsheng is trying to diversify away from Macau, as growth in the world's biggest gambling market slows this year. -From Hong Kong, China http://www.businesstimes.com.sg/specials/property/hk-listed-firm-plans-casino-saipan-20140815 London leads UK housing slowdown Surveyors cut price growth forecasts as stricter lending rules weigh on market Source: Business Times / Property [LONDON] Bank of England policymaker David Miles said that London's property market is showing signs of cooling as an index of values in the capital, published yesterday, slipped to a three-year low. "The latest indicators are that things are cooling a little bit in London, prices were rising very rapidly," he said on BBC Radio 4. "Some of the forward-looking indicators look a bit cooler" and the monetary policy committee's view is that across the country "the overall rate of increases in house prices probably will slow down a bit". An index of values in London dropped to 10 from 30 in June, the Royal Institution of Chartered Surveyors (RICS) said yesterday. That's the lowest since March 2011. The report also showed that surveyors have cut their forecast for price growth as stricter lending rules and the prospect of increased borrowing costs weigh on the market.
Last month, demand in the capital fell at the fastest pace in six years, RICS said, after a surge in prices over the previous year stretched affordability and prompted concern that a bubble may be forming. BOE governor Mark Carney announced measures in June to curb a buildup of housing debt that officials said posed a risk to Britain's recovery. -From London, UK http://www.businesstimes.com.sg/specials/property/london-leads-uk-housing-slowdown-20140815 Dubai's top two builders turn to bank borrowings Bill delays, cost overruns to blame; working capital coming under pressure Source: Business Times / Property [DUBAI] Dubai's two biggest builders are turning to bank borrowing to help fund projects as a rise in late payments from their customers takes the shine off a booming construction market. Arabtec Holding PJSC, the contractor that helped push Dubai stocks into a bear market in June, said that money owed by clients rose to 8.8 billion dirhams (S$2.98 billion) through the second quarter from 7.2 billion dirhams at the end of last year. Drake & Scull International, the emirate's second-largest publicly traded builder, took two term loans totalling about 199 million dirhams in the first half, according to its financial statements. While both builders are benefiting from rising orders, the need to borrow from banks means costly interest payments and could slow the completion of projects, according to analysts. A rapid expansion of Arabtec's backlog has added to the company's arrears, while delays for redesigns and cost overruns in Saudi Arabia are hurting cash flow and profitability at Drake & Scull.
"The payment situation for contractors hasn't improved since the beginning of 2013" even as the Dubai economy strengthens, said Taher Safieddine, an analyst at Shuaa Capital in Dubai, on Wednesday. "Working capital is continuously under pressure, which is forcing contractors to go to the banks to cover the shortfall." -From Dubai, UAE Xi’s graft crackdown drives funds into Aussie property China’s wealthy concerned about being investigated — one of the most visible signs of fear in the country Source: Today Online / China SYDNEY — More wealthy Chinese are moving their money out of China to invest in Australia’s property market as a corruption crackdown in the world’s second-biggest economy gathers momentum, said property consultants and lawyers. They added that their clients had told them they had legitimate funds to invest, but were concerned about being caught up in a probe, which, in China, often delves into the affairs of associates of the main target, and losing that wealth. “What we see at the moment is that there are more Chinese who would likely send more money out of the country, so they don’t get caught up in this crackdown,” said Mr David Green-Morgan, global capital markets research director at real estate services firm Jones Lang LaSalle (JLL). Such concern among China’s wealthy is one of the most visible signs of fear in the country due to President Xi Jinping’s 18-month-old drive against pervasive graft, which he has said threatens the Communist Party’s survival — a fear that is causing some officials to take their own lives. Beijing’s campaign has particularly targeted so-called “naked officials” — the term for state employees whose spouses or children live overseas. Those officials are generally suspected by the party of using such connections to illegally move assets. Ordinary Chinese citizens can legally transfer only US$50,000 (S$62,300) overseas each year, but vast sums leak out of China through a variety of loopholes, such as money being funnelled through Hong Kong. “The restrictions in China are becoming more onerous,” said Mr Green-Morgan. “That has triggered an increase in the amount of money that’s looking to move out of China, or probably is already outside China and is looking to be spent.” Australian property has long been a popular choice for Chinese money — both legitimate and illegitimate — but the flow of investment appears to have accelerated of late. China was the No 1 source of foreign capital investment in Australia’s real estate last year, said Australia’s foreign investment review board. It received approvals to invest nearly A$6 billion (S$6.96 billion) in the sector, up 41 per cent from a year ago. China is expected to see an annual growth of 20 per cent in outbound real estate investment in the next decade, up from US$11.5 billion last year, property agent Savills has forecast. That will help push Chinese demand in Australian property by 15 per cent over the next 12 months, said co-CEO Andrew Taylor of Juwai.com, the largest real estate portal that targets Chinese buyers looking abroad. Wealthy Chinese have long been pouring money into real estate in major cities in North America, Europe, Asia and Australia, including New York, London and Sydney. However, some markets are becoming less attractive to Chinese investors: A 15 per cent stamp duty introduced for foreign buyers in Hong Kong and Singapore, where cash-rich mainland Chinese have been blamed for driving up prices, has cooled interest, while Canada recently cancelled its Immigrant Investor Program, popular with wealthy Chinese. Australia, in contrast, may ease rules on a visa scheme aimed at luring investment from wealthy Chinese after complaints that disclosure requirements are too strict, lawyers and migration agents have said. Australia is now the second-most-favoured destination for Chinese property buyers, behind the United States, but ahead of Canada and Britain, said Juwai. Australian real estate portals Century21 and Fairfax Media’s Domain.com have launched Chinese-language websites, while REA Group recently announced that SouFun, a major real estate online marketplace in China, would carry Australian listings. Australian developers are also flying to China to promote their properties. Property investment in Australia provides an emigration option to Chinese buyers and can establish a base for their children’s education in an English-speaking country. It also offers the kind of robust, independent legal system sought by those looking to shield their assets from the Chinese authorities. “A somewhat more disturbing motivation for emigration and shifting capital out of China is that many are seeking protection of their wealth for both economic and political reasons,” said CLSA’s Andrew Johnston without elaborating. Reuters http://www.todayonline.com/chinaindia/china/xis-graft-crackdown-drives-funds-aussie-property Swire Properties’ Profit Beats Estimate on Rents, Home Sales Source: Bloomberg / Luxury Swire Properties Ltd. (1972), Hong Kong’s second-biggest office landlord, said first-half underlying profit rose 34 percent, beating analysts’ estimates, on higher rental income and an increase in home sales. Underlying profit, which excludes revaluation gains, was HK$3.78 billion ($488 million) in the six months ended June 30, compared with HK$2.81 billion a year earlier, the company said in a statement to the Hong Kong stock exchange. That compares with the HK$3.16 billion median estimate of four analysts surveyed by Bloomberg News. Swire Properties is planning to spend at least HK$10 billion over the next few years to revamp its cluster of office properties in eastern Hong Kong Island, creating an alternative to the Central business district. The company, which is the biggest office owner in the city after Sun Hung Kai Properties Ltd., said demand for its properties has improved as mainland Chinese companies and existing tenants rent more space. The company’s office portfolio “is expected to show further improvement with modest additional demand for office space in the central district and continued firm rental levels on renewals at Island East,” Chairman John Slosar said in the statement. Shares of Swire Properties advanced 1.2 percent to HK$26.15 as of 1:43 p.m. in Hong Kong, reversing an earlier 0.4 percent decline. That compared with the 0.1 percent increase in the benchmark Hang Seng Index. The shares have gained 33 percent this year. Office RentalGross rental income from its offices, totaling about 12 million square feet, rose 6.5 percent to HK$2.79 billion, the company said. Swire Properties raised rents by 27 percent in the first half at Island East, less than the 51 percent increase during the same period a year earlier, according to a filing last month. Banks have moved some of their staff to Island East, about a 15-minute subway ride from Central, where rent is cheaper by about half. Royal Bank of Scotland Group Plc, which is giving up half of its Central office, is moving most of its staff outside its private banking unit to the area, people with knowledge of the matter said this month. Luxury HomesEarnings from home sales more than doubled in the first half to HK$807 million as the company booked profit from Hong Kong luxury residences including Mount Parker Residences and Argenta, it said. Residential transactions in the city have been recovering from lows last year, after the government stepped up cooling measures, driven by developers offering discounts for new projects and low interest rates. Home prices hit a record last week, bringing this year’s gain to 4.2 percent, according to a weekly index compiled by Centaline Property Agency Ltd. “Demand for luxury residential properties in Hong Kong has picked up over the last three months, a trend that is likely to continue into the second half,” Slosar said. First-half gross income from its retail properties, which comprise six malls in Hong Kong, Beijing, and Guangzhou, rose 8 percent to HK$2.09 billion, Swire Properties said. Hong Kong’s retail sales dropped for five straight months through June, led by declines in sales of jewelry and watches, as visitor arrivals from mainland China are moderating. Retailers are becoming more cautious but it’s not expected to have a “significant adverse effect” on the company’s malls, Slosar said in the statement today. -By Michelle Yun Australia Lures Foreign Buyers Driving Deals: Real M&A Source: Bloomberg / News A buying spree in Australia by foreign acquirers may drive dealmaking this year to the highest level since 2007. Overseas buyers struck a record $40 billion of deals for Australian businesses last quarter. They included David Jones Ltd., Australia’s oldest department store, and developer Australand Property Group. (ALZ) The wave is continuing into the second half, with Roc Oil Co. targeted by a Chinese acquirer, and the next targets may include retailer Myer Holdings Ltd. (MYR) and beverage company Coca-Cola Amatil Ltd. (CCL), according to Credit Suisse Group AG. The buyers, from China to Singapore and South Africa, are betting a nation with one of the developed world’s fastest-growing populations will extend 23 consecutive years of economic expansion. The interest from offshore buyers is putting 2014 on course to be the biggest for merger activity in Australia in seven years. “We’re seeing more transactions at the moment than we have over the past several years,” Gary Nicholson, a Melbourne-based partner and deals specialist at Ernst & Young Global Ltd., said by phone. “In Australia, the transaction cycle has turned. Foreign investors do see Australia as a safe place to invest.” Foreign buyers targeted Australian companies in 149 deals in the second quarter of 2014. The $40 billion of announced transactions by overseas acquirers were the most on record for any three-month period, according to data compiled by Bloomberg. Deal ConfidenceThis month, China’s Fosun International Ltd. agreed to buy Roc Oil for A$474 million ($442 million), ending the Sydney-based company’s plan to combine with domestic peer Horizon Oil Ltd. The next day, South Africa’s Woolworths Holdings Ltd. completed the A$2.15 billion purchase of David Jones it announced in April. Last week, Singapore’s Frasers Centrepoint Ltd. took control of Australand and Cheung Kong Group won the contest for Australian gas company Envestra Ltd. “When the home markets of these foreign companies are doing well, that is likely to give them added confidence to invest in other markets, including Australia,” said Anthony Sweetman, Sydney-based head of investment banking at UBS AG. “The U.S. is getting better all the time, and Asia has been traveling well for some time.” U.S. gross domestic product rose at a 4 percent annualized rate in the second quarter, exceeding economists’ forecasts. Japan aside, Asia’s five largest economies all grew at least 3.5 percent in their most recent quarters while China recorded expansion of 7.5 percent, data compiled by Bloomberg show. Growth, StabilityIn Australia, the economy is poised to expand by as much as 3 percent in the year through June 2015, the central bank said last week. The country is “highly attractive” to foreign acquirers, said Nigel Lake, joint chief executive officer of Sydney-based advisory firm Pottinger Co. “It is relatively high-growth and it is relatively stable.” Myer, which last year proposed merging with David Jones before the chain was bought by Cape Town-based Woolworths, may itself be targeted by an international retailer, Credit Suisse analysts led by Hasan Tevfik in Sydney said in a report last month. Myer has a market value of about A$1.4 billion. A potential buyer for the A$7.3 billion Coca-Cola Amatil may be SABMiller Plc (SAB)after it bought Australian brewer Foster’s Group Ltd. in 2011, Tevfik said. A spokeswoman for Melbourne-based Myer declined to comment on any potential takeover. A spokeswoman for Coca-Cola Amatil didn’t return a call seeking comment, while a representative for London-based SABMiller declined to comment. Not CheapAustralia is luring buyers even if its assets are pricier than those in other markets, said David Wood, Sydney-based head of investment banking for Australia at Bank of America Corp. Australia’s benchmark S&P/ASX 200 (AS51) Index is at a seven-year high, when measured against the profits generated by its member companies, according to data compiled by Bloomberg. Those companies are fetching about 11 times their earnings before interest, taxes, depreciation and amortization in the previous 12 months, taking net debt or cash into account. On the MSCI Emerging Markets Index, the multiple is 7.9. “I wouldn’t say Australian companies are cheap on a global basis, but it comes down to the rarity of quality,” Wood said by phone. Developed markets “are very attractive places for companies to spend.” Wine BuyoutThis week, Treasury Wine Estates Ltd. (TWE), the Australian maker of Penfolds Grange, said a second buyout firm had matched a A$3.4 billion proposal from New York-based KKR & Co. and Rhone Capital LLC. A person familiar with the matter named TPG Capital as the suitor. Both firms have been given access to Treasury’s accounts. Worldwide, private-equity firms sat on a record $1.16 trillion of capital as of July, according to London-based research firm Preqin Ltd. It’s not just offshore entities fueling deal activity. Australian buyers are also targeting acquisitions, some overseas. Australian hospital operator Ramsay Health Care Ltd. (RHC) plans to use debt to fund a joint takeover of Paris-based rival Generale de Sante SA. The purchase will cost Ramsay 429 million euros ($5743million), it said in June. Sydney-based Aristocrat Leisure Ltd. (ALL) last month agreed to buy Franklin, Tennessee-based Video Gaming Technologies Inc. for about $1.3 billion in a debt-funded deal. Whether Australian companies are the buyers or the targets, merger activity is likely to keep going strong, according to Nicholson at Ernst & Young. “We’re at the front end of a significant period” for takeovers, he said. -By Angus Whitley and Brett Foley http://www.bloomberg.com/news/2014-08-14/australia-lures-foreign-buyers-driving-deals-real-m-a.html San Francisco Office Rents Seen Topping Manhattan in 2015 Source: Bloomberg / Tech San Francisco is poised to surpass Manhattan as the most expensive U.S. office market next year as technology companies extend a surge in leasing, according to CBRE Group Inc. (CBG), the largest commercial real estate brokerage. Office costs in San Francisco are soaring at the fastest rate in the country, CBRE said in a report this week on the effects of the technology industry on commercial property. The firm estimates that average rents in the West Coast city will rank as the priciest by the end of 2015 -- the first time it would exceed New York since the dot-com bubble in 2000. Technology companies have dominated U.S. corporate leasing since the last recession ended in 2009, accounting for one out of four U.S. office-using jobs, CBRE said. In San Francisco, the industry’s hub, almost three-quarters of tenant deals this year through June were signed by tech firms as social media, data-storage and mobile-application startups expand. “We expect tech’s growth potential to remain strong for the next two years and lead expansion in concentrated areas throughout the country,” Colin Yasukochi, CBRE’s research and analytics director in San Francisco, said in a phone interview. San Francisco office rents will climb to $69.71 a square foot by the end of next year, up almost 18 percent from $59.28 in the second quarter, Yasukochi said. Manhattan rents will grow at about a third of that rate, rising 6.5 percent to $69.68. Banks LagLeasing demand in New York from financial firms, the traditional core, has lagged technology, media, advertising and information companies, which accounted for 41 percent of new office jobs from 2011 to 2013, CBRE said. In San Francisco, hiring at companies such as Salesforce.com Inc. and Twitter Inc. helped tech represent 56 percent of new jobs, CBRE said. San Francisco’s economy is also benefiting from growth at health-care and education companies and restaurants as well as in tourism and construction, said Ben Rosenfield, the city’s controller. “Even industries that have been flat such as manufacturing are hiring,” he said in an Aug. 4 interview. The last time San Francisco’s office market saw such growth was during the boom in Internet stocks that peaked in 2000. The city led all U.S. markets starting in 1999, with average rents soaring 79 percent in a year to $73.64 in 2000, before rates crashed to $31.04 at the end of 2001, CBRE data show. This time is probably different, the company said. "At the heart of high-tech’s growth is strong demand for products and services from consumers,” Los Angeles-based CBRE said in its report. “As long as high-tech companies align themselves with this demand, the unrealistic growth and valuation expectations that defined the dot-com bubble should be avoided.” -By Dan Levy |