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Thread: Leng Beng sees high-end market recovery in 1-2 years

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    Default Leng Beng sees high-end market recovery in 1-2 years

    http://www.businesstimes.com.sg/comp...y-in-1-2-years

    Leng Beng sees high-end market recovery in 1-2 years

    By Kalpana Rashiwala

    [email protected]@KalpanaBT

    17 Feb


    CITY Developments executive chairman Kwek Leng Beng sees light at the end of the tunnel for Singapore's high-end residential market.

    "I believe the high-end should turn around within a short period of one, two years; it should blossom three years or four years down the road. I would be shocked if it is five, six years or seven years down the road, then you'll have (a total) 12 years in hibernation," Mr Kwek said at the group's fourth-quarter results briefing on Monday.

    He reasoned that when the Republic starts attracting businesses to come to its shores and relaxes quotas on the inflow of high-end expats into Singapore, the upmarket segment of the residential property sector will start to move.

    Mr Kwek was also sanguine about local banks' bad debt position, which he describes as "not bad". There has been some recovery in oil prices. He observed that Indonesians, who used to buy Singapore high-end properties but had switched to the mid- and mass market segments, are slowly returning to the top end of the market.

    CDL identified the Gramercy Park condo along Grange Road in prime district 10 as one of two residential projects here for upcoming launch, subject to market conditions. The 174-unit freehold project on the former Lucky Tower site will comprise two towers offering two to four-bedroom apartments, and penthouses. The deadline for the project to obtain Temporary Occupation Permit (TOP) has been extended till the end of this year. The group is expected to market the units individually but is open to a bulk sale of an entire block. The second block could then go on the market later.

    When asked if the time was ripe to launch a high-end project in the current market, Mr Kwek said: "I believe Singapore is facing headwinds, but it doesn't mean that we should close down the business and do nothing. We do everything possible, sometimes we take a little rabbit out of the bag. But having said that, for some of our projects the costs are not too prohibitive and I believe that whatever we do in Singapore or whatever business you are in, at some point of time, you need to have sales.

    "Without sales, you're cutting costs and cost can only be cut to a certain extent...You cannot keep on not addressing the sales, however small the sales may be. So I believe it is very important for any business that the sales must go on, in order to create employment, in order to generate income."

    CDL also has a half stake in the Nouvel 18 project in the posh Ardmore location. The project received TOP at the end of last year. Under Qualifying Certificate (QC) rules, the developers would have two years from the TOP date to finish selling the units. "In the meantime we hope to apply for a waiver for this QC... there is also a possibility we may convert one block into a serviced apartment (subject to aproval from the authorities)," Mr Kwek reiterated. CDL developed Nouvel 18 jointly with Wing Tai.

    Analysts also quizzed CDL's top management on the S$1.5 billion novel strategic plafform entailing the issuance of profit participation securities (PPS) announced late last year for its Quayside Collection assets in Sentosa Cove. One concern is whether the unsold residential units in the mixed-use project could be divested before the five-year tenor of the securities runs out.

    The downturn in the Sentosa Cove condo market is now in its sixth year. "I will be shocked and surprised if at the end of another five years, (that is a total of) 11 years, nothing has happened to the high-end market. I will be most surprised based on the six or seven property cycles that I've seen," he added.

    CDL's chief executive, Grant Kelley, when asked if the PPS structure could be applied to any of CDL's other properties, said: "If we were to replicate this type of structure, we would probably be wise to stick to the fairly basic constructs: mixed-use assets, some sort of guraranteed income yield and then potential for upside.

    "We are actively looking at those kinds of opportunities not because we necessarily want to make this a recurring product feature. There are many ways to create a funds management platform. But this particular structure (PPS) in the current market, we still think there is investor appetite. So without committing to doing another one of these during the course of 2015, I certainly think the template of the PPS at Sentosa is a good one which we should evaluate carefully to see if it has more applicability in our portfolio."

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    Quote Originally Posted by reporter2 View Post
    http://www.businesstimes.com.sg/comp...y-in-1-2-years

    Leng Beng sees high-end market recovery in 1-2 years

    By Kalpana Rashiwala

    [email protected]@KalpanaBT

    17 Feb


    CITY Developments executive chairman Kwek Leng Beng sees light at the end of the tunnel for Singapore's high-end residential market.

    "I believe the high-end should turn around within a short period of one, two years; it should blossom three years or four years down the road. I would be shocked if it is five, six years or seven years down the road, then you'll have (a total) 12 years in hibernation," Mr Kwek said at the group's fourth-quarter results briefing on Monday.

    He reasoned that when the Republic starts attracting businesses to come to its shores and relaxes quotas on the inflow of high-end expats into Singapore, the upmarket segment of the residential property sector will start to move.
    Does he not know there has never been any quota on high-end expats? S'pore welcome these high-end expats.

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    Quote Originally Posted by august View Post
    Does he not know there has never been any quota on high-end expats? S'pore welcome these high-end expats.
    Forget this joker

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    If you are a rich man/woman in Europe and ECB print 60 Billion a month what will you do.

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    Quote Originally Posted by Arcachon View Post
    If you are a rich man/woman in Europe and ECB print 60 Billion a month what will you do.
    Invest in the US, better opportunity than Asia anytime. US is now the world's growth engine. Asia was so yesterday.

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