URA revenue from land sales surges 80% to $8.3b

[mr funny]

http://www.businesstimes.com.sg/sub/news/story/0,4574,299567,00.html?

Published October 3, 2008

URA revenue from land sales surges 80% to $8.3b

By ARTHUR SIM


LAND sales revenue collected by the Urban Redevelopment Authority (URA) for the Singapore government reached $8.3 billion for FY07/08, up 80 per cent on the $4.6 billion collected during the property market peak of FY96/97.

According to URA's Annual Report FY07/08, development charge collected by URA for the current period also hit a record $1.1 billion.

On a year-on-year basis, land sales revenue for the year rose about 200 per cent over the $2.7 billion collected for FY06/07, while development charge revenue increased by about 100 per cent over the $527 million collected. A total of 31 sites were sold in FY07/08 compared with 16 sites the previous year.

The key sites sold under the Government Land Sales programme in the past year include two Marina View land parcels and a site at Beach Road.

Operating surplus increased by 75 per cent or $11.1 million to $25.9 million. However, the lower investment income earned in FY07/08 resulted in a decrease in the total surplus by 74 per cent or $78.6 million to $28.3 million.

Current assets fell to $1.33 billion for the period, down from $1.38 billion the previous financial year.

Capital and development expenditure rose by $18.3 million or 96 per cent to $37.3 million. The rise was mainly due to higher development expenditure for implementing infrastructural and environmental enhancement works for the Downtown at Marina Bay and the Southern Ridges projects.

The net surplus of $23.2 million was lower than the previous year's $85.5 million due to a drop in URA's non-operating surplus.

URA said that this resulted from a shift of some of its surplus funds to more liquid and lower yielding assets such as bonds and bank deposits to fund its development projects, and also a reduced return from investment from the volatile equity market in FY07/08.

Operating income for the year increased by $29.7 million to $166.8 million. The increase was mainly due to higher agency fees from sale of site and agency projects, and income from processing more development applications.

Agency and consultancy fees increased by 54 per cent to $34.7 million, while income from development control rose 57 per cent to $30 million for the year.

Operating income from parking fees and related charges increased by 7 per cent to $59.3 million.

[mr funny]

http://www.businesstimes.com.sg/sub/news/story/0,4574,299566,00.html?

Published October 3, 2008

Grade A office vacancy doubles to 1.2% in Q3

By ARTHUR SIM


GRADE A office vacancy has doubled in the third quarter of 2008, rising from 0.6 per cent in the previous quarter to the current 1.2 per cent.

This is also the first time in eight quarters since Q3 2006 that Grade A office vacancy has risen above the one per cent mark.

CB Richard Ellis (CBRE) says market fundamentals have changed and sentiments have 'deteriorated' with pre-commitment rent levels likely to come under pressure.

CBRE executive director Moray Armstrong added: 'There is an increase in vacancy as certain occupiers have relocated to less expensive cost options in lower grade and, or, decentralised locations.'

According to CBRE, office rents have also plateaued with both Grade A and prime office rents remaining static at $18.80 per square foot per month (psf pm) and $16.10 psf pm respectively.

CBRE had earlier anticipated rents would only soften beyond 2010. But with the events of the past few weeks, it now believes that the correction will be fast- forwarded to early 2009.

'Landlords are adopting more reasonable asking rents, although in the immediate term occupiers will still face rentals that are at all-time highs. We will continue to monitor the trend over the next few months to see how swiftly the fast approaching new office supply allied with slowing demand will combine to bring down rents from today's levels,' added Mr Armstrong.

There were increases in vacancy rates for most micromarkets in the third quarter of 2008 - with the exception being Orchard Road, which saw a one percentage point drop in vacancy due to higher occupancy at the newly completed Visioncrest and at StarHub Centre.

Mr Armstrong said that occupiers are 'understandably cautious' given the challenging financial and economic environment, but he pointed out that a number of recently announced pre-commitments demonstrate that there is underlying confidence in Singapore's relative position.

Still, he noted that many occupiers are also chasing lower costs and are relocating to decentralised locations, built-to-suit facilities and business park space.

CBRE estimates the confirmed new office supply over the next five years is now slightly higher at 10.64 million sq ft.

CBRE said the increase stemmed from increases in proposed net lettable area from developments under construction.

'We do not consider this volume of supply excessive based on our estimated average annual demand of 1.6 million sq ft,' said Mr Armstrong, highlighting that about 26 per cent of the new supply has already been pre-committed.

Mr Armstrong explained that the 1.6 million sq ft demand figure represents its projected five-year average office take-up level over the period 2008-2012.

He believes that this figure represents a realistic take-up figure that has factored in lower GDP going forward.

By comparison the past three-year average office take-up level was just under 2.2 million sq ft.