Feb 06 2010

Market recovery boosts 2 property developers

A BOOMING property market on the back of a broad if tentative economic recovery last year has boosted the results of two mainboard-listed developers.

Guocoland posted a net profit yesterday of $60.4 million in its second quarter ended Dec 31 last year – a dramatic jump from just $861,000 earned in the same quarter a year earlier.

Boosted by positive sentiment and strong property sales, Guocoland’s revenue leapt 284 per cent to hit $363.7 million from the same period a year earlier.

Wing Tai Holdings posted a more modest 7 per cent rise in net profit to $22.3 million in its second quarter in the same three-month period. Revenue shot up 93 per cent to $177 million.

Guocoland said yesterday that its strong performance was mainly due to the strong sales of projects in China, especially Nanjing’s Ascot Park.

China’s property market has rallied in the recent year, in tandem with its growing economy. Asian markets have been leading a broad global recovery following the 2008 financial crisis.

For the half year ended Dec 31, Guocoland had a net profit of $72.8 million, reversing a net loss of $2 million in the same period a year ago. Revenue was also up 85 per cent to $459.4 million.

Closer to home, the group launched Sophia Residence in the Dhoby Ghaut area and Elliot on the east coast, which chalked up more than 90 per cent and 70 per cent sales respectively.

Earnings per share for the group were 7.27 cents for the second quarter, up from 0.1 cent previously. The group’s net asset value was $2.32 as of Dec 31, compared to $2.37 as of June 30.

Brisk sales in Singapore’s private residential market also gave Wing Tai’s financial performance a lift.

The group said it sold more homes at its Belle Vue Residences at Oxley Walk and The Riverine by the Park at Kallang.

For the half year, its net profit rose 28 per cent to $68.7 million, while revenue rose 101 per cent to $454.3 million.

Earnings per share for the group for the second quarter were 2.87 cents, up from 2.67 cents in the same quarter a year earlier. Its net asset value per share was $2.06 as of Dec 31, up from $2.03 as of June 30 last year.

Guocoland’s share price closed 12 cents down at $2 yesterday, while Wing Tai Holdings closed four cents lower at $1.76.

Source: Straits Times, 6 Feb 2010

Feb 06 2010

Underground Masterplan

PROPOSAL: Where do you go when you are running out of available land to build on?

Underground, according to the sub-committee of the Economic Strategies Committee that looked into raising land productivity.

It suggests that vast quantities of underground space can be carved out for new development once a national geology office is set up to conduct surveys, update geological maps, develop a subterranean land rights system and determine how underground areas can be priced.

Such an office could act as a repository for all information on underground Singapore, and provide expert advice to the public and private sectors.

It could reduce the uncertainty involved for developers looking to build underground. And, by providing better information, developments above and below ground could be synchronised.

The state could supplement its ‘land bank’ via the creation of such spaces alongside new underground infrastructure projects such as MRT stations. This will help create new spaces to locate emerging industries.

In true Singapore fashion, the vision is accompanied by an ‘underground masterplan’, somewhat like what the Government draws up regularly to determine the uses and density permitted for specific plots of land (above ground) over a 10- to 15-year period.

POSSIBILITIES: Granite and sedimentary rocks such as sandstone and limestone cover about two-thirds of Singapore, according to the Institution of Engineers Singapore (IES), and it is within these formations that developments can be constructed.

The upside is that technology for such work is established, although experts fear it will take some time before people are willing to accept the idea of living more than six feet underground.

But IES suggests that underground space could be used to house power stations, sports facilities, warehouses, wafer fabrication factories, laboratories, research centres and even incineration plants.

Moving such facilities underground would free up land for housing, parks and open spaces, thereby raising the quality of life.

Furthermore, the legal foundations for the development of subterranean land rights already exist, says Associate Professor Kelvin Low from the Singapore Management University’s School of Law. At present, the owner of a plot of land has the right to build both skywards and into the ground via the creation of basements. This existing framework can easily be adapted for underground developments.

In order to allow two projects on each plot of land, the Government could subdivide state-owned land so that the underground portion is treated separately from that above ground. In the same way, a private owner of land can apply for permission to subdivide his or her plot to allow for dual above- and below-ground construction.

PRECEDENTS: Singapore currently uses underground space to accommodate shopping malls, train networks, new highways, civil defence shelters, pedestrian links, and storage for ammunition and oil. Think CityLink underground mall, which links City Hall MRT station to Suntec City, and the 12km-long Kallang-Paya Lebar Expressway, of which 9km runs underground.

And subterrestrial success stories abound across the world.

The Canadian city of Montreal is well-known for its underground city called Reso. Inhabitants can live, work, eat, exercise and be entertained there without setting foot above ground, where temperatures can slip below 10 deg C for six months of the year.

More than 30km of underground tunnels and ground-level interior walkways link the offices, hotels, malls, movie theatres and museums which are part of this network.

The Japanese city of Osaka also has an integrated underground city centre and no fewer than six underground malls, all of which are connected by rail. The walkways, and office and department store basements form a labyrinth-like subterranean network, adorned with artificial rivers, sunken gardens and glass facades to direct natural light to the basement level.

PRACTICAL PROBLEMS: Despite technological advances, building underground is inherently difficult. Extensive geotechnical studies and mapping are required, plus feasibility studies to ensure projects are viable.

Cost is another big factor, as depending on soil conditions, such developments can end up costing up to three times more than comparable surface structures.

Property consultant Knight Frank’s managing director Danny Yeo feels cost considerations will restrict large underground developments to areas where land costs are high, like Orchard Road.

How to protect existing surface-level property could also prove to be another stumbling block.

According to SMU’s Prof Low, owners of properties next to underground sites are protected by law, given that subterranean developers are deemed liable for any damage to their buildings resulting from construction, even if it is not due to carelessness.

Such liability, he notes, is stricter than that found in some other common law countries like Canada and New Zealand, which require proof that the developer was negligent before he can be made liable.

While Singapore’s stricter regime safeguards the interests of those with terrestrial property, it could render subterranean development more expensive here if neighbouring buildings were shoddily built and hence more easily damaged, he notes.

Source: Straits Times, 6 Feb 2010

Feb 06 2010

Condos hit the sweet spot, even without a tennis court

PAYING big money does not necessarily get you everything these days, at least when it comes to buying a private apartment.

New homes going for as much as $2,600 per square foot can offer designer furnishings and place you in a coveted district, but they may no longer come with large common spaces or even tennis courts traditionally associated with a private address.

In the core central region (CCR), home seekers would not find tennis courts in projects such as Marina Bay Suites, Sophia Residence and Illuminaire on Devonshire.

Further from town, buyers have paid as much as $1,345 psf at Alexis or $1,514 psf at Suites@Guillemard, where there is just a margin of space around the buildings, and swimming pools and gyms congregate on the rooftop. Tennis courts are also missing from the picture.

Nowadays, ‘you don’t really get developments with sprawling grounds, where there’s openness’, observes DTZ executive director Ong Choon Fah. ‘Those are actually more difficult to come by.’

Many projects cannot offer large landscaped grounds or a full range of facilities simply because their sites are not big enough. A tennis court alone measures 78 ft by 36 ft, taking up 2,808 sq ft. According to EL Development managing director Lim Yew Soon, a developer could try to tuck a court just nicely into a smallish site, but it could become a ‘disamenity’ to residents living too close to the noise.

In fact, there are buyers who do not expect to see tennis courts for smaller projects within or near town, he adds. ‘Even if they really see, they’ll be asking if it will be too near their units.’

EL Development has three projects in CCR which do not have tennis courts – Illuminaire on Devonshire, Parc Centennial and Rhapsody on Mount Elizabeth – but they are sold out.

Many projects are still able to command high prices because of their location. This is especially so if owners intend to rent the apartments out.

The absence of a tennis court, for instance, may mean a longer search for a tenant but consultants say rents are unlikely to be dented much. ‘That’s about property investment. Location is everything,’ says Savills residential director Phylicia Ang.

GuocoLand is banking on Sophia Residence’s location near Dhoby Ghaut MRT station to attract buyers. The project does not have a tennis court, but home seekers’ ‘main buying criterion was to be in the city, to have easy MRT access to all parts of Singapore and also a property which offered attractive rental yield’, it told BT. The development will be where Sophia Court used to be and the latter also did not have a tennis court.

Beyond site constraints, high land prices may be prompting developers to cut back on common spaces and certain facilities.

‘With land costs so high, most developers want to maximise the saleable area,’ says ERA Asia Pacific associate director Eugene Lim.

But that’s not to say that all developers have free rein on the site design. The Urban Redevelopment Authority (URA) has rules on site coverage, which indicate how much space buildings can occupy.

For developments classified as flats/apartments and condominiums, site coverage cannot exceed 40 per cent. Mixed-use developments are the ones which are not subject to this rule.

Still, developers are careful to keep features which most residents cannot seem to do without, namely swimming pools and gyms. Faced with a smaller site, ‘the priority is given to swimming pools’, says DP Architects director Tai Lee Siang. But ‘where possible, it is likely that developers will still want to incorporate tennis courts’.

As it becomes harder to find prime projects offering large ground spaces and complete facilities, existing developments with these features are likely to stand out. ‘One of the reasons why Ardmore Park is so popular is because it has a beautiful landscaped garden, and the grounds are sprawling. You don’t get many of these, these days,’ says DTZ’s Mrs Ong.

Source: Business Times, 6 Feb 2010

Feb 06 2010

Resorts World at Sentosa awarded casino licence

Resorts World at Sentosa has been awarded its casino licence. It is the first of Singapore’s two integrated resorts to get the go ahead for its casino operations.

Although the opening date of the casino at Resort World has not been announced, preparations are in full swing.

Resorts World Sentosa chairman Lim Kok Thay said: “We are very happy to have received the casino licence. This was made possible by the dedicated team, consultants, contractors and government officials, especially the Casino Regulatory Authority, which worked tirelessly to set up the regulatory framework within a very agressive timeline.”

Lunar New Year decorations have already been put up at the lobby of the casino.

Resorts World staff were in the midst of an orientation when the MediaCorp news team visited.

Although the doors remain shut, visitors are excited about the prospect the casino may be opening soon.

Some are hoping the casino will be open in time for the Lunar New Year which begins on February 14.

While foreigners do not have to pay the US$100 levy before entering the casino, locals will have to do so at this booth.

Before arriving at the booth, visitors to the casino will be segregated according to whether they are Singaporeans or overseas guests.

The S$6.6 billion integrated resort at Sentosa is opening in phases, starting with its hotels last month.

Many are also waiting for the theme park, Universal Studios Singapore to open.

Some of the staff at the resort have been busy testing out the amusement rides and more.

Andrea Teo, vice president, Entertainment, Resorts World Sentosa, said: “We are in full swing, getting ready for the theme park. We have been testing and commissioning the rides. Some of our people have been experiencing this – going from ride to ride to ride and having a very good time. And we have all been eating at restaurants, trying out the food at very good prices.

“We are at various percentages of finishing the different rides and resorts. But I would say that we are on an actually pretty fast track to completely everything. Our hotel opened on the January 20 and since then, we’ve had 90 per cent occupancy. Festive Hotel and Hard Rock have been fully booked. And for Chinese New Year, we are fully booked.”

And while casino staff are busy gearing up for the opening day, Singapore’s Police have also been started serving the Exclusion Orders to those with a history of crimes such as those related to drugs and illegal moneylending.

So far, about 3,500 people with serious criminal records have been barred from the two casinos when they open.

The latest exclusion orders are on top of what the National Council on Problem Gambling has issued.

Some 28,000 undischarged bankrupts and those on public assistance have also been banned from entering casinos.

Source: Channel News Asia, 6 Feb 2010

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