Our article highlighting the BCA Research report has drawn a counter-view from a reader, who is a property industry insider. Interestingly, it is his personal take and it differs from his company's.
1. Even at current low interest rates, property buyers are not tripping over themselvesto buy physical properties in Singapore - look at the low, low URA transaction volumes.
2. Physical property prices on average have gone up 100% (e.g. East Coast - Fort Road 99-year leasehold condo price has shot up from $850 psf in 2005 to $1,600 psf in 2007) but our salaries have not doubled. So BCA's chart 3 (see below) on affordability index is very questionable.
3. The 100% surge in property prices is a result of high rental rates that force expats to BUY rather than to RENT. Genuine buyers are being forced to buy homes at 2x the price because there have been speculation, en-bloc sales and the presence of private equity funds with the financial muscle to hold on to assets for the long-term.
4. Higher-end property assets have seen prices fall but mass market is up in simple terms, as follows:
a. High-end $5,000 psf in mid-2007 to $3,000 psf in mid-2008.
b. Mid-end $2,500 psf in mid-2007 to $1,600 psf in mid-2008
.c. Mass market $800 psf in mid-2007 to $850 psf in mid-2008.
5. The reality is:
a. Property prices have surged in a short span of 2 years (2005 to 2007) because of liquidity & not affordability.
b. We are seeing prices correcting to a decent level (But what's decent, we don't know)
c. The sub-prime woes in the US are a mirror reflection of Singapore property in allowing free liquidity to result in price upside, so please be circumspect.
6. Let' not get smitten by the monthly change in property data. We have to be realists in this market:
a. Interest rates are likely to go up, not down, to combat inflation.
b. Singapore is globally exposed; any stumble in the US economy, we’ll feel the heat.
c. What we don't know: Buyers who bought property at, say, $1,600 psf could be trying to sell at $1,300 psf but there are no takers.
d. Supply, supply, supply in 2009: We expect rents to come down and property prices to weaken (by how much, we don't know)
e. Property stocks are not exactly cheap compared to Apr 06 levels. We think the high Apr 07 prices are anomalies and the result of greed. Apr 08 prices are fair.
8. We are not bears, just being realistic. We do like property stocks with regional exposure (Capitaland, KepLand) and mass-market exposure (Allgreen). So be very selective and avoid the high-end property stocks because there will be more bad news than good coming out from the US sub-prime saga.
Monday, April 21, 2008
Wednesday, April 2, 2008
Milk Nurtures Success
Hot Growth in Asia November 20, 2007, 7:59AM
Milk Nurtures Success
Capitalizing on China's growing taste for milk, the dairy company bought 970 head of cattle—before the ban on imports of U.S. and Canadian beefby Chi-Chu Tschang The outbreak of mad cow disease in Canada and the U.S. in 2003 knocked the North American cattle industry on its back. The largest importers of U.S. and Canadian beef, including Japan, South Korea, and China, banned the import of beef from North America. But for China Milk Products, the restrictions proved to be a blessing in disguise. The privately owned raw milk company had already purchased 970 Canadian Holstein cattle. Its state-owned rivals failed to import as many cattle because they had to navigate government bureaucracy to get bank loans.
Today, China Milk owns the largest herd of Holstein cattle in China and ranks 50th in BusinessWeek's annual Hot Growth rankings of Asia companies. Liu Shuqing and five partners started China Milk in the summer of 2001 to produce raw milk, after recognizing China's demand for milk was outstripping supply. As Chinese families become wealthier from the booming economy, more parents are buying milk for their children. China traditionally has not been a milk-consuming country, so local cows were not bred to maximize their milk production until very recently. Chinese dairy cows produce roughly four metric tons of milk per year, about half the yield from U.S. and Canadian Holstein cows. Monopoly on Bulls.
To narrow the gap in production, China Milk began importing Holstein bulls and cows, first from Canada and then, after the import ban, from Australia to breed with Chinese cows. At the same time, the Heilongjiang Province-based company also set up embryo-transfer and semen-extraction facilities to breed cows producing greater yields of milk. Once China banned North American cattle, China Milk cornered the market on bull semen and cow embryos from Canadian Holstein cows in China. "We used to love the import ban because no one [could] compete with us when we started in the industry," says Martin Choi, chief financial officer for China Milk. "But right now, we really want the import ban to go because it's stopping us [from importing] the cows." Any rancher wanting to breed his cows with a Canadian Holstein has to go to China Milk. The company charges its customers $9.50 per sample of bull semen from a Canadian Holstein, compared with $6.75 from Australian Holsteins and $2.70 from Chinese Holsteins. However, Chinese ranchers are still willing to pay a premium for Canadian Holsteins, especially after receiving a little help from the government. Starting this year, the Chinese government is giving Chinese ranchers a subsidy of $2 toward each sample of bull semen. The sale of bull semen accounted for more than three-quarters of China Milk's sales this year. The company's revenues have gone up more than fourteenfold, to $57 million, while profits have risen more than elevenfold, to $51 million this year, since 2003.
Persuading China to Lift the BanChina Milk's virtual monopoly on North American Holsteins won't last forever. American and Canadian trade negotiators have been trying to persuade their Chinese counterparts for years to lift the import ban. The restrictions were originally supposed to be lifted in 2007, but several more cases of mad cow disease were found in Canada and the U.S. this spring. China Milk Chief Executive—and son of the company founder and executive chairman—Liu Hailong now expects the ban to be lifted in late 2008 or early 2009 at the earliest. "Once they lift the ban, we will probably import the first batch of the best bulls and cows from the U.S. and Canada to China. Our other competitors will still be far behind us and won't pose a threat," he says
.....it has the biggest Canadian Holsteins in China... almost monopolistic nature
....another strength is in terms of financial strength which will pull it ahead of other competitors even when the ban is lifted
........ as of March 2008 there is still mad cow disease uncovered in Canada...http://www.medicalnewstoday.co.../50402.php
....with quaratine of a few months....this makes the advantage even more pronounce
Milk Nurtures Success
Capitalizing on China's growing taste for milk, the dairy company bought 970 head of cattle—before the ban on imports of U.S. and Canadian beefby Chi-Chu Tschang The outbreak of mad cow disease in Canada and the U.S. in 2003 knocked the North American cattle industry on its back. The largest importers of U.S. and Canadian beef, including Japan, South Korea, and China, banned the import of beef from North America. But for China Milk Products, the restrictions proved to be a blessing in disguise. The privately owned raw milk company had already purchased 970 Canadian Holstein cattle. Its state-owned rivals failed to import as many cattle because they had to navigate government bureaucracy to get bank loans.
Today, China Milk owns the largest herd of Holstein cattle in China and ranks 50th in BusinessWeek's annual Hot Growth rankings of Asia companies. Liu Shuqing and five partners started China Milk in the summer of 2001 to produce raw milk, after recognizing China's demand for milk was outstripping supply. As Chinese families become wealthier from the booming economy, more parents are buying milk for their children. China traditionally has not been a milk-consuming country, so local cows were not bred to maximize their milk production until very recently. Chinese dairy cows produce roughly four metric tons of milk per year, about half the yield from U.S. and Canadian Holstein cows. Monopoly on Bulls.
To narrow the gap in production, China Milk began importing Holstein bulls and cows, first from Canada and then, after the import ban, from Australia to breed with Chinese cows. At the same time, the Heilongjiang Province-based company also set up embryo-transfer and semen-extraction facilities to breed cows producing greater yields of milk. Once China banned North American cattle, China Milk cornered the market on bull semen and cow embryos from Canadian Holstein cows in China. "We used to love the import ban because no one [could] compete with us when we started in the industry," says Martin Choi, chief financial officer for China Milk. "But right now, we really want the import ban to go because it's stopping us [from importing] the cows." Any rancher wanting to breed his cows with a Canadian Holstein has to go to China Milk. The company charges its customers $9.50 per sample of bull semen from a Canadian Holstein, compared with $6.75 from Australian Holsteins and $2.70 from Chinese Holsteins. However, Chinese ranchers are still willing to pay a premium for Canadian Holsteins, especially after receiving a little help from the government. Starting this year, the Chinese government is giving Chinese ranchers a subsidy of $2 toward each sample of bull semen. The sale of bull semen accounted for more than three-quarters of China Milk's sales this year. The company's revenues have gone up more than fourteenfold, to $57 million, while profits have risen more than elevenfold, to $51 million this year, since 2003.
Persuading China to Lift the BanChina Milk's virtual monopoly on North American Holsteins won't last forever. American and Canadian trade negotiators have been trying to persuade their Chinese counterparts for years to lift the import ban. The restrictions were originally supposed to be lifted in 2007, but several more cases of mad cow disease were found in Canada and the U.S. this spring. China Milk Chief Executive—and son of the company founder and executive chairman—Liu Hailong now expects the ban to be lifted in late 2008 or early 2009 at the earliest. "Once they lift the ban, we will probably import the first batch of the best bulls and cows from the U.S. and Canada to China. Our other competitors will still be far behind us and won't pose a threat," he says
.....it has the biggest Canadian Holsteins in China... almost monopolistic nature
....another strength is in terms of financial strength which will pull it ahead of other competitors even when the ban is lifted
........ as of March 2008 there is still mad cow disease uncovered in Canada...http://www.medicalnewstoday.co.../50402.php
....with quaratine of a few months....this makes the advantage even more pronounce
Monday, March 31, 2008
Residential rents seen rising further 2008
Published March 27, 2008
Residential rents seen rising further
En bloc sales and population increase caused by influx of foreigners will continue to fuel demand, writes LEONARD TAY RESIDENTIAL rents bottomed out in 2004, recovering until 2007 when they staged an extraordinary rise, surging by more than 40 per cent within the year. This was the highest rate of increase in Urban Redevelopment Authority's private residential rental index since the index started in 1990. And 2008 is likely to see continued strength in rentals, although growing at a more modest pace of 5-10 per cent. Rents rose a negligible 0.2 per cent in 2004, and then a stronger 3.1 per cent in 2005, according to the URA private residential rental index. But as the residential sector recovered strongly from 2006 onwards, rental values rose more steeply. The non-landed residential segment, which forms the bulk of the leasing market, chalked up rental growth of 15 per cent in 2006 before sky-rocketing 43.1 per cent in 2007. A key reason for the supernormal growth in rents was the population increase as a result of immigration. Singapore's total population rose from 4,401,400 in 2006 to 4,588,600 in 2007, an addition of 187,200, of which Singapore residents made up 57,200 while foreigners constituted 130,000. This is a 14.8 per cent rise year-on-year and is the largest increase in the number of foreigners seen in over seven years. The foreign population refers to professionals, workers, students and their family members. This is the first time the total has crossed the one-million mark. The increase in 2006 was 9.7 per cent.
Main attractions The positive run in the economy, growth prospects for the country and an attractive living environment brought many here, leading to the surge in demand for housing accommodation. The foreigners chose Singapore because of the job opportunities here and its connectivity to other major cities in Asia. Generally, they formed the bulk of the tenant pool and the prime districts (Orchard, Holland and Bukit Timah areas) were their favourite locations. However, due to the recent escalating rents, more expatriates have opted to move out of the prime districts for cheaper accommodation elsewhere. Some have even gone ahead to buy their own homes instead of renting. The swelling demand was further fuelled by the number of residential projects that were sold on the collective sale market. A number of displaced home owners have rented in the interim while waiting for their new replacement homes to be completed. While rents have increased islandwide, some regions are ahead of the pack. Rents in the Core Central Region (districts 9, 10, 11, Downtown Core and Sentosa) lead the market with a median rent of $3.86 per sq ft per month, going by URA's median rent numbers at end-2007. This is followed by the Rest of Central Region with a median rent of $2.74 psf per month and the areas Outside of Central Region with a median rent of $2.01 psf per month. Using CBRE Research's basket of properties for the luxury, prime and island-wide segments of the leasing market, average rents have reached even higher levels. The average rent for luxury residences ended 2007 at $6.10 psf per month, having risen 36 per cent during the year. Properties in this luxury class include the top 10 to 15 completed condominiums located in the prestigious areas around Orchard Road. Average rents for prime residential properties were $4.50 psf per month, having increased by 55 per cent in 2007, while islandwide rents were $2.65 psf per month, after rising 33 per cent in the same period. As rentals at prime and popular locations become more expensive, both local and foreign residents have been moving further out; first to the city fringe and eventually along the east-west axis of the MRT lines to the suburban areas. A comparison of non-landed median rents from the URA's Realis system in December 2006 and December 2007 shows that the most significant increases have not been restricted to the central areas, but have been seen in the eastern and western parts of the island. It should be noted that although districts 9 and 10 remain the most popular among expatriates, these districts have a range of old and new residences, leading to a relatively lower median rent compared with those in district 4. The residential landscape in district 4 (Telok Blangah/Harbourfront) is generally more homogenous and comprises newer developments that can fetch a premium. Outlook for 2008 The leasing market is expected to remain firm in 2008 and rents will continue to rise, albeit at a more moderate pace in line with the less aggressive growth projected for the economy. The same phenomenon experienced in 2007 will continue into 2008 as fringe and suburban areas become more sought after by occupiers who find the higher rents in the prime central areas prohibitive. The spillover from the central area would cause rents to rise in other parts of the island and lead to overall growth in the leasing market. At the same time, as Singapore continues to attract the well-heeled from around the world, rents for luxury and city living condominiums in the popular areas around Orchard Road and the CBD will continue to move upwards. Average residential rents are expected to increase by about 5-10 per cent this year.
BT Leonard Tay is a director of CBRE Research
Residential rents seen rising further
En bloc sales and population increase caused by influx of foreigners will continue to fuel demand, writes LEONARD TAY RESIDENTIAL rents bottomed out in 2004, recovering until 2007 when they staged an extraordinary rise, surging by more than 40 per cent within the year. This was the highest rate of increase in Urban Redevelopment Authority's private residential rental index since the index started in 1990. And 2008 is likely to see continued strength in rentals, although growing at a more modest pace of 5-10 per cent. Rents rose a negligible 0.2 per cent in 2004, and then a stronger 3.1 per cent in 2005, according to the URA private residential rental index. But as the residential sector recovered strongly from 2006 onwards, rental values rose more steeply. The non-landed residential segment, which forms the bulk of the leasing market, chalked up rental growth of 15 per cent in 2006 before sky-rocketing 43.1 per cent in 2007. A key reason for the supernormal growth in rents was the population increase as a result of immigration. Singapore's total population rose from 4,401,400 in 2006 to 4,588,600 in 2007, an addition of 187,200, of which Singapore residents made up 57,200 while foreigners constituted 130,000. This is a 14.8 per cent rise year-on-year and is the largest increase in the number of foreigners seen in over seven years. The foreign population refers to professionals, workers, students and their family members. This is the first time the total has crossed the one-million mark. The increase in 2006 was 9.7 per cent.
Main attractions The positive run in the economy, growth prospects for the country and an attractive living environment brought many here, leading to the surge in demand for housing accommodation. The foreigners chose Singapore because of the job opportunities here and its connectivity to other major cities in Asia. Generally, they formed the bulk of the tenant pool and the prime districts (Orchard, Holland and Bukit Timah areas) were their favourite locations. However, due to the recent escalating rents, more expatriates have opted to move out of the prime districts for cheaper accommodation elsewhere. Some have even gone ahead to buy their own homes instead of renting. The swelling demand was further fuelled by the number of residential projects that were sold on the collective sale market. A number of displaced home owners have rented in the interim while waiting for their new replacement homes to be completed. While rents have increased islandwide, some regions are ahead of the pack. Rents in the Core Central Region (districts 9, 10, 11, Downtown Core and Sentosa) lead the market with a median rent of $3.86 per sq ft per month, going by URA's median rent numbers at end-2007. This is followed by the Rest of Central Region with a median rent of $2.74 psf per month and the areas Outside of Central Region with a median rent of $2.01 psf per month. Using CBRE Research's basket of properties for the luxury, prime and island-wide segments of the leasing market, average rents have reached even higher levels. The average rent for luxury residences ended 2007 at $6.10 psf per month, having risen 36 per cent during the year. Properties in this luxury class include the top 10 to 15 completed condominiums located in the prestigious areas around Orchard Road. Average rents for prime residential properties were $4.50 psf per month, having increased by 55 per cent in 2007, while islandwide rents were $2.65 psf per month, after rising 33 per cent in the same period. As rentals at prime and popular locations become more expensive, both local and foreign residents have been moving further out; first to the city fringe and eventually along the east-west axis of the MRT lines to the suburban areas. A comparison of non-landed median rents from the URA's Realis system in December 2006 and December 2007 shows that the most significant increases have not been restricted to the central areas, but have been seen in the eastern and western parts of the island. It should be noted that although districts 9 and 10 remain the most popular among expatriates, these districts have a range of old and new residences, leading to a relatively lower median rent compared with those in district 4. The residential landscape in district 4 (Telok Blangah/Harbourfront) is generally more homogenous and comprises newer developments that can fetch a premium. Outlook for 2008 The leasing market is expected to remain firm in 2008 and rents will continue to rise, albeit at a more moderate pace in line with the less aggressive growth projected for the economy. The same phenomenon experienced in 2007 will continue into 2008 as fringe and suburban areas become more sought after by occupiers who find the higher rents in the prime central areas prohibitive. The spillover from the central area would cause rents to rise in other parts of the island and lead to overall growth in the leasing market. At the same time, as Singapore continues to attract the well-heeled from around the world, rents for luxury and city living condominiums in the popular areas around Orchard Road and the CBD will continue to move upwards. Average residential rents are expected to increase by about 5-10 per cent this year.
BT Leonard Tay is a director of CBRE Research
Thursday, March 27, 2008
China's milk hunger - China's milk production February 11, 2008
ARTICLE
China's milk hunger - China's milk production
Lior Yaron
Published: February 11, 2008
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
En
-->
Introduction
There are about 1.3 billion people in China, 745 million in the countryside and 555 million in the cities. The standard of life is increasing year by year, trying to reach that of the western world. The Chinese government considers milk to be an important part of the young person’s diet, and this, combined with the increasing western influence, is bringing a 10% yearly increase in dairy production – albeit from a relatively low base. Dairy production in China is changing rapidly and it will continue to do so in the near future. Milk production continues to grow rapidly in response to domestic demand, mainly in the urban sector.
Milk consumption
Twenty years ago China was not among the countries that were mentioned when we talked about milk consumption or production. The reasons for that were no tradition of milk products in the diet, that it it was an expensive product and the local people had low incomes, and lack of cooling facilities in the marketing chain. However in the last few years it has all changed dramatically. The urban population is growing rapidly, urban people have higher incomes which will be spent on high value food like milk. Government support for school milk and changing consumption habits. The average milk consumption in Beijing is about 46.2 kg per capita; even if only in the big cities people will reach this average, an additional 16 million tones of milk will be needed, equivalent to the total current New Zealand milk production (source: IFCN).
Milk production
There are today about 14 million dairy cows in China producing about 34 MMT of milk. The growth rate in cows and production is about 10% to 15% per year which comes mainly from increasing the number of cows. China is still importing a lot of dairy products mainly from the US, EU, Australia and New Zealand. The main regions for milk production are the North East, Central North and North West of China while in the meantime the main consumption areas are in the east and the south of China.
There are three different units of production:
1. Small private units – one to ten cow farm units are very common (60% of the cows) but at the same time there are also 50 - 100 cow units in this sector. The logistics problems with such small units are being resolved by a unique solution in China: a) Village Milk Centre (VMC) – in the middle of the village there is a milking centre and each farmer brings his cows to be milked there by a professional milkman.b) Hotel farm – all the farmers in one village bring their cows to one big dairy farm. They are shareholders in this operation but not working in it.
2. State owned farm – typically with 800 to 2000 cows. They normally require advanced equipment. They represent about 8% of the dairy cows.
3. Large dairy farms – owned by large dairies –typically with 1,000 to 10,000 cows. They normally require advanced equipment and they represent about 3% of the dairy cows.
The main challenges that the dairy industry will have in the near future are:
1. Milk quality – since the demand is much higher than supply the quality issue hasn’t yet come down to the farm level. Most of the dairy farmers are backyard farmers with other farming business and dairy is only one of them. Most of those farmers are new to the business with low levels of understanding of the dairy business; especially what milk quality is all about, cow comfort and nutrition of dairy cows.
2. Feeding cows – most of the know how about it came from mono gastric animals like pigs and chickens, there is lack of understanding of the importance of forage and forage quality in ruminants nutrition, and the farm structure is such that it is very difficult to get enough forage close to big cities. The increases in feed prices are creating big debates regarding crop production compared to milk production.
3. Support units for the farm and farmers: right now it’s very difficult to find any support units which can solve problems at the farm level: no extension service, herd book system, farmer association, dairy cattle breeder association, milk quality and mastitis control laboratory, or feed and forage laboratory.
Summary
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
This article was presented at the International Dairy Farmers' Congress 2008 in Berlin
China's milk hunger - China's milk production
Lior Yaron
Published: February 11, 2008
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
En
-->
Introduction
There are about 1.3 billion people in China, 745 million in the countryside and 555 million in the cities. The standard of life is increasing year by year, trying to reach that of the western world. The Chinese government considers milk to be an important part of the young person’s diet, and this, combined with the increasing western influence, is bringing a 10% yearly increase in dairy production – albeit from a relatively low base. Dairy production in China is changing rapidly and it will continue to do so in the near future. Milk production continues to grow rapidly in response to domestic demand, mainly in the urban sector.
Milk consumption
Twenty years ago China was not among the countries that were mentioned when we talked about milk consumption or production. The reasons for that were no tradition of milk products in the diet, that it it was an expensive product and the local people had low incomes, and lack of cooling facilities in the marketing chain. However in the last few years it has all changed dramatically. The urban population is growing rapidly, urban people have higher incomes which will be spent on high value food like milk. Government support for school milk and changing consumption habits. The average milk consumption in Beijing is about 46.2 kg per capita; even if only in the big cities people will reach this average, an additional 16 million tones of milk will be needed, equivalent to the total current New Zealand milk production (source: IFCN).
Milk production
There are today about 14 million dairy cows in China producing about 34 MMT of milk. The growth rate in cows and production is about 10% to 15% per year which comes mainly from increasing the number of cows. China is still importing a lot of dairy products mainly from the US, EU, Australia and New Zealand. The main regions for milk production are the North East, Central North and North West of China while in the meantime the main consumption areas are in the east and the south of China.
There are three different units of production:
1. Small private units – one to ten cow farm units are very common (60% of the cows) but at the same time there are also 50 - 100 cow units in this sector. The logistics problems with such small units are being resolved by a unique solution in China: a) Village Milk Centre (VMC) – in the middle of the village there is a milking centre and each farmer brings his cows to be milked there by a professional milkman.b) Hotel farm – all the farmers in one village bring their cows to one big dairy farm. They are shareholders in this operation but not working in it.
2. State owned farm – typically with 800 to 2000 cows. They normally require advanced equipment. They represent about 8% of the dairy cows.
3. Large dairy farms – owned by large dairies –typically with 1,000 to 10,000 cows. They normally require advanced equipment and they represent about 3% of the dairy cows.
The main challenges that the dairy industry will have in the near future are:
1. Milk quality – since the demand is much higher than supply the quality issue hasn’t yet come down to the farm level. Most of the dairy farmers are backyard farmers with other farming business and dairy is only one of them. Most of those farmers are new to the business with low levels of understanding of the dairy business; especially what milk quality is all about, cow comfort and nutrition of dairy cows.
2. Feeding cows – most of the know how about it came from mono gastric animals like pigs and chickens, there is lack of understanding of the importance of forage and forage quality in ruminants nutrition, and the farm structure is such that it is very difficult to get enough forage close to big cities. The increases in feed prices are creating big debates regarding crop production compared to milk production.
3. Support units for the farm and farmers: right now it’s very difficult to find any support units which can solve problems at the farm level: no extension service, herd book system, farmer association, dairy cattle breeder association, milk quality and mastitis control laboratory, or feed and forage laboratory.
Summary
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
This article was presented at the International Dairy Farmers' Congress 2008 in Berlin
Wednesday, March 26, 2008
Yishun condo site draws record bid of $213.5m
A YISHUN condominium site drew a higher-than-expected top bid when its tender closed yesterday, belying expectations of a property market slide.
Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.
HIGH BID = HIGH HOME PRICES?
Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.
Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.
This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.
MCL Land's bid pipped four others and came in almost 70 per cent higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.
Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.
But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.
'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'
Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.
MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sq ft.
The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.
'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'
Separately, HDB yesterday put two more sites up for sale through its reserve list system.
One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.
Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.
HIGH BID = HIGH HOME PRICES?
Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.
Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.
This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.
MCL Land's bid pipped four others and came in almost 70 per cent higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.
Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.
But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.
'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'
Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.
MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sq ft.
The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.
'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'
Separately, HDB yesterday put two more sites up for sale through its reserve list system.
One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.
Fund tops Serangoon site tender with $801m bid Located above MRT station
Fund tops Serangoon site tender with $801m bid Located above MRT station, it will be used for a mall and new bus interchange. -->
Joyce Teo
Thu, Mar 27, 2008The Straits Times
THE sleepy Serangoon area received a huge vote of confidence yesterday when a fund bid a sky-high $800.9 million for a land site, which will be used for a mall and a new bus interchange.
Six hopefuls lined up for the 99-year leasehold plot above Serangoon MRT station with four bidding over $660 million - well above the figure some people in the property industry thought the plot would attract.
The $800.9 million bid came from Pramerica Real Estate Investors (Asia) but was submitted under the name Gold Ridge. It reflects a price of $850 per sq ft (psf) of gross floor area.
This was 10 per cent above the second bid of $727 million from Serangoon Community Developments. Another bid came in at $401 million and one was a distant $215 million.
The site - launched by the Land Transport Authority - is destined to be a hub with Serangoon MRT serving as a junction station for the new Circle Line. Any development must include a new bus interchange integrated with the enlarged North-East and Circle Line stations.
The strategic location also offers enormous retail opportunities, say property experts.
'Serangoon Central is not a heavy residential area but there are no major malls within a 3km to 5km radius,' said Mr Danny Yeo, Knight Frank's deputy managing director.
'A mall can be a regional centre. The only tricky situation is that there can only be slightly over 200 carpark lots.'
Pramerica intends to build a full retail centre. It manages the Asian Retail Mall Fund I and II, which own several malls here, including Liang Court in River Valley, White Sands in Pasir Ris and Century Square in Tampines.
The Serangoon mall could have a net lettable area of around 600,000 sq ft, said CBRE Research executive director Li Hiaw Ho.
That would make it of similar size to Parkway Parade in Marine Parade and IMM in Jurong.
The plot is designated a white site, meaning it can be used for different functions, such as residential or commercial, but a full retail mall would bring the highest profit margin, said Savills Residential director Ku Swee Yong - and the highest risk in terms of cash flow.
The site has a gross floor area of 87,527 sq m. Consultants said a mall could probably bring average gross rent of up to $14 psf.
Assuming rent of $12 psf to $13 psf, the developers could expect a net income yield of about 5.5 per cent on a stabilised basis, said Mr Li.
Those who placed the lower bids were probably looking at a residential component, which could eventually sell for $800 psf to $900 psf, consultants said.
While the residential space would help with cash flow, proceeds from apartment sales should not be used to fund the retail mall, said an industry expert.
This is to avoid paying heavy taxes when the developer eventually sells the mall.
Meanwhile, the Urban Redevelopment Authority made available two 99-year leasehold sites yesterday. Interested developers can apply to have these reserve list sites put up for tender.
One is a 0.55ha plot at the junction of Clemenceau Avenue and Havelock Road, which is designated for a hotel of up to six storeys.
Another is a 3.07ha residential plot in Upper Changi Road North.
Mr Nicholas Mak, Knight Frank's director of research and consultancy, said the first site could accommodate a three- to four-star hotel with up to 270 rooms. If it is put up for tender, its land price is estimated to be $75 million to $81 million, or $600 psf to $650 psf of gross floor area.
The second site could have up to 400 condo units and fetch between $83 million and $111 million, with new units commanding $650 psf to $720 psf.
var newwindow;
Joyce Teo
Thu, Mar 27, 2008The Straits Times
THE sleepy Serangoon area received a huge vote of confidence yesterday when a fund bid a sky-high $800.9 million for a land site, which will be used for a mall and a new bus interchange.
Six hopefuls lined up for the 99-year leasehold plot above Serangoon MRT station with four bidding over $660 million - well above the figure some people in the property industry thought the plot would attract.
The $800.9 million bid came from Pramerica Real Estate Investors (Asia) but was submitted under the name Gold Ridge. It reflects a price of $850 per sq ft (psf) of gross floor area.
This was 10 per cent above the second bid of $727 million from Serangoon Community Developments. Another bid came in at $401 million and one was a distant $215 million.
The site - launched by the Land Transport Authority - is destined to be a hub with Serangoon MRT serving as a junction station for the new Circle Line. Any development must include a new bus interchange integrated with the enlarged North-East and Circle Line stations.
The strategic location also offers enormous retail opportunities, say property experts.
'Serangoon Central is not a heavy residential area but there are no major malls within a 3km to 5km radius,' said Mr Danny Yeo, Knight Frank's deputy managing director.
'A mall can be a regional centre. The only tricky situation is that there can only be slightly over 200 carpark lots.'
Pramerica intends to build a full retail centre. It manages the Asian Retail Mall Fund I and II, which own several malls here, including Liang Court in River Valley, White Sands in Pasir Ris and Century Square in Tampines.
The Serangoon mall could have a net lettable area of around 600,000 sq ft, said CBRE Research executive director Li Hiaw Ho.
That would make it of similar size to Parkway Parade in Marine Parade and IMM in Jurong.
The plot is designated a white site, meaning it can be used for different functions, such as residential or commercial, but a full retail mall would bring the highest profit margin, said Savills Residential director Ku Swee Yong - and the highest risk in terms of cash flow.
The site has a gross floor area of 87,527 sq m. Consultants said a mall could probably bring average gross rent of up to $14 psf.
Assuming rent of $12 psf to $13 psf, the developers could expect a net income yield of about 5.5 per cent on a stabilised basis, said Mr Li.
Those who placed the lower bids were probably looking at a residential component, which could eventually sell for $800 psf to $900 psf, consultants said.
While the residential space would help with cash flow, proceeds from apartment sales should not be used to fund the retail mall, said an industry expert.
This is to avoid paying heavy taxes when the developer eventually sells the mall.
Meanwhile, the Urban Redevelopment Authority made available two 99-year leasehold sites yesterday. Interested developers can apply to have these reserve list sites put up for tender.
One is a 0.55ha plot at the junction of Clemenceau Avenue and Havelock Road, which is designated for a hotel of up to six storeys.
Another is a 3.07ha residential plot in Upper Changi Road North.
Mr Nicholas Mak, Knight Frank's director of research and consultancy, said the first site could accommodate a three- to four-star hotel with up to 270 rooms. If it is put up for tender, its land price is estimated to be $75 million to $81 million, or $600 psf to $650 psf of gross floor area.
The second site could have up to 400 condo units and fetch between $83 million and $111 million, with new units commanding $650 psf to $720 psf.
var newwindow;
Higher housing grant for singles who live with parents
GOOD news for singles who want to buy a Housing Board flat to live with their parents.
They will get a higher CPF housing grant of $20,000 - from the current $11,000 - from April 1, the HDB announced on Thursday morning.
This higher-tier singles grant will also apply to eligible singles buying flats under the Design, Build and Sell Scheme (DBSS).
The catch is: the eligible single must commit to living together with his parents in the resale flat for at least five years.
Within the five years, the parents cannot buy or take over the ownership of another HDB flat, or invest in a private property, said the HDB.
Under the single Singapore citizen (SSC) scheme, single Singaporeans aged 35 years and above can get a CPF housing grant of $11,000 to buy a HDB resale flat if they satisfy the eligibility conditions.
Minister for Prime Minister's Office, Mr Lim Boon Heng, announced the higher singles grant in Parliament on March 8.
'It is a pro-family initiative to encourage children to look after their parents,' said the HDB.
The higher-tier singles grant will apply to resale applications or booking of DBSS flats from April 1.
All other prevailing policies such as the income ceiling, minimum occupation period for resale, will apply.
For enquiries, the public can call the toll free Sales/Resale Customer Service Line at 1800 8663 066.
They will get a higher CPF housing grant of $20,000 - from the current $11,000 - from April 1, the HDB announced on Thursday morning.
This higher-tier singles grant will also apply to eligible singles buying flats under the Design, Build and Sell Scheme (DBSS).
The catch is: the eligible single must commit to living together with his parents in the resale flat for at least five years.
Within the five years, the parents cannot buy or take over the ownership of another HDB flat, or invest in a private property, said the HDB.
Under the single Singapore citizen (SSC) scheme, single Singaporeans aged 35 years and above can get a CPF housing grant of $11,000 to buy a HDB resale flat if they satisfy the eligibility conditions.
Minister for Prime Minister's Office, Mr Lim Boon Heng, announced the higher singles grant in Parliament on March 8.
'It is a pro-family initiative to encourage children to look after their parents,' said the HDB.
The higher-tier singles grant will apply to resale applications or booking of DBSS flats from April 1.
All other prevailing policies such as the income ceiling, minimum occupation period for resale, will apply.
For enquiries, the public can call the toll free Sales/Resale Customer Service Line at 1800 8663 066.
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