The second phase of the Circle Line will open to passengers on April 17. The 11-station stretch, from Bartley to Dhoby Ghaut stations, will start operations almost a year after the first five stations were opened to the public last May.

With this new opening, about half the Circle Line or about 16 stations will connect commuters to places like the new Sports Hub through Stadium Station, to Suntec via Promenade Station and the museums via Bras Basah Station.

Transport Minister Raymond Lim said: “This is a significant thing for us because now you have these direct connections. So if you are on the eastern side, north-eastern side, you have a direct line that connects you instead of having to go to the city centre.”

So a commuter going from, say, interchange station Paya Lebar to Bishan can shave off about 18 minutes or half his travelling time, said the Land Transport Authority. Commuters can bypass the busy City Hall and Raffles Place stations.

Building the Paya Lebar Station was not easy. One of the challenges that engineers faced in building this interchange station was that they had to connect an underground line to an existing above ground station.

For commuters who also had to endure congestion during road diversions, the opening has been welcomed.

Said one man in the street: “The transportation was very bad and there used to have jams all over and time taken from one place to another was very bad. Now of course, there are a lot of changes.”

“It saves time, like when we are rushing to meet friends and family, it will be much more better,” said another commuter.

Transport authorities now expect the Circle Line ridership to spike to about 200,000 daily.

Also operating will be the station that caused a delay to the opening of the Circle Line when the site at Nicoll Highway collapsed.

Sim Wee Meng, group director, Rail, Land Transport Authority, said: “Nicoll Highway, we have built at the new site which is 100 metres away from existing site. It’s now completed and will open as part of Circle Line 1 & 2.”

As for the possibility of bus rationalisation, Mr Lim said: “The LTA will have to work with the operators to see whether they need to streamline any of the services in order to feed into the Circle Line.”

The final phase of the Circle Line, which will link up the western parts of Singapore to the line with stops in places like Botanic Gardens and Holland Village, is expected to be ready next year.

Source: Channel News Asia, 26 Jan 2010

It plans to sell 16.65m ADS at between US$8.75 and US$10.75 each

China’s IFM Investments Ltd’s initial public offering could suffer because of mounting fears about a slowdown in China’s booming real estate market.

IFM has an exclusive franchise agreement to sell residential property in China under the Century 21 brand.

It said in a regulatory filing that it plans to sell 16.65 million American Depositary Shares priced at between US$8.75 and US$10.75 each.

At the midpoint, the IPO would raise about US$162 million.

But Eric Guja, a research analyst with Connecticut-based investment firm Renaissance Capital, said the IPO may price below the company’s forecast range, both because of concerns about the Chinese real estate market and because two private equity investors are selling part of their stakes.

Private equity firms are often good at selling assets at the top of the market, and in 2009 stock investors grew increasingly wary of IPOs where private equity funds were selling.

The company was not available for a comment.

IFM is heavily exposed to the Chinese residential real estate market. It has offices in 34 major cities and has about 4.7 million property listings.

It sells mortgage management and franchise services, but in the first three quarters of 2009, IFM’s company-owned brokerage offices accounted for more than 90 per cent of its revenue.

China’s real estate market has benefited from strong economic growth and improved access to credit, but some say the market could be getting too torrid for its own good.

‘The housing market in major cities is hot, reflecting an abundance of credit and limited investment options for Chinese households,’ said Michael Lea, the director of the Corky McMillin Center for Real Estate at San Diego State University.

Mr Lea added that the market in major cities like Beijing and Shanghai is likely overheating.

Some argue that the Chinese real estate market in general is looking frothy.

Earlier this month, at a conference in Hong Kong, economist Nouriel Roubini said that asset bubbles in commodity, real estate and equity markets could eventually slow China’s rapid growth.

Mr Roubini was one of the few economists who accurately predicted the magnitude of the US and European financial crisis.

Some local economists believe that China is moving closer to boosting interest rates, in part to rein in speculative excess in property markets.

The beginnings of a slowdown in real estate may already be here. China’s National Bureau of Statistics said recently that property investment rose 16.1 per cent in 2009 from the previous year – slower than the 17.8 per cent increase in the first 11 months of the year.

‘It’s still a very underdeveloped real estate market compared to the rest of the world, but the recent news from the country is likely going to concern some investors about the near-term growth trends in the business,’ said Renaissance’s Mr Guja.

If IFM can meet its longer-term growth targets, its valuation may be more attractive, he added.

IFM’s valuation is roughly in line with much larger publicly-traded Chinese real estate services company E-House China Holdings Ltd, said IPOdesktop.com president Francis Gaskins. At the midpoint of its planned IPO range, IFM has a price-to-book value of 2.82 compared with E-House’s 2.78.

IFM reported net revenue of 443.7 million yuan (S$91 million) for the nine months ended Sept 30, up 112.4 per cent from a year earlier.

It swung to a profit in the same period, reporting net income of 88.3 million yuan, compared with a loss of 99.3 million a year earlier.

The company is expected to price today and debut on the New York Stock Exchange under the symbol ‘CTC’ tomorrow.

The underwriters, led by Goldman Sachs and Morgan Stanley, have the option to buy an additional 2.5 million shares.

Source: Business Times, 26 Jan 2010

Saudi Arabian central bank governor Muhammad al-Jasser said that the kingdom would issue its first mortgage law in the next few months, boosting the real estate industry and allowing banks to diversify their balance sheets.

‘I’m optimistic that in the next few months, the law will be issued,’ said Mr al-Jasser yesterday.

‘It will be a qualitative jump in the way we finance housing in the country and in the way we use financial instruments that are linked to the housing market.’

Saudi Arabia’s property market is suffering from a shortage of housing units, shielding the kingdom from corrections in the real estate markets of other Gulf Arab states such as the United Arab Emirates, Banque Saudi Fransi said in a report on Jan 13.

Real estate prices in Dubai, the second-largest emirate in the UAE, plummeted around 50 per cent from their peak, according to Deutsche Bank estimates.

The Syariah-compliant legislation which has been discussed for the past two years will consist of five parts, Mr al-Jasser said. It will define the terms of mortgages, how they are designed, how they are granted, how companies are licensed and how procedures will be enforced.

The law is on the way to the council of ministers before going to the Shura Council, the country’s consultative assembly, for final approval, he said.

‘We expect demand for new housing will continue, steered by the indigenous population,’ John Sfakianakis, Riyadh-based chief economist at Banque Saudi Fransi, said in the report.

‘In most areas of the kingdom, a shortfall in the number of housing units available persists, which has placed upward pressure on consumer price inflation in the past two years.’

Bank lending in the world’s largest oil exporter slowed following the global credit crisis and the default of two Saudi family conglomerates: Ahmad Hamad Algosaibi & Brothers Co and Saad Group.

Eighty banks, including BNP Paribas and Citigroup Inc, are owed at least US$15.7 billion, sparking a flurry of litigation.

‘Hopefully, the mortgage law will ensure the production of sufficient sukuk and corporate bonds that will be held by banks in lieu of government bonds,’ Mr al-Jasser said, when asked if the government planned to issue longer maturity bonds.

Islamic bonds, or sukuk, are asset-based securities that pay profit distributions to investors as Syariah law forbids interest payments.

Source: Business Times, 26 Jan 2010

Habtoor Group, a stakeholder in Barclays plc, has hired Rothschild to identify five-star hotel targets in Europe, its chairman said yesterday.

The conglomerate, one of the United Arab Emirates’ largest family businesses, is also aiming to win up to US$8.2 billion worth of building contracts this year with Australia’s Leighton Holdings.

Habtoor, which owns hotels in the UAE, was one of several Middle East investors that bought into Barclays in 2008 as the lender looked to boost its capital to weather the global financial crisis.

‘We talked with Rothschild bank . . . about investment in Europe and especially in London and Paris for hotels if there is anything they can find so they are looking for us,’ billionaire Khalaf al-Habtoor said in an interview.

He added that the group was also looking at companies which want to sell their assets due to a lack of financial liquidity.

Mr Habtoor said in August that the group had about US$1.3 billion to invest in Europe.

The group, which rivals Dubai’s largest contractor Arabtec, has a joint venture with Leighton and has said it may float its engineering unit or the entire group in the third quarter of 2010 with possible listings in Dubai and London.

Mr Habtoor declined to comment on the potential initial public offering yesterday.

The construction firm is working on about 27 billion dirhams (S$10.3 billion) of projects in the United Arab Emirates at present and expects to bid on about 40 billion dirhams worth of projects in Abu Dhabi alone this year, Mr Habtoor said.

‘We are expecting this year that we have to grab a minimum of 25-30 billion dirhams in projects,’ he said.

The company also expects to boost its presence in Qatar as it looks to diversify revenues away from its home market.

Source: Business Times, 26 Jan 2010

Bids, with a floor of 300,000 rupees per square metre, open on March 3

India’s financial capital plans to sell office space in an emerging business district at a minimum price of 4.35 billion rupees (S$132 million) in a deal that may test demand for property amid an economic recovery.

The Mumbai Metropolitan Region Development Authority, or MMRDA, proposes to sell 14,500 square metres of built-up area on 3,162.5 sq m of land in Bandra-Kurla, where Citigroup Inc and the nation’s capital markets regulator are located.

The reserve price is 300,000 rupees per sq m, the authority said in an advertisement, unchanged from the last such offer in 2008.

The sale aims ‘to cater to the growing demand for business area’ in the north-central neighbourhood that was reclaimed from marshland, MMRDA said.

Indian and overseas companies in financial services, insurance, fund management, information technology, telecommunications, among others, can bid for the land, the advertisement said yesterday. Bids open on March 3.

Standard Chartered Plc and Nomura Holdings Inc are among companies expanding their India operations as consumer spending fuels growth in Asia’s third-biggest economy.

An 81 per cent rally in the benchmark stock index in 2009 has also revived developers’ interest, with Lodha Developers Ltd and Sahara Prime City Ltd among at least nine property companies planning to raise about 164 billion rupees in initial sale of shares.

Bandra-Kurla is centrally located in the Manhattan-shaped island-city and the authorities are increasing its access with a new Metro rail, in addition to the existing commuter train and road networks. The existing main business district in South Mumbai at the tip of the city lacks expansion space and stretches daily commuting to up to four hours for some.

The new business district is closer to the city’s two airports, compared with Nariman Point in South Mumbai, which is about 25 km from the closest domestic airport.

The last sale of land in 2008 attracted buyers for only three of the five plots on offer as the global economic slowdown dried up funds and demand for property. Jet Airways India Ltd then bidded 344,448 rupees per sq m for a land parcel with a maximum 24,000 sq m of development area.

India’s gross domestic product grew 7.9 per cent in the three months ended Sept 30, making it the fastest-growing major economy after China.

Finance Minister Pranab Mukherjee on Jan 8 forecast growth of as much as 7.75 per cent for the year ending March.

The Reserve Bank of India has slashed interest rates to a record low to shield India’s US$1.2 trillion economy from the global recession, fuelling demand.

Source: Business Times, 26 Jan 2010

The financially troubled owners of two massive apartment complexes that sold for a record US$5.4 billion a few years ago said yesterday that they are turning them over to their creditors.

The joint venture ownership led by Tishman Speyer Properties and BlackRock Realty couldn’t make a US$16 million loan payment earlier this month for the Stuyvesant Town and Peter Cooper Village apartments in Manhattan.

Over the last few days it became clear that the only viable alternative to bankruptcy would be to transfer to lenders control and operation of the 110 buildings and 11,000 apartments overlooking the East River, partnership spokesman Bud Perrone said.

‘We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city,’ Mr Perrone said.

It hadn’t been determined when the ownership transfer would take place and who specifically the new owners would be, he said.

The group bought the complexes, which have about 25,000 tenants, in 2006, in America’s largest residential real estate deal. Since then, the city’s housing market has cooled considerably.

The partnership had been trying to restructure its debt.

A report in The Wall Street Journal said that earlier this month, Gramercy Capital Corp, the most junior lender in the 2006 purchase of Stuyvesant Town/Peter Cooper Village, asked that co-owner Tishman Speyer be replaced as manager of the huge Manhattan apartment complexes.

Tishman Speyer and BlackRock Realty Advisors formed joint venture PCV ST to buy the Stuyvesant Town/Peter Cooper Village in 2006.

Source: Business Times, 26 Jan 2010

Sales of existing homes in the United States fell more than expected last December, by nearly 17 per cent, following a three-month surge driven by a government tax credit, an industry organisation said yesterday.

The National Association of Realtors (NAR) said sales fell 16.7 per cent to a seasonally adjusted annual rate of 5.45 million units, from 6.54 million in November.

The sharp decline was worse than an average analyst forecast of 5.9 million units and was the steepest monthly drop since NAR began tracking the data series in 1999.

The industry group said the decline was expected after sales surged from September through November as first-time buyers rushed to take advantage of federal tax credits originally due to expire on Nov 30.

Congress passed and President Barack Obama signed an extension of the first-time tax credit that expands it to include other home purchases made prior to April 30.

The December number was 15 per cent above the year-ago level of 4.74 million units.

‘It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,’ said Lawrence Yun, NAR’s chief economist.

‘We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer, the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010.’

First-time home buyers represented 43 per cent of the market in December, compared with 51 per cent the prior month.

The industry group noted that sales had risen every month since April, apart from a slight dip in August, and had often topped expectations.

For all of 2009, sales of existing homes totalled 5.156 million, a gain of 4.9 per cent from 2008.

‘It was the first annual sales gain since 2005,’ NAR said.

Source: Business Times, 26 Jan 2010

It’ll have more facilities for pre-clinical trials; medical tech cluster also in the works at Tukang

THE government is ramping up development of the biomedical sciences sector, with plans to release another site at Biopolis for tender and set up a new medical technology cluster at Tukang.

Phase Four at Biopolis could cost some $80-$100 million to build and will have more facilities for pre-clinical trials, JTC Corporation said yesterday.

The expansion will add another 40,000 square metres of gross floor area (GFA) to the biomedical research and development (R&D) centre in Buona Vista. JTC will award the project to a private developer this year, and the site could be ready by end-2012 or early-2013.

According to JTC, there has been an increase in demand for R&D spaces. Gross expenditure on R&D was $7.18 billion in 2008, or 2.77 per cent of GDP. Singapore’s aim is to have this reach 3 per cent of GDP, JTC said.

Biopolis currently comprises three phases, which together cost close to $700 million to develop. Phases One and Two have more facilities for basic research. Phase Three is under construction and should be completed by the end of this year.

Phase Four will house more facilities for pre-clinical trials. There will also be laboratories built around a ’shelf-plus’ concept, fitted with basic equipment and furnishings to help reduce set-up costs for smaller outfits.

Over in the Jurong area, JTC is drawing up plans for a medical technology cluster that will house sterilisation facilities, warehouses, laboratories, equipment manufacturers, suppliers and other supporting firms under one roof.

The cluster would be located next to Tukang Innovation Park and could be built in two phases, each measuring 40,000 square metres. The first phase could cost $60-80 million to develop.

According to JTC, the medical technology industry is headed for more growth. Singapore’s manufacturing output from the sector is expected to increase from $2.9 billion in 2008 to $5 billion by 2015.

Going by data from the Economic Development Board yesterday, the biomedical manufacturing sector (which includes medical technology and pharmaceutical activities) attracted $1.1 billion of fixed asset investment commitments in 2009.

JTC believes that the cluster environment would foster greater collaboration within the medical technology industry and lead to several benefits, such as faster product developments.

The agency is in talks with companies in the industry to obtain their feedback on the concept. If it takes off, the first phase of the cluster could be ready towards the middle or end of 2013.

JTC is also working on a concept for high-rise biologics plants. These plants would have plot ratios which are almost double those of traditional low-rise plants and would take up less land.

Source: Business Times, 26 Jan 2010

Q1 gross revenue up 19.6%, with net property income surging 24%

FRASERS Centrepoint Trust (FCT) reported a distribution per unit of 1.91 cents for its first quarter ended Dec 31 2009, a 14.4 per cent increase from 1.67 cents for the corresponding period a year ago, in line with analysts’ estimates.

Its distributable income rose 15.1 per cent from $10.4 million to $12 million for the same periods.

The group’s gross revenue saw a 19.6 per cent gain from the same period in 2008 to $23.3 million, which in turn sent net property income for the quarter surging 24 per cent to $15.9 million, driven by improvement in revenue from the Northpoint enhancement works.

Property expenses for the quarter rose 10.6 per cent over the previous year’s to $7.4 million, mostly due to the increase in property tax.

‘FCT maintained strong operational momentum with portfolio occupancy rising to 98.6 per cent as Causeway Point registered full occupancy as at December 2009,’ said DMG & Partners Securities analyst, Jonathan Ng, in his report yesterday.

Mr Ng had maintained his ‘buy’ call on the stock with a target price of $1.66, implying a 5 per cent yield at fair value.

‘Rental renewals remained strong, with a total of 10 leases renewed at an average of 4 per cent increment above preceding rental rates. Occupancy costs in FCT’s malls remain healthy, with tenants at Causeway Point and Anchorpoint registering average occupancy costs of 13.4 per cent and 16.2 per cent respectively as at Nov 2009, well in line with market benchmarks,’ Mr Ng added.

For the quarter, net income rose 19.7 per cent from $8.4 million to $10.1 million.

The group’s total return after tax, however, surged 89.5 per cent from $5.8 million to $10.9 million, mainly because of a 90 per cent decrease in unrealised fair value losses in derivatives.

FCT’s proposed acquisition of Northpoint 2 and YewTee Point, approved during its extraordinary general meeting yesterday, and slated to be completed before July, will stand it in good stead, credit rating-wise, according to DMG’s Mr Ng.

‘Apart from the accretion FCT will enjoy from these acquisitions, we believe the injection of the two assets may improve FCT’s credit rating as its asset-concentration risks will substantially be reduced with income contributions from Causeway Point dropping from 64 per cent to 51 per cent,’ said Mr Ng.

FCT’s unit price fell 3 cents in trading yesterday, closing at $1.40.

Source: Business Times, 26 Jan 2010

This brings 2009 DPU up 6.2% to 11.703 cents

SUNTEC Real Estate Investment Trust (Reit) reported a distribution per unit (DPU) of 2.886 cents, for its fourth quarter ended Dec 31, 2009, one per cent higher year-on-year.

This brings its DPU for 2009 to 11.703 cents, a 6.2 per cent increase.

Its distribution income for the quarter stood at $47.83 million, up 8.4 per cent from $44.1 million for the same period a year ago. For the year, Suntec Reit posted a distribution income of $189.6 million compared to $167.7 million for 2008.

‘I am happy to report that, amidst the serious challenges in 2009, we managed to record a strong growth of 13.1 per cent in our distribution income for the financial year ended December 31 2009,’ said Yeo See Kiat, chief executive officer of ARA Trust Management (Suntec) Limited, the manager of Suntec Reit.

‘Furthermore, we managed to secure a club loan of $825 million . . . in early 2009 to address all our refinancing needs in FY09.’

Gross revenue for the quarter, however, slipped 2.7 per cent to $61.8 million, mainly due to lower retail revenue.

Suntec Reit’s gross office revenue saw a marginal increase of 0.3 per cent to $28.8 million for the quarter because of marginally higher rents from Park Mall.

For the year ended Dec 31, gross revenue rose 5.4 per cent to $253.1 million.

For Suntec Reit’s office and retail portfolio, the overall committed occupancy stood at 96.8 per cent and 98.1 per cent respectively as at Dec 31, 2009.

Net property income also dipped 1.4 per cent to $47.2 million for the quarter, but rose 5.6 per cent to $192.2 million for the year.

Net financing costs incurred for the quarter was $18.9 million, an increase of 37.3 per cent over Q4 FY2008, mainly attributed to the net loss of $5.9 million from the re-measurement of interest rate swap transactions and convertible bonds, which has no impact on distributable income.

Excluding the re-measurement, the net financing cost for Q4 FY2009 was about $13.1 million.

For the quarter, the overall all-in financing cost averaged 3.47 per cent and the gearing ratio stood at 33.3 per cent as at end-2009.

The counter closed one cent lower at $1.33 in trading yesterday.

Source: Business Times, 26 Jan 2010