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Wednesday, November 30, 2011

SP Setia wins land tender in Singapore

Property developer SP Setia Bhd has won a tender bid of an 18,700sqm site along Chestnut Avenue, Singapore, for S$180 million (RM437.4 million).

"The Chestnut Avenue site has a potential development value of RM1.1 billion and a maximum allowable gross floor area of 39,270sqm," the company said in a statement today.

The land tender represents SP Setia's second foray into the Singaporean property market following its acquisition of a freehold development along Woodsville Close in April.

The group's maiden project in at Woodsville Close is expected to be launched in a few months' time followed by the proposed launch of the Chestnut Avenue site by end-2012.

In the statement, SP Setia President and Chief Executive Officer Tan Sri Liew Kee Sin said the land tender provided the group with an extremely rare and excellent opportunity to showcase its core and multiple award-winning development expertise of building eco-brand sanctuaries in a lush green neighbourhood.

"We are very excited about this site which is next to the Zhenghua Park with nearby Bukit Timah Nature Reserve and Bukit Batok Nature Park offering scenic views and recreation," he said.

By Bernama

LBS Bina reaps higher 9-month revenue

LBS Bina Group Bhd has chalked up higher revenue and pre-tax profit for the nine-month period ended Sept 30, 2011 of about RM302 million and RM46 million, respectively.

This represents 59 per cent improvement in revenue and 2113 per cent pre-tax profit in the same period last year, the company said in a statement.

For the current quarter under review, the group earned RM125 million revenue and RM16 million pre-tax profit, respectively.

"This represents a 57 per cent improvement in revenue and 230 per cent rise in pre-tax profit in the same quarter last year," it said.

The company attributed the better growth to its ongoing projects with good take-up rates such as D’Island Residence in Puchong, Topaz III, Ivory Residences I & II, Indigo Homes and Lavender II in Bandar Saujana Putra.

Other commercial and industrial projects such as the Tasik Perdana Industrial Park in Puchong and Saujana Business Park in Bandar Saujana Putra also contributed to the company's good showing in the third quarter.

By Bernama

Singapore private resale home prices remain flat

SINGAPORE: Resale prices of private homes rose a touch last month, reversing a slight dip in September, but the overall trend suggests a period of flat values.

The new Singapore Residential Price Index (SRPI) flash figures out yesterday showed that prices rose 0.9% last month, rallying from a 0.1% dip in September. The overall SRPI which tracks a basket of completed non-landed projects points to a cautious market, with monthly price movements mostly fluctuating within a range of just 1% or less this year.

Prices of centrally located homes, excluding small apartments of less than 500 sq ft, posted a gain of 1% last month compared with the 0.4% dip in September. Non-central area values rose 0.8%, building on September's 0.1% increase. Prices for small apartments inched back 0.9% after a 3.5% drop in September.

Experts offered various reasons for the trends seen in the SRPI index, which is compiled by the National University of Singapore.

DTZ head of Asia-Pacific research Chua Chor Hoon noted that the index's ups and downs could be due to its nature as a monthly snapshot, and there were fewer caveats lodged in October.

Chesterton Suntec International research head Colin Tan said the fluctuation could be due to prices reaching a turning point.

“The underlying trend is still up ever so slightly. This is to be expected as there is still positive economic growth,” he added, suggesting that there could be a to-and-fro between the HDB resale and private resale mass market segments.

By The Straits Times

Retail rents jump 32% in Melbourne

SYDNEY: Retail rents in Melbourne surged 32.3% in the year to September, the third fastest growing market behind Hong Kong and Beijing, fuelled by international tenants tapping the market, said property services firm CBRE.

Against the backdrop of its relatively healthy economy, Australia has lured a number of high-profile international retail brands.

Zara, owned by the world's biggest fashion retailer Inditex SA, opened stores in Melbourne and Sydney this year, while UK fashion retailer Topshop is opening its store in Melbourne next month.

In the third quarter this year, Sydney was the third most expensive retail market globally and Melbourne ranked eighth, while New York retained the top spot to be the world's expensive shopping destination, CBRE said.

Still, CBRE expects Australian markets to slip down the rankings next year partly due to the record levels of outbound tourism and increasing labour and utility costs.

Globally, total retail rents edged down 0.6% quarter-on-quarter in the third quarter, with rents in the Americas dropping 2% while those in the Asia-Pacific, Europe, the Middle East and Africa regions remained flat, according to CBRE.

By Reuters

HK plans to get tough with errant developers

HONG KONG: Hong Kong has proposed a new law that will slap fines and jail terms on developers that mislead buyers of new homes.

The government yesterday kicked off a two-month consultation period on the new law, which it hopes to introduce to the Legislative Council in the first quarter of next year.

“There are consumer protections in other areas, and there should be similar protections on selling properties,” Eva Cheng, the secretary for transport and housing, said as she called for improved transparency, as she unveiled the proposed law. “It has to be done, and there is never a better time.”

Cheng said the current slump in property prices in Hong Kong did not affect the government's motivation to put new rules in place. A steering committee has been working on the rule changes over the past year. The new law would govern all first-hand projects, whether completed or sold off-plan.

The maximum penalty for misleading the public would be a fine of HK$5mil and seven years in prison. Minor breaches would be punished by a fine of around HK$100,000.

Under the proposed rules, developers would have to make a sales brochure on each property available at least seven days before sales begin. The brochure would list the property's address and the neighbourhood it is in. The brochure would also have to provide the saleable area of the property, and would not be allowed to contain artist's impressions of the development.

Residential property in Hong Kong has traditionally been priced and promoted based on gross floor area, not the net area. But consumers have complained about misleading practices from developers, who often include an apportionment of public areas such as lift lobbies, electricity plants and clubhouses in the gross floor area of a flat.

Cheng admitted that current legislation on new-home sales was insufficient.

“We agree the current measures are not sufficient,” she said, adding that the new rules were a top priority for her bureau in the coming year.

“The public is rightly concerned about the sale of first-hand properties,” Cheng said.

The saleable area is the floor area of the residential property itself, including any verandah or utility platform, but excluding bay windows and public parts of a development.

Developers would also be required to provide a price list for the development at least three calendar days before it goes on sale. With the government cracking down on property speculation in Hong Kong, transactions have stalled and prices weakened.

Edward Farrelly, the director of research for Hong Kong, Macau and Taiwan at brokerage CBRE, expects residential prices to fall 20% over the next year.

The new rules would have an impact, he said. “I think there's a lot of good in getting more transparency into the market,” he said. “It remains to be seen how the secondary market responds.”

New home prices would likely rise as a result of developers building extra costs into their baseline price, Farrelly said. But they may not be able to push through that kind of increase in the current market.

“Developers will try to resist a major hit on their margin,” Farrelly said. “However, if the market is faced with a downturn, they may have to accept lower margins.”

Andrew Lawrence, the Hong Kong property analyst at Barclays Capital, has forecast a decline of 25% to 30% in Hong Kong property prices, assuming the former British colony pulls off a soft landing. The drop would rise to 35% to 45% in case of a hard landing, Lawrence predicts.

His favorite pick in the sector is Cheung Kong, run by Hong Kong tycoon Li Ka-shing, since the company has been deleveraging its balance sheet over the past 24 months.

That should allow it to buy assets at the bottom of the cycle, Lawrence said. Cheung Kong is Hong Kong's second largest developer by market capitalisation, behind Sun Hung Kai Properties.

By contrast, Sun Hung Kai, the world's second biggest developer by market capitalisation, was relatively highly geared, Lawrence said. It and Henderson Land had the potential to need to issue fresh equity in the future, he said.

By Reuters