Singapore briefs

Lian Beng wins Th e Laurels deal worth S$95 mil
Lian Beng has won its third contract in a month, bringing its total order book to S$915 million (about RM2.13 billion). The contractor-developer said it has been awarded a S$95 million contract by Sing Holdings to build The Laurels, a condominium development at Cairnhill Road.The contract includes the construction of 229 apartments in two 19-storey residential blocks, a swimming pool, a basement car park and other facilities. The two other contracts won by Lian Beng are for the construction of Far East Organization’s Centro Residences in Ang Mo Kio and UOL Group’s Waterbank at Dakota. Work on The Laurels will  begin this month, and the project is slated for completion by March 2013.

In a separate announcement , Lian Beng said its net profit for the nine months ended March 31 rose 52% yo-y to S$17.4 million. Turnover was up 4.5% to S$240.47 million, led by busier construction activity. In the same period, its gross margins improved from  11.2% to 13.1%, helped by its business and stakes in several key areas along the construction value chain, including readymix concrete, construction equipment and in-house scaffolding.

UE buys Ang Mo Kio industrial building for $25 mil
United Engineers (UE) has acquired an Ang Mo Kio industrial property for S$25 million, which will become the company’s  corporate headquarters. UE plans to expand the property’s gross floor area (GFA) to 500,000 sq ft, up from the current 378,426 sq ft. The property, at Ang Mo Kio Street 64, will be renamed UE BizHub CENTRAL. It now consists of two buildings, one seven-storeys and the other four-storeys high, linked by a skybridge.

The acquisition is in line with the company’s plans to expand its built-to-suit business. In 2008, UE announced the development of UE BizHub EAST, an integrated multipurpose development at Changi Business Park consisting of 611,500 sq ft of office space, 250 hotel and serviced apartment rooms and a 26,400 sq ft convention centre. It is slated for completion in 2013. The company is on the lookout for other suitable sites.

OKH wins Yishun Ave 6 industrial site
OKH Management, a unit of contractor OKH Holdings, has been awarded an industrial site at Yishun Avenue 6 with a top bid of S$27.2 million. The 60-year leasehold site covers 14,192.8 sq m (152,771.3 sq ft) and has a maximum GFA of 35,482 sqm, or 381,928 sq ft. OKH’s bid works out to S$766.59 psm per gross plot ratio (gpr). Soilbuild Group Holdings put in the second-highest bid of S$25.1 million, or S$707.96 psm per gpr, from among a field of seven bidders in total. The bidding of this Yishun site, which was in the Reserve List, was launched when an unnamed developer committed to put in at least S$11.5 million for the site.

Li Hiaw Ho, executive director of CB Richard Ellis (CBRE) Research, calls this bidding exercise “encouraging”. He attributes the healthy interest to a lack of industrial sites in the area. “No sites in Yishun were awarded under the Government Land Sales programme in the last 10 years,” he points out. Li also believes the robust response can be  attributed to positive business sentiment. For example, manufacturing output in February grew 19.1%, reversing a contraction of 12.5% in the same month last year, he says. According to Li, the last transaction for industrial buildings at Yishun was in November 2007, when MacarthurCook Industrial REIT bought 61 Yishun Industrial Park A for S$24.6 million, or S$157 psf.

Lower dip in Orchard prime retail in 1Q
The pace of the retail rental decline along Orchard Road slowed in 1Q2010, led by the opening of more F&B outlets. Suburban rents, in the same period, continued to hold steady. Prime Orchard Road retail rental in 1Q dropped only 0.7% q-o-q to S$32.20 psf a month. Between 3Q and 4Q2009, the decline was 1.5%, according to CBRE.

“The slowdown in rental decline is a good sign that Orchard Road shops are holding up fairly well at this stage in the recovery,” says Letty Lee, CBRE’s director of retail services. “We are seeing more 24-hour grocers, gourmet markets, shop-cafés and all-day breakfast outlets.” With the increased F&B demand, Lee expects to see more upside in rental rates for such spaces, and that will prompt tenants to exercise prudence before committing to space.

Prime suburban retail space remained the same at SS$28.10 psf a month, unchanged from 4Q2009. Demand is seen in certain spots, like nex, an upcoming mall at Serangoon, which is already near full occupancy ahead of its completion in 4Q2010 this year, notes CBRE.

Several upcoming city-area developments are also seeing active demand. *scape at Somerset Road is already 80% taken, ahead of its opening in June, while the new Basement Two link between Raffles City and the Esplanade, scheduled to open in July, is more than 63% committed.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 802, April 19-25, 2010