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Developers head into crisis with more cash
'On average, the net debt-equity ratio had come down from 0.52 times in Q2 to 0.49 times in Q3. And the improvement was generally attributable to a stronger equity base, paring of borrowings and an increase in cash held from divestments. 'CapitaLand, City Developments and GuocoLand all cut their debt-to-equity ratios in Q3, OCBC's data shows. At end-2001, CapitaLand had $1.9 billion of cash and a gearing of 0.87 times. Now, it has $4.2 billion in cash and a gearing ratio of 0.51 times. City- Dev has increased its cash holding from $701.8 million to $813.3 million and cut its gearing from 0.8 times to 0.46 times. KepLand has also increased its cash holding, from $120.9 million to $663.4 million, and cut its gearing from 1.33 times to 0.54 times. Downward revaluations of investment properties are still expected in Q4 2008 when developers do their yearly valuations.
- The Business Times, P1 |
Life after DPS won't be crippling for developers
A new report from DBS Research, which looks at the potential impact if buyers who bought homes under the deferred payment scheme (DPS) choose to walk away from their deals, concludes that developers are not likely to be too badly hit even under a 20 per cent default scenario. But among the developers, the smaller players would be more impacted in terms of proportional decline in earnings and interest cover. In addition, the recent property upcycle also saw active participation by foreign buyers, which adds an additional unknown to the equation: whether these buyers will follow through on their payments upon TOP. The research note concluded that while a 20 per cent default is not likely to hurt developers too much, the effect of DPS defaults is just one of a few challenges facing the developers in 2009.
- The Business Times, P5 |
Faster, cheaper for firms to get reclaimed land
In a joint initiative of the Singapore Land Authority (SLA) and JTC Corp to streamline the building of shore protection. Cutting edge analysis of wave erosion patterns will mean up to $16 million in savings for every kilometre of reclaimed shoreline. Currently, rock embankments costing $12.5 million per km are erected on the shoreline of newly-reclaimed land to prevent soil erosion, SLA said. The wait for the land could be cut by up to eight months. JTC reclaims land for industrial purposes and then leases it to industrial firms. Waterfront industrial sites, for example, are highly sought after by shipbuilding and marine-related industries.
- The Straits Times, B20 |
Thakral signs MOU with Aussie developer
As part of its bid to reposition itself as a pan-Asian property player, consumer electronics distributor Thakral Corporation has signed a memorandum of understanding (MOU) with an Australian developer for investments totalling up to A$117.5 million (S$115 million). The proposed transactions with Australian-listed Payce Consolidated came after Hong Leong Asia (HLA) failed in its bid against the MOU. Board representatives from HLA's indirect subsidiaries had opposed the MOU resolution but were outvoted. Of the proposed investments of up to A$117.5 million, some 13 per cent or A$15.73 million will be funded in cash; 63 per cent or A$73.55 million in debt; and 24 per cent or A$28.22 million through the issuance of new shares and share options to Payce, possibly making it a strategic shareholder.
- The Business Times, P7 |
Margaret Drive to get foreign worker dorm
The authorities have identified 10 more sites for temporary foreign worker dormitories, with the Queenstown Polyclinic site in Margaret Drive being the closest to residential areas. The building is across the road from three blocks of HDB flats, a hawker centre and the Queenstown library. The 10 sites will hold up to 20,000 foreign workers and tenures will range from three to six years. The majority of the sites are in remote areas like Mandai, Seletar West and Choa Chu Kang, which house industrial estates, farms and army camps. Three sites, two of which are situated in Changi and a third in Hougang Avenue 3, are near residential areas but are at least a 10-minute walk away. The MND said the 10 sites will help meet Singapore's construction needs over the next five to six years.
- The Straits Times, A3
(Also see, The Business Times, P9, “Govt releases 10 new sites for foreign worker dorms”) |
Developers in China scramble to raise cash
Suffering from a slumping housing market, Chinese developers are scrambling to find new ways to keep the cash flowing in and creditors at bay, with anything from factories to timeshares in their sights. An oversupply of new apartments in an economic downturn, and the lingering effects of government steps to stamp out rampant property speculation have sent home sales and prices tumbling. Shanghai-listed developer Vantone Estate aims to spend three billion yuan (S$667.2 million) on industrial property in the next couple of years, according to Wu Dongwei, general manager at the unit responsible for the venture. Holding investment properties usually produces much lower returns on assets than building homes because equity is tied up for much longer.
- The Business Times, P29 |
China SWF chief's blow to bailout hopes
The head of China's sovereign wealth fund said yesterday that he had lost the confidence to invest in foreign financial firms because of unclear and inconsistent government policy abroad which also fails to sufficiently protect investors. The comments by Mr Lou Jiwei, chairman and chief executive of the US$200billion China Investment Corp (CIC) will deal a fresh blow to embattled banks around the world hoping for a Chinese bailout. Mr Lou's remarks also suggested that US Treasury Secretary Henry Paulson may not receive generous pledges of further investment when he meets Chinese officials in Beijing today and tomorrow.
- The Straits Times, B17 |
Bank of Thailand cuts key interest rate
The Bank of Thailand reduced its one-day bond repurchase rate by one percentage point to 2.75 per cent. The first rate reduction in 17 months follows six months of anti-government protests that culminated in the seizure of Bangkok's international airport and Tuesday's court ruling that forced Prime Minister Somchai Wongsawat to step down. Thailand's economic growth slowed to 4 per cent in the third quarter as exports cooled and the violent political protests damped domestic spending. Inflation eased to 2.2 per cent in November, the slowest pace in 14 months.Thailand may not expand next year, as the closure of Bangkok's two main airports hurts tourism and a global recession slows exports.
- The Business Times, P13 |
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