GIC hires country head for India

The real estate arm of the Government of Singapore Investment Corporation (GIC) has confirmed the appointment of Kishore Gotety as its country head for India.

Mr. Gotety’s appointment, which took effect on August 23, suggests that GIC believes there are good investment opportunities in the Indian real estate market.

GIC, which currently has offices in eight cities around the world, will soon establish its first office in Mumbai, India, which will become operational later this year.

Mr. Gotety was previously working with RREEF Alternative Investments, the property investment management business of the Asset Management division of Deutsche Bank. In 2007, he joined RREEF as its country head in India, aiming to spearhead the company’s expansion in the country.

However, the credit crisis prompted RREEF to postpone its plans of expanding its India portfolio. In 2009, Mr. Gotety was transferred to Hong Kong as head of portfolio management for Asia-Pacific in the global opportunistic investments team of RREEF.

In 2009, GIC announced its plan to intensify its real estate allocation. The sovereign wealth fund is also believed to be looking at listing some property assets through a Singapore IPO that could raise about US$1 billion.

British buyers lose interest in Southeast Asian properties

Cash-strapped British buyers seem to have lost interest in properties located in Southeast Asia, based on data released by RightMove Overseas, a leading property website in the UK.

The results of the report, which compared search statistics between July 2008 and July 2010, do not bode well for countries in Southeast Asia which have earlier enjoyed great interest from British buyers.

Malaysia and the Philippines were the two biggest losers, recording 67.30 percent and 76.39 percent in search activity, respectively. Meanwhile, Thailand witnessed a 51.07 percent drop in interest, said the report.

“Two years on from when the Credit Crunch first started to really bite, it’s clear that the overseas property market is radically different. Many of the market dynamics that used to be in place have gone, some would argue for good. For example, you’d be hard pushed to find a casual investor looking to make a quick buck by flipping off-plan apartments in out of the way places, availability of mortgage finance is much harder and many businesses have failed to adapt to the new conditions,” said Robin Wilson, head Overseas at Rightmove.

Mr. Wilson, however, noted that British interest for overseas properties has not declined. “People are still dreaming about a life abroad. What’s clear is that whilst only a few countries have really bucked the trend and gained on their 2008 position, there are big gaps in how fast some countries are recovering, if at all.”

“Dubai in the United Arab Emirates has been hit very hard, struggling to regain the peaks it saw at almost 80 per cent fewer searches than 2008. Eastern Europe has also taken a battering with previously hot destinations for investment returns falling out of favour. At the other end of the scale, Germany is the undoubted success story. It’s maybe not as glamorous as France or Italy, but has many of the same benefits and seems to be carving out a niche of its own. On this evidence it’s certainly undervalued and overlooked.”

Thailand ranked 17th in its Top 20 list of most searched nations, making up 0.85 percent of all enquiries. It is the only country in Southeast Asia to be part of the list, though it fell 14 notches in the chart.

Ying Li issues earnings warning for its H1 performance

Mainboard-listed property developer Ying Li International Real Estate has issued a profit warning for its performance for the first half of the year ending June 30.

The firm said that it expects an increase on its expenses after issuing convertible bonds worth S$200 million.

The residential and commercial developer expects to record lower sales from the San Ya Wan phase one development largely due to market timing factors.

Ying Li believes it will generate a net loss for the first quarter of 2010, compared to the RMB14,000 or S$2,812.73 net profit in the same period last year.

The company also expects to record a net loss in H2 ending June 30.

However, it remains optimistic and said it expects to record an overall profitable result in this financial year.

Ho Bee Investment’s net profit up 11.8% in Q1

Property developer Ho Bee Investment reported a net profit of $41.7 million for the first quarter ended 31 March 2010, up 11.8 percent compared with the same period in 2009.

The increase from $1.9 million to $10.8 million was mainly attributed to a surge in share of profit of jointly controlled entities, of which the joint-venture project Parvis at Holland Hill was the main contributor.

Group turnover for Q1 2010 dropped 16.1 percent year on year to $92.4 million –primarily due to lower recognition of revenue from property development.

Ho Bee enjoyed higher revenue recognition in Q1 2009, as two projects, Quinterra and Vertis, obtained Temporary Occupation Permit in that period.

According to Chua Thian Poh, chairman and CEO of Ho Bee, the group has benefited from the robust property market sentiment and economic recovery.

“Our residential projects, Trilight, located at Newton Road, and the JV project with MCL Land, Parvis, at Holland Hill, have sold very well. The progressive recognition of income from the residential projects sold will be a significant contributor to the group’s profitability for 2010,” he said.

In Q1 2010, Ho Bee sold 198 residential units in various projects - Parvis, Trilight, Orange Grove Residences, Dakota Residences, Seascape and The Orange Grove. As at end-March 2010, about 17 percent of the group’s 151-unit Seascape condominium at Sentosa Cove changed hands, although this has since improved to 21 percent.

Cash and cash equivalents contracted to $52.4 million at end-March 2010 from $171.7 million at end-Dec 2009, as the developer put a deposit for its share for the acquisition of a prime residential site in Shanghai’s Qingpu district and repaid term loans of $104.7 million. Ho Bee has teamed up with Yanlord Land Group for the acquisition.

Ho Bee posted earnings per share of 5.66 cents in Q1 2010, up from 5.07 cents over the same period in 2009. Net asset value per share also increased to $1.68 at end-March 2010 from $1.63 at end-Dec 2009.

On the stock market yesterday, the counter closed two cents higher at $1.66.

Property consultancy firm CBRE said that more than $500 million worth of Good Class Bungalows (GCBs) have been sold during the first quarter of 2010.

Based on CBRE’s analysis of URA Realis caveats, 29 deals were made in Q1 2010, amounting to $470.33 million. In addition, Mr. Douglas Wong, director for luxury homes at CBRE, confirmed that he brokered a $36.3 million transaction in March, which has yet to be included in the caveats.

According to market watchers, additional caveats for deals made last month may be captured over the next few weeks.

The 14 Bishopsgate deal brokered by Mr. Wong would be the biggest in dollar quantum during the first three months of the year. The single-storey conservation bungalow, which is being sold by members of the Wong family, who once controlled Tien Wah Press, is more than 50 years old and has a land area of 32,405 sq ft.

Market watchers say that transactions will continue to stream in this month, including a $23-million sale at Victoria Park with a land area of 21,190 sq ft and a $23.5-million sale at Ladyhill Road with a land area of slightly over 16,000 sq ft. However, with the number of deals this year expected to drop amid rising prices, they generally do not expect a repeat of last year’s $1.72-billion record of transacted GCBs.

Mr. William Wong, managing director of RealStar Premier Property, said: “Current GCB prices are about 10-20 percent higher than a year ago, depending on location of the bungalows. Those in prime areas such as Tanglin have gone up as much as 20 percent.”

Agreeing, Mr. Wong of CBRE said that properties in the Jervois/Chatsworth/ Bishopsgate areas fetched around $1,000 psf in the 2007 property boom. “Today, people are asking $1,200-1,400 psf, and even $1,500 psf.”

A spokesperson for FRN Properties said that the asking price in locations like Brizay Park and King Albert Park, ranged from $900 psf to $1,000 psf, compared with the $500 psf to $700 psf during the 2007 to 2008 period.

The sale of a property at Binjai Park was among the interesting GCB deals done in Q1. The bungalow is said to have been sold by Mr. Sudhir Gupta of Amtel Group to Sareen Gajendra Singh, another entrepreneur who owns Omni United (S) Pte Ltd.

With the stringent planning requirements of GCBs, they are the creme de la creme of the housing market, at least on mainland Singapore. Only about 2,400 such bungalows are in the 39 gazetted GCB areas.

Real estate agents cited anecdotal evidence of high net-worth mainland Chinese, Indians and others who have taken up citizenship and who are purchasing GCBs.

Local players have also been active in the GCB market, noted KH Tan, managing director of Newsman Realty. These include investors who own several GCBs and those upgrading from smaller homes.