Singapore Real Estate Bulk of Farrer Sq medical suites taken up in 2 deals HSC of M'sia said to buy three levels as S'pore group leases another three levels Source: Business Times / Top Stories [SINGAPORE] Nearly 85 per cent of the 27,500 sq ft at the medical tower of the Farrer Square project in Little India has been committed in two bulk deals. One involves a bulk sale of three floors and the other, a long-term lease of another three levels. Farrer Square's medical suites will span the upper eight levels of a 12-storey tower in the project, which will also include a 20-storey hotel with 300 rooms.
BT understands that the bulk sale, involving the lowest three levels of medical suites - on Level 5 to Level 7 - was done at slightly over S$44 million. This would work out to around S$3,800 per square foot (psf) of the total strata area of 11,674 sq ft, based on information listed in the project's brochure. -By Kalpana Rashiwala New-look Suntec City starts drawing crowds Sales up at reopened sections; $410m makeover in final phase Source: Straits Times / Singapore BUSINESS has picked up for several restaurants and shops at Suntec City, as its $410 million makeover enters the final phase of a 21/2 year revamp. Sales for eight eateries and stores in the mall's new West Atrium and near the Fountain of Wealth have risen by about 10 per cent to 20 per cent in the first half of the year. Among them are mid-range Western restaurants Peperoni Pizzeria and L'Entrecote, and Muthu's Curry, an old-timer at the mall since 2006. Said Muthu's Curry's director of operations, Mr Srinivasan Ayyakkannu, 36: "We suffered a massive drop in sales of about 35 per cent during the six-month renovation period from end 2012 to May last year. But our customers have certainly increased now. "Before the renovations, our 120-seater restaurant would be only one quarter full during dinner time on weekdays. Now, we have 160 seats which are at least three quarters occupied." When The Straits Times visited the mall last weekend, queues of about 10 people were spotted at restaurants such as Din Tai Fung and Ramen Dining Keisuke Tokyo in the West Atrium. There were also long queues at the eateries near the Fountain of Wealth. The walkways in both areas were crowded with families and young people. Tenants in the area estimated that the mall's foot fall has risen by about 20 per cent this year compared to last year. Suntec City Mall and its convention centre have been undergoing renovations in three phases since June 2012. The West Atrium, which opened in June last year, fell under Phase 1. It features F&B outlets and high street fashion brands like H&M and Uniqlo. Phase 2 in the East Atrium, which opened two months ago and focuses on entertainment, includes a karaoke outlet, an indoor playground and Toys 'R' Us. A Golden Village multiplex with 11 screens will open there in November. The final stage of the revamp is slated for completion by the end of this year. While the mall has yet to announce the line-up of tenants for this phase, most of the shops will be flagship stores, said Ms Susan Sim, deputy chief executive of Suntec Reit, which owns Suntec City Mall. They will include brands that are new to the Singapore market. Despite the larger crowd, however, some businesses did not make it. Two high-end restaurants, Oushin Steakhouse by the Akashi Group and Le by the Paradise Group, both located in the West Atrium, closed in April and July, respectively. One reason for their closures could be the inability to attract their target clientele as they were located among mid-range restaurants and shops, said retail expert Samuel Tan, course manager for retail management at Temasek Polytechnic. Stores near the middle of the mall between Office Towers 1 and 2, which has been hoarded up for the last phase of the revamp since February, are also not getting the foot fall or sales they expected. Adore Cosmetics said foot traffic to its store has fallen by up to 50 per cent since the renovation started. On tenants' request for more advertising and promotion (A&P) events, Suntec Reit's Ms Sim said that the management's A&P efforts have been strategically focused based on tenant mix so far. Meanwhile, some retailers are doing their own promotions. Said The Travel Store marketing manager Embre Kew: "Our store has been doing okay so far, but we plan to come up with our own marketing activities and collaborate with other tenants related to attractions and travel by the end of this year."
Since the completion of the first two phases of upgrading, Suntec City Mall has had a committed occupancy rate of 97.6 per cent, with about 220 tenants. The number will go up to about 300 when the mall is fully open by early next year. -By Cheryl Faith Wee & Tjoa Shze Hui OCBC in talks to sell United Engineers Source: Business Times / Top Stories [SINGAPORE] OCBC Bank is talking to Thai billionaire Charoen Sirivadhanabhakdi to sell its stake in United Engineers Ltd (UEL), according to sources. UEL yesterday jumped 17 Singapore cents or 7.4 per cent to S$2.46 before trading in the counter was suspended at 11.13am. After market close, OCBC and its 87 per cent insurer unit Great Eastern Holdings issued a statement saying "they have been approached by a party in connection with a possible transaction relating to their combined stakes in UEL and WBL Corporation which may or may not lead to an offer for the shares of UEL and WBL". Last year, UEL bought WBL in the largest local takeover which valued WBL at S$1.25 billion. OCBC, Great Eastern Holdings (GEH) plus the bank's founding family shareholder, the Lee group own a combined 34 per cent in UEL. "Discussions are preliminary at this stage and shareholders of OCBC Bank and GEH are advised that there is no certainty that any transaction or agreements will be entered into pursuant to these discussions," the statement said. UEL also released a statement which said that it understands the talks are at a preliminary stage. It added that it is "in advanced stages of discussions regarding the sale of a non-core business" with no certainty that a deal may be struck. "It's very, very early days . . . they approached us . . . before the rights issue," said a source who confirmed that the party is Mr Charoen. Morgan Stanley is believed to be acting on behalf of Mr Charoen, the richest man in Thailand and who has been on a buying spree in the last couple of years. The proposed UEL sale is no surprise given that OCBC had just completed its S$6.2 billion acquisition of Hong Kong's Wing Hang Bank and launched on Monday a S$3.3 billion rights issue to pay for the deal. OCBC's senior executives had stressed that the bank's capital - with the incoming proceeds from the fully underwritten rights issue - will be at prudent levels and does not need to rely on sales of non-core assets to boost it further. Samuel Tsien, OCBC chief executive had said on Monday that it will divest its non-core assets, mainly in Singapore and Malaysia with perhaps some from Wing Hang. He added that the bank is not in a hurry and sales will only take place when "we can achieve the right value". Observers noted that if the UEL sale does transpire, it will help boost the bank's capital, but more is needed and they expect further divestments from OCBC's vast property interests which includes a hotel and shopping mall in Orchard Road worth S$618 million. According to UEL's annual report, the participating fund of GEH owns 12.6 per cent. It's not clear how much OCBC owns, but it's believed to be about 4 per cent. Based on UEL's market value of S$1.5 billion on Wednesday, the sale might reap S$60 million. GEH could pay a special dividend from the sale and one analyst estimated that it may add S$160-S$190 million to OCBC's coffers. "We estimate that OCBC's sale of its UEL stake will boost its core tier 1 ratio by only 10-11 basis points though it is the first progressive step towards raising its capital buffer," said Kenneth Ng, CIMB bank analyst. "We maintain our add rating and look forward to further sales of non-core assets," he said. OCBC is estimated to require an additional S$3 billion of capital come December 2018 to comply with the new Basel III capital requirements. According to Bloomberg, companies backed by Mr Charoen have announced US$4.5 billion of acquisitions this year. GEH, OCBC Bank and Lee Rubber in 2012 sold stakes in Asia Pacific Breweries and Fraser and Neave to Mr Charoen for S$3.2 billion.
OCBC closed yesterday up six Singapore cents to S$10.44. -By Siow Li Sen UE stock soars on talk OCBC may sell its stake Report suggests Thai tycoon is eyeing bank's holdings in developer Source: Straits Times / Top of The News SPECULATION that OCBC could sell its stake in United Engineers (UE) to Thai tycoon Charoen Sirivadhanabhakdi sent the property developer's shares soaring yesterday. UE's stock hit a high of $2.49 in just over two hours of trade yesterday before it called for an immediate trading halt at 11.13am. The stock last changed hands at $2.46 apiece, 17 cents or 7.4 per cent above Wednesday's closing price of $2.29. The price jump also prompted a query from the Singapore Exchange (SGX). UE said after markets closed that its controlling shareholders, OCBC and insurer Great Eastern, have been approached by a party over the possible sale of their combined stakes in the firm. A Bloomberg report speculated that Mr Charoen, who has struck some huge deals with OCBC in the past, has been in talks with the bank over buying its UE holdings. OCBC and Great Eastern, together with parties acting in concert with it, such as the bank's founding Lee family, hold a combined interest of just over 30 per cent in UE. Any deal involving more than 30 per cent of a listed firm's capital triggers a mandatory takeover offer. UE also said in response to the SGX query that it is "in advanced stages of discussions regarding the sale of a non-core business". OCBC and Great Eastern also announced that they have been approached about a possible transaction involving their stakes in UE, though they added that discussions are at a preliminary stage. No mention was made of who the interested party may be, but the Bloomberg report named Mr Charoen, citing people familiar with the matter. This would not be the first time that OCBC has done business with the Thai billionaire. The bank sold its holdings in Fraser & Neave and Asia Pacific Breweries to parties linked to Mr Charoen in 2012. Market players were not surprised that OCBC could be divesting its stake in UE given that it is looking to raise capital to fund its purchase of Hong Kong's Wing Hang Bank. OCBC has previously divested non-banking stakes, including those in Raffles Hotel and Robinson & Co, to focus on its core business. Voyage Research investment analyst Yew Meng Hau said Mr Charoen could be looking to beef up his property assets. "Over the past few years, Mr Charoen has made huge acquisitions and UE also has a strong property development arm, so that could be a reason for his interest in UE." Mr Yew added that one potential non-core business that UE may sell is its construction and engineering unit, though it is still too early to tell for now.
OCBC shares closed up six cents at $10.44 yesterday while Great Eastern was unchanged at $23. -By Mok Fei Fei Singapore Supreme Court Builder in Play as Shares Rally Source: Bloomberg / News United Engineers Ltd. (UEM) may be poised for a takeover after Oversea-Chinese Banking Corp. (OCBC) said it’s in talks to sell its stake in the Singapore property and construction company. OCBC, Southeast Asia’s second-largest lender, and its insurance unit Great Eastern Holdings Ltd. (GE) were approached about a possible offer for their United Engineers shares, they said in a joint stock exchange filing yesterday without naming the suitor. Thai billionaire Charoen Sirivadhanabhakdi is in talks to buy the holding, Bloomberg News reported yesterday. The discussions are at an early stage, according to the announcement. OCBC, Great Eastern and the bank’s founding Lee family together own 34.1 percent of United Engineers, according to a filing in August last year. Buying more than a 30 percent stake would trigger a mandatory takeover offer for the company under Singapore rules. United Engineers shares jumped as much as 14 percent in early trading in Singapore, the biggest gain in five years, after being suspended following a 7.4 percent increase yesterday. The two-day rally pushed the company’s market value to S$1.77 billion ($1.4 billion). Selling the stake would help OCBC bolster capital after its $5 billion takeover of Hong Kong’s Wing Hang Bank Ltd. this year. Companies backed by Charoen have announced $4.5 billion of acquisitions this year, data compiled by Bloomberg show. OUE InterestIn 2012, OCBC entered talks to sell its holdings in Fraser & Neave Ltd. and Asia Pacific Breweries Ltd. to Charoen’s Thai Beverage Pcl. That touched off a three-front bidding war for the two companies, with Heineken NV eventually buying Asia Pacific Breweries and Charoen beating out OUE (OUE) Ltd. for Fraser & Neave in deals that totaled $15 billion, data compiled by Bloomberg show. “The F&N takeover demonstrated that Charoen is a savvy investor who will not overpay for assets,” said Xuan Tan, an analyst at CIMB Group Holdings Bhd., in a note yesterday. “In the long term, the assets offer enhancement potential. Although the discussions are still at an early stage, we think that there is a high likelihood of this transaction coming true.” Tan raised her target price for United Engineers to S$2.53 from S$2.22. OUE had earlier expressed interest in OCBC’s stake in United Engineers, though those talks are no longer active, said one of the people. OCBC and its units also control 69 percent of the company’s preference shares, according to United Engineers’ latest annual report. Charoen’s EmpireSoammaphat Traisorat, chief executive officer of Charoen’s Bangkok-based TCC Land Co. unit, didn’t respond to phone calls or e-mails seeking comment. Spokesmen for OCBC and OUE declined to comment. United Engineers shares traded at S$2.77 at 11:08 a.m. local time. The average price in the two months before Bloomberg News first reported on OCBC’s talks was S$2.35, data compiled by Bloomberg show. Charoen is Thailand’s richest man with a $12.7 billion fortune, according to the Bloomberg Billionaires Index. He controls an empire whose businesses span industries from beer to property development. Frasers Centrepoint Ltd., a developer controlled by Charoen, succeeded this month in gaining control of Sydney-based Australand Property Group in a $3.4 billion deal, according to data compiled by Bloomberg. His consumer goods distributor, Berli Jucker Pcl, agreed Aug. 7 to buy Metro AG’s wholesale stores in Vietnam for $874 million including debt. Asset SalesUnited Engineers, which bought Singapore-based builder WBL Corp. last year for $725 million including debt, was founded in 1912 as an engineering company that helped build Singapore’s Shangri-La hotel and historic supreme court. The company last week said second-quarter profit doubled as it booked income from recently completed residential properties. United Engineers’ properties includes the UE Square shopping mall in central Singapore, and it owns real estate projects in five Chinese cities through WBL, according to the companies’ websites. United Engineers agreed to sell its MFS Technology business this month for S$124 million, and its engineering unit said in March that its parent was in talks to sell its stake. United Engineers is also divesting its luxury-car dealership, according to people familiar with the matter. OCBC Chief Executive Officer Samuel Tsien said this week that he’ll look to sell “non-core” assets following the Wing Hang purchase. The Singaporean bank plans to raise S$3.4 billion by selling shares to existing investors to replenish capital after the acquisition. -By Joyce Koh http://www.businesstimes.com.sg/premium/top-stories/ocbc-talks-sell-united-engineers-20140822
Greener pastures lie overseas, says Oxley CEO Developer eyeing Europe, Myanmar; full-year profit soars to S$286.7m Source: Business Times / Companies OVERSEAS pastures look greener now for home-grown developer Oxley Holdings, which has set its eyes on recovering markets like Europe and emerging markets such as Myanmar. The group, which yesterday announced a quadrupling of net profit for the year ended June 30 to S$286.7 million, is now in talks on a mixed development site in Europe. Oxley chairman and chief executive Ching Chiat Kwong said he hopes to make an announcement in the next quarter if a deal in Europe materialises.
"Two years ago, we have already decided not to participate in any land deals in Singapore because of the (cooling) measures," Mr Ching said. "We are still exploring further opportunities along the way in other countries, especially regionally." -By Lynette Khoo The cost of living near Singapore’s international schools Source: Today Online / Business In its recent annual cost-of-living survey, global human resources consulting firm Mercer ranked Singapore as the fourth-most expensive city in the world for expatriates and the second-most expensive in Asia. A large chunk of an expat’s household budget goes to schools and housing. An international school can cost tens of thousands of dollars a year, while the rent to house a family of a mid-level manager can amount to more than S$10,000 a month. In the past, corporations defrayed much of these costs, providing expat families with school and housing allowances. International schools and landlords were the big beneficiaries of these generous allowances. In many cases, the host company paid the full tuition and rent directly to the school and the landlord. Landlords were delighted to win these deals because a typical contract was with the tenant’s company, which essentially guaranteed that rent was paid on time and in full. However, during the global financial crisis, this practice changed. Many companies in Singapore did away with the generous expat packages and put their foreign employees on local terms. This means that more and more expats are now paying for housing and schools out-of-pocket. The result is that expats are becoming more cost-conscious, now that it is their money going towards housing and schools. This is bad news for landlords and international schools, but good news for those looking for homes near these schools now that rents and prices are under pressure. In an earlier commentary in TODAY (“Rents in affluent areas suffer from outward migration”), I showed that expats had been moving further away from the Core Central Region in search of lower rents. The Singapore Real Estate Exchange (SRX) Price Index for Non-landed Rentals showed that rents in July had fallen 7.3 per cent from their peak of January last year. This is a 38-month low since May 2011. The prices and rents of homes near international schools vary from very expensive to reasonable. The SRX monitors the cost of renting and buying in neighbourhoods within 2km of 56 Singapore international schools, and the data can be found athttp://srx.com.sg/singapore-international-schools. The category leaders for sale and rental price per square foot (psf) are shown here. As you can see from the table, Insworld is located in the most expensive neighbourhood for buying or renting a landed home. It will cost you more than S$3 million per 1,000 sqf of land to buy there. As for the private condominiums, the most expensive area to buy is near the Norwegian Supplementary School. Within 2km, the median transacted price is about S$1.8 million per 1,000sqf. It will cost you close to S$5,000 per 1,000 sqf to rent near Eton House International School at Outram, making this the most expensive neighbourhood for renting a home near an international school. The least expensive neighbourhoods to rent or buy (in certain property types) are near Chatsworth Kindergarten in District 28, One World International School in District 16, and Singapore American School in Woodlands (District 25).
Sam Baker is co-founder of SRX, an information exchange formed by leading real estate agencies in Singapore to disseminate market pricing information and facilitate property transactions. -By Sam Baker Despite slow sales, Singapore retail sector ‘not in crisis’ Source: Today Online / Business SINGAPORE — Retailers in the Republic may be facing a host of challenges such as intensifying regional competition and slowing tourist arrivals, but the country remains a premier shopping hub, although recent data showed that the 20-year-old Great Singapore Sale (GSS) might be losing its sheen, said industry practitioners. In June, the first month of the two-month GSS shopping extravaganza, retail sales excluding vehicles dropped by 2.1 per cent from the previous year, despite a 3.2 per cent rise in total sales value in the month, the latest data from the Department of Statistics showed. However, the Singapore Retailers Association remains confident in the Republic’s attractiveness as a shopping haven for tourists, saying the GSS has not seen a decline in sales volume for at least three years. “Although the strong Singapore dollar has always had a direct impact on tourist spending, the GSS has not seen any recent decline. Data by the Ministry of Trade and Industry showed that retail sales, excluding motor vehicles, during the GSS grew by 10.6 per cent on-year in 2011, 0.8 per cent in 2012 and 2.6 per cent in 2013,” Mr Anthony Gan, executive director of the Singapore Retailers Association, told TODAY. And despite a 14 per cent on-year dip in Chinese tourist arrivals in the first quarter of this year due in part to new tourism rules imposed in China in 2013, based on the latest data by the Singapore Tourism Board, “data by MasterCard shows that Chinese visitors spent 30 per cent more this GSS, indicating Singapore’s strong appeal as a tourist and shopping destination”, noted Mr Gan. Agreeing, Ms Julienne Loh, general manager at MasterCard Singapore, added: “Spending on cards under MasterCard by international visitors to Singapore in the first half of 2014 grew by 8 per cent on-year and transactions made by international visitors also grew 23 per cent in the same period.” “Despite increasing competition from other regional destinations, spending on cards under MasterCard during the GSS has been growing since 2010,” she said. These comments follow recent reports of Singapore’s retailers struggling amid rising labour costs, increasing competition from the region and the online sphere, as well as slowing visitor arrivals. A Savills report released last week also cited shopowners as saying they expect sales volume from this year’s GSS to underperform compared with last year. While the jury is still out on the overall performance of Singapore’s biggest retail event this year, it would not come as a surprise if data shows weaker sales, said Euromonitor research analyst Loh Pei Ying. “Customers are well informed about the availability of cheaper products from other places. With travelling to other regional countries such as Malaysia becoming more affordable, there is an increasing trend of consumers planning for short getaways to these places, which also have a strong retail scene and variety of established brands,” she added. “With improving technology, consumers will also seek out lower-priced products from alternative channels such as online retailers,” she said. “As such, slower retail sales in Singapore are expected.” Responding to TODAY’s queries, STB’s director for attractions, dining and retail Ms Ranita Sundramoorthy said the Government is aware of issues retailers face and is ready to help boost a sector that accounted for 19 per cent of Singapore’s tourism receipts last year. “(Our approach) includes providing support for events and concepts that help strengthen Singapore’s standing as an exciting leisure destination, exploring new growth opportunities and promoting homegrown brands.”
Euromonitor’s Ms Loh added: “Retailers can collaborate with stakeholders from major events and campaigns held in Singapore, such as the Formula One Singapore Grand Prix. In this way, the retail sector can aim to hold more promotions to attract tourists and local consumers to shop and spend more.” -By Wong Wei Han http://www.todayonline.com/business/despite-slow-sales-singapore-retail-sector-not-crisis Options available to elderly to monetise their flats 72 per cent of HDB flats owned by residents aged 55 and above are three- and four-room units. This means these seniors have the option to sublet or 'right size' to monetise their flat. Source: Channel News Asia / Singapore SINGAPORE: About 293,000 HDB flats in Singapore are owned by residents aged 55 and older and 72 per cent of these flats are three- and four-room units. This means these seniors have the option to sublet or 'right size' to monetise their flat. Selling part of their leaseback to the HDB is another option - for those who have met their CPF drawdown age, which is currently at 63. Madam Han Siew Lan, 65, has been renting out her four-room flat in Bukit Merah for the last three years. She currently gets about S$2,900 a month. She moved in with her daughter and grandchildren, who live in a five-room flat in the neighbouring block. Madam Han said: “Each month, I use about S$700 to S$800 for my daily expenses. The rest, I use it to buy insurance or save it. When you are older, you may have more problems, so it is good to save it as standby." PROS AND CONS OF RENTING/SUBLETTING FLATS In the second quarter, the median rent for a four-room HDB flat was about S$2,400, according to the Singapore Real Estate Exchange flash report in July. According to HDB, the median rent for a bedroom was S$650 in July. Mr Eugene Lim, key executive officer at ERA Realty Network, said: “If you have the spare capacity, or you are able to rent out your whole flat, actually it gives you a pretty good return for investment. You would have bought your flat many years ago and so your capital value is very low. So from the current rental that you can get from the HDB, when you rent out the whole flat, it gives you a return of between six and eight per cent. This is very high considering private residential rental returns are only in the bracket of two to perhaps four per cent." But not all seniors see subletting as an attractive option. Only one in 10 of eligible senior citizens chooses to rent out a room or the whole flat. A previous study showed that reasons cited for not wanting to sublet included privacy and security concerns, not needing the rental income, as well as not having a spare room. Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore said: "Subletting very much depends on the rental market and the location. If you are looking at the rental mainly from foreign students and workers in Singapore, they may have a certain preference for location. For example, if it is students from university, they may want to choose rental flats near the university areas or in the western areas. So there could be a difference in terms of demand for some of these rental flats in different locations. Not every area can probably command the same sort of rent." LEASE BUYBACK SCHEME So other options to help seniors monetise their flat are available, including the Lease Buyback Scheme. Prime Minister Lee Hsien Loong announced at the National Day Rally that the scheme would be extended to four-room flats. Previously, only those with three-room flats or smaller could apply for the scheme. Here is how it works. Take for example a couple who have met their CPF drawdown age of 63 and whose flat has a 70-year lease left. A professional valuer determined its market value to be S$323,000. Thirty years of the lease - worth S$185,000 - is retained by the couple. HDB will buy the remaining, tail-end 40 years of the lease for S$138,000. But how is the value of the 30-year lease determined? According to HDB, the depreciating lease term is taken into account - that is, the value of a flat goes down over time. Restrictions placed on flats under the Lease Buyback Scheme that prevent resale and subletting are also considered. There have been 797 households who have taken up the scheme since it was introduced in 2009. With plans to extend the scheme to four-room flats, analysts said that while the take-up rate should improve, a large surge is not expected. Assoc Prof Sing said: "Even though the prices have come down, I think there is still demand in the market and prices still remain pretty stable and strong. So that is also one of the factors that hold back a lot of people's choice or decision to participate in the Lease Buyback Scheme." Mr Lim noted: "The two main concerns is firstly, your flat will no longer be allowed to be sold in the open market if you want to. If you do not need the flat anymore, you will have to sell it to HDB. Secondly, you will not be able to bequeath your flats to your successor. For example, you can't give it to your children in your will anymore." Some analysts added that communication about monetisation schemes should be improved and made simpler to understand for seniors, so more can unlock the value of their homes for retirement.
- CNA/ms http://www.channelnewsasia.com/news/singapore/options-available-to/1323946.html Zouk's tenancy given conditional extension Length of extension tied to the popular club's ability to find new home Source: Business Times / Singapore PARTY-GOERS have been given a reprieve: Popular Singapore nightspot Zouk has been allowed a final, conditional extension on its lease at its current premises in Jiak Kim Street. A joint statement by the Singapore Land Authority, Singapore Tourism Board (STB) and Urban Redevelopment Authority (URA) said yesterday that when Zouk's current tenancy ends on Dec 31 this year, it will be granted a final extension of the tenancy at its current premises, with the duration of the extension tied to Zouk's ability to secure alternative premises. If a new location is found by June 30, 2015, the extension will be up until Dec 31, 2017 for the relocation to take place; this will give the club enough time to undertake renovations or to build a new structure at its new address. But if Zouk cannot or chooses not to secure a new location by June 30, 2015, the tenancy at Jiak Kim Street will simply expire on Dec 31, 2015. This extension of the lease is the last of several which the club has been granted since June 2012.
The three bodies said they took into consideration the concerns of people living in the predominantly residential area, who have complained about the noise and litter, as well as Zouk's contribution to boosting Singapore's reputation in the international entertainment scene. -By Lee Meixian Zouk gets more time to move to new location Club can stay up to end-2017 if it secures new spot by June next year Source: Straits Times / Top of The News THE owner of Zouk said he is prepared to spend $20 million to $30 million to build a new site for his iconic club at the Singapore Flyer, after being given more time to work out the move yesterday. Mr Lincoln Cheng was given a one-year extension on Zouk's lease in Jiak Kim Street when it expires at the end of the year. If he is able to secure a new location by June 30 next year, the lease will be extended until the end of 2017. This "will give Zouk sufficient time to undertake renovations or... construct a new structure... at the new site, and (to) relocate," said the Singapore Land Authority, Singapore Tourism Board (STB) and Urban Redevelopment Authority (URA) in a statement. They made it clear no further extensions will be given, adding that yesterday's decision gives residents who are concerned with the noise and littering caused by drunk clubbers, a set deadline for the club to move. In the meantime, the agencies will work with Zouk to minimise problems. The deal was not exactly what Mr Cheng - who invested $10 million in 1991 to turn the conserved warehouse next to Singapore River into the renowned nightspot - had asked for, he said. But he was happy he could stay for another three years if he can find a new home for Zouk. The 67-year-old entrepreneur had started his search as early as 2010, looking at venues in Sentosa, the Old Tanjong Pagar Railway Station and Old Kallang Airport. "I have already explored the whole of Singapore," he said, adding that he has his sights set on the Singapore Flyer. But the future of the $240 million ferris wheel is still hanging in the balance. Last May, the company behind the now six-year-old attraction was placed under receivership and the site put up for sale. Sources told The Straits Times last month that a local company in the tourism trade has emerged as the front runner to buy the Singapore Flyer. Said Mr Cheng: "Once they announce who the winning bidder is, I am sure STB will put us together." And if things do not work out, Mr Cheng said he will then re-consider the Old Kallang Airport site offered by URA and STB earlier, although that could be a "big risk". "We don't know the Masterplan for the area and URA has said that nothing has been fixed yet," said Mr Cheng. He could also end up shutting his club by the end of next year or selling it. Last year, financial audit firm Ernst & Young valued the home-grown brand and its business at $40 million. Fashion director Daniel Boey, 49, who has partied at Zouk since it opened, said he was confident Zouk will bring life to the Old Kallang Airport site, just like how it "single-handedly raised the value of real estate" in Jiak Kim Street. Meanwhile, some residents of the condominiums near Zouk said they will continue to bear with the noise and litter.
Housewife Florence Lim, 45, said: "We have already put up with the problem for so long. Three more years won't make any difference. I think the authorities should just ban the consumption of alcohol in public." -By Joyce Lim Lighting the way to clean energy with solar power With the government looking to increase Singapore's solar energy capacity, things are looking brighter for solar lessor Sunseap Leasing, reports RAPHAEL LIM Source: Business Times / Singapore HARNESSING the Sun's energy to power electrical needs has long been available to those with large roofs to lay solar panels. Pursuing that green option, however, has been more difficult for those without the physical space needed. Solar lessor Sunseap Leasing is hoping to change that, director and co-founder Lawrence Wu told The Business Times. "We want to make clean energy available to anyone, with or without a rooftop . . . everyone should have access to clean energy at a price competitive to traditional fossil fuels," he said. "As we apply for a wholesale licence, that's where we are headed. Whether you have a rooftop or not, we will supply to you."
The company obtained its wholesaler licence from the Energy Market Authority (EMA) last month, allowing it to export power to the grid. -By Raphael Lim http://www.businesstimes.com.sg/premium/singapore/lighting-way-clean-energy-solar-power-20140822 Real Estate Companies' Brief Parkson Retail's Q4 earnings down 36% Fall in same-store sales in Vietnam, adverse currency effects cited Source: Business Times / Companies DEPARTMENT store operator Parkson Retail Asia reported a near 36 per cent year-on-year drop in net profit to S$3.17 million for its financial fourth quarter ended June 30. This was due to negative same store sales growth (SSSG) in Vietnam, initial losses from new stores and adverse currency translation effects. Revenue slid 4 per cent to S$99.18 million due to negative SSSG in Malaysia and Vietnam as well as the weaker Indonesian rupiah. Earnings per share for the period worked out to 0.47 Singapore cent, down from 0.73 a year earlier. During the quarter under review, total expenses fell nearly 2 per cent to S$100.46 million, while total gross sales proceeds were S$246.05 million, down 2.2 per cent.
Share of losses of an associate was S$15,000 versus a share of profits of S$35,000 for the corresponding quarter a year ago. -By Nisha Ramchandani Parkson's net profit shrinks in fourth quarter Unenthusiastic consumers in Malaysia, Vietnam drag down earnings to $3.2m Source: Straits Times / Money POOR consumer sentiment in Malaysia and Vietnam has weighed down earnings at South-east Asian department store operator Parkson Retail Asia. Parkson, which does not have stores in Singapore, saw fourth-quarter net profit plummet 35.9 per cent from the previous year to $3.2 million. Revenue for the three months to June 30 shrank 4 per cent to $99.2 million, it told the Singapore Exchange yesterday. The firm said in its statement that sales fell in Malaysia and Vietnam, where consumer sentiment remained subdued. Some new stores also incurred losses, it said. Parkson ran 63 department stores as at June 30, spanning about 727,000 sq m of retail space across cities in Malaysia, Vietnam, Indonesia and Myanmar. It also has a presence in Sri Lanka through its 47.46 per cent stake in retailer Odel. The poor showing in Malaysia and Vietnam was offset slightly by an improvement in its Indonesia business. "The positive performance of Indonesia has helped us to buffer more challenging operating environments in our other markets, especially in Vietnam, where the retail scene has been disappointing," said group chief executive Toh Peng Koon in the statement. Parkson said yesterday that it expects to open four to five stores in Indonesia each year to capitalise on the growing middle-class population and rising consumer spending in the country. "We continue to expand our retail footprint across South-east Asia by opening new stores in our key markets, as well as emerging economies such as Sri Lanka and Myanmar," Mr Toh said. "Prudent cost management achieved through economies of scale in our markets, particularly in Indonesia, will allow us to maintain our healthy margins." For the full financial year, Parkson posted a 12.5 per cent tumble in net profit to $34.6 million, while revenue slipped 3 per cent to $432 million from the preceding year. Earnings per share for the fourth quarter stood at 0.47 cent, down from 0.73 cent in the same period last year. Net asset value per share was 35 cents as at June 30 this year, lower than the 38 cents as at June 30 last year. Parkson proposed a final dividend of 2.5 cents and a special interim dividend of three cents per share.
Its shares fell 4.5 cents to close at 83.5 cents yesterday. -By Melissa Tan
http://www.straitstimes.com/premium/money/story/parksons-net-profit-shrinks-fourth-quarter-20140822 Oxley Holdings Source: Business Times / Singapore Markets Aug 21 close: S$0.685 DMG & PARTNERS RESEARCH, Aug 21
OXLEY was listed three years ago as a boutique developer of residential projects. Post listing, the group diversified across all segments of the real estate market, launching some 28 projects that have since been mostly sold out. http://www.businesstimes.com.sg/premium/singapore-markets/others/brokers-take-20140822 Centurion Corp Source: Business Times Centurion's Singapore dormitories were stable in Q2 FY14, with Mandai and Toh Guan seeing near-full occupancy rates and strong pre-commitment levels, due to their attractive locations and flexibility in housing workers from all industries. Tuas saw a slight dip in occupancy due to an islandwide slowdown in construction activity. Therefore, we expect near-term weakness in occupancy rates for Tuas, and bed-rate growth in the next 3-5 years could be flattish. However, the group's low cost base should enable the dormitory to remain profitable despite supply pressures.
http://www.businesstimes.com.sg/premium/singapore-markets/others/brokers-take-20140822 GuocoLand S'pore group MD steps down Source: Business Times / Companies GUOCOLAND Singapore's group managing director Margaret Goh has relinquished her duties on Aug 15. Ms Goh was appointed the group managing director of GuocoLand Group's Singapore property division in August last year. Before GuocoLand, the 53-year old Ms Goh was the CEO of Special Projects at CapitaLand Singapore. She has reportedly also served in the NTUC Choicehomes Cooperative, Sentosa Cove, City Developments, Pontiac Marina and Hong Leong Holdings, among other jobs.
Cheng Hsing Yao, who was the managing director of Guocoland's group project office, was appointed as her replacement with effect from that date. He was previously chief operating officer for GuocoLand Singapore. -By Malminderjit Singh Views, Reviews & Forum Second city for S'pore makes long-term sense Source: Straits Times / Forum Letters THERE has been a recent surge of property projects in Johor Baru and Iskandar Malaysia targeting Singaporeans. As the world is becoming borderless, more of us will be investing in businesses and properties abroad. Developments in the region, in some ways, complement and widen our economic opportunities. But we should also put more efforts to redevelop Singapore. As Minister for Social and Family Development Chan Chun Sing has said, we have to compete against cities, not countries, to survive another 50 years. In 50 years, our population could have grown beyond 6.9 million. Many regional cities would be more populated and, perhaps, more modern and bustling than Singapore. Is our single-city urban model the best or only way for Singapore to compete? Our sole city already is one of the most expensive globally. Building more MRT lines leading to it would only result in attracting more offices there, increasing rental and land prices. This would make the city less attractive or viable for future developments, other than office skyscrapers and high-class apartments and hotels. Besides offering lower rental, a second city built at the other tip of our island will divert traffic to the opposite direction during rush hours - the best strategy to tackle traffic congestion in our city-state in the long run. We should incorporate unique features and facilities and state-of-the-art technologies into the second city, making it one that other global and regional cities would envy.
It is one of the best ways to tap our citizens' ideas and resourcefulness for Singapore to compete and survive for 100 years and beyond. -By Ng Ya Ken Don't turn Jurong Lake Gardens into tourist playground Source: Straits Times / Forum Letters AS A resident of Taman Jurong, I am concerned that the plans to transform Jurong Lake District will cause the park to become not only a "people's garden" but also a tourist attraction ("Lakeside area will get 'people's garden'"; Monday). Over the years, Jurong Lake Park, the Chinese Garden and Japanese Garden have evolved into a distinct heartland park much loved by Jurong's heartlanders. It may not bustle with activity like other parks, but has its own vibe - it draws regular joggers, cyclists, anglers, groups that practise various exercises and martial arts, as well as students from nearby schools who exercise or canoe there. It is a piece of tranquillity and greenery. However, it is true that the facilities there are lacking, and that existing ones are poorly maintained. While I look forward to the new Jurong Lake Gardens, I urge the Government to be sensitive when transforming this area. I hope it will not make the Gardens a tourist playground. Waterfront hotels and a future tourist attraction are slated to be built on a part of the existing Jurong Lake Park, right next to where the new Gardens will be. These developments will transform the whole area into a tourist playground. Tourist attractions in the area, such as the Tang Dynasty Village, have failed in the past. It was heartlanders who kept the area going and made it a part of their home. Let the Gardens be a true "people's garden".
Give us the facilities and we residents will rekindle the heartland vibe in our own neighbourhood. -By Chan Ching Wei (Madam) Global Economy & Global Real Estate Atlantic City hit by impending casino closures Revel Hotel adds to city's growing empty gambling space concern Source: Business Times / Property [ATLANTIC CITY] Inside the towering oval atrium of the Revel Casino Hotel, visitors are greeted with a plain printed sign at the base of a four-storey escalator, noting simply that the building will "cease operations" at 5am on Sept 2. The impending shutdown of Atlantic City's newest casino, after little more than two years in business, will be another blow to what used to be the unchallenged gaming mecca of the East Coast. Not even the popularity of "Boardwalk Empire", the historical drama series on HBO, could stem the decline of the big-casino tourist attractions along the shoreline. Revel's closing adds to a growing pile of empty gambling, hotel and resort space that the city will be left with when two other casinos close, as scheduled, by the end of September.
In addition to 127,000 square feet of gambling space abandoned at Revel, there is nearly as much at the adjacent Showboat casino-hotel, which is scheduled for closing at the end of this month. And then there is 87,000 square feet at the Trump Plaza, which is scheduled to shut on Sept 16. -From Atlantic City, US US housing starts up but analysts remain cautious 15.7% rise in July is from apartments, which attract lower income renters Source: Business Times / Property [NEW YORK] The housing market in the United States roared in July, but investors may want to tiptoe rather than jump into the sector, analysts and fund managers say. That is because much of the 15.7 per cent increase in new home construction in July, the first gain in two months, came from apartment buildings, which tend to attract lower income renters and do not generate as much overall economic activity as single-family homes, analysts said. Furthermore, the solid activity reported in new construction and by Home Depot in its quarterly report on Tuesday may in part be due to activity delayed by bad weather in the first quarter.
The appeal of apartments to millennials, a generation laden with student loan debt that may make it difficult to afford a down payment on a home, is one reason why some noted investors, such as DoubleLine Capital's Jeffrey Gundlach, have said they are betting against the shares of homebuilders. -From New York, US Central Pattana delays M'sian mall opening Its first shopping centre in the country will open in 2017 Source: Business Times / Property [BANGKOK] Thailand's largest department store developer, Central Pattana Pcl, said yesterday it would delay the opening of its first mall in Malaysia to 2017 from 2016 as it needs more time to study the market. The Malaysian mall will be the first overseas shopping centre to be opened by the company over the next five years as part of a drive to tap into strong growth in South-east Asia. The company is also keen to open new shopping centres in Indonesia and Vietnam, but cancelled a plan to open a mall in China after a study showed returns may be below target, Naparat Sriwanvit, executive vice-president for finance, told reporters.
"We are working on a construction plan and model for the Malaysian mall. We need to study it carefully," she said, adding Central Pattana will eventually open in two more locations in Malaysia by 2020. -From Bangkok, Thailand http://www.businesstimes.com.sg/specials/property/central-pattana-delays-msian-mall-opening-20140822 Home Sales Show U.S. Pickup as Factories Expand: Economy Source: Bloomberg / Personal Finance The economy in the U.S. took a step forward as home sales unexpectedly climbed, manufacturing accelerated and the outlook for the second half of 2014 brightened. Purchases (ETSLTOTL) of previously owned homes rose in July to a 5.15 million annualized pace, a 10-month high, according to data from the National Association of Realtors in Washington. A factory gauge climbed in August to the loftiest level in more than four years, the index of leading indicators jumped last month and fewer Americans than projected filed claims for jobless benefits last week, other reports showed. “The economy has got good momentum,” said Michelle Girard, chief U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “The second half of the year is going to look a good deal better than the first half.” Employment growth, historically low mortgage rates and more properties from which to choose are giving would-be homebuyers the confidence to take the plunge, just as improving business investment is probably behind the pickup in manufacturing. The data come as Federal Reserve Chair Janet Yellen prepares to address central bankers tomorrow on the job-market outlook, which may provide clues on policy makers’ next move. The drop in jobless claims “is pointing to a labor market that’s gaining traction,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York. More data like this “will certainly mean that the Fed will be encouraged to move sooner rather than later” to raise interest rates, he said, although “the Fed needs a body of evidence greater than what they have now for them to feel decisive in one direction or the other.” Fed MinutesAt their July meeting, Fed officials raised the possibility they’ll increase the target interest rate sooner than anticipated in light of labor-market strength, according to meeting minutes released yesterday. Weak wage growth and low inflation have given the Fed room to hold the target rate near zero, which has kept mortgage rates low. Stocks rose, sending the Standard & Poor’s 500 Index to an all-time high, as data boosted optimism in the economy amid speculation the Fed will continue to support the recovery. The S&P 500 climbed 0.3 percent to 1,992.38 at the close in New York. The news elsewhere wasn’t as positive, as rising political tensions threatened to weaken global trade, contributing to a slowing in manufacturing in the euro area and China, other reports showed. In the U.S., the Markit Economics preliminary manufacturing index for August jumped to 58, the highest since April 2010, as production, orders and employment picked up, the London-based group said today. Readings exceeding 50 in the purchasing managers’ gauge indicate expansion. Philadelphia FedA regional report corroborated the improvement as the Federal Reserve Bank of Philadelphia’s factory index climbed to 28 this month, the highest level since March 2011 and the second-highest in the past decade. Readings greater than zero signal growth in the region covering eastern Pennsylvania, southern New Jersey and Delaware. The gains in manufacturing are being reflected in an improving job market. Jobless claims fell by 14,000 to 298,000 in the week ended Aug. 16, according to Labor Department figures. The report coincides with the period the government surveys employers to calculate monthly payroll growth. The employment report for August will be released on Sept. 5. “There’s a good chance we’ll get another solid month of payrolls,” said Guy Berger, an economist at RBS Securities, who projected 295,000 claims. “Lower layoffs, together with faster hiring, mean better prospects for consumer spending.” Brightening OutlookThe drop in firings is one reason the second half of 2014 is looking sunnier. The Conference Board’s index of leading indicators rose in July by the most in four months, according to another report today. The gauge of the outlook for the next three to six months climbed 0.9 percent after a 0.6 percent gain in June, the New York-based group said. Seven of the 10 indicators in the leading index contributed to the increase last month, led by declining jobless claims and more building permits. The gauge has jumped 8.2 percent over the past six months at an annualized rate, the most since April 2011. Builders are also showing signs of life after a construction lull at the start of the year, a sign that the market’s momentum is sustainable. Housing is “going to continue to pull up,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who accurately forecast the increase in existing home sales. “The labor market continues to improve, interest rates are low, affordability is high.” Survey ResultsThe median forecast of 74 economists in a Bloomberg survey projected purchases would cool to a 5.02 million pace last month. Estimates ranged from 4.85 million to 5.17 million. The June figure was revised to 5.03 million from a previously reported 5.04 million. The number of properties for sale climbed to 2.37 million, the most since August 2012, the real estate agents’ report showed. Inventory was up from 2.24 million a year earlier. The increase in supply is coming about as prices recover and an improving economy gives sellers confidence they’ll find buyers, the group said. “More inventory in my view will mean more home sales,” NAR Chief Economist Lawrence Yun said at a news conference as the figures were released. “We are in a multiyear housing market recovery.” The median price of an existing home rose 4.9 percent to $222,900 in July from $212,400 a year earlier, today’s report showed. Distressed SalesDistressed property sales, which include foreclosures and short sales where the lender agrees to accept less than the value of the mortgage, accounted for 9 percent of the total last month, the least since records began in 2008, the group said. “We’re moving from a market that was driven by the overcorrection, driven by distressed asset sales, to a market that’s returning to being based on the fundamentals,” Budge Huskey, president and chief executive officer of Coldwell Banker Real Estate, a brokerage firm based in Madison, New Jersey, said in an interview. “It’s jobs and wages, it’s traditional homebuyers and particularly first-time buyers.” Existing home sales, which are tabulated when a purchase contract closes, are recovering from a 13-year low of 4.11 million in 2008 after reaching a record 7.08 million in 2005. The housing rebound had been giving mixed signals this year after a frigid and snowy winter and gradual improvement in the labor market. Residential construction starts increased in July to an annual pace of 1.09 million units, the highest level in eight months, as permits for future projects advanced 8.1 percent. Cheaper borrowing costs have helped. The average 30-year, fixed-rate mortgage was 4.10 percent in the week ended Aug. 21, the lowest this year and down from 4.53 percent at the start of January, according to data from Freddie Mac in McLean, Virginia. -By Lorraine Woellert and Victoria Stilwell U.K. Recovers $498,000 From Criminal’s Dubai Home Sale Source: Bloomberg / Luxury U.K. authorities recovered more than 300,000 pounds ($498,000) from the sale of a convicted drug trafficker’s home in Dubai in the first such confiscation involving the United Arab Emirates. The apartment in Dubai Marina was owned by Redwan El-Ghaidouni, 37, who was convicted at Kingston Crown Court in March 2011 on drug charges, the Crown Prosecution service said in a statement on its website. A confiscation order in 2012 for about 417,000 pounds, was fully satisfied by the sale and the money was transferred to the British public purse under an asset-sharing agreement with the U.A.E., according to the CPS statement. Dubai’s housing market, with its international clientele and high volume of cash purchases, provides an opportunity for people looking to hide illegally earned money. The CPS currently has asset-recovery advisers working in the U.A.E. and Spain and plans to add three more advisers to focus on Europe, the Caribbean and South Africa, according to the statement. “Criminals often consider that hiding money overseas is a safe bet and that their assets will be untouchable,” Gary Balch, the CPS’s deputy chief prosecutor for crime proceeds, said in the statement. “They are mistaken and should take note of today’s result.” -By Zainab Fattah http://www.bloomberg.com/news/2014-08-21/u-k-recovers-498-000-from-criminal-s-dubai-home-sale.html |