Take-up of JTC ready-built space rises to 2-year high

Strong demand for factory, business park premises in third quarter

THE take-up among businesses for JTC Corp’s ready-built facilities is at a two-year high.

Net allocation of such industrial space stood at 75,100 sq m in the July to September quarter – 29 per cent more than in the previous quarter and the highest since the third quarter of 2005.

This increase in take-up from the industrial landlord was due mainly to good demand for factory space and business park space.

Gross allocation of ready- built space in JTC’s business parks almost doubled to 5,300 sq m in the third quarter.

If the amount of space given up is taken into account, the net amount of business park space taken up stood at 1,800 sq m for the third quarter, more than double the figure achieved from April to June.

Occupancy of JTC’s business parks was 94 per cent as at the end of September.

The net take-up of JTC’s prepared industrial land stood at 55.9ha in the quarter.

This is 13 per cent down from the previous quarter but still more than twice the figure achieved in the third quarter of last year.

Such land – which has road access, drains, water and sewer mains so companies can develop their own facilities – is provided both inside and outside specialised parks such as Changi Business Park, International Business Park in Jurong East and Biopolis at one-north in Buona Vista.

JTC said demand came mostly from companies dealing in logistics, precision engineering and services.

Meanwhile, consultants expect more companies to consider moving operations from the Central Business District (CBD) as office rentals soar.

Rents grew 14.8 per cent in the third quarter and have shot up more than 40 per cent since the end of last year.

The director of research and consultancy at Colliers International, Ms Tay Huey Ying, said: ‘We are seeing firms that are more prepared to consider alternative business premises other than office space within the CBD.’

Companies providing management services or those in the insurance, design or aviation sectors, for example, have already made the move out or are preparing to do so, she said.

Ms Tay expects the trend to continue until more prime office space is added from 2010, mainly at Marina Bay.

Meanwhile, JTC said that the first phase of its research and development complex, Fusionopolis in one-north, is expected to be completed by the end of this year. It will offer about 120,730 sq m of business park space.

 

Source: The Straits Times 3 Nov 07

$308.5M INVESTMENT – KepLand in 2 tie-ups to build Viet homes

KEPPEL Land (KepLand) has bought more residential sites in Ho Chi Minh City to ride on the rapid growth of Vietnam’s property market.

The developer announced yesterday that it has entered into two separate joint ventures with local developer An Phu to develop luxury villas and condominiums in an upmarket area of Ho Chi Minh City.

The combined investment capital for the two projects is estimated at US$213 million (S$308.5 million).

KepLand will take a 55 per cent stake in the joint-venture companies. Its partner An Phu will take the remaining share.

A 13ha villa site will yield about 200 residences, while an adjacent 6.8ha condo site will boast about 1,940 apartments when completed.

The sales launch for the first phase of the developments is slated for early 2009.

Said KepLand’s director, regional investments, Mr Ang Wee Gee: ‘Our first mover advantage and established network in Vietnam have enabled us to build a strong portfolio of prime properties rapidly.’

KepLand has fully sold out its gated waterfront villa project in the city’s District 2 called Villa Riviera.

The company is also preparing to soft launch a 1,500-unit condo project, called The Estella, in Ho Chi Minh City soon.

 

Source: The Straits Times 3 Nov 07

SingLand, UIC profits up on higher rentals

A ROBUST property market lifted net profits at Singapore Land and its parent, United Industrial Corporation (UIC), in the third quarter.

SingLand said its earnings in the quarter rose 30 per cent to $30.1 million from $23.2 million a year earlier.

Revenue was up 27 per cent at $70.5 million.

It attributed the revenue jump for the three months ended Sept 30 to ‘the contribution from the Pan Pacific Singapore Hotel and higher rental income’.

The company acquired full ownership of the hotel in April.

Higher rental rates and improved occupancy lifted its rental income by $8.1 million, although it did not say where this increase came from.

Earnings per share in the third quarter came to 7.3 cents, up from 5.6 cents in the same period last year. Net asset value per share was $7.45, a slight dip from $7.50 as at Dec 31.

UIC had an even rosier story to report. Its earnings were up 43 per cent in the third quarter at $25.4 million from $17.8 million a year earlier on a 76 per cent surge in revenue to $134.8 million.

The higher revenue was due to stronger sales of residential properties, contributions from the Pan Pacific Singapore Hotel and increased rental income.

UIC named One Amber, the Grand Duchess at St Patrick’s and Northwood as the sites that had contributed $26.5 million to the company’s coffers.

It is bullish about its prospects, noting that with ‘Singapore’s economic growth and positive consumer sentiment, demand for office and retail space and private housing is expected to remain steady’.

Earnings per share stood at 1.8 cents, up from 1.3 cents. Net asset value was $1.78, down from $1.77 as at Dec 31.

 

Source: The Straits Times 3 Nov 07

Asian bourses hit by fresh fears of US credit crunch

Investors spooked by concerns that big Western banks may face losses; STI down 2.3%

ASIAN markets fell into a tailspin yesterday, a day after renewed fears over the health of the United States economy sparked a swoon on Wall Street.

Hong Kong led the falls, tumbling 1,024 points, or 3.25 per cent. Taiwan fell 3.39 per cent, while South Korea dropped 2.12 per cent.

Singapore managed to escape with flesh wounds. The Straits Times Index lost 88.24 points, or 2.3 per cent, to 3,715.32 – its biggest one-day fall in two weeks. About $11.7 billion was wiped off the value of shares.

The spark for Wall Street’s 364-point plunge on Thursday was a renewed worry that more credit-market turmoil was on the horizon.

That fear, plus the increasingly likely prospect of US$100-a-barrel oil, led to new concerns about the health of the American economy, and sent stocks diving.

Another factor: The US Federal Reserve’s signal on Wednesday – after it shaved interest rates by 0.25 percentage point – that it had no further rate cuts in mind to help ease the credit crunch.

The worries were eased somewhat late last night with the release of better-than-expected employment figures, but Wall St remained wary, losing over 100 points at press-time to reverse early gains from an upbeat start.

In Asia, investors were rattled by concerns that big Western banks have huge losses lurking on their balance sheets.

Singapore remisier Paul Lee said: ‘Share prices were still holding up pretty well at opening bell. Then all hell broke loose, and it was like knives falling all over the place, with nowhere to hide.’

Traders were taken aback by the sudden change in sentiment, given the optimism that infected the market after the Fed’s rate cut.

Market experts are divided over whether shares are headed for a further thrashing, given the mixed bag of data coming out of the US.

Phillip Securities’ managing director, Mr Loh Hoon Sun, said: ‘Because prices have gone up so much already, investors are very sensitive to any bad news, so this type of volatility will persist.’

The ignition for yesterday’s Wall Street sell-down was a 7 per cent plunge in Citigroup after an analyst warned that the banking giant might have to cut dividend or sell assets to raise capital.

That revived worries that US and European banks may have to unveil further write-offs linked to the US mortgage markets.

Asian banks felt the collateral damage. Some do have exposure to risky financial instruments known as collateralised debt obligations, but it is more the fear of the unknown that is spooking investors.

Local banks felt the pain, with DBS down 4.4 per cent and United Overseas Bank off 1.9 per cent.

Elsewhere, Japan’s Mitsubishi UFJ Financial Group lost 6 per cent, while in Hong Kong, Bank of China was down 2.5 per cent.

Given the heavy weightage given to financial stocks in most regional indexes, analysts warn that investors should brace themselves for more turmoil.

One concern expressed by many dealers is the large operations that these banks run in major financial centres such as Singapore and Hong Kong.

Said one analyst: ‘The fear is that they may stop enlarging operations in Asia and sound the retreat to cope with problems back home. This may cause our real estate prices to feel the pinch if they start chopping heads and cutting prime office space.’

JP Morgan Private Bank’s senior portfolio manager, Mr Elan Cohen, believes that while share prices will be ‘volatile for the next couple of days, it is not the beginning of a bear market’.

‘For regional markets that have risen so sharply this year, a 2 to 3 per cent correction is common.’

 

Source: The Straits Times 3 Nov 07

US jobs growth picks up strongly

WASHINGTON – AMERICAN employers added almost twice as many jobs last month as forecast, helping steer the economy clear of recession even as the housing slump deepens.

Payrolls climbed by 166,000 after a 96,000 increase in September, the Labour Department said yesterday.

The jobless rate held at 4.7 per cent.

Economists said the report makes an interest-rate cut by the Federal Reserve even less likely next month. The central bank lowered the benchmark rate by a quarter point on Wednesday.

‘The labour market continues to be inconsistent with fears of a recession,’ said Mr Dean Maki, the chief United States economist at Barclays Capital in New York and a former senior economist at the Fed.

‘This report will increase the Fed’s conviction that it should keep rates unchanged in coming months.’

Although the report helped the Dow Jones Industrial Average open higher, the index fell 72.35 points, or 0.5 per cent, to 13,495.52 after 30 minutes of trading.

Source: BLOOMBERG NEWS (The Straits Times 3 Nov 07)