Ascott’s China service residences lauded

THREE service residences managed by The Ascott Group have been named ‘China’s Best Serviced Apartments’ by Forbes China magazine.

Ascott Beijing, Ascott Shanghai Pudong and Somerset Olympic Tower, Tianjin were among 15 winning projects chosen from 100 short-listed in Beijing, Dalian, Guangzhou, Shanghai, Shenzhen and Tianjin.

Ascott bagged the most awards in the service residence category, created this year to recognise excellence in service, stay experience, facilities and location.

The awards are part of Forbes magazine’s ‘China’s Best Business Hotels 2008′ awards.

Ascott’s CEO for China Ee Chee Hong said: ‘Winning three out of 15 awards is a validation of Ascott’s focus on delivering service and product excellence.’

Ascott is the largest international service residence owner-operator in China, with a total of about 4,000 units in Beijing, Dalian, Guangzhou, Shanghai, Shenzhen, Suzhou, Tianjin, Xi’an and Hong Kong.

The group plans to grow its China portfolio to 10,000 units by 2010. It has won numerous brand and property awards.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

HK property deals surge to 2-year high in August

A SURGE in property deals has fuelled hopes that Hong Kong’s mass market is poised to catch up with the city’s runaway luxury sector.

The number of deals surged last month to a two-year high of 13,664, an increase of 22.9 per cent from July and a rise of 58.3 per cent from August 2006. In the past six months, the figure has exceeded 10,000, signalling a consistent shift upwards.

The total amount paid for these sale and purchase agreements came to HK$44.2 billion (S$8.6 billion), an increase of 16.3 per cent over the previous month.

The figure represents a hefty 76.3 per cent increase compared to the amount paid in August 2006.

Hong Kong’s mass residential market has been a notable laggard over the past two years as the luxury sector took off. Sales in up-market locations such as the Peak and the South Side of Hong Kong Island have well outstripped 1997 levels.

Luxury residential sales in Hong Kong are expected to post double-digit growth this year as limited supply and an influx of capital to the city pushes up prices. Property firm Savills expects the luxury sector to post growth of 16 per cent in the 12 months to April 2008.

This follows stellar growth in 2006, in both sales and leasing.

While luxury sales are at 1997 levels or above, the mass sector is still about 20 per cent short. Residential property on Hong Kong island is 20-25 per cent below 1997 prices, while prices out in Kowloon and the New Territories could be as much as 40 per cent below.

Market players are hoping the latest transaction figures signal healthy buying power and renewed interest in buying a home.

Many home buyers are still stinging from the Asian financial crisis, after which the value of their homes fell by up to 40 per cent, often to less than the level of the housing loans they took out to buy the homes.

Another factor potential buyers are taking into account is that developers have been reluctant to drop their prices, despite ample supply in the mass sector.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

CBRE, Savills open new offices

PROPERTY firm CB Richard Ellis (CBRE) is set to open its office in Koh Samui, Thailand, while its competitor Savills officially opened its office in Dalian, China, yesterday. CBRE’s office opens tomorrow.

The group, which already has offices in Bangkok and Phuket, said in a press statement yesterday that the move was in response to growing investor demand, and the number of quality developments on the market.

The Koh Samui office will offer a full range of services, including residential sales, investment and land services, research and consulting, and valuation services.

It will be supported by CBRE’s regional offices in Asia and will be part of a larger business plan to roll out a high-end luxury properties platform.

Separately, integrated property services provider Savills yesterday launched its Dalian office, bringing the group’s total number of offices in China to eight, with staff strength estimated at 3,000.

Earlier this year, Savills also opened offices in Tianjin and Chengdu. Savills Dalian offers full agency services, including residential sales, commercial and retail leasing, property management, research, development and consultancy, and valuation.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

Jones Lang plans mall mgmt JV in China

(BEIJING) Global real estate services company Jones Lang LaSalle (JLL) is in talks with a shopping centre management firm to establish a 50-50 joint venture in China, a senior company executive said yesterday.

Managing director David Hand said the company ‘is looking at doing a merger – a joint venture with an overseas expert in shopping centre management’ to strengthen its hand in a market where the world’s top retail brands are swarming in.

If everything goes smoothly, ‘by the end of the year, we will be able to announce it’, he told reporters.

He said the deal would make JLL the largest shopping centre management company in China and in Asia as well.

JLL provides management and leasing services to many shopping malls in China, including new developments in downtown Beijing. Its rivals include DTZ Holdings and CB Richard Ellis.

Mr Hand added that JLL would move its regional headquarters to China from Singapore to capitalise on Bejing’s drive to spur consumption in order to wean the economy off investment and exports.

He did not say when the move would occur. ‘In the future, China will be our strongest growth engine,’ he said.

For the full report, please visit www.asia1.com.sg

Source: The Business Times

House prices in Chinese cities up 8.2% in August

(BEIJING) House prices in 70 large and medium-sized Chinese cities were up 8.2 per cent in August compared with last year, as the rising trend continues to show no sign of stopping, according to latest statistics released yesterday.

The rise actually hit a new high and was 0.7 percentage points higher than the July figure, according to a report by the National Bureau of Statistics (NBS) and the National Development and Reform Commission.

The prices of newly-built commercial housing units were up by 9 per cent in August, 0.9 percentage points higher than the rise in July.

The prices of low-cost housing rose 3.1 per cent and the prices of luxury housing went up 10 per cent.

The cities of Beijing, Shenzhen, Beihai and Urumqi saw price hikes of more than 10 per cent, with Beihai the highest at 18.2 per cent.

The housing prices in Beijing went up 13.5 per cent and the prices in Shenzhen were up 17.6 per cent. Prices of second- hand houses in those cities were up by 7.8 per cent.

The Chinese government has pledged to tame the wild property market but house prices have rocketed over the last few years despite round after round of government measures including restrictions on housing ownership by foreigners. Speculation by domestic and overseas investors has been blamed as one of the main reasons for the price hikes.

China’s real estate investment soared 28.5 per cent from a year earlier to 988.7 billion yuan (S$200.3 billion) in the first half of 2007, according to the NBS.

Analysts attributed the rising investment to booming housing demand, excessive liquidity and robust housing price hikes.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

District 19 – home of property investors

(SINGAPORE) It may not top Singapore’s wealth charts, but Hougang has plenty of property investors – or speculators. District 19, which includes Serangoon Gardens, Hougang and Punggol, has the highest number of borrowers with multiple property loans, at 3,263.

According to data from Credit Bureau Singapore (CBS), which analysed loans and looked at where borrowers live, investors are defined as people with two home loans and more. They live all over Singapore and are not confined to the rich districts of 10 and 11 or 15.

In fact District 9, which includes Orchard, Cairnhill and River Valley, has only 716 borrowers with at least two home loans. This is much lower than districts 16, 18, 20, 22 and 23, each of which has between 2,000 and 2,700 borrowers with more than one loan.

People with multiple home loans totalled 38,520 in June – a 64 per cent jump from 12 months earlier.

And District 19 took the top prize in this category – at 3,263. CBS general manager Mark Rowley said this could be due to the number of property launches in the area, although the data would include residents who have bought elsewhere.

CBS gets its property loan data from 10 financial institutions, eight banks and two finance companies.

They are ABN Amro Bank, CitiBank, DBS Bank, HSBC, Maybank, OCBC, Standard Chartered Bank, United Overseas Bank, Hong Leong Finance and Sing Investments & Finance.

For the full report, please visit www.asia1.com.sg

Source: The Business Times

New rule may result in lumpy property earnings

(SINGAPORE) A new accounting interpretation standard being proposed will require property developers to recognise revenue from their projects only on completion and not in phases.

Developers are said to be resisting the proposed change in accounting standard which, they say, will result in greater fluctuations in earnings reported by listed property companies.

The new standard is put forward by the Council on Corporate Disclosure and Governance (CCDG) which adopted it from the UK-based International Accounting Standards Board. The CCDG sets accounting standards in Singapore.

The Institute of Certified Public Accountants of Singapore vice-president Ernest Kan said: ‘This will cause earnings of property companies to be more erratic.’

‘Currently, if I started an 18-month project in January, and I complete two-thirds of the project this year, the 2007 financial statement looks nice because I can recognise two-thirds of the revenue and profit.

‘But under the new standard, there will be nothing to show for it in the 2007 financial statements, but next year when the project is completed there will be a sudden surge of revenue and profit which is recognised.’

The proposed change aims to standardise accounting practices among real estate developers for sales of units such as apartments before construction is complete.

Hiap Hoe executive director Cindy Lim said: ‘Financial accounting should reflect the business and economic value generated by companies.’

‘If we were to recognise revenue only upon the completion of a property, it would not be a fair reflection of a company’s performance. Commercially speaking, revenue would have already been generated once the property is sold – even if it is only half completed.’

And the chief financial officer of a listed property developer said: ‘Most developers would prefer the status quo because we don’t want gyrations in earnings.

‘Besides, home buyers here make progressive payments based on completion, and risks are passed on to them accordingly, so developers should be allowed to recognise revenue.’

Dr Kan said the change could be implemented as soon as the financial year beginning on or after Jan 1 next year.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

Boom resonates in home loan numbers

(SINGAPORE) For thousands in Singapore, a single home – or a single loan – is no longer enough.

Riding the property boom, with its promise of huge gains, the number of people with multiple home loans soared to 38,520 in June this year.

This represented a 64 per cent jump from 12 months ago. In June 2006, the number of people with two home loans or more stood at just 23,541, according to the Credit Bureau (Singapore) Pte Ltd (CBS), which released data on property loans for the first time yesterday.

In tandem with rising property prices, new home loan applications surged to 17,323 in May. If the past 30 months are a benchmark, then the average month sees just 10,000 new home loan applications.

Also, over the past two-and-a-half years, an average of 4,000 applications have been approved each month. But in May, a total of 4,856 applications were approved, suggesting that while banks had stepped up the pace of approvals, the applications had flooded in even faster.

June saw 4,794 approvals against 16,017 applications. The breather that the property market then took was echoed in the number of new loan applications, which fell to 13,870 in August.

Property loan approvals increased 12 per cent in June 2007 to 50,514 from a year ago.

Explaining the relatively low rate of approvals compared to the applications flowing in, Mark Rowley, CBS general manager, ventured that people making ‘multiple applications’ could have something to do with it – as could the credit policy of banks.

And while there has been some anecdotal evidence of banks tightening credit, he said it was too early to say if the low rate of approval was a result of that.

CBS said the data, which have been compiled over the 30 past months and used to develop a property loan index, show a hunger for credit to finance properties under the current property boom.

The index showing credit hunger climbed to a high in May, 71 per cent above the baseline or 17,323 new loan applications. Single-day sellouts at various property launches also repeatedly made the headlines.

Home loan approvals jumped 23 per cent in May to 4,856. In April, the number stood at just 3,967.

The good news is that along with the relentless climb in property prices, the delinquency rate, or the proportion of borrowers behind with their home loan instalments, is falling.

For the full report, please visit www.asia1.com.sg 

Source: The Business Times

HDB launches design, build and sell site at Ang Mo Kio

THE Housing and Development Board has launched a third Design, Build and Sell Scheme (DBSS) site for sale. The latest site, which is at Ang Mo Kio Street 52, is the second to be launched for sale this year. The site area is 16,789.1 sq m (180,716 sq ft), with an allowable gross floor area of 58,761.85 sq m (632,506 sq ft). It is close to the Ang Mo Kio town centre with its MRT station, bus interchange and the AMK Hub.

Noting the attractive location of the new site, Savills Singapore director of marketing and business development Ku Swee Yong said that he believes the site could fetch between $110 million and $125 million or about $170 to $200 per square foot per plot ratio (psf ppr).

The development is targeted at HDB upgraders or en bloc sale downgraders, and Mr Ku said that he expects a good take-up because the stock of vacant HDB flats has fallen of late.

CBRE Research estimated that the site can yield more than 500 units. CBRE added: ‘Given the established residential environment in Ang Mo Kio, together with the known popularity of DBSS units, we expect a good response from mid-sized developers and joint venture of contractors and developers.’

Upon building completion, the successful developer will hand over the entire development site to the HDB for lease administration, and to the Town Council for maintenance of the common areas and car parks.

For the full report, please visit www.asia1.com.sg

Source: The Business Times

Property boom far from over: Kwek Leng Beng

CITY Developments executive chairman Kwek Leng Beng believes that the property boom here is far from over, despite the current financial market turmoil.

‘The boom actually just started in 2005, and if you’re thinking of a relapse, I don’t think that is possible,’ he told chief executives yesterday at the Forbes Global CEO Conference.

‘Sub-prime has to some extent affected Singapore … there’s a psychological fear of what will happen.’

But ‘our banks are still lending a lot of money’, Mr Kwek noted. ‘They’re a little bit more cautious, but we have plenty of liquidity.

‘The banking and financial systems here are very well controlled … they are well regulated and the central bank has taken action to pre-empt crises like what you’ve seen in sub-prime.’

He said that, after adjusting for inflation, high-end residential property prices have risen only about 10 per cent in real terms from their lowest level over the past decade, ‘which is not alarming’.

He said: ‘My advice is, look at it realistically – crisis means opportunity. I’m a bottom-fisher, I like to go in when the market is bad.

‘I believe there’s still a lot of upside. The mid-end is still 19 per cent below the peak of ‘96.’

In addition, he said Singapore had introduced a lot of initiatives over the past 10 years to attract foreigners to live and work here, which has fuelled demand for property.

‘You may say it’s very dull, but we are going to have the integrated resorts, Formula One, and a host of other events that will make Singapore an exciting city to live, work and play.’

For the full report, please visit www.asia1.com.sg 

Source: The Business Times