SOUTH-EAST Asia’s largest developer, CapitaLand, is set to stage a giant US$2.2 billion (S$3 billion) acquisition of Hong Kong property investment holding company Orient Overseas Developments Limited (OODL).

CapitaLand China Holdings (CCH) – a wholly owned subsidiary of CapitaLand Limited – announced yesterday that it had signed an agreement to buy OODL from Hong Kong-listed container line Orient Overseas International Limited (OOIL), controlled by the family of former Hong Kong chief executive Tung Chee Hwa.

The deal – set to be completed by the end of the first quarter – will boost CapitaLand’s real estate business with a portfolio of seven sites in Shanghai, Kunshan and Tianjin boasting a total gross floor area of 1.48 million sq m.

Some 87 per cent of that is in Greater Shanghai, while the remaining is in the Tianjin city centre.

Residential area constitutes the largest component – 56 per cent – while offices, serviced apartments and hotels, and retail make up 19 per cent, 17 per cent and 8 per cent respectively, according to CapitaLand.

The purchase will, at a stroke, double the firm’s China property portfolio from 1.4 million sq m to 2.8 million sq m, and increase CapitaLand’s assets in China to approximately 36 per cent.

CapitaLand group chairman Richard Hu said the proposed acquisition was timely and provided an excellent strategic fit.

‘It also fits into our stated goal of growing our asset size in China from the present 28 per cent of total assets to 45 per cent over the next five years, as we remain very confident of the long-term future of the country,’ he said.

The developer will fund the acquisition from internal cash resources, much of which have been generated by the initial public offering of CapitaMalls Asia, which raised $2.8 billion in November. CapitaLand will assume responsibility for a US$1.05 billion shareholder loan owed by OODL to its parent.

CapitaLand president and chief executive Liew Mun Leong said the acquisition, which is still subject to OOIL shareholder approval, represented an ‘opportunistic’ investment.

As most of the sites already have planning and land-use approval, and some have construction permits in place, red tape is reduced and developments can be released quicker to the market.

‘In Shanghai, demand far exceeds supply, and the competition for land at good price levels is tough. With one go, we have solved a few years of land acquisition problems,’ Mr Liew said.

He is bullish about demand, citing Shanghai’s position as a financial centre and its status as a main shipping hub as key engines of growth, while CapitaLand China executive committee deputy chairman Lim Ming Yan said urbanisation would help keep demand high.

DMG & Partners Securities analyst Brandon Lee said the acquisition was likely to be a positive move for CapitaLand in the medium to long term.

‘Some of CapitaLand’s developments have been in lower tier cities so far. This will really allow it to expand its footprint – especially in Shanghai and Tianjin – which are good growing cities in property development,’ he said.

Hong Kong’s OOIL said yesterday it expected to book a profit of US$1.06 billion from its China property sale to Singapore’s CapitaLand.

The transaction represented an opportunity for the group to redirect capital to its core business of container transport and logistics services, it said in a statement released yesterday.

A slump in global trade and excessive capacity in the shipping industry led to a loss of US$231.8 million in the half-year to June 30 – its first in a decade.

Source : Straits Times – 19 Jan 2010

LAW Minister K. Shanmugam’s remarks in yesterday’s report about the impact of foreigners on public housing (‘Wrong to accuse them of driving up costs: Shanmugam’) did not address the consequences on single Singaporeans or offer more effective ways to help all citizens.

In dismissing the perceived impact of foreigners, Mr Shanmugam noted that foreigners cannot buy HDB flats and that there are too few permanent residents (PRs) to affect prices.

He also noted that the Government gives Singaporeans a leg up with concessionary loans and housing grants, and is ready to launch up to 12,000 build-to-order (BTO) units to meet demand.

But concessionary loans and housing grants are not enough to offset rising flat prices, and single Singaporeans cannot buy BTO units.

If the Government will not regulate rising HDB flat resale prices, the HDB should build more two- and three-room flats and let single citizens buy them.

PRs should also be banned from renting out their flats or putting them up for resale at a profit. The price at which PRs resell their flats should not be higher than what they paid for them.

Such a rule will prevent PRs who do not intend to take up citizenship from reaping a windfall when they return home after a few years. It will indeed ensure that foreigners are not responsible for high flat prices.

Lua Eng Chuan

Source : Straits Times – 19 Jan 2010

BUYERS have rushed to the HDB’s first build-to-order (BTO) projects launched this year, with one category of flats attracting 14 times more applications than homes available.

The intense interest in the developments at Choa Chu Kang and Hougang mirrors the flood of applications for two similar BTO projects at Dawson in Queenstown just before the new year.

The new estates – both in well-established areas – had attracted a total of 6,848 applications for 1,291 units ranging from studios to four-room units by 5pm yesterday.

Mr Eugene Lim, associate director of ERA Asia-Pacific, told The Straits Times: ‘For a long time, HDB programmes have been in areas like Punggol and Sengkang. It is now offering more choices for people. It is a welcome move as far as buyers are concerned.’

Limbang Green estate at Choa Chu Kang was the star attraction when applications opened on Jan 5.

Its 188 four-room flats have pulled in 2,681 applications – a take-up rate of about 14 times – while the 128 three-room units had reaped 402 bidders.

Things were a little less intense at Buangkok Vale in Hougang, but home seekers were still out in force with 2,608 hopefuls chasing 458 four-room units.

The estate also attracted 480 applicants keen to buy from a pool of 113 three-room apartments.

Studios had their fans as well, with 521 applications for the 276 units offered in Limbang Green, although two-room flats, while over-subscribed, received a relatively modest response.

Choa Chu Kang prices range from $64,000 for a studio unit to $278,000 for a four-room flat, while Hougang’s two-room units start at $88,000 to about $288,000 for a four-room apartment.

The final tally of applications will be posted on the HDB website at 2pm today.

Mr Lim pointed out that both projects are in areas with good infrastructure and older estates, but price is also a factor.

BTO flats – only built once a certain sales level has been achieved – are becoming more attractive given the rising prices of resale HDB units.

‘Using the Choa Chu Kang flats as a guide, selling price is $100,000 cheaper than what you can get from the resale market,’ Mr Lim said.

The new launches are likely to be the first of many, with the HDB stating earlier this month that it will offer 12,000 new BTO flats this year if demand stays robust.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the Government might have to provide more large- sized flats to meet demand.

He said: ‘The HDB might have to run this kind of exercise every month and after every quarter or so to see if the 12,000 figure is enough for this year.’

Supply can reduce when over-subscription falls, he said.

While thousands of buyers were making a beeline for BTO flats, some tried a different tack after finding the overwhelming number of applicants daunting.

Marketing representative Wan’er Chong, 26, and her partner opted for a Bishan apartment in the HDB’s design, build and sell scheme instead.

‘We were allowed to choose our unit, and there was no balloting. It was possible to buy the flat on the same day, no wait required,’ she said.

Another advantage was that the flat would come fully furnished, eliminating renovation costs, she added.

Source : Straits Times – 19 Jan 2010

CITY Harvest Church has announced a $310 million expansion plan to buy land, and to erect a building that will house shops, restaurants and a 12,000-seat auditorium.

Founder Kong Hee, 45, said during church services yesterday and last Saturday that the land sale would be completed later this month. He did not specify the location, but said the site would be in the ‘central south’ district.

He described the site as ’super large’. It is believed the site covers an area as large as three football fields – six times the size of the Protestant church’s current home in Jurong West Street 91, which it owns.

‘This is truly amazing,’ Dr Kong said yesterday at the Singapore Expo, where it has been renting a hall for services. ‘Finally, we will have a church in the marketplace, for the marketplace, to penetrate the marketplace.’

The church’s plans to incorporate retail elements into its building project follow similar plans announced in 2007 by New Creation Church, another large Christian group in Singapore.

New Creation has teamed up with mall developer CapitaLand Retail to build an ‘integrated hub’ at Buona Vista. The $1 billion project, when ready in 2012, will house shops, a concert hall and a theatre.

Details of the City Harvest project remain fuzzy. It is not known how many floors the building will have, how much space will be for retail and religious use, or when construction will start and end.

It is also unclear if the church will rope in partners, as New Creation did, to develop the site.

In response to queries from The Straits Times, Reverend Derek Dunn, City Harvest’s executive pastor, said yesterday that a non-disclosure agreement prevented him from commenting on the project.

At yesterday’s service, Dr Kong said only that there would be ‘ample parking’, and that the building would have ‘eateries, restaurants and world-class facilities’. The news surprised many churchgoers, who cheered and waved their hands.

Last Saturday night, Dr Kong posted a message on his Twitter service that proclaimed: ‘Told them the great news. People were laughing, crying, clapping. A new day for City Harvest Church.’

Yesterday, he told the congregation that expansion plans had been germinating since 2005, when the church began renting a hall at Singapore Expo to hold additional services for its growing congregation – now 27,000 strong. The Jurong West church seats only about 2,400.

According to City Harvest financial statements, it spent $3 million on rent from July 2007 to October 2008.

Dr Kong said he had considered 25 potential sites, including the Capitol Theatre at Stamford Road, The Pines Club at Stevens Road and the Toa Payoh Sports Complex, but had found them all unsuitable.

At $310 million, the proposed facilities would cost each member about $11,000 if they divided the amount equally.

Member donations make up more than 95 per cent of the church’s annual income.

The church plans to pay for the project over seven to 10 years, although it has set an initial target of $17 million by June.

Members were optimistic, despite the recession, that they would reach the target. They also pointed to how New Creation Church members managed to raise $19 million in just one day last year in March – at a time when banks were failing and millions worldwide were out of jobs.

Source : Straits Times – 18 Jan 2010

A FREEHOLD ramp-up light industrial building will be coming up at 9 Tagore Lane and its developer is putting it up for sale.

The four-storey 9@Tagore will comprise 124 units ranging from 1,800 sq ft to 4,800 sq ft. Prices for the units start from $410 per sq ft, and the building is expected to receive temporary occupation permit at end-2011.

3M Building, which currently occupies the site, will make way for the new property developed by Chiu Teng @ Tagore Pte Ltd.

Colliers International is marketing 9@Tagore. According to its industrial director Tan Boon Leong, the building is the only freehold ramp-up industrial development in Singapore that is available for strata sale.

9@Tagore would attract companies looking for new space given that most of the existing industrial developments in the vicinity are five to 20 years old, he said.

‘Additionally, given its high potential yield of 5-6 per cent, the development is also likely to appeal to investors,’ he added.

‘On the back of an expected improvement in both the economy and the manufacturing sector, as well as more optimistic business sentiment, we expect to see a pick up in the demand for industrial space.’

9@Tagore will have an integrated ramp-up driveway providing direct access to all units. There will also be a loading bay for 40-foot prime movers.

Units there would be suitable for housing storage facilities, light assembly and production facilities or ancillary showrooms. Most of them are column-free and have a floor-to-ceiling height of six metres.

Source : Business Times – 19 Jan 2010

Allgreen expected to launch sales next week at 83-unit Holland Residences

CITY Developments Ltd (CDL) is expected to begin previewing its Cube 8 condo on Thomson Road this week; the average price is tipped to be at about $1,250 per square foot.

Next week, Allgreen Properties is expected to start sales at the 83-unit Holland Residences, a five-storey condo at Taman Warna. The average price could be around $1,600 psf, some market watchers suggest. Both projects are freehold.

Meanwhile, Frasers Centrepoint has sold 42 of the total 81 units at its Residences Botanique, a five-storey freehold condo at Yio Chu Kang/Sirat roads opposite Serangoon Stadium. The average price is about $1,000 psf. The developer held a one-day private preview in early December and began its ‘official preview’ on Jan 9.

‘Units were sold at prices ranging from $844 psf to $1,262 psf. The buyers were mostly Singaporeans and PRs. About half of the buyers had HDB addresses, with the other half residing in landed properties and condos in a catchment area stretching from Serangoon Gardens to Kovan,’ said Frasers Centrepoint chief operating officer Cheang Kok Kheong.

Units range from one-bedroom-with-study to four-bedroom duplex apartments. The one and two-bedders were the most popular although the developer has started to sell the bigger units as well, Mr Cheang added.

At Thomson Road, on the site of the former The Albany and Thomson Mansion, CDL will develop Cube 8, a 36-storey condo comprising 177 units. The project is next to the group’s earlier project, The Arte at Thomson, which it began selling in March last year at an average price of about $880 psf; by May, CDL had revised the pricing to about $900 psf on average. Six units are still available in the 336-unit project, according to government data on developers’ December sales.

While the two projects are next to each other, The Arte is in District 12 while Cube 8 is in District 11 – one of Singapore’s three traditional prime districts. A property consultant who is not involved with marketing Cube 8 described the $1,250 psf reported average price for the development as ‘aggressive but achievable’. He noted that in the secondary market, owners of upper floor units in Sky @ Eleven – a 43-storey development which offers better views of the Singapore Polo Club and surrounding greenery – are asking $1,400 psf and above.

Cube 8 includes 39 one-bedroom units, 68 two-bedders, 57 three-bedders, nine four-bedroom apartments and four penthouses or sky villas. Prices of one bedroom units, which will have an area of about 560 sq ft, are expected to start from about $730,000. Three bedders, which will be 1,335 to 1,475 sq ft, will cost $1.6 million to $1.9 million. The sky villas will likely be priced above $3.5 million apiece.

Holland Residences comprises mostly three- and two-bedroom apartments, although there are also 17 penthouse units.

Source : Business Times – 19 Jan 2010