Singapore Real Estate Soft market ahead for most developers But high-spec buildings, business parks that support high-end manufacturing will do fine Source: Business Times / Real Estate A weaker manufacturing outlook and continued targeted measures by JTC Corporation to boost supply and cool speculation are likely to keep Singapore's industrial property market soft going into 2015 (see infographic). Certain types of properties, such as high-specification factories, business parks and warehouses, as well as niche developments such as food factories, will probably still see strong take-up and stable rents. -By Lee Meixian http://www.businesstimes.com.sg/real-estate/outlook-2015/soft-market-ahead-for-most-developers $18m green makeover well under way in Yuhua Dual bicycle rack system, LED street lighting among initiatives rolled out Source: Straits Times / Singapore THE $18 million project to transform Yuhua in Jurong into Singapore's first "green" neighbourhood is well under way. Among the initiatives rolled out thus far are a new bicycle parking system, a vertical green wall and LED lighting in carparks. Under the Housing Board's Greenprint scheme announced in 2012, 38 blocks in the estate will be equipped with energy- and water-saving solutions. So far, LED street lighting has been installed at all three open-air carparks and their driveways in the estate. It is estimated that this will reduce energy consumption by at least half. New double-tiered bicycle racks have also been installed at the void decks of 28 blocks. Known as a dual bicycle rack system, the frames allow for twice the number of bicycles to be parked in the same space. Block 223 in Jurong East Street 21 has also received a green makeover - literally. Its walls are now covered in plant creepers, which, besides enhancing the estate's greenery, are expected to reduce the building's surface temperature by up to 5 deg C. Also afoot are works to install solar panels on the roofs of 29 blocks, as well as elevator energy-regeneration systems in 18 blocks. The lift systems can shave off about 20 per cent in energy consumption, while the solar panels will be used to power common areas such as lifts, as well as corridor and staircase lighting. Work has similarly begun on building a pneumatic waste conveyance system. This automated method uses vacuum-type underground pipes to gather household refuse, hence reducing the manpower needed for waste collection. These green initiatives, to be completed next year, are expected to save up to $144,000 annually, said the HDB. Residents in Yuhua are getting on the green bandwagon with their own activities. Through the HDB's Greenprint Fund, which supports the testing of green ideas, they have started three hobby farming zones, as well as two community "parklets" - landscaped corners at void decks where residents can rest and interact. Research engineer Lin Min, 26, who lives in Block 231, said he feels lucky to live in Yuhua and likes the new bicycle racks. "I grew up here and it's cool to see the estate having a fresher look, and with greener technology," he said. "The novelty appeals to me, and it feels good to do something for the environment." -By Yeo Sam Jo Companies' Brief OUE Lippo to buy 22.97% stake in Gemdale for HK$1.5b Source: Business Times / Companies & Markets OUE Lippo, a subsidiary of mainboard-listed real estate owner, developer and operator OUE Limited, has entered into a conditional subscription agreement to subscribe for 2.9 billion new ordinary shares in Hong Kong-listed Gemdale Properties and Investment Corporation Limited (GPI) at an issue price of HK$0.52 per share, amounting to about HK$1.508 billion (S$256.4 million). -By Claire Huang http://www.businesstimes.com.sg/companies-markets/oue-lippo-to-buy-2297-stake-in-gemdale-for-hk15b Academic joins DTZ as head of Singapore research Source: Business Times / Real Estate DTZ has appointed Lee Nai Jia as associate director and head of Singapore research. Dr Lee, who holds a PhD in urban and regional planning from the Massachusetts Institute of Technology, joined the firm on Dec 18. Prior to that, he was an assistant professor at National University of Singapore's School of Design and Environment, Department of Real Estate. -By Kalpana Rashiwala http://www.businesstimes.com.sg/real-estate/academic-joins-dtz-as-head-of-singapore-research S'pore Tong Teik builds stake in UE E&C Move by firm may be bid to stop private fund's plans to delist engineering company Source: Straits Times / Money A COMPANY linked to rubber industry veteran Oei Hong Bie has been quietly amassing a substantial stake in listed engineering firm UE E&C. Analysts say this could be a bid by Mr Oei to thwart a private equity fund's plans to delist the company. Singapore Tong Teik, which lists Mr Oei as one of its directors, has raised its stake in UE E&C from less than 5 per cent to more than 7 per cent over the past two months, according to Singapore Exchange (SGX) filings. It crossed the 7 per cent threshold on Dec 9 and is expected to cross 8 per cent soon, following a flurry of purchases on the open market. The company started to build its stake after private equity fund Southern Capital Group agreed in early October to buy a controlling stake in UE E&C from United Engineers. United Engineers, one of the oldest companies in Singapore, is UE E&C's parent company. It agreed to sell its 68.2 per cent stake in UE E&C to Southern Capital for $1.25 per share, which works out to about $230.2 million. That deal values UE E&C at about $337.5 million, which some market watchers have said is relatively cheap considering the engineering firm's significant cash pile. UE E&C had $164.2 million in cash and bank balances at the end of September this year, going by its most recent quarterly financial report. The company also had $129.2 million in trade receivables and other receivables, which are also considered liquid assets. Analysts said last week that Singapore Tong Teik either wants to make Southern Capital raise its offer price for UE E&C or wants to prevent Southern Capital from delisting it. If it achieves a large enough stake, Singapore Tong Teik will have the "veto power to prevent UE E&C from being privatised", remisier Charles Chua said. For Southern Capital to successfully take UE E&C private, its delisting proposal must not have been voted against by shareholders holding 10 per cent or more of the firm's total issued shares, according to SGX listing rules. However, Mr Chua added that even if Singapore Tong Teik's aim is to keep UE E&C listed, that may change if Southern Capital raises its offer. "What if the new offer is so good that it cannot be resisted, coming from an investment point of view?" he said. However, even if Singapore Tong Teik can veto the delisting proposal, it could run into another problem, market watchers said. The Singapore takeover code says that if the number of a firm's shares held in public hands falls below 10 per cent of the total issued shares, the bourse may suspend and later delist the company. Substantial shareholders, which are those holding more than a 5 per cent stake - such as Singapore Tong Teik - are not considered part of the public for the purposes of the free float. Singapore Tong Teik declined to comment. Southern Capital did not respond by press time. UE E&C shares closed half a cent lower at $1.255 last Friday, slightly above Southern Capital's offer price. -By Melissa Tan Global Economy & Global Real Estate Dubai Investments plans 10b dirhams of property projects as market recovers A market recovery in the emirate is fuelling a tranche of real estate projectsSource: Business Times / Real Estate HK new home sales seen to reach record proceeds this year Source: Business Times / Real Estate Dubai Investments Sees $2.7 Billion of Property Projects Source: Bloomberg / Luxury Dubai Investments PJSC plans 10 billion dirhams ($2.7 billion) of real-estate projects in the next five years as it seeks to benefit from resurgent property demand. Developments include Mirdif Hills, a 2.5 billion dirham project in Dubai that will include 1,500 homes, a 230-room hotel, shops and 200,000 square-feet of office space, Chief Executive Officer Khalid Bin Kalban said in an interview. The company’s Dubai Investment Real Estate Co. unit will start tendering for the development in the next two months, he said. Dubai Investments, whose largest shareholder is state-owned Investment Corporation of Dubai ICD, is seeking to profit from a market recovery in the emirate after one of the world’s worst property crashes during the financial crisis in 2008. Local developers are reviving projects amid a surge in prices and new measures such as limiting mortgages and a doubling of transaction fees which have helped stabilize the market. “We don’t think there will be need to borrow” for Mirdif Hills, Bin Kalban said. “We’ll be able to sell the project easily because of its size, location and components.” Still, the company may need bank or debt-market funding for a 7 billion-dirham project planned in Dubai Investment Park. The 13 million square-feet village with homes, shops, offices and hotels, may require the company to raise cash either through loans, Islamic bonds or by seeking investors to take a stake in the project, according to Bin Kalban. “We are talking to a major investor to come on board and help,” he said. “They will either pay us rental or take over the project within a certain number of years. ‘‘We are discussing seriously the option of rent to own with them.’’ Fujairah Business ParkWork started two weeks ago on a 800 million-dirham business park in Fujairah, another sheikhdom in the United Arab Emirates, Bin Kalban said. The park will include a 220-room hotel, 200,000 square feet of offices, 150,000 square feet of retail space and some apartments. It’s set for completion within two and half years, he said. Al Taif Investment, a 60 percent-owned unit of Dubai Investments and developer of the business park, secured a 300 million dirham loan from Al-Hilal Bank PJSC for the project. Dubai Investments is also in talks with owners of several unfinished buildings within Dubai Investment Park to take over and complete the stalled construction, he said, without naming them. -By Zainab Fattah Hong Kong New Home Sale Proceeds to Reach Record, Centaline Says Source: Bloomberg / Luxury Hong Kong’s new home sales are expected to bring record proceeds this year as property developers actively sell new residential projects to raise cash for land. Full-year new private residential sales in the city are estimated at HK$175 billion ($22 billion), the highest since 1996, when the data was first collected, Wong Leung-sing, an associate research director at Centaline Property Agency Ltd., said in an e-mailed statement on Dec. 27. “Home prices are so high that the new units are sold at HK$10 million on average,” Wong said by phone yesterday. His company is Hong Kong’s largest privately held realtor. “Developers are actively selling new residential units to generate cash.” Sentiment has improved and buyers have returned to the market after Hong Kong’s recent pro-democracy protests, Wong said. Developers are seeking to expand their landbanks as the city’s government accelerates land sales to boost housing supply. The government stopped regular land auctions in 2004 amid the Asian financial crisis and the SARS epidemic, only resuming them in 2011. Dragons Range, a new residential project in the Sha Tin district developed by companies including Kerry Properties Ltd. (683) and Sino Land Co. (83), has generated sales of HK$4.4 billion this month through Dec. 19, according to the statement. The Parkside, a project by Wheelock Properties Ltd., has recorded sales of more than HK$2.7 billion in the same period, the highest after Dragons Range. New home sales in Hong Kong may reach a total of 16,500 units this year, the highest since 2007, Wong said in the statement. A total of 16,190 new home sales were registered this year through Dec. 19, 66 percent higher than the whole of 2013. They have brought in HK$174 billion this year through Dec. 19, 89 percent more than 2013, according to the statement. Separately, the number of used home transactions may reach 42,500 with a total of HK$235 billion proceeds, according to the statement. -By Alfred Liu |