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Ascott Group to grow through Citadines brand
It aims to extend reach in Eastern Europe and the Asia-Pacific
By NISHA RAMCHANDANI
(SINGAPORE) The Ascott Group is working on extending its reach in Eastern Europe and the Asia-Pacific through its Citadines brand.
The Singapore-headquartered group, which operates the Ascott, Somerset and Citadines brands, owns and/or manages 189 properties. The Citadines brand accounts for 34 per cent of them.
'The brand has not only given us financial returns but the cost structure is good. We get very good operating margins,' said Ascott CEO and president Jennie Chua. 'This brand has got lots of legs to grow, particularly in Asia and some of the emerging European markets.'
Ascott bought a 50 per cent stake in the European Citadines brand in 2002, then exercised a call option to acquire the remaining 50 per cent in 2004 for a total of 180 million euros (S$351.3 million), making it the biggest Singapore investor in France.
Its Somerset brand is also flourishing in second-tier cities.
'Citadines and Somerset are growing well in second-tier cities of China, for example,' said Ascott Real Estate CEO Chong Kee Hiong.
For now, the group will focus on extending its presence in countries where it already has operations. 'We will continue to give attention to where we are, but go a bit deeper,' said Ms Chua.
The economic slowdown and credit crunch will also see Ascott being a bit more cautious in terms of investment. 'The next two years, we will have to be a bit more selective,' said Mr Chong.
Instead, the focus will be on acquiring more management contracts. 'I think lots more people will come to us to manage their properties,' said Ms Chua. 'They look for good operators to generate income for them, while waiting for the real estate market to turn. We will be very aggressive and targeted in getting more management contracts. I think the opportunities are there.'
Thirty-four of the group's 189 properties are currently under development - 14 Somerset residences, 14 Citadines properties, four under the Ascott brand and the other two unbranded. Thirty-one of the 34 properties are slated to open by 2010.
In China, where Ascott has over 20 properties, it recently won seven awards for brand and operational excellence.
'These seven awards recognise the strong reputation Ascott has built over the group's decade long presence in China,' said Ascott Hospitality CEO Gerald Lee. 'We will continue to strengthen our position in China's key cities and expand our presence in Chongqing, Dalian and Suzhou.'
Ascott's FY2007 net profit grew 8 per cent to $177.3 million from 2006, as revenue rose 7 per cent to $435.3 million. Revenue this year is expected to match that of last year.Ascott's 25,000 units makes it the world's largest international service residence owner-operator. The group has more than 5,000 employees worldwide.
The Ascott Group is a wholly owned subsidiary of CapitaLand Limited.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
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| British mortgage approvals fall
It is at the lowest level since the series began 10 years ago
(LONDON) British mortgage approvals fell in October to match their lowest level since the series began a decade ago, data showed yesterday, putting further pressure on policymakers to get banks lending again.
Mortgage lending was also much weaker than expected, and less than a sixteenth of its level a year ago.
The government has injected £37 billion (S$86.1 billion) of public funds into major banks and offered unprecedented guarantees for short-term bank debt. But these actions have so far done little to stimulate fresh lending as banks shore up their balance sheets in the face of an impending recession.
Mortgage approvals - a leading indicator of housing demand - fell from 33,000 in September to 32,000 in October, matching August's reading which was the lowest since the series began in January 1999.
Mortgage lending totalled just £459 million, down from September's £1.492 billion and more than £8 billion a year ago.
A global shortage of capital has forced many banks to clamp down on lending over the past year, squeezing the lifeblood out of the property market. House prices have already fallen around 15 per cent from their peak last year and show no sign of stopping.
Bank of England governor Mervyn King told legislators last week that getting banks lending again was the single most pressing challenge for the economy, which otherwise risked a sharp recession.
Finance Minister Alistair Darling has warned that the government will clamp down harder on banks if they refuse to honour pledges on maintaining lending in the downturn.
The Bank of England has cut interest rates by two percentage points since October to 3 per cent, and investors expect another cut of up to a percentage point this week.
Gilts rose after the data - which coincided with a survey showing Britain's manufacturing sector contracted at a record pace last month - as markets increased bets on a hefty UK rate cut on Thursday.
'Mortgage approvals are bottoming out at a very low level,' said Brian Hilliard, chief UK economist at Societe Generale.
'We are going to see very poor numbers for the next month or two.' - Reuters
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
UK house prices fall 8.1% yoy in Nov
(LONDON) House prices in England and Wales fell by 1.1 per cent in November to take them 8.1 per cent lower year-on-year, property consultancy Hometrack said in its monthly survey yesterday.
The pace of monthly decline eased slightly from October's 1.3 per cent drop, but the average house price is down to £161,400 (S$375,600), the same as in January 2006.
British house prices tripled in the 10 years running up to their peak in the middle of last year, but have since fallen by as much as 15 per cent in other surveys as the global financial crisis has caused the supply of mortgages to dry up.
'All the indicators from the latest survey point to a continued fall in property prices in the short term,' said Richard Donnell, director of research at Hometrack. 'A weak economic outlook and limited availability of mortgages are set to keep prices under downward pressure in 2009.'
He added that transaction volumes might be bottoming out, with a hard core of buyers and sellers who have to move left in the market. -- Reuters
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
| Property no longer a safe asset
(LONDON) Real estate used to be the ultimate all- weather asset class, with low correlation to volatile stocks and unexciting bonds. But in today's debt-starved market, property is not the safe haven it once was.
Trusted property market tenets have been deformed by an acute shortage of debt and a worldwide souring in economic fundamentals, leaving the sector in a deep rut - awash with equity and rich with discounts but bereft of buyers.
Before, property rental income could rise even if values fell and as one regional market sagged, another flourished. But now, property market misery is universal and many of the world's biggest investors are standing on the sidelines.
'Things are going to be a difficult for quite a while,' Robert Houston, chairman and chief executive of of ING Real Estate Investment Management, told Reuters.
'Everyone wants to know when the bottom of the market is. I have a good record at calling these things and all I'm prepared to say is that we haven't reached it yet.'
Like the majority of its peers, ING has slowed the pace of its real estate investments in recent months, refusing to gamble capital when the only thing it feels sure of is that property prices worldwide will continue to fall.
The EPRA/NAREIT Global property index has slumped to a lifetime low of 861 points at market close on Nov 21 from an all-time high of 2,897 on Feb 23, 2007, but bargain hunters have yet to be spurred into action\. \-- Reuters
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
| M'sians again in top spot as foreign home buyers
By KALPANA RASHIWALA
(SINGAPORE) For the second consecutive quarter, Malaysians continued to be the largest group of foreign buyers (including permanent residents or PRs) of private homes here.
They bought 201 private homes, or accounted for 22 per cent of the total 903 caveats lodged for private home purchases by foreigners in Q3, a DTZ caveats analysis shows.
Indonesians bought 170 units, giving them a 19 per cent foreign buying share, followed by mainland Chinese (13 per cent), Indians (12 per cent) and UK citizens (6 per cent).
Projects that drew the largest numbers of foreign buyers in Q3 were Clover by the Park (40 units), Livia (30 units) and Kovan Residences (20).
However, in terms of projects where foreign buyers had the largest share of caveats lodged in Q3, the chart toppers were The Lakeshore in Jurong and Nassim Park Residences.
Foreigners took 55 per cent or 17 of the 31 units that changed hands at The Lakeshore, and accounted for 48 per cent of the 31 caveats also lodged for Nassim Park Residences during the July to Sept quarter of this year.
Non-PR foreigners made up the bulk of the foreign buying at The Lakeshore, Nassim Park Residences, Kovan Residences, Dakota Residences and Park Infinia at Wee Nam in Q3. However, PRs bought more units than non-PR foreigners at Livia (in Pasir Ris), Clover by the Park in (Bishan) and Beacon Heights (at St Michael's Road).
The total 903 units that foreigners (including PRs) acquired in Q3 was a 6 per cent drop from the previous quarter, and made up 22 per cent of total private home deals in Q3, down from a 25 per cent share in Q2.
DTZ executive director Ong Choon Fah expected foreign investors to continue to be cautious about buying properties in Singapore in the near term. 'There's a lot of frightened money around. Some investors have the money but fear that if they buy today, tomorrow it may be cheaper. This is keeping them away. However, foreigners, especially PRs buying for their own occupation, are more likely to adopt a longer term view and make a commitment,' she added.
PRs bought 53 per cent or 476 of the total 903 private homes picked up by foreigners in Q3, with non-PR foreigners accounting for the remaining 47 per cent. The PR share was similar to the 54 per cent in Q2.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
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| Dubai high-end property defaults rise
Developers told to review projects not launched or unsold
(DUBAI) Dubai is witnessing an increase in defaults on high-end properties as financing conditions worsen and is likely to see smaller developers merge, a member of the Gulf Arab trade hub's financial crisis committee said on Sunday.
'There are more and more defaults on the high end if banks do not give mortgages and speculators are (many) in the market,' Marwan bin Ghalita, chief executive of the Real Estate Regulatory Authority (Rera), told Reuters in an interview.
Tighter mortgage lending, a liquidity squeeze and a real estate slowdown have hit Dubai, part of the seven-member United Arab Emirates federation, in recent months.
Signs that Dubai's property boom days are over are increasing as developers scale back projects, property prices fall and jobs are cut.
Secondary prices in Dubai and Abu Dhabi fell 4-5 per cent in October from the previous month, with Dubai's advertised villa prices falling by 19 per cent after several banks tightened lending conditions in August and September, HSBC said recently.
Mr Marwan sits on a nine-strong crisis panel set up to tackle the effects of the global financial crisis on Dubai. The council reports to Dubai's ruler.
He said that now would be a good time for smaller developers to join forces, and that he expected some to do so.
'If you look at the market, a merger between smaller companies would give it confidence. I always support . . . good mergers in any sector if it adds value to the sector,' he said.
In October, Dubai developers Deyaar and Union Properties denied that they were in merger talks but were unable to say if the government might order a tie-up.
Mr Marwan said that developers should review projects that had not yet been launched, or where only a few units had been sold.
'This is not a good time to start a new project if you don't have enough liquidity to construct,' he said. 'Slowing down is very important and this is what we at Rera asked the developers to do about a year back. Slow down and review is very important for the market.'
Mohamed Alabbar, a Dubai government official who also chairs the crisis committee, said late last month that the emirate would pull back on its building spree in the light of the financial crisis.
Mr Marwan said that the only market that was truly suffering in Dubai was that for off-plan properties.
'The only market that is not doing well is the off-plan . . . because there are a lot of the speculators on some of the projects. Some of the banks are not dealing with this crisis professionally so they stopped financing,' he said, noting that some developers were also asking for too high a price.
Prices for 'affordable' off-plan properties could pick up in the second quarter or 2009 if banks increase lending, he said.
Mr Marwan said that Rera would enforce a law on the registration of off-plan property sales, after a Muslim holiday next week. Rules for time shares were also being finalised.
'People will be selective in where they put their money. It's not like before where people came to buy anywhere.' - Reuters
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved. |
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