Li Ka-Shing Says `Worst Is Yet to Come' in Global Economy Slump
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Saturday, 23 August 08 - 12:57 AM (GMT +08:00) By isabel rojo tiong in General |
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Aug. 21 (Bloomberg) -- Hong Kong billionaire Li Ka-shing, who predicted China's stock market bubble would burst, says the ``worst is yet to come'' from the global credit crunch.
The crisis is turning Li ``very conservative about acquisitions,'' he told reporters in Hong Kong today while announcing the results of his companies Hutchison Whampoa Ltd. and Cheung Kong (Holdings) Ltd.
The U.S. housing slump has triggered more than $500 billion in credit-market losses for banks globally and led to the collapse and sale of Bear Stearns Cos., the fifth-largest U.S. securities firm. Li, Asia's richest man according to Forbes Magazine, controls companies that operate businesses including retail, real estate, container ports and energy in 57 countries.
``Mr. Li's views tend to be accurate,'' said Castor Pang, a strategist at Sun Hung Kai Securities Ltd. in Hong Kong. ``Looking ahead, signs of a U.S. economic slowdown will become even more obvious. Asia has a high correlation with the U.S., so market performances will likely get worse.''
Sometimes called ``superman'' by Hong Kong's media for his investing skill, Li arrived in Hong Kong from mainland China in 1940 and built his Cheung Kong (Holdings) Ltd. into Hong Kong's second-biggest developer by market value from a company he founded in 1950 to make plastic flowers.
Li's comments echo those of Kenneth Rogoff, former chief economist at the International Monetary Fund, who said ``the worst is yet to come in the U.S.''
Credit-market turmoil has driven the U.S. into a recession and may topple some of the nation's biggest banks, Rogoff, a Harvard University professor of economics, said in an interview in Singapore on Aug. 19.
`Needs to Shrink'
``The financial sector needs to shrink,'' Rogoff said. ``I don't think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.''
Hong Kong will be shielded to some extent because of China's economic outlook, Li said.
Hong Kong's negative real interest rates are keeping the housing market stable and real estate ``has always been a big part of the economy here,'' Li said at today's briefing.
China, the world's fastest growing major economy, will see its economy continue to grow above 8 percent ``in the next few years,'' Li said.
China's CSI 300 Index is down 54 percent this year, the most among 88 major benchmark indexes tracked by Bloomberg, because of concern measures to cool inflation will damp both profit and economic growth.
`Must Be a Bubble'
Li, whose company invests in real estate and ports in China, said in May last year that China's stock valuations ``must be a bubble,'' and that prices were likely to decline.
The gauge surged 7.9 percent yesterday, the most in four months, after JPMorgan Chase & Co., in a report, said the government may spend as much as 400 billion yuan ($58 billion) to boost growth. Today, the benchmark slid 3.5 percent.
``Relying on government to support the stock market is not practical,'' said Li, who said he couldn't substantiate the accuracy of the report. ``Investors need to take their own risks.''
Hutchison Whampoa Ltd., his largest company, posted first half profit that beat analysts' estimates after narrowing losses on high-speed mobile-phone services and boosting port and energy earnings.
Profit dropped 63 percent to HK$10.7 billion ($1.4 Billion). The year-earlier profit was boosted by a HK$35.8 billion gain from selling a stake in an Indian wireless carrier. Cheung Kong's profit gained 60 percent to HK$6.68 billion, not including the contribution from unit Hutchison. more...
Malaysian real estate still on foreign investors’ radar despite being low key
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Saturday, 16 August 08 - 04:36 AM (GMT +08:00) By isabel rojo tiong in General |
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THERE is still interest in Malaysian real estate, especially in the KLCC area, among foreign buyers.
According to Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng, investors are now more cautious in view of the current political and economic uncertainties.
Investors are also concerned about the large number of units that would be completed within the next 12 months and the possible impact on the rental market and yields.
In a regional context, prices of Malaysian top-end condominiums are still cheap, being only 20% that of Singapore and about 12% that of Hong Kong.
Cancellations
Tang said foreign investors were still keen to invest but the level of interest was low compared with the strong surge in foreign interest in the second and third quarters of 2007.
“After the results of the general election, we had a couple of purchasers who cancelled their bookings for one of the projects that we were marketing.
“However, we suspect that they were probably only using the election results as an excuse. Once things settled down and people accepted the results, we had no more issues. Sometimes it’s a knee-jerk reaction.
“On the whole, we have not heard of situations where a developer faced a significant increase in the cancellation of bookings.”
Some investors were adopting a wait-and-see attitude, said Tang. The impact was felt more strongly in the low and medium-cost sector as the target buyers were more adversely affected by the rise in the cost of living.
Well-heeled investors were, however, still investing in the upper medium-cost and high-cost sectors but they were now more selective over the location, pricing and developer’s track record.
There had been no increase in KLCC condominium properties but prices had remained stable, said Tang.
Tender difficulties
Tang said he had not heard of any specific examples of developers falling behind or being unable to meet their construction schedule. But from market talk, he understood that some developers faced difficulties in getting contractors to tender for their projects.
There had also been cases where the contractor turned down the award after being informed that they were successful in the tender exercise.
“I also heard of a developer whose contractor stopped work after the project was 80% completed and the developer had to continue the construction work on his own.”
At this point in time, investors who still keen on buying KLCC properties ought to look out for projects that stood out from the rest, advised Tang.
Look for distinguishing factors, for example, branding, architectural features and design. “In that sense, you would have no competition and therefore, you would be in a position to dictate your own price and rental,” he said.
Second, unless it was a project undertaken by a financially strong developer, it would be safer to invest in a completed project. “You would not have to worry about the project being abandoned and whether the workmanship was of the right quality,” said Tang.
“Third, if you are investing in a project not yet completed, choose a developer with the financial capability and track record in handling similar projects,” he added.
Lastly, the investor would obviously have to do his homework thoroughly to make sure he is paying is a fair price and that his desired return on investment is achievable.
Although the property market could see a reduction in the volume of transactions compared with 2007, Tang believed that property prices were unlikely to go down due to the significant rise in construction costs.
As the current fixed deposit and savings rates of banks were below the real inflation rate, it would be pointless to keep money in the bank.
Property has always proven to be a good hedge against inflation, so it would be a good move to look for outstanding buying opportunities in the property market. However, investors would have to choose wisely.
Luxury condos, Singapore-style - Rajarhat complex to offer wi-fi link, aroma garden and cricket field
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Saturday, 10 May 08 - 12:54 PM (GMT +08:00) By isabel rojo tiong in General |
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A realty major from Singapore is setting up luxury condos in New Town, complete with wi-fi connectivity, an aroma garden, an elevated green podium to camouflage the underground parking lot and a mini cricket field.
Elita Garden Vista, a 1,278-unit complex, is being developed on a 25-acre land parcel in Action Area III of the Rajarhat township by Keppel Land Limited, the property arm of the Keppel Group, one of Singapore’s multinational behemoths with core businesses in offshore and marine infrastructure and property.
Keppel Land’s Indian partners in the project — the first in the city being developed by a Singapore realty major — are the Jatia Group and the Puravankara Group. It’s set to be ready by end-2011.
Earlier, the Salim and Ciputra groups from Indonesia and Universal Success Group of Jakarta-based NRI Prasoon Mukherjee had kicked off the Kolkata West International City in west Howrah.
“We are happy to establish a footprint in Calcutta, which is one of the fastest-growing cities in India. We plan to do at least three more projects here, both in the residential and retail/commercial segments in the next five years,” said Albert Neo of Keppel Land, the marketing director of Keppel Magus Development Pvt Ltd, the consortium developing the New Town project. Keppel Land won the FIABCI award in 2005 (the Grammy equivalent in real estate) for its Caribbean at Keppel Bay, Singapore.
The Garden Vista complex in Rajarhat has Architects 61 of Singapore as the landscape consultants, while the project design was done by local architect J.P. Agrawal. The condos will be housed in 15 towers, with the tallest going up to 30 storeys.
Besides recreational amenities like a central swimming pool, a clubhouse, a gymnasium and a children’s playground, the complex will have features designed to suit the needs of IT professionals. “Calcutta is among the most significant IT growth centres in India after Bangalore and Hyderabad and our project, with an average unit price of around Rs 50 lakh, has been created to facilitate the lifestyle of the executives in the new-age service sectors,” said Neo.
“This project will provide a huge fillip to Calcutta’s property market,” feels Pawan Agarwal, of realty agents N.K. Realtors.
Asia property stocks still a strong bet-trade group
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Thursday, 03 April 08 - 04:24 PM (GMT +08:00) By isabel rojo tiong in General |
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SEOUL, April 2 (Reuters) - Asia's listed property sector is still in a broad-based recovery and, although returns are likely to slow from 2007, solid results based on strong asset values are likely this year, property investors at a regional forum said on Wednesday.
China continued to get the votes of listed property investors due to its strong economic growth outlook, continued population shift to large cities and growing need for residential and commercial property.
Record U.S. home foreclosures on the back of a shakedown in the subprime mortgage market have led investors away from listed real estate investment trusts, or REITs, in the past several months, pushing their prices sometimes below net asset value.
But fundamentals remain strong with demand and supply balanced, members of the Asian Public Real Estate Association (APREA), which represents the region's listed real estate sector, told Reuters at the organisation's annual forum, held in Seoul.
"Compared with 6 to 9 months ago, the value of REITs is less," said Graham Sugden, CEO of AMP Capital Investors REIT Management. "But underneath that, the assets are fundamentally sound."
"Returns were very strong in 2007," said Chris Reilly of Henderson Global Investors based in Singapore. "That is bound to moderate this year, but asset value is improving."
Alfred Liu, an executive at UBS Global Asset Management said there were bargains, patricularly in Japan.
"In the Japanese situation, domestic players or institutions will come back because it's really undervalued," he said.
"The Asian mentality is that people won't part with their assets. They won't walk away from their houses." more...
Property Investors Focus on Asia
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Monday, 24 March 08 - 11:15 AM (GMT +08:00) By isabel rojo tiong in General |
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Asia's real estate markets are outperforming the slowing US and European markets. The main countries benefiting from this trend have been the larger markets such as Japan, Hong Kong and Singapore, and there is now an increasing focus on Thailand, according to leading international property consultants CB Richard Ellis.
Property investment has become a global market with a rapidly increasing number of cross-border transactions.
"Property markets used to be dominated by local investors but this is no longer the case. In many ways, property investment has become similar to the equity markets with investors looking for worldwide opportunities," said Ms. Kulwadee Sawangsri, Director of Investment Properties at CB Richard Ellis Thailand.
Many Asian property markets have performed strongly over the last two years and international investors now see the possibility of Thailand outperforming regional competitors.
Last year, office rents in Singapore doubled, whereas there was almost no growth in office rents in Bangkok. International investors are focusing more on Thailand because they feel that there is more room for growth.
Investors' confidence in Thailand has improved because of some of the early policy measures of the new democratically elected government such as the removal of inbound capital controls and tax incentives to help the property sector. An escrow law is also being put in place which will facilitate large property transactions.
The Thai market is challenging because there are restrictions on foreign ownership and a scarcity of income-producing buildings available for sale and so most international investors have focused on new development rather than the acquisition of existing assets.
High-end Bangkok condominiums, hotels and residential resort developments have been the most active sectors.
Foreign investors have in some cases formed strategic joint ventures on multiple projects with a Thai partner. For example, Singapore-based Capital Land is in a joint venture with Charoen Sirivadhanabhakdi's TCC Group and is just completing the Athenee Residence, a luxury condominium on Wireless Road.
IFA Hotels and Resorts, listed on the Kuwait Stock Exchange, acquired a stake in Raimon Land, a Thai publicly listed luxury property developer.
Istithmar, a private equity firm based in Dubai, has agreed to invest in the W Hotel which is currently under construction in Golden Land's Sathorn Square project.
The resort market was also very active last year, with Hong Kong's PCPD buying the Thai Muang golf course in Phang Nga and Destination Properties buying two hotels in Phuket.
CB Richard Ellis believes that, this year, investors will be focusing on site acquisition for condominiums, offices and hotels in Central Bangkok. "The mass transit routes have firmly anchored Bangkok's Central Business District. There is now a scarcity of development sites in the Central Business District and strong competition from developers when freehold sites come on to the market," added Ms. Kulwadee.
CB Richard Ellis has recently been appointed as sole agent to sell a prime site on Sathorn Road and already strong interest has been shown by potential purchasers.
Meanwhile, in Bangkok's suburban locations, developers continue to acquire sites for mid-market condominium developments.
Competition will also remain strong for any grade A building that comes onto the market. This is a rare occurrence in Bangkok, where only three grade A office buildings have been sold in Bangkok in ten years, and is because there are relatively few vendors.
Thailand's resort markets continue to attract investors with the focus being on development because few existing properties are available for sale.
There are large amounts of both Thai and foreign capital looking for real estate investments in Thailand. The limited number of buildings for sale means that many investors will continue to take the development route, with residential properties (for sale) both in Bangkok and resort locations being the most popular.
Singapore says has enough land to meet office demand
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Tuesday, 11 March 08 - 08:50 AM (GMT +08:00) By isabel rojo tiong in General |
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SINGAPORE, March 10 (Reuters) - Singapore will provide more land for offices as part of a strategy to strengthen its position as an Asian financial centre, the government's real estate planning agency said on Monday.
"The new growth area set aside for the seamless extension of the existing financial district ... will be more than twice the size of London's Canary Wharf," the city-state's Urban Redevelopment Authority (URA) said in a statement.
"Over a span of more than 15 years, the development of the 85 hectare site identified for extension of the existing financial district will see the addition of around 2.82 million square metres of office space," it added.
Demand for office space in Singapore has grown strongly in the past three years, spurred by the growth in financial services, in particular private banking.
According to URA data, office rents soared 56 percent last year as demand for office space rose by an average of 260,000 square meters per annum over the last three years -- a 60 percent increase from the historical average of 160,000 square meters a year.
Foreign direct investment in Singapore's real estate was S$14.4 billion ($10.40 billion) in 2007, compared to S$6.7 billion in 2006, the agency said.
Singapore is currently developing the Marina Bay Financial Centre on reclaimed land south of the existing central business district. It has also offered sites to the east and west of the business district.
The city-state, with a population of 4.6 million, has expanded its land area by more than 10 percent since independence in 1965 through reclamation from the sea.
Developers involved in the Marina Bay project include Hong Kong developers Cheung Kong (0001.HK: Quote, Profile, Research) and Hongkong Land (HKLD.SI: Quote, Profile, Research), as well as Singapore-based Keppel Land (KLAN.SI: Quote, Profile, Research). (Reporting by Kevin Lim, editing by Neil Chatterjee)
Source: Reuters
Consolidation expected for real estate investment trusts in Singapore
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Friday, 07 March 08 - 11:51 AM (GMT +08:00) By isabel rojo tiong in General |
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SINGAPORE: Once-booming real estate investment trusts in Singapore could face a round of mergers to weed out the weak who find it harder to raise money and refinance loans because of the global credit crisis.
At least six of 20 listed real estate investment trusts, or REITs, in Singapore are valued for less than what their properties are worth, as is the case with many trusts in Japan and Australia, which means expansion is being hurt by higher financing costs and investor returns are limited.
Some of the trusts will face higher interest payments when they need to refinance their debt soon, leading to lower earnings and distributions to investors.
"I would expect consolidation to gather pace in the course of the next six to 12 months," said Tony Darwell, head of Asian equity research at Nomura. "The cost of debt has risen and it is impacting everyone."
For investors, many of whom are already steering clear of property and other assets that rely on debt financing, the takeover speculation means some REITs like Macquarie MEAG Prime could get bid up to prices closer to book value.
But others like Mapletree Logistics Trust could see their shares fall further because of large amounts of debt on their books.
"Singapore's REIT market is still very young and shouldn't have reached the stage for consolidation, but the situation now is quite conducive" to that, said Tricia Song, an analyst with Credit Suisse.
The Singapore market for property trusts, one of the three largest markets in Asia, has grown rapidly since 2002, when the first REIT, CapitaMall Trust, went to market.
The industry has since grown to 20 REITs worth $19 billion, although that number could fall because at least two are up for sale.
Acquisition targets include REITs trading at high yields, at large discounts to book value, or with quality assets that bigger funds could be interested in, Song said.
Experts in the industry say the first Singapore REITs that could be taken over will be those that have ties to firms or property funds in Australia, Asia's biggest property trust market.
Macquarie MEAG Prime REIT, which owns two large properties on the Orchard Road shopping belt in Singapore, said it might sell assets or go private after its main shareholder, Macquarie, received unsolicited offers for its 26 percent stake.
Allco Commercial REIT, which owns office properties in Singapore and Australia, is being closely watched as its Australian parent, Allco Finance, is trying to sell assets to meet debt repayment deadlines.
Allco in November dropped plans for a share sale of 150 million Singapore dollar, or $108 million, because of weak markets. In January, Moody's cut its credit rating to junk levels from a healthier investment grade rating, citing potential problems in refinancing 550 dollars million in short-term debt due in July.
Other REITs downgraded or placed on review for downgrade this year by major ratings agencies include MMP, Mapletree Logistics Trust and Suntec REIT, on concerns of refinancing risks.
Suntec REIT last week closed a five-year convertible bond issue worth 250 million Singapore dollars at a 4.25 percent yield to maturity, much higher than its average financing cost of 3.13 percent as of the end of December. The higher yield is a perception of higher risk among investors.
"Credit spreads have widened significantly over the past month," Melinda Baxter, an analyst with Merrill Lynch, said in a note to clients last week. "We believe this is likely to place pressure on both the cost and availability of future debt."
Besides Macquarie and Allco, other Singapore REITs could be privatized or sold, analysts said.
"There are some independent REITs out there and there could be some M&A activity," said Mark Ebbinghaus, head of Asian real estate investment banking at UBS. "I wouldn't say that there is going to be wholesale M&A in the sector."
Despite the difficulty in raising equity and the need to refinance debt, acquisition talks have helped lift REIT share prices. MMP's share price has rebounded 30 percent from record lows in January, while Allco is up 26 percent.
Source: International Herald Tribune
Overseas investors circle ABC Learning
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Saturday, 01 March 08 - 11:52 AM (GMT +08:00) By isabel rojo tiong in General |
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THE Singapore Government's investment arm has tightened its grip on the stricken ABC Learning Centres, giving it a key say in the future of Australia's biggest childcare centre operator.
Temasek Holdings said yesterday it had increased its stake in ABC from 12.4 per cent to 14.7 per cent, buying the bulk of the shares as other investors dumped their stock during Tuesday's stock market plunge.
The buying increases speculation that Temasek could become a bidder for all or part of ABC, whose shares remain suspended from trading as the company considers selling some of its international empire to cut its heavy debt load.
However, Temasek's new $150 million stake also puts it just below the 15 per cent trigger that would require the approval of the commonwealth's Foreign Investment Review Board.
Temasek, as a government-controlled fund, will face additional scrutiny from the FIRB under Wayne Swan's proposal this month to ensure that "sovereign funds" cannot be manipulated by their political masters, before they are allowed to invest in Australian companies.
Industry experts said yesterday the sale of ABC childcare centres to foreign interests would see millions of dollars in government subsidies flow out of Australia and on to the bottom line of overseas companies.
The Singapore Government, through Temasek and the Government Investment Corporation, is already one of the biggest foreign investors in Australia. It holds a majority stake in Singapore Telecommunications, which in turn owns Australia's No2 telecommunications group, Optus.
The move on ABC, which runs almost 1100 childcare centres in Australia, is part of the flurry of activity by Singapore's sovereign funds in the country over the past 12 months. Last year, a Temasek subsidiary bought underwater electricity cables group BassLink for $1.2billion. A Temasek associate, CapitaLand, owns 55 per cent of listed property company AustraLand and is believed to be looking over the portfolio of shopping centres owned by the ailing Centro property empire.
Temasek took its initial stake in ABC last year at $7.30 a share, compared with Tuesday's closing price of $2.14. The fund yesterday refused to comment on the possibility of a bid for ABC, saying it "does not get involved in the operational and commercial decisions of our portfolio companies, including those in Australia". more...
Singapore abolishes Estate Duty with immediate Effects to Welcome High Net worth Investors from all over the world, Says Singapore Company Incorporation Specialists
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Tuesday, 19 February 08 - 12:07 PM (GMT +08:00) By isabel rojo tiong in General |
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Singapore abolished Estate Tax, which it had inherited during the British era. The move will encourage Singapore to become an attractive place for wealth to be invested and built up, whether by Singaporeans or foreigners. The Estate Duty will be removed with immediate effect from the Singapore tax regime.
The Finance Minister, Mr.Tharman Shanmugaratnam in the budget speech said "Wealth is also being managed today on a global basis. Proponents of removing estate duty have therefore argued that removing it would encourage wealthy individuals from all over Asia to bring their assets into Singapore, thus supporting the growth of the wealth management industry. Ordinary Singaporeans have also argued that having worked, paid taxes on their income and property, and built up their savings, they want to be able to pass it on to their families. Some are in fact liable for Estate Duty when their estates receive large life insurance payouts."
Ms. Ragini Dhanvantray, CEO of Rikvin Consultancy welcomes the "death of the estate duty tax." Singapore is fast becoming a business city of choice. With excellent business infrastructure, political stability, and close economic ties with many of the world's leading economies, there has never been a better time than now for entrepreneurs to migrate and set up their business in Singapore. For clients who wish to set up their businesses in Singapore, Rikvin provides a full range of Singapore Company Incorporation for estate planning including processing of Singapore Employment Pass or EntrePass application for business migration.
Source: India PR Wire
Singapore Real Estate Market is Booming
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Thursday, 14 February 08 - 09:44 AM (GMT +08:00) By isabel rojo tiong in General |
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The HomesGoFast.comSingapore Real Estate market has been on a decided upswing in recent years, and it has been drawing a wider attention of foreign investors as a result. Prices in the small nation in Southeast Asia have been rising rapidly, with 2007 residential prices increasing by over 30% for the year!
According to the Singapore Urban Redevelopment Authority, prices for residences rose 6.8% in the fourth quarter alone, but that was down some from the third quarter when prices rose 8.3%. One reason for the slowing price increase was the number of new projects in the pipeline. At the end of 2007, there were 64,852 units under construction or had gained approval for construction. Of these, over 56,000 are expected to be completed during 2008.
With Singapore growing so quickly in recent years, more and more foreign investors are looking to purchase apartments and condominiums. According to a recent article in the International Herald Tribune, both the number of foreign buyers is increasing as well as the base from which they come.
For 2006, for example, Indonesians and Malaysians made up nearly 20% of foreign purchasers in the Singapore. That number is down from 23% in 2003. Britons, who had previously been a very small percentage of buyers, made up nearly 9% of foreign buyers in 2006. In addition to the increasing Brits who are buying, other Asians from India, China, Taiwan and Korea are bringing a lot of new money into Singapore for property purchases.
Singapore is booming, and while it might be slowing a bit, the hot market looks to continue for the next few years at least.
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