Debt-laden Dubai World will present plans to restructure its US$26 billion debt pile to creditors this week, with details due to emerge yesterday, sources familiar with the talks told Reuters.

The conglomerate, which has been locked in talks with its creditors, will discuss how it plans to repay its commitments with an informal bank panel, which represents 97 creditors to the state-owned conglomerate, in Dubai.

‘People will be looking for anything not already priced in (the market) such as a government guarantee,’ said Robert McKinnon, ASAS Capital’s chief investment officer.

The debt is linked mainly to Dubai World’s property units, Nakheel and Limitless World. The company ringfenced other key assets, such as ports operator DP World, from the restructuring.

Talks have tested the tolerance and positions of both sides with early reports floated about a ‘haircut’, or loss, as large as 40 per cent, while bankers have countered with demands for nothing less than full repayment.

A final proposal on the debt could involve tranches with different repayment profiles, one with a repayment over three to five years, with the principal discounted, and another with repayment over seven to nine years with no discount.

The eventual proposal will centre on the extension of maturities with low or zero interest, and the option of an early exit at a discount or eventual repayment over a longer period of time.

‘We now expect much better scenarios, an extension of the maturity date giving domestic banks some breath,’ said Rami Sidani, head of Mena at Schroders Investments.

He said that a ‘haircut’ would have had a ’severe impact’ on domestic banks and leave them in need of a capital injection from the UAE central bank. Moody’s estimated local banks have US$15 billion in exposure to Dubai World.

The quality of the offer rests with Abu Dhabi, Dubai’s wealthier and larger neighbour, which bailed the emirate out late last year.

‘It looks very much like the main scenario of Abu Dhabi bailout is taking shape,’ said David Butter, director for Middle East and North Africa, Economist Intelligence Unit.

‘I doubt that we will ever be able to get an authoritative figure on it, but the bottom line is that Abu Dhabi seems to have decided that it has to pay whatever is necessary to avoid serious reputational damage for the UAE as a whole.’

A Dubai government spokeswoman said on Tuesday that meetings with the core creditor committee, known as CoCom, were part of ‘an ongoing dialogue related to the restructuring process’.

The spokeswoman said that Dubai remains on track to present a formal proposal to creditors this month.

The panel includes Standard Chartered, HSBC, Lloyds, Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank, which, combined, are believed to have two-thirds of the total exposure.

Dubai said in November that it would ask creditors to delay repayment on US$26 billion in debt linked to its flagship conglomerate Dubai World, sending shockwaves through markets.

The last-minute lifeline from Abu Dhabi helped the glitzy Gulf Arab emirate, known for its tax free earnings and easygoing lifestyle, avert default on a US$4.1 billion Islamic bond linked to Nakheel.

‘For creditors, it would be music to their ears to know that Abu Dhabi is involved in any restructuring plan,’ said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.

Source: Business Times, 25 Mar 2010

MONGOLIA might not be the first name that pops to mind when it comes to luxury property investments, but one development there is already attracting keen interest from Singaporeans – with about 80 enquiries ahead of its launch here this weekend.

Called the Olympic Residence, it sits in the town of Ulaanbaatar between The Hilton and the Shangri La hotels and will be priced at an average of $360 psf.

Each apartment ranges from about 1,500 square feet to 1,940 square feet, which works out to about $540,000 for its smaller units. All 135 units – which range from 2 to 7 roomers – will be located in one 18-storey building, which will be divided into three wings.

It is developed by Asia Pacific Investment Partners (APIP), a firm incorporated in Hong Kong with principal activities in Mongolia. It is working with CB Richard Ellis to launch the property in Singapore and will be completed in December next year.

APIP’s chairman and managing director Lee Cashell said that investors, can expect a rental yield of 14 per cent.

Apart from residences, the development will also come with retail and food and beverage outlets, which will be located on the first to third floors of the building.

Mr Cashell added that the property is an unmovable property asset in Mongolia, which under the law prevents the development from being taken away or knocked down without the owner’s consent.

About 10 apartments have been sold so far, while one Singaporean has bought two apartments before the launch.

Olympic Residence will be launched this Saturday and Sunday at the Marriott Hotel’s Lengkuas Room from 10am-6pm on both days. For more information on the development, please go to http://olympic.mongolia-properties.com/

Source: Business Times, 25 Mar 2010

Members-only online sales offer 20-60% off luxury hotels

AN ocean-view room at the Gansevoort Turks & Caicos, normally US$460 a night, slashed to US$285. A fireplace room at the US$500- a-night Ventana Inn & Spa in Big Sur, California, for US$315. A water villa at the Six Senses’ Soneva Gili resort in the Maldives, normally US$1,040 a night, reduced to US$840.

Interested in these and other luxury hotel discounts? Sorry, they’re for members only.

Luxury hotels have long aimed for an image of exclusivity – setting prices beyond the reach of most travellers, allowing wait lists to build for restaurant reservations, and carefully generating buzz with a well-placed celebrity guest in the gossip magazines. Now, a growing number of websites are offering ‘private sales’ of 20-60 per cent off luxury accommodations to select travellers on an invitation- only basis.

In October, the Gilt Groupe, an invitation-only retail site that’s been a hit with fashion devotees, spun off Jetset ter.com, which offers discounts several times a week on yachts, villas and hotels. Soon after that, Tablet Hotels.com, a booking site for fashionable hotels, started its private sale from Tuesdays to Thursdays or until inventory sells out. So did Kayak. com, the popular meta-search site.

Ruelala.com, another fashion- focused invitation-only site, also has begun to offer hotel sales.

Unlike last-minute sales, which offer deep discounts to travellers who can take off at the spur of the moment, the members-only deals generally offer a longer travel window. For example, the Gansevoort Turks & Caicos, on the island of Providenciales, was recently offered for US$285 a night (nearly 40 per cent off) on Jetsetter. A booking calendar highlighted the dates for which that rate was available, with options till December, more than 10 months out.

Travellers have only a limited time to book, however, and that creates a sense of urgency and spontaneity around the offers.

Jetsetter, for one, alleviates some pressure by allowing members to put accommodations on hold for 10 per cent of the trip’s cost. If the trip is not purchased, the money can be used towards another booking.

Members, generally invited to join the group by a current user, can sign up for weekly e-mail alerts about when the bargains will go live.

And all sales are upfront and nonrefundable.

Fans of private sales said that such caveats are a small price to pay for access to exclusive luxury bargains. ‘There are plenty of discount hotel booking options online but rarely do they include any true luxury accommodations,’ said Jason Klein, 31, a Jetsetter member who said that he saved an estimated US$2,000 on a weekend getaway in February to the Banyan Tree Mayakoba in Mexico. ‘It’s not as though the prices were cheap by any means,’ he added, ‘but relative to standard rates I had seen for these hotels in the past, the discounts were significant.’

Hotels like the private sales, which because of the membership requirement, generally do not appear in online searches or aggregator sites. This helps maintain the idea of a velvet rope around the deals.

The nature of the sales allows hotels to maintain control over inventory, listing only dates for sale when they have empty rooms for a limited booking window.

It’s also a way for hotels to tap into a new set of clients willing to return at full price. ‘We always want new customers,’ said Jim Monastra, marketing director at the Fairmont Turnberry Isle in Aventura, Florida, which has listed deals on Jetsetter. ‘Hopefully, the service will be great and they’ll come back.’

The sites also do a good job of curating popular hotels, which makes hotels feel like they are part of an elite group and keeps members checking back to see what new hot spot is on sale. Tablet Hotels and Jetsetter hand-select properties featured in their private sales. ‘We only want to run sales with things you’re going to brag about to your friends when you come home,’ said Drew Patterson, chief executive of Jetsetter, reciting some of its recent sales, which included the Hotel Plaza Athenee in New York and the Four Seasons Costa Rica. ‘It’s got to be exceptional.’

Kayak takes a data-driven approach, looking at trends to determine what customers are searching for and what types of properties they are staying in. ‘We can then use that information to target a smaller list of properties – ones that we already know the Kayak audience likes,’ said Robert Birge, the chief marketing officer of Kayak.

So how do you become a member? It’s easier than the sites make it sound. Tablet Hotels, for example, says that there are three ways to access the special discounts – book your next stay on the site, be invited by a member, or pay US$195 for a Plus Membership, which includes 24-hour advance access to the private sales and other perks such as free room upgrades, airport transfers or breakfast, depending on the hotel. But a Google search for ‘Tablet Hotels + private sale + invite’ in March led to the site’s Facebook page, which offered a limited-time invitation with the code ‘FBNOMAD’.

Travellers who want to be invited to Rue La La’s private sales can go to the homepage, click on the link ‘Not a member?’ and enter an e-mail address to be notified when space is available. With Kayak, it’s as easy as registering an e-mail address.

But how good are the deals compared with what you might find on your own? In a far-from-scientific check of several private sales, the sites beat the hotel’s website and other travel booking sites such as Expe dia.com and Orbitz.com nearly every time, often by a significant discount.

‘The sales are competitive with what you might find if you were savvy enough to strike your best deal at an opaque site,’ like Priceline or Hotwire, said Mr Birge of Kayak. ‘However, you don’t need to guess on price or property, so we believe this is a more attractive option for consumers.’

Source: Business Times, 25 Mar 2010

NEIL BEHRMANN observes that prime real estate in London outperforms the rest of the country

THE UK residential property sector has become a two-tier market.

Prime real estate in London and the stockbroker belt have outperformed the rest of the country by a wide margin in the past year. Wealthy foreign buyers taking advantage of a cheap pound, the stock market recovery and banker, broker and trader bonuses are behind the revival. Much lower mortgage rates have also helped over-stretched property owners, enabling them to hang on to their pricey properties. There were thus less forced sales than expected. The supply of properties declined and this has played a part in pushing up prices.

The result is that after the property bubble in 2006 to 2007 and the crash in 2008, prices of selected residential properties, especially prime London, jumped in the past year.

The chart from the Royal Institute of Chartered Surveyors describes what has happened in the UK. Despite the revival, however, average residential property values are still well below their peaks and so far this year, are declining in real, inflation-adjusted terms. In contrast there has been a smart recovery in London’s plush areas but even those prices, on average, are still below their 2007 bubble peaks.

Savills’ indices show that average values in the prime central London market increased by 4.6 per cent in the final quarter of 2009, raising annual growth to 8.9 per cent. In prime south-west London, values rose by as much as 17.8 per cent during the course of the year.

‘One of the key features of the prime London property market during the past decade was the demand for large-scale dwellings,’ says Yolande Barnes, a director of Savills. ‘The sheer scarcity of these much larger properties led to premiums being paid.’

The average value of a 1,000 to 1,500 square foot prime central London property was under £1,100 (S$ 2,320) per sq ft in 2009. Units between 5,000 and 10,000 sq ft averaged £1,850 per sq ft, with second-hand properties larger than 10,000 sq ft exceeding the £2,000 per sq ft barrier.

Premium

This premium for large properties is the result of purchases from super-rich multinational buyers who have been seeking big townhouses in the most prestigious addresses, according to Savills.

In 2009, international buyers accounted for 45 per cent of all central London purchasers above £2 million, according to Knight Frank. Above £5 million, the proportion reached 60 per cent. The most significant individual nationalities buying real estate in London were Russians (14 per cent of all international buyers), Italians (11 per cent), US (9 per cent) and the French (7 per cent). Asians and Middle Eastern investors were active too.

The corresponding rise in demand for luxury accommodation paved the way for high-profile luxury flat developments such as The Bromptons in Chelsea, The Knightsbridge and One Hyde Park. Price premiums have not been confined to these rarefied markets as there were also above-average bids for large older London apartments.

Likewise, in the more domestic prime markets of south-west London, units over 3,500 sq ft also were priced at noticeable premiums, says Savills. Similar trends were apparent in St Johns Wood and Hampstead in North London.

According to the UK Land Registry index of houses and apartments that have been traded, average prices in Kensington and Chelsea slid from £856,000 at the end of 2007 (US$1.8 million at the exchange rate at the time) to £752,000 (US$1.1 million at the current rate) early 2009, but have since risen to £821,000; City of Westminister fell from £612,000 to £564,000 and have increased to £594,000; Tower Hamlets, near the financial centre of Canary Wharf, declined from £376,000 to £329,000, but the area experienced a minimal rise to £339,000.

Other popular areas such as Richmond slid from £455,000 in 2007 to £383,000 early 2009 and are currently £416,000, Islington from £450,000 to £383,000 has risen to £402,000, Barnet down from £355,000 to £318,000 is up to £333,000; and Camden, including Hampstead, tumbled from £538,000 to £473,000, but has since revived to £503,000.

These are averages of properties ranging from small apartments to semi-detached and detached houses. In practice, large houses in Chelsea and Kensington are currently trading from around £2 million to £5 million with prices of £1.5-3.5 million in areas surrounding Hampstead, St Johns Wood, Islington, Richmond and Wimbledon. Two-bedroom purpose-built apartments in these areas which dropped to between £350,000 and £600,000 have recovered by 5-10 per cent.

For international investors, property was a bargain when sterling was trading below 1.40 against the US dollar and was depressed against the euro. But since then sterling and property values have risen, so there are fewer bargains. The British government has also tightened tax regulations for foreigners resident in the country.

Tax rates jumped to 40 per cent for individuals earning just below £40,000 a year and will rise to 50 per cent for earnings above £150,000. Due to the more stringent tax regime, hedge funds, other asset managers and several corporations are moving out of the country. Medium to long term, this will be to the detriment of property prices.

Price revival

Now that prices have revived to levels not far below bubble levels, the London market cannot be regarded as cheap for either local or foreign buyers. Since the market is distorted by a shortage of supply there tends to be a wide spread between bid and offer prices and there is a high stamp duty.

Growing numbers of people are seeking rental accommodation, but despite this demand, rents have only increased slightly. The standard of rentals varies greatly. Yields are at uneconomic levels for potential property investors who want to buy quality property in good locations.

The surge in property prices from 2000 to 2007 slashed average gross income yields from 8.1 per cent to around 4.6 per cent, estimates Savills. There are wide yield differentials between properties in the poorer districts where gross yields are around 6 per cent and prime properties where gross yields are as low as 3.8 per cent.

Net yields, including maintenance, agents’ fees and voids, are below 3 per cent for prime properties and approach that level for lower quality real estate because of higher maintenance costs and unreliable tenants.

Supply is also beginning to rise. A growing number of home owners are placing their properties on the market following the price recovery, according to figures from the Royal Institute of Chartered Surveyors.

The number of people offering properties for sale in February rose at twice the rate as those wishing to buy. With uncertainty leading up to the UK elections, expected in early May, real estate prices are forecast to flatten out.

Source: Business Times, 25 Mar 2010

The nation avoided the recession that hit most developed countries, says DANIEL BOMAN

AUSTRALIAN residential property prices have been quick to return to growth after the global financial crisis, underpinned by a strong economy and increasing population growth.

Australian capital cities recorded an average of 5.2 per cent growth in dwelling prices over the fourth quarter of 2009, a strong improvement on the 1.3 per cent decrease in the corresponding quarter a year ago.

Over the past year, figures from the Australian Bureau of Statistics show house price growth has equated to 13.6 per cent, a strong result that has been buoyed by a strong recovery in consumer confidence and consistently strong economic growth.

Due to its diversified economy, stable political climate and secure banking system, Australia was able to avoid the recession experienced in most of the developed world during 2008/09.

Over the last 12 months Australia’s GDP grew by 2.7 per cent, well above the averages of the G7 countries at -0.9 per cent, the European Union at -2.3 per cent and the US at 0.1 per cent. Economic growth is forecast to continue, with Oxford Economics predicting a further 2.7 per cent growth for 2010 and 4 per cent for 2011.

The strong economic performance is attracting an increasing number of foreign migrants to the country, with a net total of 285,300 persons moving to Australia during the year ended June 2009, up from 213,600 the previous year. Coupled with a strong natural increase of 157,800, the demand for Australian property continues to be underpinned by a need for new dwellings to meet a rising population.

The increase in residential property prices is occurring in all major capital cities in Australia, with the largest city, Sydney, recording price growth of 12.8 per cent over the past year.

The city of Melbourne, located to the south of Sydney recorded the largest increase last year, returning 19.7 per cent, while Brisbane to the north recorded 10.9 per cent.

In the west, Perth recorded 11.5 per cent growth, largely underpinned by the strong performance of the mining sector which comprises a large proportion of the city’s economy.

Due to the lack of bank finance created by the global crisis, the construction of new dwellings has not kept pace with Australia’s strong population growth.

During the year ended June 2009, Australia’s population increased by 443,100 persons. With an average household size of 2.6 persons per dwelling this creates an indicative demand for an additional 170,000 dwellings.

Yet during the same period, only 131,300 new dwellings commenced construction, creating an indicative shortage of 39,000 dwellings. This is expected to place further upward pressure on prices and rents.

On a closing note, it is interesting to note a changing demand in dwelling types by Australian buyers and renters.

In the past, new development has usually taken the form of house-and-land packages located on the outer fringes of major cities, but now development is increasingly focused on inner city apartment developments and smaller lot housing.

In our view, this change is a response to a growing shortage of land in the outer suburbs driving up prices, coupled with a desire of many people to live closer to their workplace and to the inner city restaurants, bars and shopping.

Changing demographics have also increased the proportion of people seeking to rent a property rather than to own, creating opportunities for investors to own low-maintenance inner city units.

Daniel Boman is research manager at DTZ Australia

Source: Business Times, 25 Mar 2010

Market may not have rebounded to levels seen elsewhere but it posted a decent performance in 2009, reports PAULINE NG

IT may have been counter-intuitive, but 2009 proved to be a good year for Malaysian developers, the recession notwithstanding. The property market may not have rebounded to the levels experienced in other markets such as Singapore, Australia or Hong Kong, but it was generally decent.

Despite economic output contracting by 1.7 per cent, Jones Lang Wootton executive director Malathi Thevendran described last year as ‘exceptional’ for the property sector, which was buoyed by a RM67 billion (S$28 billion) stimulus package, cuts in lending rates, and attractive developer incentives such as the 5:95 home deal, where buyers foot just 5 per cent of the bill until completion.

CH Williams Talhar & Wong (CTW) director Foo Gee Jen observed that landed properties did well, listing Lake Edge and Sunway Kiara Hills as examples, because ‘the rich were less affected’.

Generally, there were no major price reductions of residential properties, except for high-end condominiums in areas where mainly foreign interest had led to intense speculation and hence strong capital appreciation in 2008. This would be largely in the premium Kuala Lumpur City Centre area and Mont Kiara where existing stock is estimated at slightly below 4,500 and 9,000 units, respectively. Because of the robust supply pipeline and a limited expat base, recovery is expected to be slower.

Tightening

Last month, the central bank moved to curb the swirling liquidity and possibility of inflated assets by lifting the key interest rate by 25 basis points to 2.25 per cent. It has hinted at more increases to come but plans to keep rates ’supportive of growth.’

Notwithstanding monetary tightening, property analysts do not foresee too much of an impact on launches or transactions given that developers are expected to continue to offer buyers the best deals.

CTW’s Mr Foo anticipates a greater range of new products this year, ‘likely not high-end, but mid to mid-high’ types of around RM250,000 to RM500,000 – mainly terrace houses outside the more established townships since those in the more popular suburbs of the Klang Valley cost upwards of RM800,000.

Ms Thevendran concurs. Houses in the RM400,000 to RM500,000 price range have seen ‘higher sales rates’ in recent months and ’schemes by reputable developers particularly to the west of Kuala Lumpur continue to experience strong demand’, she said.

With the lower end category over-done in the 1990s, builders are now focusing on the higher end as buyers have grown more discerning. She said the supply of houses over the past decade has expanded by 9 per cent per annum compared to 21 per cent for the high end and 11 per cent for lower end condo segments respectively.

Besides the Klang Valley – the centre for employment opportunities and hence inter-state migration – Penang and Johor Baru should also continue to see robust housing demand, especially projects with reputable developers and in close proximity to upgraded roads, new highways and public transport.

Because of the government’s aim to leverage Iskandar Malaysia as a growth area, infrastructure development is currently strongest in Johor Baru. New highways and links are being built especially in the south near the city and state administrative centre, Causeway and Second Link.

With better links and more commercial and leisure activities taking place, Iskandar promoters expect a ‘tipping point’ to be reached next year or the year after. The blueprints being rolled out appear to support this belief.

Big projects

Take the two massive developments in the pipeline. The 300-acre South Key project on the former Majidi Army camp site in the city, envisages festive malls, alfresco dining, shops, corporate offices and the like in a fully integrated development that could be built over 12-15 years. Its estimated gross development value (GDV) is RM12 billion.

Lido Boulevard, although a third of South Key’s GDV, will not be minor. Undertaken by Central Malaysian Properties (CMP), the 123-acre project along the Johor Straits will stretch from the current abandoned Lot 1 shopping mall to the Harbour Master’s office.

Land reclamation will soon commence for the waterfront development which will include high-end condos, hotels, a mall, cultural centre, indoor snow park and a ‘garden city.’ CMP plans to launch the Lido Residences by the second half of the year. Its managing director Chan Tien Ghee said the 908-unit residences attracted a lot of foreign interest (Singaporeans and Indonesians in particular) at a soft launch.

The waterfront apartments would be fully furnished and sized from about 1,800 square feet. When asked about pricing, he told BT: ‘We are talking about a very high niche.’

CTW director Danny Yeo said the Johor property market has had a generally poor decade. But looking ahead, he said the ‘right projects’ – waterfront, secure, and those boasting developers with a good track record – will have minimal downside risks. He also recommends inter-city developments as they are ‘even cheaper than in a smaller town like Kuantan.’

‘If you are a Singaporean and have the intention to buy with a view to reside, it is a good time to do so now especially near the Nusajaya side,’ he opined. For investors, he suggests that commercial real estate is ‘a better bet.’ As in the case of the administrative city of Putrajaya, pricing for some of the residential developments could be ‘ahead of time’.

He believes now is the time for developers eyeing Iskandar to make a move as once the tipping point has been reached, land will cost more. ‘The question is do you believe in Iskandar?’

Penang prices

Going by Penang’s ever-rising property prices, many appear to believe in the island state. ‘Penang property has gone crazy because of the limitations (of being an island). Prices on the mainland have also improved but it’s industry driven,’ said Mr Foo.

A Penang think-tank attributed property increases in the state to the lack of land but also to speculation, robust investor demand from wealthy Malaysians and foreigners, and low cost of funds.

Over the period 1999 to 2008, Penang properties had increased a tenth more than the national average, according to Michael Lim, a senior fellow at the Socio-Economic and Environmental Research Institute. But with developers focusing mainly on the growing demand for higher-end products, signs of an under-supply of affordable housing were beginning to emerge, Mr Lim told a roundtable on the gap in affordable housing in George Town recently.

Penang could also be a victim of its own success with a growing number of residents upset over the burgeoning high-rise projects now dominating the landscape.

Henry Butcher Malaysia senior manager Fook Tone Huat has a suggestion: Look across the island to Seberang Prai – twice the island’s size and about 40 per cent cheaper. He expects the area to see a 10 per cent appreciation in price owing to its higher population density compared to the surrounding areas in the north.

Source: Business Times, 25 Mar 2010

77% of total sales of $4.4b came from private market

THE investment sales market strengthened further in the first quarter of 2010, as robust sales of residential government land sale (GLS) sites showed developers’ hunger for land.

Total investment sales came up to $4.41 billion in the first quarter, 16 times more than the paltry $273.83 million in Q1 last year, a CB Richard Ellis report said yesterday.

Of these, 77 per cent or $3.4 billion came from the private investment sales market, while investment sales in the public sector contributed the remainder.

CBRE’s Q1 tally includes land deals, collective sales, transactions of entire office and other buildings as well as strata-titled units above $5 million, which have taken place since the start of the year.

Residential investment sales – including good class bungalow (GCB) sales – chalked up $2.11 billion in transacted value, accounting for 48 per cent of the quarter’s total investment sales. This was 27 per cent below the $2.88 billion in residential investment sales recorded for Q409, but is significantly higher than the $149.91 million registered in Q109.

GLS sites sold in the quarter include the Sengkang West Avenue site awarded to City Developments for $200.5 million. A Tampines site sold to Sim Lian Land for $302 million while Far East Organisation was awarded the mixed residential Ten Mile Junction. Two executive condominium sites were also sold during the quarter.

To date, 18 GCBs have been sold for a combined total of $283.61 million. With the GCB market’s current momentum, CBRE says a possible 80 to 90 GCBs could be sold in 2010, which translates into $1.2 to $1.4 billion in value.

The commercial investment market was also active in Q1, with $1.08 billion in sales recorded to date, making up 24.5 per cent of total investment sales.

As for the industrial sector, 26 known transactions so far in the quarter made up 26.3 per cent of $1.16 billion of total investment sales.

The CBRE report noted that while many transactions in the industrial sector last year were from end-users, 2010 has seen the return of selective purchases by the real estate investment trusts (Reits) such as A-Reit and MapletreeLog. Cache Logistics Trust, also purchased the six properties which will make up its portfolio when it soon lists.

Jeremy Lake, executive director of investment properties at CBRE said: ‘While most of the major investment sales transactions in 2009 were dominated by Asian investors, there is now a diverse pool of buyers. Among these would include local as well as foreign developers competing for GLS sites for residential development. Investment funds are also looking for opportunities.’

Source: Business Times, 25 Mar 2010

Ranking makes city appealing to global firms wishing to bring in staff: ECA

SINGAPORE has emerged as the top place for Asian expatriates to live in for an 11th year running, according to global human resource consultancy ECA International.

High quality infrastructure, alongside low health risks, air pollution and crime rates, and a cosmopolitan population make Singapore the best city for Asian expats to relocate to, ECA says. Singapore came in first ahead of Sydney and Kobe, both of which retained their rankings from 2009 too.

Its annual location ratings report is intended to help global companies decide on ‘hardship allowances’ for expatriates, by analysing the quality of life for over 400 locations. The assessments take into account the home and destination countries of employees, which explains why while Singapore is top of the chart for Asian expats, it ranks 55th on the list for Western European ones. On that list, European cities dominate the top spots, but Singapore still ranks above Hong Kong, Tokyo and the major Chinese cities.

Lee Quane, Asia regional director of ECA, told BT that hardship allowances could come up to 20 per cent of an assignee’s base salary in less favourable locations.

Singapore’s emerging top on this survey thus bodes well for its cost attractiveness to global companies who wish to bring in staff from abroad. But these allowances are just one component of an expatriate’s overall compensation package.

In an ECA report comparing cities’ cost of living last December, Singapore climbed three spots to be the ninth most expensive Asian city for expatriates from all over.

Even then, Mr Quane said: ‘If you look at the wider picture, of the major cities in Asia – Singapore, Hong Kong, Shanghai, Beijing, Tokyo and Seoul – the cost to a company of sending an employee from elsewhere in Asia to Singapore would probably still be lowest.’

For instance, neither Hong Kong nor Singapore’s quality of living would warrant a ‘hardship allowance’ recommendation from ECA, but the cost of living in Hong Kong is still higher than in Singapore. This makes the overall compensation package for an Asian assignee sent here more cost competitive, he said.

Source: Business Times, 25 Mar 2010

WATERFRONT apartments at Reflections at Keppel Bay are riding high on the property wave, with 710 of the 740 units launched at the 99-year leasehold project already sold.

At the latest launch at the weekend, 29 of 30 units released in tower block 2B – touted as the block with the best view – were bought. The average selling price of these units – two to four-bedroom apartments, one penthouse and a 13,300 sq ft super penthouse – was $2,200 per sq ft, with the highest price hitting $2,600 psf. Market sources say the lowest price was about $1700-1750 psf.

Keppel Corp owns 70 per cent of the development, while its property arm Keppel Land owns the other 30 per cent.

At the topping out ceremony for the first tower yesterday, KepLand’s Singapore residential chief executive Augustine Tan said Keppel is looking to release another 20 more units in tower 2B, and may launch between 100-200 apartments for the entire year, depending on demand.

Sale of the remaining units will be paced, he said. ‘We are not really rushing to sell them. We have another two years of construction to go.’

Reflections at Keppel Bay will be completed by the first half of 2012. It comprises six towers and 11 villa apartment blocks, featuring a total of 1,129 waterfront apartments along a 750-metre shore line.

Mr Tan said three other plots of land at Keppel Bay are in the design development stage. It will take at least a year or two before development plans for them can be firmed up, he said.

Source: Business Times, 25 Mar 2010

It will open 16 new properties this year; buy buildings in UK, Europe, China

GROWTH will continue to be on the agenda for Frasers Hospitality even after it hits its target of managing more than 10,600 service apartments by end-2012.

The rate of expansion is likely to be as fast as that seen in the last few years – Frasers will open 16 new properties this year alone. ‘We think that we can continue this pace,’ said chief executive officer Choe Peng Sum.

Management contracts will contribute to a large part of the growth. But Frasers is also looking at purchasing its own properties in the UK, Europe and second tier cities in China where prices are still reasonable.

Mr Choe was speaking to BT before the official launch of Fraser Suites Seef Bahrain yesterday. The property has 91 service apartments and marks Frasers’ first foray into the Middle East.

Fraser Suites Seef Bahrain sits on the reclaimed area of Seef and offers residents a glimpse of Bahrain’s growth ambitions. The 19-storey building is linked to Seef Mall, one of the largest malls in the country with more than 300 retail outlets. Outside, a business district is in the making as office towers are being constructed.

Bahrain’s ‘forecast of an estimated 6.7 per cent growth in international arrivals this year, together with a sharp demand-supply imbalance in the hospitality sector, set the scene for a successful start to our expansion through the region’, Mr Choe said in a press release.

Frasers is looking for further growth worldwide – both in places where it already has a presence and in new markets.

Within the Middle East, it will launch another four properties in the next two years. Fraser Suites Dubai and Fraser Suites Doha will soft open in April and around August respectively. Another two in Oman and Saudi Arabia are under development and will take longer to be ready.

Frasers is also exploring more projects in Abu Dhabi, Kuwait and other parts of Saudi Arabia, Mr Choe said.

The second tier cities of China such as Ningbo and Hangzhou also present opportunities. ‘China will start to connect a lot of these cities with fast speed trains’ and there will no longer be a ‘distance issue’, he said.

Frasers has so far focused on growing its presence through the Fraser brand of service apartments, but the Modena line is set to get more attention. Frasers came up with the latter last year for a highly mobile and budget-conscious group of business travellers.

There is a big market for this group of travellers and the initial pace of growth for Modena properties could even be faster than that for the Fraser ones, Mr Choe said. Four Modena properties are set to open this year, of which one is in Tianjin next month and the other in Shanghai in May.

Source: Business Times, 25 Mar 2010