Singapore Real Estate Fund manager Fullerton opens London office Source: Business Times / Singapore [LONDON] Singapore fund management arm, Fullerton, is to open an office in London to build up its business with European investors, Britain's finance ministry said on Tuesday. Fullerton Fund Management, which specialises in Asian and emerging markets and manages about S$12 billion in assets, cited Britain's initiative, launched last year, to improve tax and regulatory competitiveness as a major draw. "Our choice to establish in the UK reflects the UK's strengths as a hub for asset management, and we have noted the improvements that have been made as part of the UK's Investment Management Strategy," chief executive Manraj Sekhon said.
Britain's asset management industry is the second-biggest in the world after the US, representing some £5.2 trillion pounds (S$11 trillion) in assets under management, according to trade body Investment Management Association. Ratio of HDB owners buying shoebox units up: Report Source: Straits Times Bigger proportion of Housing Board flat owners are opting for shoebox units when they buy private homes, according to property consultancy DTZ yesterday. The purchases were likely for investment and not upgrading, said the report, which also noted that private home sales tumbled 40 per cent last year.
SingHaiyi to build $762m retirement home in US Source: Straits Times Singapore-Listed property developer SingHaiyi Group has agreed to buy a plot of land in California to build a US$600 million (S$762 million) high-end community for seniors. The developer said yesterday that it would pay US$24.4 million for the waterfront land in San Francisco Bay, its third property project in the United States in six months.
http://www.straitstimes.com/premium/money/story/singhaiyi-build-762m-retirement-home-us-20140227 First DBSS flats go on resale market, asking price as high as $780,000 The Premiere on Tampines Avenue 6 was the first HDB flat project designed, built and sold by a private developer. Source: Channel News Asia / Singapore SINGAPORE - The first HDB flats under the Design, Build and Sell Scheme (DBSS) have been put on the resale market, after reaching the minimum occupancy period of five years. Some flat owners are asking for as much as 60 per cent more than what they paid five years ago. The Premiere on Tampines Avenue 6 was the first HDB flat project designed, built and sold by a private developer. 90 per cent of the development are five-room flats, which were sold for between $308,000 and $450,000. Now, online listings for some of these properties have prices starting at $650,000 and going up to as high as $780,000. That's $70,000 to $200,000 more than other five-room flats in
the same area.
- CNA/ir http://www.channelnewsasia.com/news/singapore/first-dbss-flats-go-on/1013406.html Transcu strikes deal for reverse takeover Source: Straits Times Established contractor Straits Construction plans to inject its business into struggling mainboard-listed biotech firm Transcu Group, the latest in a recent spate of reverse takeovers (RTOs). Transcu said in a statement yesterday that it recently signed a memorandum of understanding with the privately held Straits Construction but declined to reveal the value of the deal.
http://www.straitstimes.com/premium/money/story/transcu-strikes-deal-reverse-takeover-20140227 More property privatisations to come? Source: Business Times / Companies THE proposed privatisation of Singapore Land by parent United Industrial Corporation throws the spotlight on the depressed residential property development segment. While residential prices here have not corrected by that much, many developers have been steadily sold down in the past year, in anticipation of a market downturn. As SingLand gets taken private at an 11 per cent premium to its last traded share price on Feb 19 (inclusive of dividends), investors may very well ask which company comes next. A number of property development companies are trading at sizeable discounts to their stated values, but only a few may have upside catalysts by being privatisation candidates. Developer profits tend to be lumpy, so a key metric to examine is either the net asset value (NAV) of a company, or its revised net asset value (RNAV) - essentially an analyst's estimate of the company's worth after taking into account properties held at cost that should be revalued to market prices - and the present value of future development profits, with liabilities subtracted.
The SingLand bid comes at a roughly 30 per cent discount to average RNAVs, a discount level to which analysts usually set target prices. RNAVs are usually higher than NAVs due to adjustments made for market prices and future profits. This implies that profitable, long-established counters trading at a sufficiently wide discount to their NAVs or RNAVs - say 50 per cent or more - could be perceived as severely undervalued by their owners, who might then see value in taking their companies private. -By Cai Haoxiang http://www.businesstimes.com.sg/premium/companies/others/more-property-privatisations-come-20140227 Real Estate Companies' Brief Weiye's Q4 net profit up on robust sales Source: Business Times / Companies WEIYE Holdings, a property developer in Henan and Hainan, China, has posted a 13.5 per cent increase in net profit attributable to owners to 46.6 million yuan (S$9.6 million) for the fourth quarter ended Dec 31, 2013 (Q4 2013), up from 40.3 million yuan a year ago. Gross revenue jumped by more than eight times from 43.7 million yuan a year ago to 370.5 million yuan in Q4 2013, as property development sales surged by 720 per cent to approximately 212.4 million yuan, on higher total net saleable floor area handed over to customers. For the full year, net profit jumped five times from 36.9 million yuan to 184.5 million yuan, while gross revenue jumped more than six times from 222.7 million yuan to 1.38 billion yuan, driven mainly by a 391 per cent year-on-year increase in property development sales to 646.3 million yuan.
According to Weiye, full-year revenue from its property development segment came from existing projects: WeiyeXiangdi Bay (which contributed 395.1 million yuan), Weiye Central Park (154.1 million yuan), Weiye Oxygen Town (50.5 million yuan), Weiye Costa Rhine (13.5 million yuan) and Weiye Western International Park (19 million yuan). -By Jacquelyn Cheok http://www.businesstimes.com.sg/premium/companies/others/weiyes-q4-net-profit-robust-sales-20140227 Yanlord Q4 profit jumps 85% Source: Business Times / Companies YANLORD Land Group's fourth quarter net profit leapt 85 per cent year on year, from higher fair value gains on investment properties. Net profit for the three months ended Dec 31, 2013, was 1.1 billion yuan (S$227.3 million) or 56.1 fen per share, against the year-ago 590 million yuan or 30.26 fen per share. Other operating income during the quarter was 597 million yuan, 153 per cent higher than the prior year period, primarily due to higher fair value gains, Yanlord said. Also boosting the bottom line was 92.8 million yuan in share of profit of jointly controlled entities, reversing from a 2.23 million yuan loss a year earlier. For the full year, Yanlord's net profit fell 19 per cent to 1.47 billion yuan, primarily due to lower other operating income, higher administrative expenses and higher finance costs. This was partially offset by higher gross profits and share of profit from jointly controlled entities.
Revenue for the full year was up 9 per cent to 11.28 billion yuan, driven by a higher average selling price per square metre coming from a change in product mix composition, the group said. Earnings per share for FY 2013 was 75.63 fen, down from 93.57 fen in the previous year. A first and final cash dividend of 1.3 Singapore cents was declared, lower than the 1.86 cents previously. -By Raphael Lim http://www.businesstimes.com.sg/premium/companies/others/yanlord-q4-profit-jumps-85-20140227 HPL's full-year earnings up 37% Source: Business Times / Companies HOTEL Properties Limited's (HPL) net profit for the 12 months ended Dec 31, 2013, jumped nearly 37 per cent year-on-year to $177.64 million. Revenue rose 27.5 per cent to $691.96 million, on the back of income recognition from the Tomlinson Heights condominium development on a percentage of completion basis as well as better performances by the group's hotels and resorts. Earnings per share were 33.19 cents for the full year, up from 25.64 cents in the previous financial year.
The group's share of results of associates and jointly controlled entities increased from $52.56 million to $61.56 million, thanks in part to a gain on disposal of investment properties in London as well as profits from d'Leedon condominium at Farrer Road and The Interlace condominium at Alexandra Road. -By Nisha Ramchandani http://www.businesstimes.com.sg/premium/companies/others/hpls-full-year-earnings-37-20140227 Global Economy & Global Real Estate Logistics facilities provider GLP leases more space to Vipshop Source: Business Times / Companies GLOBAL Logistic Properties (GLP) has leased 36,000 square metres of space to Vipshop, making the Chinese e-commerce company GLP's third largest customer in China. Including the newly leased space in GLP Park Huangpi in Wuhan, Vipshop has leased a total of 180,000 sq m from GLP across three cities, said the provider of modern logistics facilities in China, Japan and Brazil yesterday. Kent Yang, president of GLP China, said in a statement: "E-commerce is playing an important role in the increase in domestic consumption in China and is a key driver of demand for modern logistics facilities. We look forward to supporting Vipshop as they continue to grow across China."
GLP Park Huangpi is now fully leased, one month after completion. -By Raphael Lim Purchases of new homes in January climb to 5-year high Sales rise 9.6% to 468,000 annualised pace, the highest since July 2008 Source: Business Times / Top Stories [WASHINGTON] Purchases of new US homes unexpectedly climbed in January to the highest level in more than five years, showing underlying strength in the industry even in the midst of unusually harsh weather. Sales increased 9.6 per cent to a 468,000 annualised pace and the most since July 2008, figures from the Commerce Department showed yesterday in Washington. Demand improved in three of four regions.
Home remodelling companies such as Mohawk Industries remain upbeat about the market's prospects for 2014 as property values climb and the economy improves. -From Washington, US Sales of New U.S. Homes Rise to a Five-Year High Source: Bloomberg / Luxury Purchases of new U.S. homesunexpectedly climbed in January to the highest level in more than five years, showing underlying strength in the industry even in the midst of unusually harsh weather. Sales increased 9.6 percent to a 468,000 annualized pace, exceeding the highest estimate of economists surveyed by Bloomberg and the most since July 2008, figures from the Commerce Department showed today in Washington. Demand improved in three of four regions. Home remodeling companies such as Mohawk Industries Inc. (MHK) remain upbeat about the market’s prospects for 2014 as property values climb and the economy improves. Nonetheless, limited housing supply, rising borrowing costs and still-tight credit conditions are preventing the industry from making even bigger strides. “I’m hopeful the recovery in home sales will get back on track in the next couple of months,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, who projected demand would increase. “If we continue to get solid employment growth, which was the trend last year, chances are you’ll see home sales continue their uptrend.” Stocks rose after the report, erasing earlier losses. The Standard & Poor’s 500 Index increased 0.1 percent to 1,847.48 at 10:17 a.m. in New York. The S&P Supercomposite Homebuilding Index advanced 2.3 percent. Survey ResultsThe median forecast of 82 economists surveyed by Bloomberg called for 400,000. Estimates (NHSLTOT) in the Bloomberg survey ranged from 380,000 to 442,000. December sales were revised up to 427,000 from an originally reported 414,000 pace. For all of 2013, demand jumped 16.3 percent to 428,000, the most in five years. The median sales price rose 3.4 percent last month from January 2013 to $260,100, today’s report showed. The Northeast led the advance last month with a 73.7 percent surge, the biggest jump since July 2012. Sales climbed 11 percent in the West and 10.4 percent in the South. They dropped 17.2 percent in the Midwest. Inclement weather also might have weighed on the housing market as frozen ground kept builders from starting work and buyers from shopping for properties. Last month was the coldest start to the year since 2011, according to the National Oceanic and Atmospheric Administration. The months’ supply of homes declined to 4.7, the fewest since June, from 5.2 in December. There were 184,000 new houses on the market at the end of January, the same as in December. Leading GaugeNew-home sales, which account for about 7 percent of the residential market, are tabulated when contracts are signed, making them a timelier barometer than transactions on existing homes. Housing starts fell 16 percent last month to an 880,000 annualized rate following December’s revised 1.05 million, the Commerce Department reported last week. The decrease was the biggest since February 2011. Permits (NHSPATOT) for future projects showed a smaller drop in the report -- a sign activity may stabilize as the weather improves. Transactions for previously owned homes also weakened in January, declining for the fifth time in six months, figures from the National Association of Realtors showed last week. Purchases decreased 5.1 percent to a 4.62 million annual rate, the fewest since July 2012. Sales fell in all four regions of the country, indicating unusually frigid temperatures were only partly to blame. Mortgage RatesHigher mortgage rates are limiting affordability for buyers, with borrowing costs climbing since mid-2013. The 30-year fixed mortgage rate averaged 4.33 percent in the week ended Feb. 20, up from 3.35 percent in early May 2013, according to data from Freddie Mac in McLean, Virginia. The weather might be weighing on the market more heavily in February. Builder confidence also slumped in all four regions this month as potential buyer traffic and sales slowed, the National Association of Home Builders/Wells Fargo sentiment gauge showed last week. The measure slumped to 46 from 56 in January, the biggest decline since monthly record-keeping began in 1985. Readings less than 50 mean more respondents reported poor market conditions than good. Executives at Mohawk Industries in Calhoun, Georgia, which makes residential and commercial flooring, still see strength for the industry in the year ahead. “Our future optimism is supported by a number of leading indicators that anticipate continued improvement in new construction and remodeling,” Chief Executive Officer Jeffrey Lorberbaum said on a Feb. 21 earnings call, citing an NAHB remodeling index that has held at its highest level in 10 years in the first quarter this year. “The improvement in remodeling is being driven by an improving economy, higher housing prices as well as growing sales of existing homes,” Lorberbaum said. -By Michelle Jamriskob
Is it game over for Sochi's Winter Olympics resort? Russia grapples with trying to make back the billions spent on the Winter Olympics Source: Business Times / Property [ROSA KHUTOR, Russia] Stanislav Kuznetsov has a headache like no other: it measures 780,000 square metres and covers a large expanse of Russian mountainside. The Gorky Gorod resort in the snowy Caucasus peaks above Sochi was packed during the Winter Olympics. Now that the Games have ended, Mr Kuznetsov's job is to keep filling the nine hotels. And the holiday apartment. And the luxury stores. And the large supermarket complex, which includes a massive artificial beach and lake on the top floor. "We are seriously thinking about the future," said Mr Kuznetsov, deputy chairman of the board at Russian state lender Sberbank, which owns 92 per cent of Gorky Gorod.
His challenge epitomises the broader struggle that Russia faces to get a lasting return on the US$50 billion spent on developing the region for the Sochi Games. -From Rosa Khutor, Russia Israel property investors not deterred by IMF Source: Business Times / Property [JERUSALEM] Investors in Israel's real estate market are brushing off the International Monetary Fund's warning of a possible housing bust. Africa Israel Residences Ltd has risen 3.3 per cent in the two weeks since the IMF raised the alarm, compared with the 2.7 per cent increase in the TA-100 Index. The yield on the company's 5.9 per cent bonds maturing December 2016 dropped 26 basis points in the week ended Feb 20, the biggest decline since Nov 28. Other home construction stocks have climbed even more, with Ashdar Building Co gaining 13 per cent since Feb 12. "The IMF can say whatever it wants, but at the end of the day, there are plenty of transactions," said Shai Azar, a real estate analyst at IBI-Israel Brokerage & Investments in Tel Aviv. "Investors aren't getting wound up because people have been saying for a long time that prices are very high, and in the meantime they just keep climbing."
Surging housing prices ignited a summer of mass protests that swept the country in 2011, and while the government has taken steps to increase supply, that hasn't capped costs because demand remains higher. Even though declining mortgage rates have driven up prices by encouraging purchases, the Bank of Israel cut the benchmark rate again on Monday. The bank is more concerned about the prospect of growing unemployment than rising housing costs, according to policy maker Rafi Melnick. -From Jerusalem, Israel Londoners at odds over restoration Future of Smithfield pits big, global money against local conservationists Source: Business Times / Property [LONDON] Trying to renovate a Victorian market and tack on some offices hip enough for Google in the oldest part of this ancient city is not a task for the weak of heart. Just ask Geoff Harris. As head of property development for Henderson Global Investors, he is the face of a £160 million (S$337.8 million) proposal to restore a handful of buildings in the historic Smithfield Market in the heart of the City of London historical financial centre and designed by Sir Horace Jones, the architect responsible for the Tower Bridge. According to Mr Harris, Henderson's project is noble and expensive, restoring historical grandeur to the Victorian market buildings while integrating new space for shops, restaurants and desperately needed modern offices.
His opponents beg to differ. "This would be the worst mutilation of a major Victorian building in 30 years," said Marcus Binney, founder of Save Britain's Heritage, a conservation group that has two full-time employees and significant political sway. -From London, UK http://www.businesstimes.com.sg/specials/property/londoners-odds-over-restoration-20140227 First-time London homebuyers up 33% Source: Business Times / Property [LONDON] The number of first-time London homebuyers climbed 33 per cent in the fourth quarter compared with a year earlier as a recovering economy and government assistance boosted mortgage lending. Home-loan borrowers rose to 13,400 from 10,100 a year earlier, the Council of Mortgage Lenders said yesterday. Total mortgages increased by almost 50 per cent in value to £3 billion (S$6.33 billion) compared with a year ago. Prime Minister David Cameron's efforts to stimulate the economy through the housing market are bearing fruit as buyers take up the government's offer to provide equity loans of up to 20 per cent of a home's value. Mortgages totalling almost £1 billion have been sought under Help to Buy, the prime minister's office said last month.
First-time buyers typically borrowed £198,900, a rise from £196,000 a year earlier, according to the statement. They spent about 20.6 per cent of their income on mortgage payments, less than the 21.3 per cent spent a year earlier. -By Bloomberg London First-Time Homebuyers Climb by a Third, Lending Rises Source: Bloomberg / Luxury The number of first-time London homebuyers climbed 33 percent in the fourth quarter compared with a year earlier as a recovering economy and government assistance boosted mortgage lending. Home-loan borrowers rose to 13,400 in the British capital from 10,100 a year earlier, the Council of Mortgage Lenders said today in an e-mailed statement. Total U.K. mortgages increased by almost 50 percent in value to 3 billion pounds ($5 billion) compared with a year ago. The financial crisis prompted a drop in first-time buyers as banks increased down payment requirements and raised barriers to lending. Now, Prime Minister David Cameron’s efforts to stimulate the economy through the housing market are bearing fruit, with buyers seeking almost 1 billion pounds of mortgages under the government’s Help to Buy program. First-time buyers typically borrowed 198,900 pounds, a rise from 196,000 pounds a year earlier, according to the statement. They spent about 20.6 percent of their income on mortgage payments, less than the 21.3 percent spent a year earlier. U.K. homebuilders are ramping up construction to satisfy rising demand. Persimmon Plc (PSN), the U.K.’s largest homebuilder, said yesterday that full-year profit rose 54 percent from a year earlier. Taylor Wimpey Plc (TW/), the third-largest homebuilder by market value, today said net income rose 19 percent in 2013 as home sales and prices climbed. Both beat analysts’ estimates. For all of 2013, first-time buyers in London received 45,800 loans, up 24 percent from a year earlier, according to the statement. The total value of those loans was more than 10 billion pounds, up 34 percent from 2012. -By Patrick Gower http://www.businesstimes.com.sg/specials/property/first-time-london-homebuyers-33-20140227
China rental biz drives second-home sales Beijing-based Tujia cashes in on idle homes by renting them for short stay Source: Business Times / Property [BEIJING] Wu Junhua had been allowing her investment, a furnished one-bedroom apartment in the lake city of Hangzhou, to sit empty for a year until she found a solution: China's version of Airbnb.com, known as Tujia. Letting Tujia put up short-time travellers who otherwise would stay in a hotel, Ms Wu shares the income they generate while waiting for her 37-square-metre asset to appreciate. Her place can rent for around 260 yuan (S$58) a night, the starting price of nearby four-star lodgings listed as "most popular" on China's biggest online booking website, Ctrip.com, which also carries Tujia's listings. "Now I have nothing to worry about, and I get paid," said Ms Wu, 59, a retired pharmacist, noting that Tujia also changes towels, arranges cleaning and has kept her apartment in the same condition as when she bought it, erasing her sceptical first impression of Tujia: "Are these people con artists?"
It's no trick. The global trend known as the sharing economy has come to China almost 65 years after the Communist Party took power. The short-stay model run by Beijing-based Tujia Technology (Beijing) Co, which started two years ago and now lists more than 80,000 places for rent in China and abroad, is taking advantage of idle properties held by homeowners such as Ms Wu, simultaneously helping drive sales of second homes on promises of rental income and property management services for their sometimes far-away investments. -From Beijing, China http://www.businesstimes.com.sg/specials/property/china-rental-biz-drives-second-home-sales-20140227 Thailand's homebuilders face tough times as crisis drags on New project launches are expected to drop 30% this year Source: Business Times / Property [BANGKOK] Political unrest and an over-supplied US$20 billion real estate market in Thailand are the latest challenges threatening developers who are cancelling new launches in the hopes of staving off a bubble. New project launches are expected to drop as much as 30 per cent this year, which should help ease concerns about oversupply, but other sectors of the market may suffer. The number of new housing units hit a record high last year with a boom in condominiums, which accounted for 58 per cent of the market.
This year the market, which accounts for about 5.5 per cent of Thailand's GDP, is expected to contract by 2-5 per cent after rising 4 per cent last year. -From Bangkok, Thailand Chinese developers increase promotions for projects Move suggests spread of slowdown in property prices Source: Business Times / Property [HONG KONG] Chinese property developers are stepping up the use of sales promotions for some suburban housing projects, an early sign that a slowdown in property prices that spooked investors this week may be spreading. In the big cities, demand remains robust and the chances of a slump in prices are slim, according to a Reuters poll. But prices are falling in some smaller centres, causing jitters among investors since the property sector drives a significant portion of the world's second biggest economy. Developers are offering price promotions such as free car park spaces and renovation options that translate into discounts of 5-10 per cent even in developments on the edge of the capital, Beijing, according to real estate firm Knight Frank. "In some areas where sales are not good, developers are offering discounting or more promotions, even in suburban areas an hour away from Beijing city," Thomas Lam, Knight Frank's head of research & consultancy for Greater China, told Reuters.
The comments follow recent reports that developers have cut prices in some smaller cities in eastern China, about an hour from the commercial capital Shanghai, while one bank said that it had cut back on some lending to developers. -From Hong Kong, China China unlikely to see sharp correction in property prices Source: Business Times / Property [BEIJING] China's property market is likely to see at most a moderate correction in prices in some small cities this year, according to a Reuters straw poll of 13 industry watchers this week, with a very slim chance of a sharp fall in prices nationwide. A series of indications of a slowdown in the property market this week, beginning with official data and reports of banks cutting lending and developers cutting some unit prices, has spooked financial markets and raised concerns over the health of tone of the economy's main drivers. Analysts in the poll said that the market had overreacted to the news as China's ongoing drive to have more people move to its cities, plus generally strong housing demand in wealthy cities, could put a floor on the downside risk. "We did see some corrections from certain development projects in some overpriced cities, but it doesn't tell the entire story of China," said Zhang Xiaoduan, head of South and West China Research at property firm DTZ. "The pressure for price correction is not particularly high for major developers thanks to strong sales performance from last year, which gives them a better liquidity position."
The poll asked 13 market participants ranging from analysts to developers to sales staff about the risk of a correction in prices this year. -From Beijing, China Indian billionaire Uday Kotak's property fund to raise US$200m It will invest in residential markets in India's top cities Source: Business Times / Property [SINGAPORE] Kotak Investment Advisors Ltd, which manages US$1 billion in real estate assets, plans to raise US$200 million for a private equity fund that will invest in residential properties in India's biggest cities. The company, owned by billionaire Uday Kotak, raised US$200 million from overseas investors last year for the fund and will complete raising a similar amount by May this year, said V Hari Krishna, a director at Kotak Investment. The fund will invest in residential markets in cities including Mumbai, Delhi, Bangalore and Pune, he added.
"There is some level of capital shortage in the residential space and we will look to provide funds with a focus on top cities," Mr Krishna said in an interview in Mumbai on Monday. The fund will target a 20 per cent return by providing debt and structured financing to large developers, he noted, declining to name the companies. -From Singapore Singles fall for Japan apartment fraud Source: Business Times / Property [TOKYO] A group of singletons in Japan who claim that they were tricked into buying apartments by real estate agents feigning a romantic interest in them launched legal action yesterday. Two men and 10 women, all in their 30s or early 40s, filed a lawsuit against 14 firms, including real estate agencies and loan companies, demanding a total of 200 million yen (S$2.5 million) in compensation. According to their lawyers, the plaintiffs had become emotionally involved with people they met on online dating sites, with many being led to believe that they were heading towards tying the knot. Their intendeds, however, were more interested in pushing property and talked each alleged victim into buying at least one condominium, with an average price tag of 26 million yen, the lawyers said. Once contracts were signed and sealed, the romance disappeared and the estate agent skipped out of the relationship, leaving the new homeowners with the keys to a new front door but not to anyone else's heart. One victim was persuaded to buy three properties, the lawyers said.
"These firms' employees made the plaintiffs buy the condominiums, taking advantage of their romantic feelings," said lawyer Shinichi Hirasawa. -From Tokyo, Japan http://www.businesstimes.com.sg/specials/property/singles-fall-japan-apartment-fraud-20140227 UEM Sunrise CEO Wan Abdullah dies Source: Business Times / Property [KUALA LUMPUR] The managing director and chief executive officer of Malaysian property company UEM Sunrise, Wan Abdullah Wan Ibrahim, has died, the company announced in a statement yesterday, according to a Bernama report. He was 56. Mr Wan Abdullah, who had been on medical leave of absence since December last year, resigned as a director of UEM Sunrise on Tuesday. He was an inspirational leader who oversaw the transformation of UEM Sunrise into a leading Malaysian and international property player, the company said.
Izzaddin Idris, group managing director and chief executive officer of UEM Group, who has been performing the duties and functions of the MD/CEO of UEM Sunrise as executive director, will continue to perform this role and business will continue as usual. -From Kuala Lumpur, Malaysia http://www.businesstimes.com.sg/specials/property/uem-sunrise-ceo-wan-abdullah-dies-20140227 Hong Kong expects 3-4% growth this year Source: Today Online http://www.todayonline.com/business/hong-kong-expects-3-4-growth-year-0 Hong Kong to Raise Land Sales to Meet Home Targets, Tsang Says Source: Bloomberg / Luxury The Hong Kong government will sell land this fiscal year that could yield 11 percent more private homes, as it seeks to bring down prices in the world’s most-expensive residential market. The government will sell land for as many as 15,500 private homes for the fiscal year ending March 2015, up from the 14,000 units expected this year, Financial Secretary John Tsang said in his budget speech today. Chief Executive Leung Chun-ying made tackling soaring property prices one of his main goals, introducing the city’s toughest curbs last February and pledging to provide more public housing. Transactions last year slowed to the lowest since 1996, according to Land Registry data. “Before the supply-demand situation of the property market regains its balance, the government must continue with its demand-side management measures,” Tsang said. Together with land sold by others, developers will have access to sites to build 20,000 private homes for the 2015 fiscal year, the annual target of the government, Tsang said. -By Hwee Ann Tan Manhattan Condo Tower Extends China Vanke’s Reach in U.S. Source: Bloomberg / Luxury China Vanke Co. (200002), China’s biggest publicly traded developer, is teaming with real estate investor Aby Rosen to build a luxury midtown Manhattan condominium tower for its first project in New York. Rosen’s firm, RFR Holding LLC, and Vanke broke ground yesterday on the property at 610 Lexington Ave., adjacent to the Seagram Building, the companies said in a statement today. The planned 61-story skyscraper is Vanke’s second project in the U.S. after it joined Tishman Speyer Properties LP last year to develop the dual-tower Lumina condo complex in San Francisco. “It truly reflects Vanke’s globalization objective of forging strategic partnerships with world-class developers and learning through close collaboration,” Yu Liang, president of Shenzen-based Vanke, said in today’s statement. The Lexington Avenue project “will undoubtedly transform the New York City skyline and redefine modern urban living.” Developers from China are committing billions of dollars to projects around the world amid regulatory restrictions at home and concerns that the Chinese property market is overheating. Major U.S. cities and parts of Europe and Australia are appealing to developers for their relative stability and predictable population growth, as well as their popularity among wealthy Chinese individual buyers that may be attracted to the properties. Investments JumpIn the U.S., the six biggest metropolitan areas attracted almost $3 billion in commercial real estate investment by Chinese companies last year, up from $335.3 million in 2012, according to research firm Real Capital Analytics Inc. Manhattan and other New York City boroughs were the biggest areas for deals, with Los Angeles third. The median sale price of Manhattan condos reached a record $1.32 million in the fourth quarter, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The median for apartments in new developments was $1.73 million, up 27 percent from a year earlier. The planned tower at the corner of East 53rd Street was designed by Foster + Partners, the London-based firm run by Norman Foster, whose credits include the U.K. capital’s city hall, Singapore’s Supreme Court and a terminal at Beijing Airport that’s among the world’s biggest buildings. The New York site is just east of the Seagram Building at 375 Park Ave., which RFR controls. -By Oshrat Carmiel Prudential Hires Deutsche Bank’s Tan for Asia Real Estate Source: Bloomberg / News Prudential Financial Inc. (PRU), the second-largest U.S. life insurer, hired Yen Keng Tan from Deutsche Bank AG (DBK) to bolster its business investing client funds in Asian real estate. Tan will be based in Hong Kong and report to Eryck Su, chief investment officer in Asia for Prudential Real Estate Investors, the company said yesterday in a statement. The insurer and larger rival MetLife Inc. have been expanding real estate offerings in a push for fee income. Newark, New Jersey-based Prudential has been pursuing growth outside the U.S., hiring Ezequiel Rodriguez last month to run real estate operations in Mexico. Su was hired last year from Grosvenor Fund Management. Tan will work in “portfolio management, responsible for developing new strategic and separate-account relationships in Asia, with a focus on Malaysia,” according to the statement. He joined Deutsche Bank in 2006 and worked there most recently as a portfolio manager and global relationship manager at RREEF Real Estate where he raised and invested more than $2 billion over three years, according to the statement. A graduate of the University of Putra Malaysia, Tan is fluent in Malay, Mandarin and Cantonese, Prudential said. He has an MBA and doctorate from the University of Western Sydney. PREI managed $53.9 billion in gross real estate assets as of Sept. 30, compared with $51.2 billion a year earlier. The business has about 670 employees and operates from 22 locations, according to its website. Tom Vogel, a spokesman for Deutsche Bank, declined to comment. -By Alexandria Baca KKR Adds to Malls With $94 Million Long Island Purchase Source: Bloomberg / News KKR & Co. (KKR), the private-equity firm that raised $1.5 billion for its first real estate fund in December, and its partners bought a suburban New York shopping mall from Vornado Realty Trust (VNO) for $94 million. The 1.14 million-square-foot (105,600-square-meter) Broadway Mall in Hicksville, Long Island, was sold to an investor group including KKR, Cushman & Wakefield Inc. said in a statement today. KKR teamed with Broadway Mall Pacific, a partnership of Pacific Retail Capital Parters, Clifton Realty and Peter Fair of Continuum Partners, for the purchase, said the brokerage, which represented New York-based Vornado. The real estate investment trust said on Feb. 14 it agreed to sell the mall. It didn’t identify the buyer. “This was a rare Long Island mall offering, and with its great demographics it attracted considerable interest,” Andrew Merin, a Cushman broker, said in today’s statement. Almost 20 prospective buyers toured the property, “an indication of the fact that retail continues to be a strong performer in the heavily populated tri-state area” of New York, New Jersey and Connecticut. KKR and TPG Capital are among U.S. private-equity firms expanding in property investments to diversify beyond corporate buyouts. Within retail, KKR has bought three regional malls, including Broadway Mall, and one outlet center since it formed a real estate unit in 2011. The New York-based firm said in April 2013 that it was part of an investor group that bought the Colonie Center shopping mall in Albany, New York, teaming with the same partners it had for its first retail deal in April 2012, the $196 million acquisition of Yorktown Center in the Chicago suburb of Lombard. Outlet CenterKKR also entered the outlet-center business last year by winning a January 2013 foreclosure auction for Legends Outlets Kansas City. The purchase price was $131.5 million. Broadway Mall was built in 1956 as an open-air center, enclosed in 1972 and renovated in 1991, according to Cushman. It is more than 90 percent occupied and anchored by Ikea, Macy’s and Target stores, the brokerage said. “With a targeted capital improvement program and a revamped leasing strategy, Broadway will be a more attractive home for current and prospective retailers,” Ralph Rosenberg, KKR’s global head of real estate, said in a statement today. The mall generated about $300 million of retail sales in 2013, according to KKR. Broadway Mall is KKR’s 15th real estate fund investment since 2011, according to the statement. Before raising a fund, KKR used mostly its own cash and money from its credit division, KKR Financial Holdings LLC. The credit unit also invested in Broadway Mall, KKR said. -By Hui-yong Yu Lowe’s Profit Rises 6.3% on Housing Rebound Source: Bloomberg / Personal Finance Lowe’s Cos. (LOW), the second-largest U.S. home-improvement chain, posted a 6.3 percent profit gain as the housing rebound spurred renovation spending. The company also announced a plan to buy back $5 billion in shares. Fourth-quarter net income increased to $306 million, or 29 cents a share, from $288 million, or 26 cents, a year earlier, the Mooresville, North Carolina-based retailer said today in a statement. Excluding some items, profit was 31 cents a share in the period, which ended Jan. 31. That matched the average of 24 analysts’ estimates compiled by Bloomberg. Chief Executive Officer Robert Niblock has added workers at Lowe’s busiest times to take advantage of a surge in home renovations, fueled by rising property values and increasing purchases of new homes. Sales at locations open at least a year rose 4.8 percent for the year and 3.9 percent in the fourth quarter. “This was a solid quarter,” Robin Diedrich, an analyst with Edward Jones & Co. in Des Peres, Missouri, said today in a note to clients. “The company’s core home-improvement categories posted strong performance, which offset weak seasonal gift sales.” Lowe’s rose 5.4 percent to $50.72 at the close in New York. The Standard & Poor’s 500 Index traded above its record closing level as an unexpected increase in new-home sales bolstered optimism in the economy. Sales GainFourth-quarter revenue climbed 5.6 percent to $11.7 billion, matching analysts’ average estimate. Same-store sales advanced 3.9 percent. Profit this year will be about $2.60 a share, Lowe’s said today. Analysts had projected $2.64 on average. The retailer also forecast same-store sales would gain 4 percent. While the company described the outlook as cautious, since the fiscal year ended in February 2006, that growth would only be surpassed by last year’s 4.8 percent increase. “Some of the recent housing and jobs data has softened a little bit, but we still think the consumer is going to be there and 2014 is going to be a great year,” Niblock said in an interview. “It made more sense to come out slightly more cautious with our guidance and then deliver numbers above.” Home Depot (HD), the largest U.S. home-renovations chain, said yesterday that it expected the housing recovery to continue boosting its results. Same-store sales will increase 4.6 percent in the current fiscal year, the Atlanta-based company said. Since the fiscal year ended January 2005, that would only be bested by last year’s 6.8 percent gain. The chain’s fourth-quarter profit also topped analysts’ estimates, marking six straight years of exceeding or meeting projections. Share BuybackLowe’s also said today that its board approved the $5 billion share repurchase, which comes in addition to the $1.3 billion remaining on its current authorization. Like Home Depot, Lowe’s growth strategy has shifted to boosting sales at current stores rather than opening new locations. The one recent exception came last year, when Lowe’s bought the majority of Orchard Supply Hardware Stores Corp.’s assets, including 72 locations, out of bankruptcy for about $205 million. Lowe’s said today it plans to add about 15 home-improvement and five hardware stores in its current fiscal year. Lowe’s has been revamping its product lines to remove items that were less profitable or took longer to sell. Those moves should continue to benefit the company as the economy improves, Keith Hughes, an analyst at SunTrust Banks Inc. in Atlanta, said in a phone interview before the results were released. The chain should receive another boost because it focuses more on premium goods than Home Depot and shoppers often trade up to higher-priced items as consumer confidence increases and incomes rise, he said. In the fourth quarter, same-store sales gains were driven by purchases above $500 that rose 8.9 percent, Niblock said. That more than doubled the total gain. “Lowe’s has played at the high end, and Home Depot has played at the low end,” Hughes said. “That has helped Home Depot, but that advantage should flip to Lowe’s.” -By Matt Townsend http://www.bloomberg.com/news/2014-02-26/lowe-s-profit-rises-6-3-on-housing-rebound.html |