Serangoon residents will have a new public library in March next year.

The National Library Board (NLB) announced on Wednesday that the new Serangoon Public Library will be located at “nex”.

“nex” is a mega eco-friendly mall linked to the new 16-bay Serangoon Bus Interchange and the stations of the new Circle line and existing North East line.

The Serangoon Public Library will cater to some 122,000 residents in Serangoon.

It will cover an area of about 17,000 square feet, and start with a collection of about 150,000 books, magazines and audio-visual material.

Source : Channel NewsAsia – 3 Feb 2010

An upcoming mall in Serangoon Central, called nex, has leased out about 90 per cent of its space some nine months ahead of its official opening in November.

The mall’s developer, Gold Ridge, said it has signed on the Serangoon Public Library as the newest anchor tenant at the complex.

The new public library will occupy about 17,000 square feet of space and is scheduled to open to the public in March 2011.

Other anchor tenants include Challenger, Cold Storage, Courts, and FairPrice Xtra.

With over 600,000 square feet of net lettable area over six storeys, nex will be the largest mall in northeast Singapore.

The mall is integrated with a new bus interchange and the Serangoon Interchange Station where the North East Line and the Circle Line converge.

The retail mix will extend to over 350 specialty shops offering international and local fashion brands, various apparel wear and home products.

Source : Channel NewsAsia – 3 Feb 2010

CapitaMalls Asia’s net profit in 2009 jumped 235 per cent on-year to S$388 million.

In its maiden full-year results since listing last November, CapitaMalls Asia said the boost to the bottom line came mainly from its China market. It also said it may benefit from the recent moves by the Chinese government to tighten credit.

Consumer spending in Asia has remained robust despite the economic downturn, benefiting groups like CapitaMalls Asia.

Its 2009 net profit soared over three-fold amid improved valuations of its properties, which span five countries in Asia.

Lim Beng Chee, CEO of CapitaMalls Asia, said: “Singapore, China and Malaysia are experiencing a huge growth in their property income, mainly because of the underlying growing consumer market … And we’ve also opened a total of 11 malls in 2009, which also contributed to the bottom line.”

The top line for the period rose 11.6 per cent on-year to S$229 million, due to higher contribution from existing malls and investment activities.

CapitaMalls Asia said China is expected to be a major market, which it hopes will form 40 per cent of its assets in future.

The company also said the recent moves by China to tighten credit may not adversely affect its operations there. But it said any impact on its Chinese competitors may provide some opportunities for growth.

Mr Lim said: “Most of the property players are actually residential developers. In fact, some of them may have non-core retail properties. Given the credit situation, they may want to go back to their core residential businesses and that may present some opportunities for us.”

As for its core Singapore portfolio, CapitaMalls Asia said it does not have a time frame for selling its ION Orchard property.

It said it will wait until the sales of the residential portion of that project are sold before a sale is planned.

Source : Channel NewsAsia – 3 Feb 2010

Weak pound helping to fuel demand, but few sellers as most await GE outcome

Luxury home prices in central London rose last month at the fastest annual pace since April 2008 as a growing number of buyers chased fewer properties on the market, Knight Frank LLP said.

Values of houses and apartments costing more than £1 million (S$2.2 million) climbed 11.5 per cent from a year earlier, the London-based property broker said in a statement yesterday. The 1.1 per cent gain from December was the 10th straight monthly advance and the smallest since last August. Prices remain 12 per cent lower than the market’s peak in March 2008.

‘There still seems to be considerable life left in the recovery in pricing,’ Liam Bailey, head of residential research at Knight Frank in London, said in the statement. ‘While buyers are back in force, vendors are few and far between.’

Some potential sellers are waiting to put houses on the market until they see how the outcome of the UK general election, which must be held by June, affects regulation of the financial industry and taxation of banker bonuses, Mr Bailey said.

There is also concern that the withdrawal of the government’s economic stimulus package and cuts in public spending will impact the housing market.

Most of Knight Frank’s offices in central London have 15 per cent to 20 per cent fewer properties for sale than normal for this time of year, the broker said.

At the same time, the number of potential buyers in January was 15 per cent higher than the five-year average. ‘Slim pickings are the fuel that has been driving this market bounce,’ Mr Bailey said. Some venders are starting to price their homes close to or even above peak levels again, which is a risky strategy ‘for anything other than perfect properties’. ‘The market has not been truly tested by a well-stocked larder,’ he said.

A shortage of properties can create a domino effect, as potential sellers wait until they have more choice of places to buy themselves, Mr Bailey said.

The pound’s weakness in the past two years has fuelled demand for British real estate by making it more affordable for overseas buyers. That has helped encourage property funds to raise more money to buy luxury homes.

The Prime London Capital Fund, the only open-ended property fund investing in prime central London residential real estate, has more than tripled funds under management to about £40 million, it said in an e-mailed statement on Jan 26. That followed an investment by Lee Hing Development Ltd, a Hong Kong-based property investment company, and its chairman.

‘Prime London property has been incredibly resilient over the last couple of difficult years and has acted as a good protector of wealth,’ said Stephen Yorke, chief executive officer of D&G Investment Management Ltd, the fund’s manager.

South African Investors London Central Portfolio Ltd has raised £4.5 million in equity for its London Central Residential Recovery Fund, the only closed-end fund investing in the market. Hugh Best, its manager, said that he expects to achieve his target of £10 million by next month’s deadline, helped by South African investors. The fund will be able to invest as much as £23 million, including debt financing.

Prices of luxury properties in central London surged 82 per cent during the last boom, between January 2005 and March 2008, according to Knight Frank’s data.

The broker compiles its luxury index from estimated values of properties in the Mayfair, St John’s Wood, Regent’s Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and South Bank neighbourhoods of London.

January prices rose the most in Kensington, Knightsbridge and Notting Hill, the district where Conservative opposition leader David Cameron lives.

Residential development land prices in districts favoured by bankers, such as Kensington and Chelsea, rose 7 per cent in the fourth quarter of last year, more than anywhere else in the UK, the broker said in a separate report on Tuesday.

Urban land prices are still 51 per cent below the peak in 2007.

Source : Business Times – 4 Feb 2010

In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.

Doing nothing about these underwater mortgages could encourage more walk-aways, dealing another blow to the fragile US economy.

‘People like me are beginning to feel like suckers,’ Mr Koellmann said. ‘Why not let it go in default and rent a better place for less?’

After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan-modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.

New research suggests that when a home’s value falls below 75 per cent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.

In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.

‘We haven’t yet found a way of dealing with this that would, we think, be practical on a large scale,’ assistant Treasury secretary for financial stability Herbert M Allison Jr said in a recent briefing.

The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 per cent of the mortgage balance.

They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June – about 10 per cent of all Americans with mortgages.

‘We’re now at the point of maximum vulnerability,’ said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. ‘People’s emotional attachment to their property is melting into the air.’

Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.

‘Since the beginning of December, I’ve advised 60 people to walk away,’ said Steve Walsh, a mortgage broker in Scottsdale, Arizona. ‘Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.’

Mr Walsh is taking his own advice, recently defaulting on a rental property he owns. ‘The sun will come up tomorrow,’ he said.

The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call ‘house arrest’.

Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 per cent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.

Some experts argue that walking away from mortgages is more discussed than done. People hate moving; their children attend the neighbourhood school; they do not want to think of themselves as skipping out on a debt. Doubters cite a Federal Reserve study using historical data from Massachusetts that concludes there were relatively few walk-aways during the 1991 bust.

The US Treasury falls into the sceptical camp. ‘The overwhelming bulk of people who have negative equity stay in their homes and keep paying,’ said Michael S Barr, assistant Treasury secretary for financial institutions.

It would cost about US$745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.

Using government money to do that would be seen as unfair by many taxpayers, Mr Barr said. On the other hand, doing nothing about underwater mortgages could encourage more walk-aways, dealing another blow to a fragile economy. ‘It’s not an easy area,’ he said.

Source : Business Times – 4 Feb 2010

It’s interested in commercial property but chairman says buying land not easy

Hong Kong-listed developer Hang Lung Properties aims to invest US$2-3 billion over the next couple of years into China if it finds good opportunities in the country’s commercial property sector, a top executive said.

Although Hang Lung expected robust retail sales in China, second-half turnover would likely fall short of the HK$9.7 billion (S$1.7 billion) logged in the fiscal first half ended Dec 31 as the earlier part of the financial year saw strong sales in Hong Kong residential property, chairman Ronnie Chan told Reuters on the sidelines of the PERE Forum: Asia yesterday.

‘If I had the choice, I would love to invest in another US$2-3 billion worth of projects (in China), but land acquisition is just so difficult,’ Mr Chan said. ‘I will just have to see what kind of land I can buy.’

In October last year, Mr Chan said Hang Lung aimed to invest HK$4-5 billion in new commercial property projects in China, after committing around US$5 billion in Chinese projects as of mid-2009.

Hang Lung, which entered China in 1992, has developed two major shopping complexes in downtown Shanghai and largely focuses on office and retail projects in the mainland. In Hong Kong, where it is based, the company has a mix of residential and commercial properties.

Hang Lung, which has no debt in its net cash position, had set a target in 2003 to acquire land for 18 commercial projects in China by the end of 2009 at a total cost, including development, of HK$40 billion.

Mr Chan said office rents were under pressure in China as fast-rising property prices damped yields, although its shopping malls were performing strongly as domestic consumption was robust after the Chinese government doled out billions of dollars in stimulus during the global downturn.

‘We surprised ourselves,’ Mr Chan said. ‘We thought retail would be hurt because of the financial crisis.’

In the office space, Hang Lung was eyeing second-tier Chinese cities for rental growth, expecting rental income from China to surpass Hong Kong in the next two years when projects in Shenyang and Jinan cities are complete, he said.

Mr Chan said he saw few opportunities beyond Greater China so far, even as some Asian companies were eyeing distressed properties in Western markets such as the United States. ‘I have three problems with the United States: One, the economy is going too slow. Two, you’re playing the cycle only and the cycle is not on an upward trend. Three, it’s highly tax-related,’ Mr Chan said. ‘You can make money, but only one time.’

Hang Lung’s shares yesterday closed up 1.4 per cent, compared with the Hang Seng Index’s 2.2 per cent gain.

Source : Business Times – 4 Feb 2010

Rising interest rates will trigger defaults on Australian home loans and commercial mortgages, causing deterioration in the quality of assets underpinning mortgage-backed bonds, according to Fitch Ratings.

Three straight interest rate rises last year and further increases expected in 2010 may cause Fitch’s Dinkum Index, which measures delinquency rates on prime home loans, to climb to as much as 1.5 per cent this year from 1.21 per cent at Sept 30, the London-based risk assessor said in a report yesterday.

‘The improvement in Australia’s structured finance asset performance, which was experienced during 2009, thanks to historically low interest rates and a resilient economy, is unlikely to continue during 2010,’ David Carroll, a director in Fitch’s Australian structured finance team, said in the report. ‘Rates will continue to rise during 2010 and structured finance arrears are likely to trend up,’ he said in an interview.

Central bank governor Glenn Stevens unexpectedly kept the overnight cash rate target at 3.75 per cent on Tuesday, opting to support the economy’s acceleration and stem inflation later. Borrowing for home buying fell to a five-year low last month, according to Australian Finance Group. Colonial First State, Australia’s biggest asset manager, froze an A$850 million (S$1.06 billion) mortgage income fund to withdrawals on Jan 14 after signs that some commercial property loans may sour.

Australian household debt remains a concern, with the ratio of household debt to disposable income standing at 156 per cent as of June 2009, Fitch said.

The increase in delinquencies isn’t expected to be severe enough to affect the ratings of mortgage-backed bonds, according to Mr Carroll. Australian Finance Group says that it accounts for more than 10 per cent of the nation’s mortgage market. The group arranged A$1.55 billion of mortgages in January, 19 per cent less than a year earlier and the lowest level for any month since 2005.

Source : Business Times – 4 Feb 2010

Jones Lang LaSalle Inc, one of the world’s largest real estate service companies, said on Tuesday that fourth-quarter net income rose 26.8 per cent, driven in part by its US corporate outsourcing business and its Asia operations.

It posted a net profit of US$52 million, or US$1.19 per share, compared with US$41 million, or US$1.17 per share, in the year-earlier quarter. Excluding US$11 million in restructuring and US$4 million in non-cash charges, net income came to US$63 million, or US$1.44 per share.

Revenue rose 2 per cent to US$815 million. Analysts had expected the company to post a profit of US$1.34 a share on US$700.4 million revenue, according to Thomson Reuters IBES.

The global property market for the most part was slammed last year as credit remained tight and debt overwhelmed big ambitious property investors, such as Dubai World and Tishman Speyer.

Although Asia did not suffer as deeply and Europe has begun to recover, the US property market, the largest and most mature market, saw sales fall 64 per cent and yields, which move inversely to prices, rise, according to research firm Real Capital Analytics.

But fourth-quarter sales picked up 38 per cent from the third quarter, according to Real Capital.

Jones Lang’s diverse revenue sources have helped blunt the impact of the global real estate downturn, more so than its main competitor, CB Richard Ellis Group Inc.

‘Although markets face a slow and uneven recovery, the actions we’ve taken to protect our businesses and win market share make us confident about our prospects for 2010,’ chief executive office Colin Dyer said.

At Jones Lang’s Europe- Middle East-Asia division, revenue fell 7 per cent to US$243 million. It rose 9 per cent in the Americas region to US$345 million and was up 23.6 per cent at US$178 million in the Asia-Pacific region.

LaSalle Investment Management, which invests for pension funds and other institutional investors, posted fourth-quarter revenue of US$64 million, down from US$90 million a year before. The results were issued after the close of the market when Jones Lang shares closed down 27 US cents at US$57.99 on the New York Stock Exchange. They were unchanged in after-hours trading.

Source : Business Times – 4 Feb 2010

Cushman & Wakefield Inc, the world’s biggest closely held commercial-property broker, named Glenn Rufrano as its president and chief executive officer.

Mr Rufrano, 60, is the CEO of Centro Properties Group, Australia’s second-biggest retail real estate investment trust. He will join Cushman on March 22, according to a statement by the New York-based company. Cushman has been searching for someone to fill the position since October, when it announced plans to make Bruce Mosler, who holds both posts, co-chairman alongside John C Cushman III. Mr Rufrano has been Centro’s CEO since 2008.

Centro was the biggest overseas buyer of US property from 2005 to 2007, a strategy that backfired when credit dried up and property prices tumbled. The owner of more than 600 US malls agreed with creditors to restructure assets on Dec 24.

Mr Rufrano was CEO of New Plan Excel Realty Trust Inc from 2000 to 2007, the year that it was acquired by Centro. He also co-founded O’Connor Capital Partners, worked for five years at Landauer Associates Inc and serves on the board of General Growth Properties Inc.

He is a graduate of New Jersey’s Rutgers University, and has a master’s degree in real estate from Florida International University, according to Cushman’s statement.

Source : Business Times – 4 Feb 2010

Opening of 11 malls, revaluation gains help to boost bottomline

CAPITALAND’S shopping malls unit CapitaMalls Asia (CMA) posted a net profit of $388.1 million for 2009, its first annual result after listing late last year.

The company’s net profit rose 236 per cent from $115.6 million in 2008 as it opened a total of 11 malls last year. Revenue rose 12 per cent to $228.9 million last year from $205.2 million in 2008.

In Q4 2009, CMA recorded a net profit of $169.9 million on the back of a revenue of $66.1 million. Earnings in Q4 2008 were a negative $7 million, while revenue was $64.1 million.

CMA’s bottomline last year was boosted by a close to $178 million increase in the valuation of its properties between end-2008 and end-2009.

A large part of this was contributed by the revaluation of ION Orchard, which was valued at $3,950 per square foot (psf) at end-2009 – although this was partially offset by the downward valuations (recognised on June 30, 2009) of One-North and the portfolio of CapitaMall Trust in Singapore as well as assets in Japan and India.

CMA proposed a first and final dividend of one cent a share for 2009. The company also said that it has secured credit facilities of over $1 billion from various banks.

The company now has a total of 60 operational malls across Asia.

‘We are developing another 26 malls in Singapore, China and India, which we will open over the next few years,’ said chief executive Lim Beng Chee.

In China, the company expects to open another six malls this year. It will also open its second mall in India by the end this year. Added Mr Lim: ‘In addition to this growth pipeline, we see further development and acquisition opportunities in our key markets of Singapore, China and Malaysia, which we will actively explore to strengthen our presence in those markets.’

Mr Lim also addressed questions about the tightening credit conditions in China.

‘As a long-term investor in China, the current credit tightening measures will not hinder our expansion plan in the country,’ he said. ‘On the contrary, we are encouraged by the steps taken by the Chinese government, to ensure the sustainability of its economic growth.’

CMA shares closed unchanged at $2.25 yesterday.

Source : Business Times – 4 Feb 2010