Mapletree Logistics Trust has acquired a warehouse at Changi South Street for S$34 million.

The acquisition is expected to be completed in the first quarter of this year.

The vendor of the property is CEVA Freight, which will lease back the property for an initial term of five years, with an option to extend for another five years.

Its rental will rise two per cent per year from the second year.

MapletreeLog said the acquisition will be accretive to its distribution per unit, adding an additional 0.02 Singapore cents or 0.4 per cent.

The acquisition is fully funded by proceeds from the trust’s recent private placement of 115 million new units in November last year.

Source: Channel News Asia, 22 Jan 2010

Prices of resale HDB flats continued to rise in the fourth quarter of last year, bringing the full-year increase to 8.2 per cent.

Statistics from HDB also showed that the median cash premium paid by home buyers doubled quarter-on-quarter. But analysts said the market may be approaching a limit.

93 per cent of resale transactions in the 4th quarter of last year were above valuation and the cash premium paid by home buyers jumped by a 100 per cent from S$12,000 in Q3 to S$24,000 in Q4.

Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic, said: “There seems to be more families that are going in to buy larger flats – your 4-room and 5-room flats – and as a result, these larger flats also come with higher cash-over-valuation amount, which in a way pulls up that median cash-over-valuation.”

But this increase is unlikely to continue indefinitely.

HDB said the median cash-over-valuation amount has stabilised in recent months.

The cash premium for January has gone down to S$22,000. Analysts said this may indicate that the market is approaching a limit to how much home buyers are willing to pay.

Mr Mak added: “Our salary is still not catching up at such a high rate. There will be a certain time when the affordability issue will come into play. As the sellers start to demand higher and higher COV, they may see that there may come a stage when there will be some buyer resistance.”

Efforts by the government to raise the supply of new homes by launching more Build To Order projects and Design Build and Sell Schemes will also gradually help to cool the market, once the flats are completed.

Colin Tan, head of Research and Consultancy, Chesterton Suntec International, said: “The government efforts at pushing out the BTOs and DBSS and all the executive condos, that may have helped to allay some of the panic buying. And this probably resulted in some people actually shifting the demand from the resale market to the new flats.”

To meet demand, HDB said it will be offering 6,900 new flats in the first half of this year.

Source: Channel News Asia, 22 Jan 2010

Private home prices in Singapore continued to recover in the fourth quarter of last year, growing 7.4 per cent on-quarter.

According to data from the Urban Redevelopment Authority, the rise is a slower pace from the 15.8 per cent jump in the previous three months.

But analysts expect the cost of homes to still creep up this year, and match the peak levels seen in the second quarter of 2008.

Mass market projects powered the private residential sector last year. Strong demand from those upgrading from public housing pushed prices up 11.8 per cent in 2009.

Market watchers said prices of mass market homes will still inch up this year at between 3 per cent and 5 per cent, despite having exceeded their peak prices.

But observers said suburban homes will likely play second fiddle to more expensive projects this year. And prices may match previous highs, given that the 7.4 per cent increase in the three months to December is just 6.6 per cent off the peak in second quarter of 2008.

Donald Han, managing director, Cushman & Wakefield, said: “This year, we are expecting prices to move as much as 10 per cent to 12 per cent, dominated primarily by the high-end as well as the luxury market.

“We would anticipate the first two quarters to go something like four to five per cent first, we would probably hit the top of the market, revisit that towards the third quarter of this year.”

Analysts expect six in 10 homes from the total stock this year to come from the mid- to high-end segments, where prices could rise 10 per cent to 20 per cent this year.

Developers may also launch fewer suburban homes after running down their inventory.

Tay Huey Ying, director, Research & Advisory, Colliers International, said: “If we are looking at the whole market including your secondary sales and your sub-sales, the total number of transactions is likely to hover around the 32,000 over units that we saw transacted in 2009. The bulk of the activity, we think will be led by secondary sales.”

For 2009, prices of new homes in the central area fell 1.8 per cent, while those in the city fringes rose 3 per cent. Overall, prices of private residential properties went up by 1.8 per cent in 2009.

After a bumper year in 2009, where over 14,700 homes were sold, market watchers expect sales to trend lower this year at between 9,000 and 12,000 units.

Source: Channel News Asia, 22 Jan 2010

It plans to be more careful in funding purchases; Q4 DPU climbed 8.9%

MAPLETREE Logistics Trust (MapletreeLog) is focusing more on growth this year and is looking at acquisitions in Singapore and the region. But it also intends to be more careful in funding purchases and this could affect the timing of cash calls.

The trust said this yesterday as it posted a net property income of $44.9 million for the fourth quarter ended Dec 31, 2009, which was 0.4 per cent less than that a year ago.

Nevertheless, the amount distributable rose 12.3 per cent to $31.8 million. This was boosted by a $2.5 million consideration from Prima Limited for a lease extension at a Singapore property.

As a result, available distribution per unit (DPU) rose 8.9 per cent to 1.59 cents. This came despite a larger unit base from a $79 million private placement in November last year.

‘We think 2010 is a transition year,’ said Richard Lai, deputy CEO and chief financial officer of the Reit manager at a briefing. While the Reit is building up its acquisition pipeline, ‘we will continue to be quite conservative in terms of how we use our balance sheet’.

Mr Lai explained that the Reit is looking to match borrowings and cash calls more closely. ‘What we are saying is that it will be harder to predict when we have to do an equity fund-raising.’

MapletreeLog is also looking to undertake build-to-suit projects in Singapore and abroad.

MapletreeLog’s leverage ratio as at Dec 31 was 36.7 per cent, down from 38.5 per cent year-on-year. Around $204 million or 19 per cent of its total debt is due for refinancing this year and it has received firm refinancing offers from banks.

The trust’s portfolio comprised 82 properties with a book value of around $2.9 billion as at Dec 31. It was revalued downward by $16.5 million in FY2009. The portfolio occupancy rate was 98.1 per cent, down from 99.6 per cent a year ago.

For FY2009, MapletreeLog reported an amount distributable of $117.9 million, 21 per cent higher year-on-year. DPU was 6.02 cents, down 16.9 per cent.

MapletreeLog gained half a cent yesterday to close at 79 cents.

Source: Business Times, 22 Jan 2010

ASCOTT Residence Trust (ART) yesterday said that unitholders’ distribution for the fourth quarter ended Dec 31, 2009, rose 12 per cent to $11.5 million, from $10.3 million a year ago.

The rise was despite a 2 per cent dip in revenue for the three months to $46.1 million mainly due to weaker demand for serviced residences in Singapore. Revenue in Q4 2008 was boosted by the higher rental rates contracted in the earlier months of 2008 before the onset of the global financial crisis, ART said.

But the trust’s gross profit rose 7 per cent to $21.9 million as its direct expenses fell year-on-year. Distribution per unit (DPU) for Q4 2009 rose to 1.87 cents from 1.69 cents for Q4 2008.

ART achieved a RevPAU (revenue per available unit) of $124 in Q4 2009 – a decrease of 7 per cent as compared to 4Q 2008. This came about from a reduction in the average daily rates of its serviced residences, the trust said.

The trust is upbeat about its prospects in 2010 and remains confident of the longer term growth in the markets where it operates.

‘We have seen a continued stability in hospitality demand extending from Q3 2009 into Q4,’ said Lim Jit Poh, chairman of the trust’s manager. ‘We expect improvement in hospitality demand in 2010 in line with the more positive economic sentiments though the extent of the economic recovery is uncertain.’

For the whole of 2009, ART’s distribution to unitholders fell 16 per cent to $45.2 million from $53.7 million in 2008. DPU fell 17 per cent to 7.32 cents from 8.78 cents.

Chief executive Chong Kee Hiong said ART has accelerated asset enhancement plans for selected properties including Somerset Grand Cairnhill and Somerset Liang Court in Singapore and Somerset Grand Hanoi in Vietnam to improve asset yields. ‘We will also seek accretive acquisition opportunities to expand Ascott Reit’s portfolio,’ he added.

ART’s portfolio comprises 38 properties with 3,644 units in seven countries. The stock lost 5 cents to end at $1.28 yesterday.

Source: Business Times, 22 Jan 2010

WESTMINSTER Unicampus was also in the news recently when it defaulted on its rent to the Singapore Land Authority (SLA) on another site – the former Queenstown Neighbourhood Police Centre at 15 Commonwealth Avenue.

It was announced in 2007 that it had submitted the highest bid to pay a monthly rent of $55,888 for the site.

Westminster was to use the building for an arts, dance and drama studio, an association, and a martial arts and fencing school.

None of this materialised.

Not only did it default on its rental payments – accumulating arrears and late payment interest of more than $184,000 – it also carried out unauthorised renovations.

Westminster sub-let the place, which became an unauthorised canteen and food outlet. It also demolished the toilets on all three storeys of the building, removed the entire front wall of the first storey and set up a 300 sq m shelter.

SLA terminated the tenancy last May, but gave Westminster several opportunities to pay the arrears and remove the unauthorised structures.

Westminster failed to comply and refused to vacate the premises. Last August, SLA got a court order to recover the property.

When asked about the site, Westminster’s director Tan Eng Hong would only say: ‘It’s an investment that has gone sour and we’re not able to carry on within our ability.’

Source: Straits Times, 22 Jan 2010

ART collector Ivan Chin spent half a million setting up his gallery – putting in landscaping, chandeliers, security and sound systems – only to be told four months later that he had to vacate the premises.

He is one of 15 sub-tenants of 7 Mount Sophia who have to go because the master tenant of the site, Westminster Unicampus, breached its tenancy agreement with the Singapore Land Authority (SLA).

Mr Chin’s Enesis Art gallery was to house 55 pieces from his own collection, including one by Picasso, reportedly worth an eight-figure sum.

His two-year lease, at a rental rate of $20,000 a month, was to expire only next June.

Westminster’s own 22-month lease with the SLA – to use the site as an arts, dance and drama studio – expired on Dec 27.

The SLA said that Westminster, a company registered to conduct distance learning courses, sublet some 60 per cent of the space for commercial usage – in breach of the agreement that it should be no more than 20 per cent.

Not only did Westminster refuse to remedy the breaches, it also sublet the premises to be used as a student hostel.

In addition, it had rental arrears and interest on late payments which amounted to over $136,000.

When The Straits Times visited the former Trinity Theological College site on Tuesday, most of the units were vacant.

The four businesses still in operation said they had been given till the end of the month to move out. Two of their leases had ended in December.

All said that Westminster had given them the impression that their leases would be renewed after two years, and so they had pumped in at least five-figure sums to do up their units.

‘If we had known of the situation, we wouldn’t have moved in in the first place. It’s disruptive for the business,’ said a manager of Polystone, a company selling stone products.

Director Barry Hill of office design firm Davenport Campbell said that two previous tenants – a bar and media school – moved out after pumping in large sums, when they discovered that the land was not authorised for such use.

When contacted, Westminster’s director Tan Eng Hong said his original intention was to be at Mount Sophia longer and to build a multi-faculty and multi-campus institution.

When asked why he broke tenancy rules and rented out space to businesses, he said that he had made submissions for the change of use of the site but was not able to get them.

‘We should have gotten the permit first before leasing it out, but it took us quite long to get everything in place,’ said Mr Tan.

The SLA has also started legal proceedings to recover possession of the site, as Westminster has refused to vacate it. It said it would tender out the site again, for approved uses. The Straits Times understands that the site, a national monument, is slated for the creative and artistic industry.

The SLA also said that sub-tenants of state properties should do due diligence checks, and seek it’s written consent, as well as legal advice, before signing any sub-tenancy agreements.

For now, Mr Chin hopes that the SLA will let remaining tenants stay till the next master tenant takes over.

‘We’ve already spent so much money on the place, it would be best if I could stay rather than move my pieces to a warehouse,’ he said.

Source: Straits Times, 22 Jan 2010

ANOTHER high-end condominium is set to hit the market following a number of recent upscale launches.

Allgreen Properties will launch Holland Residences for sale next week, said marketing agent CB Richard Ellis (CBRE).

The five-storey freehold development – it is on Taman Warna and next to Chip Bee Gardens off Holland Road – has been 13 years in the making.

Allgreen bought the site, which used to host nine bungalows, for $78.26 million in 1997.

The launch price for Holland Residences is ‘yet to be confirmed’ but is likely to be at an average of $1,600 to $1,700 per sq ft, said Mr Joseph Tan, CBRE’s executive director for residential.

He said CBRE has already received inquiries and expressions of interest. ‘We expect the response to Holland Residences to follow the strong sales momentum that started in the second half of 2009.’

Allgreen will release 30 to 40 of the development’s 83 units for sale in the first phase.

It will start previews on Monday for ex-owners of the site’s former bungalows. This will be followed by a preview for Allgreen’s directors, staff and business associates before sales are opened to the public.

The 83 units at Holland Residences will range from one-bedroom to four-bedroom apartments and penthouses.

Sizes start from 600 sq ft for a one-bedder and go up to 2,800 sq ft for a four-bedroom penthouse.

There will also be three-bedroom loft units of 1,900 sq ft with a jacuzzi on the ground floor.

Other developers are also starting to kick off their 2010 launches.

City Developments opened the doors of Cube 8 at Thomson yesterday to former owners of The Albany and Thomson Mansion, the projects that used to stand on the site.

Staff and directors were also invited to the preview, where units were sold for an average of $1,250 psf, The Straits Times understands.

The public preview for Cube 8 will start today.

Source: Straits Times, 22 Jan 2010

UPFRONT cash paid by buyers for HDB resale flats doubled in the fourth quarter of last year on the back of high demand amid tight supply.

The Housing Board’s official statistics for the fourth quarter released on Friday showed the median cash-over-valuation paid for HDB flats was $24,000 – up from $12,000 in the third quarter last year.

The Resale Price Index hit a fresh record, with resale prices rising 3.9 per cent – 0.1% higher than the flash estimate released three weeks ago – for the last three months of 2009, bringing the full year increase to 8.1 per cent.

HDB said in a statement that sales volume declined by about 23 per cent, from 11,649 cases in third quarter last year to 8,926 cases in the following quarter. But 2009 was still a bumper year compared to 2008, with total number of resale transactions surging to 37,205 – an increase of 31 per cent over the previous year.

HDB also said that 93 per cent of sales in the fourth quarter transacted above valuation – up from 79 per cent in the third quarter. However, it added that the median COV has stabilised in recent times, with the figure for the first half of January down to $22,000.

HDB said it will launch 12,000 new flats this year under its build-to-order (BTO) scheme, or more if there is demand, and will monitor the market closely and adjust the flat supply accordingly.

Source: Straits Times, 22 Jan 2010

PRIVATE home prices shot up by 7.4 per cent in last three months of 2009 as the property market made a quick recovery from a nightmarish start to the year.

This followed the previous quarter’s increase of 15.8 per cent – a turnaround from a contraction of 18 per cent in the first half of 2009.

Official data by the Urban Redevelopment Authority (URA) released on Friday showed prices of private residential properties for 2009 as a whole increased by 1.8 per cent.

Prices of non-landed properties rose d by 7.2 per cent in the fourth quarter, compared with the 15.9 per cent increase in the previous quarter. Private apartment prices fetched 9.7 per cent more, while prices of condominiums were up by 6.1 per cent. Prices of non-landed properties in Core Central Region1 (CCR) went up by 7.3 per cent in the fourth quarter, while those in Rest of Central Region2 (RCR) and Outside Central Region (OCR) increased by 9.5 per cent and 6.3 per cent respectively.

For 2009, prices of non-landed properties in CCR decreased by 1.8 per cent, while those in RCR and OCR increased by 3 per cent and 11.8 per cent respectively. For the fourth quarter, office, shop and industrial properties increased by 1 per centm 0.6 per cent and 1.8 per cent respectively.

The URA said as at fourth quarter 2009, there were 60,476 private residential units in the pipeline, comprising supply from projects that were already under construction and those that had been granted planning approval but were not under construction yet.

Source: Straits Times, 22 Jan 2010