It wins $213.7m in deals to bring order book up to $598m

LIAN Beng Group yesterday reported a 29 per cent growth in after-tax profit to $11.3 million for the first half of its 2010 financial year, compared with $8.8 million a year ago.

This was achieved on the back of a 4 per cent rise in revenue to $157.6 million, from $151 million for the same six months the previous year.

The top-line growth was driven by revenue recognition on progress made in the construction of various projects including the Ritz Carlton Residences in Cairnhill and camp facilities at Kranji, together with contribution from the property development and ready- mixed concrete business, the construction company said.

Compared to a year ago, the gross profit margin registered an improvement to 13.3 per cent from 12.2 per cent. Earnings per share for the six months rose to 2.13 cents from 1.66 cents.

‘The local private residential property market has continued to enjoy a robust, healthy and sustained level of interest in the past six months,’ Lian Beng said in a filing to the Singapore Exchange. ‘Following the successful launch of various private property developments, the group is hopeful of an increase in demand for construction services from the private sector in the ensuing 12 months.’

During the half year under review, Lian Beng was awarded two contracts worth $213.7 million for the construction of private residential projects Waterfront Key and The Gale.

With the addition of these contracts, the company’s order book as at Nov 30, 2009 was about $598 million and should provide it with a constant flow of construction activities through to the 2013 financial year, it said.

Lian Beng shares closed unchanged at 32 cents yesterday.

Source : Business Times – 13 Jan 2010

HDB flat owners who sub-let rooms in their flats will, from next month, have to register with the Housing Board within seven days of doing so.

They are also required to notify the HDB when they renew or terminate the sub-letting of rooms, and when there are changes to their sub-tenants’ particulars.

While there has been no need to seek prior approval for sub-letting of rooms, the latest move supports ongoing efforts by the Home Affairs Ministry to eradicate loan-sharking activities, and comes amid changes made to the law to better deal with the problem.

The HDB noted in a statement yesterday that some people used their old addresses to borrow from loan sharks while they rented a room in another HDB flat.

This resulted in the new occupiers of the flat being harassed by loan sharks instead, while the borrowers were untraceable as they moved without updating their addresses.

‘Through this new rule, HDB will be able to capture the particulars of those who rent rooms in HDB flats. With information on the addresses of owners and subtenants, the Ministry of Home Affairs will be able to trace the movements of borrowers,’ the statement said.

In Parliament yesterday, Associate Professor Ho Peng Kee, who is Senior Minister of State for Law and Home Affairs, said the move will make it harder for borrowers to remain untraceable when they rent a room in an HDB flat.

In tandem with the HDB’s move, the National Registration Act and Immigration Act will also be amended to empower the Immigration and Checkpoints Authority to obtain information from the HDB to administer and enforce the new requirements more effectively.

Source : Straits Times – 13 Jan 2010

A RANGE of HDB housing options is available for the elderly, from studio apartments for those who prefer to live alone, to paired-unit flats that let them live separately but next door to their children and grandchildren.

At the same time, HDB estates are designed to be barrier-free and with social spaces for different generations to interact.

The overriding aim of these efforts is to allow the elderly to live an active and independent lifestyle while not isolating them, said Senior Minister of State for National Development Grace Fu.

Ms Fu was replying to Nominated MP Paulin Straughan, who had asked about the multi-generation living scheme at SkyTerrace@Dawson.

The scheme – which pairs a studio flat with an adjacent four- or five-room flat – has been oversubscribed, with 408 applications for 65 paired units.

Ms Fu said the HDB will study the response and consider public feedback to decide if the scheme should be extended to future projects.

She noted that it complements HDB’s existing policies that encourage young couples to live near their parents.

Currently, those intending to live with or near their parents have double the chances in balloting for a new flat. And those buying a resale flat can apply for a higher Central Provident Fund grant of $40,000. The grant is otherwise $30,000.

SkyTerrace@Dawson will have facilities catering to both the young and the elderly, such as a children’s playground, an elderly fitness corner and a taiji court.

However, some elderly folk prefer to live alone or in a town they are familiar with, noted Ms Fu. ‘So even though the children may have grown (up) and moved away, they are not prepared to move to a new flat.’

So, both stand-alone studio apartments and studio apartments paired with flats have been built.

Associate Professor Straughan said she had heard ‘from the ground’ that young Singaporeans did not want to live in estates where studio apartments for the elderly predominated.

She did not elaborate on the reason, but past reports have suggested that such estates are sometimes targeted by thieves and con men.

Replying, Ms Fu said it was ‘part and parcel’ of living in an HDB estate to have neighbours from a wide range of backgrounds.

‘We would not want to see an enclave of elderly,’ she said.

‘That, in a way, is the value of HDB estates – that we see this real integration of different segments of Singaporeans, whether age- or income-wise. I think Singaporeans have come to accept this as part of HDB estate living.’

Source : Straits Times – 13 Jan 2010

The bank will give up the space it occupies at Suntec, Six Battery Road

The flight to newer office buildings continues. Marina Bay Financial Centre (MBFC) is close to clinching another tenant, Nomura Singapore.

The Japanese bank, which acquired the former Lehman Brothers’ operations in Asia in late 2008, is expected to lease about 100,000 square feet in MBFC’s Tower 2, which is slated for completion around the middle of this year.

BT understands that the signing rent is slightly below $9 per square foot (psf) a month. Market watchers suggest that the headline rent, which appears to be high for a space this size, could be due to Nomura planning to begin its lease late – sometime after Tower 2 is complete.

Nomura is expected to give up the space that it is leasing at Suntec City Tower 5 and Six Battery Road – said to total about 90,000 sq ft – and move to MBFC either later this year or early next year.

Sources suggest that it would occupy the middle stack of floors in the 50-storey MBFC Tower 2.

Other tenants in the block include Australian resources giant BHP Billiton, which has leased 231,000 sq ft on the top 11 floors.

Macquarie, Servcorp and Murex South East Asia have also leased space in the tower, which has a total of one million sq ft net lettable area (NLA) of offices.

Tower 2 forms part of MBFC’s first phase, which is being completed this year. Next door, the 33-storey Tower 1, with about 620,000 sq ft of offices, is fully let. The major tenant is Standard Chartered Bank; other tenants include French bank Natixis and Wellington International Management Company.

The development’s third office tower, a 46-storey block with 1.3 million sq ft NLA, will be anchored by DBS Bank, which has inked a 700,000 sq ft lease.

Tower 3 is slated for completion in 2012 under MBFC’s second phase.

Market watchers are cheered by the pick-up in leasing activity since Q4 last year but point out that the bulk of leasing activity currently involves replacement demand, that is, tenants moving from older office blocks to newer ones.

This means that older buildings will continue to come under pressure on rents and occupancy.

Jones Lang LaSalle said last month that the rental gap between newly completed Prime Grade A and other existing Grade A buildings is likely to widen over the next few years.

It has also predicted that for new Prime Grade A properties that have been well received by the market, rents may bottom out as early as H2 2010. However, rents in existing office blocks may continue to slide until the end of the year.

CB Richard Ellis (CBRE) data shows that the average monthly Grade A office rental value eased about 8 per cent quarter on quarter to $8.10 psf in Q4 2009 – the smallest drop in five quarters of declines.

For the whole of 2009, the decrease was 46 per cent; the latest Q4 number is also 57 per cent below the peak of $18.80 psf scaled in Q2/Q3 2008.

The Grade A vacancy rate rose from 4.2 per cent in Q3 2009 to 6.2 per cent in Q4, while the islandwide vacancy rate stayed at 12.2 per cent, according to CBRE.

Office rents are expected to ease further this year, although at a slower pace than in the past 15 months, as the economy recovers, boosting demand for offices, office industry players say.

Source : Business Times – 13 Jan 2010

THE recent sharp rise in private home prices here is not yet indicative of a bubble and prices could increase further, DBS Group research head Timothy Wong said yesterday.

‘In the mass market, what you are seeing is real end-user demand that is catching up,’ he told reporters at a briefing to present the group’s economic outlook and investment strategy for the year.

‘If you look at affordability levels, the average cost to service a mortgage taken against the median wage is about 30 per cent, which is fairly stable. When it moves up to 50 per cent, you know you have a bubble forming.

‘So we’re not really at a bubble stage yet. I think the last time we had a major bubble was probably in 1995-96, when queues were forming outside showflats and people were buying three or four properties at one go.

‘This time, it’s more circumspect – there are some speculators out there, but by and large people are genuinely buying homes to upgrade and move into,’ Mr Wong said.

‘Rental yields have come down, because they were exceptionally high at about 4-5 per cent, now they’re about 3-3.5 per cent. If they got down to one per cent, I would say that represents a bubble.’

The group’s research team expects high-end private home prices here to rise a further 10-15 per cent this year, while mid-tier home prices are expected to rise 5-10 per cent. It expects any increase in the price of mass-market private homes and public housing to be relatively muted.

Source : Business Times – 13 Jan 2010

The Marina Bay Financial Centre (MBFC) is clinching another tenant, Nomura Singapore.

The Japanese bank, which acquired the operation of Lehman Brothers in late 2008, is expected to lease 100,000 square feet of office space in Tower 2 of MBCF, which is slated for completion in mid-2010.

The signing rent works out to slightly below $9 per square foot (psf) a month. Market watchers believe that the rent, which appears to be a little higher for a space of this size, could be due to Nomura’s decision to begin leasing the space after Tower 2 is completed.

Nomura is expected to give up the 90,000 square feet leasing space at Six Battery Road and Suntec City Tower 5 and move to MBCF either later this year or in early 2011.

Some observers suggest that Nomura will occupy the middle section of the 50-storey building.

Other occupants in the block include Australian resources company BHP Billiton, which has leased 231,000 square feet on the eleventh floor.

Murex South East Asia, Macquarie and Servcorp have also leased space in MBFC, which has a total of one million square feet of net lettable area (NLA).

Tower 2 is part of MBFC’s first phase, which is due for completion this year. Next door, the 33-storey, 620,000-square-feet Tower 1, is fully occupied. Its major tenant is Standard Chartered Bank. Others include Wellington International Management Company and French bank Natixis.