CEO’s Keynote Speech at Cityscape Asia 2007 Singapore, 10 April 2007

CEO’s Keynote Speech at Cityscape Asia 2007 Singapore, 10 April 2007

Opportunities in Singapore's Real Estate Market

Good morning Ladies and Gentlemen. Welcome to Singapore and the inaugural Cityscape Asia exhibition. I am sure you will see a wide range of wonderful investment opportunities here at Cityscape Asia, and this morning, I am very happy to share with you the exciting opportunities that are available here in Singapore.

Introduction to Singapore
For those not so familiar with Singapore, a brief introduction. We have a population of about 4.2 million, living on a land area of about 700 sq km. Singapore has a highly developed and successful free market economy. It enjoys an open and corruption-free environment and a high per capita GDP.

As one of Asia’s main air, sea and telecommunications hubs, it has access to some 2.8 billion people within a 7-hour flight radius. More than 7,000 MNCs are already located here. Of these, about 60% also house their regional functions in Singapore. We have been consistently ranked as one of the most competitive nations, and just last month a Price Waterhouse Coopers survey ranked Singapore as No.1 in terms of ease of doing business.

Singapore offers an exciting blend of culture, cuisine, arts and architecture. Coupled with our safe, secure and clean environment, our city is ranked the most liveable city in Asia, according to a study by Mercer HR Consultants published in April 2006. This was based on a number of criteria which included a country’s political, economic and social environments, medical and health provision, schools and education, as well as housing and recreational options.

Singapore’s high quality of life has been a large draw for many businesses and talents to set up base in Singapore, contributing to the cosmopolitan character of our city.

URA – Planning for Growth
The Urban Redevelopment Authority (URA) is Singapore’s national land use planning authority. URA’s vision is to make Singapore a vibrant global city and enhance Singapore’s attractiveness as a great place to live, work and play in. We prepare long-term strategic plans and detailed local area plans to guide the physical development of Singapore. Our Concept Plan maps out our vision for the next 40-50 years. That vision is then translated down to the medium term in our Master Plan which stipulates the use and development intensity for each site to guide and facilitate current development proposals.

Careful planning is also coupled with good urban design. Whether it is the varying of building heights to create a layered skyline; the creation of public spaces for the community; or the provision of covered walkways and shelters for pedestrians’ comfort, good urban design sets out the context for which individual buildings can fit well into the larger environment. These design gestures give character to a place and raise the quality of our urban life. Individual buildings are guided to enhance not only its own image, but that of the entire area. Cumulatively, they help to realize part of the greater plan of making Singapore distinctive

We take a balanced approach as well to conserve our built heritage in tandem with development growth. For example, despite being a small city-state, some 6,500 buildings island-wide have been conserved over the past two decades, and this achievement was recognized last year when we were conferred the Global Award for Excellence by the Urban Land Institute. Today, many of these buildings have been given a new lease of life, both physically and economically

URA is also the main land sales agent for the State. The selling of sites is a key instrument in bringing our plans to reality and realizing our vision for Singapore. URA works closely with other government agencies in Singapore to ensure that infrastructure is planned and put in place to support our developments. For example, utilities, road and rail network, convenient pedestrian linkages, public spaces and landscaping which enhance the city while helping to maximise real estate values, are carefully thought through and implemented in a timely manner.

As a result, urban growth is well planned and orderly. An example of this is the Marina Bay area. Land was reclaimed more than 30 years ago in the 1970s to serve the future growth of the city centre. Today, the vision for Marina Bay is being realized through our planning, urban design, sales and events programming.

Key development areas in the City
I would now like to draw your attention to some key development areas in the city area which will play a large part in making Singapore a great city to live, work and play in.

Marina Bay
Firstly, let me bring you through our plans for Marina Bay. It is one of Singapore’s most exciting and ambitious urban projects, with a new future Downtown that will extend seamlessly from the existing Central Business District (CBD). However, it is more than just a business and financial hub. The URA’s plan is to have a wide range of quality residential, shopping, dining, cultural and entertainment facilities to establish a 24/7 live-work-play community. Today, crowds are already drawn to the many exciting developments around the bay including the Esplanade-Theatres – an international performance facility, Merlion Park, the heritage Fullerton hotel and other waterfront hotel, shopping and entertainment developments at Marina Centre.

The Singapore government is committed to developing Marina Bay over the next 15 to 20 years. It has already committed to pump in S$2 billion (US$1.26 billion) worth of state-of-the-art infrastructure to ensure the smooth functioning of Marina Bay. These include a Rapid Transit System (RTS) extension into Marina Bay, a 3.5km long promenade and a new iconic pedestrian bridge, featuring the world’s first double helix design construction of which has just begun last month; and a network of Common Services Tunnel, which will house key services such as electrical and telecommunication cables, potable water, pipes for district cooling.

Marina Bay is shaping up well and fast. Total private investment in Marina Bay to date is S$10billion. The Singapore government has successfully sold a site to Marina Bay Sands for the development of Singapore’s first Integrated Resort which will include a casino. The development will offer 110,000 sq m of meeting and convention facilities and three 50-storey hotel towers, world-class entertainment in two 2,000-seat theatres, an Art & Science museum, luxury retail outlets, and unique dining venues such as the floating pavilions in the Marina Bay.

One Raffles Quay, our first sale site, has been completed and its prime office space is now fully leased to premium tenants such as ABN AMRO, Deutsche Bank, Barclays Capital and Ernst and Young). The same consortium that developed One Raffles Quay, Hongkong Land, Cheung Kong Holdings and Keppel Land, has also been awarded the tender for the neighbouring Marina Bay Business and Financial Centre (MBFC) site which will have 438,000 sqm of office, retail, hotel and residential space. The developer plans to complete phase I of the development in 2010. Signalling the confidence investors have in our property market, the consortium exercised its option in February this year to purchase and develop Phase II.

The Sail @ Marina Bay, a luxurious condominium with breathtaking views of the Bay and the Singapore skyline, was sold out within weeks of its launch. It will be completed in 2009. A 2.67ha site at Collyer Quay was awarded in December last year and will be developed into a “lifestyle hub” featuring a luxury boutique hotel with a good mix of retail and entertainment uses to create an exciting lifestyle destination for locals and visitors alike.

The Singapore Flyer – one of the tallest observation wheels in the world, is now very visible on our skyline, and is scheduled to be completed in 2008. This exciting attraction will add to the loop of existing attractions around the bay.

We also took a very bold step in setting aside about 100 ha of prime land in our downtown area for 3 distinctive and unique gardens to ring Marina Bay and reinforce our City in a Garden image. We have concluded an international competition to develop 2 of these Gardens by the Bay, targeted to open in 2010. Two joint winning entries by world-renowned landscape architects Grant Associates and Gustafson Porter were selected and each will provide a very unique and distinct experience for visitors. The Garden at Marina South will include 2 large climate controlled conservatories that showcase plants from around the world, and offer spectacular views across the Bay. The Gardens at Marina East will have a strong water theme and an extensive water frontage and will be equipped with facilities for water-based activities such as canoeing and dragon boat races.

Beside facilitating the physical development of Marina Bay, URA, which is also the Development Agency for Marina Bay, actively markets and promotes the area to investors and future tenants. URA has, together with other agencies, organized several large-scale public events and celebrations, from our signature New Year’s Eve countdown celebration, to international dragon boat competitions, firework festivals and various carnivals. Starting from this year, we can look forward to the Marina Bay Urban Challenge (MBUC), an annual series of four sporting events that is being organised at Marina Bay. These sporting events will take place amidst the backdrop of Singapore’s skyscrapers and scenic waters within the Marina Bay area. Such events will add buzz to the downtown area, reinforcing our desire for making Marina Bay a spectacular venue for exciting sports and lifestyle events.

Future sale sites at Marina Bay

As part of our next phase of development for Marina Bay, we will be launching a 1ha “white site” at Marina Bay (Central Subzone) in May. Located in the heart of the existing CBD and Marina Bay, it offers a prestigious address for mixed-use development comprising office, hotel, retail and residential uses, contributing to our vision of transforming Marina Bay into a 24/7 live-work-play environment.

One site that might interest investors is an opportunity for a unique boutique hotel next to the lush greenery of the new 54ha Gardens at Marina South. The idea is to have a boutique hotel set within extensive lush green grounds and near the waterfront. The site will be connected to the Integrated Resort via walkways and to the adjacent underground MRT station for easy access and convenience. We look forward to hearing your ideas for this unique site!

URA has also safeguarded a site at the southern coast of Marina South for an International Cruise Terminal. This site will be well connected to the city directly via highways and roads and could potentially become an exciting development complemented by hotel, retail and entertainment facilities.

We are still in the planning stage for these sites, and URA is working with relevant agencies to seek out investors’ feedback and garner interesting business concepts and ideas. We will also identify other sites in the Marina Bay area for office and residential development and release them over time to meet demand. With all these developments happening in Marina Bay, we expect to see dramatic transformation in about 5 years’ time.

Orchard Road
Besides Marina Bay, we are also rejuvenating and enhancing existing districts in the city. At Orchard Road, Singapore’s premier shopping street, three new retail projects with a total GFA of about 200,000 sqm, can be expected within the next few years to enhance the retail diversity of this area. Orchard Turn, located above the Orchard Road MRT station, will be the tallest development along Orchard at 55 storeys. The podium retail block is scheduled to be completed in Dec 2008. The other two sites recently awarded, both next to the Somerset MRT station, are envisaged to be anchor retail developments along Orchard Road that will reinforce Orchard Road’s position as a leading international shopping destination.

The development of these three sites will contribute to the major makeover of Orchard Road to enliven and enhance the experience for shoppers. On its part, the government will contribute to improving public infrastructure and enhancing the environment. Over the next 3 years, the government plans to inject S$40 million to enhance Orchard Road’s landscape and infrastructure through upgrading of pedestrian walkways, street furniture, signage and street lighting.

Development opportunities in the city
As part of the government land sales programme for 2007, the government had announced that several prime sites for development within the city will be released for sale. One of the key sites I would like to highlight is at Beach Rd.

Beach Road site
The prime site at Beach Road provides an opportunity to celebrate Singapore’s rich history and stitch it together with a new exciting development. This site, which was just launched in March, occupies a prime and highly strategic nodal location within Singapore Downtown area. It is surrounded by two distinctive and vibrant districts of the city centre – the Marina Centre area which is Singapore’s key convention and hotel hub with a number of major hotel developments; and the Civic District which is home to many of Singapore’s historical buildings and places such as the former Supreme Court and City Hall, the Padang and the world-renowned Raffles Hotel.

This site has a rich and unique history with four historic and architecturally significant conserved buildings and is ideal for a mixed use development comprising prime office space and hotel rooms. The conserved buildings on the site enhance the uniqueness of the development. By allowing new high-rise and low-rise conserved buildings within the site, it will create a unique development with an exciting mix of old and new buildings interspersed with attractive open space and plazas.

Hotel sites
As demand for hotels is expected to increase significantly, URA is planning for more sites to accommodate the expected growth in visitors to Singapore. A number of sites offering a range of hotels, from business hotel sites in the CBD, a budget hotel site in Little India and a trendy upmarket hotel site along the Singapore River are also available for application.

Why is it a good time to invest in Singapore now
We have shared our plans and investment opportunities with you, and invite you visit the URA booth to find out more about our exciting plans and opportunities.

Singapore has always been a choice city for investments and location of businesses. The government takes a pro-business approach and provides regulatory framework that is transparent and clear.

Strong economic fundamentals will continue to underpin Singapore’s attractiveness as an investment location, real estate included. The overall economy is expected to grow at 4.5% - 6.5% for 2007. For the property market, there has been broad recovery in all sectors; ranging from office, retail, residential to hotel.

On the demand side, we understand many offices are considering relocating to, or expanding in Singapore because of the good growth prospects of the business and financial sectors. Also, office rentals(#1) and cost of living are more affordable than other comparable cities. At the same time, we offer a good quality of living.

Foreign developers and investors have found Singapore’s property market to be increasingly attractive. More of them are participating in the government land tenders or buying up existing properties. The total transaction value of foreign investment in Singapore's real estate (primary and secondary market) for the whole of 2006 was estimated to be around US$3.5 billion.

For the private residential market, apart from the traditional buyers from Malaysia, Indonesia, UK, India and China, there is also increasing interest from the Middle East, Sweden, Belgium, Greece and Japan for housing units. This broad range of buyers from around the world reflects Singapore’s growing appeal as a global city.

Conclusion
With all the current initiatives and development plans in Singapore, it’s an exciting and opportune time for investors to consider real estate development opportunities in Singapore. We invite your bold and exciting new ideas and hope you will be our partners in shaping our city.

Thank you.
(#1) CB Richard Ellis’ Global Market Rents survey of 173 markets in June 2006 reported that occupancy costs for prime office space in Singapore were ranked 43rd, more affordable than those in Tokyo (ranked 2nd), Hong Kong (ranked 5th), and Shanghai (ranked 37th).