Beachfront condo in Australia from A$1,100 psf

A BEACHFRONT home on the Western Australian coast, just a 15-minute drive from Perth, can be yours at prices starting at around A$1.5 million (S$2 million) to A$1.6 million for the smallest units.

This works out to be between A$1,100 and A$1,200 per square foot (psf).

Called The Leighton, the 45-unit apartment development by Multiplex Living is located at the former Leighton Marshalling Yards.

It is marketed by Jerrytan Residential. Managing director Jerry Tan said that so far, about 20 units have been sold.

In Singapore, four units have been sold with two bought by Singaporeans.

Mr Tan believed that the property market in Perth still promises ‘capital upside’. ‘Talk of the mining boom will last for some time,’ he said.

Still, Mr Tan believed that The Leighton is more likely to attract owner-occupiers.

As with all high-end developments, The Leighton will come with luxury finishes like travertine floors and designer fittings. But it is the view of the Indian Ocean that will be the main selling point.

If a seaview is not for you, Knight Frank is marketing a prime lakefront property set against a mountain range in Queenstown New Zealand.

Called The Rees, the development comprises 89 luxury apartments and 23 lakefront private residences on a lake-edge site, located midway between Queenstown’s airport and the central business district.

The prices for these homes range between $853 psf and $1,147 psf. The development will comprise two, three and four-bedroom apartments and three and five-bedroom lakefront residences. The homes will come fully furnished with appliances and fittings.

Source: Business Times

Aussie mortgage arrears rise to record-high in May

Late repayments on prime loans increase for sixth consecutive month

(MELBOURNE) Australia’s mortgage arrears rate rose to a record in May as home owners struggle to meet loan repayments which have surged with the highest interest rates in 12 years, according to Standard & Poor’s.

Payments more than 30 days late on so-called prime loans increased for a sixth consecutive month in May, gaining one basis point to a record 1.49 per cent of mortgages used to secure bonds from a month earlier, S&P said yesterday in a statement. A basis point is 0.01 percentage point.

‘Mortgage lenders have increased their lending rates, independent of official rate rises, due to the ongoing high cost of wholesale funding,’ analysts led by Vera Chaplin said in the report. ‘This has meant that there has been no relief to borrowers in recent times.’

Australia’s central bank has increased its benchmark lending rate four times since August to 7.25 per cent to cool the fastest inflation in 17 years.

Banks, trying to offset higher funding costs, have raised interest rates even faster at a time when housing affordability is at a three-decade low.

Arrears on sub-prime and nonconforming loans in residential mortgage-backed securities, as measured by S&P’s SPIN index, fell to 14.52 per cent in May from 14.62 per cent in March. This rate may increase in coming months, Ms Chaplin said.

‘If the economy slows and living costs continue to rise, then it is likely that Australian borrowers will be put under more stress,’ she said in the report.

Standard & Poor’s Mortgage Performance Index measures the weighted-average arrears more than 30 days past due on residential mortgage loans on both publicly and privately rated Australian mortgage-backed bond transactions. — Bloomberg

Source: Business Times

Ascendas India Trust Q1 distributable income up 12%

ASCENDAS India Trust has reported distributable income of $12.4 million for its first quarter ended June 30, 2008, up 12 per cent from a year ago.

This translates into a distribution per unit (DPU) of 1.65 cents for the quarter, which represented an annualised yield of 8.3 per cent over the closing price of 79.5 cents of the units on July 22, 2008.

Total property income was $28.6 million, which is 23 per cent higher than the year-ago period. Net property income was $16.0 million or 20 per cent higher.

The trust said demand for its portfolio of 4.7 million sq ft of space, and hence its income stream, remained stable. The two buildings which were completed in the last half year have contributed to the bottom line, and will continue to do so as the building operations stabilise and margins further improve.

It said its high quality IT Parks continue to enjoy rental growth and high occupancy, and are well placed to weather market uncertainties due to a diversified and well-constructed income stream.

Source: Business Times

ART Q2 distributable income climbs 9.6%

Trust cites organic growth, acquisitions for better results      

ASCOTT Residence Trust (ART) said yesterday its second-quarter distributable income climbed 9.6 per cent to $13.3 million, from $12.1 million a year ago.

Distribution per unit was 2.19 cents, an increase of 9 per cent from 2.01 cents in Q2 last year.

The trust said its better performance was due to organic growth across its portfolio - particularly in Singapore and Vietnam - and contributions from properties acquired in the past 12 months.

Revenue for Q2 ended June 30 rose 13.3 per cent to $46 million, from $40.6 million in Q2 2007. In Singapore, revenue per available unit rose some 30 per cent from last year.

For the first six months of 2008, distributable income rose 36.1 per cent to $27.5 million. Distribution per unit rose 25.6 per cent to 4.52 cents. Revenue for the half-year rose 31.6 per cent to $91.6 million.

ART intends to increase its investment in emerging markets such as China, Vietnam and India, said Chong Kee Hiong, chief executive of the trust’s management team. ‘If you look at the current environment, I would say the opportunities are in emerging markets,’ he said.

Right now, the trust has 50 per cent of its $1.5 billion portfolio in emerging markets. Mr Chong said he wants to increase the proportion to 60-70 per cent in the longer term. ART owns 3,550 apartments in 37 properties across seven countries.

The trust said the global financial turmoil triggered by the sub-prime crisis and tighter credit had some effect on the Asian hospitality industry in the first half of this year.

‘Should these factors persist, there will be further impact on business travel patterns to the markets we operate in, although the group’s geographical diversity and extended stay business model allow it to mitigate these factors,’ it said.

The trust’s units rose two cents to close at $1.12 yesterday. The units have shed 22.8 per cent since the start of the year.

Source: Business Times

FCT distributable income rises 19% in Q3

Gross revenue up 10% to $20.8m; DPU rises to 1.88 cents

FRASERS Centrepoint Trust (FCT) yesterday reported distributable income of $12.2 million for the third quarter ended June 30, 2008 - an increase of 19 per cent from the year-ago period.

This came on the back of a 10 per cent growth in gross revenue from Q3 2007 to $20.8 million.

Higher portfolio occupancy, strong rental renewals at Causeway Point, and better performance from the post-revamp Anchorpoint drove gross revenue increase.

Distribution per unit (DPU) for the quarter stood at 1.88 cents, 13 per cent higher than in the same period last year.

‘Strong organic growth coupled with the successful revamp of Anchorpoint delivered record distributable income to FCT unitholders for the second consecutive quarter,’ said Christopher Tang, CEO of FCT manager Frasers Centrepoint Asset Management Ltd.

With the completion of enhancement work at Anchorpoint, overall portfolio occupancy improved 2.8 percentage points from a year ago to 95.7 per cent as at June 30.

Anchorpoint enjoyed close to full occupancy and rents rose over 40 per cent, resulting in its gross revenue more than trebling to $1.7 million in Q3.

At Causeway Point, renewed rentals in Q3 2008 were 17 per cent above preceding rates.

‘Unitholders can also look forward to benefiting from the current enhancement work to Northpoint which remains on schedule for completion in June 2009,’ said Mr Tang.

As for Northpoint 2, construction is on schedule and work is in the final stages of completion.

The property is expected to obtain Temporary Occupation Permit by Q4 2008, and could be injected into FCT by the fourth calendar quarter this year or the first calendar quarter next year.

According to FCT, demand for Northpoint 2 is strong and almost all of its net lettable area has been leased or tagged in advanced stages of negotiations.

FCT has a gearing of 29.5 per cent and an A3 corporate rating from Moody’s.

‘Barring any unforeseen circumstances, the manager of FCT expects FCT to benefit from the rental renewals and the proactive asset management activities planned for the rest of the financial year ending 30 September, 2008,’ the trust’s financial statement said.

FCT’s units closed unchanged at $1.15 yesterday.

Source: Business Times

US lawmakers agree on housing rescue package 

Plan to help home owners and prop up Freddie, Fannie could cost US$25b

WASHINGTON - UNITED States lawmakers have hammered out a compromise deal on a major housing rescue package that will permit the government to help struggling home owners get new and cheaper loans. It will also help to prop up troubled mortgage giants Fannie Mae and Freddie Mac with cash in an emergency.

The House of Representatives was expected to vote on the Bill yesterday (today, Singapore time), and it could become law as early as this week.

The Bush administration and lawmakers in both parties teamed up to negotiate the measure, which paired the Democrats’ and Republicans’ top priorities.

Democrats are pushing for government help for Americans facing foreclosures, and US$3.9 billion (S$5.3 billion) for neighbourhoods hit hardest by the housing crisis.

Republicans, on the other hand, are aiming to rein in Fannie Mae and Freddie Mac, while reassuring financial markets of their stability.

The package hands the Treasury Department power to extend the government-sponsored mortgage finance companies an unlimited line of credit and buy an unspecified amount of their stock, if necessary, to prop them up. Fannie Mae and Freddie Mac back or own more than US$5 trillion in US mortgages - nearly half the nation’s total.

Congressional analysts estimated that the rescue could cost US$25 billion, but they predicted there was a better-than-even chance it would not be needed at all.

The Bill will let thousands of home owners trapped in mortgages they cannot afford escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration (FHA).

Lenders will have to agree to take a substantial loss on the existing loans. In return, they will walk away with at least some payoff and avoid the often-costly foreclosure process.

The plan also creates a new regulator with tighter controls for Fannie Mae and Freddie Mac and modernises the FHA.

It includes about US$15 billion in housing tax breaks, among which is a credit of up to US$7,500 for people buying homes for the first time between April 9 this year and July 1 next year.

To fund all this, the Bill increases the statutory limit on the national debt by US$800 billion to US$10.6 trillion.

The White House, which initially denounced the FHA rescue as too burdensome on the government and risky for taxpayers, dropped most of its objections in recent weeks in search of a swift deal.

The Bill sets a cap of US$625,000 on the loans Fannie Mae and Freddie Mac may buy and the FHA may insure, but it lets them buy and back mortgages up to 15 per cent above the median home price in certain areas.

Home loan rates at five-year high

A DEAL to save the United States housing market cannot come too soon: The troubles of mortgage finance giants are pushing up home loan rates to their highest levels in five years.

The average interest rate for 30-year fixed-rate mortgages rose to 6.71per cent on Tuesday, from 6.44per cent last Friday, according to HSH Associates, a publisher of consumer rates. The average rate for very big, so-called ‘jumbo loans’, which cannot be sold to Fannie Mae and Freddie Mac, was 7.8per cent, the highest since December 2000.

Loan rates are rising because of concerns in the financial markets about the future of Fannie Mae and Freddie Mac, which own or guarantee nearly half of the nation’s US$12trillion (S$16.3trillion) mortgage market.

Worried that the companies may not be as big a support to the market as they have been, bond investors are driving up interest rates on securities backed by home loans. The added cost is being passed on to consumers via the mortgage markets. For a US$400,000 loan, the increase in 30-year rates in the last few days would add US$71 to a monthly bill, or US$852 a year.

The rate hike is of greatest concern to home owners whose mortgages required them to pay only the interest on their loans for the first few years. If such borrowers are unable to refinance into lower-cost loans, many of them will face the prospect of having to pay both interest and principal at higher, adjustable rates.

For borrowers with a US$400,000 loan, such a jump could send their monthly payments to US$2,338 from US$1,417, estimates mortgage broker Louis Barnes.

NEW YORK TIMES

Source: Straits Times

Economy, rent hikes boost CCT’s results

THE robust economy - and the rent increases it delivered - allowed CapitaCommercial Trust (CCT) to deliver a bumper result yesterday and bask in a rising share price.

Distributable income for the June quarter shot up 23.2 per cent from a year ago to $36.1 million. Investors will benefit from a 22.6 per cent rise in distributions to 2.6 cents per unit.

Gross revenue climbed 25 per cent to $74.4 million while net property income rose 18.6 per cent to $51.5 million.

The strong results sent the shares up seven cents to $1.98.

Mr Richard Hale, the chairman of CCT’s manager, said Singapore’s economic performance had driven the trust’s higher net asset value and rental revenue for the three months to June 30. He also cited the ’still steady office demand underpinned by the country’s solid economic fundamentals’.

Mr Hale tipped that the good times will roll for a while yet: ‘Given Singapore’s attractiveness as a global city and the tight office supply, we are confident of exceeding our forecast distribution per unit of 10.61 cents for the financial year ending 2008.’

CCT achieved a distributable income of $71.9 million and a distribution per unit of 5.19 cents for the first six months of the year.

The annualised first-half distribution per unit of 10.44 cents would provide a distribution yield of 5.5 per cent, based on the July 22 closing price of $1.91 per unit.

CCT’s total asset size is now close to $7 billion - following its July 11 completion of the $1.165 billion purchase of 1 George Street, ahead of its 2009 target size of $6 billion. The trust said its gearing is at a prudent 35.7 per cent.

New leases and renewals contracted over the first half of the year registered average rent increases of 193 per cent for office space and 52 per cent for retail, said Ms Lynette Leong, the chief executive of CCT’s manager.

Ms Leong said there remains ‘considerable potential’ rental upside as the prevailing rents of leases not yet due for renewal are still substantially below market rates.

Despite slower economic growth and increased stagflation fears, office rents continued to rise in the second quarter, albeit at a slower rate. They averaged $18.80 per sq ft (psf) per month for Grade A space and $16.10 psf for prime space.

While some property consultants have said that office rents are peaking, CCT remains confident.

‘Notwithstanding the current weak macroeconomic sentiments, demand for space in our portfolio, especially by the financial institutions and supporting business services, remains continually steady,’ said Ms Leong.

Moody’s Investors Service recently downgraded CCT’s A3 corporate family rating to Baa1, and its Baa1 senior unsecured ratings to Baa2, which reflects the entirely debt-funded nature of its purchase of 1 George Street.

Source: Straits Times

Newton Suites shortlisted for International Highrise Award

By ARTHUR SIM

UOL’s Newton Suites has been selected as one of the five contenders for the International Highrise Award (IHA).

Having made the shortlist, Newton Suites, which is designed by award-winning Singapore architectural firm, WOHA, has been elevated to the same league of buildings designed by Foster and Partners (Hearst Tower, New York), Renzo Piano Building Workshop (New York Times Building) and OMA (Television Cultural Centre, Beijing).

An international jury of architects, engineers, real-estate specialists and architecture critics in Frankfurt/Main were responsible for the selection of the five buildings.

On Newton Suites, the Jury citation reads: ‘In this residential tower, the feeling of living in the tropics both indoors and outdoors is transferred to a vertical dimension. It represents a development for life in the vertical in densely developed metropolises and can be seen as a pioneering model for other tropical cities.’

UOL Group COO Liam Wee Sin said that being on the shortlist with the likes of Hearst Tower and New York Times Building, ‘is a step closer towards building an exciting living environment for Singapore, and having a development good enough to be selected among entries from around the world’.

‘For UOL, the recognition will inspire us to continue to push the frontier of good design and sustainable city living in Singapore,’ he added.

Newton Suites is a 36-storey apartment building, clad in metal mesh sunshading. It features cantilevered skygardens and a 30-storey wall of creepers.

The green areas of the building exceed the original site area, demonstrating how cities in the future can become much greener without loss of density or quality of living.

WOHA director Wong Mun Summ added: ‘The integration of the environmental features such as sunshading and hanging gardens into the design shows how tropical highrise can be different from temperate climate models.’

Source: Business Times

S’pore is 13th most expensive city

It is also the 5th costliest in Asia for expats: Mercer survey

By ARTHUR SIM

SINGAPORE is the world’s 13th most expensive city for expatriates, and the fifth most expensive in Asia.

According to Mercer’s Worldwide Cost of Living Survey 2008, Singapore ranks above Sydney (15th), New York (22nd) and Shanghai (24th).

Mercer’s survey, which covers 143 cities on six continents, measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

For instance, a fast-food hamburger meal costs US$4.50 in Singapore, US$3.18 in Hong Kong and US$5.97 in Tokyo.

Mercer’s managing director (Asean) Su-Yen Wong said: ‘Singapore’s rise in the rankings is partly due to the appreciation of the Singapore dollar against the US dollar.’ At the same time, Singapore’s strength as a regional hub and its ‘high quality of living’ have attracted talent from overseas. ‘Consequently, this has increased demand for items such as housing, food and transport.’

Rents have increased significantly here. According to Mercer, a ‘luxury’ two-bedroom unfurnished apartment now costs US$3,539.77 a month, an increase of about 20 per cent from US$2,946.09 in 2007.

But ‘luxury’ rent here is lower than in Hong Kong at US$6,411.89 a month and Tokyo at US$5,128.84.

On the upside, Singapore’s annual ranking has not increased as rapidly as before. Its 13th place this year is only a notch up from its 14th last year. In 2006 it ranked 17th - way up from 2005 when it was 34th.

In the latest survey, Moscow has been ranked the world’s most expensive city for expatriates - for a third straight year. London dropped one place to third.

Yvonne Traber, a principal and research manager at Mercer, said: ‘Although the traditionally expensive cities of Western Europe and Asia still feature in the Top 20, cities in Eastern Europe, Brazil and India are creeping up the list. Conversely, some locations such as Stockholm and New York now appear less costly by comparison.’

With New York as the base city at 100 points, Moscow scored 142.4 and is close to three times costlier than Asunción in Paraguay, the least expensive city with a score of 52.5.

Mercer noted that contrary to a trend last year, the gap between the world’s most and least expensive cities now seems to be widening.

In its report, it says: ‘Our research confirms the global trend in price increases for certain food items and petrol, though the rise is not consistent in all locations. This is partly balanced by decreasing prices for certain commodities, such as electronic and electrical goods. We attribute this to cheaper imports from developing countries, especially China, and to advances in technology.’

Source: Business Times

En bloc site relaunched with 40% lower price tag

Elsewhere, Straits Trading asking $162m for Gallop Gables apartments

By UMA SHANKARI

A DISTRICT 10 collective sale site at Robin Drive, off Bukit Timah Road, has been relaunched for sale - with a new asking price as much as 40 per cent lower in view of the current market sentiment.

The two properties on the site are now being sold for $964-$996 per square foot per plot ratio (psf ppr), a downgrade from the initial asking price of $1,500- $1,600 psf ppr when the site was first launched in December 2007.

The property was not the only one to be put on the market yesterday. The Straits Trading Company has put up for sale two blocks of apartments at Gallop Gables with a price tag of about $162 million, or $1,500 psf.

The Robin Drive site now consists of two properties - Robin Court and No 1 Robin Drive. Robin Court is an apartment block with 15 units while No 1 Robin Drive is a detached house now occupied by a preschool.

The indicative price of the combined plots is now $58-$60 million. If the developer maximises the potential of building up to 10 per cent of gross floor area (GFA) for balconies, the land rate works out to be about $964-$996 psf ppr, said Credo Real Estate, which is marketing the sites.

The majority owners of Robin Court had agreed to the collective sale before amendments to the en bloc laws took effect last October. But now, they have begun signing the collective sale agreement to lower the reserve price in view of the current cautious sentiment in the property market, Credo said.

No development charge is payable for redevelopment of the site at a plot ratio of up to 1.4, with a further 5.5 per cent in GFA for balconies, said Yong Choon Fah, Credo’s executive director.

The new development on the site could accommodate a luxurious residential project with a GFA of about 62,398 sq ft and can be configured into 30 apartments with an average size of 2,000 sq ft each, Credo said.

The developer should be able to break even at about $1,470-$1,500 psf, the firm added.

The expressions of interest (EOI) exercise for the two properties will close at 2.30pm on August 14.

Elsewhere, Straits Trading is selling two blocks consisting of 38 large apartments in Gallop Gables. Situated off Farrer Road, Gallop Gables, which was completed in 1997, has seven low-rise blocks with 140 apartments in all.

Straits Trading’s apartments have been retained for investment since completion. The 38 apartments have a total gross floor area of about 108,170 sq ft.

The apartments are tenanted and ‘present an opportunity to purchase an income-producing investment with capital growth potential’, said Knight Frank, the property firm marketing the two blocks.

The EOI for the apartments will close on September 9 at 3pm.

Source: Business Times