BT: Luxury home prices defy market lethargy

Business Times - 04 Jan 2011

Luxury home prices defy market lethargy

Overall price growth for private homes, HDB resale flats slowed in Q4 but high-end hit new high

By UMA SHANKARI

(SINGAPORE) A surge of interest in high-end and luxury homes pushed prices in the segment, which has underperformed the rest of the market over the last two years, to a fresh all-time high in Q4 2010.

But in the rest of the market, prices of private homes as well as HDB resale flats grew more slowly in the fourth quarter compared to the first three quarters of last year.

Flash estimates released by the Urban Redevelopment Authority (URA) yesterday show that overall private housing prices edged up 2.7 per cent in Q4 to a fresh record high.

Private home prices in Singapore first surpassed the former all-time peak achieved in 1996 in Q2 2010, and then continued to inch upwards in Q3 and Q4. For the whole of 2010, prices climbed 17.6 per cent.

But the gain in fourth-quarter prices was the smallest in six quarters, URA's data shows.

The high-end market was a notable exception. Non-landed home prices in the Core Central Region (CCR) micro-market, which includes the prime districts Marina Bay and Sentosa Cove, rose 2.3 per cent in Q4, faster than the 1.6 per cent growth seen in Q3.

This pushed luxury home prices to a new all-time high, outstripping the previous peak in Q1 2008.

By contrast, the price index for Rest of Central Region (RCR) rose by 1.7 per cent in Q4, down from 2.3 per cent in Q3. And in the Outside Central Region or OCR (where suburban condos are located), prices climbed 1.6 per cent in Q4 after increasing 2.2 per cent in Q3.

Analysts attributed the slowdown in price growth in the RCR and OCR areas to resistance from buyers for increasingly expensive projects.

Price growth in the CCR region, by contrast, rose on the back of the prevailing strong economy and low interest rates, which once again enticed foreign investors to pick up luxury homes in Singapore.

'In 2010, much of the activity was focused on the mass and mid-market segments,' said Joseph Tan, CBRE's executive director for residential. 'Foreigners stayed away, thinking that the lack of transaction activity in the high-end segment would lead to a fall in prices and allow them to buy the properties for less.'

But since most high-end home owners proved to have 'holding power', the anticipated fall in luxury home prices did not occur and foreign buyers are slowly returning to the luxury market, Mr Tan said.

The number of foreign home buyers rose by 14 per cent in 2010 compared to 2009, said Knight Frank's head of consultancy & research Png Poh Soon.

'The tightened regulations in Hong Kong and aggressive anti-speculation rules in China caused some investors to shy away from those markets and directed them to Singapore,' Mr Png said. 'High net worth foreign buyers would definitely consider the Singapore property market to park their money.'

Analysts also noted that while the latest round of cooling measures introduced by the government on Aug 30 have not dampened transaction volumes, they appear to have at least moderated price growth. A record 15,500-16,500 new private homes are estimated to have been sold in 2010, despite demand-side and supply-side measures introduced periodically throughout the year.

CBRE's Mr Tan said that transaction volumes were still high in 2010 as many potential buyers are still out looking for units.

But the price growth has slowed as these buyers - especially those house-hunting in the mass-market segment - are sticking to a budget.

Over at the HDB market, prices of resale flats rose 2.4 per cent in Q4 2010 - a slower rate of growth than the 4 per cent increase in Q3 2010 - according to flash estimates from the Housing & Development Board.

But while the resale price index was pushed to yet another all-time record, the transaction volume fell.

The resale volume declined by about 21 per cent in Q4, HDB said. And the median cash-over-valuation (COV) amount is also estimated to have fallen by $7,000 or 23 per cent, from $30,000 in Q3 2010 to $23,000 in Q4 2010.

In fact, COV levels declined progressively over the last three months of 2010, according to data from PropNex.

The firm's chief executive, Mohamed Ismail, said that according to monthly transactions handled by his company in Q4 2010, the median COV fell from $26,000 in October to $23,000 in November and to $20,000 in December.

But overall resale prices are still climbing in spite of falling COV levels due to a time lag, he explained

'Valuations for resale flats that were transacted in Q4 2010 were based on prevailing caveats for flats in the vicinity,' Mr Ismail said.

'There is therefore a certain lag time of about two months and hence the (HDB) prices overall are still climbing.'

Looking ahead, growth in private home prices may slow to anywhere between 3 per cent and 10 per cent in 2011, analysts predicted.

But most are more bullish on luxury home prices, which some said could climb by up to 15 per cent this year.

In the mass-market segment, the ample supply of new homes coming onstream from the beefed-up 2010 Government Land Sales programme should help to keep price growth to less than 5 per cent, analysts said.

And in the HDB resale market, prices are expected to grow by 5-10 per cent in 2011. The overall median COV level should also fall to about $18,000 to $20,000 in Q1 2011, said Mr Ismail.

BT: Wilmar in joint bid for more China sites

Business Times - 30 Dec 2010

Wilmar in joint bid for more China sites

Wilmar, together with Kerry Properties and Shangri-La Asia, could invest up to 7.5b yuan in the project

By FELDA CHAY

FRESH from the successful bid for three plots of land in China's Liaoning province, Wilmar International, together with Kerry Properties and Shangri-La Asia have struck again.

This time, the trio are planning to enter a joint bid for six sites in the province that could see a total investment of 7.5 billion yuan (S$1.4 billion), with Wilmar to pump in up to 2.63 billion yuan.

This is based on Wilmar's shareholding in the joint venture (JV) firm that will be set up to see the project through, if the trio's bid is successful.

According to Wilmar's announcement after the market closed yesterday, it will hold a 35 per cent stake in the JV, while Kerry will take up 40 per cent. Shangri-La will have the remaining 25 per cent.

Wilmar said that it will fund the project using internal sources of funds and bank borrowings. It does not expect the investment to have a material impact on its financial position.

The three have paid an aggregate deposit of 271.6 million yuan to the Chinese authorities to qualify for the public bid, which will be held next Wednesday.

Wilmar has contributed 95.1 million yuan to pay for this deposit, while its partners Shangri-La and Kerry have forked out 67.9 million yuan and 108.6 million yuan, respectively.

Kerry and Shangri-La Asia are both linked to Malaysian billionaire Robert Kuok, while Wilmar is controlled by Mr Kuok's nephew.

Located in Yingkou city, the six pieces of land are designated for residential and commercial purposes - which will be granted land use rights of 70 and 40 years, respectively. They have a total gross site area of 6.1 million sq ft.

The joint bid comes after the trio bought three pieces of land in Liaoning province earlier this month for 240 million yuan, with the aim to pump in up to 2.57 billion yuan into the entire project.

Wilmar will own 35 per cent of this project, while Kerry and Shangri- La will respectively take up 40 per cent and 25 per cent.

The news sparked a sell-off in Wilmar's shares, as investors questioned the commodity firm's decision to diversify into property.

DMG said in a research report then: 'We fear this could mark the start of Wilmar's loss of business focus and corporate discipline, and do not think the venture will be well received by the market.'

Wilmar, however, appears unfazed by these worries. The firm said in its statement yesterday that it is 'in the process of searching for other suitable sites in China and may jointly bid for such sites in the future' with Kerry and Shangri-La.

In November, Wilmar said that its third quarter net profit plunged 60.3 per cent year-on-year due to the weaker performance of its oilseeds and grains division, and the absence of a big one-time gain.

Net profit for the period ended Sept 30 was US$259.5 million. In the corresponding period last year, Wilmar registered US$652.9 million in earnings, partly buoyed by a net exceptional gain of US$167 million from the sale of new shares by its Wilmar China unit.

Yesterday, its shares closed 1.1 per cent higher, or six cents, at $5.69.

DJ Market news: Wilmar

DJ MARKET TALK:Wilmar Down 0.5%;S/T Performance May Be Capped-UOB
12/30/2010 9:25:00 AM

0125 GMT [Dow Jones] Wilmar (F34.SG) is down 0.5% at S$5.66 after the company announced it's forming a 35:40:25 JV with the China units of Kerry Properties (0683.HK) and Shangri-La Asia (0069.HK) to bid for six sites in Liaoning province again, with a potential total investment of CNY7.5 billion (US$1.1 billion); Wilmar will inject CNY2.63 billion (US$394 million). The sites are designated for residential and commercial purposes with a total gross area of 6.1 million sq ft. UOB KayHian, which has a Buy recommendation and a S$7.10 target on the stock, says its 5.1% fall the day after its first property investment announcement (Dec. 21) "is a clear indication that investors do not like Wilmar's diversification into non-commodity business...(it) could be seen as the start of Wilmar's loss of business focus." The house adds that its short-term performance could be capped by the negative reaction over new property investments and the regulatory risks in China, but it awaits a meeting with the management Jan. 7 for more clarity. Tuesday's low at S$5.56 may support near-term. (matthew.allen@dowjones.com)

DJ: Wilmar

DJ MARKET TALK: Wilmar Off 0.9%; Property Concerns Seem Priced In
12/30/2010 10:54:00 AM

0254 GMT [Dow Jones] Selling in Wilmar (F34.SG) could be tapering off judging from its modest decline following its latest move to venture more deeply into property development. The stock is off 0.9% at S$5.64 in light volume, after losing 3.9% since December 21, when it first unveiled its entry into China's property market with Kerry Properties (0683.HK) and Shangri-la Asia (0069.HK), and down 17.3% from the November S$6.88 peak. Support is at this month's S$5.56 low. Any sustained recovery will, however, depend on whether 4Q10 margins recover from their 3Q10 weakness; results will be known around February. Wilmar's latest move with both partners involves bidding for six sites for residential and commercial use in Liaoning's Yingkou City, where they already have 3 land parcels. "Operational and execution risks from the property ventures are likely to be minimal due to the strength of Wilmar's joint venture partners," says AmResearch; has a Buy call with a S$7.60 target. (frankie.ho@dowjones.com)

怡發證券：薦吸四環醫藥 (460)

24/12/2010 09:20
《勝算在握》怡發證券：薦四環（４６０）及華潤水泥（１３１３）

　　
　　　　　　　　　　　　怡發證券：薦吸四環醫藥及華潤水泥

　　四環醫藥（００４６０）：集團主要業務在國內從事藥物研究發展、生產及銷售，以心腦血
管藥物為主。為中國領先的製藥公司，更是全國最大心腦血管藥物的供應商。集團供應超過４４
種藥物，是以「克林澳」、「安捷利」、「川青」、「曲奧」及「澳苷」等品牌銷售。專用於治
療抗感染、新陳代謝、癌症、心腦血管及中樞神經系統等。集團研發隊伍實力雄厚、重點發展創
新藥及首仿非專利藥。已成功開發１３種產品，並擁有全國分銷權。於國內正式擁有超過９９項
專利，另有超過２３３項正在申請中，而在國外則有４項。大部分已列入國家及省級醫療保健藥
品目錄和國家基本藥物目錄。集團擁有「克林澳」ＡＰＩ生產廠、鍋爐房、擴建設施及口服固體
藥包裝廠，共有６條生產線，總面積近４０００平方米。所有生產設施均獲國家藥監局之ＧＭＰ
認可證。分銷網絡遍布全國超過３１個省市及自治區，近萬間醫院和藥房。

　　截至２０１０年６月３０日止之６個月業績為營業額４﹒７３億元人民幣，上升近４７％，
而稅後盈利則上升超過１﹒１倍至２﹒５５億元人民幣。可於現價５﹒６元附近買入，中長線可
見７﹒４元，跌穿５元止蝕。（建議時股價：＄５﹒５９）

14/12/2010 10:44

《外資精點》摩通予四環醫藥（４６０）增持評級，目標價７﹒４元

　　《經濟通通訊社１４日專訊》摩根大通發表報告指，四環醫藥（００４６０）是向內地主要
醫院提供心腦血管藥物的行業領導者，首予「增持」評級，目標價７﹒４元，該股今早開市報　
５﹒８５元。
　　報告認為，內地對心腦血管藥物需求正在增加，０９年醫院購買該等藥物的金額總值３２０
億人民幣，此外，料四環醫藥其他核心藥物的增速至少能保持行業２４％水平，加上該集團正拓
展防感染、癲癇症及呼吸道藥物，相信可繼續推動增長。
　　目前四環２０１１財年預測市盈率為３２倍，較同業的２４倍市盈率高３４％。摩通認為，
憑藉行業領導地位，四環醫藥值得有較高估值，料其研發新產品能力可持續帶動增長。（ｍｈ）

08/12/2010 11:59

《外資精點》大摩：首予四環藥業「增持」評級，目標價７﹒１元

　　《經濟通通訊社８日專訊》摩根士丹利發表報告指，作為四環藥業（００４６０）保薦人首
予「增持」投資評級，目標價７﹒１元，四環較其他海外藥業股有溢價，主要是由於集團在心腦
血管市場加快增長，並有領導地位，同時營業額及純利增長較市場預期為高，銷售網絡亦理想，
研發開支有改善。
　　大摩指，該行預測與市場分別在於市場普遍認為Ｋｅｌｉｎａｏ腦產品增長空間有限，因銷
售基礎較高，但大摩相信，四環於內地藥業市場有強勁增長，已對有關產品銷售預測較為保守，
表現可能較預期佳，不過，市場認為四環過於依賴Ｋｅｌｉｎａｏ產品，相信公司可以保持數個
產品的獨家銷售權，而國家落實藥業改革對該股有利。（ｃｙ）

BT: 11,849 homes left unsold in launched private projects

Business Times - 16 Dec 2010

11,849 homes left unsold in launched private projects

Twenty eight projects have more than 100 unsold units each

By UMA SHANKARI

DEVELOPERS are sitting on close to 12,000 unsold units in private residential projects that have already been launched.

Data compiled by The Business Times using information from the Urban Redevelopment Authority (URA) shows that as at end-November this year, developers had a stockpile of 11,849 units in projects that they have already started marketing - that is, projects in which at least one unit has been sold.

While some developments have just a handful of units left unsold, a total of 138 launched projects scattered across the island have 10 or more unsold units left. And of these, 28 projects have more than 100 unsold units each.

The more recently-launched projects include Kheng Leong's The Minton; Frasers Centrepoint's Flamingo Valley; and City Developments' Residences At W Singapore Sentosa Cove - all of which were put on the market in the first half of this year when sentiment was buoyant.

But six projects with more than 100 unsold units each have been on the market for at least three years. These include prime developments such as Keppel Land's Reflections at Keppel Bay; SC Global Developments' Hilltops; Allgreen Properties' The Cascadia; and Wheelock Properties' Scotts Square.

The 11,849 units are held by the entire range of both big and small developers and include landed projects, though the majority are condominium developments.

Market observers say the stockpile could have been accumulated as developers typically roll out units in large developments in phases.

Those with strong holding power may also hold back some units in their projects as part of a larger marketing strategy. Keppel Land, for instance, did this with its Caribbean At Keppel Bay condominium.

But the ample supply of ready-to-buy homes should show prospective homebuyers that there is no need to rush to pick up units in new launches, said another industry veteran.

Homebuyers snapped up 1,909 new private homes in November even as developers launched a strong supply of 2,329 new homes for sale. The strong demand from buyers took the total sales volume for 2010 to a record 15,025 units - even higher than the then-record 14,811 homes sold in 2007 during the last property boom.

'The fact that we have recovered so quickly from the financial crisis has given a lot of false confidence to many people with money,' the industry veteran said. 'They think that it is the right time to jump into property.'

In October, URA said that at the end of Q3 2010, there was a total supply of 64,358 uncompleted units of private housing from projects in the pipeline. Of these, 33,771 units were still unsold. The numbers include both launched and unlaunched projects.

But data compiled using URA's monthly update on the number of units launched, sold and unsold in residential projects in Singapore, released yesterday, showed that as at end-November, there were 11,849 units left unsold in launched projects.

BT: Developers hold back on luxury projects in Q4

Business Times - 17 Dec 2010

Developers hold back on luxury projects in Q4

This despite higher buying interest for high-end homes in October, November

By UMA SHANKARI

DEVELOPERS continued to hold back on launching new luxury projects in the fourth quarter even as buyer interest in such projects grew slightly in October and November.

No new luxury projects were launched in the fourth quarter, noted CB Richard Ellis (CBRE) in a report yesterday.

This was even though there was increased buying interest for high-end homes - that is, units that sell for more than $2,000 per square foot (psf) - in both October and November.

Around 230 units were sold in this segment in October and another 160 units last month. By comparison, the number of new homes that cost more than $2,000 psf did not cross the 100-mark from June to September 2010.

And for units priced at above $3,000 psf, the number sold doubled to 12 units last month compared to October. Analysts also noted that older launches such as Paterson Suites, The Trizon and The Laurels also saw renewed buying interest in November.

But despite this, most of the launch activity was centred in the mass market segment as developers capitalised on the strong demand from upgraders for cheaper private homes.

'Contrary to expectations that developers would look to unload previously accumulated land for high-end properties to ride on the building up of buying momentum for such properties, developers have only launched 9 per cent more of high-end homes in November,' noted Colliers International's director of research and advisory Tay Huey Ying. 'Instead, developers have surprised many by launching primarily mass-market homes in November.'

The 1,638 units of new mass-market homes released by developers last month was more than triple the 513 units launched in October and accounted for 70 per cent of all new homes released in November.

Buyers responded well, picking up 1,229 mass market units last month - 64 per cent of the 1,909 private homes sold in the month. The strong demand took total sales volume for this year to 15,025 units - even higher than the record 14,811 new private homes sold in 2007.

'Projects located close to MRT stations remain popular among homebuyers,' said Joseph Tan, CBRE's executive director for residential. 'Besides location, other selling points include government plans for future development and new transport network, amenities, tenure and product attributes.'

The trend was true for the first 11 months of the year as well. Data compiled by CBRE shows that out of the 10 best-selling projects, eight were in the outside central region (OCR), which is a proxy for mass market locations.

The three projects that drew the most buyer interest were: UOL Group's 616-unit Waterbank at Dakota (all but one unit sold as of end-November); MCL Land's 608-unit The Estuary (fully sold); and Kheng Leong's The Minton (482 units out of 1,145 sold).

The lack of activity in the high-end segment has also kept prices of such homes dampened despite gains in other categories.

The official URA private residential price index, which already went up 14.4 per cent in the first three quarters of this year, is expected to register another marginal climb in the final quarter, translating to a total rise of 15 per cent to 16 per cent for the whole year.

But most of the growth has been led by mass market homes, analysts noted.

'Overall, prices for prime, mid-tier and mass-market homes have more or less caught up with the peak levels in end-2007. However, prices of new luxury properties were still lagging behind by around 15 per cent,' said Mr Tan.

Equity analysts are getting increasingly wary of residential stocks with large exposures to the mass market segment on concerns that the government could announce more policy measures to cool the market.

'With sales activity largely centred on mass market condos, we believe this will lead to more demand-side and supply-side tightening measures ahead,' said DMG & Partners Research analyst Brandon Lee. 'As such, we are maintaining our preference towards high-end developers, which are less susceptible to policy concerns.'

He reiterated his 'buy' calls on Wing Tai Holdings and SC Global Developments.

DBS Group Research, on the other hand, said in a fresh report that it prefers companies with greater office exposure and laggards such as Keppel Land, UOL Group and Singapore Land, which have the largest office content in their revised net asset values.