SC Global Q1 earnings jump 75% to S$19.2m, outlook cautious

SC Global Q1 earnings jump 75% to S$19.2m, outlook cautious


SINGAPORE : Property developer SC Global saw its net profit jump 75 percent in the first quarter to S$19.2 million, despite revenue falling 20 percent to S$43 million.


But the outlook going forward appears cautious. Like many other developers releasing results in recent days, SC Global said market sentiment has been dampened by the sub-prime fallout in the US. It said medium to long-term fundamentals in the Singapore market continue to remain sound, which is expected to help underpin the property sector.


Barring unforeseen circumstances, SC Global expects to remain profitable in the next quarter ending June 30. – CNA /ls


Source: Channel News Asia

Former MHA Complex at Tanglin Road put up for tender

Former MHA Complex at Tanglin Road put up for tender


SINGAPORE: The former Ministry of Home Affairs (MHA) Complex at Tanglin Road, which is also known as Phoenix Park, has been placed for tender.


According to the Singapore Land Authority (SLA), the prime site on the fringe of the Orchard Road belt will be open for adaptive re-use as office space.


Analysts said they are expecting to see strong interest due to the current office space crunch.


Winston Cheah, Senior Management, Project Services, SLA, said: “At the moment, there is an office space crunch. We are contributing by providing more office space. We hope the successful bidder can make this into an office icon.”


Phoenix Park has a land area of just under 57,000 sqm and a gross floor area of about 13,000 sqm. The tenancy is for an initial three years and renewable on terms up to 2017.


And what makes the site stand out is its 31 individual blocks.


Danny Wong, Marketing Manager, Hean Nerng Holdings, said: “The potential is very good here. There are a lot of blocks. Companies are better off leasing one block to themselves, (compared to leasing) a commercial development where they have to share different floors. Over here, they can have their own space and their own entrance. This is good for companies who want a strong corporate image.”


And the sprawling landscape means more car park space will be available, compared to the financial district.


Its current indicative rent of S$165,000 a month is also seen as tempting, despite the retrofitting work required.


Donald Han, Managing Director, Cushman & Wakefield (Singapore), said: “The current price as a guide price translates into about S$1.15 psf. If you’re looking at refurbishing this entire portfolio at a cost of about S$50 – S$70 psf, it (will) breakeven at about S$2.50 to S$3 psf. In this area, you can look at leasing anything from about S$4 to S$5.50.”


Cushman & Wakefield said bidders may pay up to S$4 psf.


“If you look at other transitional sites at Scotts Road near the MRT, the breakeven point is about S$5 psf. We lease that at about S$7 to S$8 psf. So where Phoenix Park is, with no easy access to MRT, we’re at S$5, not beyond S$6,” said Mr Han.


Likely tenants include those who may not require a city centre location, but would like to remain accessible to the financial district such as advertising agencies.


The tender closes on June 4.


Since February last year, SLA had tendered out 20 former schools, vacant community centres, childcare centre and institutional buildings for office use only.


Source: Channel News Asia

SC Global Q1 net profit up 75%

SC Global Q1 net profit up 75%


SC Global Developments Ltd said net profit for the three months to end March 2008 rose 75 per cent to $19.21 million.


Revenue however slopped 20 per cent to $43.14 million.


During the quarter, the group began revenue recognition of its development project at The Marq on Paterson Hill based on progress of construction.


Group revenue also included contributions from the group’s development projects at The Lincoln Modern and Kairong International Gardens in Shenyang.


The Group had a low level of remaining inventory of completed properties for sale as compared to last year where revenue was attributable to sales of completed properties.


Contribution from the group’s associate company in Australia, AVJennings Limited decreased slightly to $1.7 mil from $2.3 mil in the same period last year.


The group maintained a healthy cash and cash equivalent position of $67.9 million as at March 31, 2008.


Baring any unforeseen circumstances, the


SC expects to remain profitable in the next quarter ending 30 June 2008. — BT newsroom


Source: Business Times

Wee Hur wins $5.7 million building contract

Wee Hur wins $5.7 million building contract


Wee Hur Holdings Ltd said its wholly-owned subsidiary, Wee Hur Construction Pte Ltd, has been awarded a $5.7 million contract for the proposed erection of 2-storey detached dwelling house with a swimming pool, located at Cove Drive, Sentosa.


The contract work is expected to be completed by December 31, 2008. — BT newsroom


Source: Business Times

CapitaLand says 2 China malls closed after quake

CapitaLand says 2 China malls closed after quake


SINGAPORE – CapitaLand Limited on Tuesday clarified that its properties in China are not affected by the earthquake in Sichuan.



However, two of its retail malls in Sichuan — Chengdu Jinniu Mall and Mianyang Fucheng Mall which are held by the CapitaRetail China Development Fund of which CapitaLand Limited has an indirect interest of 45 per cent — are closed to allow time for their tenants to resume business.


As a safety precaution, structural engineers will also be engaged to inspect the two malls prior to the resumption of operations.


CapitaLand also said all its employees in China are safe. — BT Newsroom


Source: Business Times

CDL likely to post 43 percent rise in net profit : Analysts

CDL likely to post 43 percent rise in net profit : Analysts 


Property developer City Developments is likely to report a first quarter net profit increase of 43 percent on-year to 180 million dollars.


That’s according to an average forecast from four analysts polled by Dow Jones.


The analysts said the company’s profit will get a boost from the recognition of sales of luxury properties over the last two years and good contributions from its hotel and rental businesses.


Poor sales in the first quarter, however, could hurt results.


Nonetheless, the analysts say CDL could play a role in bringing back sector confidence following the cooldown that started in the fourth quarter.


CDL’s upcoming launches in the mass and mid-range residential segment could reinvigorate sentiment toward the sector and lead it out of its present state.


The developer is expected to release its Q1 results tomorrow


Source: 938Live

Old army barracks now a hip hangout for students

Old army barracks now a hip hangout for students


A FORMER home of British and Malayan soldiers has been converted into a hip hangout for students of the Singapore Polytechnic’s Dover Road campus.


Called Moberly, the old barracks, refurbished at a cost of over $1 million, is the last colonial building on the campus.


The building’s original facade is the only thing that has been retained; its interior space has been revamped and reconfigured to accommodate a LAN gaming room, music studios and a study area.


A former British soldier in town for the official launch of the student hub last week said: ‘I’m sure the old soldiers would love it! I’m glad they didn’t knock it down.’


Fond memories came flooding back for the now 70-year-old Barry Hardy as he toured the place, which was his home for six months in 1963, eight years before the British armed forces pulled out of Singapore.


It was not a hard posting. Even back then, the facility was modern and comfortable, compared to tents. It had ceiling fans and mosquito nets were not needed.


Mr Hardy recalled: ‘We had a boot boy to clean our boots, polish the brass and make the beds, a man to do our laundry and an old, very shy Chinese lady to do our mending.’


Singapore Polytechnic began occupying the 33ha Princess Mary Barracks in 1971, when its Shenton Way campus could no longer hold its growing student intake.


The polytechnic demolished most of the colonial buildings there, save for Moberly, which housed the Civil Engineering and Building Department and the School of Nautical Studies.


In the late 1990s, it was renovated and used for co-curricular activities and student camps.


The idea to convert it into a student hub was thus a natural progression from that, said Mr Liew Beng Keong, director of the department of student and alumni affairs at the polytechnic.


To connect current users of the place to history, a museum has been set up in Moberly to display memorabilia like old trophies, teaching aids and historical documents donated by alumni and former staff members. Military insignia donated by former soldiers also take pride of place.


Moberly is fast becoming a hangout for the students.


Nick Koh, 19 and in his third year in the School of Electrical and Electronic Engineering, plays pool there thrice a week.


He said: ‘When we are stressed or tired, we come by here to chill out with friends.’


Source: Straits Times

What kind of paperwork deserves that much money for property agents?

What kind of paperwork deserves that much money for property agents? 


I WRITE to join Mr Patrick Sio’s discussion on the contentious issue of the 1 per cent property sales commission. Let me state that I am all for real estate agents who deserve their due. If a buyer has commissioned an agent to represent them as they have no time to look for a HDB flat and are in need of the agent, by all means, the agent has earned it. An independent buyer’s position, however, is completely different.

If HDB holds educational seminars for buyers to help them with the resale purchasing process, that clearly shows and means that buyers are empowered to act on their own and have a right to represent themselves, in which case, why should the sellers’ agents be paid a commission by independent buyers in order to make up for what agents say is a loss in profit as they are not selling a multi-million dollar private property? As reported on May 8, ‘Fee dispute: PropNex drops lawsuit against couple’, agents say the 1 per cent commission is practised by them due to the ‘lower prices of HDB flats, which translates into a lower commission’.


Saying that independent buyers should pay the 1 per cent commission in order to make up for the lower commission they make on HDB flats is like saying we should all pay a $2,000 airfare regardless or whether we are travelling to Los Angeles or Bali so that the airline company can make up for the ‘loss’ in profit. What’s the rationale behind that? It is utterly ridiculous and a blatant perversion of financial integrity.


The fact that agents say the 1 per cent commission is due them in order to boost their earnings on a lower-priced sale already betrays their position. In which case, how can the same agent represent both seller and the independent buyer?


Then there are reports of agents who refuse to sell it to independent buyers without the commission. These agents are practically extorting money from buyers who end up being blackmailed into signing the commission agreement. What recourse do independent buyers have when they are coerced in this manner? None.


The difference between the definition of a commission or service fee and that of an admin fee is huge. They cannot be the same. Does the service of a form filler command a fee of thousands? How much paperwork is there really? Please.


If, for example, having to fill in names and details, say five times over, in a 25-page document equals to a lot of paperwork and I get thousands for that, I think we need to seriously consider making an executive profession out of this prestigious task that seems so difficult it’s beyond the mental capacity of any independent HDB flat buyer. We must be a nation of HDB dwellers who do not know how to write even our own names.


And what services do they render that justify them a commission that equals twice, thrice, four times that of what an average Singaporean may earn in a month? I found this comment on a blog: ‘If a lawyer gets $3k for helping a client buy or sell a $3mil house, why should the agent earn $30k for helping the client buy or sell the same house?’


Even conveyancing lawyers do not represent both the seller and buyer. And these agents are not even required to have relevant qualifications. If they were to be paid by the hour, independent buyers would be paying them by the thousands. That’s a $1,000-$5,000/hr job. Even Donald Trump has to do a lot more than ‘paperwork’ to earn that kind of a salary. Never mind that agents submit part of the ‘paperwork’ online these days in less than 15 minutes.


I cannot understand this – why haven’t there been laws instituted to regulate this 1 per cent commission issue despite it being raised for a few years already? Are we waiting incredulously for the real estate agent associations whose own interests are at stake to address this issue? What can be done to create a movement to begin this?


I hope to see an article with a comparison between other nations and Singapore in this area. It is an issue that is in dire need of regulation. The silence and inaction of those in leadership positions who have been empowered to create the much-needed legislation in this area is very disappointing.


Huang Qiao Ying (Ms)


Source: Straits Times

To pay or not to pay

To pay or not to pay


ONE week after The Straits Times reported that housing agency PropNex was suing two independent home buyers for not paying its agent a fee, the firm withdrew its case.


The agent, Mr Ricky Low Yong Sern, had been hired by the seller of a $400,000 terrace house in Whampoa which marketing specialist Loh Yi Min and his wife, polytechnic lecturer Ariel Wee, bought last year. The couple had acted on their own without hiring an agent. They refused to sign the commission agreement to pay Mr Loh a fee equivalent to 1 per cent of the price of the property, which was classified as an HDB flat. Mr Low claimed he was entitled to the commission or a fee commensurate with the services that he said he had provided.


PropNex dropped its landmark suit as part of a confidential deal both sides reached through mediation last Tuesday. Given that the sum at stake – about $4,000 or less – would have been dwarfed by the roughly $10,000-per-day cost of a trial, it was surprising the case went as far as it did.


But the case is not unique in the HDB resale market, where a growing proportion of buyers and sellers is transacting without agents. Last year, 3.6 per cent – or 1,060 people – submitted their applications through the HDB’s e-Resale system, which caters to buyers and sellers without agents. This figure has been creeping up – it was 2 per cent in 2003 and 3 per cent in 2005.


Growing awareness of consumer rights has given momentum to the debate over whether independent buyers need to pay a fee to sellers’ agents. Adding to the controversy are rogue agents who mislead buyers into signing commission forms at the last minute by claiming it is a ‘rule’.


Although the law does not stipulate who should pay the fee and how much is payable, it is common for sellers to pay their agents a sum equivalent to 2 per cent of the property’s price, while buyers foot 1 per cent. If both sellers and buyers are represented by agents in an HDB flat transaction, both parties pay the fee to their own agents. This practice is known as co-broking.


Questions crop up when buyers act on their own – which is more common than sellers acting on their own. Many agents hired by sellers then try to claim a 1 per cent cut from buyers. This fee, peculiar to the HDB resale market, is levied because the quantum of commission on HDB deals is lower than that for private property deals, says the Institute of Estate Agents.


Agents and agencies cite other arguments:


Firstly, by advertising a property for sale, helping the buyer to make contact with its owner and negotiating the deal, the seller’s agent provides a service to the buyer.


Secondly, when the deal is inked, the seller’s agent has to do paperwork for the buyer, such as filling up the sale and purchase agreement and submitting the document.


Thirdly, since this 1 per cent fee is ‘market practice’, it is up to independent buyers to declare upfront they do not wish to pay it. If the buyer seals a deal without bringing up the matter, he would be tacitly agreeing a fee is payable.


But in the absence of a written commission agreement between an independent buyer and the seller’s agent, these arguments hold little weight, say lawyers. Under Singapore law, commission deals can be verbal, so refusing to sign a form does not solve the problem. The bigger question is whether both sides are aware of the commission and agree that it should be paid at all.


Drew & Napier director Hri Kumar says that while the courts will take note of the prevailing ‘market practice’, an agent will find it difficult to prove that the buyer was aware of this ‘practice’ if the buyer is a layman.


Ramdas & Wong consultant Ellen Lee says the agents – deemed the ‘experts’ in this scenario – are obliged to inform the buyer upfront that they are levying a fee. ‘If someone doesn’t know (about the fee), he doesn’t even know that he should say he is not paying it.’


But the buyer who is informed of such a fee and does not intend to pay has to object to it at the earliest possible instance. If he does not, he can be said to have agreed implicitly to pay, says Mr Freddi Lim, a partner at Trinity Law Corporation.


Awareness aside, what kind of acts can be considered ’services’ that sellers’ agents render buyers? The lawyers found it unlikely that introducing a buyer to a seller could be considered a service. Ms Lee points out that the seller’s agent places a property ad and makes contact with potential buyers because he is duty-bound to market the home on behalf of his client. His role as a liaison does not give him an inherent right to claim a fee from the buyer. However, if that potential buyer subsequently asks the agent to, say, recommend suitable properties, he may be said to be soliciting the agent’s services.


The question of whether handling paperwork constitutes a service to buyers is less clear-cut. This is because only one set of sale and purchase documents needs to be submitted to the Housing Board for the resale of a flat. Although the HDB does not stipulate which party should submit the form, the design of its online application system – through which most applications are made – places the burden of submission on the seller’s agent if the buyer is not represented by an agent. This often means that sellers’ agents fill up the form and submit the applications for both parties.


Assuming that the independent buyer has done his own checks to make sure he qualifies to buy the particular apartment, it is questionable whether a fee can be levied for such paperwork. Infinitus Law Corporation director Leo Cheng Suan, for example, feels such paperwork is simply part and parcel of the steps needed to complete a deal.


The HDB says: ‘The submission mode should not be misused by housing agents as a basis for charging commissions (which), like payment for all types of services, are subject to negotiation.’


A large part of the validity of housing agents’ claims hinges on what the agents disclose and when they do so in the dealings leading up to a sale. Unfortunately, many agents today produce commission payment slips only after a purchase is sealed. As Ms Wee says after settling her lawsuit with PropNex: ‘Agents should state clearly the services they are providing to justify the fee they are charging.’


Until that happens, the industry will continue to be dogged by doubts over the ethics of its rank and file.


Source: Straits Times

UE’s Q1 profit falls 90% on fair-value losses

UE’s Q1 profit falls 90% on fair-value losses





UNITED Engineers (UE) has reported Q1 2008 revenue of $133.6 million, up 9 per cent from the same period last year. But net profit was down 90 per cent to $1.22 million.



UE said operating profit was affected by fair-value losses from short-term investments and the carrying value of its interest in Anhui Hefei United Power Generation Company (AHUP).


It said ‘other income’ dropped 95 per cent to $588,000 due to fair-value gains from short-term investments recognised in Q1 2007, while ‘other expenses’ increased 459 per cent to $13.8 million due to fair-value losses of $2.9 million from short-term investments and $8 million (with $4.4 million attributable to the group, after minority interest) relating to the carrying value of AHUP.


AHUP has ceased contributing since Dec 1, 2007 due to proposed divestment approved by UE shareholders and pending finalisation.


In December, UE said it would sell its stake in United Power Corporation (S), which has a 49 per cent stake in AHUP, for US$85.6 million.


Gross profit for Q1 rose 20 per cent to $28.4 million and gross profit percentage was 21.3 per cent, up from 19.2 per cent in Q1 2007. This was attributed mainly to higher rental rates and partial recognition of income from the sale of the condominium project, The Rochester.


Earnings per ordinary share fell to 0.5 cents, from 5.4 cents in Q1 2007.


UE’s share price closed eight cents lower at $3.91 yesterday.


Source: Business Times