Saturday, July 31, 2010

US growth slows to 2.4% in Q2

Consumers turn cautious but business spending shows some encouraging signs

(Washington) THE United States' economic recovery lost momentum in the spring as growth slowed to a 2.4 per cent pace, its most sluggish showing in nearly a year and too weak to drive down unemployment.

Consumers spent less, companies slowed their restocking of shelves and the nation's trade deficit dragged more on the economy in the April-to-June quarter.

In a separate report, the Commerce Department said the recession was deeper than previously estimated.

The Commerce Department's report released yesterday also showed that the economy grew at a 3.7 per cent pace in the first three months of this year. That was much better than the 2.7 per cent pace estimated just a month ago.

Still, the recovery has been losing power for two straight quarters. That raises concerns about whether it will fizzle out. Or worse, tip back into a 'double-dip' recession.

Consumer spending, usually the lifeblood of economic activity, slowed in the second quarter. Such spending rose at an anaemic 1.6 per cent pace. That was down from a 1.9 per cent pace in the first quarter and was the weakest showing since the end of last year.

Instead, Americans saved more. They saved 6.2 per cent of their disposable income in the second quarter, the highest share in a year.

The 2.4 per cent growth rate logged in the April-to-June quarter was slightly less than the 2.5 per cent pace economists were forecasting.

It was also the weakest since a 1.6 per cent pace in the third quarter of last year, when a record streak of four straight losing quarters came to an end.

'The economy is growing but not enough to make most Americans happy. At this weak pace, it will take more time than many hoped for people to really feel the benefits of this upturn,' said Joel Naroff, president of Naroff Economic Advisors.

In the revisions issued yesterday, the government estimated that the economy shrank 2.6 per cent last year - the steepest drop since 1946.

However, there were some encouraging signs in terms of business spending. Spending by businesses on equipment and software increased at a blistering 21.9 per cent pace in the second quarter, the most in nearly 13 years.

Builders boosted spending on commercial projects, such as office buildings and plants, at a 5.2 per cent pace. It marked the first increase after seven straight quarters of cuts.

Overall economic growth was bolstered in the second quarter by strong spending by the federal government. It boosted spending at a 9.2 per cent pace, the most in a year. And, state and local governments, coping with budget shortfalls, increased their spending for the first time in a year. -- AP

Source: Business Times, 31 Jul 2010

Tanjong Pagar site expected to fetch over $1b

THE landscape around Tanjong Pagar MRT Station is set to be transformed over the next few years when a new development is built, rising to about 60 storeys.

The project, opposite International Plaza, will be built on a 'white' site launched by the Urban Redevelopment Authority (URA) yesterday and which is expected to fetch over $1 billion.

The 99-year leasehold site can generate nearly 1.7 million square feet maximum gross floor area (GFA), of which at least 60 per cent must be for offices and another 10 per cent for hotel use. Most market watchers expect the successful developer to put the balance 30 per cent GFA to residential use, cashing in on strong demand for inner-city apartments. Sales of apartments will help part-finance the development, say property consultants.

The apartments are expected to be built on the 1.5 hectare site's front portion (facing Wallich Street and Maxwell Chambers), which can have a maximum height of 280 metres above mean sea level (AMSL). This is currently the maximum height control allowed in Singapore and will optimise views of the apartments.

Caveats of new residential launches in the vicinity such as Altez and 76 Shenton range from $1,900 to $2,300 psf, from sales in the past six months, says CB Richard Ellis executive director Li Hiaw Ho.

Cushman & Wakefield Singapore managing director Donald Han estimates the residential component can generate between 400 and 540 apartments, assuming an average unit size of 1,200 sq ft and 900 sq ft respectively.

The project is expected to generate about 846,000 sq ft net lettable area of offices - based on the minimum 60 per cent office component stipulated, says CBRE.

As at the second quarter of this year, the average monthly rental of premium-grade office space in the Tanjong Pagar area was about $6.80 psf, compared with $8.37 psf in the Marina Bay area. During the office market peak in Q2/Q3 2008, the figures were $12.50 psf and $19 psf respectively.

'Office rents have bottomed and the overall pipeline supply will taper off after 2012. Hence the development will benefit from an upswing in office rents, barring any slowdown or decline in the major economies,' says Chua Chor Hoon, head of Southeast Asia research at DTZ.

Cushman's Mr Han also observed that on the back of strong take-up for new office projects, confidence and appetite for commercial-dominated developments in the financial district is slowly building up among developers.

He estimates that the project's minimum hotel component - 10 per cent of GFA - would be enough for a 315 to 320-room hotel.

DTZ's Ms Chua expects the site to draw only a handful of bidders, mainly bigger developers experienced with office projects. Mr Han predicts 4-6 bids, most of them in the $650-$720 per square foot per plot ratio (psf ppr) range. This range of unit land price works out to absolute land bids of about $1.1 billion-$1.2 billion.

Some analysts reckon bids could be pushed even higher, to around $800 psf ppr or $1.4 billion.

'Strong interest is expected from the 'usual suspects' of listed developers and foreign funds either individually or on a joint- venture basis. As this is a big-ticket site, we expect participation by foreign developers like Hongkong Land and Cheung Kong,' says Mr Han.

While a chunk of the site has a maximum building height of 280 metres AMSL, the rear portion (facing Peck Seah Street) can be built up to 200 metres AMSL. Part of the site (mostly above the MRT station box) has a maximum six-storey height.

Analysts say the project will contribute to the rejuvenation of the Tanjong Pagar area and inject new office space in the old CBD - helping to offset some of the loss of stock from the conversion of ageing office blocks into apartments.

The Tanjong Pagar site is being offered under the Government's Confirmed List for the second half of 2010. Its tender will close on Nov 16. 'Selection of the successful tenderer will be based on the tendered land price only,' URA said.

Source: Business Times, 31 Jul 2010

Multi-purpose site beside Tanjong Pagar station up for tender

A PRIME multi-purpose site in the Central Business District has been put up for tender.

The 1.5ha plot at the corner of Peck Seah and Choon Guan streets and next to Tanjong Pagar MRT station was launched yesterday as a confirmed list site.

The development will have a gross floor area of 157,744 sq m with at least 60 per cent earmarked for offices and a minimum of 10 per cent for hotel-related use.

The remaining area can be used for commercial, hotel or residential purposes, said the Urban Redevelopment Authority (URA) yesterday.

The 99-year leasehold site could yield an estimated 490 apartments, 315 hotel rooms and 102,380 sq m of commercial space.

It could reach 280m above sea level, commanding panoramic views of the city skyline across the CBD to Marina Bay and Chinatown, the URA said.

An underground pedestrian network will link the site to Capital Tower and 8 Shenton Way.

Executive director Li Hiaw Ho of CBRE Research said the development will tower over others in the vicinity and change the landscape of the Tanjong Pagar micro-market, hastening the area's pace of rejuvenation.

Mr Li said that with inner-city living growing in popularity over recent years, the successful tenderer would be tempted to utilise the remaining 30 per cent of floor space for flats.

Caveats lodged in the past six months from new launches at Altez and 76 Shenton ranged from $1,900 to $2,300 per sq ft (psf) while the completed Icon project has had recent resale transactions from $1,600 to $1,700 psf, CBRE Research said.

Knight Frank consultancy and research manager Ong Kah Seng expects 'keen interest' and about five bids for the prime site.

He also highlighted the attractiveness of the Tanjong Pagar area, where 'prime commercial area is complemented by a variety of lifestyle amenities and entertainment hangouts'.

Mr Ong added that with the office market in early recovery, this presents the best opportunity to develop or invest, as rents and prices are still attractive and economic fundamentals are in sight.

'Developers also have better access to financing compared to during an economic downturn,' he added.

The site, which can take up to seven years to be fully developed, might also appeal to developers who prefer a cautious stance as they would be able to adjust development plans according to prevailing market conditions, Mr Ong added.

The tender, which is part of the Government's land sales programme, closes on Nov 16.

Source: Straits Times, 31 Jul 2010

More firms expect slower growth in second half

THE key manufacturing and services sectors are still optimistic about the months ahead but more bosses are bracing themselves for slower growth.

Two surveys out yesterday point to a change in the economic climate, which could bring slower growth and a cut-back on hiring.

An Economic Development Board (EDB) poll showed that a weighted 25 per cent of manufacturers expect business conditions to improve over the next six months, down from 34 per cent in the April survey. And a weighted 7 per cent of companies felt things would get worse in the second half, up from 5 per cent three months ago.

About 376 manufacturers were surveyed between May and June.

Within manufacturing, firms in the electronics sector which have seen a huge uptick in fortunes over the past six months remained the most positive.

A weighted 43 per cent said things will get better, and another 45 per cent expect to increase production for the third quarter, with more export orders coming for Christmas.

'The firms foresee orders being sustained by demand for consumer electronic products such as wireless handsets and mobile computing devices,' said the EDB.

But only 7 per cent of manufacturers expect to hire workers over the next six months compared with 10 per cent three months ago.

Hiring is expected mainly in the electronics and precision engineering sectors.

OCBC economist Selena Ling said: 'We are seeing a more cautious tone. Certain sectors will be looking at a more modest pace of growth.

'Manufacturing is not going to be the main job creator going ahead, services is going to be, and we are really talking about the financial and tourism sectors in particular.'

A Department of Statistics survey of about 1,400 firms in the services sector found that a weighted 39 per cent of firms expect a more positive outlook, down from 45 per cent three months ago.

More firms also felt that things would stay the same, while slightly fewer firms said things would get worse.

The opening of the two integrated resorts and the upcoming Youth Olympic Games (YOG) and Formula One (F1) race appear to have given the services sector a boost in prospects.

The most positive were those in amusement and recreation - a new industry category that first appeared in the April survey.

A weighted 67 per cent in this segment expect a brighter second half, up from 34 per cent three months ago, while 51 per cent of hotels and caterers also expect things to get better, up from 48 per cent in April.

A weighted 40 per cent of companies in the information and communications sector also believe things will improve, compared with just 11 per cent in April.

Hoteliers also expect a rise in occupancy and the hiring of more people for the next three months for the F1 and YOG.

In April, 70 per cent of banks, fund managers and insurers felt things would get better but this has fallen to 41 per cent, with 4 per cent expecting worse conditions. Three months ago, no one expressed such pessimism.

But firms in the financial sector are the most bullish about hiring, with 46 per cent expecting to increase employment, a reflection that fund flows are still coming into Asia and Singapore, said Ms Ling.

Source: Straits Times, 31 Jul 2010

Three more HUDC estates to be privatised

THREE HUDC estates comprising 797 flats in Hougang and Potong Pasir have been given the green light to privatise.

Two of the estates are in Hougang North - blocks 344 to 350 in Hougang Avenue 7 and blocks 713 to 720 in Hougang Avenue 2. The other covers blocks 110 to 112 in Potong Pasir Avenue 1.

The homes are all in opposition wards represented either by Hougang MP Low Thia Khiang of the Workers' Party or Potong Pasir MP Chiam See Tong of the Singapore People's Party.

Privatisation means HUDC residents become owners of their units as well as the common property, and so have better control over the running of their estate. They will also no longer be subject to HDB's housing policies such as having to seek approval to sublet their flats.

This is the seventh batch of HUDC estate privatisations and will allow home owners to enjoy price gains, experts say.

PropNex chief executive Mohamed Ismail said prices of homes in the HUDC estates might go up an estimated 20 per cent once the privatisation process is complete.

'Residents will have control of their estate and can improve facilities such as introducing a security system... There's also an enhanced lifestyle and image,' he said.

The Ministry of National Development (MND) said the estates were selected as residents had registered an interest in going private.

The privatisation costs that lessees might incur - there are legal and survey fees, for example - will be capped at $30,000 per flat for three years from Aug 2. The Government will absorb the difference if costs exceed the cap. But residents must acquire 75 per cent support for privatisation within this three-year period.

After that, privatisation costs will be adjusted to account for the prevailing redevelopment potential of the land.

The three estates can now form committees of resident representatives to garner support for the privatisation and liaise with involved parties such as the HDB.

Once the 75 per cent support is obtained, residents can lodge a Strata Titles Application with the Registry of Titles so they can get subsidiary strata certificates of title for their flats.

The process of legal transfer of title from HDB to the flat owners will take about 21/2 years, the MND said. Once the conversion to strata titles has been done, residents will have to form a management council to run and maintain the estate.

A Potong Pasir resident, who did not want to be named, said he was glad his estate was finally chosen for the conversion. 'I've been living here for about 25 years... We see others getting privatised and we ask ourselves when it'll be our turn. At last we've got that chance.'

HUDC flats were built in the 1970s and 1980s as an option for middle-income families, but were phased out in 1987 as demand declined. Privatisation began in 1995 in response to the rising aspirations of Singaporeans to own private housing.

All but the Braddell View HUDC estate have been privatised or identified for privatisation. The MND said as that estate was developed in two phases, the issue of lease harmonisation has to be resolved before the estate can be privatised.

Source: Straits Times, 31 Jul 2010

Service sector powers S'pore's job growth

Pace of creation slows to 26,500 jobs but Manpower Minister remains upbeat

THE Singapore economy continues to enjoy strong employment growth, adding 26,500 jobs in the second quarter.

The fuel for growth came overwhelmingly from the service sector, thanks to the two integrated resorts, new hotels and heartland shopping malls.

Although the pace of job creation has slowed from the first quarter, when 36,500 jobs were added, Manpower Minister Gan Kim Yong is upbeat about the outlook for the rest of the year.

'Looking ahead, unemployment appears to have broadly stabilised and the labour market outlook for 2010 is optimistic, with robust employment growth expected,' he wrote in a posting on his ministry's newly set up blog.

The overall, seasonally adjusted unemployment rate was 2.3 per cent last month, up slightly from that in March but significantly lower than the rate of 3.2 per cent a year ago.

The resident unemployment rate - among Singaporeans and permanent residents - was 3.3 per cent last month, with an estimated 87,800 residents without jobs.

Redundancies also fell across the manufacturing, construction and service sectors, from a total of 2,400 in the first quarter to 1,900 in the second quarter.

Mr Gan described the fall as 'reassuring'.

The slowdown in job creation in the second quarter as compared with the first quarter could be due more to 'tight supply, rather than soft demand', Citigroup economist Kit Wei Zheng said.

Hiring difficulties could stem from more picky job seekers and a slower inflow of foreign workers, as compared with previous years, he added.

In terms of job growth, the service sector created 27,400 jobs in the second quarter. Construction added some 1,800 jobs, while manufacturing actually lost 2,400 jobs.

Economists believe job losses in manufacturing should not be a big source of concern, given the recent strong output growth. The losses were more likely due to the ongoing restructuring of the economy, said National University of Singapore economist Shandre Thangavelu.

'It will be very interesting to see third-quarter figures, whether employers will adjust slowly or immediately to the end of Jobs Credit,' he added.

He was referring to the $4.5 billion government scheme to subsidise local worker payrolls and encourage employers not to lay off workers during the recession. The scheme ended last month.

Looking ahead, the war for talent is likely to heat up as employee turnover is increasing, said Ms Yvonne Cox, South-east Asia managing director of human resource consultancy Towers Watson.

'The service sector, in particular the hospitality and retail industries, is experiencing spikes in employee turnovers as the integrated resorts have ramped up in the last six months,' she said.

Service-sector firms are upbeat about business conditions in the second half of this year, according to a Department of Statistics survey on third-quarter business expectations released yesterday.

Among those hoping to grow their business is coffee-shop chain Ya Kun Kaya Toast, which plans to open five outlets in November. The tight labour market, however, presents problems.

Its operations manager Jimmy Ng said it faces difficulties hiring young Singaporeans and a cap on hiring foreigners.'It's a good time to expand the business now but, without staff, we cannot open new outlets,' he said.

Mr Gan addressed the issue in his ministry's blog.

As productivity gains will take some time to materialise, employers 'may need to bring in additional foreign workers this year, despite the higher levy which took effect this month', he wrote.

But he also called on employers to step up efforts to raise productivity to meet the pace of growth, innovate and 'reduce their dependence on foreign manpower'.

Source: Straits Times, 31 Jul 2010

More HDB carparks on the way

Plans to add more than 5,000 parking spaces to ease residents' woes

MORE than 5,000 new parking spaces, costing $66 million, will be added in public housing estates in the next three years by the Housing Board (HDB).

The announcement was made yesterday by the HDB, following queries from The Straits Times.

The HDB estimates that about 10 per cent of its carparks do not have enough spaces for residents nearby.

What's causing the carpark crunch?

The HDB cited the increase in car ownership, including households with more than one car, in recent years as the chief reason.

Members of Parliament (MPs) whom The Straits Times spoke to also attributed it to the rising number of HDB households owning more than one car.

According to HDB figures, the number of such households has surged from 22,700 in 2006 to 36,370 now - a jump of 60 per cent.

HDB households owning more than one car make up about 12 per cent of the pool of car-owning households, up from 9 per cent in 2006.

MPs and residents have been complaining about the tight squeeze in HDB carparks for more than a year, as the car population has surged faster than the supply of parking spaces.

There are currently 1,810 HDB carparks, with a total of 551,430 parking spaces.

Mr Yeo Guat Kwang, MP for Aljunied GRC, noted wryly: 'Last year was the economic downturn, but the car population grew instead.'

The increase is in tandem with a rise in the overall car population in Singapore.

According to Land Transport Authority (LTA) figures for June, there are now 577,163 cars on the roads, about 100,000 more than in 2006.

This figure does not include rental cars, taxis and goods vehicles.

The HDB said the extra parking spaces will be created by increasing the capacity of existing carparks as well as by building new multi-storey carparks to replace existing surface ones.

The MP for Paya Lebar ward in Aljunied GRC, Madam Cynthia Phua, said: 'It's a relief that HDB is looking into this matter. But HDB needs to look at the long term as 5,000 new lots may be taken up very quickly.'

The new multi-storey carparks being built must be structures that can have even more storeys added in future, she said.

Madam Phua has on average 20 to 30 people a month complaining to her about the lack of parking spaces.

Over in Hougang Avenue 4, MP Mr Yeo plans to have 80 spaces added to an existing carpark. Parking spaces are hard to come by there because the carpark is near a busy neighbourhood centre.

Tampines resident Murugian Vadiveloo, 61, is looking forward to the new parking spaces. The HDB is building a multi-storey carpark one block away from his home in Block 939. The carpark will have space for 260 vehicles.

The Singapore Airlines cabin crew operations supervisor now spends half an hour circling around the carpark in his

area before finding a parking space if he returns home after 9pm.

Often, he has to park at another carpark 300m away.

Mr Vadiveloo, who has been living in Tampines for 25 years, said: 'The shortage worsened in the past year. Many people were parking illegally along the road.'

Mr Chew Kay Ping, who lives in Hougang Avenue 1, is cheered by the news too as he now has to while away time at a coffee shop - with his car parked illegally along the road - as he waits for an empty parking space.

Said the 58-year-old part-time contractor: 'I really look forward to HDB's addition of new lots. Then I don't have to waste so much time any more - and risk getting traffic summons.'

Source: Straits Times, 31 Jul 2010

Friday, July 30, 2010

HDB offers 1,016 flats in 2 BTO projects

This year's launches now top offers for whole of last year

THE Housing & Development Board (HDB) is launching two new Build-To-Order (BTO) projects with 1,016 units at Bukit Panjang and Jurong West.

This brings the number of new flats it has introduced under the scheme so far this year to 9,844 - exceeding the 9,000 for the whole of last year.

Senja Gateway, located at the junction of Kranji Expressway and Woodlands Road, will have 741 standard flats. They consist of 254 studio apartments, 313 four-roomers and 174 five-roomers.

The site is near the LRT station at Ten Mile Junction, and is surrounded by schools such as Pioneer Junior College.

A five-room flat at the estate will go for $308,000 to $398,000. According to HDB, comparable resale flats in the area cost $378,000 to $450,800.

The second project, Corporation Tiara, is at the junction of Corporation Road and Yung Kuang Road. Up for sale are 275 premium flats, comprising 171 four-roomers and 104 five-roomers.

The project will include another 190 studio apartments but HDB will put these up for sale later.

Corporation Tiara is some distance from the Lakeside and Boon Lay MRT stations. But it is near green lungs - Chinese Garden and Japanese Garden.

A five-room flat at the estate will cost $304,000 to $389,000. Prices of comparable resale flats in the vicinity range from $384,000 to $420,000.

HDB has ramped up the supply of new flats this year as prices of resale flats continue to climb - they rose 4.1 per cent in Q2 from Q1. Buyers also had to pay larger cash premiums.

The agency will be rolling out another 1,400 new flats in Yishun next month, and it plans to offer up to 16,000 BTO flats for the whole year.

HDB pointed out that the annual take-up of HDB flats ranged from 7,000 to 16,100 in the last 10 years. 'There were balance flats almost every year,' it added.

Source: Business Times, 30 Jul 2010

Singapore's richest get 17% wealthier this year

(SINGAPORE) The Republic's wealthiest are enjoying better fortunes this year, in tandem with the local economy's improving performance, according to data collected by Forbes Asia.

The publication, which tracks the wealth of Singapore's 40 richest people, said their total net worth this year is US$45.7 billion (S$62.4 billion) - up 17 per cent from last year's US$39 billion.

Of the lot, 26 tycoons saw their wealth increase this year, while seven suffered declines.

The family of the late Ng Teng Fong - who died in February - topped the list with a combined net worth of US$7.8 billion.

Still, they were among the few whose wealth declined - from US$8 billion the year before, as the value of their shareholding in Hong Kong developer Tsim Sha Tsui Properties fell 18 per cent over the past year, on fears of a slowdown in China. Forbes Asia said the biggest chunk of the family's wealth continues to come from its privately held Singapore property development company Far East Organization.

Meanwhile, the family of the late Khoo Teck Puat (who died in 2004) is second, with a total net worth of US$5.9 billion, up from US$5.5 billion in 2009. The family - the 14 children who inherited the fortune - sold its stake in Standard Chartered Bank to Temasek for US$4 billion in 2004. Its main asset is the Goodwood Group of hotels and a minor stake in the Ng family's Orchard Parade Holdings.

United Overseas Bank chairman Wee Cho Yaw moves up to third from fifth place last year, adding US$500 million to his wealth. Wilmar International's chairman Kuok Khoon Hong holds steady in fourth place with a net worth of US$3.5 billion. He's expected to add more to his fortunes, however, with the recently inked US$1.5 billion deal to buy Sucrogen (the largest raw sugar producer in Australia and maker of fuel ethanol) expected to be completed by September.

There were also some notable entrants to the list this year. Making a debut, at No 5, is New Zealand- born social entrepreneur Richard Chandler, who became a Singapore resident in 2008. The 52-year-old heads RF Chandler (a fund which invests in emerging markets) and has also set aside US$100 million for educational causes in the developing world.

The other newcomers to the top-40 list this year are Otto Marine's Yaw Chee Siew, who comes in at No 22, with a total net worth of US$385 million, and ARA Asset Management's John Lim at No 38, with US$202 million.

And returning to the list, after a two-year absence, is Osim International's Ron Sim. He re-enters at No 28, with a net worth of US$301 million, after having written off his investment in loss-making Brookstone in 2008.

Hotelier Ong Beng Seng and his wife Christina Ong are also first-time billionaires - with a combined wealth of US$1 billion, up from US$700 million last year, thanks to the better performance of their hotel and retailing empire. Between them, they control Hotel Properties, UK fashion house Mulberry, the Club 21 retail chain and the Como Group.

Meanwhile, among those suffering a decline in fortunes is Yanlord Land Group's Zhong Sheng Jian, who made his fortune from China's property boom over the last two decades, and was named 'Businessman of the Year' at BT's Singapore Business Awards 2010. His net worth fell 10 per cent from the year before, to US$1.8 billion this year, as Yanlord's stock price fell due to worries about the Chinese government's efforts to curb real estate prices.

The full list of Singapore's richest can be found in the August issue of Forbes Asia.

The magazine said it compiled the list by calculating the individuals' public net worth using share prices and exchange rates as at July 14. For privately held wealth, it estimated what they would be worth if they were public.

The publication also said that this ranking, unlike the Forbes billionaire list, includes numerous family assets shared by individuals and their children, grandchildren and siblings. Where family assets are held by extended families, such as the Kwek cousins (that is, Kwek Leng Beng, Kwek Leng Kee and Kwek Leng Peck), Forbes Asia split them into separate entries.

Source: Business Times, 30 Jul 2010

Building sector uneasy with cool demand up to May

But prelim figures for June, upcoming projects paint brighter picture

(SINGAPORE) The value of construction contracts awarded in the first five months of the year was less than hoped for, keeping the building industry on edge.

Nevertheless, authorities are keeping their full year construction demand forecast intact as preliminary June figures and upcoming projects paint a brighter picture of the industry.

According to figures released by the Building and Construction Authority (BCA) to the public, construction demand from January to May was $8.17 billion. Some 59 per cent or $4.84 billion of this came from the private sector, and the remaining 41 per cent or $3.33 billion was from the public sector.

The demand up to May - compared with BCA's full year forecast of $21-27 billion - triggered some unease among industry insiders.

'It looks as though the target of $21-27 billion may not be reached this year,' said Rider Levett Bucknall (RLB) managing partner Winston Hauw yesterday. He was giving an update on how the construction sector has fared at a conference organised by the Real Estate Developers' Association of Singapore (Redas).

He cited other figures from BCA that implied slowing construction demand. The value of contracts awarded in April and May was $2.6 billion, which is around 18 per cent less than the $3.1 billion in the same period last year.

Davis Langdon & Seah director Seah Choo Meng shared similar concerns with BT. 'Contractors feel that there is still not enough work in the market,' he said.

Construction demand has come off sharply from the record $35.7 billion in the boom year of 2008. The subsequent economic slowdown forced many private sector projects off the pipeline, and the construction sector was left with excess capacity after completing large jobs.

The arrival of more foreign contractors looking for work as construction demand dries up in markets such as Dubai has exacerbated the situation. 'Competition is high at the moment,' said Lum Chang Building Contractors executive director Tan Wey Pin.

While the current situation does not look too promising, Mr Hauw, Mr Seah and Mr Tan hesitated to write off the year's performance. Construction demand might still meet BCA's full- year forecast if the public sector awards more contracts later this year, they said. One of the most awaited projects is Stage 3 of the MRT Downtown Line.

Still, there is hope. In response to queries from BT yesterday, BCA shared preliminary figures on the value of construction contracts awarded from January to June - about $11 billion.

Going by the agency's mid-year review, another $10 billion to $16 billion worth of contracts are likely to be awarded in the second half.

These projects include the widening of Keppel Viaduct and the conversion of the former Supreme Court and City Hall to the National Art Gallery. Contractors will also be needed for the International Cruise Terminal, Lanxess Butyl's synthetic rubber plant, and various condominium developments.

'This will bring the total construction demand for this year to $21-27 billion, similar to the original projection released by BCA in January,' said a BCA spokesperson.

At yesterday's seminar, Redas launched a new Real Estate Sentiment Index, which it developed jointly with the National University of Singapore's real estate department.

'Redas will work even more closely with higher institutes of learning, professional bodies and government agencies to embark on new initiatives in research and executive programmes,' said Redas president Simon Cheong.

Source: Business Times, 30 Jul 2010

Double-dip recession a part of recovery process?

THE optimism that emerged in the early stages of the recovery has given way to more sobering assessments of challenges facing the global economy and its constituent national parts.

In many countries, fears have arisen of a prolonged period of slow and occasionally negative growth or, worse, of a Japanese- style 'lost decade' with multiple recessions, or, even worse, of a depression.

But are multiple downturns so unusual in periods of severe economic distress?

The global recession was severe, probably unmatched since World War II. From the start of the crisis in December 2007 to its apparent end last year, the decline in

real gross domestic product (GDP) in the United States was 3.8 per cent.

All the other G-7 economies (Japan, Germany, Italy, France, Canada and Britain) also saw severe recessions in this period. Major middle-income trading economies like Brazil, Singapore, South Korea and Taiwan saw brief but even sharper declines. The downturn was so severe, and for so long, that some used the term 'depression', before settling on 'Great Recession'.

How is a recession defined? Different national statistical agencies define, and thus date, such episodes differently. In the US, recessions are officially dated by a non-partisan, non-profit, private research institution, thus depoliticising the measurement.

The point at which the economy stops growing is called the 'peak', and the 'trough' is when it stops contracting. The period from when the economy starts to grow again until the point at which it reaches the previous peak is the 'recovery'. Growth thereafter is an 'expansion'.

For economists, a recession ends when the economy starts to grow. The economy falls to the bottom of a well, and then, as soon as it begins to climb out of it, the recession is declared 'over', even though it may be a long climb back to the top.

Little wonder, then, that ordinary citizens consider a recession over only when the economy has returned to 'normal', which means that incomes are rising and jobs are no longer desperately scarce.

A common rule of thumb is that two consecutive quarters of falling real GDP constitute a recession. But sometimes recessions don't satisfy this rule. Neither the 2001 nor the 1974-75 US recessions met that criterion. Besides real GDP, employment, income and sales are considered, as are the depth, duration and diffusion of the downturn.

Dating a recession is, at times, a judgment call. America had a brief, sharp recession in 1980, followed by a long and severe one in 1981-82. Many economists believe it was one major episode, and that is probably appropriate, in a broader context.

But the economy did indeed grow in the interim - just barely enough to consider them distinct recessions. And, since they were separated by a transition from president Jimmy Carter to president Ronald Reagan, it was politically consequential that two recessions were identified. Likewise, the recent recession was dated as starting in December 2007, but it could equally well have been dated as starting in mid-2008 because, in the interim, the economy grew.

Double-dip downturns are more the rule than the exception. If we focus on real GDP and define a double dip as a historical sequence in which a period long enough to be declared a recession is followed by recovery, and then quickly followed by a second recession, the 1980-82 period in the US is a classic example. In fact, defined more loosely as a sequence that includes periods of growth followed by periods of decline, followed by further periods of growth and decline, the 1973-75 period, with eight quarters of alternating gains and losses in real GDP, was one quadruple-dip recession.

These are not rare occurrences: About the same time, Germany saw this type of double dip and the UK a quadruple dip. In the early 1980s, Britain, Japan, Italy and Germany all had double dips. America's 2001 recession was one brief, mild double dip. Within the current recession, we have already had a double dip; a dip at the start of 2008, some growth, another long, deep dip, then renewed growth. If the economy declines again - a highly plausible prospect - the US would have a triple dip, although perhaps not an outright second recession.

So history suggests that economies seldom grow out of recessions continuously, without an occasional subsequent decline. Dips - double, triple and quadruple - have been America's recessionary experience since World War II.

While the baseline forecast seems to be slow global growth, history suggests that another decline would hardly be surprising before sustained stronger growth emerges.

The writer is professor of economics at Stanford University. He was chairman of President George H. W. Bush's Council of Economic Advisers from 1989-1993.


Source: Straits Times, 30 Jul 2010

New index shows property market likely to worsen

A NEW index tracking the property market shows that developers and other industry players remain positive but believe conditions will cool down from the bullish levels seen in recent months.

More developers also believe the slowing global economy and an increased supply of new development land may hit market sentiment over the next six months.

The Real Estate Sentiment Index, which was launched at a seminar yesterday, also points to rising interest rates and an excessive supply of new property launches as market risks. The index has been jointly developed by the Real Estate Developers Association of Singapore (Redas) and the department of real estate at the National University of Singapore (NUS). It is based on data collected in a quarterly survey of Redas members to get a snapshot of market sentiment. The poll started in the first quarter.

The reading for the second quarter stood at 5.9, down from 6.8 in the first quarter. This shows that while industry players are still positive, they expect market conditions to worsen.

With empirical data, it is always about the past, said Dr Yu Shi Ming, head of NUS' department of real estate.

'With the index, we hope that as soon as a policy is announced, we can get a sense of how the industry feels,' he said.

Redas chief executive Steven Choo said that apart from its members, policymakers, banks and other firms may find it useful.

There have been about 70 respondents for the survey each quarter - about 60 per cent are developers and the rest consultants and other industry figures.

About 51 per cent of developers polled for the second quarter expect prices of new launches to rise, compared with 85 per cent in the first quarter. About 68 per cent expect more new units to be launched over the next six months, compared with 83 per cent in the first quarter.

About half of the developers polled feel the level of interest for public and private development land will remain unchanged in the near term. Developers are most concerned with rising land prices, followed by the cost of building materials and labour.

At Redas' seminar yesterday, Rider Levett Bucknall's managing partner, Mr Winston Hauw, said: 'It's good to tender this year as there's more uncertainty next year. We think prices will go up slightly next year.'

Source: Straits Times, 30 Jul 2010

1,016 new flats on offer in Bukit Panjang, Jurong West

TWO build-to-order (BTO) Housing Board (HDB) projects that will add 1,016 new flats to the market were launched yesterday. The launch means 9,844 flats have been released in seven months, exceeding the 9,000 units offered for the whole of last year.

The projects are Senja Gateway in Bukit Panjang and Corporation Tiara in Jurong West.

Senja Gateway at the junction of Kranji Expressway and Woodlands Road will have 741 standard flats, comprising 254 studios, 313 four-room flats and 174 five-roomers.

Studios of 35 sq m to 45 sq m will cost $67,000 to $95,000, four-room flats of 90 sq m will be from $242,000 to $306,000 while five-roomers of 110 sq m will go from $308,000 to $398,000.

Corporation Tiara in Jurong West, at the junction of Corporation Road and Yung Kuang Road, will have 275 premium flats, comprising 171 four-roomers and 104 five-roomers.

Four-roomers of between 90 sq m and 93 sq m will cost between $242,000 and $325,000 while five-room flats of 110 sq m to 113 sq m will cost between $304,000 and $389,000.

Under the BTO scheme, flats are built only when a certain level of demand for the project is met.

PropNex chief executive Mohamed Ismail expects this launch to be more than three times oversubscribed as demand is still strong due to the high cash-over-valuations (COV) asked for in the HDB resale market.

He added that the pattern of demand from past BTO launches showed that four- and five-room flats were often the most popular.

'I think demand will be sustained throughout this year and we might even see a record number of BTO flats being launched,' he said.

The HDB said that if demand from first-time buyers is sustained, it is prepared to offer up to 16,000 BTO flats this year. This is a significant supply as the total annual take-up of HDB flats in the last 10 years ranged from 7,000 in 2006 to 16,100 in 2000, with flats left unsold almost every year, the board said.

Buyers can expect about 1,400 flats to be launched in Yishun next month while upcoming projects include areas like Woodlands, Punggol and Sengkang.

The BTO stock will also be supplemented by an upcoming supply of 4,700 units under the design, build and sell scheme (DBSS) and executive condominium scheme such as a site launched for tender in Tampines Avenue 5 last month.

The HDB said it is prepared to launch more DBSS sites if demand keeps up.

Applications for the BTO flats launched yesterday can be made online at until Aug 11.

Source: Straits Times, 30 Jul 2010

Thursday, July 29, 2010

The Scala: Crowd ballots for chance to buy

Units fetch average price of $1,150 psf

The public launch of The Scala yesterday drew a huge turnout and defied official data of slowing private home sales in recent months. Over a thousand property buyers turned up and balloted for a chance to make a purchase.

The developer, Hong Leong, said it had sold over 75 per cent of the 468 units available as of yesterday. It said the units, sized between 474 and 2,142 square feet, were sold at an average of $1,150 per square foot.

Hong Leong also said that the buyers comprised a good mix of HDB upgraders and investors, with local buyers making up the majority.

Buyers who spoke to MediaCorp said properties in the central area were out of their price range. Instead, they picked The Scala because of its suburban location.

One of them is Mr Andrew Low, 43, an IT manager at an insurance firm, who wanted to buy a two-bedroom unit for investment. He said: “The Scala should not be affected by the recent dip in private sales. It is close to the Lorong Chuan MRT and near the NEX Mega Mall. I see a 10- to 20-per-cent increase in prices in two years.”

Some buyers were also encouraged by the potential rental yields as they reckon that the units can attract expatriates due to their proximity to international schools.

“If I rent it out, I’m looking at a monthly rent of between $3,000 and $4,000 a month. If not, I can move in here myself,” said Mr Low.

Also looking for a two-bedroom unit was Mr Zhao Han, a permanent resident from China, who had been working here as a technical specialist in the automotive industry for three years.

He said: “Mainland Chinese have too much cash but they can only invest in property because other sectors like manufacturing and enterprises in China have not been fully developed yet.”

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that bullish property investors may be willing to pay a premium and push the property prices higher still. “At $1,150 psf, the price can still go up to $1,200 and some units may even reach $1,250,” he said.

Source: Today, 29 Jul 2010

Most firms less bullish about Q3 growth: Poll

THE threat of a fallout from the euro zone debt crisis has dented the confidence of some local firms, but most remain optimistic going into the third quarter, according to a new survey.

Bosses polled by credit rating firm D&B Singapore were largely positive and expect increases in profits, sales and new orders over the next three months.

D&B said the optimism was mainly down to the strong performance of key sectors here, with construction, services and manufacturing leading the way.

Ms Audrey Chia, a D&B senior director, also singled out the biomedical and electronics sectors as star performers, as the global recovery continues.

'A positive business outlook was observed across the board (for the third quarter) with the overall optimism index for both net profit and employment maintaining in the positive region,' she said.

'Nevertheless, the anxiety from Europe's sovereign debt crisis and the global financial fragility are starting to take their toll on overall business confidence with reported figures appearing less robust than in the previous quarter.'

Although less optimistic, most of the 200 companies polled by D&B still had high hopes for the third quarter.

The survey was to compile the Business Optimism Index (BOI), which compares the net percentages of the respondents' expectations in areas such as sales, profits and hiring activities with those in the previous quarter. A positive reading indicates optimism, a zero reading signals no change, while a negative one means the respondent expects a drop in performance.

'The majority of companies surveyed have indicated continued optimism towards their third-quarter performance for sales volume, net profit, selling price, employment and inventory,' said Ms Chia. 'Although overall sentiment is less bullish than in the second quarter.'

Compared with second-quarter figures, the third-quarter index for net profit dipped from 45 per cent to 26 per cent, sales volume from 41 per cent to 29 per cent, and new orders from 42 per cent to 35 per cent.

The BOI for employment also dipped from 14 per cent to 13 per cent, although it remained in the positive range for the fifth quarter running.

However, selling prices are expected to rise moderately in most sectors, led strongly by the mining, services and construction sectors, said Ms Chia.

The BOI results were also in line with similar studies done in recent months.

Last week, the HSBC Small Business Confidence Monitor revealed that small and medium-sized enterprises here were among the most confident in Asia, with more investing to expand in the first half of this year. The official growth forecast for the year was revised upwards last month from 7 to 9 per cent to 13 to 15 per cent.

With Singapore set for record growth, it came as no surprise that businesses were in a buoyant mood. Mr Alex Lau, managing director of Anacle, one of Singapore's fastest growing technology start-ups, said he was 'extremely positive' about the outlook for the rest of the year. 'Our order books have already surpassed our expectations, but the real question is how much of the recovery is driven by real demand and not government stimulus.'

Source: Straits Times, 29 Jul 2010

Exodus of property agents expected

New rules on education level likely to shrink pool, but lifeline exists

THOUSANDS more property agents are set to bail out of the industry over the next 17 months due to tough new rules being introduced by the Government.

The regulations will impose a basic educational standard - a minimum four GCE O-level passes - on estate agents.

There are now no such requirements and no mandatory examination, so anyone can easily become a property agent.

While the new rules allow agents who do not meet the educational requirements to sit an industry exam to earn qualification, the immediate effect will be an exodus from the industry, say experts.

ERA Asia-Pacific associate director Eugene Lim estimates that the number of agents who do not have four O-level passes may comprise up to 30 per cent of the 30,000-strong pool of agents.

Experts forecast a drop of up to 25 per cent to 30 per cent in the number of agents by the end of next year.

About 15 per cent to 20 per cent will drop out by the end of this year, and possibly another 10 per cent by the end of 2011, although new ones may join, said Mr Lim.

But there is a lifeline for existing agents once the rules kick in later this year.

The Ministry of National Development (MND) recently told real estate agencies that agents who have done at least three property deals over the past two years will not need to have the minimum O-level passes.

But they will need to pass the new mandatory exam for agents within a year from January 2011.

This means that older, experienced full-time agents who do not have the four O-levels or the equivalent will have more time to pass the industry exam.

New agents who may have joined the industry earlier this year will also benefit as they will be able to complete three deals fairly quickly, said Dennis Wee Group director Chris Koh.

Under the new rules, agents need to have a minimum educational requirement and take an industry exam.

They will also have to register through their firms at a new statutory board called the Council for Estate Agencies.

But the expected clear-out should not affect the industry too much, given the big number of agents, including inactive ones.

'Nobody knows exactly how many agents are out there. Many agencies have not done any housekeeping at all. I won't be surprised if some names are repeated at different agencies,' said Mr Koh.

He recently let go of 1,500 inactive agents, leaving 3,500. That was after he tried to recall all agents to update their particulars to meet MND requests.

Mr Koh said the 1,500 agents had not done any deals in a year and had failed to update their particulars. Some quit as they are in the civil service and do not want their names in the public registry, as is required under the new rules.

'Every month, I bring in new agents and let go of some inactive agents. But previously, there was no urgency to terminate so many,' Mr Koh said.

At HSR Property Group, executive director (agency) Jeffrey Hong said the firm will do a 'screening exercise' in the next two weeks. It now has 7,000 agents and has not had a regular practice of terminating inactive ones.

There has been little change at the other two big agencies - ERA and PropNex - as they have been doing their housekeeping.

ERA's Mr Lim said: 'We do not need to chop just because of the new rules. On average, we let go of about 100 inactive agents every month. Our sales force is about 3,000-strong and it is active.'

PropNex chief executive Mohamed Ismail added: 'I let go of 2,800 agents two years ago and another 1,200 this January.

'All my agents are covered by professional indemnity insurance and are active. My next audit will be in October.'

Source: Straits Times, 29 Jul 2010

Mass market condos still hot property

200 units at The Scala in Serangoon snapped up at launch yesterday

HUNDREDS of eager buyers yesterday braved the early morning rain, making a beeline for the public launch of Hong Leong's The Scala, as keen interest in mass market condominiums shows no sign of abating.

Demand for the 300 or so remaining units of the 99-year leasehold project near Lorong Chuan MRT station was so strong that balloting was needed to sort out who got to enter the showflat first.

By late morning, more than 800 property agents and potential buyers who had submitted blank cheques had packed the balloting tent at the condo site in Serangoon Avenue 3. This is the biggest turnout at a mass market public launch since Trevista in Toa Payoh and Hundred Trees in the West Coast area were launched late last year.

A private preview was held on Tuesday for Hong Leong staff and buyers who had registered their interest with the developer. About 150 units were sold then.

Hong Leong said that as of yesterday, more than 75 per cent of the project's 468 units had been sold. That means more than 350 were sold, of which about 200 went yesterday.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the condo had set a benchmark price for new projects near MRT stations in the north-east.

'There is a demand for mass market homes among investors and they generally feel more comfortable buying projects near MRT stations,' he said.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said: 'The market is still hungry, and the proximity of the project to the Circle Line has given (buyers) a reason to buy.' He said worries over the euro debt crisis had receded so buying sentiment had turned positive again.

Property experts say the strong demand for mass market homes is expected to continue, with prices set to rise about 7 per cent in the second half of this year.

The Government is rolling out a record number of residential sites in the second half of this year, and has assured buyers that there will be no shortage of homes.

Units at The Scala, in five residential towers, are between 474 and 2,142 sq ft each and range from one- to four-bedroom apartments. They were sold at an average of $1,150 per sq ft (psf).

In terms of total price, the smallest units were priced from $600,000 while the four-bedders were from $1.5 million.

Hong Leong said the buyers, mainly locals, comprised a good mix of HDB flat upgraders and investors.

Most buyers The Straits Times spoke to listed as key selling points the project's close proximity to newly opened Lorong Chuan MRT station and the range of amenities such as the NEX mega mall due to be completed next year.

Some buyers also cited nearby schools such as the Australian International School and the Stamford American International School. They said this could mean high rental yields.

Sales executive Tammy Lim, 30, bought a two-bedroom unit. She said the project is near her parents' home.

In addition, the project is close to schools that her three-year-old daughter could attend later, she said. 'Prices keep increasing. We decided to buy now rather than keep waiting.'

Nearby Chiltern Park condo, completed in 1995, saw an average selling price of $746 psf for five units sold last month, according to caveats lodged with the Urban Redevelopment Authority.

The Scala is expected to be completed in the first quarter of 2014.

Source: Straits Times, 29 Jul 2010

Why flats were taken back

IN AN unprecedented crackdown on illegal subletting, the Housing Board (HDB) has taken action against four flat owners and compulsorily acquired their flats.

These owners did not live in the flats they purchased and sublet their homes without meeting the minimum period of occupation - five years for subsidised flats and three years for non-subsidised flats - or obtaining the HDB's approval.

Locked out, then found out

The owner sought the HDB's help in getting into his flat after he was locked out of it.

That was when he was found out. He had allowed his three-room flat in the western part of Singapore to be used as collateral for a loan. His moneylender had sublet the flat as repayment.

After he got back into his flat, the HDB reminded him repeatedly that he had to resume occupation of it and evict the tenants.

But he did neither, even after he was given a grace period.

The HDB thus took over the flat.

Let out too soon

She let out her flat without the HDB's approval only a year after she had bought the property. The HDB requires home owners to live in their flats for a minimum period before they can let them out.

Though she did as told by the HDB and evicted her tenants, she failed to move back in, and left the flat empty.

The HDB then took over the flat.

Didn't live in matrimonial home

She bought the flat with her former husband, a foreigner, while they were married.

But she never moved in. Instead, she lived abroad and sublet the flat without meeting the minimum occupation period or getting approval from the HDB.

When their marriage broke down, her ex-husband wrote to the HDB to say that the flat was never intended as their matrimonial home and he had, in fact, never even seen it.

Even after she returned to Singapore, she chose to live with her family and not in her own property.

The HDB proceeded to acquire the flat.

Sublet to religious group

The flat owner lived in another home with her family while she sublet her unit to a religious group.

The flat was compulsorily acquired on the grounds that it was let out without the HDB's approval and that the owner did not resume occupation.

Source: Straits Times, 29 Jul 2010

HDB seizes flats of four home owners

Six other flat owners fined, in clampdown on illegal subletting

FOUR Housing Board home owners lost their flats in the first five months of this year, after the HDB launched an unprecedented crackdown on those who let out their flats illegally.

Six others have been fined amounts that ranged from $4,200 to $14,400.

Making good its earlier pledge to clamp down on illegal subletting, HDB inspectors checked 2,600 homes from January to May, four times more than in the preceding five months last year.

Some 2,300 flat owners are in the clear, but of the 300 still being investigated, 59 cases have been classified as suspicious.

The crackdown comes after measures announced in March to ensure that heavily subsidised HDB flats are used as homes, and not as money-making tools.

For example, the minimum occupation period for resale flat buyers before they can sell the flat was lengthened to three years, up from as short as one year, to cool speculative demand for HDB flats.

The Government had said that illegal subletting was not rampant, but it also gave the assurance that it would step up enforcement against owners who flouted the rules to milk rental income.

The HDB confirmed that this is the biggest number of flats checked and compulsorily acquired over a five-month time frame.

In the preceding two years, the HDB repossessed four flats out of 56 illegal subletting cases. The other 52 were fined amounts ranging from $1,000 to $21,000.

'HDB flats are primarily meant for owner occupation. Subletting of HDB flats without HDB's approval is an infringement of the lease conditions,' its spokesman said yesterday.

As of the end of last month, 30,500 HDB flat owners, or 3.6 per cent, out of a total of 841,000 flat owners have obtained approval to sublet their flats.

In the latest blitz, the spokesman said that in all 10 cases, the flat owners were not living in their homes and had sublet the whole flat without HDB approval.

She said a fine would generally be imposed on first-time offenders, unless their actions were particularly blatant, such as repeatedly ignoring HDB reminders to evict tenants.

Then, under the HDB Act, it would resort to compulsory acquisition, returning the owner only the value at which he had bought the flat.

A penalty would also be deducted from that amount.

The HDB cited one case in which a woman bought a flat with her then-husband but stayed overseas all the while.

When the marriage broke up, the ex-husband confirmed that they had no intention of living in the flat, which had been sublet before the expiry of the minimum occupation period.

One owner even allowed his moneylender to let out his flat to collect rent that constituted his debt repayment.

The HDB also found cases where flat owners skirted subletting rules by locking up one room and renting out the rest of the flat.

The rules mandate that owners can sublet their whole flats only after they fulfil the minimum occupation periods of five years for subsidised flats and three years for non-subsidised flats.

Approval must be obtained from the HDB, with caps on the number of sub-tenants allowed, based on flat size.

Former chairman of the Government Parliamentary Committee for National Development Charles Chong said the crackdown will 'send out a very strong message that the flats are not for people to make money, but for accommodation'.

There had been public concern that illegal subletting was indirectly linked to rising resale prices.

However, property analysts interviewed said that stricter enforcement is unlikely to have a significant impact on the market.

Said group managing director Danny Yeo of Knight Frank real estate consultancy: 'There are many illegal subletters, but compared to the total number of flats available, the numbers are small.'

Mr Gerard Thomas, marketing director of SHL Realty, said: 'There are also external factors to consider, for example, what the economy is like, whether there are any disasters.'

Mr Thomas added that the stricter enforcement would reduce the incentive for people to sublet illegally because the 'price is too high to pay'.

About three in every 10 cases in the crackdown came from public tip-offs.

While flat owners who rent out rooms do not need HDB approval, they must register the subletting details within a week, on pain of a fine of up to $3,000.

This move helps track tenants who use the flat addresses to borrow from loan sharks.

A six-month grace period for those who had sublet their flats before the start of February expires at the end of this month.

Those who want to report on illegal subletting can call the HDB on 1800-555-6370.

Source: Straits Times, 29 Jul 2010

Iskandar shows more promise

WHEN the two Prime Ministers of Singapore and Malaysia announced recently, and rather unexpectedly, a resolution to the long-standing issue of Malaysian railway land, there was a quiet sense of relief on both sides. But for none more so than among the backers of Iskandar Malaysia, an ambitious concept mooted in 2006 by the Malaysian government with the vision of transforming greenfield clusters in Johor into a sustainable and prosperous metropolis by 2025.

Singapore's initial response to the mega development plan was lukewarm. Singapore businesses viewed warily the rosy forecast of lucrative investment opportunities in waterfront projects and building and operating educational institutions and theme parks. The onslaught of the global financial crisis in 2008 did not help matters and Iskandar developments appeared to be moving slowly.

However, to the credit of the project's planners and managers, and the commitment of the Malaysian government, hundreds of millions of dollars have been sunk into developing the necessary infrastructure. Roads and highways were built, rivers cleaned up, and water and energy services to the area upgraded. In short, Malaysia's planners spared no effort and now the development is ripe for takeoff.

Private investments have been picking up. The catalytic driver of investments for the area, Iskandar Investments, signed on some major projects and achieved its own target for joint ventures. Indeed, Iskandar Malaysia is reported to have gone beyond its target of achieving US$13.2 billion in investments by 2010. However, there can be no denying that Singapore investors have been by and large in 'wait and see' mode.

Several business delegations have gone across from Singapore over the past two years to take a look at the region and see developments for themselves. But except for a few small investors, there was no notable commitment from a Singapore party - until recently, when the Management Development Institute of Singapore (MDIS) announced one of its biggest forays overseas, a $128 million investment to set up a 30-acre campus in an area within Iskandar's EduCity. The new facility will be about five times bigger than its Singapore campus.

Now that political reassurances have been made, and basic infrastructure is in place, will potential investors from Singapore take the plunge? Already Temasek Holdings is eyeing some 200 hectares of land in the development zone for a medical and wellness centre. This must be the clearest signal that the Malaysian project has got that it is ready to fly.

But while government assurances and commitments are necessary, nothing can replace the hard-nosed approach of business people, who base their decisions purely on investment returns. How much, and how quickly, private investment flows into Iskandar Malaysia will be the real test. But it must be said that the prospects now look better than at any time since the project's launch.

Source: Business Times, 29 Jul 2010

Hang Lung profit rises on HK apartment sales

(HONG KONG) Hang Lung Properties Ltd, the best performer in the Hang Seng Property Index this year, said full-year profit excluding gains from revaluations more than doubled after it sold more apartments in Hong Kong.

Net income excluding revaluation gains and deferred tax rose to HK$6.67 billion (S$1.2 billion) in the 12 months to June 30 from HK$2.39 billion a year earlier, the developer said in a statement to the Hong Kong stock exchange yesterday. That fell short of the average estimate of HK$6.96 billion from 12 analysts surveyed by Bloomberg.

Hong Kong's third-biggest developer by market value said full-year property sales jumped after it sold more luxury apartments at its HarbourSide project. Hong Kong home prices have risen 38 per cent since early 2009, fuelled by record-low mortgage costs, near-zero interest rates on savings deposits and buying by rich mainland Chinese.

Luxury home prices in the city may rise 10 per cent by the end of this year after already gaining 10 per cent in the first half, property consultant Jones Lang LaSalle Inc said last week.

'I'm optimistic about Hong Kong's luxury market in the long run,' Hang Lung chairman Ronnie Chan said at a press briefing yesterday.

The company sold 425 garden-view units at the HarbourSide development in West Kowloon and recorded profit from property sales of HK$5.26 billion, compared with HK$3 million a year earlier.

The shares fell 3.1 per cent to HK$32.60 at the 4pm close in Hong Kong, while the Hang Seng Property Index lost one per cent. The stock is up 6.5 per cent this year compared with a 3.6 per cent decline in the seven-member property index.

Hang Lung, which has two office and shopping mall complexes in Shanghai and one in Shenyang and is building several others in cities such as Wuxi and Jinan, said projects in China are progressing 'well'.

Rental profit from mainland China rose 14 per cent to HK$1.6 billion, it said.

The developer is seeking to buy more prime sites in China, according to yesterday's statement.

'We'll stay focused on mainland China's high-end commercial leasing properties, and focus primarily on second-tier cities, which generate returns as good as the first-tier cities,' Mr Chan said. 'China's system is flooded with money.'

Rental profit from its Hong Kong investment properties was little changed at HK$2.1 billion. Hang Lung owns the Hong Kong headquarters of Standard Chartered plc.

Hang Lung also booked a HK$21.2 billion gain reflecting the increased value of real estate held for investment, against a HK$3.5 billion gain the same period the previous year.

Including those gains, net income for the year surged more than 400 per cent to HK$22.3 billion, or HK$5.30 a share, from HK$4.13 billion, or 99 Hong Kong cents a share, a year earlier.

The company is the first of the city's biggest builders to announce earnings. Cheung Kong (Holdings) Ltd, Hong Kong's second-biggest developer controlled by billionaire Li Ka-shing, will report on Aug 5. Sun Hung Kai Properties Ltd, the city's biggest developer, and Sino Land Co will likely report next month.

Hang Lung will pay a final dividend of 54 Hong Kong cents, from 51 cents last year. -- Bloomberg

Source: Business Times, 29 Jul 2010

HK site fetches HK$10.4b, close to estimates

Auction atmosphere not as good as expected, with no aggressive bidding

(HONG KONG) Nan Fung Development Ltd and Wharf (Holdings) Ltd bid HK$10.4 billion (S$1.85 billion) for a building site in Hong Kong's Peak district yesterday at an auction that was close to surveyors' estimates.

The price for the Mt Nicholson Road site in one of the city's most exclusive residential areas was lower than the HK$10.5 billion median estimate of seven analysts in a Bloomberg News survey.

Their forecasts ranged from HK$8.9 billion to HK$11.5 billion, or HK$27,000 to HK$35,000 per square foot of gross floor area.

The government has been trying to curb a 38 per cent surge in home prices since the beginning of 2009 amid concerns housing is out of reach of ordinary residents. The Hang Seng Property Index turned lower after the auction result, ending down one per cent at the 4 pm close in Hong Kong.

'The market is worried we're going to have a bubble burst again like after 1997,' when the market peaked, said Trevor Cheung, an analyst at BNP Paribas in Hong Kong.

Hong Kong's luxury home prices have been fuelled by record-low mortgage costs, near-zero interest rates on saving deposits and buying by mainland Chinese. The city's home prices have gained 9.6 per cent this year and last week rose to the highest since 1997, according to Centaline in a July 23 report.

Luxury home prices may rise another 10 per cent in the second half if interest rates stay at two-decade lows and the local economy keeps growing, property consultant Jones Lang LaSalle said this month.

Nan Fung, a privately held developer, and Wharf will develop the site in a 50-50 venture, said Donald Choi, managing director at Nan Fung, after the auction. Wharf owns two of Hong Kong's largest shopping centres and the city's cable TV operator.

The site at 103 Mt Nicholson Road, formerly used for government staff quarters, has a total gross floor area of 324,861 square feet (30,180 square metres). The auction was initiated by the government, which has pledged to increase land supply as part of its measures to keep home prices in check.

About 30 per cent of the gross floor area at the plot will be used to build townhouses, while the rest will be used for apartments, Mr Choi said. At HK$10.5 billion, the developers paid HK$32,014 per square foot for gross floor area.

It is a 'unique site in a very rare location' and there are not that many sites at the Peak, Mr Choi said. He said the price was 'reasonable.' Martin Lee, the youngest son of Henderson Land billionaire chairman Lee Shau-kee, in May paid HK$1.82 billion, or a record HK$68,200 per square foot, for a site on Barker Road in the Peak district at an auction held by Jones Lang. Mr Lee said afterwards he would use the site to build houses for his family.

'Hong Kong land prices are already so expensive,' Hang Lung Properties Ltd chairman Ronnie Chan said at the company's full-year earnings briefing as the auction elsewhere in the city got underway. 'With that kind of price we can develop three or even four Hang Lung plazas in Shenyang' in north-eastern China, he said, referring to estimates of about HK$10 billion for the Peak site.

Most government land sales in recent years have been triggered by developers who promised to pay minimum amounts for sites on a list of available plots under the so-called land application system. Regular government land auctions were halted in 2004 to support falling home prices.

Yesterday's auction attracted four bidders, with only two vying for the site from HK$9 billion.

'The atmosphere was not as good as we expected; there was no aggressive bidding at all,' said Alnwick Chan, executive director at property consultant Knight Frank LLP.

'The demand is there but the market is relatively small. There's speculation that because there are three other sites coming up to auction catering to the middle to upper income groups, they're saving their resources for that.'

The government will sell two sites in the Kowloon area at auction on Aug 17 and a residential plot in Kowloon Tong district on Aug 31.

Demand for luxury properties is being supported by a lack of new supply and an influx of mainland Chinese buyers, who account for about 20 per cent of local residential transactions this year, Ricky Poon, managing director for residential sales at Colliers International Ltd, said before the auction.

'This is a normal price; for a luxury site, demand is always there because developers are not taking a lot of risks,' said James Cheung, a director at the surveyor unit of Centaline Properties Ltd, one of the city's biggest real estate agencies.

'There will continue to be a healthy growth in Hong Kong's property market.' Nan Fung paid HK$3.42 billion in May for a site in the city's Tung Chung area in the government's first land auction in the fiscal year that started April 1. The price was a third less than surveyors' estimates.

Sun Hung Kai Properties Ltd, the world's biggest developer by market value, last month bought a site in the Ho Man Tin district for HK$10.9 billion. At HK$12,540 per square foot, it was the highest price paid in a government auction in urban Hong Kong since the market peaked in 1997. The gross floor area for the site is 869,000 square feet.

Luxury homes in Hong Kong are those at least 1,000 square feet or costing at least HK$10 million. -- Bloomberg

Source: Business Times, 29 Jul 2010

More than 75% of The Scala sold

MORE than 75 per cent of the Hong Leong group's latest residential project, The Scala, has been sold at prices averaging $1,150 per square foot.

The 468-unit development in Serangoon Avenue 3 was publicly launched yesterday.

Hong Leong said yesterday that the units sold at the 99-year leasehold project are spread across five residential towers that feature one to four-bedroom units ranging from 474 square feet to 2,142 sq ft.

Buyers comprise a mix of Housing & Development Board upgraders and investors, with the majority being Singaporeans.

Betsy Chng, Hong Leong's head of sales and marketing, attributed the strong response to the project's location, unique features, finishing and pricing.

The Scala is next to the Circle Line's Lorong Chuan MRT Station and near several schools, including St Gabriel's Primary, Yangzheng Primary, Nanyang Junior College, the Australian International School, Stamford American International School and Lycee Francais de Singapour.

It is also close to a bus and MRT interchange at Serangoon Central, and the soon-to-be-opened NEX mega mall.

The project is slated for completion in the first quarter of 2014. Apart from the usual condominium facilities, The Scala will have features such as pavilions with wood-fired pizza ovens and teppanyaki hotplates, a Harvest Garden and a Green Gazebo.

Source: Business Times, 29 Jul 2010

Shanghai's Peace Hotel opens after restoration

(SHANGHAI) The city's Peace Hotel, which once accommodated Charlie Chaplin and other celebrities, opened to guests yesterday after three years of restoration, the managers said in a statement.

Fairmont Peace Hotel will be managed by Chinese hotelier Shanghai Jin Jiang International Hotels (Group) Co and Fairmont Hotels & Resorts Inc, which runs the Savoy hotel in London.

Jin Jiang, which operates more than 600 hotels in China, spent HK$500 million (S$88 million) to restore the building.

Some of the main features of the hotel have been kept, including the lobby with an Octagon ceiling, the hoteliers said.

Rates start from 2,300 yuan (S$464) and go as high as more than 7,000 yuan for a night, the hotel's general manager, Kamal Naamani said at a press conference.

The hotel has 270 rooms including the so-called Nine Nations Suites.

The building, located on the Bund promenade overlooking the Huangpu River, has six restaurants and lounges, including the Jazz Bar patronised by former US Presidents Jimmy Carter and Ronald Reagan.

The Indian, English, Chinese and American suites have been preserved, while the French, Italian, Spanish, Japanese and German rooms were redesigned.

The hotel was previously called the Cathay Hotel and was built by British businessman Victor Sassoon, opening in 1929. The art deco property reopened as the Peace Hotel in 1956.

Jin Jiang also has an agreement with Swatch Group AG to develop the south wing of the old Peace Hotel, called Swatch Art Peace Hotel, part of which will serve as an arts centre. -- Bloomberg

Source: Business Times, 29 Jul 2010

HDB steps up checks on unauthorised sub-letting

THE Housing and Development Board has cracked down on unauthorised sub-letting. Almost four times as many checks were carried out in the first five months of this year - 2,600, versus 690 between August and December 2009.

About 70 per cent of the 2,600 checks were routine inspections. The others were carried out after public feedback.

HDB said it has taken compulsory acquisition action against four flat owners this year and fined six others for unauthorised sub-letting.

Those whose flats were repossessed were not staying in them and had sub-let without HDB approval.

Owners are allowed to sub-let whole flats only after occupying them for at least five years if they are subsidised flats, or three years if they are non-subsidised.

Owners must also obtain written approval from HDB before sub-letting an entire flat. Different flat types have different limits on the number of sub-tenants allowed. One and two-room flats are allowed four sub-tenants, three-rooms are allowed six and larger flats are allowed up to nine sub-tenants.

Approval is not required for sub-letting of rooms, but flat owners must let HDB know within seven days of doing so.

Source: Business Times, 29 Jul 2010

Developer sentiment still positive for H2: survey

But Q2 consensus as indicated by net balances weaker than in Q1 poll

MORE respondents polled for Real Estate Developers' Association of Singapore's (Redas's) and NUS Department of Real Estate's (DRE's) Q2 2010 survey were still positive rather than negative on the overall performance of the prime and suburban residential markets over the next six months. However, the consensus as indicated by the net balances was weaker compared with the Q1 survey.

A net balance of +32 per cent of respondents in Q2 said that they expect better future market performance (over the next six months) in the prime residential sector, down from a +54 per cent net balance in Q1.

Likewise, the net balance of respondents who indicated better future market performance for the suburban private housing sector also slipped from +38 per cent to +27 per cent.

For an assessment of current market performance (now compared with six months ago), the net balance also declined from +79 per cent to +43 per cent for the prime residential sector. In the suburban housing segment, the net balance for current performance fell from +69 to +47 per cent.

Net balance is defined as the difference between the proportion of respondents who have selected positive options (such as 'Better') and the proportion of respondents who have selected the negative options (such as 'Worse').

The respondents who selected the neutral option (such as 'Same') are omitted from the calculation. A '+' sign in the score denotes a net positive sentiment (optimism) and a '-' sign indicates net negative sentiment (pessimism). The derived net balance scores are not weighted by the size of the respondents' business.

Market watchers said the survey findings tallied with ground feedback. Generally, sentiment for the private housing market was less upbeat in Q2 as the sovereign debt problems in European economies unfolded. Some potential buyers also felt priced out of the market after rapid price increases and took a break during the World Cup and June school holiday season.

On the other hand, the outlook for the Singapore office sector improved in April-June as net office take-up continued to increase against the backdrop of the Republic's economic recovery.

Reflecting this, the survey shows net balance of +63 per cent in Q2 for future performance of the office sector, an improvement from the Q1 figure of +43 per cent. A lower percentage of developers in Q2 expect stronger interest in land sales - both the Government Land Sales (GLS) Programme and private sector en-bloc sales market - over the coming half year compared with those polled in Q1.

About half of the developers in the latest survey said that the level of interest for both sources of land will remain unchanged in the next half year.

Only about 27 per cent of developers surveyed in Q2 expect more interest in the GLS Programme in the next half year, down from 71 per per cent in Q1.

Similarly, in Q2, 31 per cent of developers forecast a higher interest level in the en bloc sales market, down from 61 per cent in the preceding quarter. Of developers polled in April-June, about 24 per cent and 15 per cent foresee lower interest in GLS and en bloc sales respectively in the next half year.

Developers were also asked to identify the potential risks that may adversely impact market sentiment in the next six months.

In the second quarter, about 73 per cent and 63 per cent view a global economic slowdown or decline and an increase in supply of new development land respectively as the key threats - significantly higher than the 56 per cent and 44 per cent recorded in the previous quarter.

Other major risk factors listed by developers in the latest Q2 survey include rising interest rates (49 per cent of developer respondents) and excessive supply of new property launches (54 per cent).

Notably, about 49 per cent of the developer respondents were concerned with government intervention to cool the market over the next six months, significantly lower than the 81 per cent registered in Q1 this year.

Following government measures to cool the market in September last year and February and the record GLS programme for second half 2010 announced in May, the market probably read that the danger of further cooling measures has receded for now, say market watchers.

Among development cost concerns over the coming half year, developers said that their biggest worry is rising land prices, building materials cost and labour cost, with 90, 76 and 73 per cent respectively of developers polled expressing a moderate to high level of concern.

Interestingly, the percentage of developers who are 'very concerned' about escalating land cost fell from 83 per cent in Q1 to 35 per cent in Q2. 'This could be due to the unexpected or suddenness of the spike in land bid prices seen at state tenders in Q1. In contrast, the 'shock effect' probably lessened as more tenders closed in the second quarter. However, I must emphasise that rising land cost is a very major issue for the development business,' says Redas CEO Steven Choo.

Source: Business Times, 29 Jul 2010

Greek villas marked down 45% as crisis devalues island homes

(MADRID) Greek island homes, long coveted by millionaires and Hollywood stars such as Tom Hanks, are being marked down by as much as 45 per cent as the country's debt crisis destroys demand for holiday getaways.

A half-built villa on Mykonos, an island in the Aegean Sea known for its all-night beach parties, is being offered by brokers at Athens-based Ploumis Sotiropoulos OE for 2 million euros (S$3.5 million) after the price was reduced by 500,000 euros. The same firm is seeking a buyer for a three-bedroom home on Corfu for 750,000 euros, down from an original asking price of 1.4 million euros. So far, no bidders have emerged.

'It's a scary place to invest right now,' said Mike Braunholtz, a broker at Prestige Property Group, which markets properties on the Greek islands. 'Things aren't going to improve until the economic picture becomes clearer.'

Greece is counting on a 110 billion euro bailout from the European Union and the International Monetary Fund (IMF) to avert a default and end the nation's first recession since 1993. Prime Minister George Papandreou, having raised taxes and cut civil service wages, is imposing luxury property taxes to convince voters that the wealthy also are helping foot the bill.

Mr Papandreou's austerity package calls for an extra levy on properties valued at more than 5 million euros. Owners of homes worth more than 400,000 euros also will pay higher taxes.

The programme puts pressure on homeowners and debt-laden developers to lower prices, said Ioannis Kaligiannakis, an Athens-based property analyst at Colliers International Hellas.

Greece, which borders Albania, the Republic of Macedonia, Bulgaria and Turkey, has more than 1,000 islands and the 10th- longest coastline in the world. The country attracts about 15 million visitors a year, according to data compiled by the Hellenic Statistical Authority.

Property declines have been smaller in Spain, Portugal and Italy. Prices for luxury homes have dropped 8-10 per cent in Spain from the peak in 2008, according to, the country's largest real estate website.

The market is holding steady in Portugal, where 832 kilometres of coastline and the archipelagos of Madeira and Azores attract about 13 million tourists each year, said Liselore Ligtermoet, a Lisbon-based marketing manager at International Realty Group. 'We're not seeing bargain hunters here,' he said.

Discounts also have been hard to find in Italy since the country emerged from recession in the third quarter of 2009, said Angelo Savioli, a director at Sotheby's International Realty in Rome. 'Prices are actually rising in areas such as Rome, Venice, Milan and Florence,' he said.

Greece plans to increase the so-called objective value it places on real estate for tax purposes next year. The system depends on an assessment of a property's value based on the area and amenities, rather than on the actual market value, which is usually higher.

State revenue will increase next year with the new programme, Finance Minister George Papaconstantinou said on July 5.

'The tax overhaul is certainly a concern for property investors in Greece,' said Liam Bailey, head of residential research at Knight Frank LLC in London. 'These measures specifically target the rich, higher-end buyer.'

Prestige is marketing a three-storey, eight-bedroom villa with a swimming pool on Mykonos for 4.1 million euros, down from 5.5 million euros. More than a third of the island's 11,000 residents are foreigners, according to its official website.

Tom Hanks, Oscar-winning star of Forrest Gump, and his wife Rita Wilson, an actress whose father was born in Greece, have a property on Antiparos, according to a spokeswoman for the island's Community Council.

House prices on the mainland also are falling. Ploumis Sotiropoulos is helping sell a 450 square metre villa in Ekali, a wealthy suburb of Athens where former premier Andreas Papandreou lived until his death in 1996, for 2 million euros. The asking price has dropped 48 per cent.

'It's tough this year,' said Giannis Ploumis, CEO of Ploumis Sotiropoulos. 'More properties are on the market and fewer buyers are willing to invest.'

The economy will contract by about 4 per cent this year and by 2.6 per cent in 2011, according to estimates from the Greek Finance Ministry.

Greece is losing its cache with potential buyers 'simply looking at other places', said Mr Bailey of Knight Frank.

France is gaining in popularity as it offers plenty of bargains and the country's economic prospects make the market more attractive than Greece, Mr Braunholtz said. -- Bloomberg

Source: Business Times, 29 Jul 2010

Dubai office rents drop 17% in Q2

(DUBAI) Office rents in Dubai dropped by as much as 17 per cent in the second quarter as new supply put pressure on landlords, CB Richard Ellis Group Inc (CBRE) said.

About 240,000 square metres of commercial space became available in areas such as Al Barsha, Tecom C and Jumeirah Lakes Towers, Matthew Green, head of United Arab Emirates research at CBRE, said in a report yesterday.

Rates at the Dubai International Financial Centre (DIFC), a tax-free hub that's home to hundreds of companies, dropped by 7.5 per cent to 3,982 dirhams (S$1,481) a square metre when offered by DIFC authority and 2,690 dirhams to 3,014 dirhams when offered by private developers, according to CBRE.

Companies in Dubai have shed thousands of jobs since the onset of the global credit crisis, increasing office vacancy rates.

Available commercial space is set to increase by almost 80 per cent by the end of 2011, Colliers CRE plc said in May.

Dubai's economy shrank 2.5 per cent last year, according to preliminary government estimates.

Power delays are pushing back the completion of construction in the Business Bay development, reducing the amount of office space coming onto the market in the second half, according to CBRE.

Office supply is increasing by about 5 per cent per quarter in Dubai, mainly in areas including Port Saeed, Al Mamzar, Airport Road and Diyafa Street, according to CBRE.

The value of leases has dropped by 60 per cent since the mid-2008 peak, while prices slumped by 57 per cent and occupancy dropped to about 71 per cent from 90 per cent, according to property researcher Colliers International.

The total space available will rise to about 6.4 million square metres from about 3.6 million square metres at the end of 2009. -- Bloomberg

Source: Business Times, 29 Jul 2010

CBRE, Jones Lang LaSalle rebound in Q2

Pick-up in building sales, leasing boost commercial services firms' earnings

(NEW YORK) Two of the world's largest commercial real estate services firms reported sharply improved earnings on Tuesday, fuelled chiefly by a pick-up in building sales and leasing, particularly in the United States.

US commercial real estate has been struggling since it began to weaken in late 2007, with activity falling precipitously last year. That hurt commercial real estate firms such as Jones Lang LaSalle Inc and CB Richard Ellis Group (CBRE), which rely heavily on sales and leasing commissions.

However, during the second quarter, sales of investment-grade US commercial real estate rose 32 per cent over the first quarter to US$20.6 billion, according to preliminary data by real estate research firm Real Capital Analytics, which measures sales greater than US$5 million.

'In the US, we saw a very strong pick-up in property sales and leasing, reflecting recovering market conditions,' Brett White, CB Richard Ellis chief executive, said in a statement.

His company posted a second-quarter profit of US$54.8 million, or 17 cents a share, compared with a loss of US$6.6 million, or two cents per share, a year ago.

Excluding one-time charges related to acquisitions, severance, space consolidations and impairments, the Los Angeles- based company earned US$58.8 million, or 18 cents a share, exceeding analysts' average expectation of nine cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 23 per cent to US$1.2 billion in the second quarter. Revenue from the Americas region, which includes the United States, Canada and Latin America, rose 20 per cent to US$722.3 million. Jones Lang LaSalle reported a second-quarter profit of US$32 million, or 72 cents per share compared with a net loss of US$14 million, or 40 cents per share in the second quarter 2009.

Excluding restructuring and other charges, the company's income was US$37 million, or 83 cents per share, versus analysts' average forecast of 58 cents per share, according to according to Thomson Reuters I/B/E/S, and US$11 million, or 30 cents per share, a year earlier.

Chicago-based Jones Lang LaSalle said its revenue rose 18 per cent to US$680.3 million. In the Americas, second-quarter revenue rose 18 per cent to US$296 million.

'Business prospects for the year remain good, and we are moving forward with confidence while watching market and economic dynamics,' Colin Dyer, Jones Lang LaSalle chief executive, said in a statement. - Reuters

Source: Business Times, 29 Jul 2010