Frasers Hospitality to its grow presence in China, India and Vietnam

Frasers Hospitality to its grow presence in China, India and Vietnam


SINGAPORE : Frasers Hospitality – the property arm of mainboard-listed Fraser & Neave – is planning to grow its presence in the emerging markets of China, India and Vietnam.


Revealing this at a news briefing on Thursday, Frasers said it plans to add about 5,000 serviced apartment units to its portfolio over the next two years. It is scheduled to open 10 new properties this year, and another 25 over 2009 and 2010.


Frasers believes there is room for growth in the serviced apartments sector in China, India and Vietnam, and is pumping in US$135 million for a prime property in the Beijing’s central business district.


That will be part of the 5,000 units that Frasers is planning to add to its portfolio. About 80 per cent will be held under fee-based management contracts.


Frasers has already opened two developments in Tokyo and Hanoi. Eight more will be launched within the next eight months, mainly in China, including a soft opening for its first apartment units in Hong Kong. The target is to open 25 properties within the next two years.


Serviced residences in most Asian countries account for about 10 per cent of the hotel inventory. Frasers said it sees more upside potential in this, especially with increased demand from multi-national corporations.


Choe Peng Sum, CEO of Frasers Hospitality, said: “I think the outlook for serviced apartments is (great). A lot of companies, instead of sending long-term expatriates there for 3-4 years, they are actually bringing project groups over for maybe 1-8 months, where they’ll start up the project and then fly back. That’s exactly where our market is, and a lot of our properties are seeing 80-90 per cent occupancy.”


Frasers is also looking at other opportunities in the Middle East, particularly in Abu Dhabi, Qatar, Oman and Kuwait, on top of recently announced Dubai and Bahrain.


Frasers currently has about 3,500 apartments worldwide, and it expects to have 8,478 apartments by 2010. – CNA /ls


Source: Channel NewsAsia

Frasers Hospitality planning global expansion

Frasers Hospitality planning global expansion


Frasers Hospitality is planning an aggressive expansion globally, with 5,000 serviced apartment units slated for China, India and Vietnam by 2010.


The property arm of mainboard-listed Fraser & Neave then plans to expand its presence in the Middle East, Australia and Europe, and maybe even enter the US.


Among the service apartments that will be launched by 2010, one is a 23-storey prime properrt in Beijing, in which Frasers has invested 135 million US dollars.


But most of the company’s other upcoming serviced apartments will be owned by other parties, and Fraser will only operate them on fee-based management contracts.


In fact Frasers will own only 20 percent of the upcoming 5,000 rooms to be launched in the next 3 years.


Chief Executive Choe Peng Sum said the expansion will help to meet the pent up demand for serviced residences around the world, and especially in cities such as China and India, which are seeing tremendous economic growth.


He said the demand is being created by the fact that many firms are now cutting back on long-term expatriate contracts, and instead sending project teams to stay overseas for just a year or less.


“If you stay for 3, 4, 5, 6, 8 months, to stay in a hotel would be a bit claustrophobic after a while. Yet if you’re not signing 1, 2 or 3-year leases, then you’re not in the apartment or condo market. So we fall right in the middle, where we meet the needs of the mid- to long-term segment.”


After 2010, Frasers plans to expand its presence in the Middle East, with developments slated for Abu Dhabi, Kuwait, Doha and Oman.


Mr Choe added that the company also plans to expand in Australia and Europe, including entry into cities such as Prague, Budapest, Madrid and Barcelona.


He said Frasers is even looking for possible acquisitions in New York, as the US market is now softer in the wake of the subprime and financial crisis.


Source: 938Live

Retail property market remains stable in Q2: DTZ

Retail property market remains stable in Q2: DTZ

Turnover rents rise; limited growth for fixed gross rents


BUOYED by positive consumer sentiment and the Great Singapore Sale period, the retail property market remained stable in the second quarter of this year, according to a market report by real estate consultancy DTZ.


Turnover rents in Q2 rose, but there was limited growth for fixed gross rents. DTZ noted that tenants were ‘resisting committing at higher rents for both new retail space and lease renewals’.


First-storey monthly fixed gross rents remained largely unchanged quarter on quarter, hovering at an average of $42.40 per square foot (psf) for prime areas such as Orchard/Scotts Road, $33.70 psf in suburban areas and $27.10 psf in other city areas.


The retail market is expected to remain stable, despite competition from additional supply that will come on stream over the next few years. Malls such as ION Orchard, Orchard Central and 313 @ Somerset are slated for completion by 2009.


As much as 5.4 million square feet of retail space will be added to the mix between the second half of this year and 2012. Marina Bay Shoppes by developer Marina Bay Sands will account for the biggest chunk of that space, with 15 per cent or 800,000 sq ft, closely followed by CapitaLand and Sun Hung Kai Properties’ ION Orchard at 663,000 sq ft.


The suburban retail scene will also be bolstered by upcoming developments, mainly in the west and north-west regions, such as the Big Box project at Jurong Regional Centre and the Civic Cultural and Retail Complex at Vista Xchange. Fifty per cent of the potential supply in suburban areas is in the west.


DTZ’s retail associate director Anna Lee says: ‘The increase in future supply will put a cap on price and rental increases, while offering opportunities for the retail market to reinvent itself with new concepts and offerings.’


Singapore‘s retail sales for April – excluding vehicles – rose 7.7 per cent year on year. But total retail sales value dipped about 4 per cent to $2.77 billion, from March’s $2.89 billion, with almost all sectors reporting less activity in April.


Source: Business Times

It pays to ask the women

It pays to ask the women

Property developer gets women focus group to help design mixed-use centre


IN designing shopping centres and mixed-use properties, Trademark Property Co of Fort Worth, Texas, used to do what many developers do: put together teams of professionals like architects, designers and building consultants; send out surveys; and hold community meetings. But in 2005, when it began planning a large mixed-use centre, Watters Creek, for a 21 hectare site in Allen, near Dallas, it decided to consult a group it had never called on before: women.


CEO Terry Montesi first hired two female retail consultants: Claudia A Sagan and J’Amy Owens. But Trademark also invited two dozen women from the Allen area to pick apart its plans for the centre. They included Kirsten Fair, a stay-at-home mother of two, and Debbie Stout, a City Council member, who runs a company that sells business forms.


The women weighed in on dozens of features, like the centre’s layout, landscaping, parking options, pedestrian walkways and outdoor art. The developers ‘asked us about every detail, and then they listened’, Ms Stout said recently. At Watters Creek, Trademark Property discovered that some of the reaction from its women’s focus groups challenged conventional retailing wisdom.


Like many retail developers, Trademark Property was used to installing tall, often ornate, brick or stone buildings, as well as sidewalks, at developments like Market Street, a mixed- used centre it opened in Woodlands, near Houston, in 2004. The core of that mixed-used centre was intended to have a classic Main Street look.


The Watters Creek centre, however, was to be part of a 202 ha planned community whose master plan called for significant green space as part of its environment-friendly design.


The women also wanted a village look and feel, with buildings of various sizes, colours and textures that followed the rolling topography of the area, rather than sitting flat.


The first phase of Watters Creek, which is expected to cover 1.15 million square feet eventually, opened in May. So far, Trademark has studded it with buildings that act mostly as a backdrop to a parklike area with two stone bridges, a pond, a creek, a 10-metre-tall community fireplace, climbable sculptures, and 10 restaurants that have outdoor seating with views of the pond, creek or village green.


The women are delighted. — NYT


Source: Business Times

Hi-tech rents, occupancy rates up

Hi-tech rents, occupancy rates up

Insufficient and expensive offices drive tenants to business parks, leading to 6.8% rise q-o-q


RENTS and occupancy rates for hi-tech and business park space were lifted in the second quarter of this year by spillover demand for office space, property consultants say. And rents for factories and warehouses have edged up too.


According to CB Richard Ellis (CBRE), the average island-wide hi-tech monthly rent rose 6.8 per cent quarter-on-quarter to $3.15 per sq ft (psf) in Q2. Year-on-year, the increase was 34 per cent.


Insufficient and increasingly expensive office space is driving tenants to hi-tech space or business parks, CBRE said in a statement yesterday.


Jones Lang LaSalle (JLL) also says that companies are relocating backroom operations to hi-tech space. Its latest figures show that the average island-wide hi-tech rent rose 2.4 per cent quarter-on-quarter to $4.25 psf per month in Q2. Compared with a year earlier, the increase was 63.5 per cent.


While figures from both property consultants indicate rising rents for hi-tech space, the degree of increase differs.


‘The disparity is a result of differences in the basket of properties that research houses use to track the market,’ said JLL’s head of research (South-east Asia) Chua Yang Liang. ‘This difference is more pronounced in periods when segments of the market respond differently to external stimulus.’


CBRE says that for business parks, the average occupancy rate was 88 per cent at end-March and could have exceeded 90 per cent by the end of Q2. This would be a new peak.


The firm’s director of industrial and logistics services, Bernard Goh, says that rents at business parks also rose in Q2.


More business park space will be coming on stream. According to CBRE, Biopolis Phase III will be completed in Q4 2009. And JTC Corporation launched a tender for Plot 61 in Changi Business Park last month.


For factory space, the average monthly rent for a ground-floor unit rose 3.3 per cent to $1.55 psf in Q2, says CBRE.


The average capital value of ground-floor units in 60-year leasehold strata-titled factories edged up about 3 per cent quarter-on-quarter to $302 psf.


Ground-floor units in warehouses registered a 3.3 per cent increase in average monthly rent to $1.55 psf in Q2.


Rising raw material costs, a stronger Singapore dollar and weakening demand for exports have made manufacturers cautious about their outlook, dampening demand for factories and warehouses, says CBRE.


‘However, the government has reiterated that the manufacturing sector will remain important to Singapore’s economy,’ it says. ‘As such, manufacturers are still encouraged to set up their facilities on the island, and demand for industrial space is expected to remain healthy.’


CBRE points out that recently there have been few purchases by industrial REITs, as funding availability has dropped. According to Mr Goh: ‘The limited credit supply is likely to continue to curtail the ability of the REIT players to expand their respective portfolios, but on the whole, industrial properties continue to remain an attractive asset class for institutional investors.’


Source: Business Times

CentraLand takes the lead

CentraLand takes the lead


CENTRALAND has become the first diamond sponsor of the Singapore Exchange’s Bull Charge 2008 – the first time the company is contributing to the cause. Bull Charge 2008 is the fifth charity fun run organised by Singapore Exchange (SGX) and the only charity fun run in the central business district.


A record 19 charities will benefit from funds raised this year. Over the past four years, SGX has raised more than $10 million for needy children, young people and families through its charity fun run. This year’s run takes place on Oct 24 at the Padang.


Bull Charge 2008 is organised by SGX in collaboration with Temasek Holdings and in partnership with the Central Singapore Community Development Council, The Business Times, Channel NewsAsia and honorary auditor PricewaterhouseCoopers. It also receives the support of the Land Transport Authority and the Singapore Sports Council.


Source: Business Times

Mapletree full-year earnings dip 3%

Mapletree full-year earnings dip 3%

But operating profit rises 35%; revenue jumps 69% to $365.6m


MAPLETREE Investments posted a 3 per cent dip in net earnings for the year ended March 31, 2008 to $1.04 billion because of lower net revaluation gain and higher net finance cost.


Operating profit, however, rose 35 per cent to $146.9 million on the back of first full-year contributions from VivoCity and St James Power Station (SJPS) and maiden contribution from The Beacon, a residential project at Cantonment Road.


The fully owned subsidiary of Temasek Holdings also achieved much higher occupancy and rental rates from all its investment properties across the board.


Revenue jumped 69 per cent to $365.6 million with VivoCity and SJPS contributing a total $99.5 million and The Beacon contributing $47.5 million.


The Temasek unit booked a net revaluation gain of $879 million (after deferred tax provision) for the latest financial year, lower than the $971.2 million in the preceding year.


Mapletree chairman Edmund Cheng said the group is exploring several mixed-use commercial projects in Vietnam (in Ho Chi Minh City, Hanoi and the provinces abutting them). ‘In line with our business model, we will seed these projects with our own balance sheet, and will consider the possibility of starting a Vietnam-focused fund once we have achieved a significant asset size,’ he said in his message in Mapletree’s latest annual report.


Elsewhere in the report, the group revealed it is ‘in the advanced stage of evaluating several projects comprising a wide spectrum of property types, from office, retail, residential, to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


When asked, Mapletree’s spokeswoman said the Vietnam fund will be started within the next 12 months but this will depend on market conditions in Vietnam. The fund size will be at least US$500 million.


Mapletree’s real estate assets, both owned and managed, stood at $8.9 billion as at March 31, 2008, up 59 per cent from $5.6 billion a year earlier. Of these, its third-party assets under management (AUM) amounted to $3.1 billion, an increase of 94 per cent, while the group’s owned assets grew nearly 45 per cent from $4 billion to $5.7 billion.


Fee income, excluding fee income from associates, grew 40 per cent last year. The group’s AUM and fee income will be boosted significantly in the current financial year from the Mapletree India-China Fund launched in April this year and a new Mapletree-Arcapita Bank fund formed to hold the $1.7 billion portfolio of properties acquired from JTC Corp.


In an interview with BT in April this year, Mapletree CEO Hiew Yoon Khong projected the group’s total assets could hit $15 billion to $20 billion in a year.


The India-China fund has secured a US$600 million commitment at the initial closing and is currently marketing its second closing with a target to secure a total commitment of US$1.5 billion.


In Singapore, the group is developing Mapletree Business City, an office and business park with 1.7 million sq ft of total net lettable area and slated for completion in second-half 2010.


It is also developing a 19-storey Grade A office building at Anson Road called Mapletree Anson, which is expected to be ready in mid-2009. These two assets could be potentially sold at some point to the proposed Mapletree Commercial Trust.


This trust was to have been listed here earlier this year holding about $3 billion of the group’s assets in the HarbourFront and Alexandra Precincts with VivoCity as the anchor asset. However, the launch has been deferred due to unfavourable stock market conditions.


Source: Business Times

Rentals making gentle waves at Sentosa Cove

Rentals making gentle waves at Sentosa Cove

They could hold firm despite gloom elsewhere and offer decent yields


(SINGAPORE) Close to 300 homes at Sentosa Cove, including 200 condominium units, have received Temporary Occupation Permit (TOP) and the exclusive enclave is starting to bustle.


DTZ Debenham Tie Leung, which is the property manager of the 200-unit The Berth by the Cove says that the development is now about 70 per cent tenanted.


It added that the remaining units of the fully-sold development are owner-occupied, some of which are weekend homes or holiday homes for foreigners.


Other developments that have received TOP include The Berthside, Ocean 8, The Villas @ Sentosa Cove, Coral Island and North Cove.


Expected to come onto the leasing market next is the 116-unit The Azure, which is also fully sold.


And the popularity of The Berth by the Cove with the leasing market bodes well for the remaining 2,200 homes that are still being constructed.


DTZ senior director (research) Chua Chor Hoon said that the supply of new homes in Sentosa Cove is still ‘limited’ compared to the rest of Singapore and the units have ‘the unique feature of close proximity to the sea’.


Saying that the limited supply of units in Sentosa Cove will limit any downward pressure on rentals, Ms Chua added: ‘Rental prospects are likely to be better.’


This upbeat outlook for Sentosa Cove is particularly pertinent at a time when new housing supply is expected to flood the rental market by next year.


In a recent report, DTZ noted that in general, rentals would come under pressure between 2009 and 2011, not just from new supply but from the sub-sale market as well as it is unlikely that speculators will want to hold units for low rental income.


DTZ said that based on its basket of non-landed properties in the prime district (excluding luxury properties) average monthly rents are currently still holding steady at $4.90 psf per month.


While DTZ did not reveal rentals at The Berth by the Cove, a check with SISV-Realink shows that the rental for a unit there contracted for $19,500 per month in May.


Colliers International also said it believes median rentals could be around $6 psf per month.


Colliers director (research and advisory) Tay Huey Ying added that based on the average launch price of The Berth by the Cove of about $860 psf in 2004/2005, investors who bought units at this price could now be enjoying a net rental yield of about 5.5 per cent.


Those that bought units from the secondary market later when the price rose to about $1,500 psf will be looking at a net rental yield of 3.5 per cent.


‘Nevertheless, these investors would still be enjoying a higher net rental return compared to those who invested in a freehold luxury apartment on the main island of Singapore in recent times since the latter are generating average net rental returns estimated to be in the region of 2.3 per cent,’ added Ms Tay.


In time over 1,700 condominiums will be completed. Savills Singapore director (marketing and business development) Ku Swee Yong believes that buyers for most of these units will be investors, suggesting that a majority will be put up for lease.


Still, he said that there is a niche market for this type of waterfront home. ‘We had an expat client who was looking to rent and after showing him a few options, he chose The Berth because he already has a yacht,’ reveals Mr Ku.


Interestingly, Mr Ku says the advent of the integrated resort on Sentosa may not necessarily guarantee a pool of tenants. ‘Not everyone will want to live so close to work,’ he added.


What he does believe is crucial to the success of Sentosa Cove as an exclusive enclave is the provision of high end amenities. He added: ‘Once these are completed, we believe Sentosa Cove rents could demand a premium over Orchard Road.’


Source: Business Times

Business parks and high-tech sites gaining popularity

Business parks and high-tech sites gaining popularity


BUSINESS parks and other high-tech industrial sites in Singapore have become increasingly popular among eligible tenants.

According to a new report released yesterday by CB Richard Ellis (CBRE), the overall occupancy rate at business parks probably hit a new high of 90 per cent last month, up from 88 per cent in March.


To rent space at sites like Changi Business Park, prospective tenants must meet certain criteria. These include carrying out research and development work.


Rental rates at these high-tech spaces are heading north. The rates may be cheaper than ultra-high-tech business parks and prime office space, but they were expected to have risen 6.8 per cent last month to $3.15 per sq ft per month from the first quarter.


The popularity of these sites, the report said, was due to the ‘limited availability and continued rental increases’ of office space in the Republic, although the dizzying upward spiral in rental rates had abated in recent months.


Nevertheless, prime office spaces can cost upwards of $16 per sq ft per month – far more expensive than in business parks.


Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50 per cent-plus rise that prime office rents registered in 2006.


More business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.


Biopolis Phase III, which will have a gross floor area of 41,505 sq m when completed late next year, is being built by Crescendas Bionix.


Solaris, formerly known as Fusionopolis Phase 2B, will be built by Soilbuild Group Holdings. When completed by June next year, Solaris will have a gross floor area of 50,271 sq m.


Industrial landlord JTC Corp has also launched a new ‘concept and price’ tender at Changi Business Park.


This site will have a maximum gross floor area of 47,006 sq m, of which 40 per cent is designed for hotel and retail use. The tender will close next month.


Source: Straits Times

Mapletree planning $682m fund in Vietnam

Mapletree planning $682m fund in Vietnam


REAL estate firm Mapletree Investments is setting up a US$500 million (S$682 million) fund to invest in properties in fast-growing Vietnam, to be launched within 12 months.

The Temasek Holdings unit said it is setting up the fund to ‘harness Vietnam’s rising development cycle, and to tap into the growing affluence of the middle-class segment of its population’.


Mapletree unveiled its plans for the fund in its recently published annual report.


It is ‘currently in the advanced stages of evaluating several projects comprising a wide spectrum of property types, from office, retail and residential to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


Mapletree spokesman Shae Hung Yee said the company plans to launch the fund, which will be at least US$500 million in size, within the next 12 months.


This timeline, however, may be altered depending on ‘market conditions’, she said. ‘We will make sure the time is right before starting any fund,’ she added.


Mapletree’s fund will include its own seed money, said Ms Shae, who added that the firm is considering ‘syndicating the fund’ out to like-minded investors with aligned interests.


The move is part of Mapletree’s efforts to tap into the high growth potential of emerging markets such as China, India and Vietnam, said chairman Edmund Cheng in the company’s annual report.


Mapletree posted a net profit of $1.04 billion for the financial year ended March 31, down 3 per cent from the year before.


On Tuesday, it announced that it had completed a $1.71 billion acquisition of industrial landlord JTC Corporation’s assets in Singapore.


The JTC properties, comprising 39 multi-storey factories and 23 offices and warehouses, had originally been slated for a real estate investment trust. Plans to list the trust were subsequently scrapped due to poor market conditions.


Mapletree owns and manages $5.7 billion worth of real estate assets in Singapore, including the VivoCity mall and St James Power Station. It manages about $4.8 billion worth of assets in the region. The latter figure includes the recent JTC acquisition.


Source: Straits Times