Construction costs for developers have been going up.According to some estimates, the jump was as much as 20% last year.
Industry watchers say that is mainly because of the increased demand for building services from major new projects like the integrated resorts.
Ku Swee Yong, Director of Savills Singapore, said: “There are several mega projects that Singapore is under-taking, in particular the two $5 billion investments in the casino integrated resorts, and several government infrastructure projects. All these would be fighting for the same pool of resources such as manpower, scaffolding, cranes.”
Major developer City Developments noted in a recent report that its construction costs increased in the past year, due to higher demand because of the more active property market.
Building costs aside, architect and design fees have also been on the uptrend.
This, as developers rope in famous international designers - such as Dutch architect Rem Koolhaas - to come up with unique designs to attract increasing-savvy home buyers.
These architects can command fees which are at least 50% higher than those of their local counterparts.
Wallace Chu, DBS Vickers’ Assistant Vice President, said: “They want their projects to stand out, with the buyers becoming more internationalized - they’ve been travelling and they know more about design, and they get used to the international lifestyle. That will push them to go for high quality, and they may not accept those normal types of designs.”
But analysts say property developers can well afford the higher costs, thanks to the buoyant property market.
Wallace Chu said: “The current situation is that (home) prices continue to go up. So for developers who have bought land a little bit earlier, that increase in overall costing will be buffered by that (home) price increase. So the bottom-line should still be strong for developers.”
Private home prices rose 10.2% last year and are seen climbing by some 15% this year.
Source: Channel NewsAsia, 05 April 2007
Saturday, April 7, 2007
Two CityDev projects get Green Mark Platinum awards
City Developments Ltd (CDL) has been conferred two BCA Green Mark Platinum awards by the Building and Construction Authority (BCA) for 2007.
CDL won the awards for its City Square Mall commercial development and its Oceanfront @ Sentosa Cove residential project. It is the first private developer to get a Green Mark Platinum award. Previously they have gone to public sector developments.
The 700,000 sq ft City Square Mall is a prototype eco-friendly, community-friendly mall projected to use almost 40 per cent less energy than a standard design.
A project must achieve 30 per cent energy and water savings and incorporate environmentally-sustainable building practices and innovative green features to be in the running for a Green Mark Platinum award. CDL has gained more green mark awards than any other private developer - 14 so far.‘
Minimising the impact of our business on the environment has always been an integral part of CDL’s corporate mission,’ said managing director Kwek Leng Joo. ‘We have been adopting the green building approach since 2001 and we are glad that our efforts are in line with the government’s vision to be a socially responsible, environmentally conscious global city.’
Source: The Business Times, 06 April 2007
CDL won the awards for its City Square Mall commercial development and its Oceanfront @ Sentosa Cove residential project. It is the first private developer to get a Green Mark Platinum award. Previously they have gone to public sector developments.
The 700,000 sq ft City Square Mall is a prototype eco-friendly, community-friendly mall projected to use almost 40 per cent less energy than a standard design.
A project must achieve 30 per cent energy and water savings and incorporate environmentally-sustainable building practices and innovative green features to be in the running for a Green Mark Platinum award. CDL has gained more green mark awards than any other private developer - 14 so far.‘
Minimising the impact of our business on the environment has always been an integral part of CDL’s corporate mission,’ said managing director Kwek Leng Joo. ‘We have been adopting the green building approach since 2001 and we are glad that our efforts are in line with the government’s vision to be a socially responsible, environmentally conscious global city.’
Source: The Business Times, 06 April 2007
Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out
Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out - the first time such a move has been needed for private homes in more than 10 years.
The dramatic rush, which even caught the marketing agents by surprise, was triggered when the 95 units in Thomson V were released at 3pm on Tuesday. Within four hours, more than 300 cheques had poured in, despite minimal advertising.
Marketing agent Huttons Real Estate Group opted to ‘draw lots for the units that had more than one interested buyer’, said its project director, Ms Peggy Ngiam, told The Straits Times.
‘The buyers had already identified the units they wanted, and we had to draw lots for most of the apartments.’
The ballot was a further indication, like the recent overnight queues and blank cheques, of the intense demand for new homes, said property experts.
‘It is yet another piece of the puzzle to show that the market has got a demand not filled by the current home supply,’ said Mr Ku Swee Yong, the director of marketing and business development at consultancy Savills
Singapore.
Balloting for apartment units has not been been seen here for over a decade but the practice is unlikely to become more widespread, said Mr Peter Ow, the executive director of residential marketing at Knight Frank.
‘It is a very orderly and very fair sales method, but it is unlikely that more developers will start using it because the prices have to be fixed beforehand,’ he added. In a rising market, many developers choose to release units in phases and raise prices progressively for each successive phase.
Mr Ow said the first project to be balloted here was the Merasaga, near Holland Village, which was snapped up within a day in 1993. Buyers had to draw lots for queue numbers.
The object of the latest frenzy, Thomson V in Sin Ming Road, comprises two four-storey residential towers, one freehold, the other 99-year leasehold. It is part of a mixed project that also has 60 shops still up for sale.
It is being developed by boutique firm Macly Group, which also developed Soho 188 in Race Course Road.
The keen interest for Thomson V was ‘a bit surprising’ because of its relatively high per sq ft (psf) prices and limited pre-marketing activities, said Ms Ngiam.
The development’s 71 freehold units went for an average of $880 psf, while the leasehold units fetched $760 psf on average. The highest price achieved was $989 psf.
There are no comparable new projects in the vicinity, but a market watcher said he would expect to pay slightly more than $700 psf for a new freehold development in the area.
However, Thomson V’s units are unusually small, which means they would still be affordable.
The apartments, mostly one-bedroom units, range in size from 355 sq ft to 1,098 sq ft. A typical unit would cost about $377,000.
But there was also little buzz about the property. Huttons had placed a few four-line advertisements in the classified ads, but project brochures were distributed to property agents only last Friday.
And Thomson V’s showflat and price lists were only made available on Tuesday afternoon itself.
Mr Ku of Savills said the strong demand was in part because there are few projects on the market with small units catering to singles or retirees.
There have also not been many new launches in this area or within this price bracket, he added.
Source: The Straits Times, 06 April 2007
The dramatic rush, which even caught the marketing agents by surprise, was triggered when the 95 units in Thomson V were released at 3pm on Tuesday. Within four hours, more than 300 cheques had poured in, despite minimal advertising.
Marketing agent Huttons Real Estate Group opted to ‘draw lots for the units that had more than one interested buyer’, said its project director, Ms Peggy Ngiam, told The Straits Times.
‘The buyers had already identified the units they wanted, and we had to draw lots for most of the apartments.’
The ballot was a further indication, like the recent overnight queues and blank cheques, of the intense demand for new homes, said property experts.
‘It is yet another piece of the puzzle to show that the market has got a demand not filled by the current home supply,’ said Mr Ku Swee Yong, the director of marketing and business development at consultancy Savills
Singapore.
Balloting for apartment units has not been been seen here for over a decade but the practice is unlikely to become more widespread, said Mr Peter Ow, the executive director of residential marketing at Knight Frank.
‘It is a very orderly and very fair sales method, but it is unlikely that more developers will start using it because the prices have to be fixed beforehand,’ he added. In a rising market, many developers choose to release units in phases and raise prices progressively for each successive phase.
Mr Ow said the first project to be balloted here was the Merasaga, near Holland Village, which was snapped up within a day in 1993. Buyers had to draw lots for queue numbers.
The object of the latest frenzy, Thomson V in Sin Ming Road, comprises two four-storey residential towers, one freehold, the other 99-year leasehold. It is part of a mixed project that also has 60 shops still up for sale.
It is being developed by boutique firm Macly Group, which also developed Soho 188 in Race Course Road.
The keen interest for Thomson V was ‘a bit surprising’ because of its relatively high per sq ft (psf) prices and limited pre-marketing activities, said Ms Ngiam.
The development’s 71 freehold units went for an average of $880 psf, while the leasehold units fetched $760 psf on average. The highest price achieved was $989 psf.
There are no comparable new projects in the vicinity, but a market watcher said he would expect to pay slightly more than $700 psf for a new freehold development in the area.
However, Thomson V’s units are unusually small, which means they would still be affordable.
The apartments, mostly one-bedroom units, range in size from 355 sq ft to 1,098 sq ft. A typical unit would cost about $377,000.
But there was also little buzz about the property. Huttons had placed a few four-line advertisements in the classified ads, but project brochures were distributed to property agents only last Friday.
And Thomson V’s showflat and price lists were only made available on Tuesday afternoon itself.
Mr Ku of Savills said the strong demand was in part because there are few projects on the market with small units catering to singles or retirees.
There have also not been many new launches in this area or within this price bracket, he added.
Source: The Straits Times, 06 April 2007
Sand cost: How much will filter down to home owners?
With prices of sand, granite and concrete now costing more than twice what they used to be, home buyers and home owners should expect to pay more for renovation and building work.
But exactly how much more will depend on the deal that they signed with their contractor and their relationship with him.
The price hike was triggered by Indonesia’s ban on the export of land sand on Feb 5, which led to Singapore turning to countries further afield for its supplies.
A few weeks after that, Indonesia detained barges carrying granite to Singapore, disrupting the supply of another basic construction material.
The price of sand used to be roughly $20 per tonne. Now, the Building and Construction Authority (BCA) is releasing sand from its stockpile at a price of $60 per tonne, and granite at $70 per tonne to stabilise supply.
The price of concrete - which is made with sand, cement and granite - has risen from about $70 per cubic metre to about $200 now.
As a result, the cost of renovating a five-room flat has risen by about $1,000, estimates renovation contractor Lim Ah Bah, who is also an adviser to the Singapore Renovation Contractors and Material Suppliers Association.
To build a $2.5 million bungalow from scratch will require more raw materials - with the increase in cost weighing in at about $100,000.
But whether a home owner bears the cost will depend on factors like timing. Property owners who signed fixed-price deals with their contractors before the disruptions started are legally not obliged to pay more.
Still, some like engineer Siow Phek Chuan, 28, chose to do so out of goodwill.
Mr Siow hired a renovation firm in early February to do up the executive flat in Sengkang he had just bought.
A few weeks later, his contractor, Mr Lim , approached him for help, as the price of sand needed for the $35,000 project had risen by about $750.
Mr Siow offered to pay an extra $300 anyway. He told The Straits Times: ‘My renovation would be done up better if I have a very good relationship with my contractor. A few hundred dollars is not a big issue.’
However, the cost increase is not dealt with so amicably in every instance.
According to a Straits Times check with more than 10 renovation contractors and building contractors, it is more common for home owners and developers who had sealed fixed-price deals before the hikes to refuse to pay a single cent more.
With Singapore’s current building boom unlikely to slow, the big question now is who will ultimately pay the bill.
BCA estimates that the increase in prices of sand and granite will raise total construction cost of building projects by 7 per cent on average.
This works out to a 2 per cent increase in development cost - of which construction cost is one component. And this will eventually filter down to home buyers and home owners.
Renovation contractors and construction firms polled say they are now more likely to push for a clause in their contracts that takes into account the fluctuation of raw material prices. If that is not possible, they will tender for jobs at higher prices to prepare for similar hikes in the future.
Private developers mostly stayed silent when asked whether the future cost increases would be passed on to home buyers, but analysts reckon that the answer is almost certainly a yes.
According to property firm Knight Frank’s director of research and consultancy, Mr Nicholas Mak, most of the increase in cost can be easily passed on to consumers in a booming private property market.
And this sector has been anything but sluggish over the previous year, with private home prices growing 4.6 per cent between January and March, and 10.2 per cent for the whole of last year.
Before the ban, Singapore imported about six to eight million tonnes of sand from Indonesia annually.
Singapore also imports about 10 million tonnes of granite aggregate from Indonesia a year.
Now, contractors are tapping supplies in countries like Malaysia, China and Vietnam.
Contractors also say they are getting frequent offers from brokers or ‘middlemen’ hoping to make a quick buck by trying to hook them up with suppliers from new sources such as Myanmar, Cambodia and even Australia.
Source: The Straits Times, 07 April 2007
But exactly how much more will depend on the deal that they signed with their contractor and their relationship with him.
The price hike was triggered by Indonesia’s ban on the export of land sand on Feb 5, which led to Singapore turning to countries further afield for its supplies.
A few weeks after that, Indonesia detained barges carrying granite to Singapore, disrupting the supply of another basic construction material.
The price of sand used to be roughly $20 per tonne. Now, the Building and Construction Authority (BCA) is releasing sand from its stockpile at a price of $60 per tonne, and granite at $70 per tonne to stabilise supply.
The price of concrete - which is made with sand, cement and granite - has risen from about $70 per cubic metre to about $200 now.
As a result, the cost of renovating a five-room flat has risen by about $1,000, estimates renovation contractor Lim Ah Bah, who is also an adviser to the Singapore Renovation Contractors and Material Suppliers Association.
To build a $2.5 million bungalow from scratch will require more raw materials - with the increase in cost weighing in at about $100,000.
But whether a home owner bears the cost will depend on factors like timing. Property owners who signed fixed-price deals with their contractors before the disruptions started are legally not obliged to pay more.
Still, some like engineer Siow Phek Chuan, 28, chose to do so out of goodwill.
Mr Siow hired a renovation firm in early February to do up the executive flat in Sengkang he had just bought.
A few weeks later, his contractor, Mr Lim , approached him for help, as the price of sand needed for the $35,000 project had risen by about $750.
Mr Siow offered to pay an extra $300 anyway. He told The Straits Times: ‘My renovation would be done up better if I have a very good relationship with my contractor. A few hundred dollars is not a big issue.’
However, the cost increase is not dealt with so amicably in every instance.
According to a Straits Times check with more than 10 renovation contractors and building contractors, it is more common for home owners and developers who had sealed fixed-price deals before the hikes to refuse to pay a single cent more.
With Singapore’s current building boom unlikely to slow, the big question now is who will ultimately pay the bill.
BCA estimates that the increase in prices of sand and granite will raise total construction cost of building projects by 7 per cent on average.
This works out to a 2 per cent increase in development cost - of which construction cost is one component. And this will eventually filter down to home buyers and home owners.
Renovation contractors and construction firms polled say they are now more likely to push for a clause in their contracts that takes into account the fluctuation of raw material prices. If that is not possible, they will tender for jobs at higher prices to prepare for similar hikes in the future.
Private developers mostly stayed silent when asked whether the future cost increases would be passed on to home buyers, but analysts reckon that the answer is almost certainly a yes.
According to property firm Knight Frank’s director of research and consultancy, Mr Nicholas Mak, most of the increase in cost can be easily passed on to consumers in a booming private property market.
And this sector has been anything but sluggish over the previous year, with private home prices growing 4.6 per cent between January and March, and 10.2 per cent for the whole of last year.
Before the ban, Singapore imported about six to eight million tonnes of sand from Indonesia annually.
Singapore also imports about 10 million tonnes of granite aggregate from Indonesia a year.
Now, contractors are tapping supplies in countries like Malaysia, China and Vietnam.
Contractors also say they are getting frequent offers from brokers or ‘middlemen’ hoping to make a quick buck by trying to hook them up with suppliers from new sources such as Myanmar, Cambodia and even Australia.
Source: The Straits Times, 07 April 2007
Friday, April 6, 2007
Economic Spillovers From IDR, Singapore A Boon To Local Developers
Economic Spillovers From IDR, Singapore A Boon To Local Developers
JOHOR BAHARU, April 5 (Bernama) -- Local property developers stand to gain tremendously from the economic development in the Iskandar Development Region (IDR), as well as the spillover benefits from Singapore, Gamuda Land chief operating officer, Steven Chu, said today.
He said the IDR, being the engine of growth under the South Johor Development Corridor and Nusajaya, the single largest contiguous development as the nucleus of IDR, was poised to be a regional and international economic hub, which would create more than 80,000 new jobs over the next 20 years.
"In addition, we can enjoy the spillover benefits from Singapore's integrated resort and casino, which is expected to create another 100,000 of jobs and opportunities," he said.
Chu was one of the speakers at a two-day IDR conference on Planning and Investment Opportunities in IDR organised by the Institution of Surveyors Malaysia (Johor) and the Johor State Economic Planning Unit.
He said the liberalisation of Foreign Investment Committee policies, especially on foreign ownership, coupled with the abolition in the Real Property Gains Tax and the current steady bank interest rates, would certainly spur foreign direct investment and create a new demand for properties and boost property values in Johor.
Gamuda became part of the IDR through its strategic partnership with the master developer of Nusajaya, UEM Land Sdn Bhd to jointly develop Horizon Hills, a residential and commercial development.
Chu said the partnership, coupled with the strong support from the government, had enable Gamuda and UEM to leverage on each other's strengths, experties and experiences to deliver a premier lifestyle residential development within the IDR.
"UEM has a challenging vision for Nusajaya, a key component and the catalyst for development of the IDR in south Johor. It is certainly going to be a challenge to realise this vision, which is a crucial part of the Ninth Malaysia Plan.
"We at Gamuda Land together with our partner UEM Land are highly committed to ensure the success of Horizon Hills and eventually the IDR," he said.
-- BERNAMA
JOHOR BAHARU, April 5 (Bernama) -- Local property developers stand to gain tremendously from the economic development in the Iskandar Development Region (IDR), as well as the spillover benefits from Singapore, Gamuda Land chief operating officer, Steven Chu, said today.
He said the IDR, being the engine of growth under the South Johor Development Corridor and Nusajaya, the single largest contiguous development as the nucleus of IDR, was poised to be a regional and international economic hub, which would create more than 80,000 new jobs over the next 20 years.
"In addition, we can enjoy the spillover benefits from Singapore's integrated resort and casino, which is expected to create another 100,000 of jobs and opportunities," he said.
Chu was one of the speakers at a two-day IDR conference on Planning and Investment Opportunities in IDR organised by the Institution of Surveyors Malaysia (Johor) and the Johor State Economic Planning Unit.
He said the liberalisation of Foreign Investment Committee policies, especially on foreign ownership, coupled with the abolition in the Real Property Gains Tax and the current steady bank interest rates, would certainly spur foreign direct investment and create a new demand for properties and boost property values in Johor.
Gamuda became part of the IDR through its strategic partnership with the master developer of Nusajaya, UEM Land Sdn Bhd to jointly develop Horizon Hills, a residential and commercial development.
Chu said the partnership, coupled with the strong support from the government, had enable Gamuda and UEM to leverage on each other's strengths, experties and experiences to deliver a premier lifestyle residential development within the IDR.
"UEM has a challenging vision for Nusajaya, a key component and the catalyst for development of the IDR in south Johor. It is certainly going to be a challenge to realise this vision, which is a crucial part of the Ninth Malaysia Plan.
"We at Gamuda Land together with our partner UEM Land are highly committed to ensure the success of Horizon Hills and eventually the IDR," he said.
-- BERNAMA
Ritz Carlton to open new resort on Bintan
Ritz Carlton to open new resort on Bintan
The Jakarta Post, Fadli, Batam
Ritz Carlton is to open a new resort in the Bintan Resort Tourism Zone on Bintan island in Riau Islands province by the end of 2008 at a total cost of US$65 million.
The 77,000-square meter resort, which will boast 60 villas, is expected to attract more tourists to the area, Bintan Resort Development Corp.'s public relations manager Nia Firtica said Tuesday in Batam.
The resort, the construction of which will start in July, will also have a conference center that can accommodate 600 people.
It is expected to be fully operational by the end of next year and will create 200 new jobs.
Nia said that Ritz Carlton would manage the resort, which would be built by PT Pacific Palace Jakarta.
Ritz Carlton currently manages 63 hotels throughout the world, one of which is located in Jakarta and one in Bali. It is developing 35 more hotels in a number of different countries.
Besides the Ritz Carlton resort, Malaysian property company Landmark Holdings is also planning to build a large resort on the island. "The construction of the resort, which will be called Waterfront City, will begin next year," Nia said.
According to Nia, the Ritz Carlton and other tourist projects had been encouraged by the development of the Singapore Integrated Resort, which was due to open on the island in 2010.
"The investors' main reason for developing projects here is the steady increase of the number of tourists visiting the island," Nia explained.
At least 333,000 tourists from Singapore, Malaysia, Thailand, Korea, India and the Middle East visit the island annually. The Bintan Resort Tourism Zone was inaugurated in 1996.
With a total area of 23,000 hectares, the special resort zone, which is less than an hour by ferry from Singapore, so far houses five hotels and resorts built at a total cost of $4.8 billion, and employs 4,500 workers.(04)
The Jakarta Post, Fadli, Batam
Ritz Carlton is to open a new resort in the Bintan Resort Tourism Zone on Bintan island in Riau Islands province by the end of 2008 at a total cost of US$65 million.
The 77,000-square meter resort, which will boast 60 villas, is expected to attract more tourists to the area, Bintan Resort Development Corp.'s public relations manager Nia Firtica said Tuesday in Batam.
The resort, the construction of which will start in July, will also have a conference center that can accommodate 600 people.
It is expected to be fully operational by the end of next year and will create 200 new jobs.
Nia said that Ritz Carlton would manage the resort, which would be built by PT Pacific Palace Jakarta.
Ritz Carlton currently manages 63 hotels throughout the world, one of which is located in Jakarta and one in Bali. It is developing 35 more hotels in a number of different countries.
Besides the Ritz Carlton resort, Malaysian property company Landmark Holdings is also planning to build a large resort on the island. "The construction of the resort, which will be called Waterfront City, will begin next year," Nia said.
According to Nia, the Ritz Carlton and other tourist projects had been encouraged by the development of the Singapore Integrated Resort, which was due to open on the island in 2010.
"The investors' main reason for developing projects here is the steady increase of the number of tourists visiting the island," Nia explained.
At least 333,000 tourists from Singapore, Malaysia, Thailand, Korea, India and the Middle East visit the island annually. The Bintan Resort Tourism Zone was inaugurated in 1996.
With a total area of 23,000 hectares, the special resort zone, which is less than an hour by ferry from Singapore, so far houses five hotels and resorts built at a total cost of $4.8 billion, and employs 4,500 workers.(04)
Tax changes planned for Aussie REITs
Tax changes planned for Aussie REITs
(LONDON) The Australian government plans changes to the tax treatment of Australian listed property trusts (LPTs) that will boost their competitiveness abroad, an Australian trade magazine said yesterday.
According to a report in Financial Standard, the Minister for Revenue and Assistant Treasurer Peter Dutton said plans were afoot to provide LPTs - the Australian version of real estate investment trusts (REITs) - a means for rolling over some of their capital gains tax (CGT) liabilities.
'This may have implications for Australian REITs' expansion plans into Europe, as they will be better able to justify potential transactions to their investors on more attractive after-tax ROEs,' a note from investment bank JP Morgan said.
As well as providing a capital gains tax rollover for investors where there was a unit trust in place between a stapled group and its stapled entities, the planned changes would also ensure there were no tax triggers that might lead to the entire income of the interposed unit trust being treated as if it were a company.
'These proposals seek to improve the international competitiveness of stapled entities, such as Australian property trusts, and to facilitate their expansion into offshore markets,' Mr Dutton was quoted by the report as saying.
Cash-rich Australian property funds invested around US$6 billion in Europe last year, more than half of it in Germany, data from property services firm Jones Lang LaSalle showed last month.
Another US$3 billion each was invested in Asian and US property, fuelled by annual inflows into Australian property funds of about US$4 billion annually, Jones Lang said. - Reuters
(LONDON) The Australian government plans changes to the tax treatment of Australian listed property trusts (LPTs) that will boost their competitiveness abroad, an Australian trade magazine said yesterday.
According to a report in Financial Standard, the Minister for Revenue and Assistant Treasurer Peter Dutton said plans were afoot to provide LPTs - the Australian version of real estate investment trusts (REITs) - a means for rolling over some of their capital gains tax (CGT) liabilities.
'This may have implications for Australian REITs' expansion plans into Europe, as they will be better able to justify potential transactions to their investors on more attractive after-tax ROEs,' a note from investment bank JP Morgan said.
As well as providing a capital gains tax rollover for investors where there was a unit trust in place between a stapled group and its stapled entities, the planned changes would also ensure there were no tax triggers that might lead to the entire income of the interposed unit trust being treated as if it were a company.
'These proposals seek to improve the international competitiveness of stapled entities, such as Australian property trusts, and to facilitate their expansion into offshore markets,' Mr Dutton was quoted by the report as saying.
Cash-rich Australian property funds invested around US$6 billion in Europe last year, more than half of it in Germany, data from property services firm Jones Lang LaSalle showed last month.
Another US$3 billion each was invested in Asian and US property, fuelled by annual inflows into Australian property funds of about US$4 billion annually, Jones Lang said. - Reuters
Britain can avert property crash despite growing risks
Britain can avert property crash despite growing risks
Focus turns to business property market in UK amid US subprime crisis
(LONDON) A UK commercial property crash this decade is a growing possibility as borrowing costs rise and as a cold wind begins to blow through the white-hot market, but the risks are still small, despite growing nervousness.
The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year.
'There has to be a significant slowdown in returns but the scope for any sort of crash in the true sense of the word is limited,' Nick Tyrrell, head of research and strategy for European real estate at JPMorgan Asset Management, said.
As the US subprime mortgage crisis has unfolded, reminding investors of the risks attached to bricks and mortar, so the attention in Europe has turned to Britain's commercial property market, which is expected by property valuers and analysts to decelerate sharply after a protracted boom.
The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year, after three exceptional years in which the market averaged 18-19 per cent a year.
Rental income is expected to account for a greater share of future property returns, as prices stabilise or even ease and as interest rate rises make debt-funded purchases of UK property increasingly unprofitable.
The dangers are reflected in the UK property derivatives market, where spreads have fallen sharply this year and where zero capital growth was priced in for next year, traders said.
According to investment bank Eurohypo AG, capital returns on UK commercial property have averaged less than zero in only five years since 1971 - and four of those were during the country's last property crash in the early 1990s.
Capital preservation has also become more of an issue for some funds, in anticipation of a tougher investment climate. The Henderson UK Property Fund, for example, has switched its focus to higher-quality buildings in prime locations with prime tenants from slightly higher-yielding secondary property assets.
On the surface, the market appears increasingly vulnerable since average UK property yields have fallen below 5 per cent from more than 7 per cent in 2001 as property prices have boomed, while the Bank of England has raised rates to 5.25 per cent.
Yields on a property measure rental income relative to capital values.
In a note last month, Kelvin Davidson of independent forecaster Capital Economics said the threshold for UK property prices to begin falling was closer than commonly thought. Worse still, he said little was needed to trigger a crash, which he defined as a cumulative 10-15 per cent fall in property prices over three years.
One possible catalyst was for the gap between UK property yields and yields on 10-year UK government bonds to revert to 2005 levels by 2010, by moving to a positive 120 basis points (bps) from about minus 20 bps, Mr Davidson calculated.
Another was for the property/gilt yield gap to widen by half as much and for yields on 10-year government bonds to rise to 5.25 per cent from 4.95 per cent and stay there, he said.
Neither scenario was wildly unrealistic and depended on the inflation outlook changing a little and economists factoring in more than just one more UK rate hike.
'The risk of a hard landing is non-negligible and, given that even small shifts in sentiment and/or interest rates could have such large effects, monetary policy holds an important key to the property market's future,' Mr Davidson said.
Nonetheless, Capital Economics's central forecast is for no meaningful falls in commercial property prices over the next four to five years, in line with the vast majority of other forecasters.
'We still think a significant correction is very unlikely,' said David Wiley, head of UK economics and forecasting at property services firm CB Richard Ellis (CBRE). 'A soft landing is our central view and beyond that it looks fairly steady.'
Mr Wiley said that CBRE was looking for total returns above 10 per cent this year and 6-7 per cent in 2008 and 2009, placing it above the consensus, according to Investment Property Forum. He also said he was not minded to change these forecasts in the absence of an external trigger, such as a marked deterioration in the US property market and economy.
Underpinning his confidence and that of others was the strength of the UK economy, which was fuelling tenant demand for office space and was also set to keep demand for retail and industrial space ticking along, even as new buildings went up.
London's office market, especially, was benefiting from the city's expansion as a global financial services hub.
'If the timing works out nicely you could actually accommodate a reasonable drifting out of (property) yields and still have robust property returns because rents are growing, and there is a fairly good chance that that will actually happen,' JPMorgan's Mr Tyrrell said. 'So you wouldn't get a decline in values, all you'd have is rising yields but rising rents at the same time.'
The alternative, he said, was for yields to remain flat or to continue falling as rents improved, risking 'a substantial decline in capital values several years out from now'. - Reuters
Focus turns to business property market in UK amid US subprime crisis
(LONDON) A UK commercial property crash this decade is a growing possibility as borrowing costs rise and as a cold wind begins to blow through the white-hot market, but the risks are still small, despite growing nervousness.
The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year.
'There has to be a significant slowdown in returns but the scope for any sort of crash in the true sense of the word is limited,' Nick Tyrrell, head of research and strategy for European real estate at JPMorgan Asset Management, said.
As the US subprime mortgage crisis has unfolded, reminding investors of the risks attached to bricks and mortar, so the attention in Europe has turned to Britain's commercial property market, which is expected by property valuers and analysts to decelerate sharply after a protracted boom.
The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year, after three exceptional years in which the market averaged 18-19 per cent a year.
Rental income is expected to account for a greater share of future property returns, as prices stabilise or even ease and as interest rate rises make debt-funded purchases of UK property increasingly unprofitable.
The dangers are reflected in the UK property derivatives market, where spreads have fallen sharply this year and where zero capital growth was priced in for next year, traders said.
According to investment bank Eurohypo AG, capital returns on UK commercial property have averaged less than zero in only five years since 1971 - and four of those were during the country's last property crash in the early 1990s.
Capital preservation has also become more of an issue for some funds, in anticipation of a tougher investment climate. The Henderson UK Property Fund, for example, has switched its focus to higher-quality buildings in prime locations with prime tenants from slightly higher-yielding secondary property assets.
On the surface, the market appears increasingly vulnerable since average UK property yields have fallen below 5 per cent from more than 7 per cent in 2001 as property prices have boomed, while the Bank of England has raised rates to 5.25 per cent.
Yields on a property measure rental income relative to capital values.
In a note last month, Kelvin Davidson of independent forecaster Capital Economics said the threshold for UK property prices to begin falling was closer than commonly thought. Worse still, he said little was needed to trigger a crash, which he defined as a cumulative 10-15 per cent fall in property prices over three years.
One possible catalyst was for the gap between UK property yields and yields on 10-year UK government bonds to revert to 2005 levels by 2010, by moving to a positive 120 basis points (bps) from about minus 20 bps, Mr Davidson calculated.
Another was for the property/gilt yield gap to widen by half as much and for yields on 10-year government bonds to rise to 5.25 per cent from 4.95 per cent and stay there, he said.
Neither scenario was wildly unrealistic and depended on the inflation outlook changing a little and economists factoring in more than just one more UK rate hike.
'The risk of a hard landing is non-negligible and, given that even small shifts in sentiment and/or interest rates could have such large effects, monetary policy holds an important key to the property market's future,' Mr Davidson said.
Nonetheless, Capital Economics's central forecast is for no meaningful falls in commercial property prices over the next four to five years, in line with the vast majority of other forecasters.
'We still think a significant correction is very unlikely,' said David Wiley, head of UK economics and forecasting at property services firm CB Richard Ellis (CBRE). 'A soft landing is our central view and beyond that it looks fairly steady.'
Mr Wiley said that CBRE was looking for total returns above 10 per cent this year and 6-7 per cent in 2008 and 2009, placing it above the consensus, according to Investment Property Forum. He also said he was not minded to change these forecasts in the absence of an external trigger, such as a marked deterioration in the US property market and economy.
Underpinning his confidence and that of others was the strength of the UK economy, which was fuelling tenant demand for office space and was also set to keep demand for retail and industrial space ticking along, even as new buildings went up.
London's office market, especially, was benefiting from the city's expansion as a global financial services hub.
'If the timing works out nicely you could actually accommodate a reasonable drifting out of (property) yields and still have robust property returns because rents are growing, and there is a fairly good chance that that will actually happen,' JPMorgan's Mr Tyrrell said. 'So you wouldn't get a decline in values, all you'd have is rising yields but rising rents at the same time.'
The alternative, he said, was for yields to remain flat or to continue falling as rents improved, risking 'a substantial decline in capital values several years out from now'. - Reuters
Spottiswoode Apt sets new benchmark
Spottiswoode Apt sets new benchmark
UOL's $79.5 million acquisition of Spottiswoode Apartment, announced late on Tuesday, works out to a unit land price of $732 per square foot per plot ratio including an estimated $167,000 development charge.
This is a new benchmark for the Neil Road/Cantonment Road area, says United Premas, which brokered the freehold collective sale and released unit land price details yesterday.
Based on a land cost of $732 per sq ft per plot ratio, UOL's breakeven cost for a new condo project will be about $1,050 psf, market watchers reckon.
The 38,878 sq ft freehold site is zoned for residential use with a 2.8 plot ratio - the ratio of potential maximum gross floor area to land area - and a 36-storey maximum height under Master Plan 2003.
The site can be redeveloped into a new condo of about 100 units averaging 1,200 sq ft.
UOL's $79.5 million acquisition of Spottiswoode Apartment, announced late on Tuesday, works out to a unit land price of $732 per square foot per plot ratio including an estimated $167,000 development charge.
This is a new benchmark for the Neil Road/Cantonment Road area, says United Premas, which brokered the freehold collective sale and released unit land price details yesterday.
Based on a land cost of $732 per sq ft per plot ratio, UOL's breakeven cost for a new condo project will be about $1,050 psf, market watchers reckon.
The 38,878 sq ft freehold site is zoned for residential use with a 2.8 plot ratio - the ratio of potential maximum gross floor area to land area - and a 36-storey maximum height under Master Plan 2003.
The site can be redeveloped into a new condo of about 100 units averaging 1,200 sq ft.
Singaporeans queue for days before condo launch; private property prices soaring
The Associated PressPublished: April 6, 2007
SINGAPORE: Retired businessman Tan Phong is not only willing to fork out more than 1,000 Singapore dollars (US$660; euro500) per square foot for a condominium apartment, he will even queue overnight on the street just to get his dream unit.
Singapore's private property market is booming, and the rising prices have not dissuaded Singaporeans and foreigners alike from snapping up prime real estate. Some condominiums have sold out within the first few hours of opening.
Tan was first in line to purchase a unit in a yet-to-be-built condominium to be called Seafront @ Meyer, in the Marina Bay area, near where the city's first casino-resort will open in 2009.
He hoped for a unit on the 18th floor or higher in the 24-story building.
"The location is good and I want something that faces the sea," said Tan, 66. "I love the sea breeze and that's exactly why I want a unit here."
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Sales for the 300-unit Seafront started Friday, but Tan and at least 80 others have camped out on the street since Monday morning, equipped with folding chairs, sleeping bags, umbrellas, playing cards and bottles of water. Many of them were hired by housing agents to retain a spot at the front of the line.
"I only stayed on the first night," said Tan, who recruited four friends to take turns standing in line for him. "It's very uncomfortable."
The condominium's developer, CapitaLand Limited — Southeast Asia's largest property developer — said the units will cost between S$1,400 (US$925; euro689) to S$1,800 (US$1,190; euro887) per square foot.
Singapore's Business Times reported last week the development's sea-facing penthouses may cost up to S$2,200 (US$1,455; euro1,083) per square foot, with one to be priced at S$9 million (US$5.95 million; euro4.5 million).
With Singapore's economy growing at a 7.9 percent pace, demand for such luxury apartments is driven by a variety of reasons, from people seeking comfort and status to a savvy investment.
Singapore real estate has also the interest of foreign buyers, according to real estate firm CB Richard Ellis Research.
Even though prices have risen here, they are still far lower than in cities like New York, Tokyo and London. Ultra high-end property prices in London can be as high as US$5,900 per square foot, according to research published last year by CB Richard Ellis Group Inc.
Several new projects away from Singapore's city center are being priced 50 percent more than what they would have fetched a year ago, led by strong interest in high-end homes, according to Li Hiaw Ho, an executive director with the firm.
Condo prices in the nonprime areas of central Singapore rose 2.9 percent in the first quarter following a 2.2 percent rise in the fourth quarter of 2006, according to the government's flash estimate released Monday.
On the broader market, private property prices in Singapore rose 4.6 percent from the fourth quarter after rising 3.8 percent quarter-on-quarter in the last three months of 2006.
Singapore's property market stagnated in the wake of the Asian financial crisis, lagging other Asian cities like Hong Kong, but signs of a recovery began emerging in 2005, helped by the government relaxing rules such as borrowing limits.
The market got a major lift from luxury developments like One Shenton, where hundreds of units were sold for about S$2,000 (US$1,322; euro985) per square foot at a soft launch in January this year.
An Orchard Turn development broke a record for residential properties in March, when penthouse units sold for more than S$4,000 (US$2,645; euro1,970) per square foot.
"Barring any unforeseen circumstances, it is likely that residential prices will rise by a total of 10 to 15 percent for the whole year, led by high-end projects," Li said in a statement.
About 85 percent of Singaporeans live in public housing built by the government's Housing and Development Board. Private developers compete to provide housing for the remaining 15 percent of Singapore nationals, along with the sizable foreign population.
The Associated PressPublished: April 6, 2007
SINGAPORE: Retired businessman Tan Phong is not only willing to fork out more than 1,000 Singapore dollars (US$660; euro500) per square foot for a condominium apartment, he will even queue overnight on the street just to get his dream unit.
Singapore's private property market is booming, and the rising prices have not dissuaded Singaporeans and foreigners alike from snapping up prime real estate. Some condominiums have sold out within the first few hours of opening.
Tan was first in line to purchase a unit in a yet-to-be-built condominium to be called Seafront @ Meyer, in the Marina Bay area, near where the city's first casino-resort will open in 2009.
He hoped for a unit on the 18th floor or higher in the 24-story building.
"The location is good and I want something that faces the sea," said Tan, 66. "I love the sea breeze and that's exactly why I want a unit here."
Today in Business
China's appetite for meat feeds a Brazilian soybean boom
Turkey aims to pressure Europe over gas pipeline
Germany rethinks board structure after corruption scandals
Sales for the 300-unit Seafront started Friday, but Tan and at least 80 others have camped out on the street since Monday morning, equipped with folding chairs, sleeping bags, umbrellas, playing cards and bottles of water. Many of them were hired by housing agents to retain a spot at the front of the line.
"I only stayed on the first night," said Tan, who recruited four friends to take turns standing in line for him. "It's very uncomfortable."
The condominium's developer, CapitaLand Limited — Southeast Asia's largest property developer — said the units will cost between S$1,400 (US$925; euro689) to S$1,800 (US$1,190; euro887) per square foot.
Singapore's Business Times reported last week the development's sea-facing penthouses may cost up to S$2,200 (US$1,455; euro1,083) per square foot, with one to be priced at S$9 million (US$5.95 million; euro4.5 million).
With Singapore's economy growing at a 7.9 percent pace, demand for such luxury apartments is driven by a variety of reasons, from people seeking comfort and status to a savvy investment.
Singapore real estate has also the interest of foreign buyers, according to real estate firm CB Richard Ellis Research.
Even though prices have risen here, they are still far lower than in cities like New York, Tokyo and London. Ultra high-end property prices in London can be as high as US$5,900 per square foot, according to research published last year by CB Richard Ellis Group Inc.
Several new projects away from Singapore's city center are being priced 50 percent more than what they would have fetched a year ago, led by strong interest in high-end homes, according to Li Hiaw Ho, an executive director with the firm.
Condo prices in the nonprime areas of central Singapore rose 2.9 percent in the first quarter following a 2.2 percent rise in the fourth quarter of 2006, according to the government's flash estimate released Monday.
On the broader market, private property prices in Singapore rose 4.6 percent from the fourth quarter after rising 3.8 percent quarter-on-quarter in the last three months of 2006.
Singapore's property market stagnated in the wake of the Asian financial crisis, lagging other Asian cities like Hong Kong, but signs of a recovery began emerging in 2005, helped by the government relaxing rules such as borrowing limits.
The market got a major lift from luxury developments like One Shenton, where hundreds of units were sold for about S$2,000 (US$1,322; euro985) per square foot at a soft launch in January this year.
An Orchard Turn development broke a record for residential properties in March, when penthouse units sold for more than S$4,000 (US$2,645; euro1,970) per square foot.
"Barring any unforeseen circumstances, it is likely that residential prices will rise by a total of 10 to 15 percent for the whole year, led by high-end projects," Li said in a statement.
About 85 percent of Singaporeans live in public housing built by the government's Housing and Development Board. Private developers compete to provide housing for the remaining 15 percent of Singapore nationals, along with the sizable foreign population.
Golden outlook for year
Golden outlook for year
Raymond Wang
Friday, April 06, 2007
Market watchers expect fiscal 2007 to be another bumper year for property giant Cheung Kong (Holdings) (0001) on the back of relatively lower land costs.
"Coupled with 60 percent of fiscal 2007 completions pre-sold, Cheung Kong continues to have the lowest earnings risk among developers," investment bank JPMorgan said in a research report.
The Hong Kong's largest developer by sales sold about 4,000 homes in fiscal 2006.
Hong Kong developers do not book revenues from presales of flats until projects are completed.
Cheung Kong said contribution from property sales for the financial year ended December 31, 2007, will be mostly derived from the sale of residential units of The Apex, Sausalito, Le Point and Central Park Towers Phase 1 in Hong Kong and other property projects in the mainland.
Due to acquisition of some low-cost land bank properties, Cheung Kong probably is the only developer which could see improvement in development margins in the coming two years, Merrill Lynch said.
"Profit is protected as some of the costs are low, " Cheung Kong deputy chairman Victor Li Tzar-kuoi said.
"We are optimistic about fiscal 2007-08 results, very relaxed and confident," he said after the company recently reported a 29 percent jump year on year in net profit to HK$18.1 billion for the year ended December 31, 2006.
Cheung Kong' s land bank in Hong Kong is about 45.8 million square feet, sufficient for the next few years, Li said.
He said the prospects for the property market in Hong Kong are good, underpinned by robust economic growth and strong purchasing power from homeowners.
"Most of the buyers are end users and investors. There does not seem to be too many problems with speculators," he said, adding that both the primary and secondary markets have been very strong.
Cheung Kong chairman Li Ka-shing expects gross domestic product in Hong Kong to be about 5-6 percent this year. "The fast pace of growth in the mainland would also propel our growth," he added.
Cheung Kong's earnings from property sales climbed 69 percent to HK$5.6 billion in 2006 from HK$3.3 billion the previous year, mainly driven by improved margin.
Core Pacific-Yamaichi analyst Andy So estimated that The Legend, the developer's upscale project at Jardine's Lookout, had a pretax margin of about 60 percent, while the Metro Town residential project atop Tiu Keng Leng MTR station had about 50 percent.
Apart from its Hong Kong land bank of 6.2 million sqft, which will provide 8,600 homes for sale after fiscal 2009, Cheung Kong is also beefing up its foothold in Singapore, Britain and China.
"While it still takes time to prove the success of a regional expansion strategy, this could be a potential medium-term driver," JPMorgan said.
The group's global land bank has reached 255 million sqft gross floor area, Cheung Kong said.
That cache, held jointly by Cheung Kong and associate Hutchison Whampoa (0013), includes projects under construction, investment properties, agricultural land and properties owned by the group's two real estate investment trusts - Hong Kong-listed Prosperity REIT (0808), and Singapore-listed Fortune REIT.
Victor Li said the group has made several environmentally conscious initiatives in design and construction of its properties.
"We use less wood, incorporate balconies in our design and encourage recycling," he said. "We also initiated the Fung Lok Wai wetland project in the New Territories," Li said.
The much-awaited Fung Lok Wai development, incorporating several eco-friendly principles proposed by Cheung Kong, is expected to be an example for other developers to follow if it wins approval, market watchers said.
Cheung Kong has been seeking environmental approval since it teamed up with the World Wide Fund for Nature Hong Kong in December 2005 to develop the project, which will include a residential development of 1.6 million sq ft.
The property component represents 5 percent, or four hectares, of the 80-hectare site at the existing fishponds at Fung Lok Wai.
Meanwhile, Li said there should not be a lack of home supply in Hong Kong.
"In 2009-2010, not counting supply from other developers, just the ones from Cheung Kong and our partnerships with MTRC and KCRC, there is already considerable supply, though not too much," he said.
Li said he supports the government's existing land application system of land sales.
"The system has worked well for a long time. There is no need for changes," he said, adding that it supports the economy and is market-driven.
In the past three years, Cheung Kong has acquired a considerable amount of land, from the land application list and from railway property tenders.
"The land application system provides a framework for predictable and transparent land sales," he said.
"Hong Kong needs a stable economy and the property market is related closely to it. When you lack of land, go through the land-application process and bid."
Under the application list system, a developer must submit a price that is at least 80 percent of the government estimate to trigger a site for auction.
He also said real estate is still of vital importance to Hong Kong as property owners influence the consumer market and overall confidence in the economy.
Raymond Wang
Friday, April 06, 2007
Market watchers expect fiscal 2007 to be another bumper year for property giant Cheung Kong (Holdings) (0001) on the back of relatively lower land costs.
"Coupled with 60 percent of fiscal 2007 completions pre-sold, Cheung Kong continues to have the lowest earnings risk among developers," investment bank JPMorgan said in a research report.
The Hong Kong's largest developer by sales sold about 4,000 homes in fiscal 2006.
Hong Kong developers do not book revenues from presales of flats until projects are completed.
Cheung Kong said contribution from property sales for the financial year ended December 31, 2007, will be mostly derived from the sale of residential units of The Apex, Sausalito, Le Point and Central Park Towers Phase 1 in Hong Kong and other property projects in the mainland.
Due to acquisition of some low-cost land bank properties, Cheung Kong probably is the only developer which could see improvement in development margins in the coming two years, Merrill Lynch said.
"Profit is protected as some of the costs are low, " Cheung Kong deputy chairman Victor Li Tzar-kuoi said.
"We are optimistic about fiscal 2007-08 results, very relaxed and confident," he said after the company recently reported a 29 percent jump year on year in net profit to HK$18.1 billion for the year ended December 31, 2006.
Cheung Kong' s land bank in Hong Kong is about 45.8 million square feet, sufficient for the next few years, Li said.
He said the prospects for the property market in Hong Kong are good, underpinned by robust economic growth and strong purchasing power from homeowners.
"Most of the buyers are end users and investors. There does not seem to be too many problems with speculators," he said, adding that both the primary and secondary markets have been very strong.
Cheung Kong chairman Li Ka-shing expects gross domestic product in Hong Kong to be about 5-6 percent this year. "The fast pace of growth in the mainland would also propel our growth," he added.
Cheung Kong's earnings from property sales climbed 69 percent to HK$5.6 billion in 2006 from HK$3.3 billion the previous year, mainly driven by improved margin.
Core Pacific-Yamaichi analyst Andy So estimated that The Legend, the developer's upscale project at Jardine's Lookout, had a pretax margin of about 60 percent, while the Metro Town residential project atop Tiu Keng Leng MTR station had about 50 percent.
Apart from its Hong Kong land bank of 6.2 million sqft, which will provide 8,600 homes for sale after fiscal 2009, Cheung Kong is also beefing up its foothold in Singapore, Britain and China.
"While it still takes time to prove the success of a regional expansion strategy, this could be a potential medium-term driver," JPMorgan said.
The group's global land bank has reached 255 million sqft gross floor area, Cheung Kong said.
That cache, held jointly by Cheung Kong and associate Hutchison Whampoa (0013), includes projects under construction, investment properties, agricultural land and properties owned by the group's two real estate investment trusts - Hong Kong-listed Prosperity REIT (0808), and Singapore-listed Fortune REIT.
Victor Li said the group has made several environmentally conscious initiatives in design and construction of its properties.
"We use less wood, incorporate balconies in our design and encourage recycling," he said. "We also initiated the Fung Lok Wai wetland project in the New Territories," Li said.
The much-awaited Fung Lok Wai development, incorporating several eco-friendly principles proposed by Cheung Kong, is expected to be an example for other developers to follow if it wins approval, market watchers said.
Cheung Kong has been seeking environmental approval since it teamed up with the World Wide Fund for Nature Hong Kong in December 2005 to develop the project, which will include a residential development of 1.6 million sq ft.
The property component represents 5 percent, or four hectares, of the 80-hectare site at the existing fishponds at Fung Lok Wai.
Meanwhile, Li said there should not be a lack of home supply in Hong Kong.
"In 2009-2010, not counting supply from other developers, just the ones from Cheung Kong and our partnerships with MTRC and KCRC, there is already considerable supply, though not too much," he said.
Li said he supports the government's existing land application system of land sales.
"The system has worked well for a long time. There is no need for changes," he said, adding that it supports the economy and is market-driven.
In the past three years, Cheung Kong has acquired a considerable amount of land, from the land application list and from railway property tenders.
"The land application system provides a framework for predictable and transparent land sales," he said.
"Hong Kong needs a stable economy and the property market is related closely to it. When you lack of land, go through the land-application process and bid."
Under the application list system, a developer must submit a price that is at least 80 percent of the government estimate to trigger a site for auction.
He also said real estate is still of vital importance to Hong Kong as property owners influence the consumer market and overall confidence in the economy.
I've found paradise, says Chao
I've found paradise, says Chao
Danny Chung
Friday, April 06, 2007
For Cecil Chao Sze-tsung, tycoon and youngest son of the late Hong Kong shipping magnate Chao Tsong-yea, it is the end of a long struggle to get what he wanted, namely a plot of land on the outlying islands which he hopes to turn into "a paradise."
Last week, as he inched his way slowly to the exit at the cultural center through a blockade of reporters desperate for a soundbite, his peers, outside observers and investors may have been wondering why his company Cheuk Nang (Holdings) (0131) paid nearly HK$100 million for the site on Cheung Chau.
The answer came the next day at a press conference when Chao explained himself.
For a developer of Cheuk Nang's size, to get a site of 110,000 square feet with sea views is extremely difficult.
"Even if you find agricultural land with no sea view and can develop it as low-density residential, the change of use premium plus the cost of the land itself, I think [the total amount] would not be less than HK$100 million," Chao said.
Looking at it from that perspective, then perhaps the company got off lightly with final price of HK$96.5 million for the site at Shui Hang on Cheung Chau even though the price came in at 147 percent above the opening bid of HK$39 million.
Chao indicated he was prepared to go higher to win control of the site, which had been the subject of four unsuccessful attempts to trigger an auction by him since last April.
"The Cheung Chau site price was lower than the price which we set, but the [final] price wasn't exactly cheap," Chao said.
The site has an area of 111,752 sq ft, offering 44,692 sq ft of residential space at a plot ratio of 0.4. This translates into an accommodation value of HK$2,159 per square foot or four times the HK$491 psf set in August 1999, the last time a Cheung Chau site was sold at auction.
Chao brushed aside concerns that he may have trouble selling his units when nearby flats are selling at HK$2,200 psf on the secondary market.
This is because Cheuk Nang is not going to build a run-of-the-mill residential project at the site. Cheung Chau is likely to be seeing some dramatic changes in future.
The islands of Tsing Yi and Lantau, Chao said, are already linked with roads.
"I think, sooner or later, there will be road links [to Cheung Chau] but as to when, it is government policy," he said.
Until then, the site - which will be called "New Villa Cecil" - will be served by helicopters and luxury yachts.
"We will not only turn the site into a paradise in Cheung Chau, we will also change the surroundings," Chao said.
Such improvements include an artificial beach, a lagoon for swimmers, a pier to the site, improvements to roads and the possibility of using golf carts for transport by the residents at New Villa Cecil.
"Cheung Chau's development will not be done in one day. We are looking at development in the next 10 to 20 years. So we are bullish on Cheung Chau," Chao said.
The company has estimated a construction cost of about HK$1,200 psf with total investment, including the land cost, coming in at HK$200 million.
However, details on the number of units, their size and whether the company will sell or lease them are yet to be decided.
Chao sought to allay fears that the company will have trouble getting a return on the project.
"On a land price of about HK$100 million, I guarantee it will definitely make money. As to how much money is made, it could exceed everybody's forecast," he said.
The company's previous experience with Villa Cecil at Pok Fu Lam, which pre-dates Bel-Air at Cyberport by at least a decade. underscores his optimism for the Cheung Chau purchase.
"When we got the [Pok Fu Lam] site, compared with the Cheung Chau site, it was even quieter. There weren't even street lights," Chao said.
Phase I of Villa Cecil at 200 Victoria Road was sold out a few years ago while phase II at 192 Victoria Road is 90 percent leased.
Phase III at 216 Victoria Road is under construction.
The company bought the site at phase II for HK$32 million in May 1990 while the site for phase III goes further back to January 1986 when the company bought it for HK$6.3 million.
To further silence doubters, Chao also pointed to the company's Cotai Strip No 1 project in Macau where it is building more than 1,000 flats.
When details of the project were announced last November, it was looking to sell at HK$3,000 to HK$4,000 psf but now Chao said it is looking at prices of HK$5,000 to HK$6,000 psf.
"The projects I invest in, 90 percent of them make money," said Chao, presumably with an eye to reassuring his investors that include US-based banking group Citigroup, which has a 12.7 percent stake, and Value Partners, which holds 6.3 percent.
So certain is Chao that he has a winner on his hands that he is offering the ultimate buy-back offer. "I guarantee you one thing, if it does not make money, I'll privately buy it all," he said.
Danny Chung
Friday, April 06, 2007
For Cecil Chao Sze-tsung, tycoon and youngest son of the late Hong Kong shipping magnate Chao Tsong-yea, it is the end of a long struggle to get what he wanted, namely a plot of land on the outlying islands which he hopes to turn into "a paradise."
Last week, as he inched his way slowly to the exit at the cultural center through a blockade of reporters desperate for a soundbite, his peers, outside observers and investors may have been wondering why his company Cheuk Nang (Holdings) (0131) paid nearly HK$100 million for the site on Cheung Chau.
The answer came the next day at a press conference when Chao explained himself.
For a developer of Cheuk Nang's size, to get a site of 110,000 square feet with sea views is extremely difficult.
"Even if you find agricultural land with no sea view and can develop it as low-density residential, the change of use premium plus the cost of the land itself, I think [the total amount] would not be less than HK$100 million," Chao said.
Looking at it from that perspective, then perhaps the company got off lightly with final price of HK$96.5 million for the site at Shui Hang on Cheung Chau even though the price came in at 147 percent above the opening bid of HK$39 million.
Chao indicated he was prepared to go higher to win control of the site, which had been the subject of four unsuccessful attempts to trigger an auction by him since last April.
"The Cheung Chau site price was lower than the price which we set, but the [final] price wasn't exactly cheap," Chao said.
The site has an area of 111,752 sq ft, offering 44,692 sq ft of residential space at a plot ratio of 0.4. This translates into an accommodation value of HK$2,159 per square foot or four times the HK$491 psf set in August 1999, the last time a Cheung Chau site was sold at auction.
Chao brushed aside concerns that he may have trouble selling his units when nearby flats are selling at HK$2,200 psf on the secondary market.
This is because Cheuk Nang is not going to build a run-of-the-mill residential project at the site. Cheung Chau is likely to be seeing some dramatic changes in future.
The islands of Tsing Yi and Lantau, Chao said, are already linked with roads.
"I think, sooner or later, there will be road links [to Cheung Chau] but as to when, it is government policy," he said.
Until then, the site - which will be called "New Villa Cecil" - will be served by helicopters and luxury yachts.
"We will not only turn the site into a paradise in Cheung Chau, we will also change the surroundings," Chao said.
Such improvements include an artificial beach, a lagoon for swimmers, a pier to the site, improvements to roads and the possibility of using golf carts for transport by the residents at New Villa Cecil.
"Cheung Chau's development will not be done in one day. We are looking at development in the next 10 to 20 years. So we are bullish on Cheung Chau," Chao said.
The company has estimated a construction cost of about HK$1,200 psf with total investment, including the land cost, coming in at HK$200 million.
However, details on the number of units, their size and whether the company will sell or lease them are yet to be decided.
Chao sought to allay fears that the company will have trouble getting a return on the project.
"On a land price of about HK$100 million, I guarantee it will definitely make money. As to how much money is made, it could exceed everybody's forecast," he said.
The company's previous experience with Villa Cecil at Pok Fu Lam, which pre-dates Bel-Air at Cyberport by at least a decade. underscores his optimism for the Cheung Chau purchase.
"When we got the [Pok Fu Lam] site, compared with the Cheung Chau site, it was even quieter. There weren't even street lights," Chao said.
Phase I of Villa Cecil at 200 Victoria Road was sold out a few years ago while phase II at 192 Victoria Road is 90 percent leased.
Phase III at 216 Victoria Road is under construction.
The company bought the site at phase II for HK$32 million in May 1990 while the site for phase III goes further back to January 1986 when the company bought it for HK$6.3 million.
To further silence doubters, Chao also pointed to the company's Cotai Strip No 1 project in Macau where it is building more than 1,000 flats.
When details of the project were announced last November, it was looking to sell at HK$3,000 to HK$4,000 psf but now Chao said it is looking at prices of HK$5,000 to HK$6,000 psf.
"The projects I invest in, 90 percent of them make money," said Chao, presumably with an eye to reassuring his investors that include US-based banking group Citigroup, which has a 12.7 percent stake, and Value Partners, which holds 6.3 percent.
So certain is Chao that he has a winner on his hands that he is offering the ultimate buy-back offer. "I guarantee you one thing, if it does not make money, I'll privately buy it all," he said.
Thursday, April 5, 2007
Major changes are in store at Century Square
Major changes are in store at Century Square mall with old favourite Metro departing while Seiyu moves in - but under a new name and a new look.
Department store Metro will go when its lease expires in August, ending more than a decade-long stay at the Tampines mall.
Shoppers will only have to wait a few months before Seiyu, under its new brand name BHG, opens for business.
The revolving door changes point to a fast-shifting retail scene here with the old order facing a tougher playing field.
Metro’s move underlines the dwindling presence for what was once the dominant department store chain here.
Its first store opened in 1957 in High Street and at its height had 10 locations in town, including Lucky Plaza and Scotts Shopping Centre.
But there will soon be just three left - at Paragon, Causeway Point in Woodlands and Compass Point in Sengkang. The Metro store at Far East Plaza - one of the chain’s best-known branches - closed in mid-2002, after 19 years.
Metro has been an anchor tenant at Century Square since 1996 and occupies four floors with a sub-tenant, Best Denki, part of the mix.
A Metro Holdings spokesman told The Straits Times that it plans to move some staff to other stores and will try to minimise the disruption from the move.
‘We will continue to look for new locations,’ she said.
Mainboard-listed Metro Holdings has operations and investments overseas, including shopping malls in Shanghai and Beijing.
Its departure from Tampines will leave a gap of 82,000 sq ft but about 50,000 sq ft of that has been snapped up by the new anchor tenant - BHG or Seiyu to most people.
The name change stemmed from an ownership shuffle in late 2005. Parent firm Seiyu Japan sold Seiyu Singapore to CapitaLand, which in turn sold it to the Beijing Hualian Group (BHG) in China.
Seiyu Japan had at the time told The Straits Times that the Seiyu brand name would be retained in Singapore only for a certain period.
That name change is now official with the three existing Seiyu stores - in Bugis Junction, Junction 8 and Lot 1 - being rebranded as BHG at a ceremony tonight.
The new name - which reflects its marketing tagline Be Here For Good Things - has been accompanied by extensive revamps of some departments, including beauty halls and fashion quarters.
Said BHG Singapore’s managing director, Mr Katsuharu Inamoto: ‘We want the new store brand to be able to take us into the new retail era and adapt to the changing consumer profiles.
‘Our new investors are more forward-looking. As a result, we are not only opening a new store in Singapore but also looking at the feasibility of starting stores in neighbouring countries.’
Metro’s departure is also the signal for a mini revamp at the 210,000 sq ft Century Square thanks to the extra space created by the move.
Mall manager AsiaMalls Management will be able to carve out 23 specialty shops selling fashion and accessories on levels one and two.
Best Denki, which has 21,000 sq ft on level four, may take the entire floor.
These changes will tie in with the $7 million in enhancement works that AsiaMalls is planning in July.
Century Square is owned by Asian Retail Mall Fund, which also owns Tampines 1, the nearby 260,000 sq ft mall due to open late next year.
Source: The Strsits Times, 05 April 2007
Department store Metro will go when its lease expires in August, ending more than a decade-long stay at the Tampines mall.
Shoppers will only have to wait a few months before Seiyu, under its new brand name BHG, opens for business.
The revolving door changes point to a fast-shifting retail scene here with the old order facing a tougher playing field.
Metro’s move underlines the dwindling presence for what was once the dominant department store chain here.
Its first store opened in 1957 in High Street and at its height had 10 locations in town, including Lucky Plaza and Scotts Shopping Centre.
But there will soon be just three left - at Paragon, Causeway Point in Woodlands and Compass Point in Sengkang. The Metro store at Far East Plaza - one of the chain’s best-known branches - closed in mid-2002, after 19 years.
Metro has been an anchor tenant at Century Square since 1996 and occupies four floors with a sub-tenant, Best Denki, part of the mix.
A Metro Holdings spokesman told The Straits Times that it plans to move some staff to other stores and will try to minimise the disruption from the move.
‘We will continue to look for new locations,’ she said.
Mainboard-listed Metro Holdings has operations and investments overseas, including shopping malls in Shanghai and Beijing.
Its departure from Tampines will leave a gap of 82,000 sq ft but about 50,000 sq ft of that has been snapped up by the new anchor tenant - BHG or Seiyu to most people.
The name change stemmed from an ownership shuffle in late 2005. Parent firm Seiyu Japan sold Seiyu Singapore to CapitaLand, which in turn sold it to the Beijing Hualian Group (BHG) in China.
Seiyu Japan had at the time told The Straits Times that the Seiyu brand name would be retained in Singapore only for a certain period.
That name change is now official with the three existing Seiyu stores - in Bugis Junction, Junction 8 and Lot 1 - being rebranded as BHG at a ceremony tonight.
The new name - which reflects its marketing tagline Be Here For Good Things - has been accompanied by extensive revamps of some departments, including beauty halls and fashion quarters.
Said BHG Singapore’s managing director, Mr Katsuharu Inamoto: ‘We want the new store brand to be able to take us into the new retail era and adapt to the changing consumer profiles.
‘Our new investors are more forward-looking. As a result, we are not only opening a new store in Singapore but also looking at the feasibility of starting stores in neighbouring countries.’
Metro’s departure is also the signal for a mini revamp at the 210,000 sq ft Century Square thanks to the extra space created by the move.
Mall manager AsiaMalls Management will be able to carve out 23 specialty shops selling fashion and accessories on levels one and two.
Best Denki, which has 21,000 sq ft on level four, may take the entire floor.
These changes will tie in with the $7 million in enhancement works that AsiaMalls is planning in July.
Century Square is owned by Asian Retail Mall Fund, which also owns Tampines 1, the nearby 260,000 sq ft mall due to open late next year.
Source: The Strsits Times, 05 April 2007
Standard Chartered Bank, which will lease close to half a million square feet
The developers of Marina Bay Financial Centre (MBFC) are said to have secured the project’s first office tenant. Industry sources say it is likely to be Standard Chartered Bank, which will lease close to half a million square feet in what will be one of the biggest office leasing deals in Singapore.
Stanchart’s lease is likely to be for more than 10 years, market watchers reckon. It remains to be seen what the bank plans to do with the 130,000 sq ft or so it now leases at 6 Battery Road, owned by CapitaCommercial Trust (CCT).
The MBFC developers are also said to be at various stages of talks with a string of other big-name banking and financial groups - including UBS, Merrill Lynch, HSBC, Credit Suisse, ING, JPMorgan, BNP and DBS. ‘It’s probably logical to assume these are the sort of names that would be targeted as a tenant list for the project,’ a property market watcher said.
It is not known what sort of rent Stanchart will pay at MBFC, but market watchers believe it could be in the ballpark of $8-$9 per square foot (psf) a month, judging by current rents in the area. The last unit at the nearby One Raffles Quay, believed to be about 4,000 sq ft, was leased at gross monthly rent of about $12 psf - almost three times the effective rent when leasing there began in 2004.
The first phase of MBFC includes two office towers with about 1.65 million sq ft of net lettable area, slated for completion in early 2010. The second phase, expected to be ready by late-2011, will have another office tower with more than one million sq ft of lettable area.
Stanchart’s space at 6 Battery Road is under a long-term lease that expires in January 2020 and is subject to a rent review to open market value every three years, according to information made public by landlord CCT in March 2004, around the time of its introduction to the Singapore Exchange, and in an equity-raising exercise last year.
Will Stanchart continue to lease all of this space after MBFC is ready?
‘They could still want to reserve some space at 6 Battery Road for potential expansion, especially given the scramble among big banks for office space in Singapore,’ said an office market watcher. ‘A possible scenario may be for Stanchart to continue leasing the space at 6 Battery Road from CCT but then sub-let any space it does not need in the near term to other tenants.’
This is what Stanchart is understood to have done in the past at the building, although it has since taken back the space from sub-tenants amid the current wave of expansion by banks and the shortage of offices in Singapore.
MBFC is being developed by a consortium that comprises Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land.
The joint venture clinched the 99-year leasehold site in an Urban Redevelopment Authority tender in July 2005. The consortium bought the site, which can be developed into a maximum gross floor area of about 4.7 million sq ft, in two phases.
It paid $381 psf per plot ratio for the first phase in 2005, and an effective land price of $435 psf ppr for the second phase earlier this year under a formula that factored in an increase in office land values in the vicinity since the initial bid in the 2005 tender.
Source: The Business Times, 05 April 2007
Stanchart’s lease is likely to be for more than 10 years, market watchers reckon. It remains to be seen what the bank plans to do with the 130,000 sq ft or so it now leases at 6 Battery Road, owned by CapitaCommercial Trust (CCT).
The MBFC developers are also said to be at various stages of talks with a string of other big-name banking and financial groups - including UBS, Merrill Lynch, HSBC, Credit Suisse, ING, JPMorgan, BNP and DBS. ‘It’s probably logical to assume these are the sort of names that would be targeted as a tenant list for the project,’ a property market watcher said.
It is not known what sort of rent Stanchart will pay at MBFC, but market watchers believe it could be in the ballpark of $8-$9 per square foot (psf) a month, judging by current rents in the area. The last unit at the nearby One Raffles Quay, believed to be about 4,000 sq ft, was leased at gross monthly rent of about $12 psf - almost three times the effective rent when leasing there began in 2004.
The first phase of MBFC includes two office towers with about 1.65 million sq ft of net lettable area, slated for completion in early 2010. The second phase, expected to be ready by late-2011, will have another office tower with more than one million sq ft of lettable area.
Stanchart’s space at 6 Battery Road is under a long-term lease that expires in January 2020 and is subject to a rent review to open market value every three years, according to information made public by landlord CCT in March 2004, around the time of its introduction to the Singapore Exchange, and in an equity-raising exercise last year.
Will Stanchart continue to lease all of this space after MBFC is ready?
‘They could still want to reserve some space at 6 Battery Road for potential expansion, especially given the scramble among big banks for office space in Singapore,’ said an office market watcher. ‘A possible scenario may be for Stanchart to continue leasing the space at 6 Battery Road from CCT but then sub-let any space it does not need in the near term to other tenants.’
This is what Stanchart is understood to have done in the past at the building, although it has since taken back the space from sub-tenants amid the current wave of expansion by banks and the shortage of offices in Singapore.
MBFC is being developed by a consortium that comprises Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land.
The joint venture clinched the 99-year leasehold site in an Urban Redevelopment Authority tender in July 2005. The consortium bought the site, which can be developed into a maximum gross floor area of about 4.7 million sq ft, in two phases.
It paid $381 psf per plot ratio for the first phase in 2005, and an effective land price of $435 psf ppr for the second phase earlier this year under a formula that factored in an increase in office land values in the vicinity since the initial bid in the 2005 tender.
Source: The Business Times, 05 April 2007
All in line for a full house: Property price index could grow 15% to 18% this year (Analyst)
He may not have the money to buy an apartment yet, but 21-year-old Jasper Ong is already a beneficiary of Singapore’s booming property market.Mr Ong, who is fresh out of National Service, and three of his friends are being paid $100 each every 24 hours to stay in the queue of people waiting to buy - or representing those who want to buy - The Seafront @ Meyer units at Meyer Road in District 15.The 24-storey freehold condominium project by CapitaLand, which has yet to be built, will only be launched to the public on Friday.
Mr Ong and his friends were hired by an ERA property agent and have been holding onto their “30-something” positions since 10pm on Monday.
They have spent their time sprawled on a mat, playing cards and reading newspapers.
Armed with four sets of clothing, loaves of bread and soft drinks, each of the group has taken turns to make three trips a day to a nearby workers’ quarters to bathe because of the heat.
“It’s very boring here, but since there’s money, why not?” Mr Ong reasoned.
As of last night, there were about 80 people in the queue. The line - reminiscent of the good old days when investing in property was deemed a surefire way to make mega profits - is yet another indication that
Singapore’s property market is heading north.
Several other property launches in recent days have also attracted high buyer interest.
One of these is CapitaLand’s Orchard Residences, where all 98 units in Phase 1 of the luxury condominium have been snapped up.
According to the developer, the units sold for an average $3,213 per square foot (psf).
City Developments Limited’s The Solitaire, a boutique 59-unit development nestled in Balmoral Park in District 10, is now 100-per-cent sold, just one week after its soft launch.
The units sold at an average price of more than $2,000 psf, CDL reported in a press release yesterday. This works out to about $2.3 million for a two-bedroom unit to more than $7.4 million for a penthouse.
“The prices achieved represent a new benchmark for the Balmoral Park vicinity,” CDL said.
Buyers’ love affair with condos with a waterfront view helped Keppel Land get such a good response on the first day of the soft launch of its Reflections at Keppel development at Keppel Bay Drive, which the developer decided to increase the number of units on offer from 80 to 150. A total of 1,129 units, including 35 penthouses, will be on offer for between $1,900 and $1,950 psf. The highest-priced unit at yesterday’s launch, which was reserved for Keppel staff, directors and associates, was $2,400 psf for a villa unit.
Keppel Land’s Singapore residential director Augustine Tan said that with these prices, the company believes “we have set a benchmark” for the Keppel Bay/Sentosa area.
These encouraging responses to the launches is in line with analysts’ predictions that the property market will continue to do well this year, thanks to factors such as a healthy economy and strong foreign investor interest.
According to flash estimates from the Urban Redevelopment Authority released on Monday, the property price index rose from 130.2 points in the previous quarter to 136.2 points in the first three months of this year - the highest increase in seven years.
“The overall residential property price index could chalk up growth between 15 per cent and 18 per cent for the entire year of 2007,” said Ms Tay Huey Ying, director for research and consultancy at Colliers International.
Source: Today, 04 April 2007
Mr Ong and his friends were hired by an ERA property agent and have been holding onto their “30-something” positions since 10pm on Monday.
They have spent their time sprawled on a mat, playing cards and reading newspapers.
Armed with four sets of clothing, loaves of bread and soft drinks, each of the group has taken turns to make three trips a day to a nearby workers’ quarters to bathe because of the heat.
“It’s very boring here, but since there’s money, why not?” Mr Ong reasoned.
As of last night, there were about 80 people in the queue. The line - reminiscent of the good old days when investing in property was deemed a surefire way to make mega profits - is yet another indication that
Singapore’s property market is heading north.
Several other property launches in recent days have also attracted high buyer interest.
One of these is CapitaLand’s Orchard Residences, where all 98 units in Phase 1 of the luxury condominium have been snapped up.
According to the developer, the units sold for an average $3,213 per square foot (psf).
City Developments Limited’s The Solitaire, a boutique 59-unit development nestled in Balmoral Park in District 10, is now 100-per-cent sold, just one week after its soft launch.
The units sold at an average price of more than $2,000 psf, CDL reported in a press release yesterday. This works out to about $2.3 million for a two-bedroom unit to more than $7.4 million for a penthouse.
“The prices achieved represent a new benchmark for the Balmoral Park vicinity,” CDL said.
Buyers’ love affair with condos with a waterfront view helped Keppel Land get such a good response on the first day of the soft launch of its Reflections at Keppel development at Keppel Bay Drive, which the developer decided to increase the number of units on offer from 80 to 150. A total of 1,129 units, including 35 penthouses, will be on offer for between $1,900 and $1,950 psf. The highest-priced unit at yesterday’s launch, which was reserved for Keppel staff, directors and associates, was $2,400 psf for a villa unit.
Keppel Land’s Singapore residential director Augustine Tan said that with these prices, the company believes “we have set a benchmark” for the Keppel Bay/Sentosa area.
These encouraging responses to the launches is in line with analysts’ predictions that the property market will continue to do well this year, thanks to factors such as a healthy economy and strong foreign investor interest.
According to flash estimates from the Urban Redevelopment Authority released on Monday, the property price index rose from 130.2 points in the previous quarter to 136.2 points in the first three months of this year - the highest increase in seven years.
“The overall residential property price index could chalk up growth between 15 per cent and 18 per cent for the entire year of 2007,” said Ms Tay Huey Ying, director for research and consultancy at Colliers International.
Source: Today, 04 April 2007
Home sellers hope for bigger profits via auctions
Auctions are gradually shredding the stigma of being associated with morgtgagee sales, says property agency CKS. It is arranging an auction next week for eight homes in high-end projects such as Icon.
A small group of home owners are putting their luxury apartments up for auction, but not because they cannot afford them.
These sellers are hoping a bidding war will yield higher profits for their homes than if they go down the normal sales routes.
Eight homes go under the hammer next Thursday. All are in popular projects - The Sail @ Marina Bay, The Oceanfront and The Coast at Sentosa Cove, Caribbean at Keppel Bay and Icon at Tanjong Pagar - where several units have already changed hands.
All the condos are 99-year leasehold and are not yet ready for occupation.
These home sellers are the clients of property agency CKS Property Consultants, which hit on the idea of using an auction as a sales channel.
CKS said yesterday that this would be one of the first auctions in Singapore comprising only owners’ properties.
Usually, property auctions here are conducted regularly by bigger property firms and include both owners’ properties as well as repossessed assets.
But CKS believes that auctions are gradually shedding the stigma of being associated with mortgagee sales.
‘More Singaporeans are eager to utilise the mode of auction to fetch lucrative prices for their properties,’ it said in a statement.
Its clients see this auction as the best way to take advantage of the booming demand for high-end property, the agency added.
‘Though many of them have already attracted offers via open listings, they want to generate wider exposure for their properties so as to capture the highest, most competitive price possible,’ CKS told The Straits Times.
The agency will absorb the administrative fees of the auction, which amounts to $1,000 for each property.
The auction, which will be called ‘hot spots’, will be held next Thursday at 2.30pm on Level 6 of Raffles City Tower.
CKS is not the first to jump on the auction bandwagon.
Property auctioneers have been seeing an increasing number of owners’ sales, as more sellers turn to auctions as an alternative sales method for luxury homes.
Last weekend, developer Tuan Sing Holdings held the first auction of uncompleted condo units in Singapore.
It put 12 units at its high-end Botanika in Holland Road on offer and sold them all at prices within its expectations.
While the units fetched benchmark prices of up to $2,400 per sq ft, reports said the bidding was slow-going, partly because of the high value of the properties.
But while the Botanika auction was open only to invited bidders, the ‘hot spots’ auction is welcoming all interested buyers and investors.
Source: The Straits Times, 05 April 2007
A small group of home owners are putting their luxury apartments up for auction, but not because they cannot afford them.
These sellers are hoping a bidding war will yield higher profits for their homes than if they go down the normal sales routes.
Eight homes go under the hammer next Thursday. All are in popular projects - The Sail @ Marina Bay, The Oceanfront and The Coast at Sentosa Cove, Caribbean at Keppel Bay and Icon at Tanjong Pagar - where several units have already changed hands.
All the condos are 99-year leasehold and are not yet ready for occupation.
These home sellers are the clients of property agency CKS Property Consultants, which hit on the idea of using an auction as a sales channel.
CKS said yesterday that this would be one of the first auctions in Singapore comprising only owners’ properties.
Usually, property auctions here are conducted regularly by bigger property firms and include both owners’ properties as well as repossessed assets.
But CKS believes that auctions are gradually shedding the stigma of being associated with mortgagee sales.
‘More Singaporeans are eager to utilise the mode of auction to fetch lucrative prices for their properties,’ it said in a statement.
Its clients see this auction as the best way to take advantage of the booming demand for high-end property, the agency added.
‘Though many of them have already attracted offers via open listings, they want to generate wider exposure for their properties so as to capture the highest, most competitive price possible,’ CKS told The Straits Times.
The agency will absorb the administrative fees of the auction, which amounts to $1,000 for each property.
The auction, which will be called ‘hot spots’, will be held next Thursday at 2.30pm on Level 6 of Raffles City Tower.
CKS is not the first to jump on the auction bandwagon.
Property auctioneers have been seeing an increasing number of owners’ sales, as more sellers turn to auctions as an alternative sales method for luxury homes.
Last weekend, developer Tuan Sing Holdings held the first auction of uncompleted condo units in Singapore.
It put 12 units at its high-end Botanika in Holland Road on offer and sold them all at prices within its expectations.
While the units fetched benchmark prices of up to $2,400 per sq ft, reports said the bidding was slow-going, partly because of the high value of the properties.
But while the Botanika auction was open only to invited bidders, the ‘hot spots’ auction is welcoming all interested buyers and investors.
Source: The Straits Times, 05 April 2007
Another site available for hospital-cum-hotel project
The Urban Redevelopment Authority (URA) says a reserve site on Race Course Road can now be developed with a hospital component.
The 1.36ha site, which has a maximum allowable gross floor area (GFA) of 57,225 square metres, was put on the reserve list of the Government Land Sales (GLS) programme last year.
Zoned a white site, residential and commercial use, as well as a stipulated minimum 40 per cent GFA of hotel use, was expected.
In a statement yesterday, URA said: ‘In line with increased interest in hospital development, URA has been working with the Ministry of Health and EDB (Economic Development Board) to review new sites for hospital development.’
A URA spokesman said later: ‘We have received some market feedback that the site could be suitable for a hospital development.
‘Allowing hospital use for this site also supports the government’s plan to release more land for medical facilities to cope with the increased needs of local patients and the 20 per cent annual growth in foreign patients.’
On whether growing medical tourism was a factor, the URA spokesman said: ‘An investor could choose to build a proposed hospital-cum-hotel development that could be suitable for tourists who visit Singapore for leisure purposes or to seek medical treatments, and in doing so, would contribute to the SingaporeMedicine’s initiative to attract one million foreign patients by 2012 with an expected spending of $3 billion.’
SingaporeMedicine is a multi-agency government-industry partnership set up to develop and promote Singapore as a medical hub.
Its latest figures - for 2005 - show that 374,000 international patients came to Singapore specifically for health care.
In January, another GLS hotel site aimed partly at medical tourism was sold to Far East Organization for $131.1 million or $501 per square foot per plot ratio.
Located strategically at Sinaran Drive, the site is close to Tan Tock Seng Hospital and Far East’s Novena Medical Suites.
There does appear to be demand for hospital sites.
It emerged in June last year that Parkway Holdings initially planned to convert a residential site it bought at Napier Road for $138 million into a medical centre. But URA turned down the application for a change of use.
Source: The Business Times, 05 April 2007
The 1.36ha site, which has a maximum allowable gross floor area (GFA) of 57,225 square metres, was put on the reserve list of the Government Land Sales (GLS) programme last year.
Zoned a white site, residential and commercial use, as well as a stipulated minimum 40 per cent GFA of hotel use, was expected.
In a statement yesterday, URA said: ‘In line with increased interest in hospital development, URA has been working with the Ministry of Health and EDB (Economic Development Board) to review new sites for hospital development.’
A URA spokesman said later: ‘We have received some market feedback that the site could be suitable for a hospital development.
‘Allowing hospital use for this site also supports the government’s plan to release more land for medical facilities to cope with the increased needs of local patients and the 20 per cent annual growth in foreign patients.’
On whether growing medical tourism was a factor, the URA spokesman said: ‘An investor could choose to build a proposed hospital-cum-hotel development that could be suitable for tourists who visit Singapore for leisure purposes or to seek medical treatments, and in doing so, would contribute to the SingaporeMedicine’s initiative to attract one million foreign patients by 2012 with an expected spending of $3 billion.’
SingaporeMedicine is a multi-agency government-industry partnership set up to develop and promote Singapore as a medical hub.
Its latest figures - for 2005 - show that 374,000 international patients came to Singapore specifically for health care.
In January, another GLS hotel site aimed partly at medical tourism was sold to Far East Organization for $131.1 million or $501 per square foot per plot ratio.
Located strategically at Sinaran Drive, the site is close to Tan Tock Seng Hospital and Far East’s Novena Medical Suites.
There does appear to be demand for hospital sites.
It emerged in June last year that Parkway Holdings initially planned to convert a residential site it bought at Napier Road for $138 million into a medical centre. But URA turned down the application for a change of use.
Source: The Business Times, 05 April 2007
Soft interbank rates bode well for economy
A period of softer interbank rates is expected to be generally positive for the economy and lending; although for individual banks, the impact could be mixed.
Interbank rates - the rate at which banks lend to one another and to which most loans are pegged - have been volatile of late, with sharp falls seen in recent weeks to levels not seen since 2005.
The benchmark three-month Singapore Interbank Offered Rate (Sibor) fell to a low of 2.93 per cent in mid-March, and is currently hovering at just above 3 per cent.
With loans growth and domestic consumption still lagging the strong rate of economic expansion, analysts say, softer interbank rates may help to narrow the gap.
After no meaningful increase for a decade, loans growth is starting to pick up, and some now expect double-digit expansion this year on the back of the strong domestic economy and the revival in the property market.
Credit Suisse said in a recent research report that the fall in interbank rates is likely to benefit banks by boosting asset prices and increasing demand for loans.
Recent figures released by the Monetary Authority of Singapore (MAS) show that total loans amounted to $198.4 billion in February, up 7.9 per cent from a year ago. Manufacturing loans grew 4.7 per cent to $10.7 billion, while construction loans increased 18 per cent $27.6 billion. Housing loans grew 2.7 per cent to $63.8 billion.
Brandon Ng, bank analyst at Phillip Securities, said: ‘This decline seems beneficial to local banks in the near-term as time deposits will adjust accordingly and will ease some funding pressures, whereas floating loans usually take longer to re-price.’
For home loan borrowers, it also signals the end of a cycle of upward re-pricing, although rates are not expected to drop. While the interbank rate cycle had peaked at the end of last year, some home loan borrowers were still asked to pay higher interest rates because of the lag effect.
‘Further mortgage rate hikes now look less likely, but they will also be sticky downwards,’ said Citigroup bank analyst Robert Kong.
However, while lower interest rates are broadly welcomed, the net impact of a lower Sibor on each of the three Singapore banks is dependent on the size of their deposits relative to their loan books and the composition of their loan and investment portfolios.
In an analysis of the impact of a falling Sibor on the banks, Mr Kong said that DBS Bank is likely to be a loser, with OCBC Bank a relative winner.
‘The speed and severity of the fall could mean margin concerns for DBS in 2Q/3Q,’ he said.
DBS has the most rate-sensitive earnings of its peers because of factors such as a low Singapore loan-deposit ratio, a high level of interbank loans and a large amount of low-cost funds, as well as a high exposure to corporate loans which are Sibor sensitive, according to Mr Kong.
As three-month Sibor surged between Q3 2005 and Q1 2006, DBS enjoyed the largest boost (at a time when volume growth was weak), followed by United Overseas Bank (UOB), while OCBC suffered.
OCBC, however, has a high dependence on Sibor time deposits, which re-price more quickly than asset yields. Hence, it tends to benefit from a lower Sibor, while UOB lies somewhere in between.
One implication for bank customers is that deposit rates, which peaked in the later part of last year, will now soften.
Interbank rates are not expected to reverse their current trend in the near term, but could stabilise at around current levels.
‘As long as moderate appreciation of Singapore dollar according to MAS remains on track and no major movements in the interest rates within the $NEER (Sing-dollar nominal effective exchange rate), we should not see much adjustment in local interest rates,’ said Mr Ng.
Source: The Business Times, 05 April 2007
Interbank rates - the rate at which banks lend to one another and to which most loans are pegged - have been volatile of late, with sharp falls seen in recent weeks to levels not seen since 2005.
The benchmark three-month Singapore Interbank Offered Rate (Sibor) fell to a low of 2.93 per cent in mid-March, and is currently hovering at just above 3 per cent.
With loans growth and domestic consumption still lagging the strong rate of economic expansion, analysts say, softer interbank rates may help to narrow the gap.
After no meaningful increase for a decade, loans growth is starting to pick up, and some now expect double-digit expansion this year on the back of the strong domestic economy and the revival in the property market.
Credit Suisse said in a recent research report that the fall in interbank rates is likely to benefit banks by boosting asset prices and increasing demand for loans.
Recent figures released by the Monetary Authority of Singapore (MAS) show that total loans amounted to $198.4 billion in February, up 7.9 per cent from a year ago. Manufacturing loans grew 4.7 per cent to $10.7 billion, while construction loans increased 18 per cent $27.6 billion. Housing loans grew 2.7 per cent to $63.8 billion.
Brandon Ng, bank analyst at Phillip Securities, said: ‘This decline seems beneficial to local banks in the near-term as time deposits will adjust accordingly and will ease some funding pressures, whereas floating loans usually take longer to re-price.’
For home loan borrowers, it also signals the end of a cycle of upward re-pricing, although rates are not expected to drop. While the interbank rate cycle had peaked at the end of last year, some home loan borrowers were still asked to pay higher interest rates because of the lag effect.
‘Further mortgage rate hikes now look less likely, but they will also be sticky downwards,’ said Citigroup bank analyst Robert Kong.
However, while lower interest rates are broadly welcomed, the net impact of a lower Sibor on each of the three Singapore banks is dependent on the size of their deposits relative to their loan books and the composition of their loan and investment portfolios.
In an analysis of the impact of a falling Sibor on the banks, Mr Kong said that DBS Bank is likely to be a loser, with OCBC Bank a relative winner.
‘The speed and severity of the fall could mean margin concerns for DBS in 2Q/3Q,’ he said.
DBS has the most rate-sensitive earnings of its peers because of factors such as a low Singapore loan-deposit ratio, a high level of interbank loans and a large amount of low-cost funds, as well as a high exposure to corporate loans which are Sibor sensitive, according to Mr Kong.
As three-month Sibor surged between Q3 2005 and Q1 2006, DBS enjoyed the largest boost (at a time when volume growth was weak), followed by United Overseas Bank (UOB), while OCBC suffered.
OCBC, however, has a high dependence on Sibor time deposits, which re-price more quickly than asset yields. Hence, it tends to benefit from a lower Sibor, while UOB lies somewhere in between.
One implication for bank customers is that deposit rates, which peaked in the later part of last year, will now soften.
Interbank rates are not expected to reverse their current trend in the near term, but could stabilise at around current levels.
‘As long as moderate appreciation of Singapore dollar according to MAS remains on track and no major movements in the interest rates within the $NEER (Sing-dollar nominal effective exchange rate), we should not see much adjustment in local interest rates,’ said Mr Ng.
Source: The Business Times, 05 April 2007
Little India site open to hospitals
The Urban Redevelopment Authority (URA) has decided to open up a vacant plot in Little India to hospital development, after no takers came forward to develop it for its original purpose.
The 1.36ha site above Farrer Park MRT station at the junction of Rangoon Road and Race Course Road was first offered as a ‘white’ site in August last year. This means developers could build homes, shops, offices or hotels there.
But no developer expressed an interest.
Yesterday, the URA said it would extend the site’s permitted uses to hospitals, ‘in line with increased interest in hospital development’, though 40 per cent of the site’s total floor area must still be given over to a hotel.
The agency said the plot is suitable for a hospital as ‘it is compatible with the surrounding land uses’.
Further down Race Course Road is Kwong Wai Shiu Hospital and Nursing Home.
The land parcel on offer can be built up to a total floor area of about 616,000 sq ft.
It is on the URA’s reserve list, which means that interested developers have to submit a bid that meets the authority’s reserve price before the plot can be launched for public tender.
Source: The Straits Times, 05 April 2007
The 1.36ha site above Farrer Park MRT station at the junction of Rangoon Road and Race Course Road was first offered as a ‘white’ site in August last year. This means developers could build homes, shops, offices or hotels there.
But no developer expressed an interest.
Yesterday, the URA said it would extend the site’s permitted uses to hospitals, ‘in line with increased interest in hospital development’, though 40 per cent of the site’s total floor area must still be given over to a hotel.
The agency said the plot is suitable for a hospital as ‘it is compatible with the surrounding land uses’.
Further down Race Course Road is Kwong Wai Shiu Hospital and Nursing Home.
The land parcel on offer can be built up to a total floor area of about 616,000 sq ft.
It is on the URA’s reserve list, which means that interested developers have to submit a bid that meets the authority’s reserve price before the plot can be launched for public tender.
Source: The Straits Times, 05 April 2007
Far East buys Ocean Apartments for $39m
Far East Organization has bought Ocean Apartments in East Coast Road for $39 million or $481 psf of potential gross floor area including an estimated $150,000 development charge (DC).
The collective sale, brokered by Colliers International, is understood to have taken place about a fortnight ago.
Just before that, Far East is said to have bought Sheridan Court next door for $13.5 million or $483 psf per plot ratio including an estimated $50,000 DC.
Assuming Far East combines the plots, it will have a freehold land area of 78,195 sq ft. The combined plots could be redeveloped into a project with about 80 units averaging 1,500 sq ft.
Both plots are zoned for residential use with 1.4 plot ratio - the ratio of maximum potential gross floor area to land area - and a five-storey height limit.
Ocean Apartments now comprises a couple of four-storey walk-up blocks totalling 48 units. Owners will receive more than $800,000 a unit from the collective sale - about 35 per cent more than if they had sold individually.
As for Sheridan Court, which comprises 14 apartments, industry sources say another investor had signed a deal to buy all the units through a collective sale, but before the deal could be completed in July this year, he ‘flipped’ the properties to Far East.
Market watchers note that because the Ocean Apartments/Sheridan Court combined site is slightly L-shaped, Far East could consider buying some adjoining properties to give the site a more squarish shape. ‘But this is just speculation at this stage,’ said a source.
Last week, Far East teamed up with Frasers Centrepoint in an equal joint venture to buy Tampines Court for $405 million or $260 psf per plot ratio inclusive of DC and a premium to top up the site’s lease to 99 years. The 702,162 sq ft site is zoned for residential use with a 2.8 plot ratio and can be redeveloped into 1,600 condo units.
‘It will likely be a master-planned development, given the very large site and an opportunity for both developers to join forces to produce some innovative housing in Tampines,’ Far East CEO Philip Ng said in a statement last week.
Frasers Centrepoint chief executive Lim Eee Seng said that the duo would create ‘a landmark residential project’.
Source: The Business Times, 05 April 2007
The collective sale, brokered by Colliers International, is understood to have taken place about a fortnight ago.
Just before that, Far East is said to have bought Sheridan Court next door for $13.5 million or $483 psf per plot ratio including an estimated $50,000 DC.
Assuming Far East combines the plots, it will have a freehold land area of 78,195 sq ft. The combined plots could be redeveloped into a project with about 80 units averaging 1,500 sq ft.
Both plots are zoned for residential use with 1.4 plot ratio - the ratio of maximum potential gross floor area to land area - and a five-storey height limit.
Ocean Apartments now comprises a couple of four-storey walk-up blocks totalling 48 units. Owners will receive more than $800,000 a unit from the collective sale - about 35 per cent more than if they had sold individually.
As for Sheridan Court, which comprises 14 apartments, industry sources say another investor had signed a deal to buy all the units through a collective sale, but before the deal could be completed in July this year, he ‘flipped’ the properties to Far East.
Market watchers note that because the Ocean Apartments/Sheridan Court combined site is slightly L-shaped, Far East could consider buying some adjoining properties to give the site a more squarish shape. ‘But this is just speculation at this stage,’ said a source.
Last week, Far East teamed up with Frasers Centrepoint in an equal joint venture to buy Tampines Court for $405 million or $260 psf per plot ratio inclusive of DC and a premium to top up the site’s lease to 99 years. The 702,162 sq ft site is zoned for residential use with a 2.8 plot ratio and can be redeveloped into 1,600 condo units.
‘It will likely be a master-planned development, given the very large site and an opportunity for both developers to join forces to produce some innovative housing in Tampines,’ Far East CEO Philip Ng said in a statement last week.
Frasers Centrepoint chief executive Lim Eee Seng said that the duo would create ‘a landmark residential project’.
Source: The Business Times, 05 April 2007
Warehouse rents up nearly 5% in first quarter
Warehouse rents rose almost 5 per cent in the first quarter of this year - the first increase since Q2 2003.
According to a report by CB Richard Ellis (CBRE), average monthly rent for warehouses improved by 4 to 4.8 per cent in Q1. It edged up to $1.30 per sq ft for ground-floor units and $1.10 psf for upper floor units.
Previously, these rents had been stagnant at $1.25 psf and $1.05 psf.
CBRE director of industrial and logistics services Bernard Goh said yesterday: ‘More logistics companies are setting up distribution centres in Singapore, given its proximity to the growing economies of China and India and its good air and sea connections with Asia and the rest of the world.’
Dubai-based shipping and logistics company CargoGulf set up its global headquarters here recently, Mr Goh noted. And Computer firm Dell had said that it would move its global supply chain management manufacturing operations to Singapore.
Average rent for high-tech space also rose in Q1 this year - by 5 per cent to $2.10 psf from $2 in the previous quarter. Year on year, high-tech rent increased 13.5 per cent.
Mr Goh attributes this to demand from companies looking to high-tech space as an alternative to traditional office space, which is in short supply.
Some companies are also opting for high-tech and business/science park space for back-up recovery offices.
The average monthly rent for factory space rose five cents psf in Q1 this year to $1.30 psf for ground floors and and $1.05 psf for upper floors.
Ascendas Reit was the most active Reit in Q1. It bought $81.7 million of properties including 27 International Business Park for $18.6 million. Cambridge Industrial Trust bought 55 Ubi Avenue 3 for $18.8 million. Mapletree Logistics Trust did not buy any properties in Singapore.
Source: The Business Times, 05 April 2007
According to a report by CB Richard Ellis (CBRE), average monthly rent for warehouses improved by 4 to 4.8 per cent in Q1. It edged up to $1.30 per sq ft for ground-floor units and $1.10 psf for upper floor units.
Previously, these rents had been stagnant at $1.25 psf and $1.05 psf.
CBRE director of industrial and logistics services Bernard Goh said yesterday: ‘More logistics companies are setting up distribution centres in Singapore, given its proximity to the growing economies of China and India and its good air and sea connections with Asia and the rest of the world.’
Dubai-based shipping and logistics company CargoGulf set up its global headquarters here recently, Mr Goh noted. And Computer firm Dell had said that it would move its global supply chain management manufacturing operations to Singapore.
Average rent for high-tech space also rose in Q1 this year - by 5 per cent to $2.10 psf from $2 in the previous quarter. Year on year, high-tech rent increased 13.5 per cent.
Mr Goh attributes this to demand from companies looking to high-tech space as an alternative to traditional office space, which is in short supply.
Some companies are also opting for high-tech and business/science park space for back-up recovery offices.
The average monthly rent for factory space rose five cents psf in Q1 this year to $1.30 psf for ground floors and and $1.05 psf for upper floors.
Ascendas Reit was the most active Reit in Q1. It bought $81.7 million of properties including 27 International Business Park for $18.6 million. Cambridge Industrial Trust bought 55 Ubi Avenue 3 for $18.8 million. Mapletree Logistics Trust did not buy any properties in Singapore.
Source: The Business Times, 05 April 2007
Reflections at Keppel Bay hits average sale price of S$1,900 psf
Keppel Land’s latest waterfront home project - Reflections at Keppel Bay - is set to transform Singapore’s west side into a premium waterfront living enclave.
The property developer is seeing strong demand for the project, which is setting a new benchmark at an average price of S$1,900 per square foot.
Tuesday was Day One of the soft launch, and already, transacted prices for units at Reflections at Keppel Bay surpassed those at Marina Bay Residences - the most recent waterfront property launched.
Reflections is Keppel Land’s latest waterfront residential development - and the second of five planned residential projects in the area.
The developer said it expected at least three-quarters of the units up for sale during Tuesday’s soft launch to be taken up.
Augustine Tan, Director, Singapore Residential, Keppel Land, added, “And we’ve done very well. Initially, we wanted to just launch 80 units. But because of the demand…to satisfy our customers, we’ve actually increased to about 150 units.
“We’ve yet to tally our prices. But I think it’ll be in the range of S$1,900 per square foot to S$1,950 per square foot.”
Keppel Land plans to sell the units in phases of about 200 to 300 units each.
Mr Tan said, “We’re very mindful that we do not disappoint our customers. So we will review the plans when we come to it. If we can sell over 500 units in a very short period, then we have to review our plans again on whether we want to immediately sell the rest or to wait for a while.”
With direct access to a marina, analysts have said Reflections is the catalyst needed for the West Coast to turn into the new East Coast.
This was despite properties on the East Coast, especially near the Tanjung Rhu and Meyer Road area, being the conventional choice for waterfront living.
Donald Han, Managing Director, Cushman & Wakefield, said, “For the West Coast, you’re targeting on a pent-up demand, something that has never been there. So we expect a fairly good launch. We expect good take-up. We expect the developers to control the supply, not to release everything at one go.
“The West Coast is now playing catch up with the East Coast. And depending on the sell out, whether this project is going to be a sell-out, or the reception from the investors, overall, prices are being re-evaluated quite comparative to the East Coast market for premier, desired, quality lifestyle residential projects.”
Although the recreational community and food and beverage outlets in the area are not as established as the ones in the East Coast, analysts have said there are a few other things going for the area.
There is the Sentosa Integrated Resort, as well as business enclaves like the HarbourFront Centre, the Alexandra Technopark and conglomerates like the PSA and NOL to offer a steady stream of corporate tenants.
Keppel Land plans to open Reflections at Keppel Bay for sale to the public this Friday.
Source: Channel NewsAsia, 04 April 2007
The property developer is seeing strong demand for the project, which is setting a new benchmark at an average price of S$1,900 per square foot.
Tuesday was Day One of the soft launch, and already, transacted prices for units at Reflections at Keppel Bay surpassed those at Marina Bay Residences - the most recent waterfront property launched.
Reflections is Keppel Land’s latest waterfront residential development - and the second of five planned residential projects in the area.
The developer said it expected at least three-quarters of the units up for sale during Tuesday’s soft launch to be taken up.
Augustine Tan, Director, Singapore Residential, Keppel Land, added, “And we’ve done very well. Initially, we wanted to just launch 80 units. But because of the demand…to satisfy our customers, we’ve actually increased to about 150 units.
“We’ve yet to tally our prices. But I think it’ll be in the range of S$1,900 per square foot to S$1,950 per square foot.”
Keppel Land plans to sell the units in phases of about 200 to 300 units each.
Mr Tan said, “We’re very mindful that we do not disappoint our customers. So we will review the plans when we come to it. If we can sell over 500 units in a very short period, then we have to review our plans again on whether we want to immediately sell the rest or to wait for a while.”
With direct access to a marina, analysts have said Reflections is the catalyst needed for the West Coast to turn into the new East Coast.
This was despite properties on the East Coast, especially near the Tanjung Rhu and Meyer Road area, being the conventional choice for waterfront living.
Donald Han, Managing Director, Cushman & Wakefield, said, “For the West Coast, you’re targeting on a pent-up demand, something that has never been there. So we expect a fairly good launch. We expect good take-up. We expect the developers to control the supply, not to release everything at one go.
“The West Coast is now playing catch up with the East Coast. And depending on the sell out, whether this project is going to be a sell-out, or the reception from the investors, overall, prices are being re-evaluated quite comparative to the East Coast market for premier, desired, quality lifestyle residential projects.”
Although the recreational community and food and beverage outlets in the area are not as established as the ones in the East Coast, analysts have said there are a few other things going for the area.
There is the Sentosa Integrated Resort, as well as business enclaves like the HarbourFront Centre, the Alexandra Technopark and conglomerates like the PSA and NOL to offer a steady stream of corporate tenants.
Keppel Land plans to open Reflections at Keppel Bay for sale to the public this Friday.
Source: Channel NewsAsia, 04 April 2007
Site above Farrer Park MRT can be developed into hospital
A new private hospital could be coming up in the Little India area.
The Urban Redevelopment Authority (URA) has given the go-ahead for a reserve site above the Farrer Park MRT station to be developed into a hospital.
The land parcel, spanning about 1.4 hectares, is located at the corner of Race Course and Rangoon Roads.
Part of the site can house a 20-storey building.
A minimum of 40 percent of the maximum gross floor area has to be allocated for hotel use.
The remaining area can be used for a hospital.
The 99-year leasehold parcel is zoned as a so-called “white site”.
This means it can be developed for commercial, residential, hotel, civic or any mix of uses at any time.
URA said the decision to allow the site for hospital use is in line with increased interest in hospital development.
Other sites that have also been made available for hospital use are sites in Novena and One-north.
The site has been made available on the reserve list since August under the Government Land Sales Programme for the second half of 2006.
Under the Reserve List system, a site will only be put up for tender if there is a minimum bid price that is acceptable to the government.
Source: Channel NewsAsia
The Urban Redevelopment Authority (URA) has given the go-ahead for a reserve site above the Farrer Park MRT station to be developed into a hospital.
The land parcel, spanning about 1.4 hectares, is located at the corner of Race Course and Rangoon Roads.
Part of the site can house a 20-storey building.
A minimum of 40 percent of the maximum gross floor area has to be allocated for hotel use.
The remaining area can be used for a hospital.
The 99-year leasehold parcel is zoned as a so-called “white site”.
This means it can be developed for commercial, residential, hotel, civic or any mix of uses at any time.
URA said the decision to allow the site for hospital use is in line with increased interest in hospital development.
Other sites that have also been made available for hospital use are sites in Novena and One-north.
The site has been made available on the reserve list since August under the Government Land Sales Programme for the second half of 2006.
Under the Reserve List system, a site will only be put up for tender if there is a minimum bid price that is acceptable to the government.
Source: Channel NewsAsia
Business is brisk at residential projects
Residential properties continue to sell and prices are expected to keep going up.
CapitaLand and Sun Hung Kai Properties have sold more than half of the 175 units at The Orchard Residences at an average price at $3,213 per sq ft - a new high-end benchmark.
This will help lift the official property price index for the first quarter. Already, flash estimates reveal it rose 4.6 per cent.
The index, which rose 3.8 per cent in Q4 2006, is widely expected to climb as much as 5 per cent for Q1 2007.
The Orchard Residences units were sold on an invitation-only basis. A spokesman for CapitaLand said that half of the buyers are foreigners, mostly from Indonesia, Japan, India and Hong Kong.
Some of the remaining 77 units will be sold by invitation only, but a public launch is expected in May.
Keppel Land has also done brisk business at its 1,129-unit Reflections at Keppel Bay. About 130 units were sold yesterday - and this was only to Keppel directors, staff and business associates at a private preview.
A Keppel Land spokesman said the average price so far is $1,900-$1,950 psf.
Private previews are expected through the week, with a public launch set for as early as end of the week. Only 500 units will be launched in the first phase.
The Solitaire, a 59-unit project at Balmoral Park by City Developments Ltd (CDL), is fully sold - after it was soft-launched just a week week ago. CDL says the average price achieved is $2,000 psf, with one penthouse going for $7.4 million.
Foreigners made up about 40 per cent of buyers.
CDL will launch a condo on the former Kim Lin Mansion site next and has roped in designer architect Carlos Ott to give it global appeal. For starters, the development will have 360 degree views because, ‘a good view is important, anywhere in the world’.
Two of the three blocks will also have units that occupy an entire floor, with lifts opening out into each unit exclusively. ‘You may never meet your neighbours,’ said the CDL spokesman.
Hearteningly, suburban launches have also been selling well.
Sim Lian Group’s 338-unit Carabelle off West Coast Road, launched last week, is almost 50 per cent sold. Sim Lian executive director Diana Kuik said the average price so far is $638 psf.
She reckons at least 25 per cent of buyers so far are public housing upgraders and the rest are mostly local buyers with private residential address.
Although Ms Kuik could not say who these buyers are, Knight Frank director of research and consultancy Nicholas Mak reckons some could be buying for ‘capital gains’ and to ‘lock in’ prices. ‘It’s not so much panic buying as it is kiasu buying,’ he said.
Mr Mak also believes that those seeking replacement units for homes sold through collective sales make up a significant number of buyers.
He estimates that they accounted for 14 per cent of all buyers in 2006.
Interest in new launches has been strong, with queues outside showflats at Reflections and CapitaLand’s Seafront on Meyer. This surprises Mr Mak. ‘There is no need to queue. Nowadays, there are buyers with more influence and clout who will beat you to it anyway,’ he said.
Source: The Business Times
CapitaLand and Sun Hung Kai Properties have sold more than half of the 175 units at The Orchard Residences at an average price at $3,213 per sq ft - a new high-end benchmark.
This will help lift the official property price index for the first quarter. Already, flash estimates reveal it rose 4.6 per cent.
The index, which rose 3.8 per cent in Q4 2006, is widely expected to climb as much as 5 per cent for Q1 2007.
The Orchard Residences units were sold on an invitation-only basis. A spokesman for CapitaLand said that half of the buyers are foreigners, mostly from Indonesia, Japan, India and Hong Kong.
Some of the remaining 77 units will be sold by invitation only, but a public launch is expected in May.
Keppel Land has also done brisk business at its 1,129-unit Reflections at Keppel Bay. About 130 units were sold yesterday - and this was only to Keppel directors, staff and business associates at a private preview.
A Keppel Land spokesman said the average price so far is $1,900-$1,950 psf.
Private previews are expected through the week, with a public launch set for as early as end of the week. Only 500 units will be launched in the first phase.
The Solitaire, a 59-unit project at Balmoral Park by City Developments Ltd (CDL), is fully sold - after it was soft-launched just a week week ago. CDL says the average price achieved is $2,000 psf, with one penthouse going for $7.4 million.
Foreigners made up about 40 per cent of buyers.
CDL will launch a condo on the former Kim Lin Mansion site next and has roped in designer architect Carlos Ott to give it global appeal. For starters, the development will have 360 degree views because, ‘a good view is important, anywhere in the world’.
Two of the three blocks will also have units that occupy an entire floor, with lifts opening out into each unit exclusively. ‘You may never meet your neighbours,’ said the CDL spokesman.
Hearteningly, suburban launches have also been selling well.
Sim Lian Group’s 338-unit Carabelle off West Coast Road, launched last week, is almost 50 per cent sold. Sim Lian executive director Diana Kuik said the average price so far is $638 psf.
She reckons at least 25 per cent of buyers so far are public housing upgraders and the rest are mostly local buyers with private residential address.
Although Ms Kuik could not say who these buyers are, Knight Frank director of research and consultancy Nicholas Mak reckons some could be buying for ‘capital gains’ and to ‘lock in’ prices. ‘It’s not so much panic buying as it is kiasu buying,’ he said.
Mr Mak also believes that those seeking replacement units for homes sold through collective sales make up a significant number of buyers.
He estimates that they accounted for 14 per cent of all buyers in 2006.
Interest in new launches has been strong, with queues outside showflats at Reflections and CapitaLand’s Seafront on Meyer. This surprises Mr Mak. ‘There is no need to queue. Nowadays, there are buyers with more influence and clout who will beat you to it anyway,’ he said.
Source: The Business Times
Wednesday, April 4, 2007
Builders worry about steel
Builders worry about steel
By LOONG TSE MIN
PETALING JAYA: Major builders' associations are urging the Government to curb what they say are “runaway steel prices.”
The associations are calling for the removal of price controls on steel bars and cement and allow the free market to determine their prices.
They also call for the removal of import controls that will allow more competitive pricing of construction materials, price fluctuation clauses for government projects and close monitoring of prices by the Domestic Trade and Consumer Affairs Ministry.
Recurring shortages and price fluctuations could interrupt construction schedules of projects under the Ninth Malaysia Plan, especially for low- and medium-cost housing, they said in a joint statement yesterday.
The associations said their members had reported that steel bar millers were now charging RM450 to RM550 above the controlled price per tonne. “Local builders are being forced to pay more than RM2,000 per tonne to keep up with construction schedules,” they said.
Patrick Wong (left) and Ng Seing Liong at the press conference.
This was higher than the cost of steel bars in neighbouring countries of Thailand, Singapore and Indonesia where market prices ranged from RM1,800 to RM1,900 per tonne, said Rehda president Ng Seing Liong.
The associations, together with The Associated Chinese Chambers of Commerce & Industry of Malaysia, had last week sent a memorandum to the Prime Minister's Department.
The four associations are Master Builders Association Malaysia (MBAM), Persatuan Kontraktor Melayu Malaysia (PKMM), Real Estate and Housing Developers’ Association (Rehda) and Persatuan Kontraktor India Malaysia.
On how a controlled-price item could be sold at higher prices, Ng said: “These charges are 'grey market prices' often in the form of handling costs or special-size requirements.”
In the memorandum, they had detailed their concerns and recommendations, MBAM president Patrick Wong told reporters.
On why the industry only made a formal complaint now, Wong said while grey market prices for construction materials had existed for some time, a sudden jump in such prices in recent months was too much for many builders to bear.
“Two months ago, members quoted that millers were charging RM200 to RM250 above the control price. Now, this has increased to RM450 to RM550 more per tonne, which is a 15% to 20% increase,” he said.
At present, 30% to 40% of construction jobs in the country were being delayed, as Class F contractors could not meet their profit margins, PKMM secretary-general Datuk Osman Abu Bakar said.
“If the issue is not resolved quickly, prices of new houses could also go up by 15% to 20%,” Ng said. Rehda had resolved to request for an increase in the price of low-cost houses to RM60,000 from RM42,000 and would submit a proposal to the Government this month, he said.
By LOONG TSE MIN
PETALING JAYA: Major builders' associations are urging the Government to curb what they say are “runaway steel prices.”
The associations are calling for the removal of price controls on steel bars and cement and allow the free market to determine their prices.
They also call for the removal of import controls that will allow more competitive pricing of construction materials, price fluctuation clauses for government projects and close monitoring of prices by the Domestic Trade and Consumer Affairs Ministry.
Recurring shortages and price fluctuations could interrupt construction schedules of projects under the Ninth Malaysia Plan, especially for low- and medium-cost housing, they said in a joint statement yesterday.
The associations said their members had reported that steel bar millers were now charging RM450 to RM550 above the controlled price per tonne. “Local builders are being forced to pay more than RM2,000 per tonne to keep up with construction schedules,” they said.
Patrick Wong (left) and Ng Seing Liong at the press conference.
This was higher than the cost of steel bars in neighbouring countries of Thailand, Singapore and Indonesia where market prices ranged from RM1,800 to RM1,900 per tonne, said Rehda president Ng Seing Liong.
The associations, together with The Associated Chinese Chambers of Commerce & Industry of Malaysia, had last week sent a memorandum to the Prime Minister's Department.
The four associations are Master Builders Association Malaysia (MBAM), Persatuan Kontraktor Melayu Malaysia (PKMM), Real Estate and Housing Developers’ Association (Rehda) and Persatuan Kontraktor India Malaysia.
On how a controlled-price item could be sold at higher prices, Ng said: “These charges are 'grey market prices' often in the form of handling costs or special-size requirements.”
In the memorandum, they had detailed their concerns and recommendations, MBAM president Patrick Wong told reporters.
On why the industry only made a formal complaint now, Wong said while grey market prices for construction materials had existed for some time, a sudden jump in such prices in recent months was too much for many builders to bear.
“Two months ago, members quoted that millers were charging RM200 to RM250 above the control price. Now, this has increased to RM450 to RM550 more per tonne, which is a 15% to 20% increase,” he said.
At present, 30% to 40% of construction jobs in the country were being delayed, as Class F contractors could not meet their profit margins, PKMM secretary-general Datuk Osman Abu Bakar said.
“If the issue is not resolved quickly, prices of new houses could also go up by 15% to 20%,” Ng said. Rehda had resolved to request for an increase in the price of low-cost houses to RM60,000 from RM42,000 and would submit a proposal to the Government this month, he said.
TA rises on REIT plan
TA rises on REIT plan
KUALA LUMPUR: The prospect of TA Enterprise Bhd (TA) raising more than RM1bil through the sale of its properties to a real estate investment trust (REIT) sent shares of the stockbroker and property developer to their highest level in six weeks yesterday.
TA Enterprise shares closed up 17 sen to RM1.94 while its warrant-B jumped 7 sen to 88 sen as the group announced it might package property assets in Australia, Canada, Malaysia and potentially South Africa into a REIT.
“REITs are a great way for property companies to unlock value,'' said the head of research at a local stockbroking house.
Shares of TA have been among the better performing stocks this year as it benefits from the stockmarket's two key themes, property and stockbroking.
“There is a need for the company to increase its landbank and grow the financial services side of the business, and that's where the money will come in useful,'' said an analyst.
In the Tuesday report, TA chairman Datin Alicia Tan said the company planned to sell RM1.8bil worth of apartments and offices in the next five years.
She said two of the three projects were located near the KLCC and the company expects income from real estate to contribute 60% of its profit by 2009 from 30% in 2005.
The prospect of having a REIT is also seen as beneficial to TA as ongoing and future property projects could be injected into the REIT to improve returns. As for the stockbroking side of the business, the share price of stockbrokers such as TA Enterprise have also been lifted as the global bull market has led to higher valuations for stockbrokers worldwide.
But for TA, the nature of its financial and stockbroking business is set to evolve after being stable for much of the past few years.
Armed with an investment banking licence, the company is set to capitalise on its assets, which include a big remisier team, a strong retail focus in its clientele, as well as growing contribution from its institutional business. “There is potential for the company to come up with structured products and TA is also eyeing expansion into similar stockbroking services in the region,'' said an analyst.
KUALA LUMPUR: The prospect of TA Enterprise Bhd (TA) raising more than RM1bil through the sale of its properties to a real estate investment trust (REIT) sent shares of the stockbroker and property developer to their highest level in six weeks yesterday.
TA Enterprise shares closed up 17 sen to RM1.94 while its warrant-B jumped 7 sen to 88 sen as the group announced it might package property assets in Australia, Canada, Malaysia and potentially South Africa into a REIT.
“REITs are a great way for property companies to unlock value,'' said the head of research at a local stockbroking house.
Shares of TA have been among the better performing stocks this year as it benefits from the stockmarket's two key themes, property and stockbroking.
“There is a need for the company to increase its landbank and grow the financial services side of the business, and that's where the money will come in useful,'' said an analyst.
In the Tuesday report, TA chairman Datin Alicia Tan said the company planned to sell RM1.8bil worth of apartments and offices in the next five years.
She said two of the three projects were located near the KLCC and the company expects income from real estate to contribute 60% of its profit by 2009 from 30% in 2005.
The prospect of having a REIT is also seen as beneficial to TA as ongoing and future property projects could be injected into the REIT to improve returns. As for the stockbroking side of the business, the share price of stockbrokers such as TA Enterprise have also been lifted as the global bull market has led to higher valuations for stockbrokers worldwide.
But for TA, the nature of its financial and stockbroking business is set to evolve after being stable for much of the past few years.
Armed with an investment banking licence, the company is set to capitalise on its assets, which include a big remisier team, a strong retail focus in its clientele, as well as growing contribution from its institutional business. “There is potential for the company to come up with structured products and TA is also eyeing expansion into similar stockbroking services in the region,'' said an analyst.
The Singapore office and retail property markets continue to be firm
The Singapore office and retail property markets continue to be firm, judging by separate releases from CB Richard Ellis and Knight Frank yesterday.
Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.
‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said.
‘As a result, rentals in those areas were stable,’ the report added.The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.
In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase.
‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.
CBRE, in its office sector report, said that with supply remaining extremely tight, the vacancy rate for Grade A office space continued to fall, from 0.8 per cent in Q4 2006 to 0.4 per cent in the first quarter of this year.
Source: The Business Times, 04 April 2007
Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.
‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said.
‘As a result, rentals in those areas were stable,’ the report added.The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.
In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase.
‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.
CBRE, in its office sector report, said that with supply remaining extremely tight, the vacancy rate for Grade A office space continued to fall, from 0.8 per cent in Q4 2006 to 0.4 per cent in the first quarter of this year.
Source: The Business Times, 04 April 2007
Out of the Cage: Iskandar not a sell-out to foreigners
Out of the Cage: Iskandar not a sell-out to foreigners
By : khairy Jamaluddin
www.nst.com.my/Current_News/NST/Sunday/Columns/20070401075258/Article/index_html
By : khairy Jamaluddin
www.nst.com.my/Current_News/NST/Sunday/Columns/20070401075258/Article/index_html
Dr M blasts Abdullah over IDR rules
Dr M blasts Abdullah over IDR rules
AFTER five months of relative quiet, former Malaysian prime minister Mahathir Mohamad returned to the offensive, this time attacking Prime Minister Abdullah Ahmad Badawi's plan to relax laws governing investment in the Iskandar Development Region (IDR) in southern Johor state.
In a speech before 300-odd supporters in Kulai, a rural hamlet in Johor, the 81-year-old Dr Mahathir lambasted Mr Abdullah in familiar fashion, accusing the premier of weakness, economic mismanagement and outright corruption. All that was old hat but the IDR was new ground.
Last week, Mr Abdullah decreed that investors in the IDR would be exempted from Foreign Investment Committee (FIC) rules which include the requirement that ethnic Malays must be accorded 30 per cent in all spheres of economic activity in Malaysia from employment to equity participation.
Instead, Mr Abdullah said that investors - both local and foreign - would enjoy FIC exemptions within five zones within the IDR that could engage in selected activities from health care to tourism. The IDR is Malaysia's most ambitious project yet with an estimated US$105 billion set to transform a region almost three times the size of Singapore into a super-economic zone over 15 years.
The Malays form the majority of Malaysia's population and have enjoyed special privileges over three decades to uplift them economically. Mr Abdullah's shift in tack thus represented economic sacrilege and the former premier seized the opportunity.
Dr Mahathir, who rose in politics as an out and out Malay nationalist, said that such a policy would not make Malaysia 'our country at all', implying, as his wont, that it was a sell-out to foreigners. 'The Malays will lose out,' Dr Mahathir said. 'They are not ready to compete with those (businessmen) who will come into the IDR. . . We will be enslaved again.'
It is not clear if Dr Mahathir's clarion call will resonate among ordinary Malays given the fact that Mr Abdullah's announcement had been cleared by the country's Cabinet, which is chaired by the Premier himself. Nor is there any reason to believe that Mr Abdullah would reverse tack given his former boss's outburst. But there is no doubt that there is genuine disquiet among some segments of the Malay community which fear being marginalised in out and out competition.
Former deputy premier Musa Hitam, for example, was slammed over the Internet after he suggested on March 22 that the IDR be exempted from affirmative action policies. Mr Musa made the remarks in his capacity as an adviser to the IDR but got branded as a 'traitor' by Malay commentators on the Internet. Without explicitly naming him, Dr Mahathir also referred critically to the comments made by Mr Musa, who resigned as his deputy in 1985. Mr Musa declined to comment when contacted by BT.
Ironically, it was Dr Mahathir who first started relaxing affirmative action policies. In 1986, he repealed portions of the policy and allowed foreigners to own 100 per cent of businesses provided it was meant for export. It led to a decade-long boom of the Malaysian economy. The exemption still holds today.
In the early 1990s, Dr Mahathir almost completely waived affirmative action policies throughout his Multimedia Super-Corridor, an area of land much larger than the five zones selected by Mr Abdullah in the IDR, and meant to be the Malaysian equivalent of California's Silicon Valley.
The rules still exist today and the project is a qualified success. For all that, however, the former premier seems to bitterly rue his choice of Mr Abdullah as his successor and seems hell bent on toppling him. But age seemed to be slowing him down.
Late last year, Dr Mahathir suffered a heart attack and doctors advised him to cut back on his schedule. He did - for nearly five months.
AFTER five months of relative quiet, former Malaysian prime minister Mahathir Mohamad returned to the offensive, this time attacking Prime Minister Abdullah Ahmad Badawi's plan to relax laws governing investment in the Iskandar Development Region (IDR) in southern Johor state.
In a speech before 300-odd supporters in Kulai, a rural hamlet in Johor, the 81-year-old Dr Mahathir lambasted Mr Abdullah in familiar fashion, accusing the premier of weakness, economic mismanagement and outright corruption. All that was old hat but the IDR was new ground.
Last week, Mr Abdullah decreed that investors in the IDR would be exempted from Foreign Investment Committee (FIC) rules which include the requirement that ethnic Malays must be accorded 30 per cent in all spheres of economic activity in Malaysia from employment to equity participation.
Instead, Mr Abdullah said that investors - both local and foreign - would enjoy FIC exemptions within five zones within the IDR that could engage in selected activities from health care to tourism. The IDR is Malaysia's most ambitious project yet with an estimated US$105 billion set to transform a region almost three times the size of Singapore into a super-economic zone over 15 years.
The Malays form the majority of Malaysia's population and have enjoyed special privileges over three decades to uplift them economically. Mr Abdullah's shift in tack thus represented economic sacrilege and the former premier seized the opportunity.
Dr Mahathir, who rose in politics as an out and out Malay nationalist, said that such a policy would not make Malaysia 'our country at all', implying, as his wont, that it was a sell-out to foreigners. 'The Malays will lose out,' Dr Mahathir said. 'They are not ready to compete with those (businessmen) who will come into the IDR. . . We will be enslaved again.'
It is not clear if Dr Mahathir's clarion call will resonate among ordinary Malays given the fact that Mr Abdullah's announcement had been cleared by the country's Cabinet, which is chaired by the Premier himself. Nor is there any reason to believe that Mr Abdullah would reverse tack given his former boss's outburst. But there is no doubt that there is genuine disquiet among some segments of the Malay community which fear being marginalised in out and out competition.
Former deputy premier Musa Hitam, for example, was slammed over the Internet after he suggested on March 22 that the IDR be exempted from affirmative action policies. Mr Musa made the remarks in his capacity as an adviser to the IDR but got branded as a 'traitor' by Malay commentators on the Internet. Without explicitly naming him, Dr Mahathir also referred critically to the comments made by Mr Musa, who resigned as his deputy in 1985. Mr Musa declined to comment when contacted by BT.
Ironically, it was Dr Mahathir who first started relaxing affirmative action policies. In 1986, he repealed portions of the policy and allowed foreigners to own 100 per cent of businesses provided it was meant for export. It led to a decade-long boom of the Malaysian economy. The exemption still holds today.
In the early 1990s, Dr Mahathir almost completely waived affirmative action policies throughout his Multimedia Super-Corridor, an area of land much larger than the five zones selected by Mr Abdullah in the IDR, and meant to be the Malaysian equivalent of California's Silicon Valley.
The rules still exist today and the project is a qualified success. For all that, however, the former premier seems to bitterly rue his choice of Mr Abdullah as his successor and seems hell bent on toppling him. But age seemed to be slowing him down.
Late last year, Dr Mahathir suffered a heart attack and doctors advised him to cut back on his schedule. He did - for nearly five months.
Mahathir could do more for Johor project
Mahathir could do more for Johor project
The Iskandar Development Region, touted as Malaysia's new growth driver, should be encouraged to work
AHEAD of steam is building up over the Iskandar Development Region (IDR). And it's being generated by former prime minister Mahathir Mohamad who seems intent on spending his retirement years trying to undermine his successor Abdullah Ahmad Badawi.
The IDR is Mr Abdullah's grand vision, a special economic zone in southernmost Johor state twice the size of Hong Kong that is being touted as Malaysia's new growth driver.
To attract foreign investors, Mr Abdullah did the expected: he relaxed New Economic Policy-type laws governing investment in selected, if yet unnamed, areas of the region.
In short, where those areas are concerned, investors can hire whoever they like, source capital wherever they want and do not have to sell 30 per cent of their equity at par to bumiputra (mainly Malay) investors.
Given that the world is already flat, that investors are spoilt for choice and every other region is trying its best to woo foreign investment, Mr Abdullah's moves are neither wildly original nor earth shattering. But it would seem so given Dr Mahathir's vitriol. In a speech before 300-odd people in the agrarian hamlet of Kulai in Johor last Thursday, the former premier made his feelings about the IDR plain.
He fretted that the government was 'selling' the country; that the Malays would 'lose out', and finally, that the Malays would 'become enslaved'. That's puzzling coming from Dr Mahathir.
He should know better than anyone else about the efficacy of relaxing NEP-style rules because he was the first premier to do so. Faced with a crippling recession in the mid-1980s, Dr Mahathir declared the NEP to be 'in abeyance' and allowed foreign investors to wholly own their companies if they exported the bulk of their output.
His timing was perfect. It coincided with a steep appreciation of the yen against the greenback - courtesy of the Plaza Accord - and Japanese manufacturers, suddenly uncompetitive at home, 'discovered' Malaysia. The influx of FDI in enormous numbers after that set the stage for a decade-long economic boom. Only a malcontent would accuse Dr Mahathir of 'selling' the country then because it was patently the right thing to do.
Now, the NEP-free zones within the Iskandar Development Region account for 2-3 per cent of its total area. What of Dr Mahathir's 1994 Multimedia Super-Corridor (MSC), an area that stretches from the Kuala Lumpur City Centre in the heart of the capital to Cyberjaya in the south?
Like the IDR after it, the MSC was created by an enabling Act of Parliament. To make it work, Dr Mahathir suspended NEP-style requirements within the area, bequeathing it with similar liberalisations which Mr Abdullah, you might say, merely copied for his IDR.
Dr Mahathir went further, tirelessly criss-crossing the world selling his concept, scouring the globe for investors to make his idea a reality. The MSC was, and still is, a terrific idea ahead of its time but it remains a qualified success, a work in progress that's evolving. One reason is that everyone else has jumped onto the bandwagon. Every other country is lavishing incentives on the global investor, the better to create its own Silicon Valley, its own Shenzhen.
The world has changed and Dr Mahathir should think about actually helping Mr Abdullah and using his considerable global connections to sell the IDR - and the MSC - internationally.
The IDR is a reasonably good concept and, like the MSC, should be encouraged to work. If Dr Mahathir does not want to help, he should not hinder. As a physician, he might do well to reflect on the abiding tenet of Hippocrates: 'Above all, do no harm.''
The Iskandar Development Region, touted as Malaysia's new growth driver, should be encouraged to work
AHEAD of steam is building up over the Iskandar Development Region (IDR). And it's being generated by former prime minister Mahathir Mohamad who seems intent on spending his retirement years trying to undermine his successor Abdullah Ahmad Badawi.
The IDR is Mr Abdullah's grand vision, a special economic zone in southernmost Johor state twice the size of Hong Kong that is being touted as Malaysia's new growth driver.
To attract foreign investors, Mr Abdullah did the expected: he relaxed New Economic Policy-type laws governing investment in selected, if yet unnamed, areas of the region.
In short, where those areas are concerned, investors can hire whoever they like, source capital wherever they want and do not have to sell 30 per cent of their equity at par to bumiputra (mainly Malay) investors.
Given that the world is already flat, that investors are spoilt for choice and every other region is trying its best to woo foreign investment, Mr Abdullah's moves are neither wildly original nor earth shattering. But it would seem so given Dr Mahathir's vitriol. In a speech before 300-odd people in the agrarian hamlet of Kulai in Johor last Thursday, the former premier made his feelings about the IDR plain.
He fretted that the government was 'selling' the country; that the Malays would 'lose out', and finally, that the Malays would 'become enslaved'. That's puzzling coming from Dr Mahathir.
He should know better than anyone else about the efficacy of relaxing NEP-style rules because he was the first premier to do so. Faced with a crippling recession in the mid-1980s, Dr Mahathir declared the NEP to be 'in abeyance' and allowed foreign investors to wholly own their companies if they exported the bulk of their output.
His timing was perfect. It coincided with a steep appreciation of the yen against the greenback - courtesy of the Plaza Accord - and Japanese manufacturers, suddenly uncompetitive at home, 'discovered' Malaysia. The influx of FDI in enormous numbers after that set the stage for a decade-long economic boom. Only a malcontent would accuse Dr Mahathir of 'selling' the country then because it was patently the right thing to do.
Now, the NEP-free zones within the Iskandar Development Region account for 2-3 per cent of its total area. What of Dr Mahathir's 1994 Multimedia Super-Corridor (MSC), an area that stretches from the Kuala Lumpur City Centre in the heart of the capital to Cyberjaya in the south?
Like the IDR after it, the MSC was created by an enabling Act of Parliament. To make it work, Dr Mahathir suspended NEP-style requirements within the area, bequeathing it with similar liberalisations which Mr Abdullah, you might say, merely copied for his IDR.
Dr Mahathir went further, tirelessly criss-crossing the world selling his concept, scouring the globe for investors to make his idea a reality. The MSC was, and still is, a terrific idea ahead of its time but it remains a qualified success, a work in progress that's evolving. One reason is that everyone else has jumped onto the bandwagon. Every other country is lavishing incentives on the global investor, the better to create its own Silicon Valley, its own Shenzhen.
The world has changed and Dr Mahathir should think about actually helping Mr Abdullah and using his considerable global connections to sell the IDR - and the MSC - internationally.
The IDR is a reasonably good concept and, like the MSC, should be encouraged to work. If Dr Mahathir does not want to help, he should not hinder. As a physician, he might do well to reflect on the abiding tenet of Hippocrates: 'Above all, do no harm.''
M'sian groups eye RM15b oil project
M'sian groups eye RM15b oil project
Pipeline scheme may cut carriage of oil through the Straits of Malacca
AT least three business groups are jostling for a RM15 billion (S$6.6 billion) oil pipeline project across northern Peninsular Malaysia in a development that could potentially cut the carriage of oil through the Straits of Malacca.
Businessmen familiar with the idea - approved late last year as a 'high-intensity' investment by a committee headed by Malaysian Deputy Premier Najib Razak - say it could also hasten the development of the northern states of Kedah, Perak and Kelantan in line with Prime Minister Abdullah Badawi's vision of a so-called 'northern corridor economic region'.
The three business groups are SKS Development, a private company controlled by tycoon Syed Mokhtar Al-Bukhary; UEM World, a listed company controlled by state investment agency Khazanah Nasional; and Trans-Peninsula Petroleum, a little-known private company controlled by former executives of state oil company Petronas.
The project partly mirrors a long-held dream to use the geography of the northern part of the Malay Peninsula to shorten shipping routes between the Middle East and North-east Asia. As far back as the 17th century there has been talk of cutting a Suez-style canal through the Isthmus of Kra as an alternative to the Malacca Straits. Thailand and London agreed in 1897 not to proceed with a canal to shield the dominance of the-then harbour of Singapore.
More than a century later, the canal idea still hasn't gotten anywhere. It would be hideously expensive at an estimated US$20-25 billion. There could be security issues given sporadic unrest in Southern Thailand.
The condensed Malaysian version of the scheme calls Middle Eastern tankers to moor off Kedah state, from which their oil would be pumped 300-plus km via pipeline to Kelantan, then loaded on to tankers from China, Japan and perhaps Korea on their way home.
The reasons for the plan may have less to do with cost savings than the need for an alternative route to transport oil. Analysts point out that the Straits of Malacca is one of the world's most congested and pirate-prone waterways.
The pipeline bids from the Malaysian groups differ. Mr Syed Mokhtar's proposal is probably the most ambitious, involving building a refinery - already licensed by the Malaysian Industrial Development Authority - on Pulau Bunting, off Kedah, from which oil products would be pumped to Bachok in Kelantan. The UEM World project is said to involve just a pipeline to a new port at Tumpat in Kelantan. Little is known about the Trans-Peninsula bid except that it, too, would involve a pipeline.
Even so, the undertaking would be an expensive and difficult affair, involving land acquisition in three states. But funding may not be a problem. Chinese interests are said to be 'very keen' to participate to promote their country's energy security.
Pipeline scheme may cut carriage of oil through the Straits of Malacca
AT least three business groups are jostling for a RM15 billion (S$6.6 billion) oil pipeline project across northern Peninsular Malaysia in a development that could potentially cut the carriage of oil through the Straits of Malacca.
Businessmen familiar with the idea - approved late last year as a 'high-intensity' investment by a committee headed by Malaysian Deputy Premier Najib Razak - say it could also hasten the development of the northern states of Kedah, Perak and Kelantan in line with Prime Minister Abdullah Badawi's vision of a so-called 'northern corridor economic region'.
The three business groups are SKS Development, a private company controlled by tycoon Syed Mokhtar Al-Bukhary; UEM World, a listed company controlled by state investment agency Khazanah Nasional; and Trans-Peninsula Petroleum, a little-known private company controlled by former executives of state oil company Petronas.
The project partly mirrors a long-held dream to use the geography of the northern part of the Malay Peninsula to shorten shipping routes between the Middle East and North-east Asia. As far back as the 17th century there has been talk of cutting a Suez-style canal through the Isthmus of Kra as an alternative to the Malacca Straits. Thailand and London agreed in 1897 not to proceed with a canal to shield the dominance of the-then harbour of Singapore.
More than a century later, the canal idea still hasn't gotten anywhere. It would be hideously expensive at an estimated US$20-25 billion. There could be security issues given sporadic unrest in Southern Thailand.
The condensed Malaysian version of the scheme calls Middle Eastern tankers to moor off Kedah state, from which their oil would be pumped 300-plus km via pipeline to Kelantan, then loaded on to tankers from China, Japan and perhaps Korea on their way home.
The reasons for the plan may have less to do with cost savings than the need for an alternative route to transport oil. Analysts point out that the Straits of Malacca is one of the world's most congested and pirate-prone waterways.
The pipeline bids from the Malaysian groups differ. Mr Syed Mokhtar's proposal is probably the most ambitious, involving building a refinery - already licensed by the Malaysian Industrial Development Authority - on Pulau Bunting, off Kedah, from which oil products would be pumped to Bachok in Kelantan. The UEM World project is said to involve just a pipeline to a new port at Tumpat in Kelantan. Little is known about the Trans-Peninsula bid except that it, too, would involve a pipeline.
Even so, the undertaking would be an expensive and difficult affair, involving land acquisition in three states. But funding may not be a problem. Chinese interests are said to be 'very keen' to participate to promote their country's energy security.
Johor woos Tokyo Disney operator for theme park
Johor woos Tokyo Disney operator for theme park
Khazanah said to be pushing for 800-ha development
By PAULINE NG
MALAYSIA hopes to rope in the operator of Japan's Tokyo Disney Resort to help build an international theme park in the Iskandar Development Region (IDR) of South Johor.
According to sources, Malaysian officials and businessmen plan to sign a memorandum of understanding with Oriental Land Company for a feasibility study and design work on a park.
A Malaysian delegation of 15, including Johor Chief Minister Ghani Othman, was scheduled to leave for Japan last week to sign the MOU, but the trip was postponed at the last moment for reasons that are not clear.
Malaysia's state investment agency Khazanah Nasional is said to be spearheading the push for a theme park on 800 hectares near the township of Nusajaya. The cost is estimated at US$4 billion.
Although Oriental Land owns and operates Tokyo Disney Resort as a licensee of Walt Disney Co, Malaysia's park is unlikely to be Disney-branded.
On the contrary, Malaysian officials have stressed that the site - next to the Ramsar wetlands, which are rich in mangroves and inter-tidal mud-lands - makes it ideal as an eco-based park that would complement the Universal theme park to be built in Singapore.
Mr Ghani has previously said Johor will get a theme park, 'branded or otherwise'. He says Dubai has a very successful unbranded park where water is the underlying theme.
Oriental Land has previously said it has studied 'a possible leisure business' in Johor, not related to Disney.
Besides an MOU for a theme park, sources say Oriental intends to sign a separate MOU for a standalone six-star hotel on the Danga Bay waterfront. Getting to the theme park site from the hotel site would be easy, taking less than 30 minutes by boat.
Oriental Land would operate the hotel. In Japan it owns several hotels including Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta and Tokyo Disneyland Hotel.
When any MOUs with Malaysia could be signed is unclear, but sources say they are still on.
'It will take Oriental Land about six months to do the study and if all goes well the parties can proceed with the concession agreement,' a businessman said.
Numerous parties would be involved in the delegation to Tokyo. Besides state officials and Khazanah, UEM group is a player because it owns most of the land at Nusajaya and is undertaking a number of catalyst development projects there. Privately-held Danga Bay Sdn Bhd's involvement would be the Danga Bay waterfront development.
The proposed theme park and integrated waterfront development is part of Malaysia's massive US$105 billion plan to transform the IDR into a regional metropolis over the next 20 years.
Khazanah said to be pushing for 800-ha development
By PAULINE NG
MALAYSIA hopes to rope in the operator of Japan's Tokyo Disney Resort to help build an international theme park in the Iskandar Development Region (IDR) of South Johor.
According to sources, Malaysian officials and businessmen plan to sign a memorandum of understanding with Oriental Land Company for a feasibility study and design work on a park.
A Malaysian delegation of 15, including Johor Chief Minister Ghani Othman, was scheduled to leave for Japan last week to sign the MOU, but the trip was postponed at the last moment for reasons that are not clear.
Malaysia's state investment agency Khazanah Nasional is said to be spearheading the push for a theme park on 800 hectares near the township of Nusajaya. The cost is estimated at US$4 billion.
Although Oriental Land owns and operates Tokyo Disney Resort as a licensee of Walt Disney Co, Malaysia's park is unlikely to be Disney-branded.
On the contrary, Malaysian officials have stressed that the site - next to the Ramsar wetlands, which are rich in mangroves and inter-tidal mud-lands - makes it ideal as an eco-based park that would complement the Universal theme park to be built in Singapore.
Mr Ghani has previously said Johor will get a theme park, 'branded or otherwise'. He says Dubai has a very successful unbranded park where water is the underlying theme.
Oriental Land has previously said it has studied 'a possible leisure business' in Johor, not related to Disney.
Besides an MOU for a theme park, sources say Oriental intends to sign a separate MOU for a standalone six-star hotel on the Danga Bay waterfront. Getting to the theme park site from the hotel site would be easy, taking less than 30 minutes by boat.
Oriental Land would operate the hotel. In Japan it owns several hotels including Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta and Tokyo Disneyland Hotel.
When any MOUs with Malaysia could be signed is unclear, but sources say they are still on.
'It will take Oriental Land about six months to do the study and if all goes well the parties can proceed with the concession agreement,' a businessman said.
Numerous parties would be involved in the delegation to Tokyo. Besides state officials and Khazanah, UEM group is a player because it owns most of the land at Nusajaya and is undertaking a number of catalyst development projects there. Privately-held Danga Bay Sdn Bhd's involvement would be the Danga Bay waterfront development.
The proposed theme park and integrated waterfront development is part of Malaysia's massive US$105 billion plan to transform the IDR into a regional metropolis over the next 20 years.
Tuesday, April 3, 2007
Kota Damansara may lose all its greenery
Kota Damansara may lose all its greenery
By JAYAGANDI JAYARAJ
PETALING JAYA: Residents protesting against the opening of a cemetery in Kota Damansara here have found out that there are other plans in the growing township that could spoil the greenery there.
Section 9 resident Kong Seng Ong claimed that a development plan for the area, obtained from a meeting with Kota Damansara state assemblyman Datuk Mokhtar Ahmad Dahlan, revealed projects beyond just a cemetery.
Kong said the plans, that included a sports complex, housing development and a Petaling Jaya City Council quarters, would cut through the town's green lung.
He added that any change from the structural plan in the use of land would require public notification and inquiry, in which case “we were not informed”.
One aim: Residents and nature lovers in Kota Damansara gathering on Monday for a quiet protest against the plan to build a cemetery in Section 9.
On March 27, Mokhtar told a gathering of about 300 people here that work on the first Muslim cemetery in the township would continue despite objections by some residents.
Work on the first 0.22ha, which would contain 1,200 burial plots, started on March 17. The first burial is expected to take place by the end of this month.
Yesterday, two groups of residents – one opposing the cemetery and one supporting the idea –came face to face but a tense situation was averted when the opponents of the cemetery withdrew.
A Section 9 resident, Datin Noor Lelawati Khalid, agreed that all religious groups in Kota Damansara needed their own cemeteries but, she added, the authorities should choose a location that does not involve cutting down the forest.
She said the preservation of the oldest lowland forest in the Klang Valley was a national responsibility.
By JAYAGANDI JAYARAJ
PETALING JAYA: Residents protesting against the opening of a cemetery in Kota Damansara here have found out that there are other plans in the growing township that could spoil the greenery there.
Section 9 resident Kong Seng Ong claimed that a development plan for the area, obtained from a meeting with Kota Damansara state assemblyman Datuk Mokhtar Ahmad Dahlan, revealed projects beyond just a cemetery.
Kong said the plans, that included a sports complex, housing development and a Petaling Jaya City Council quarters, would cut through the town's green lung.
He added that any change from the structural plan in the use of land would require public notification and inquiry, in which case “we were not informed”.
One aim: Residents and nature lovers in Kota Damansara gathering on Monday for a quiet protest against the plan to build a cemetery in Section 9.
On March 27, Mokhtar told a gathering of about 300 people here that work on the first Muslim cemetery in the township would continue despite objections by some residents.
Work on the first 0.22ha, which would contain 1,200 burial plots, started on March 17. The first burial is expected to take place by the end of this month.
Yesterday, two groups of residents – one opposing the cemetery and one supporting the idea –came face to face but a tense situation was averted when the opponents of the cemetery withdrew.
A Section 9 resident, Datin Noor Lelawati Khalid, agreed that all religious groups in Kota Damansara needed their own cemeteries but, she added, the authorities should choose a location that does not involve cutting down the forest.
She said the preservation of the oldest lowland forest in the Klang Valley was a national responsibility.
All property’s in boomtown
All property’s in boomtown
Sky-High prices at luxury launches such as Sky @ Eleven, One Shenton and One North Residences over the past three months have lifted the private property market to a quarterly gain of 4.6 per cent, according to flash estimates from the Urban Redevelopment Authority (URA).The property price index rose from 130.2 points in the previous quarter to 136.2 points in the first quarter of this year, the highest increase in seven years.
The latest record gain has led some property analysts to revise their growth projections for the year from 8 per cent, to between 10 and 18 per cent. Last year, private-property prices rose 10.2 per cent.
Chief executive Mohd Ismail of real estate firm Propnex said: “With the development of the integrated resorts and strong foreign investor interest, I believe the momentum in the property market will continue at least for the next two to three years.”
While the gains were led by condominiums in the core central region - such as St Thomas Suites, One Shenton and Orchard Turn - which had an average quarterly price increase of 5.6 per cent, mass-market property prices in the rest of Singapore grew at a healthy pace.
Prices of condos in non-prime areas of central Singapore rose 2.9 per cent in the first quarter, following a prior 2.2 per cent rise. Non-landed private residential property prices rose 2.6 per cent, compared with 1.5 per cent the previous quarter.
Ms Tay Huey Ying, Colliers International director for research and consultancy, expects next quarter’s price gains in areas outside the core central region to breach 3 per cent, while the core central region - comprising the Downtown core, Sentosa and districts 9, 10 and 11 - could stabilise in the region of 6 per cent.
Other areas that have seen a significant rise in prices include the Meyer and Amber roads region, and Buona Vista, where new projects are now priced at 50 per cent more than what they would have fetched a year ago, said CB Richard Ellis executive director Li Hiaw Ho.
Colliers’ Ms Tay said: “Final numbers of the price growth will be higher than these flash estimates, as transactions that took place in the later part of the quarter would not have been taken into account yet.”
These include transactions for Orchard Turn Residences, Botanika, One North Residences and The Trillium.
Meanwhile, prices of Housing and Development Board flats picked up, too, rising 1.2 per cent over the last quarter. This follows a mere 0.8 per cent rise in the final quarter of last year, that was preceded by three straight quarters of falling prices.
Knight Frank director of research and consultancy Nicholas Mak said: “The public housing market will also see a price increase but at a more moderate pace. The question is, will HDB upgraders be priced out of the private-property market with the rising prices?”
Source: Today, 03 April 2007
Sky-High prices at luxury launches such as Sky @ Eleven, One Shenton and One North Residences over the past three months have lifted the private property market to a quarterly gain of 4.6 per cent, according to flash estimates from the Urban Redevelopment Authority (URA).The property price index rose from 130.2 points in the previous quarter to 136.2 points in the first quarter of this year, the highest increase in seven years.
The latest record gain has led some property analysts to revise their growth projections for the year from 8 per cent, to between 10 and 18 per cent. Last year, private-property prices rose 10.2 per cent.
Chief executive Mohd Ismail of real estate firm Propnex said: “With the development of the integrated resorts and strong foreign investor interest, I believe the momentum in the property market will continue at least for the next two to three years.”
While the gains were led by condominiums in the core central region - such as St Thomas Suites, One Shenton and Orchard Turn - which had an average quarterly price increase of 5.6 per cent, mass-market property prices in the rest of Singapore grew at a healthy pace.
Prices of condos in non-prime areas of central Singapore rose 2.9 per cent in the first quarter, following a prior 2.2 per cent rise. Non-landed private residential property prices rose 2.6 per cent, compared with 1.5 per cent the previous quarter.
Ms Tay Huey Ying, Colliers International director for research and consultancy, expects next quarter’s price gains in areas outside the core central region to breach 3 per cent, while the core central region - comprising the Downtown core, Sentosa and districts 9, 10 and 11 - could stabilise in the region of 6 per cent.
Other areas that have seen a significant rise in prices include the Meyer and Amber roads region, and Buona Vista, where new projects are now priced at 50 per cent more than what they would have fetched a year ago, said CB Richard Ellis executive director Li Hiaw Ho.
Colliers’ Ms Tay said: “Final numbers of the price growth will be higher than these flash estimates, as transactions that took place in the later part of the quarter would not have been taken into account yet.”
These include transactions for Orchard Turn Residences, Botanika, One North Residences and The Trillium.
Meanwhile, prices of Housing and Development Board flats picked up, too, rising 1.2 per cent over the last quarter. This follows a mere 0.8 per cent rise in the final quarter of last year, that was preceded by three straight quarters of falling prices.
Knight Frank director of research and consultancy Nicholas Mak said: “The public housing market will also see a price increase but at a more moderate pace. The question is, will HDB upgraders be priced out of the private-property market with the rising prices?”
Source: Today, 03 April 2007
UK mortgage equity withdrawal highest in 3 years
UK mortgage equity withdrawal highest in 3 years
(LONDON) Britons borrowed the most against the value of their homes in almost three years during the fourth quarter, a sign that surging property prices are fuelling consumer spending in Europe's second-largest economy.
Mortgage equity withdrawal - borrowing secured against property to finance purchases such as vacations and cars - increased to 14.6 billion (S$43.3 billion) from a revised 12.2 billion in the third quarter, the Bank of England said yesterday. That's the highest since the first quarter of 2004.
The UK's central bank has raised its main benchmark rate three times since August as household spending fuels economic growth and threatens to keep inflation above the Bank of England's 2 per cent target. House prices rose 6.7 per cent in March from a year earlier, the most in almost four years, property research company Hometrack Ltd said on March 26.
Yesterday's report 'may raise some upside risk in the Monetary Policy Committee's mind for the consumption profile', said Karen Ward, an economist at HSBC Holdings plc who used to work for the Bank of England.
Bank of England policy makers, who begin a two-day meeting on April 5, may delay a further increase in borrowing costs until May as they watch for signs of accelerating inflation, a survey of economists showed. The UK benchmark rate currently stands at 5.25 per cent.
Mortgage equity withdrawals may have helped spur growth in the final three months of 2006, according to Howard Archer, an economist at Global Insight in London.
Consumer spending rose one per cent in the period from the third quarter, the second-fastest pace since 2004.
Withdrawals are also used by households for purposes other than spending, said Mr Archer, citing debt reduction, boosting pensions and other financial investments. - Bloomberg
(LONDON) Britons borrowed the most against the value of their homes in almost three years during the fourth quarter, a sign that surging property prices are fuelling consumer spending in Europe's second-largest economy.
Mortgage equity withdrawal - borrowing secured against property to finance purchases such as vacations and cars - increased to 14.6 billion (S$43.3 billion) from a revised 12.2 billion in the third quarter, the Bank of England said yesterday. That's the highest since the first quarter of 2004.
The UK's central bank has raised its main benchmark rate three times since August as household spending fuels economic growth and threatens to keep inflation above the Bank of England's 2 per cent target. House prices rose 6.7 per cent in March from a year earlier, the most in almost four years, property research company Hometrack Ltd said on March 26.
Yesterday's report 'may raise some upside risk in the Monetary Policy Committee's mind for the consumption profile', said Karen Ward, an economist at HSBC Holdings plc who used to work for the Bank of England.
Bank of England policy makers, who begin a two-day meeting on April 5, may delay a further increase in borrowing costs until May as they watch for signs of accelerating inflation, a survey of economists showed. The UK benchmark rate currently stands at 5.25 per cent.
Mortgage equity withdrawals may have helped spur growth in the final three months of 2006, according to Howard Archer, an economist at Global Insight in London.
Consumer spending rose one per cent in the period from the third quarter, the second-fastest pace since 2004.
Withdrawals are also used by households for purposes other than spending, said Mr Archer, citing debt reduction, boosting pensions and other financial investments. - Bloomberg
Finding cheaper space for SMEs
Finding cheaper space for SMEs
Until there are more details on JTC's divestment plans, the future of SMEs remains hazy, says JANICE DING
SINGAPORE'S industrial property market has seen dramatic movements in terms of supply, demand and occupancy in the last decade. After enjoying a golden period resulting from the economic surge of the 1980s, the industrial property market sank into the doldrums between 1997 and 2003 with a number of successive setbacks including the Asian financial crisis in 1998, the dotcom bust as well as a global downturn and electronics slump in 2000, the Sept 11, 2001 terrorist attacks and avian flu in 2003.
From 2003, the recovery of the global and local economies led to the revival of the manufacturing, logistics as well as research and development (R&D) sectors, the main drivers of industrial space. Combined with strong government support in offering various manufacturing incentives and supporting R&D and logistics sectors, demand of industrial space enjoyed four consecutive years of increase from 2003.
With the limited number of new industrial completions coupled with buoyant demand led to a strong recovery in occupancy rates from the bottom of 86.7 per cent in 2003 to reach 90.3 per cent in 2006, the highest rate since the 9/11 attacks.
The breaching of the 90 per cent mark in occupancy rates finally spurred rents of conventional industrial space to rise from Q2 2006 after some two years of stagnancy over 2004 and 2005. Rents of the upper floors of prime factory space rose 12 per cent to $1.31 per square foot (psf) per month as at December 2006 after having hovered at $1.17 psf between end-2003 and early 2006.
Rents of high-specification space picked up earlier from end-2004 due to robust demand from R&D and high value-added industries. As at December 2006, rents of upper floors of high-specs space stood at $2 psf per month, rising some 21 per cent from its lowest point of $1.65 psf at end-2003. Prices of conventional prime leasehold industrial properties have also started to trend upwards with the rise of rents, although those of its freehold counterparts remained resilient despite the improving demand.
The SME sector is critical to Singapore's economic well-being and plays a key role in attracting multinational corporations to locate in Singapore
Upper floors of prime leasehold industrial properties stood at $180 psf as at December 2006, rising some 18 per cent from its recent low of $152 psf in 2004 while those of its freehold counterparts remained unchanged at $327 psf per month since 2005.
The year 2006 proved a good one for Singapore with a strong 7.9 per cent growth in gross domestic product, powered by the manufacturing sector. While big multinational names such as Shell Eastern Petroleum, Samsung Electronics-Siltronic, Intel and Micron catch all the attention with their billion-dollar investments in Singapore, quietly toiling unnoticed are the small and medium-sized enterprises (SMEs) that are no less important in their contribution to Singapore's economy.
It may come as a surprise to know that out of the 130,000 business establishments housed in the republic, SMEs take up the lion's market share at 92 per cent. SMEs are the key drivers behind innovations and creative entrepreneurship. They are also a key driver of the economy, contributing up to 25 per cent of Singapore's GDP and employing more than half of Singapore's workforce, according to the Association of Small & Medium Enterprises (ASME).
The resilience of SMEs is also astonishing. During the recession of 2001 and 2002, employment by Singapore SMEs rose by 6.6 per cent when those of multinationals dropped by 1.7 per cent. Undoubtedly, the Singapore SME sector is critical to Singapore's economic well-being and plays a key role in attracting multinational corporations (MNCs) to locate in Singapore. Thus, the interests of this sector should be safeguarded.
For a long time, the government has taken pains to nurture the survival of the SMEs from various aspects. The most significant of these is its effort to provide for the real estate needs of SMEs in the form of flatted factories built by JTC Corporation (JTC). Flatted factories are the most common type of accommodation used by SMEs as they are smaller than the single-user factories. Flatted factories also represent the lowest rung of the multi-user industrial property pyramid in terms of rentals. Rents of JTC's flatted factories are about 35 per cent cheaper than those of multi-user factory space provided by the private sector, and this excludes rebates given by JTC during downturns. This is an important factor in assisting the survival of many SMEs, particularly start-ups.
Hence, when JTC announced in 2005 that it would evolve out of its role as a major industrial public developer and landlord by first divesting almost half of its ready-built facilities, it was only natural for SMEs to feel uncertain about their future. With private landlords in place, gone would be the enjoyment of direct protection from JTC in ensuring affordable real estate costs.
On the other hand, if the divestment brings in many players, this could result in a vibrant marketplace with healthy competition for the flatted factory-leasing segment with the happy outcome of improved products and competitive rents. Hence, privatisation of public property is a double-edged sword that could either result in a more competitive market environment beneficial to the market at large, or a monopolistic or oligopolistic market that could hurt the SMEs.
In early 2007, the news came that there would be two modes of divestment for JTC's ready-built facilities: one through the creation of a single self-sponsored Reit and one through a trade sale. The uncertainty now remains as to which properties in the divestment portfolio would be divested via a Reit, and which via a trade sale. Needless to say, a major concern of the SMEs would be that a significant proportion or all of the flatted factories in the divestment portfolio would be divested via a single self-sponsored Reit.
This concern stems from the fact that JTC's entire flatted factory portfolio as at end-2006 constitutes some 36 per cent of the island-wide conventional flatted factory leasing market. Depending on the quantum of JTC's flatted factory space that would be divested via a Reit, the Reit could end up holding a substantial market share of the flatted factory leasing market and thus have monopoly power over this segment of the market. This situation is a highly probable one considering that the next largest private sector player in this market segment, Ascendas Reit, holds less than 10 per cent of the market share.
A monopolistic situation controlled by a private sector player, particularly a Reit, in the flatted factory leasing market would have profound implications for the market. As Reit managers owe their unit holders the responsibility of maximising yields, the fund manager of this single Reit would likely take full advantage of its position as a major player and raise rents.
Hong Kong's Link Reit offers a good example of a possible scenario should the bulk of JTC's flatted factories be divested via a single Reit. Listed in November 2005, Link Reit was the vehicle by which the Hong Kong Housing Authority (HKHA) divested some of its commercial space previously run as a service to low income tenants in the housing estates.
After the listing, the manager of Link Reit sought to raise rents of these properties. This has caused discontent among the tenants and sparked off protests by thousands of workers affected by the possible closure of the shops in the estates. The negative publicity is now forcing policy makers to think twice about selling off public assets in future.
This possibility of increasing rents of JTC flatted factories in Singapore's context would similarly put our SMEs in an equally precarious situation as there are few alternatives to JTC's flatted factories. Private multi-user factories built from government industrial land sales are mostly sold on strata basis rather than held for lease, while independent high-specification space and business park facilities only take in tenants of specific industries, usually related to technology or research and development. Rents for these alternatives are also significantly higher, and could be as high as 135 per cent more than those of JTC flatted factories.
Stuck between a rock and a hard place, where can the SMEs find affordable room for themselves? Till there are more details on JTC's divestment plans, the future of SMEs remains hazy. The writer is senior analyst, research and consultancy, at Colliers International
Until there are more details on JTC's divestment plans, the future of SMEs remains hazy, says JANICE DING
SINGAPORE'S industrial property market has seen dramatic movements in terms of supply, demand and occupancy in the last decade. After enjoying a golden period resulting from the economic surge of the 1980s, the industrial property market sank into the doldrums between 1997 and 2003 with a number of successive setbacks including the Asian financial crisis in 1998, the dotcom bust as well as a global downturn and electronics slump in 2000, the Sept 11, 2001 terrorist attacks and avian flu in 2003.
From 2003, the recovery of the global and local economies led to the revival of the manufacturing, logistics as well as research and development (R&D) sectors, the main drivers of industrial space. Combined with strong government support in offering various manufacturing incentives and supporting R&D and logistics sectors, demand of industrial space enjoyed four consecutive years of increase from 2003.
With the limited number of new industrial completions coupled with buoyant demand led to a strong recovery in occupancy rates from the bottom of 86.7 per cent in 2003 to reach 90.3 per cent in 2006, the highest rate since the 9/11 attacks.
The breaching of the 90 per cent mark in occupancy rates finally spurred rents of conventional industrial space to rise from Q2 2006 after some two years of stagnancy over 2004 and 2005. Rents of the upper floors of prime factory space rose 12 per cent to $1.31 per square foot (psf) per month as at December 2006 after having hovered at $1.17 psf between end-2003 and early 2006.
Rents of high-specification space picked up earlier from end-2004 due to robust demand from R&D and high value-added industries. As at December 2006, rents of upper floors of high-specs space stood at $2 psf per month, rising some 21 per cent from its lowest point of $1.65 psf at end-2003. Prices of conventional prime leasehold industrial properties have also started to trend upwards with the rise of rents, although those of its freehold counterparts remained resilient despite the improving demand.
The SME sector is critical to Singapore's economic well-being and plays a key role in attracting multinational corporations to locate in Singapore
Upper floors of prime leasehold industrial properties stood at $180 psf as at December 2006, rising some 18 per cent from its recent low of $152 psf in 2004 while those of its freehold counterparts remained unchanged at $327 psf per month since 2005.
The year 2006 proved a good one for Singapore with a strong 7.9 per cent growth in gross domestic product, powered by the manufacturing sector. While big multinational names such as Shell Eastern Petroleum, Samsung Electronics-Siltronic, Intel and Micron catch all the attention with their billion-dollar investments in Singapore, quietly toiling unnoticed are the small and medium-sized enterprises (SMEs) that are no less important in their contribution to Singapore's economy.
It may come as a surprise to know that out of the 130,000 business establishments housed in the republic, SMEs take up the lion's market share at 92 per cent. SMEs are the key drivers behind innovations and creative entrepreneurship. They are also a key driver of the economy, contributing up to 25 per cent of Singapore's GDP and employing more than half of Singapore's workforce, according to the Association of Small & Medium Enterprises (ASME).
The resilience of SMEs is also astonishing. During the recession of 2001 and 2002, employment by Singapore SMEs rose by 6.6 per cent when those of multinationals dropped by 1.7 per cent. Undoubtedly, the Singapore SME sector is critical to Singapore's economic well-being and plays a key role in attracting multinational corporations (MNCs) to locate in Singapore. Thus, the interests of this sector should be safeguarded.
For a long time, the government has taken pains to nurture the survival of the SMEs from various aspects. The most significant of these is its effort to provide for the real estate needs of SMEs in the form of flatted factories built by JTC Corporation (JTC). Flatted factories are the most common type of accommodation used by SMEs as they are smaller than the single-user factories. Flatted factories also represent the lowest rung of the multi-user industrial property pyramid in terms of rentals. Rents of JTC's flatted factories are about 35 per cent cheaper than those of multi-user factory space provided by the private sector, and this excludes rebates given by JTC during downturns. This is an important factor in assisting the survival of many SMEs, particularly start-ups.
Hence, when JTC announced in 2005 that it would evolve out of its role as a major industrial public developer and landlord by first divesting almost half of its ready-built facilities, it was only natural for SMEs to feel uncertain about their future. With private landlords in place, gone would be the enjoyment of direct protection from JTC in ensuring affordable real estate costs.
On the other hand, if the divestment brings in many players, this could result in a vibrant marketplace with healthy competition for the flatted factory-leasing segment with the happy outcome of improved products and competitive rents. Hence, privatisation of public property is a double-edged sword that could either result in a more competitive market environment beneficial to the market at large, or a monopolistic or oligopolistic market that could hurt the SMEs.
In early 2007, the news came that there would be two modes of divestment for JTC's ready-built facilities: one through the creation of a single self-sponsored Reit and one through a trade sale. The uncertainty now remains as to which properties in the divestment portfolio would be divested via a Reit, and which via a trade sale. Needless to say, a major concern of the SMEs would be that a significant proportion or all of the flatted factories in the divestment portfolio would be divested via a single self-sponsored Reit.
This concern stems from the fact that JTC's entire flatted factory portfolio as at end-2006 constitutes some 36 per cent of the island-wide conventional flatted factory leasing market. Depending on the quantum of JTC's flatted factory space that would be divested via a Reit, the Reit could end up holding a substantial market share of the flatted factory leasing market and thus have monopoly power over this segment of the market. This situation is a highly probable one considering that the next largest private sector player in this market segment, Ascendas Reit, holds less than 10 per cent of the market share.
A monopolistic situation controlled by a private sector player, particularly a Reit, in the flatted factory leasing market would have profound implications for the market. As Reit managers owe their unit holders the responsibility of maximising yields, the fund manager of this single Reit would likely take full advantage of its position as a major player and raise rents.
Hong Kong's Link Reit offers a good example of a possible scenario should the bulk of JTC's flatted factories be divested via a single Reit. Listed in November 2005, Link Reit was the vehicle by which the Hong Kong Housing Authority (HKHA) divested some of its commercial space previously run as a service to low income tenants in the housing estates.
After the listing, the manager of Link Reit sought to raise rents of these properties. This has caused discontent among the tenants and sparked off protests by thousands of workers affected by the possible closure of the shops in the estates. The negative publicity is now forcing policy makers to think twice about selling off public assets in future.
This possibility of increasing rents of JTC flatted factories in Singapore's context would similarly put our SMEs in an equally precarious situation as there are few alternatives to JTC's flatted factories. Private multi-user factories built from government industrial land sales are mostly sold on strata basis rather than held for lease, while independent high-specification space and business park facilities only take in tenants of specific industries, usually related to technology or research and development. Rents for these alternatives are also significantly higher, and could be as high as 135 per cent more than those of JTC flatted factories.
Stuck between a rock and a hard place, where can the SMEs find affordable room for themselves? Till there are more details on JTC's divestment plans, the future of SMEs remains hazy. The writer is senior analyst, research and consultancy, at Colliers International
Behind the scenes of en bloc sales
Behind the scenes of en bloc sales
KARAMJIT SINGH tells of the colourful and humorous encounters between collective sale owners and property consultants and lawyers
COLLECTIVE sales attract much publicity for the huge gains owners make or stand to make. However, there are equally interesting stories behind the scenes that go untold. They are the colourful experiences and humorous encounters with owners from all walks of life in the course of the exercise.
Below are quotes and narrations of actual encounters experienced by our friends and colleagues from property consultancy and law firms. This is a lighter look at en bloc sales, drafted with the greatest respect to our fraternity's valuable clients - collective sale owners. It has been put together just in the name of sharing a good laugh.
Some details have been modified to protect the identities of the projects and parties concerned. And also to prevent the Jack Neos from having access to a ready-made script for the next local blockbuster. Or should it be en bloc-buster?
We get to meet all of them in this business - from the most creative in justifying why they deserve more money than the rest, to those whose conspiracy theories rival the best brains of the CIA!
Straightforward
'I am not greedy but I should get $600k more than everyone.' (Wonder what he would say if he turned greedy)
Motivator
'We are just $30 million short of the reserve price. Developers better revise their offer and not delay further - prices are going up every day!' (According to your projections, sir, we would need a capital growth rate of only 560 per cent per annum)
Flatterer
'How can so low? You're the property expert, surely you can increase it.' - An owner, in response to the consultant's recommendation of the reserve price. (Of course he can; he's not signing the cheque!)
Resourceful
Owners who wanted to sell were so unhappy with owners who had not signed because of their existing tenancies that someone 'nailed' planks over the door of the unit to prevent the tenants from coming home! (Talk about hitting it on the nail! Once and for all, nailing the problem - hmm ... now we know why the consultants parked their cars a mile away from this estate.)
Justifying
An old man, on why he was refusing to sign the collective sale agreement. Owner: When I sell, I would need another home. Lawyer: Fair enough. Owner: It needs to have at least five bedrooms to accommodate my family. Lawyer: Okay (very caring father) Owner: I definitely cannot buy a semi-detached - too expensive nowadays. Lawyer: Hmm ... (reasonable and well-informed) Owner: Hence, I'll settle for a terrace house with five rooms. Lawyer: Er ... okay. Owner: And I would need to renovate - and I want some cash in hand, not much, just about half a million, for my retirement. If you can arrange for all this from the sale, I'll sell. If not, what's the point of selling? I'm better off staying put. (The owner had a 1,200 sq ft three-bedroom unit in a 45-year-old development that was worth $550,000 before the collective sale. It eventually fetched $850,000 in the en bloc sale.)
Poetic
A sales committee (SC) member, on being told of the market's poor response to the tender: 'Is (the development) such a tough boy to be liked? It has to remain as unwanted child, even though so juicy now. (Gulp! Sounds like Hannibal!) Why is it that a parent in the making is procrastinating its adoption at this best of time opportunity? (Turning from Hannibal to Brave Heart) I will lead to explain to all owners to bear with us - and re-coup the sale amount twice over. The SC then will be having an easy job like eating tahu (phew, as long as it has got nothing to do with kids!) and no need to write countless artful messages any more. Just say a few words, and money will simply roll in as we drum-roll up. Double in two years, this is an achievable number and by then the unwanted kid will be hugged, praised in all kinds beyond description.'
Two-love ad-vantage
A lady, who had sold the apartment she jointly owned with her husband in an en bloc sale, had a shock when she read the newspaper one day. In the paper was the advertisement required for the application to STB listing all the owners' names. No, it wasn't that she was getting less money than she thought. Against another unit in her estate was none other than her husband's name, along with the name of another lady, as joint owners!
It was only then that she realised why her husband had been an avid jogger and had 'faithfully' been taking the same jogging route every day - the path that led to his mistress! To make matters worse, she later found out that she was among the minority in the estate who was not not aware of his antics while the majority - well, let's just say - had caught his love triangle performance.
There was another owner who was, perhaps, more forthright with his problem when asked why he wasn't selling when his gains were more than 100 per cent.
'The property is occupied by my mistress. If the en bloc is successful then I have to buy a new property in my mistress' name.' (Needless to say, he stressed to the consultant to keep the information to himself.)
Expert layman
SC member responding to feedback from the consultant that developers found their site, which is located immediately next to the PIE, rather noisy.
'I am no expert in noise control but my common sense, logical thinking and gut feel tell me this: (a) The traffic on the PIE is only a concern during peak hours, from, say, 6.30am to 7.30pm on week days. It is as quiet as Queen Astrid Park off peak hours (Good point! Very quiet at between 2am and 5am). What's more, during those peak noise hours, owners are at work. Where is the concern? Our development is not a holiday resort, anyway! (b) Even if during the peak hours, there is only a humming traffic noise as the background noise, which is in low decibels according to sound experts. (Somehow we get a strange feeling you are referring to yourself?) (c) If there is a noise factor we have to admit there exists, since we are located next to the PIE (this is getting confusing - so is it noisy or not?) To me, this is a plus, not a negative, as it is so conveniently located.
Getting principles right(ly priced)
Consultants get this very often - when asking why the owner is not selling.
'How to find another property that is so convenient like ours? Everything so nearby - my children's school, my workplace (only 10 km away), my wife's office, my mother-in-law (impressive!). With this money, my family would have no roof over our heads. We would have to downgrade. I need to object for my kids' sake. I owe it to them. One day, they would question me. And I would have failed them. The principle is also not right. Why should I be forced to sell when my neighbours selfishly want to make money?
'Well, if you can arrange for only $100,000 more, I will sign.'
True attachment
In a high-profile project close to Orchard Road, the lawyers wrote to the owners, following a sale, that the fixtures cannot be removed from their apartments. On completion of the sale, the lawyer was bowled over when he discovered that an owner had removed the bathtubs and even toilet bowls! (I suppose it's difficult to give up one's 'pot' of gold).
In another case, an owner refused to sign the collective sale agreement unless she was assured she could take along with her every piece of her imported kitchen.
Instant service
Immediately upon signing the collective sale agreement, the owner asked the consultant for his cheque. 'Cheque? What cheque?' asked the consultant. He wanted his sale proceeds immediately! He thought the consultant was the buyer, and was buying out every owner one by one. When explained that it didn't work that way, and she was merely helping them secure a buyer, he insisted on withdrawing his signature labelling her a 'CONsultant'. The poor professional tried her best to regain his CONfidence by assuring him she would work hard to get them a good price. He finally CONceded and CONsented.
Lastly
Six of the owners in a development each wanted to be the last to sign the collective sale agreement. No reason was given; they simply insisted on not signing if they were not the last. The lawyer came up with a brilliant idea - arranged for all six of them to meet and sign together, so that they can all share the accolade of being 'last in class'. When the 'ceremony' was supposed to begin, they couldn't agree who among the last would sign first. As a result, they all walked away without signing!
The writer is managing director of Credo Real Estate, a property consultancy firm specialising in collective sales. Acknowledgement: We wish to put on record our appreciation to our friends from DTZ Debenham Tie Leung, Knight Frank, Rodyk & Davidson and Lee & Lee for their contributions of their experiences that enabled us to put together the above article.
KARAMJIT SINGH tells of the colourful and humorous encounters between collective sale owners and property consultants and lawyers
COLLECTIVE sales attract much publicity for the huge gains owners make or stand to make. However, there are equally interesting stories behind the scenes that go untold. They are the colourful experiences and humorous encounters with owners from all walks of life in the course of the exercise.
Below are quotes and narrations of actual encounters experienced by our friends and colleagues from property consultancy and law firms. This is a lighter look at en bloc sales, drafted with the greatest respect to our fraternity's valuable clients - collective sale owners. It has been put together just in the name of sharing a good laugh.
Some details have been modified to protect the identities of the projects and parties concerned. And also to prevent the Jack Neos from having access to a ready-made script for the next local blockbuster. Or should it be en bloc-buster?
We get to meet all of them in this business - from the most creative in justifying why they deserve more money than the rest, to those whose conspiracy theories rival the best brains of the CIA!
Straightforward
'I am not greedy but I should get $600k more than everyone.' (Wonder what he would say if he turned greedy)
Motivator
'We are just $30 million short of the reserve price. Developers better revise their offer and not delay further - prices are going up every day!' (According to your projections, sir, we would need a capital growth rate of only 560 per cent per annum)
Flatterer
'How can so low? You're the property expert, surely you can increase it.' - An owner, in response to the consultant's recommendation of the reserve price. (Of course he can; he's not signing the cheque!)
Resourceful
Owners who wanted to sell were so unhappy with owners who had not signed because of their existing tenancies that someone 'nailed' planks over the door of the unit to prevent the tenants from coming home! (Talk about hitting it on the nail! Once and for all, nailing the problem - hmm ... now we know why the consultants parked their cars a mile away from this estate.)
Justifying
An old man, on why he was refusing to sign the collective sale agreement. Owner: When I sell, I would need another home. Lawyer: Fair enough. Owner: It needs to have at least five bedrooms to accommodate my family. Lawyer: Okay (very caring father) Owner: I definitely cannot buy a semi-detached - too expensive nowadays. Lawyer: Hmm ... (reasonable and well-informed) Owner: Hence, I'll settle for a terrace house with five rooms. Lawyer: Er ... okay. Owner: And I would need to renovate - and I want some cash in hand, not much, just about half a million, for my retirement. If you can arrange for all this from the sale, I'll sell. If not, what's the point of selling? I'm better off staying put. (The owner had a 1,200 sq ft three-bedroom unit in a 45-year-old development that was worth $550,000 before the collective sale. It eventually fetched $850,000 in the en bloc sale.)
Poetic
A sales committee (SC) member, on being told of the market's poor response to the tender: 'Is (the development) such a tough boy to be liked? It has to remain as unwanted child, even though so juicy now. (Gulp! Sounds like Hannibal!) Why is it that a parent in the making is procrastinating its adoption at this best of time opportunity? (Turning from Hannibal to Brave Heart) I will lead to explain to all owners to bear with us - and re-coup the sale amount twice over. The SC then will be having an easy job like eating tahu (phew, as long as it has got nothing to do with kids!) and no need to write countless artful messages any more. Just say a few words, and money will simply roll in as we drum-roll up. Double in two years, this is an achievable number and by then the unwanted kid will be hugged, praised in all kinds beyond description.'
Two-love ad-vantage
A lady, who had sold the apartment she jointly owned with her husband in an en bloc sale, had a shock when she read the newspaper one day. In the paper was the advertisement required for the application to STB listing all the owners' names. No, it wasn't that she was getting less money than she thought. Against another unit in her estate was none other than her husband's name, along with the name of another lady, as joint owners!
It was only then that she realised why her husband had been an avid jogger and had 'faithfully' been taking the same jogging route every day - the path that led to his mistress! To make matters worse, she later found out that she was among the minority in the estate who was not not aware of his antics while the majority - well, let's just say - had caught his love triangle performance.
There was another owner who was, perhaps, more forthright with his problem when asked why he wasn't selling when his gains were more than 100 per cent.
'The property is occupied by my mistress. If the en bloc is successful then I have to buy a new property in my mistress' name.' (Needless to say, he stressed to the consultant to keep the information to himself.)
Expert layman
SC member responding to feedback from the consultant that developers found their site, which is located immediately next to the PIE, rather noisy.
'I am no expert in noise control but my common sense, logical thinking and gut feel tell me this: (a) The traffic on the PIE is only a concern during peak hours, from, say, 6.30am to 7.30pm on week days. It is as quiet as Queen Astrid Park off peak hours (Good point! Very quiet at between 2am and 5am). What's more, during those peak noise hours, owners are at work. Where is the concern? Our development is not a holiday resort, anyway! (b) Even if during the peak hours, there is only a humming traffic noise as the background noise, which is in low decibels according to sound experts. (Somehow we get a strange feeling you are referring to yourself?) (c) If there is a noise factor we have to admit there exists, since we are located next to the PIE (this is getting confusing - so is it noisy or not?) To me, this is a plus, not a negative, as it is so conveniently located.
Getting principles right(ly priced)
Consultants get this very often - when asking why the owner is not selling.
'How to find another property that is so convenient like ours? Everything so nearby - my children's school, my workplace (only 10 km away), my wife's office, my mother-in-law (impressive!). With this money, my family would have no roof over our heads. We would have to downgrade. I need to object for my kids' sake. I owe it to them. One day, they would question me. And I would have failed them. The principle is also not right. Why should I be forced to sell when my neighbours selfishly want to make money?
'Well, if you can arrange for only $100,000 more, I will sign.'
True attachment
In a high-profile project close to Orchard Road, the lawyers wrote to the owners, following a sale, that the fixtures cannot be removed from their apartments. On completion of the sale, the lawyer was bowled over when he discovered that an owner had removed the bathtubs and even toilet bowls! (I suppose it's difficult to give up one's 'pot' of gold).
In another case, an owner refused to sign the collective sale agreement unless she was assured she could take along with her every piece of her imported kitchen.
Instant service
Immediately upon signing the collective sale agreement, the owner asked the consultant for his cheque. 'Cheque? What cheque?' asked the consultant. He wanted his sale proceeds immediately! He thought the consultant was the buyer, and was buying out every owner one by one. When explained that it didn't work that way, and she was merely helping them secure a buyer, he insisted on withdrawing his signature labelling her a 'CONsultant'. The poor professional tried her best to regain his CONfidence by assuring him she would work hard to get them a good price. He finally CONceded and CONsented.
Lastly
Six of the owners in a development each wanted to be the last to sign the collective sale agreement. No reason was given; they simply insisted on not signing if they were not the last. The lawyer came up with a brilliant idea - arranged for all six of them to meet and sign together, so that they can all share the accolade of being 'last in class'. When the 'ceremony' was supposed to begin, they couldn't agree who among the last would sign first. As a result, they all walked away without signing!
The writer is managing director of Credo Real Estate, a property consultancy firm specialising in collective sales. Acknowledgement: We wish to put on record our appreciation to our friends from DTZ Debenham Tie Leung, Knight Frank, Rodyk & Davidson and Lee & Lee for their contributions of their experiences that enabled us to put together the above article.
HK developers facing new pressure
HK developers facing new pressure
HONG KONG developers are under new pressure to curb unfair sales tactics or face losing self-regulation of the industry.
Sales push: An advertisement of a property development goes on display in HK. The govt has said it may mull legislation if developers skirt self-regulation
Foul play in marketing and selling flats came under fire in a stand-off between lawmakers and developer groups yesterday. 'In Hong Kong you get more protection buying canned food than a flat,' said legislator Albert Cheng.
There have been many complaints that the size of flats is grossly overstated compared with what buyers actually get. A 2000 government white paper on the subject is yet to lead to legislation, fuelling claims that the administration is shielding developers to the detriment of consumers.
Lawmakers like Leung Kwok-hung yesterday chided the government for failing to protect consumers: 'The calculation (of flat size) is very simple. It's just simple division, yet you keep asking consumers to work it out for themselves.'
Some developers market flats using gross floor area (GFA) while others use saleable area (SA). GFA includes common areas and SA, which itself includes features such as bay windows and balconies. Some developers are ambiguous about what they include in GFA and SA.
Both vary depending on the developer and flat for sale, making it difficult for consumers to make meaningful comparisons when shopping for an apartment.
The Hong Kong Institute of Surveyors (HKIS) has proposed beefing up the definition of SA. But some lawmakers want legislation so people know exactly the size of flat they are buying. People need to know how much usable space they are getting, said legislator Mr Ho.
The Consumer Council has received more than 800 complaints about properties since 2005. Consumer groups have been lobbying for more than a decade for clear rules on definitions of flat size.
In a 2000 submission to the government, the Consumer Council said: 'We are aware of the fact that many potential purchasers would regard the calculation of saleable area measuring from the external edge of the enclosing walls but including the internal walls and other permanent partitions within the properties as inadequate. A majority would prefer to be informed of the internal floor area instead.'
The government has said it would consider legislation if developers skirt self-regulation by industry body, the Real Estate Developers Association. But not all developers are association members, and critics say the association lacks teeth anyway.
'We have always said in the past if self-regulation fails we will consider introducing legislative proposals in the Legislative Council again,' said lawmaker Kwok Ka-ki. Consumer complaints come against a backdrop of sluggish sales of mass residential property, which slipped almost 3 per cent last year.
Some players expect a slight upturn this year, though nothing close to the 20 per cent anticipated growth of the luxury residential sector.
HONG KONG developers are under new pressure to curb unfair sales tactics or face losing self-regulation of the industry.
Sales push: An advertisement of a property development goes on display in HK. The govt has said it may mull legislation if developers skirt self-regulation
Foul play in marketing and selling flats came under fire in a stand-off between lawmakers and developer groups yesterday. 'In Hong Kong you get more protection buying canned food than a flat,' said legislator Albert Cheng.
There have been many complaints that the size of flats is grossly overstated compared with what buyers actually get. A 2000 government white paper on the subject is yet to lead to legislation, fuelling claims that the administration is shielding developers to the detriment of consumers.
Lawmakers like Leung Kwok-hung yesterday chided the government for failing to protect consumers: 'The calculation (of flat size) is very simple. It's just simple division, yet you keep asking consumers to work it out for themselves.'
Some developers market flats using gross floor area (GFA) while others use saleable area (SA). GFA includes common areas and SA, which itself includes features such as bay windows and balconies. Some developers are ambiguous about what they include in GFA and SA.
Both vary depending on the developer and flat for sale, making it difficult for consumers to make meaningful comparisons when shopping for an apartment.
The Hong Kong Institute of Surveyors (HKIS) has proposed beefing up the definition of SA. But some lawmakers want legislation so people know exactly the size of flat they are buying. People need to know how much usable space they are getting, said legislator Mr Ho.
The Consumer Council has received more than 800 complaints about properties since 2005. Consumer groups have been lobbying for more than a decade for clear rules on definitions of flat size.
In a 2000 submission to the government, the Consumer Council said: 'We are aware of the fact that many potential purchasers would regard the calculation of saleable area measuring from the external edge of the enclosing walls but including the internal walls and other permanent partitions within the properties as inadequate. A majority would prefer to be informed of the internal floor area instead.'
The government has said it would consider legislation if developers skirt self-regulation by industry body, the Real Estate Developers Association. But not all developers are association members, and critics say the association lacks teeth anyway.
'We have always said in the past if self-regulation fails we will consider introducing legislative proposals in the Legislative Council again,' said lawmaker Kwok Ka-ki. Consumer complaints come against a backdrop of sluggish sales of mass residential property, which slipped almost 3 per cent last year.
Some players expect a slight upturn this year, though nothing close to the 20 per cent anticipated growth of the luxury residential sector.
The Balmoral, Serene House up for sale
The Balmoral, Serene House up for sale
Both en bloc sites offered through expressions of interest exercises
TWO prime collective sale sites are being offered through separate expressions-of-interest exercises - The Balmoral at Balmoral Park off Stevens Road and Serene House next to Botanic Gardens. Both sites are freehold.
Colliers International, which is marketing Serene House, says the property has a land area of 39,828 sq ft, but the successful bidder may boost this by amalgamating a neighbouring plot of state land of 9,192 sq ft. Serene House has an indicative land value of $55 million.
Assuming the successful bidder also manages to buy the state plot next door, the all-in unit land cost, including development charges payable for the Serene House site, would work out to $924 per square foot of potential gross floor area. The site is zoned for residential use with a 1.4 plot ratio - the ratio of potential maximum gross floor area to land area. The height is subject to evaluation.
Serene House is a stone's throw from the upcoming Botanic Gardens MRT Station, near good schools and embassies. The expression-of-interest exercise closes on May 3.
The other property, The Balmoral, has a land area of 249,993 sq ft and is zoned for residential use with a 1.6 plot ratio and 12-storey height limit. Marketing agent DTZ Debenham Tie Leung did not give an indicative price, saying there is 'no similar product in the market' that would allow it to do so. However, it said an estimated $10.2 million development charge is payable.
DTZ said that assuming a building efficiency of 90 per cent and an average unit size of 1,800 sq ft, the site can be redeveloped into a new condo with about 200 units.
Both en bloc sites offered through expressions of interest exercises
TWO prime collective sale sites are being offered through separate expressions-of-interest exercises - The Balmoral at Balmoral Park off Stevens Road and Serene House next to Botanic Gardens. Both sites are freehold.
Colliers International, which is marketing Serene House, says the property has a land area of 39,828 sq ft, but the successful bidder may boost this by amalgamating a neighbouring plot of state land of 9,192 sq ft. Serene House has an indicative land value of $55 million.
Assuming the successful bidder also manages to buy the state plot next door, the all-in unit land cost, including development charges payable for the Serene House site, would work out to $924 per square foot of potential gross floor area. The site is zoned for residential use with a 1.4 plot ratio - the ratio of potential maximum gross floor area to land area. The height is subject to evaluation.
Serene House is a stone's throw from the upcoming Botanic Gardens MRT Station, near good schools and embassies. The expression-of-interest exercise closes on May 3.
The other property, The Balmoral, has a land area of 249,993 sq ft and is zoned for residential use with a 1.6 plot ratio and 12-storey height limit. Marketing agent DTZ Debenham Tie Leung did not give an indicative price, saying there is 'no similar product in the market' that would allow it to do so. However, it said an estimated $10.2 million development charge is payable.
DTZ said that assuming a building efficiency of 90 per cent and an average unit size of 1,800 sq ft, the site can be redeveloped into a new condo with about 200 units.
12 Botanika units sold at weekend auction
12 Botanika units sold at weekend auction
Prices range from $1,710 to $2,420 psf; but sources say bidding is slow
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TWELVE units at Tuan Sing's freehold Botanika development in Holland Road were sold at a Colliers International and Christie's Great Estates auction during the weekend, at prices ranging from $1,710 per square foot to $2,420 psf. The average price achieved was $2,040 psf.
Good prices: The auction units at Botanika fetched $3.05 million to $5.63 million
In absolute price terms, the units fetched about $3.05 million to $5.63 million.
While this sounds impressive, sources told BT the bidding was slow and that at times, the auctioneers seemed to be struggling to achieve the reserve prices.
Contacted yesterday, Colliers auctioneer Grace Ng, who is also the firm's deputy managing director (agency and business services), acknowledged that 'the pace of bidding was slower than usual'.
'Because of the high value of the properties, bidders hence took a longer time to think,' she said. Each property drew two to four bids.
The slow pace of bidding may also have been because Tuan Sing tried to weed out potential speculators by stating clearly in the term sheet that no reassignment of options would be allowed.
'Speculators who make private arrangements to reassign options - although this is against the law - are basically trying to save on the stamp duty payment,' said a market watcher.
The successful bidders for the apartments were predominantly foreigners, including permanent residents - from Australia, the US, Hong Kong, India, Indonesia and Malaysia. Only one or two Singaporeans are said to have been buyers. In all, there were 11 buyers for the 12 units on offer. One buyer picked up two units.
The 12 units include four combined units - that is, two apartments combined into one. Hence in all, Tuan Sing sold 16 strata units at the auction. This, combined with 18 units the listed developer sold through private previews earlier, means the 34-unit project is now fully sold.
The four-storey development, which has an attic and a basement carpark, is likely to be completed next year. It was designed by Chan Soo Kian of SCDA Architects.
The auction, at Goodwood Park Hotel on Saturday afternoon, was open only to invited bidders. It drew close to 200 people, according to Colliers, which conducted the auction jointly with Christie's Great Estates exclusive affiliate, Ken Jacobs.
The lowest per square foot price at the auction - $1,710 psf - was for a 3,294 sq ft combined unit on the ground floor. The highest - $2,420 psf - was for a penthouse.
'This is the first time an auction has been held for an uncompleted development. The winning bids exceeded our initial price expectations,' said Colliers' Ms Ng.
Prices range from $1,710 to $2,420 psf; but sources say bidding is slow
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TWELVE units at Tuan Sing's freehold Botanika development in Holland Road were sold at a Colliers International and Christie's Great Estates auction during the weekend, at prices ranging from $1,710 per square foot to $2,420 psf. The average price achieved was $2,040 psf.
Good prices: The auction units at Botanika fetched $3.05 million to $5.63 million
In absolute price terms, the units fetched about $3.05 million to $5.63 million.
While this sounds impressive, sources told BT the bidding was slow and that at times, the auctioneers seemed to be struggling to achieve the reserve prices.
Contacted yesterday, Colliers auctioneer Grace Ng, who is also the firm's deputy managing director (agency and business services), acknowledged that 'the pace of bidding was slower than usual'.
'Because of the high value of the properties, bidders hence took a longer time to think,' she said. Each property drew two to four bids.
The slow pace of bidding may also have been because Tuan Sing tried to weed out potential speculators by stating clearly in the term sheet that no reassignment of options would be allowed.
'Speculators who make private arrangements to reassign options - although this is against the law - are basically trying to save on the stamp duty payment,' said a market watcher.
The successful bidders for the apartments were predominantly foreigners, including permanent residents - from Australia, the US, Hong Kong, India, Indonesia and Malaysia. Only one or two Singaporeans are said to have been buyers. In all, there were 11 buyers for the 12 units on offer. One buyer picked up two units.
The 12 units include four combined units - that is, two apartments combined into one. Hence in all, Tuan Sing sold 16 strata units at the auction. This, combined with 18 units the listed developer sold through private previews earlier, means the 34-unit project is now fully sold.
The four-storey development, which has an attic and a basement carpark, is likely to be completed next year. It was designed by Chan Soo Kian of SCDA Architects.
The auction, at Goodwood Park Hotel on Saturday afternoon, was open only to invited bidders. It drew close to 200 people, according to Colliers, which conducted the auction jointly with Christie's Great Estates exclusive affiliate, Ken Jacobs.
The lowest per square foot price at the auction - $1,710 psf - was for a 3,294 sq ft combined unit on the ground floor. The highest - $2,420 psf - was for a penthouse.
'This is the first time an auction has been held for an uncompleted development. The winning bids exceeded our initial price expectations,' said Colliers' Ms Ng.
More foreigners pay millions for homes here
More foreigners pay millions for homes here
Buyers from Indonesia, Malaysia remain the largest groups
By Joyce Teo, Property Correspondent
Apr 01, 2007
The Straits Times
MORE foreigners than ever are forking out millions to buy a residential property in Singapore.
Last year, they snapped up nearly 5,000 units, which represented a 23 per cent market share, property consultants said.
And as the luxury property boom gained pace in the final quarter of last year, their buying spree hit an all-time high. For the first time, their market share hit 26 per cent, beating the previous all-time high of 24 per cent in 1995.
Before the market started to bounce back in 2005, foreign homebuyers made up less than 20 per cent of all buyers in Singapore.
Indonesians bought the most private residential properties here last year, accounting for about 23.7 per cent of foreign buyers, based on statistics compiled by Knight Frank. Malaysians took second place with 22.7 per cent.
Indians came third, with 8.4 per cent, followed by Britons, with 8 per cent. Buyers from China took up 7.7 per cent. Next came Australians, with 5 per cent.
Other significant foreign buyer groups came from the United States, Taiwan and Hong Kong.
More foreigners are also buying landed homes, particularly in the prime districts, even though they need approval to buy.
Some of them have benefited from recent collective sales and are looking for a landed home with their proceeds, said an agent covering the landed market.
He has worked with British and Indian clients who have no problems with paying a 1 per cent deposit for a house costing up to $10 million, even before obtaining approval to buy.
The home-buying budgets of many foreigners run to several millions of dollars.
Fourth-quarter caveats lodged showed that nearly half of the foreign buyers bought homes for between $1 million and $5 million, said Knight Frank.
About 38 per cent bought homes costing $500,000 to $1 million. An elite group of 5 per cent bought posh homes costing $5 million or more, it said.
joyceteo@sph.com.sg
Buyers from Indonesia, Malaysia remain the largest groups
By Joyce Teo, Property Correspondent
Apr 01, 2007
The Straits Times
MORE foreigners than ever are forking out millions to buy a residential property in Singapore.
Last year, they snapped up nearly 5,000 units, which represented a 23 per cent market share, property consultants said.
And as the luxury property boom gained pace in the final quarter of last year, their buying spree hit an all-time high. For the first time, their market share hit 26 per cent, beating the previous all-time high of 24 per cent in 1995.
Before the market started to bounce back in 2005, foreign homebuyers made up less than 20 per cent of all buyers in Singapore.
Indonesians bought the most private residential properties here last year, accounting for about 23.7 per cent of foreign buyers, based on statistics compiled by Knight Frank. Malaysians took second place with 22.7 per cent.
Indians came third, with 8.4 per cent, followed by Britons, with 8 per cent. Buyers from China took up 7.7 per cent. Next came Australians, with 5 per cent.
Other significant foreign buyer groups came from the United States, Taiwan and Hong Kong.
More foreigners are also buying landed homes, particularly in the prime districts, even though they need approval to buy.
Some of them have benefited from recent collective sales and are looking for a landed home with their proceeds, said an agent covering the landed market.
He has worked with British and Indian clients who have no problems with paying a 1 per cent deposit for a house costing up to $10 million, even before obtaining approval to buy.
The home-buying budgets of many foreigners run to several millions of dollars.
Fourth-quarter caveats lodged showed that nearly half of the foreign buyers bought homes for between $1 million and $5 million, said Knight Frank.
About 38 per cent bought homes costing $500,000 to $1 million. An elite group of 5 per cent bought posh homes costing $5 million or more, it said.
joyceteo@sph.com.sg
Outlook is rosy for property market
Outlook is rosy for property market
SENTIMENTS in the Singapore residential market are likely to remain upbeat this year even though the luxury market will lose some of its sizzle from the previous year, say property watchers.
The high-end segment, sparked by an influx of foreign buyers, experienced an astonishing rise of 30 per cent to 40 per cent last year. Prices for some niche large high-floor luxury units were sold for as high as $3,000 per sq ft (psf), way above the normal $1,800-$2,000 psf range for an average prime apartment.
Knight Frank managing director Tan Tiong Cheng notes that as the upmarket segment had risen from low recovery levels, any further increases would not be to the same degree, given the already steep increase in capital values over the past 18 months. Nevertheless, he says, the upward momentum is still strong.
Ms Tay Huey Ying, director of research and consultancy at Colliers International, says: "Interest in the upper-tiered market was mainly due to the excitement in the property market following the Government’s awards for the two integrated resorts (IR) at Marina Bay and Sentosa. In the absence of news of similar impact, we should expect a breather and probably see a 15 to 18 per cent rise for the luxury segment this year."
However, she expects prices for this thin super-luxury class to turn bullish again in 2009, when the two resorts and the new business financial district are completed. Prices of choice luxury units could rise to an average of $4,000 psf.
A recent Jones Lang LaSalle (JLL) report pointed out that while the robust outlook for the Singapore economy had helped to prop up the strong gains last year, the rise was also reflective of upbeat sentiments among high net worth individuals scouting for opportunities in global markets.
It noted that prices of niche luxury projects in Hong Kong were 70 per cent higher than in Singapore, and it expected high-end developments to continue to set new benchmark prices in 2007.
Dr Chua Yang Liang, associate director and head of research for Jones Lang La-Salle, notes that the new moneyed class, which has a more global outlook, preferred properties that offer unique lifestyle concepts, unlike the top–end buyers during the previous property boom who were more focused on location. This explains the appeal of Ardmore Park and Four Seasons Park in the mid-1990s.
Ms Tay notes: "These buyers are made up of the high echelons of Singapore society as well as the high net worth or ultra high-net worth individuals from around the globe. They are not just looking for an apartment but a lifestyle product."
As a result, luxury-end developers are now marketing their properties with high quality furnishing and finishes, and offering housekeeping, butler and concierge services to attract these niche buyers.
"Many of these foreigners are first-time buyers in Singapore. How much the benchmark prices for these luxury end of the market will rise will very much depend on how the developers packaged them as lifestyle offers," Ms Tay says.
Unlike the previous property upswings, when the top-end buyers generally comprised Indonesians and Hong Kongers, the overseas buyers now hail from China, India, Europe, America, Russia, Israel and the Middle East. And they are definitely richer too.
"We are talking about the really, really rich. I just shook hands with two billionaires this week. That has never happened before," says a property consultant.
For this segment of the market, prices and interest rates are less of a consideration as the buyers normally fork out the full payment for their purchases.
Another draw for these foreigners is the absence of a capital gains tax.
"Instead of paying the high taxes elsewhere in London, they can use their property purchases here as a way to preserve and enhance their capital wealth, especially when prices rise in the future," says Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
Mass market units see modest gains of 5 per cent to 10 per cent. Savills is projecting an average rise of 20 to 30 per cent for the upper-tiered residential properties in 2007. Mr Ku says the trickle-down effect of a strengthening economy could see the mass market rise by 5 per cent this year and 8 to 10 per cent for the next two years.
According to JLL’s Dr Chua, the current property boom is turning out to be a two-tiered phenomenon with the highend residential segment driving overall recovery and the mass market segments trailing behind. This is in contrast to the previous property bull run in 1996, when prices were driven up by HDB dwellers upgrading to private housing.
Dr Chua says that while there was evidence of “flipping of properties” for quick turnaround profits during the launch of Marina Bay Residences and One Shenton in the central district, such speculative behaviour remained isolated.
According to sub-sale transactions tracked by the Urban Renewal Authority, such speculative transactions made up only 4 per cent of the total sales volume in 2006. This compares with over 20 per cent during the previous all-time market peak in 1996.
There appears to be more genuine buyers these days who are seeking longterm returns or personal occupation. Hence, the bubble effect stemming from speculative buying is not expected to occur in the near future, says Dr Chua.
Generally, most property watchers are looking at a 5 to 10 per cent increase in 2007 and 2008 for the mass market, which comprises units from $400 psf for older units to $700 psf for units in the secondary market, and up to $800 psf for newer developments.
Mr Winston Liew, a research analyst at OCBC Investment, says: "Structurally, there is usually an excess of 10 to 15 per cent in the total supply of this market segment. Capital appreciation will be about 10 per cent, or about 2 per cent to 2.5 per cent per quarter, which is in line with the growth in the GDP (gross domestic product) and general income levels."
Given this scenario, Ms Tay of Colliers says that on average, the prospective house-hunter in Singapore should not be spooked into a rush for their property purchases.
Despite the news-grabbing headlines of new benchmarks from luxury sales or collective sales, she says: "There is no need to be panicked into buying new homes. Take your time to look around, not just the new developments but also the secondary market. Don’t get affected by the herd mentality. That would only encourage developers to push prices up."
The head of research at Chesterton International, Mr Colin Tan, says househunters should make it a point to visit more showflats to get a better feel of what are considered as quality developments in the residential market.
"By looking around, you will be better placed to know the difference between a highend or quality development and one that is just high-priced without the same quality finishing," he said.
Rental yields improving
For those looking for investment properties and rental returns, property consultants say that the good bets would be developments near MRT stations, parks, schools and other public amenities.
Rental yields are expected to rise at an average of 3 per cent to 3.5 per cent this year for 99-year developments and 2.3 per cent to 3 per cent for freehold properties.
Mr Ku of Savills says demand will come from an influx of foreign talent who will be working on the integrated resorts and other major government infrastructure projects.
"For people who rent these units, it doesn’t matter if they are freehold or 99-year leasehold properties as long as there are pool facilities and they are close to amenities. In this regard, 99-year property will deliver the best yield," he adds.
"The rental market will be tight for the next three years with demand coming from an increasing number of expatriates, especially with a large number of units taken off the market because of the en-bloc sales," Mr Ku says.
Mr Tan’s advice is that buyers should look for new completed units or those in good locations in the resale market to take advantage of the good rental returns in the next two to three years.
"After that, with the new developments coming into the market, the return yields may or may not be as strong. It really depends on how many new units developers are going to put into the market in future," he adds.
SENTIMENTS in the Singapore residential market are likely to remain upbeat this year even though the luxury market will lose some of its sizzle from the previous year, say property watchers.
The high-end segment, sparked by an influx of foreign buyers, experienced an astonishing rise of 30 per cent to 40 per cent last year. Prices for some niche large high-floor luxury units were sold for as high as $3,000 per sq ft (psf), way above the normal $1,800-$2,000 psf range for an average prime apartment.
Knight Frank managing director Tan Tiong Cheng notes that as the upmarket segment had risen from low recovery levels, any further increases would not be to the same degree, given the already steep increase in capital values over the past 18 months. Nevertheless, he says, the upward momentum is still strong.
Ms Tay Huey Ying, director of research and consultancy at Colliers International, says: "Interest in the upper-tiered market was mainly due to the excitement in the property market following the Government’s awards for the two integrated resorts (IR) at Marina Bay and Sentosa. In the absence of news of similar impact, we should expect a breather and probably see a 15 to 18 per cent rise for the luxury segment this year."
However, she expects prices for this thin super-luxury class to turn bullish again in 2009, when the two resorts and the new business financial district are completed. Prices of choice luxury units could rise to an average of $4,000 psf.
A recent Jones Lang LaSalle (JLL) report pointed out that while the robust outlook for the Singapore economy had helped to prop up the strong gains last year, the rise was also reflective of upbeat sentiments among high net worth individuals scouting for opportunities in global markets.
It noted that prices of niche luxury projects in Hong Kong were 70 per cent higher than in Singapore, and it expected high-end developments to continue to set new benchmark prices in 2007.
Dr Chua Yang Liang, associate director and head of research for Jones Lang La-Salle, notes that the new moneyed class, which has a more global outlook, preferred properties that offer unique lifestyle concepts, unlike the top–end buyers during the previous property boom who were more focused on location. This explains the appeal of Ardmore Park and Four Seasons Park in the mid-1990s.
Ms Tay notes: "These buyers are made up of the high echelons of Singapore society as well as the high net worth or ultra high-net worth individuals from around the globe. They are not just looking for an apartment but a lifestyle product."
As a result, luxury-end developers are now marketing their properties with high quality furnishing and finishes, and offering housekeeping, butler and concierge services to attract these niche buyers.
"Many of these foreigners are first-time buyers in Singapore. How much the benchmark prices for these luxury end of the market will rise will very much depend on how the developers packaged them as lifestyle offers," Ms Tay says.
Unlike the previous property upswings, when the top-end buyers generally comprised Indonesians and Hong Kongers, the overseas buyers now hail from China, India, Europe, America, Russia, Israel and the Middle East. And they are definitely richer too.
"We are talking about the really, really rich. I just shook hands with two billionaires this week. That has never happened before," says a property consultant.
For this segment of the market, prices and interest rates are less of a consideration as the buyers normally fork out the full payment for their purchases.
Another draw for these foreigners is the absence of a capital gains tax.
"Instead of paying the high taxes elsewhere in London, they can use their property purchases here as a way to preserve and enhance their capital wealth, especially when prices rise in the future," says Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
Mass market units see modest gains of 5 per cent to 10 per cent. Savills is projecting an average rise of 20 to 30 per cent for the upper-tiered residential properties in 2007. Mr Ku says the trickle-down effect of a strengthening economy could see the mass market rise by 5 per cent this year and 8 to 10 per cent for the next two years.
According to JLL’s Dr Chua, the current property boom is turning out to be a two-tiered phenomenon with the highend residential segment driving overall recovery and the mass market segments trailing behind. This is in contrast to the previous property bull run in 1996, when prices were driven up by HDB dwellers upgrading to private housing.
Dr Chua says that while there was evidence of “flipping of properties” for quick turnaround profits during the launch of Marina Bay Residences and One Shenton in the central district, such speculative behaviour remained isolated.
According to sub-sale transactions tracked by the Urban Renewal Authority, such speculative transactions made up only 4 per cent of the total sales volume in 2006. This compares with over 20 per cent during the previous all-time market peak in 1996.
There appears to be more genuine buyers these days who are seeking longterm returns or personal occupation. Hence, the bubble effect stemming from speculative buying is not expected to occur in the near future, says Dr Chua.
Generally, most property watchers are looking at a 5 to 10 per cent increase in 2007 and 2008 for the mass market, which comprises units from $400 psf for older units to $700 psf for units in the secondary market, and up to $800 psf for newer developments.
Mr Winston Liew, a research analyst at OCBC Investment, says: "Structurally, there is usually an excess of 10 to 15 per cent in the total supply of this market segment. Capital appreciation will be about 10 per cent, or about 2 per cent to 2.5 per cent per quarter, which is in line with the growth in the GDP (gross domestic product) and general income levels."
Given this scenario, Ms Tay of Colliers says that on average, the prospective house-hunter in Singapore should not be spooked into a rush for their property purchases.
Despite the news-grabbing headlines of new benchmarks from luxury sales or collective sales, she says: "There is no need to be panicked into buying new homes. Take your time to look around, not just the new developments but also the secondary market. Don’t get affected by the herd mentality. That would only encourage developers to push prices up."
The head of research at Chesterton International, Mr Colin Tan, says househunters should make it a point to visit more showflats to get a better feel of what are considered as quality developments in the residential market.
"By looking around, you will be better placed to know the difference between a highend or quality development and one that is just high-priced without the same quality finishing," he said.
Rental yields improving
For those looking for investment properties and rental returns, property consultants say that the good bets would be developments near MRT stations, parks, schools and other public amenities.
Rental yields are expected to rise at an average of 3 per cent to 3.5 per cent this year for 99-year developments and 2.3 per cent to 3 per cent for freehold properties.
Mr Ku of Savills says demand will come from an influx of foreign talent who will be working on the integrated resorts and other major government infrastructure projects.
"For people who rent these units, it doesn’t matter if they are freehold or 99-year leasehold properties as long as there are pool facilities and they are close to amenities. In this regard, 99-year property will deliver the best yield," he adds.
"The rental market will be tight for the next three years with demand coming from an increasing number of expatriates, especially with a large number of units taken off the market because of the en-bloc sales," Mr Ku says.
Mr Tan’s advice is that buyers should look for new completed units or those in good locations in the resale market to take advantage of the good rental returns in the next two to three years.
"After that, with the new developments coming into the market, the return yields may or may not be as strong. It really depends on how many new units developers are going to put into the market in future," he adds.
Monday, April 2, 2007
Latest joint agreement will help both companies reinforce their market leader positions in water treatment products and technologies.
Latest joint agreement will help both companies reinforce their market leader positions in water treatment products and technologies.
By year 2015, Singapore hopes to supply technology and products to three per cent of the global water market. This is a vision that is kept afloat by international players cashing in on Singapore's stellar capabilities in R&D, as well as the Republic's strong support for innovation, test-bedding and commercialisation activities. Indeed, despite the country's lack of natural resources, it's an achievement that 15 per cent of the world’s publicly listed water companies can be found on the Singapore Exchange.
Local company Hyflux Ltd is no stranger to the environmental technology sector. Specialising in membrane technologies, Hyflux has established water treatment operations and projects in Singapore and Southeast Asia, China, the Middle East, North Africa and India. Just last year, the company was awarded Water Company of the Year by the UK's Global Water Intelligence at the Global Water Awards.
To enhance its growing reputation, Hyflux announced on 22 January 2007 that it was joining forces with US-based Marmon Water LLC (Marmon Water), one of the world's largest manufacturers of residential and commercial water treatment systems. Up to S$80 million (US$52.3 million) will be invested over the next few years in two joint ventures (JV), involving R&D and manufacturing, respectively. The two companies have also entered into licence agreements on products that will allow them to leverage the other's strengths while complementing their current offerings.
L-R: Kennth Tan, Executive Director, EDB; Olivia Lum, Group CEO & President, Hyflux; Khoo Teng Chye, CEO, PUB; Lee Yi Shyan, Minister of State for Trade & Industry; John Goody, President, Marmon Water; and Judith R.Fergin, Charge d'Affaires, Embassy of United States of America.
L-R: Kennth Tan, Executive Director, EDB; Olivia Lum, Group CEO & President, Hyflux; Khoo Teng Chye, CEO, PUB; Lee Yi Shyan, Minister of State for Trade & Industry; John Goody, President, Marmon Water; and Judith R.Fergin, Charge d'Affaires, Embassy of United States of America.
PLUMBING GROWTH
The agreements were signed by Olivia Lum, CEO and President, Hyflux Ltd, and John J. Goody, President, Marmon Water LLC, at a ceremony presided over by Lee Yi Shyan, Minister of State for Trade & Industry. In the R&D alliance, an equal share JV company will be established in Singapore to develop innovative and affordable products and technologies for both residential and commercial applications in mature as well as fast-growing emerging markets. Up to S$50 million (US$32.7 million) is expected to be invested over the next five years to bring these objectives to fruition, with the company comprising of up to 50 researchers.
"Together we will develop new products to provide clean, filtered and softened water for Asian homes," says Lum. "Additionally, these initiatives will allow Hyflux to expand our industrial filtration product range in Asia and allow Marmon Water to sell our membranes in North America, a market we have not previously addressed."
Besides R&D, Hyflux and Marmon Water will also embark on a manufacturing partnership. The JV company will have a wholly-owned subsidiary in China's Jiangsu province as well as in Singapore. Hyflux's subsidiary - Hyflux Consumer Products Pte Ltd - will own 49 per cent of the manufacturing JV in Jiangsu, with Marmon Water holding the rest. Over S$30 million (US$19.6 million) will be pumped in progressively over the next few years to begin the manufacture of residential water treatment and filtration products for worldwide markets, including China. Production is expected to commence in the second half of this year.
Hyflux and Marmon Water's licensing agreements, inked at the same ceremony, will be effective the next 20 years and includes the latter giving Hyflux the exclusive licence to its stainless steel membranes, used in high pressure and high temperature industrial applications. Hyflux will manufacture these locally and sell them throughout Asia, and also capitalise on media licenced by Marmon to purify liquid streams in pharmaceutical as well as F&B applications. In turn, Hyflux has given exclusive rights to a Marmon Water subsidiary for its range of hollow fibre membranes for manufacturing and sale in North America.
Hyflux's Ecosorb - Multi-functional composite absorbents
Hyflux's Ecosorb - Multi-functional composite absorbents
STREAM OF OPPORTUNITY
"Combining our two organisations' strong international capabilities and respective technical strengths is a great strategic match," says Goody. "Marmon Water's decision to invest in Singapore also reflects the government's strong commitment to developing the water industry."
The infrastructure is indeed in place. In May 2006, the Environment & Water Industry Development Council (EWI) was formed to spearhead the growth of the environment and water industry. Two months later, the country's Research, Innovation and Enterprise Council announced that it was adding S$330 million (US$215.6 million) to R&D's coffers over the next five years to further accelerate the development of the industry.
"Singapore has consistently invested in its environmental infrastructure, which allows our companies to acquire capabilities in managing and delivering advanced water treatment and recycling systems," says Lee. "As a result, our companies are now well-placed to export their expertise."
With Hyflux and Marmon Water's milestone announcement, more companies will be encouraged to take the lead to adopt mutually beneficial measures to grow their businesses. With these tie-ups, it is hoped that dedicated investments contributing to Singapore's water sector will triple to S$1.7 billion (US$1.1 billion) by 2015.
By year 2015, Singapore hopes to supply technology and products to three per cent of the global water market. This is a vision that is kept afloat by international players cashing in on Singapore's stellar capabilities in R&D, as well as the Republic's strong support for innovation, test-bedding and commercialisation activities. Indeed, despite the country's lack of natural resources, it's an achievement that 15 per cent of the world’s publicly listed water companies can be found on the Singapore Exchange.
Local company Hyflux Ltd is no stranger to the environmental technology sector. Specialising in membrane technologies, Hyflux has established water treatment operations and projects in Singapore and Southeast Asia, China, the Middle East, North Africa and India. Just last year, the company was awarded Water Company of the Year by the UK's Global Water Intelligence at the Global Water Awards.
To enhance its growing reputation, Hyflux announced on 22 January 2007 that it was joining forces with US-based Marmon Water LLC (Marmon Water), one of the world's largest manufacturers of residential and commercial water treatment systems. Up to S$80 million (US$52.3 million) will be invested over the next few years in two joint ventures (JV), involving R&D and manufacturing, respectively. The two companies have also entered into licence agreements on products that will allow them to leverage the other's strengths while complementing their current offerings.
L-R: Kennth Tan, Executive Director, EDB; Olivia Lum, Group CEO & President, Hyflux; Khoo Teng Chye, CEO, PUB; Lee Yi Shyan, Minister of State for Trade & Industry; John Goody, President, Marmon Water; and Judith R.Fergin, Charge d'Affaires, Embassy of United States of America.
L-R: Kennth Tan, Executive Director, EDB; Olivia Lum, Group CEO & President, Hyflux; Khoo Teng Chye, CEO, PUB; Lee Yi Shyan, Minister of State for Trade & Industry; John Goody, President, Marmon Water; and Judith R.Fergin, Charge d'Affaires, Embassy of United States of America.
PLUMBING GROWTH
The agreements were signed by Olivia Lum, CEO and President, Hyflux Ltd, and John J. Goody, President, Marmon Water LLC, at a ceremony presided over by Lee Yi Shyan, Minister of State for Trade & Industry. In the R&D alliance, an equal share JV company will be established in Singapore to develop innovative and affordable products and technologies for both residential and commercial applications in mature as well as fast-growing emerging markets. Up to S$50 million (US$32.7 million) is expected to be invested over the next five years to bring these objectives to fruition, with the company comprising of up to 50 researchers.
"Together we will develop new products to provide clean, filtered and softened water for Asian homes," says Lum. "Additionally, these initiatives will allow Hyflux to expand our industrial filtration product range in Asia and allow Marmon Water to sell our membranes in North America, a market we have not previously addressed."
Besides R&D, Hyflux and Marmon Water will also embark on a manufacturing partnership. The JV company will have a wholly-owned subsidiary in China's Jiangsu province as well as in Singapore. Hyflux's subsidiary - Hyflux Consumer Products Pte Ltd - will own 49 per cent of the manufacturing JV in Jiangsu, with Marmon Water holding the rest. Over S$30 million (US$19.6 million) will be pumped in progressively over the next few years to begin the manufacture of residential water treatment and filtration products for worldwide markets, including China. Production is expected to commence in the second half of this year.
Hyflux and Marmon Water's licensing agreements, inked at the same ceremony, will be effective the next 20 years and includes the latter giving Hyflux the exclusive licence to its stainless steel membranes, used in high pressure and high temperature industrial applications. Hyflux will manufacture these locally and sell them throughout Asia, and also capitalise on media licenced by Marmon to purify liquid streams in pharmaceutical as well as F&B applications. In turn, Hyflux has given exclusive rights to a Marmon Water subsidiary for its range of hollow fibre membranes for manufacturing and sale in North America.
Hyflux's Ecosorb - Multi-functional composite absorbents
Hyflux's Ecosorb - Multi-functional composite absorbents
STREAM OF OPPORTUNITY
"Combining our two organisations' strong international capabilities and respective technical strengths is a great strategic match," says Goody. "Marmon Water's decision to invest in Singapore also reflects the government's strong commitment to developing the water industry."
The infrastructure is indeed in place. In May 2006, the Environment & Water Industry Development Council (EWI) was formed to spearhead the growth of the environment and water industry. Two months later, the country's Research, Innovation and Enterprise Council announced that it was adding S$330 million (US$215.6 million) to R&D's coffers over the next five years to further accelerate the development of the industry.
"Singapore has consistently invested in its environmental infrastructure, which allows our companies to acquire capabilities in managing and delivering advanced water treatment and recycling systems," says Lee. "As a result, our companies are now well-placed to export their expertise."
With Hyflux and Marmon Water's milestone announcement, more companies will be encouraged to take the lead to adopt mutually beneficial measures to grow their businesses. With these tie-ups, it is hoped that dedicated investments contributing to Singapore's water sector will triple to S$1.7 billion (US$1.1 billion) by 2015.
Singapore's 2006 Honorary Citizen - Exxon Mobil's Lee R. Raymond
Singapore's 2006 Honorary Citizen - Exxon Mobil's Lee R. Raymond
Date: 01/04/2007
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Commending their outstanding contributions to the nation's growth and development, Singapore confers its highest national recognition on two global business leaders - .
Through the years, Singapore is privileged to have a close friend and supporter in two of the world's most outstanding global business personalities: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation and Dr. Heinrich von Pierer, Chairman of Supervisory Board, Siemens AG. In recognition of their unwavering support and valuable contributions to the nation, they were conferred the 2006 Honorary Citizen Award.
The Honorary Citizen Award is the highest form of recognition given by the Singapore government for individuals who have made outstanding contributions to the country's growth and development, accolades that these two distinguished business stalwarts have rightly earned. "Mr Raymond and Dr. von Pierer are two outstanding business leaders who have contributed significantly to the vibrancy and diversity of our economy," commends Wong Kan Seng, Deputy Prime Minister and Minister of Home Affairs.
Raymond received his award from S R Nathan, President, Singapore at an investiture ceremony held on 1 March 2007. The other Honorary Citizen award recipient, Dr von Pierer, will receive his award from the President at a separate investiture in June, and a feature on him will appear in a later edition of the Singapore Investment News.
L-R: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
L-R: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
VOICE OF COMMITMENT
Raymond has played an instrumental role in seeing the expansion plans in Singapore for ExxonMobil come to fruition. During his tenure at ExxonMobil, he has helped in doubling the organisation's investments as well as the introduction of many diversifications in the company's core business in the oil industry. In fact, one of the highlights of his time at the helm include presiding over the opening of ExxonMobil's S$3.1 billion (US$2 billion) steam cracker plant in Singapore in 1999, a project that he was a strong advocate for. Under his stewardship, ExxonMobil, the world's largest publicly listed oil company, has built Singapore to be its main manufacturing base in Asia, with operations from oil refining to chemicals manufacturing and headquarters functions.
Reflecting on being named Honorary Citizen, Raymond says, "I am very honoured to be conferred this prestigious national award and I accept the Honorary Citizen Award on behalf of all the ExxonMobil employees in Singapore."
"I believe this Award reflects ExxonMobil's long and continued involvement in Singapore industry. I am very fortunate to have had the opportunity to work with Singapore over the years and to have played a part in the growth of ExxonMobil in Singapore, in tandem with the remarkable achievements of this country," adds Raymond.
Back Row: H.E Patricia Herbold, U.S Ambassador to Singapore; Lim Hng Kiang, Minister for Trade and Industry; Dr Ng Eng Hen, Minister for Manpower; Gan Kim Yong, Minister of State for Education and Manpower; and Lim Siong Guan, Chairman, EDB. Front Row: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
Back Row: H.E Patricia Herbold, U.S Ambassador to Singapore; Lim Hng Kiang, Minister for Trade and Industry; Dr Ng Eng Hen, Minister for Manpower; Gan Kim Yong, Minister of State for Education and Manpower; and Lim Siong Guan, Chairman, EDB.
Front Row: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
DEDICATED PARTNER
Raymond's contributions also extend beyond the business arena. As a member of the Singapore - United States Business Council, he has been a strong and resounding voice in the course of economic and business dealings between the two friendly trading nations, epitomising the qualities of a global citizen.
The Honorary Citizen Award is the second significant award that Raymond has received in Singapore. In 2004, he was presented with the Public Service Star (Distinguished Friends of Singapore Award) for his many contributions to Singapore.
It is with these friends of Singapore that a nation's future is built on. With the economy enjoying robust growth these few years, Lim Siong Guan, Chairman, Singapore Economic Development Board (EDB) says, "Singapore is very privileged to have these two global business leaders as strong advocates of Singapore. They believe in Singapore, trust Singapore, and are prepared to tell the world how and why Singapore has been good business partners for them. They have played a critical role in helping Singapore build her capabilities and global leadership positions in their business sectors. We are honoured to count them as our special friends."
Date: 01/04/2007
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Commending their outstanding contributions to the nation's growth and development, Singapore confers its highest national recognition on two global business leaders - .
Through the years, Singapore is privileged to have a close friend and supporter in two of the world's most outstanding global business personalities: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation and Dr. Heinrich von Pierer, Chairman of Supervisory Board, Siemens AG. In recognition of their unwavering support and valuable contributions to the nation, they were conferred the 2006 Honorary Citizen Award.
The Honorary Citizen Award is the highest form of recognition given by the Singapore government for individuals who have made outstanding contributions to the country's growth and development, accolades that these two distinguished business stalwarts have rightly earned. "Mr Raymond and Dr. von Pierer are two outstanding business leaders who have contributed significantly to the vibrancy and diversity of our economy," commends Wong Kan Seng, Deputy Prime Minister and Minister of Home Affairs.
Raymond received his award from S R Nathan, President, Singapore at an investiture ceremony held on 1 March 2007. The other Honorary Citizen award recipient, Dr von Pierer, will receive his award from the President at a separate investiture in June, and a feature on him will appear in a later edition of the Singapore Investment News.
L-R: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
L-R: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
VOICE OF COMMITMENT
Raymond has played an instrumental role in seeing the expansion plans in Singapore for ExxonMobil come to fruition. During his tenure at ExxonMobil, he has helped in doubling the organisation's investments as well as the introduction of many diversifications in the company's core business in the oil industry. In fact, one of the highlights of his time at the helm include presiding over the opening of ExxonMobil's S$3.1 billion (US$2 billion) steam cracker plant in Singapore in 1999, a project that he was a strong advocate for. Under his stewardship, ExxonMobil, the world's largest publicly listed oil company, has built Singapore to be its main manufacturing base in Asia, with operations from oil refining to chemicals manufacturing and headquarters functions.
Reflecting on being named Honorary Citizen, Raymond says, "I am very honoured to be conferred this prestigious national award and I accept the Honorary Citizen Award on behalf of all the ExxonMobil employees in Singapore."
"I believe this Award reflects ExxonMobil's long and continued involvement in Singapore industry. I am very fortunate to have had the opportunity to work with Singapore over the years and to have played a part in the growth of ExxonMobil in Singapore, in tandem with the remarkable achievements of this country," adds Raymond.
Back Row: H.E Patricia Herbold, U.S Ambassador to Singapore; Lim Hng Kiang, Minister for Trade and Industry; Dr Ng Eng Hen, Minister for Manpower; Gan Kim Yong, Minister of State for Education and Manpower; and Lim Siong Guan, Chairman, EDB. Front Row: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
Back Row: H.E Patricia Herbold, U.S Ambassador to Singapore; Lim Hng Kiang, Minister for Trade and Industry; Dr Ng Eng Hen, Minister for Manpower; Gan Kim Yong, Minister of State for Education and Manpower; and Lim Siong Guan, Chairman, EDB.
Front Row: Lee R. Raymond, retired Chairman and CEO, Exxon Mobil Corporation; S R Nathan, President of Singapore; Mrs Nathan; and Mrs Charlene Raymond.
DEDICATED PARTNER
Raymond's contributions also extend beyond the business arena. As a member of the Singapore - United States Business Council, he has been a strong and resounding voice in the course of economic and business dealings between the two friendly trading nations, epitomising the qualities of a global citizen.
The Honorary Citizen Award is the second significant award that Raymond has received in Singapore. In 2004, he was presented with the Public Service Star (Distinguished Friends of Singapore Award) for his many contributions to Singapore.
It is with these friends of Singapore that a nation's future is built on. With the economy enjoying robust growth these few years, Lim Siong Guan, Chairman, Singapore Economic Development Board (EDB) says, "Singapore is very privileged to have these two global business leaders as strong advocates of Singapore. They believe in Singapore, trust Singapore, and are prepared to tell the world how and why Singapore has been good business partners for them. They have played a critical role in helping Singapore build her capabilities and global leadership positions in their business sectors. We are honoured to count them as our special friends."
Budget 2007: Building Singapore Into A Global Business Hub
Budget 2007: Building Singapore Into A Global Business Hub
Date: 01/04/2007
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New business tax measures and incentives set the stage for promising growth.
New business tax measures and incentives set the stage for promising growth.
Making Singapore the best place to start, grow and globalise businesses - that was the key initiative highlighted by Tharman Shanmugaratnam, Second Minister for Finance, in his Budget 2007 Statement on 15 February 2007.
And judging by its economic progress - 7.9 per cent in 2006 - Singapore's business climate is poised for the future and headed for significant growth as an international player in the global business landscape. "Our economy has done well. Both the manufacturing and services sector are doing well, asset management in financial services is booming and the construction industry is now seeing resurgence," says Shanmugaratnam. Add to that, the major economies internationally are performing positively, painting a rosy picture for the Republic's economic development.
Stressing that the Republic must continue to focus on growth and embrace globalisation, Shanmugaratnam did not fail to caution the need to manage its downsides and make it work for everyone. In growing the economy, the government must build capabilities for the future, attract new investments, grow new businesses and create new and better paying jobs to replace old ones. To accomplish all these would require the government to spend more in the future, with additional revenues being a necessity. The new measures as outlined in Budget 2007 are designed then to prepare Singapore to be "ready for the future, ready for the world".
BENEFITS FOR BUSINESS
Taking the spotlight is the two per cent reduction in corporate tax rate, from 20 per cent to 18 per cent, with effect from Year of Assessment (YA) 2008. With the current 20 per cent corporate tax being higher than our key competitors such as Hong Kong (17.5 per cent) and Ireland (12.5 per cent), this corporate tax cut will enhance Singapore's competitiveness as a business location in the scope of intense global competition.
In addition to the cut in the corporate tax rate, companies can also look forward to an increase in the partial tax exemption (PTE) threshold from S$100,000 (US$65,329) to S$300,000 (US$195,989). This means automatic tax exemption of up to S$152,5001 (US$99,628) on the first S$300,000 (US$195,989) of a company's normal chargeable income. With this enhancement, 80 per cent of companies in Singapore will pay an effective tax rate of less than 10 per cent. For example, a company with normal chargeable income of S$300,000 (US$195,989) will have an effective tax rate of only 8.9 per cent. And for organisations with chargeable income of S$500,000 (US$326,646), the effective tax rate will be an estimated 12.5 per cent, equivalent to Ireland and significantly lower than Hong Kong.
Owi Kek Hean, Head of Tax, KPMG, gives the thumbs up to the corporate tax reduction. "Singapore's economic competitiveness has been given a boost with the two per cent reduction in corporate rates, bringing us within a whisker of Hong Kong's rate. Moreover, with the new partial exemption threshold, Singapore effective tax rate of a majority of business will even be lower."
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations.
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations.
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations. With the corporate tax exemption and the corporate tax cut of 2 per cent, a new company with normal chargeable income of about S$300,000 (US$195,989) will have an effective tax rate of only 6 per cent.
Other key business tax measures include extending the writing down allowances (WDA) for the acquisition of intellectual property for another five years. And this will be available for capital expenditure incurred on intellectual property (IP) acquisitions up to 31 October 2013. The move reinforces Singapore's commitment to develop a conducive environment and infrastructure for intellectual property management activities.
PROMOTING AVIATION
Asia-Pacific aviation is expected to lead global growth in passenger and freight activity, which will in turn drive a growth in the aircraft leasing business. To promote the development of Singapore as a regional aircraft leasing centre, the Aircraft Leasing Scheme (ALS) is enhanced by offering a five per cent concessionary tax rate (in addition to the current 10 per cent) on qualifying leasing incomes. Further measures include the expansion of the list of qualifying lease incomes to cover incomes from onshore leasing (as opposed to just offshore aircraft leasing operations currently) and leasing of aircraft engines, and the extension of the concessionary tax rate to a registered business trust/approved company engaged in aircraft or aircraft engine financing arrangements.
Complemented by Singapore's vibrant financial sector, aviation expertise and extensive treaty network, the new ALS enhancements will further improve the Republic's value proposition as an attractive location for leasing companies to base their aircraft leasing and leasing related activities, against competitors Hong Kong and Dubai.
PROMOTING INTERNATIONAL ARBITRATION WORK IN SINGAPORE
To position Singapore as a location of choice for international arbitration work in the Asia Pacific region, a new tax incentive for international arbitration activities is introduced. Approved law firms will be granted a 50 per cent tax exemption on qualifying incremental income from international arbitration work for five years. This incentive, complemented by Singapore's reputation as a neutral, efficient place to seek redress, in turn promotes the country as an ideal dispute resolution location in Asia and reinforces Singapore as a premier headquarters location - a win-win situation all around.
PROMOTING PHILANTHROPY
To grow Singapore as a philanthropy hub, automatic tax exemption is now available for all registered charities, including philanthropic grantmakers with funds that are being managed from Singapore. In addition, the local spending requirement is now removed2 and double tax deductions are available for all donations made to foundations and philanthropic grant-makers3. Complemented by Singapore's strength as a key financial centre, these changes in tax treatment will help to develop Singapore as a philanthropic hub and create vibrancy in our local charitable sector.
Further to the broad based tax exemption for charities, non profit organisations (NPOs) that are not charities that use Singapore as a base to carry out regional and global activities will also be eligible for a tax incentive. This incentive, to be administered by the EDB, will give international NPOs that carry out substantial activities in Singapore an income tax exemption and could be of great benefit NPOs especially industry organisations looking for a Asia Pacific base.
Overall, Budget 2007 covers a broad economic base and has been well received. Says Owi, "This is a national budget for global integration. It squarely faces the challenges thrown up by globalisation by dealing with underlying disconnects among the various income and generational groups." Ultimately, the success of the Budget 2007 will be reflected in how much more Singapore develops into, and gains recognition as a global business hub.
1 Tax exemption: (75% of first $10,000) + (50% of next $290,000) = $152,000
2 Under current rules, charities are required to spend at least 80% of their annual receipts on charitable objects in Singapore ("80-20" spending rule) in order to be exempt from income tax. In addition, any organisation seeking to raise funds for any foreign charitable purpose, is required to spend at least 80% of the funds raised in Singapore ("80-20" fund raising rule).
3 Provided that the donations are eventually channelled to an Institute of Public Character.
Date: 01/04/2007
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New business tax measures and incentives set the stage for promising growth.
New business tax measures and incentives set the stage for promising growth.
Making Singapore the best place to start, grow and globalise businesses - that was the key initiative highlighted by Tharman Shanmugaratnam, Second Minister for Finance, in his Budget 2007 Statement on 15 February 2007.
And judging by its economic progress - 7.9 per cent in 2006 - Singapore's business climate is poised for the future and headed for significant growth as an international player in the global business landscape. "Our economy has done well. Both the manufacturing and services sector are doing well, asset management in financial services is booming and the construction industry is now seeing resurgence," says Shanmugaratnam. Add to that, the major economies internationally are performing positively, painting a rosy picture for the Republic's economic development.
Stressing that the Republic must continue to focus on growth and embrace globalisation, Shanmugaratnam did not fail to caution the need to manage its downsides and make it work for everyone. In growing the economy, the government must build capabilities for the future, attract new investments, grow new businesses and create new and better paying jobs to replace old ones. To accomplish all these would require the government to spend more in the future, with additional revenues being a necessity. The new measures as outlined in Budget 2007 are designed then to prepare Singapore to be "ready for the future, ready for the world".
BENEFITS FOR BUSINESS
Taking the spotlight is the two per cent reduction in corporate tax rate, from 20 per cent to 18 per cent, with effect from Year of Assessment (YA) 2008. With the current 20 per cent corporate tax being higher than our key competitors such as Hong Kong (17.5 per cent) and Ireland (12.5 per cent), this corporate tax cut will enhance Singapore's competitiveness as a business location in the scope of intense global competition.
In addition to the cut in the corporate tax rate, companies can also look forward to an increase in the partial tax exemption (PTE) threshold from S$100,000 (US$65,329) to S$300,000 (US$195,989). This means automatic tax exemption of up to S$152,5001 (US$99,628) on the first S$300,000 (US$195,989) of a company's normal chargeable income. With this enhancement, 80 per cent of companies in Singapore will pay an effective tax rate of less than 10 per cent. For example, a company with normal chargeable income of S$300,000 (US$195,989) will have an effective tax rate of only 8.9 per cent. And for organisations with chargeable income of S$500,000 (US$326,646), the effective tax rate will be an estimated 12.5 per cent, equivalent to Ireland and significantly lower than Hong Kong.
Owi Kek Hean, Head of Tax, KPMG, gives the thumbs up to the corporate tax reduction. "Singapore's economic competitiveness has been given a boost with the two per cent reduction in corporate rates, bringing us within a whisker of Hong Kong's rate. Moreover, with the new partial exemption threshold, Singapore effective tax rate of a majority of business will even be lower."
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations.
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations.
New companies setting up in Singapore can also look forward to full income tax exemption up to the first S$100,000 (US$65,329) of their normal chargeable income for the first three years of their operations. With the corporate tax exemption and the corporate tax cut of 2 per cent, a new company with normal chargeable income of about S$300,000 (US$195,989) will have an effective tax rate of only 6 per cent.
Other key business tax measures include extending the writing down allowances (WDA) for the acquisition of intellectual property for another five years. And this will be available for capital expenditure incurred on intellectual property (IP) acquisitions up to 31 October 2013. The move reinforces Singapore's commitment to develop a conducive environment and infrastructure for intellectual property management activities.
PROMOTING AVIATION
Asia-Pacific aviation is expected to lead global growth in passenger and freight activity, which will in turn drive a growth in the aircraft leasing business. To promote the development of Singapore as a regional aircraft leasing centre, the Aircraft Leasing Scheme (ALS) is enhanced by offering a five per cent concessionary tax rate (in addition to the current 10 per cent) on qualifying leasing incomes. Further measures include the expansion of the list of qualifying lease incomes to cover incomes from onshore leasing (as opposed to just offshore aircraft leasing operations currently) and leasing of aircraft engines, and the extension of the concessionary tax rate to a registered business trust/approved company engaged in aircraft or aircraft engine financing arrangements.
Complemented by Singapore's vibrant financial sector, aviation expertise and extensive treaty network, the new ALS enhancements will further improve the Republic's value proposition as an attractive location for leasing companies to base their aircraft leasing and leasing related activities, against competitors Hong Kong and Dubai.
PROMOTING INTERNATIONAL ARBITRATION WORK IN SINGAPORE
To position Singapore as a location of choice for international arbitration work in the Asia Pacific region, a new tax incentive for international arbitration activities is introduced. Approved law firms will be granted a 50 per cent tax exemption on qualifying incremental income from international arbitration work for five years. This incentive, complemented by Singapore's reputation as a neutral, efficient place to seek redress, in turn promotes the country as an ideal dispute resolution location in Asia and reinforces Singapore as a premier headquarters location - a win-win situation all around.
PROMOTING PHILANTHROPY
To grow Singapore as a philanthropy hub, automatic tax exemption is now available for all registered charities, including philanthropic grantmakers with funds that are being managed from Singapore. In addition, the local spending requirement is now removed2 and double tax deductions are available for all donations made to foundations and philanthropic grant-makers3. Complemented by Singapore's strength as a key financial centre, these changes in tax treatment will help to develop Singapore as a philanthropic hub and create vibrancy in our local charitable sector.
Further to the broad based tax exemption for charities, non profit organisations (NPOs) that are not charities that use Singapore as a base to carry out regional and global activities will also be eligible for a tax incentive. This incentive, to be administered by the EDB, will give international NPOs that carry out substantial activities in Singapore an income tax exemption and could be of great benefit NPOs especially industry organisations looking for a Asia Pacific base.
Overall, Budget 2007 covers a broad economic base and has been well received. Says Owi, "This is a national budget for global integration. It squarely faces the challenges thrown up by globalisation by dealing with underlying disconnects among the various income and generational groups." Ultimately, the success of the Budget 2007 will be reflected in how much more Singapore develops into, and gains recognition as a global business hub.
1 Tax exemption: (75% of first $10,000) + (50% of next $290,000) = $152,000
2 Under current rules, charities are required to spend at least 80% of their annual receipts on charitable objects in Singapore ("80-20" spending rule) in order to be exempt from income tax. In addition, any organisation seeking to raise funds for any foreign charitable purpose, is required to spend at least 80% of the funds raised in Singapore ("80-20" fund raising rule).
3 Provided that the donations are eventually channelled to an Institute of Public Character.
Nippon Express Opens New Hi-Speed Logistics Centre
Nippon Express Opens New Hi-Speed Logistics Centre
Date: 01/04/2007
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The new facility providing end-to-end supply chain solutions also strengthens long-standing ties between Singapore and the leading international air and ocean freight forwarder.
The new facility providing end-to-end supply chain solutions also strengthens long-standing ties between Singapore and the leading international air and ocean freight forwarder.
Three years ago, Nippon Express Co. Ltd cast its vote of confidence on Singapore's logistics industry by announcing plans to set up a new - its third - facility here to meet customers demand and constantly evolving supply chain methodologies.
The Hi-Speed Logistics Centre, opened earlier this year at the Free Trade Zone within the Airport Logistics Park of Singapore (ALPS), brings the company's total amount of investments so far to a whopping S$110 million (US$71.9 million). Together with facilities catering to its ocean and air business respectively, Nippon Express now has some 60,000 sq m of warehouse space here and has cemented its position as a major player in the booming industry.
MOVING WITH THE TIMES
"The new facility is an important investment for our Singapore operations," says Takao Miyamoto, Managing Director, Nippon Express (Singapore) Pte Ltd. The state-of-the-art 28,700 sq m Centre will leverage Singapore's strategic location in the region to provide customers with increased solutions through end-to-end integration of both air and sea services. Besides warehousing, this includes international freight transportation, inventory management, trade facilitations, regional-transhipment and all ancillary services relevant to Vendor Management Inventory (VMI) and Hubbing Solution concepts.
"The Logistics industry has moved rapidly into a 'Borderless' era now, with manufacturers demanding VMI and Just in Time (JIT) services. Our Logistics services are designed with these manufacturers' and suppliers' needs in mind," says Jiro Nakamura, Executive Officer and Regional General Manager, Nippon Express Co., Ltd (Asia & Oceania Region) and Managing Director of Nippon Express (Hong Kong) Co. Ltd. "Our logistics solutions are designed to and aimed at providing the most cost-effective and process-efficient options to customers located in different countries. Our service capabilities transcend mere inventory management and cargo-delivery."
The company also plans to achieve better customer solutions through end-to-end integration of both air and sea services. The Hi-Speed Logistics Centre, coupled with two facilities located strategically at both ends of Singapore, will allow the company to have better accessibility to both sea and air ports and to provide inter-modal services.
Nippon Express is also targeting new growth markets to add to its portfolio. According to Miyamoto, the Hi-Speed Logistics Centre will help the company attract business in the technology and biomedical sectors as well as some of the other growing industries such as manufacturing.
SINGAPORE-NIPPON EXPRESS PARTNERSHIP
The company decided on Singapore as its preferred site for a number of reasons. One of these is the fact that the Lion City is well connected. It is an ideal global meeting place for not only vessels and flights, but also suppliers and manufacturers.
In addition, Singapore continues to keep up with industry changes and is going all out to establish itself as an integrated logistics hub. "With globalisation, supply chains have become ever more complex and extended. Logistics players are now competing on end-to-end supply chain solutions. To help logistics companies stay competitive, Singapore will continue to strive to be a highly efficient node and control centre for global supply chains," says Lee Yi Shyan, Minister of State for Trade and Industry.
Such measures resonate well with Nippon Express, which has its sights set on becoming a cutting edge total logistics service provider. "The construction of the Hi-Speed Logistics Centre Singapore signals Nippon Express' confidence and commitment to Singapore," says Miyamoto.
Date: 01/04/2007
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The new facility providing end-to-end supply chain solutions also strengthens long-standing ties between Singapore and the leading international air and ocean freight forwarder.
The new facility providing end-to-end supply chain solutions also strengthens long-standing ties between Singapore and the leading international air and ocean freight forwarder.
Three years ago, Nippon Express Co. Ltd cast its vote of confidence on Singapore's logistics industry by announcing plans to set up a new - its third - facility here to meet customers demand and constantly evolving supply chain methodologies.
The Hi-Speed Logistics Centre, opened earlier this year at the Free Trade Zone within the Airport Logistics Park of Singapore (ALPS), brings the company's total amount of investments so far to a whopping S$110 million (US$71.9 million). Together with facilities catering to its ocean and air business respectively, Nippon Express now has some 60,000 sq m of warehouse space here and has cemented its position as a major player in the booming industry.
MOVING WITH THE TIMES
"The new facility is an important investment for our Singapore operations," says Takao Miyamoto, Managing Director, Nippon Express (Singapore) Pte Ltd. The state-of-the-art 28,700 sq m Centre will leverage Singapore's strategic location in the region to provide customers with increased solutions through end-to-end integration of both air and sea services. Besides warehousing, this includes international freight transportation, inventory management, trade facilitations, regional-transhipment and all ancillary services relevant to Vendor Management Inventory (VMI) and Hubbing Solution concepts.
"The Logistics industry has moved rapidly into a 'Borderless' era now, with manufacturers demanding VMI and Just in Time (JIT) services. Our Logistics services are designed with these manufacturers' and suppliers' needs in mind," says Jiro Nakamura, Executive Officer and Regional General Manager, Nippon Express Co., Ltd (Asia & Oceania Region) and Managing Director of Nippon Express (Hong Kong) Co. Ltd. "Our logistics solutions are designed to and aimed at providing the most cost-effective and process-efficient options to customers located in different countries. Our service capabilities transcend mere inventory management and cargo-delivery."
The company also plans to achieve better customer solutions through end-to-end integration of both air and sea services. The Hi-Speed Logistics Centre, coupled with two facilities located strategically at both ends of Singapore, will allow the company to have better accessibility to both sea and air ports and to provide inter-modal services.
Nippon Express is also targeting new growth markets to add to its portfolio. According to Miyamoto, the Hi-Speed Logistics Centre will help the company attract business in the technology and biomedical sectors as well as some of the other growing industries such as manufacturing.
SINGAPORE-NIPPON EXPRESS PARTNERSHIP
The company decided on Singapore as its preferred site for a number of reasons. One of these is the fact that the Lion City is well connected. It is an ideal global meeting place for not only vessels and flights, but also suppliers and manufacturers.
In addition, Singapore continues to keep up with industry changes and is going all out to establish itself as an integrated logistics hub. "With globalisation, supply chains have become ever more complex and extended. Logistics players are now competing on end-to-end supply chain solutions. To help logistics companies stay competitive, Singapore will continue to strive to be a highly efficient node and control centre for global supply chains," says Lee Yi Shyan, Minister of State for Trade and Industry.
Such measures resonate well with Nippon Express, which has its sights set on becoming a cutting edge total logistics service provider. "The construction of the Hi-Speed Logistics Centre Singapore signals Nippon Express' confidence and commitment to Singapore," says Miyamoto.
Latest developments are in line with the company's objective to position Singapore as a key node for its overall global water infrastructure business.
Latest developments are in line with the company's objective to position Singapore as a key node for its overall global water infrastructure business.
Singapore's environmental and engineering sector has enjoyed renewed commitment from one of its long-time investors, Black & Veatch. The company is a consulting, engineering and construction leader in numerous markets, namely water, energy and telecommunications.
Established in 1915 in Kansas City, Missouri, the company would build its operational presence in Singapore through the acquisition of Binnie & Partners, whose history dated back to the early 1900s in Singapore. Since then, Black & Veatch has risen to become one of the most prominent and significant players in the water industry. For example, the company was appointed to provide design and permitting services for the Singapore-Tuas Seawater Desalination project. The S$137.8 million (US$90 million) seawater reverse-osmosis plant, the biggest in Asia and one of the world's largest with a capacity of 36 million gallons per day, opened in September 2005.
Fast forward to 7 February 2007 and the company added two more feathers to its cap of achievements. First, it officially opened its Global Design Centre for water, and this was followed by the company being conferred Singapore Economic Development Board's (EDB) prestigious International Headquarters (IHQ) Award for its dedication to growing its Singapore-based business.
The ribbon-cutting and award presentation ceremony was officiated by S Iswaran, Minister for Trade and Industry.
The ribbon-cutting and award presentation ceremony was officiated by S Iswaran, Minister for Trade and Industry.
DRIVEN BY EXCELLENCE
Back in December 2006, Black & Veatch had already announced its intentions to establish its Singapore office as a key node for its global water infrastructure business. "We're pleased to receive this award in recognition of our development plans, which will see Black & Veatch's Singapore office expand significantly over the next five years," says Dan McCarthy, President and CEO, Black & Veatch's global water business. "These five-year plans include doubling the number of our professionals in Singapore, as well as investing in a Global Design Centre and establishing a Centre of Excellence for Desalination."
McCarthy also praised the Singapore office for its competency in "implementing world-class engineering projects", which has proved valuable to the company's global clients. "The Global Design Centre will help us to apply our broad project expertise to further ensure we can continue to provide our clients with global solutions to their local challenges," explains McCarthy. "The Centre of Excellence in desalination will focus on optimising the performance of plants and enhancing membrane life."
To meet the need for higher-skilled professionals during this crucial expansion phase, McCarthy also renewed the company’s commitment to continue bringing in world-class practice and technology leaders to impart advanced training in key water competencies to the local office. "There is excellent talent in Singapore," affirms Ralph Eberts, Managing Director, Black & Veatch's Asia-Pacific water business. "It is our plan that the Singapore office will play a larger role in our major projects. We will continue to strengthen our technical knowledge and management capacity. By opening a Global Design Centre here, we will be able to attract more Singapore-based professionals who want to work on exciting global and leading-edge projects."
Jonathan Clement and Dr Terry Johnson, Black & Veatch, together with Khoo Teng Chye, Chief Executive, PUB, listening to S Iswaran. Flanking him, on his right, is Ralph Eberts and Amy Shanker is on his left.
Jonathan Clement and Dr Terry Johnson, Black & Veatch, together with Khoo Teng Chye, Chief Executive, PUB, listening to S Iswaran. Flanking him, on his right, is Ralph Eberts and Amy Shanker is on his left.
TURNING TIDES WITH TALENT
Singapore is on track to attain its vision of becoming a Global Hydrohub by 2015. Already, the Republic has a dedicated Environment & Water Industry Development Council (EWI), and it comprises key government agencies such as EDB and PUB. EWI has been given a budget of S$330 million (US$ 215.6 million) over the next five years as part of the government's plans to further develop the sector. In January 2007, a Technology Pioneer scheme was announced to encourage the early adoption of new locally-produced environment and water technologies. EWI also declared that more programmes and initiatives would be rolled out in the first quarter of the year to "encourage R&D in water technologies, the seeding and realisation of newly-developed technologies and expedite the movement of new and innovative technologies from laboratories into the commercial world".
Not surprisingly, Black & Veatch's IHQ Award and Global Design Centre opening ceremony was an opportune time for yet another pertinent industry announcement - S Iswaran, Minister of State for Trade & Industry, announced that S$60 million (US$39.2 million) from the existing S$330 million (US$215.6 million) reserves will be allocated to fund world-class water research centres. "Anchored by leading institutions in the field of water technology, these centres will undertake cutting edge research and, in turn, train critical postgraduate manpower for our water industry," elaborates Iswaran.
No doubt, training of talent is the way to go to bring Singapore's water sector to greater heights. With the dedicated support of organisations such as Black & Veatch, Singapore's plans to establish itself as a Global Hydrohub looks more than likely to succeed in the near future.
Singapore's environmental and engineering sector has enjoyed renewed commitment from one of its long-time investors, Black & Veatch. The company is a consulting, engineering and construction leader in numerous markets, namely water, energy and telecommunications.
Established in 1915 in Kansas City, Missouri, the company would build its operational presence in Singapore through the acquisition of Binnie & Partners, whose history dated back to the early 1900s in Singapore. Since then, Black & Veatch has risen to become one of the most prominent and significant players in the water industry. For example, the company was appointed to provide design and permitting services for the Singapore-Tuas Seawater Desalination project. The S$137.8 million (US$90 million) seawater reverse-osmosis plant, the biggest in Asia and one of the world's largest with a capacity of 36 million gallons per day, opened in September 2005.
Fast forward to 7 February 2007 and the company added two more feathers to its cap of achievements. First, it officially opened its Global Design Centre for water, and this was followed by the company being conferred Singapore Economic Development Board's (EDB) prestigious International Headquarters (IHQ) Award for its dedication to growing its Singapore-based business.
The ribbon-cutting and award presentation ceremony was officiated by S Iswaran, Minister for Trade and Industry.
The ribbon-cutting and award presentation ceremony was officiated by S Iswaran, Minister for Trade and Industry.
DRIVEN BY EXCELLENCE
Back in December 2006, Black & Veatch had already announced its intentions to establish its Singapore office as a key node for its global water infrastructure business. "We're pleased to receive this award in recognition of our development plans, which will see Black & Veatch's Singapore office expand significantly over the next five years," says Dan McCarthy, President and CEO, Black & Veatch's global water business. "These five-year plans include doubling the number of our professionals in Singapore, as well as investing in a Global Design Centre and establishing a Centre of Excellence for Desalination."
McCarthy also praised the Singapore office for its competency in "implementing world-class engineering projects", which has proved valuable to the company's global clients. "The Global Design Centre will help us to apply our broad project expertise to further ensure we can continue to provide our clients with global solutions to their local challenges," explains McCarthy. "The Centre of Excellence in desalination will focus on optimising the performance of plants and enhancing membrane life."
To meet the need for higher-skilled professionals during this crucial expansion phase, McCarthy also renewed the company’s commitment to continue bringing in world-class practice and technology leaders to impart advanced training in key water competencies to the local office. "There is excellent talent in Singapore," affirms Ralph Eberts, Managing Director, Black & Veatch's Asia-Pacific water business. "It is our plan that the Singapore office will play a larger role in our major projects. We will continue to strengthen our technical knowledge and management capacity. By opening a Global Design Centre here, we will be able to attract more Singapore-based professionals who want to work on exciting global and leading-edge projects."
Jonathan Clement and Dr Terry Johnson, Black & Veatch, together with Khoo Teng Chye, Chief Executive, PUB, listening to S Iswaran. Flanking him, on his right, is Ralph Eberts and Amy Shanker is on his left.
Jonathan Clement and Dr Terry Johnson, Black & Veatch, together with Khoo Teng Chye, Chief Executive, PUB, listening to S Iswaran. Flanking him, on his right, is Ralph Eberts and Amy Shanker is on his left.
TURNING TIDES WITH TALENT
Singapore is on track to attain its vision of becoming a Global Hydrohub by 2015. Already, the Republic has a dedicated Environment & Water Industry Development Council (EWI), and it comprises key government agencies such as EDB and PUB. EWI has been given a budget of S$330 million (US$ 215.6 million) over the next five years as part of the government's plans to further develop the sector. In January 2007, a Technology Pioneer scheme was announced to encourage the early adoption of new locally-produced environment and water technologies. EWI also declared that more programmes and initiatives would be rolled out in the first quarter of the year to "encourage R&D in water technologies, the seeding and realisation of newly-developed technologies and expedite the movement of new and innovative technologies from laboratories into the commercial world".
Not surprisingly, Black & Veatch's IHQ Award and Global Design Centre opening ceremony was an opportune time for yet another pertinent industry announcement - S Iswaran, Minister of State for Trade & Industry, announced that S$60 million (US$39.2 million) from the existing S$330 million (US$215.6 million) reserves will be allocated to fund world-class water research centres. "Anchored by leading institutions in the field of water technology, these centres will undertake cutting edge research and, in turn, train critical postgraduate manpower for our water industry," elaborates Iswaran.
No doubt, training of talent is the way to go to bring Singapore's water sector to greater heights. With the dedicated support of organisations such as Black & Veatch, Singapore's plans to establish itself as a Global Hydrohub looks more than likely to succeed in the near future.
Jurong Rock Cavern Cements Singapore's Position As Regional Petrochemicals Hub
Jurong Rock Cavern Cements Singapore's Position As Regional Petrochemicals Hub
Date: 01/04/2007
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The first of its kind in the region, the facility is a milestone project for JTC Corporation and a boost to the nation's petrochemicals industry.
"Bold" and "innovative" - these are just two adjectives used to describe JTC Corporation's (JTC) latest undertaking. Hitting the mark is the Jurong Rock Cavern (JRC) project, Singapore's first underground rock cavern for hydrocarbon storage. And tunnelling works are on the way, with Lim Hng Kiang, Minister for Trade and Industry, witnessing the groundbreaking ceremony in February 2007.
MAXIMISING SPACE AND SAFETY
Appointed by the government, who invested S$700 million (US$457.3 million) to kick-start the entire project, JTC took the opportunity to unveil some of the key features of this storage facility during the ceremony. Primarily, the multi-million JRC facility, located at Banyan LogisPark on Jurong Island, will be built at subterranean depths (essentially beneath seabed level of the Banyan Basin). This is especially crucial for it enhances safety and security on the island, a vital factor for the Republic's chemicals industry. Furthermore, it frees up approximately 60 ha of surface land for higher value manufacturing operations, another critical advantage for a land-scarce nation.
Phase One of the construction has begun, and it is expected to provide a storage capacity of approximately 1.47 million cubic m for liquid hydrocarbons such as crude oil, condensate, naptha and gasoil.
"The underground rock cavern project is a multi-million dollar infrastructure development to support Singapore's chemicals industry," says Soo Kok Leng, Chairman, JTC. "The development of the underground hydrocarbon storage cavern at Jurong Island is a strategic project that will further enhance the cluster concept and bring even more benefits to Jurong Island companies."
Although still in its early stages, JRC holds great potential and there is already strong interest from the industry to utilise this facility. Phase One is expected to be completely taken up upon its completion starting from 2010. Due to high demand, JTC is looking into Phase Two of the JRC, which could potentially provide an additional 1.3 million cubic m of hydrocarbon storage space.
And it is this intrepid sense and ambitious attitude that was lauded by Minister Lim during his speech. "Turning Jurong Rock Cavern into reality took years of hard work, imagination and perseverance by many parties both within and outside the government. But it is the spirit of constant innovation and breaking new ground that will ensure that Singapore retains her ability to compete in this fast changing and dynamic competitive environment," says Lim.
ROAD TO SUCCESS
Currently, the chemicals industry in Singapore is experiencing an unprecedented level of high growth. Singapore has established its status as the world's third largest refining centre and Jurong Island is home to more than 80 companies in the petroleum refining, petrochemicals, specialty chemicals and manufacturing business, with total gross investments exceeding S$26 billion (US$17.0 billion).
In fact, based on 2006's figures alone, the industry saw more than S$2.6 billion (US$1.7 billion) in fixed asset investments committed, with more projects streaming in steadily. And some of these developments include Concord Refinery's decision to establish Singapore's first green-field refinery and Sumitomo Chemical's second methyl methacrylate monomer plant commencing its operations.
With all these projects starting to take root, coupled with the development of JRC, Lim is optimistic that the "future of Singapore's chemicals cluster is bright". And so it appears, with the minister promising continued support from the government to ensure the industry’s "continued growth".
Date: 01/04/2007
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The first of its kind in the region, the facility is a milestone project for JTC Corporation and a boost to the nation's petrochemicals industry.
"Bold" and "innovative" - these are just two adjectives used to describe JTC Corporation's (JTC) latest undertaking. Hitting the mark is the Jurong Rock Cavern (JRC) project, Singapore's first underground rock cavern for hydrocarbon storage. And tunnelling works are on the way, with Lim Hng Kiang, Minister for Trade and Industry, witnessing the groundbreaking ceremony in February 2007.
MAXIMISING SPACE AND SAFETY
Appointed by the government, who invested S$700 million (US$457.3 million) to kick-start the entire project, JTC took the opportunity to unveil some of the key features of this storage facility during the ceremony. Primarily, the multi-million JRC facility, located at Banyan LogisPark on Jurong Island, will be built at subterranean depths (essentially beneath seabed level of the Banyan Basin). This is especially crucial for it enhances safety and security on the island, a vital factor for the Republic's chemicals industry. Furthermore, it frees up approximately 60 ha of surface land for higher value manufacturing operations, another critical advantage for a land-scarce nation.
Phase One of the construction has begun, and it is expected to provide a storage capacity of approximately 1.47 million cubic m for liquid hydrocarbons such as crude oil, condensate, naptha and gasoil.
"The underground rock cavern project is a multi-million dollar infrastructure development to support Singapore's chemicals industry," says Soo Kok Leng, Chairman, JTC. "The development of the underground hydrocarbon storage cavern at Jurong Island is a strategic project that will further enhance the cluster concept and bring even more benefits to Jurong Island companies."
Although still in its early stages, JRC holds great potential and there is already strong interest from the industry to utilise this facility. Phase One is expected to be completely taken up upon its completion starting from 2010. Due to high demand, JTC is looking into Phase Two of the JRC, which could potentially provide an additional 1.3 million cubic m of hydrocarbon storage space.
And it is this intrepid sense and ambitious attitude that was lauded by Minister Lim during his speech. "Turning Jurong Rock Cavern into reality took years of hard work, imagination and perseverance by many parties both within and outside the government. But it is the spirit of constant innovation and breaking new ground that will ensure that Singapore retains her ability to compete in this fast changing and dynamic competitive environment," says Lim.
ROAD TO SUCCESS
Currently, the chemicals industry in Singapore is experiencing an unprecedented level of high growth. Singapore has established its status as the world's third largest refining centre and Jurong Island is home to more than 80 companies in the petroleum refining, petrochemicals, specialty chemicals and manufacturing business, with total gross investments exceeding S$26 billion (US$17.0 billion).
In fact, based on 2006's figures alone, the industry saw more than S$2.6 billion (US$1.7 billion) in fixed asset investments committed, with more projects streaming in steadily. And some of these developments include Concord Refinery's decision to establish Singapore's first green-field refinery and Sumitomo Chemical's second methyl methacrylate monomer plant commencing its operations.
With all these projects starting to take root, coupled with the development of JRC, Lim is optimistic that the "future of Singapore's chemicals cluster is bright". And so it appears, with the minister promising continued support from the government to ensure the industry’s "continued growth".
New Initiative To Introduce Biodiesel For Cars Unveiled
New Initiative To Introduce Biodiesel For Cars Unveiled
Date: 01/04/2007
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Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
The project, expected to take place over the next two years, is aimed at establishing greater understanding of the use of Palm Oil Methyl Esters (POME) as a motor fuel in Southeast Asia's climate. This is achieved by powering 15 diesel cars with a blend of 95 per cent ultra-low sulphur diesel and five per cent POME, fitting them with diesel particulate filters and collating their emission and fuel consumption data for evaluation.
The nine-member group's overall project coordinator is Robert Bosch (SEA) Pte Ltd. Together with government agencies such as Singapore Economic Development Board (EDB) and National Environment Agency (NEA), this inaugural project highlights the nation's efforts to develop and testbed energy solutions from renewable sources.
Date: 01/04/2007
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Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
Singapore's first biodiesel testbedding project takes off, as nine private organisations have joined forces with government agencies to kickstart this initiative, upon signing a Memorandum of Understanding late 2006.
The project, expected to take place over the next two years, is aimed at establishing greater understanding of the use of Palm Oil Methyl Esters (POME) as a motor fuel in Southeast Asia's climate. This is achieved by powering 15 diesel cars with a blend of 95 per cent ultra-low sulphur diesel and five per cent POME, fitting them with diesel particulate filters and collating their emission and fuel consumption data for evaluation.
The nine-member group's overall project coordinator is Robert Bosch (SEA) Pte Ltd. Together with government agencies such as Singapore Economic Development Board (EDB) and National Environment Agency (NEA), this inaugural project highlights the nation's efforts to develop and testbed energy solutions from renewable sources.
DigiPen To Boost Local Digital Media Industry With First Overseas Campus In Singapore
DigiPen To Boost Local Digital Media Industry With First Overseas Campus In Singapore
Date: 01/04/2007
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The US-based computer animation and programming school's Asian campus will get S$3.3 million in funding, with R&D in curriculum and software development as part of education initiative.
The US-based computer animation and programming school's Asian campus will get S$3.3 million in funding, with R&D in curriculum and software development as part of education initiative.
DigiPen Institute of Technology is a renowned, leading educational institution specialising in computer graphics and computer simulation that offers degree programnes in computer science, computer engineering and fine arts related to the field of digital interactive simulation and entertainment. Based in Redmond near Seattle, Washington in the US, the school, in the words of Claude Comair, CEO of DigiPen, "was borne from the industry and any academic bureaucracy" - and that "industry" was computer simulation, 3D computer animation, computer and video games.
To foster this industry in Singapore, DigiPen announced in February 2007 that it will set up an Asian campus in Singapore - the school's first and only campus outside of the US, representing the first institution in the Republic to offer specialised degree-level courses for game development.
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development.
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development.
INDUSTRY MILESTONE
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development. It intends to begin classes later this year in September with about 30 students; a number similar to the inaugural class at the U.S. campus back in 1998, which currently has an enrolment of about 900 students. DigiPen Singapore plans to increase enrolment by 100 to 150 students per year, and by 2016, anticipates an enrolment of about 1,000 students.
The campus will be housed at PIXEL (Place of Interaction, eXchange, Education and Learning) @ one-north, an education facility that will cluster related and specialised institutions to create synergies with the digital media industries in the nearby Fusionopolis.
And the time is right for such a school, believes Lai Yeow Hin, Director of Education Services, Singapore Economic Development Board (EDB), as the popularity of gaming has spread like wild fire. Lai also foresees a demand for stories with a blend of Eastern and Western elements that Singapore can meet. In fact, S$3.3 million (US$2.2 million) has been set aside for the Asian campus, which will also focus on R&D work in curriculum and software development.
For DigiPen, Singapore's strict regulation of intellectual property laws was a key draw. "When someone brings in a production studio to Singapore, they can feel confident that their intellectual property is being protected and will not be copied easily," says Jason Chu, Chief Operating Officer, DigiPen Singapore. "The environment is more conducive and more production studios will be opening here. That translates to more placement opportunities for our graduates."
Ultimately, by attracting the world's best students, and fostering creativity and diversity in the process, DigiPen Singapore's presence will boost the Republic's status as a global education hub.
Date: 01/04/2007
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The US-based computer animation and programming school's Asian campus will get S$3.3 million in funding, with R&D in curriculum and software development as part of education initiative.
The US-based computer animation and programming school's Asian campus will get S$3.3 million in funding, with R&D in curriculum and software development as part of education initiative.
DigiPen Institute of Technology is a renowned, leading educational institution specialising in computer graphics and computer simulation that offers degree programnes in computer science, computer engineering and fine arts related to the field of digital interactive simulation and entertainment. Based in Redmond near Seattle, Washington in the US, the school, in the words of Claude Comair, CEO of DigiPen, "was borne from the industry and any academic bureaucracy" - and that "industry" was computer simulation, 3D computer animation, computer and video games.
To foster this industry in Singapore, DigiPen announced in February 2007 that it will set up an Asian campus in Singapore - the school's first and only campus outside of the US, representing the first institution in the Republic to offer specialised degree-level courses for game development.
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development.
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development.
INDUSTRY MILESTONE
The S$19.9 million (US$13 million) DigiPen Singapore's campus will offer undergraduate and postgraduate degree courses in 3D animation, real-time interactive simulation and games development. It intends to begin classes later this year in September with about 30 students; a number similar to the inaugural class at the U.S. campus back in 1998, which currently has an enrolment of about 900 students. DigiPen Singapore plans to increase enrolment by 100 to 150 students per year, and by 2016, anticipates an enrolment of about 1,000 students.
The campus will be housed at PIXEL (Place of Interaction, eXchange, Education and Learning) @ one-north, an education facility that will cluster related and specialised institutions to create synergies with the digital media industries in the nearby Fusionopolis.
And the time is right for such a school, believes Lai Yeow Hin, Director of Education Services, Singapore Economic Development Board (EDB), as the popularity of gaming has spread like wild fire. Lai also foresees a demand for stories with a blend of Eastern and Western elements that Singapore can meet. In fact, S$3.3 million (US$2.2 million) has been set aside for the Asian campus, which will also focus on R&D work in curriculum and software development.
For DigiPen, Singapore's strict regulation of intellectual property laws was a key draw. "When someone brings in a production studio to Singapore, they can feel confident that their intellectual property is being protected and will not be copied easily," says Jason Chu, Chief Operating Officer, DigiPen Singapore. "The environment is more conducive and more production studios will be opening here. That translates to more placement opportunities for our graduates."
Ultimately, by attracting the world's best students, and fostering creativity and diversity in the process, DigiPen Singapore's presence will boost the Republic's status as a global education hub.
International Academic Publisher SAGE Establishes Asia-Pacific HQ
International Academic Publisher SAGE Establishes Asia-Pacific HQ
Date: 01/04/2007
Singapore's publishing industry received a major boost with established academic publisher SAGE setting up its Asia-Pacific HQ here. With this move, the company, which publishes over 450 academic journals and over 500 new book titles a year, is well poised to manage and further expand its key markets in the region.
Highlighting the strategic importance of Asia, Stephen Barr, Managing Director, SAGE London, says, "Within Asia, the major players in scientific, technical and medical research are Japan, China, India, South Korea and Taiwan. We believe at SAGE that Singapore can provide a strategically important regional headquarters for our plan."
Singapore's thriving biomedical industry and ability to attract world-class universities are also major pluses. "The STM (scientific, technical and medical) market is an enormous business opportunity for SAGE, and central to our development over the next decade. We are very keen to interact with the bio-medical sciences community, which we know is so active here in Singapore," says Blaise Simqu, Chief Executive, SAGE Publications.
Date: 01/04/2007
Singapore's publishing industry received a major boost with established academic publisher SAGE setting up its Asia-Pacific HQ here. With this move, the company, which publishes over 450 academic journals and over 500 new book titles a year, is well poised to manage and further expand its key markets in the region.
Highlighting the strategic importance of Asia, Stephen Barr, Managing Director, SAGE London, says, "Within Asia, the major players in scientific, technical and medical research are Japan, China, India, South Korea and Taiwan. We believe at SAGE that Singapore can provide a strategically important regional headquarters for our plan."
Singapore's thriving biomedical industry and ability to attract world-class universities are also major pluses. "The STM (scientific, technical and medical) market is an enormous business opportunity for SAGE, and central to our development over the next decade. We are very keen to interact with the bio-medical sciences community, which we know is so active here in Singapore," says Blaise Simqu, Chief Executive, SAGE Publications.
MRCB said to have go-ahead for RM1b Johor project
MRCB said to have go-ahead for RM1b Johor project
KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is understood to have obtained approval from the Government to commence with the RM1bil-rated Eastern Dispersal Link (EDL) in Johor.
The project, which would connect the North-South Expressway to the Iskandar Development Region (IDR) and the Johor Baru city centre, would not only lift its order book closer to RM3bil but also future earnings.
Prior to the EDL job, MRCB had a construction order book of around RM2bil and among its headline key performance indicators were that it wanted to replenish its order book annually to the tune of RM1.5bil.
A broker's report said the EDL would increase MRCB's recurring income base from concession earnings and estimated that MRCB would recognise about RM25mil in construction profits in building the EDL before toll charges start in 2010.
The report estimated that MRCB's earnings would be boosted to RM100.2mil, or 12.5 sen a share, for its 2007 financial year. Earnings per share were forecast to rise to 14.2 sen in 2008 and 15.7 sen in 2009.
It also estimated that the revised net asset value of MRCB would rise to RM3.47 a share from RM3.39 a share currently.
MRCB's order book has been expanding over the years as its 30% stake in the RM1.2bil Duta-Ulu Kelang Expressway (Duke) has bumped up the group's order book.
Once completed, toll concessions at Duke will provide MRCB a stable income stream.
Toll concessions are just part of what MRCB is eyeing.
The company is said to be keenly bidding for the Bakun power transmission job, which would dramatically alter the company's order book.
The Bakun project comprises two parts – the undersea cable portion valued at RM6bil and the overhead transmission lines worth RM3bil.
Apart from benefiting MRCB, the EDL is seen as a lift to property values in Johor Baru-IDR as land values in surrounding areas should increase with the highway.
The broker felt that Tebrau Teguh Bhd's water-front landbank of 1,012 acres should see higher values given its location between Tebrau and Johor Baru, where the EDL passes.
KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is understood to have obtained approval from the Government to commence with the RM1bil-rated Eastern Dispersal Link (EDL) in Johor.
The project, which would connect the North-South Expressway to the Iskandar Development Region (IDR) and the Johor Baru city centre, would not only lift its order book closer to RM3bil but also future earnings.
Prior to the EDL job, MRCB had a construction order book of around RM2bil and among its headline key performance indicators were that it wanted to replenish its order book annually to the tune of RM1.5bil.
A broker's report said the EDL would increase MRCB's recurring income base from concession earnings and estimated that MRCB would recognise about RM25mil in construction profits in building the EDL before toll charges start in 2010.
The report estimated that MRCB's earnings would be boosted to RM100.2mil, or 12.5 sen a share, for its 2007 financial year. Earnings per share were forecast to rise to 14.2 sen in 2008 and 15.7 sen in 2009.
It also estimated that the revised net asset value of MRCB would rise to RM3.47 a share from RM3.39 a share currently.
MRCB's order book has been expanding over the years as its 30% stake in the RM1.2bil Duta-Ulu Kelang Expressway (Duke) has bumped up the group's order book.
Once completed, toll concessions at Duke will provide MRCB a stable income stream.
Toll concessions are just part of what MRCB is eyeing.
The company is said to be keenly bidding for the Bakun power transmission job, which would dramatically alter the company's order book.
The Bakun project comprises two parts – the undersea cable portion valued at RM6bil and the overhead transmission lines worth RM3bil.
Apart from benefiting MRCB, the EDL is seen as a lift to property values in Johor Baru-IDR as land values in surrounding areas should increase with the highway.
The broker felt that Tebrau Teguh Bhd's water-front landbank of 1,012 acres should see higher values given its location between Tebrau and Johor Baru, where the EDL passes.
AIG arm in talks to buy 15% in B’lore realty co
AIG arm in talks to buy 15% in B’lore realty co
RADHIKA BHALLA & MAYUR SHEKHAR JHA
TIMES NEWS NETWORK[ MONDAY, APRIL 02, 2007 12:47:30 AM]
NEW DELHI: The Private equity investment arm of AIG is learnt to be in advanced stages of negotiations for acquiring close to 14-15% stake in Bangalore-based real estate firm RMZ, for about $350 million. The companies are likely to give finishing touches to the deal and make a formal announcement shortly. This would be one of the largest private equity deals in the Indian real estate sector.
“The contract has not been signed yet. Hence, we cannot confirm the figures. A formal announcement will be made mid-week,” an AIG spokesperson said, but refused to confirm the value of the deal.
“We may be diluting a significant equity. But it will not be possible to share the exact financial details. We cannot disclose the name of the investor,” said an RMZ official. Sources say all necessary formalities for the deal have been completed, the only deterrent being valuation, one of the most recurring problems in case of deals involving unlisted players.
“There are some minor problems that RMZ has over the valuation, which will hopefully be sorted out,” a source in RMZ said. Investment banking sources in the know of the deal have said the estimated value of the deal is close to $350 million. However, a senior official in AIG refused to confirm the value of the deal.
In the past 10-12 months, the real estate sector in India has seen a slew of private equity investments. The Shapoorji Pallonji Group has been in talks with some PE investors, including Government of Singapore Investment Corporation (GIC), Dubai Capital and Abu Dhabi Investment Authority (ADIA), for raising about $400 million. Recently, Morgan Stanley invested about $152 million in Oberoi Constructions and JP Morgan invested $100 million in Emaar-MGF.
Not all potential deals, however, attain financial closure. Around 7-8 much-talked about PE deals in the last one year could finally not fructify on issues of valuation, which have been a major reason of discord between real estate companies and PE players. Last year, in an interview on the Indian real estate sector, Starwood Capital Group CEO Barry Sternlicht said, “You have to make sure you actually own things.
We had a much larger deal under contract and we couldn’t close it because of a fiduciary commitment to our investors which are the US Pension Fund, HNIs and corporate funds. The titles were too opaque.”
RADHIKA BHALLA & MAYUR SHEKHAR JHA
TIMES NEWS NETWORK[ MONDAY, APRIL 02, 2007 12:47:30 AM]
NEW DELHI: The Private equity investment arm of AIG is learnt to be in advanced stages of negotiations for acquiring close to 14-15% stake in Bangalore-based real estate firm RMZ, for about $350 million. The companies are likely to give finishing touches to the deal and make a formal announcement shortly. This would be one of the largest private equity deals in the Indian real estate sector.
“The contract has not been signed yet. Hence, we cannot confirm the figures. A formal announcement will be made mid-week,” an AIG spokesperson said, but refused to confirm the value of the deal.
“We may be diluting a significant equity. But it will not be possible to share the exact financial details. We cannot disclose the name of the investor,” said an RMZ official. Sources say all necessary formalities for the deal have been completed, the only deterrent being valuation, one of the most recurring problems in case of deals involving unlisted players.
“There are some minor problems that RMZ has over the valuation, which will hopefully be sorted out,” a source in RMZ said. Investment banking sources in the know of the deal have said the estimated value of the deal is close to $350 million. However, a senior official in AIG refused to confirm the value of the deal.
In the past 10-12 months, the real estate sector in India has seen a slew of private equity investments. The Shapoorji Pallonji Group has been in talks with some PE investors, including Government of Singapore Investment Corporation (GIC), Dubai Capital and Abu Dhabi Investment Authority (ADIA), for raising about $400 million. Recently, Morgan Stanley invested about $152 million in Oberoi Constructions and JP Morgan invested $100 million in Emaar-MGF.
Not all potential deals, however, attain financial closure. Around 7-8 much-talked about PE deals in the last one year could finally not fructify on issues of valuation, which have been a major reason of discord between real estate companies and PE players. Last year, in an interview on the Indian real estate sector, Starwood Capital Group CEO Barry Sternlicht said, “You have to make sure you actually own things.
We had a much larger deal under contract and we couldn’t close it because of a fiduciary commitment to our investors which are the US Pension Fund, HNIs and corporate funds. The titles were too opaque.”
Investors back Lai Fung bond debut
Investors back Lai Fung bond debut
By Rosie Slater | 2 April 2007
Lai Fung issues the first China real-estate deal since the recent stockmarket turbulence.
Lai Fung Holdings, the China property arm of the Lai Sun Group, issued a debut fixed-rate $200 million seven-year bullet bond via joint bookrunners HSBC and Deutsche Bank on Friday. The deal marked the first China real-estate transaction since the recent stockmarket turbulence.
The B+/B1-rated, Reg S-bond priced at par at 9.125%, attracting just under $1.5 billion of demand, 85% of which came in at the tight end of the 9.125%-9.375% guidance range. In a similar strategy to the Korean Development Bank and Kexim, Lai Fung assured investors the bond would price within that range. “This is a pretty punchy strategy for a debut issuer, which takes encouragement and understanding,” comments one source.
For comparison, Shanghai Real Estate’s 2013 seven-year issue is currently yielding 8.94%. Lai Fung arguably priced just inside the implied yield of a new Shanghai Real Estate seven-year issue, calculated at 9.25%-9.375%. advertisement
“CapitaLand’s 20% strategic shareholding in the group, and Lai Sun’s sound management experience in the Hong Kong market, played a key role in the success of the bond,” says a source. CapitaLand, one of the largest real estate companies in Asia, is 40%-owned by Temasek Holdings, the Singapore government's investment fund.
Moreover, Lai Fung owns two flagship investment properties (the Hong Kong Plaza in Shanghai and the Mayflower Plaza in Guangzhou), a recurring income generating roughly 22% of its revenues.
“The challenge with this company was its size. Lai Fung only owns 1.3 million sqm of landbank, compared to Shanghai Real Estate’s 2.3 million, and Hopson, Agile and Greentown’s 8-12 million. However, Lai Fung has proven that it is as good as any domestic company in terms of its access to a good, fairly-priced landbank, and appropriate regulatory approvals for its activities.”
The property developer’s debt-to-capital ratio (36% compared to Shanghai Real Estate’s 56%) offset its relatively high gearing ratio. Covenants include a fixed-charge coverage ratio of two times, stepping up to 3.25 times after three years.
The deal attracted 133 investors. 65% of the bonds were sold to Asia (37% to Singapore, and 17% to Hong Kong), 27% to the UK, 13% to CEMEA and 6% to the US. 58% of the bonds were allocated to funds, 17% to banks, 14% to retail, and 13% to insurance and pension funds.
Initially scheduled this week, the deal looked in good enough shape to price on Friday. After 25 meetings in Hong Kong and Singapore, Lai Fung accelerated the roadshow by pitching to London through video conference and one-to-one calls.
Copyright FinanceAsia.com Ltd., a subsidiary of Haymarket Media Ltd
By Rosie Slater | 2 April 2007
Lai Fung issues the first China real-estate deal since the recent stockmarket turbulence.
Lai Fung Holdings, the China property arm of the Lai Sun Group, issued a debut fixed-rate $200 million seven-year bullet bond via joint bookrunners HSBC and Deutsche Bank on Friday. The deal marked the first China real-estate transaction since the recent stockmarket turbulence.
The B+/B1-rated, Reg S-bond priced at par at 9.125%, attracting just under $1.5 billion of demand, 85% of which came in at the tight end of the 9.125%-9.375% guidance range. In a similar strategy to the Korean Development Bank and Kexim, Lai Fung assured investors the bond would price within that range. “This is a pretty punchy strategy for a debut issuer, which takes encouragement and understanding,” comments one source.
For comparison, Shanghai Real Estate’s 2013 seven-year issue is currently yielding 8.94%. Lai Fung arguably priced just inside the implied yield of a new Shanghai Real Estate seven-year issue, calculated at 9.25%-9.375%. advertisement
“CapitaLand’s 20% strategic shareholding in the group, and Lai Sun’s sound management experience in the Hong Kong market, played a key role in the success of the bond,” says a source. CapitaLand, one of the largest real estate companies in Asia, is 40%-owned by Temasek Holdings, the Singapore government's investment fund.
Moreover, Lai Fung owns two flagship investment properties (the Hong Kong Plaza in Shanghai and the Mayflower Plaza in Guangzhou), a recurring income generating roughly 22% of its revenues.
“The challenge with this company was its size. Lai Fung only owns 1.3 million sqm of landbank, compared to Shanghai Real Estate’s 2.3 million, and Hopson, Agile and Greentown’s 8-12 million. However, Lai Fung has proven that it is as good as any domestic company in terms of its access to a good, fairly-priced landbank, and appropriate regulatory approvals for its activities.”
The property developer’s debt-to-capital ratio (36% compared to Shanghai Real Estate’s 56%) offset its relatively high gearing ratio. Covenants include a fixed-charge coverage ratio of two times, stepping up to 3.25 times after three years.
The deal attracted 133 investors. 65% of the bonds were sold to Asia (37% to Singapore, and 17% to Hong Kong), 27% to the UK, 13% to CEMEA and 6% to the US. 58% of the bonds were allocated to funds, 17% to banks, 14% to retail, and 13% to insurance and pension funds.
Initially scheduled this week, the deal looked in good enough shape to price on Friday. After 25 meetings in Hong Kong and Singapore, Lai Fung accelerated the roadshow by pitching to London through video conference and one-to-one calls.
Copyright FinanceAsia.com Ltd., a subsidiary of Haymarket Media Ltd
Singapore’s Q1 home prices rise 4.6%
Singapore home prices rose 4.6 per cent in the first three months of the year, climbing the 12th quarter in a row, the government real estate agency said on Monday.
The Urban Redevelopment Authority (URA) said its initial estimate of the price index for private residential homes rose to 136.2 points for the January-March period, from 130.2 in the previous three-month period.
The first-quarter gain follows a 3.8 per cent rise in the last three months of 2006.
The index rose 9.8 per cent across the island republic for the whole of last year.
Singapore’s property sector recovery gained momentum after the government introduced measures in July 2005 to ease real-estate financing rules and foreign investment.
Last month, CapitaLand and its Hong Kong partner Sun Hung Kai Properties said they had set a new pricing benchmark for Singapore residential property by selling some units in their downtown development for more than $4,000 (US$2,639) per square foot.
The advance estimate is compiled from transaction prices lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units booked. The URA will release the official price index on April 27.
Source: The Business Times, 02 April 2007
The Urban Redevelopment Authority (URA) said its initial estimate of the price index for private residential homes rose to 136.2 points for the January-March period, from 130.2 in the previous three-month period.
The first-quarter gain follows a 3.8 per cent rise in the last three months of 2006.
The index rose 9.8 per cent across the island republic for the whole of last year.
Singapore’s property sector recovery gained momentum after the government introduced measures in July 2005 to ease real-estate financing rules and foreign investment.
Last month, CapitaLand and its Hong Kong partner Sun Hung Kai Properties said they had set a new pricing benchmark for Singapore residential property by selling some units in their downtown development for more than $4,000 (US$2,639) per square foot.
The advance estimate is compiled from transaction prices lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units booked. The URA will release the official price index on April 27.
Source: The Business Times, 02 April 2007
Sneak Peek Inside S’pore’s Most Luxurious Penthouse
WANT TO BUY? BID FOR IT
11,000sq ft penthouse packs in space, prestige, facilities and an astounding view in bid to woo super-rich
Imagine a posh bungalow that is perched high in the sky.
That would be an apt description for what may become Singapore’s most expensive penthouse.
Boasting built-up space of 11,000 sq ft, it is bigger than many landed homes here.
It takes up three levels - from the 39th to 41st storeys - at Reflections, a waterside residence at Keppel Bay.
The master bedroom alone - which has its own landscaped terrace - occupies one floor and is larger than a typical five-room flat.
There are five other sprawling rooms that may be used as bedrooms, a gym, cigar bar, wine cellar… the sky is truly the limit.
And if the luxurious interiors are not enough to floor you, the view definitely will.
The city’s picturesque skyline - including the bright lights of the Genting’s upcoming Resorts World at Sentosa - make for a stunning backdrop.
Developer Keppel Land will not quote a fixed price for this super-penthouse. A spokesman said: ‘For the Marina Bay Residences, $27m was the starting point of the sale price of a three-storey super-penthouse last December. There was more than one potential buyer, with competing bids.
‘For Reflections, if there is more than one interested party, it would go into a tender process.’
The spokesman said that there has been strong interest from potential buyers, but declined to release exact figures ahead of the launch next week.
Keppel Land is confident that Reflections’ penthouses will be a hit, judging from the overwhelming response to Marina Bay.
Reflections also offers 34 double-storey penthouses, ranging between 3,600 sq ft and 8,200 sq ft in area.
Each could cost at least $5m, based on the market rate of between $1,500 and $2,000psf.
And that would be considered ‘cheap’ amid the ongoing rush for high-end properties.
Reflections joins the ranks of uber-penthouses, like CapitaLand and Sun Hung Kai Properties’ The Orchard Residences and CapitaLand’s The Seafront @ Meyer, that are priced at more than $4,000 psf and $2,200 psf respectively.
At The Orchard Residences, one local buyer reportedly paid $17m for a 53rd-storey penthouse.
And, last May, SC Global sold the 7,000 sq ft penthouse at the swish The Boulevard Residence for $16m.
On average, foreigners make up between 20 and 40 per cent of buyers, property observers said.
The strong demand for penthouses is driven by the recovery of the luxury housing market, Associate Professor Sing Tien Foo said.
Assoc Prof Sing, from the National University of Singapore’s Department of Real Estate, told The New Paper on Sunday: ‘The supply of penthouses in Singapore is limited, creating scarcity value of those in prime locations.
‘The demand also comes from foreign investors who see super-penthouses as a status symbol.’
Property experts said that attracting high-networth buyers also adds to the perceived value of a property.
Sentosa Cove, for instance, is seen as a playground for the rich, just as London’s Kensington Palace Gardens - home to celebrities and dignitaries - is dubbed Billionaires’ Row.
The rich care who their neighbours are, observed Mr Jonathan Miller, president of Miller Samuel, a New York-based real estate firm.
New York is world’s penthouse capital, while other swank addresses include London. (See report at right.)
So how do Singapore’s super-penthouses stack up?
Mr Joseph Tan, director of residential housing at CB Richard Ellis, said: ‘Singapore is still in its infancy if you compare the penthouses in London, New York and Hong Kong.
‘The market in Singapore has not reached the ultimate luxe status - yet.
‘But we are already attracting a growing number of affluent foreigners because the penthouses are cheaper here than those in the US and UK. For what we offer, our penthouses are seen as good value and a good investment.’
According to the 2006 International Residential Review by Knight Frank, the world’s prime residential markets - including London, Paris, Sydney and Phuket - saw strong growth in 2005. The company also believes that buyers from the growing economies, like China and the US, will increasingly look for real estate abroad.
Apart from a panoramic view, location is still key. Mr Vincent Chong, associate director of Colliers International, noted that other factors include architecture and facilities.
Besides designer fittings, Keppel has upped the luxe quotient at Reflections by offering homeowners a 10-year free membership at the Marina at Keppel Bay on Keppel Island.
Its facilities include a clubhouse, gourmet restaurants, a spa and charter services to the neighbouring islands.
And who knows? Developers may throw in VIP access to the IRs in the future.
Source: The New Paper, 02 April 2007
11,000sq ft penthouse packs in space, prestige, facilities and an astounding view in bid to woo super-rich
Imagine a posh bungalow that is perched high in the sky.
That would be an apt description for what may become Singapore’s most expensive penthouse.
Boasting built-up space of 11,000 sq ft, it is bigger than many landed homes here.
It takes up three levels - from the 39th to 41st storeys - at Reflections, a waterside residence at Keppel Bay.
The master bedroom alone - which has its own landscaped terrace - occupies one floor and is larger than a typical five-room flat.
There are five other sprawling rooms that may be used as bedrooms, a gym, cigar bar, wine cellar… the sky is truly the limit.
And if the luxurious interiors are not enough to floor you, the view definitely will.
The city’s picturesque skyline - including the bright lights of the Genting’s upcoming Resorts World at Sentosa - make for a stunning backdrop.
Developer Keppel Land will not quote a fixed price for this super-penthouse. A spokesman said: ‘For the Marina Bay Residences, $27m was the starting point of the sale price of a three-storey super-penthouse last December. There was more than one potential buyer, with competing bids.
‘For Reflections, if there is more than one interested party, it would go into a tender process.’
The spokesman said that there has been strong interest from potential buyers, but declined to release exact figures ahead of the launch next week.
Keppel Land is confident that Reflections’ penthouses will be a hit, judging from the overwhelming response to Marina Bay.
Reflections also offers 34 double-storey penthouses, ranging between 3,600 sq ft and 8,200 sq ft in area.
Each could cost at least $5m, based on the market rate of between $1,500 and $2,000psf.
And that would be considered ‘cheap’ amid the ongoing rush for high-end properties.
Reflections joins the ranks of uber-penthouses, like CapitaLand and Sun Hung Kai Properties’ The Orchard Residences and CapitaLand’s The Seafront @ Meyer, that are priced at more than $4,000 psf and $2,200 psf respectively.
At The Orchard Residences, one local buyer reportedly paid $17m for a 53rd-storey penthouse.
And, last May, SC Global sold the 7,000 sq ft penthouse at the swish The Boulevard Residence for $16m.
On average, foreigners make up between 20 and 40 per cent of buyers, property observers said.
The strong demand for penthouses is driven by the recovery of the luxury housing market, Associate Professor Sing Tien Foo said.
Assoc Prof Sing, from the National University of Singapore’s Department of Real Estate, told The New Paper on Sunday: ‘The supply of penthouses in Singapore is limited, creating scarcity value of those in prime locations.
‘The demand also comes from foreign investors who see super-penthouses as a status symbol.’
Property experts said that attracting high-networth buyers also adds to the perceived value of a property.
Sentosa Cove, for instance, is seen as a playground for the rich, just as London’s Kensington Palace Gardens - home to celebrities and dignitaries - is dubbed Billionaires’ Row.
The rich care who their neighbours are, observed Mr Jonathan Miller, president of Miller Samuel, a New York-based real estate firm.
New York is world’s penthouse capital, while other swank addresses include London. (See report at right.)
So how do Singapore’s super-penthouses stack up?
Mr Joseph Tan, director of residential housing at CB Richard Ellis, said: ‘Singapore is still in its infancy if you compare the penthouses in London, New York and Hong Kong.
‘The market in Singapore has not reached the ultimate luxe status - yet.
‘But we are already attracting a growing number of affluent foreigners because the penthouses are cheaper here than those in the US and UK. For what we offer, our penthouses are seen as good value and a good investment.’
According to the 2006 International Residential Review by Knight Frank, the world’s prime residential markets - including London, Paris, Sydney and Phuket - saw strong growth in 2005. The company also believes that buyers from the growing economies, like China and the US, will increasingly look for real estate abroad.
Apart from a panoramic view, location is still key. Mr Vincent Chong, associate director of Colliers International, noted that other factors include architecture and facilities.
Besides designer fittings, Keppel has upped the luxe quotient at Reflections by offering homeowners a 10-year free membership at the Marina at Keppel Bay on Keppel Island.
Its facilities include a clubhouse, gourmet restaurants, a spa and charter services to the neighbouring islands.
And who knows? Developers may throw in VIP access to the IRs in the future.
Source: The New Paper, 02 April 2007
En bloc rules: Public consultation starts
The Ministry of Law kicks off a six-week-long public consultation for proposed changes to collective sales legislation from today. Besides four key changes announced by MinLaw early last month, the consultation paper also covers several other areas.
These include submission of a valuation report as at the date of acceptance of the successful bid in the collective sale application to the Strata Titles Board (STB), and allowing all owners (not just minority owners objecting to an en bloc sale) to apply to the STB to settle any compensation disputes with their tenants.
En bloc lawyer S K Phang of Phang & Co welcomed the latter change as ‘an important clarification’ which means owners who agree in principle with an en bloc sale but who may have issues with their tenants will no longer be forced to object to the collective sale and join the minority camp.
In addition, the following information will no longer need to be included in taking out an advertisement on an en bloc sale application - the names of owners, their addresses, unit numbers and strata lot numbers; as well as names of mortgagees, chargees and other persons with an estate and interest in the lots, flats and land.
‘This will also accord a certain degree of privacy to the owners of the units undergoing an en bloc sale process,’ MinLaw said.
Agreeing, Dr Phang said another benefit from the change is the savings to owners from being able to place smaller ads.
Another amendment being proposed seeks to extend en bloc sale by majority consent to a class of estates not covered by current legislation. These are estates where strata title certificates have been issued but where the original landowner/developer retained the strata title certificates, and instead gave long leases (of at least 850 years) to those who bought apartments in the estate.
Currently, apartment owners in these estates can only do an en bloc sale by unanimous consent - and with the approval of the original developer, who owns the reversionary interest in the land.
MinLaw is proposing to allow apartment owners in such estates to proceed with an en bloc sale by majority consent. The original developer’s consent will not be required as, upon approval of the en bloc sale by STB, he will lose all rights to the land.
It is not known just how many such estates there are, but at least one case - in the Novena area - is said to have surfaced and brought to the attention of the authorities. The proposed change will plug a gap in the legislation and extend en bloc sale by majority consent to such estates.
Another amendment MinLaw is proposing clarifies that the notice on the number and percentage of share value of owners who have signed the collective sale agreement (CSA) should be put up in the last week of every eight-week period, starting from the day the first owner signs the CSA.
The STB will also be empowered to disregard any technical/procedural irregularity if it is satisfied that the irregularity will not prejudice any owner’s interest.
MinLaw said that STB has had to dismiss a few applications purely because of technical non-compliance, and when that happens, the majority owners need to start the application process again, including advertising the new application, service of the notice, and so on.
The four major changes announced by MinLaw on March 2 are also included in the consultation paper:
Majority consent (80 or 90 per cent, depending on the age of a development) to be defined based on ownership of units, in addition to share values;
STB to be given power to increase sale proceeds for minority owners with valid objections in appropriate cases, subject to a cap of 0.25 per cent of sale proceeds to be deducted from every unit, or $2,000 per unit, whichever is higher;
STB to be empowered to issue guidelines on the allowable expenditures to be taken into account in evaluating claims of financial loss;
En bloc sale committees to be formed only at extraordinary general meetings convened by management corporations.
The public may view the consultation paper and the proposed legislative amendments on the Ministry of Law’s website at www.minlaw.gov.sg or the Govt Consultation Portal - REACH - at www.reach.gov.sg.
Source: The Business Times, 02 April 2007
These include submission of a valuation report as at the date of acceptance of the successful bid in the collective sale application to the Strata Titles Board (STB), and allowing all owners (not just minority owners objecting to an en bloc sale) to apply to the STB to settle any compensation disputes with their tenants.
En bloc lawyer S K Phang of Phang & Co welcomed the latter change as ‘an important clarification’ which means owners who agree in principle with an en bloc sale but who may have issues with their tenants will no longer be forced to object to the collective sale and join the minority camp.
In addition, the following information will no longer need to be included in taking out an advertisement on an en bloc sale application - the names of owners, their addresses, unit numbers and strata lot numbers; as well as names of mortgagees, chargees and other persons with an estate and interest in the lots, flats and land.
‘This will also accord a certain degree of privacy to the owners of the units undergoing an en bloc sale process,’ MinLaw said.
Agreeing, Dr Phang said another benefit from the change is the savings to owners from being able to place smaller ads.
Another amendment being proposed seeks to extend en bloc sale by majority consent to a class of estates not covered by current legislation. These are estates where strata title certificates have been issued but where the original landowner/developer retained the strata title certificates, and instead gave long leases (of at least 850 years) to those who bought apartments in the estate.
Currently, apartment owners in these estates can only do an en bloc sale by unanimous consent - and with the approval of the original developer, who owns the reversionary interest in the land.
MinLaw is proposing to allow apartment owners in such estates to proceed with an en bloc sale by majority consent. The original developer’s consent will not be required as, upon approval of the en bloc sale by STB, he will lose all rights to the land.
It is not known just how many such estates there are, but at least one case - in the Novena area - is said to have surfaced and brought to the attention of the authorities. The proposed change will plug a gap in the legislation and extend en bloc sale by majority consent to such estates.
Another amendment MinLaw is proposing clarifies that the notice on the number and percentage of share value of owners who have signed the collective sale agreement (CSA) should be put up in the last week of every eight-week period, starting from the day the first owner signs the CSA.
The STB will also be empowered to disregard any technical/procedural irregularity if it is satisfied that the irregularity will not prejudice any owner’s interest.
MinLaw said that STB has had to dismiss a few applications purely because of technical non-compliance, and when that happens, the majority owners need to start the application process again, including advertising the new application, service of the notice, and so on.
The four major changes announced by MinLaw on March 2 are also included in the consultation paper:
Majority consent (80 or 90 per cent, depending on the age of a development) to be defined based on ownership of units, in addition to share values;
STB to be given power to increase sale proceeds for minority owners with valid objections in appropriate cases, subject to a cap of 0.25 per cent of sale proceeds to be deducted from every unit, or $2,000 per unit, whichever is higher;
STB to be empowered to issue guidelines on the allowable expenditures to be taken into account in evaluating claims of financial loss;
En bloc sale committees to be formed only at extraordinary general meetings convened by management corporations.
The public may view the consultation paper and the proposed legislative amendments on the Ministry of Law’s website at www.minlaw.gov.sg or the Govt Consultation Portal - REACH - at www.reach.gov.sg.
Source: The Business Times, 02 April 2007
Lower DC for Wing Tai at Ardmore Point site
Listed Wing Tai Holdings may enjoy a saving in its land cost for Ardmore Point, resulting in a lower breakeven cost for the new project that it will develop on the site.
BT understands that the development charge (DC) - a component of the developer’s land cost - will be significantly lower than the $31 million estimated earlier because the development baseline has turned out to be higher than previously assumed.
DC is typically calculated based on the difference between proposed development use and the development baseline. The latter is pegged to the site’s existing entitlement or the highest use for the site which has been paid for.
The higher the development baseline the lower the DC amount payable, based on a given DC rate.
Industry observers reckon that following its development baseline search, Wing Tai has managed to lock in the DC quantum based on the Sept 1, 2006 rates by obtaining provisional permission for a new condo project before the latest revisions in DC rates took effect on March 1, 2007 rates.
When Wing Tai announced its acquisition of Ardmore Point in October last year at $201 million, the DC was assumed to be $31 million, reflecting an all-in unit land price of $1,369 per square foot per plot ratio.
With a lower DC, the unit land price is lower and, as a result, Wing Tai’s breakeven cost for the new project on the plot will also be lower. This translates to a bigger profit margin for the listed property group.
The company declined to comment.
The 60,533-square-foot freehold site is zoned for residential use with a 36-storey maximum height. It could be developed into a new condo with about 108 units averaging 1,800 square feet. Wing Tai has not given details of the project, except to say recently that it is slated for launch early next year.
The application for the collective sale of Ardmore Point by its majority owners was made to the Strata Titles Board in late November last year. Two owners objected but the case was settled following a mediation in January this year.
Market sources say one area of dispute could have been the higher-than-expected development baseline which Wing Tai now enjoys. The sale, brokered by CB Richard Ellis, was approved on Jan 27.
The $31 million DC quantum indicated earlier was an estimate, made without a development baseline search with the Urban Redevelopment Authority (URA).
Property agents told BT that a common reason agents do not make any application to URA to confirm the development baseline is the high costs involved ranging anywhere from about $4,000-$10,000 for engaging the services of an architect to estimate the gross floor area (GFA) of the existing development and then recomputing it from the old definition of GFA to the current definition.
This is required by URA if the existing development on the site was approved before Sept 1, 1989. Based on the information provided, URA will process the application for $1,500.
A seasoned property consultant told BT that for very important collective sales cases, his firm may decide to take a business risk and first pay for the costs involved in verifying the development baseline, but with an undertaking from the en bloc sales committee that the amount would be deducted from sale proceeds of all owners upon the successful sale of the property.
However, if a sale fails to materialise, then the property consultancy firm runs the risk of being saddled with the costs. Another alternative would be to ask members of the en bloc sales committee to bear the costs first and claim them from the remaining owners later.
Yet another solution would be to state explicitly in the sale and purchase agreement with the developer buying the site as to how any difference in actual development baseline/DC will be split between owners and developer.
Some quarters argue that if the developer makes an unconditional offer for a site - that is, one not tied to a specific redevelopment approval from the authorities or to a certain development baseline/DC - then the developer would have a stronger case for not being obligated to agree to share any DC saving with the sellers, just as the owners would not want to accept a lower price in the event that the developer has to bear a higher DC.
Source: The Business Times, 02 April 2007
BT understands that the development charge (DC) - a component of the developer’s land cost - will be significantly lower than the $31 million estimated earlier because the development baseline has turned out to be higher than previously assumed.
DC is typically calculated based on the difference between proposed development use and the development baseline. The latter is pegged to the site’s existing entitlement or the highest use for the site which has been paid for.
The higher the development baseline the lower the DC amount payable, based on a given DC rate.
Industry observers reckon that following its development baseline search, Wing Tai has managed to lock in the DC quantum based on the Sept 1, 2006 rates by obtaining provisional permission for a new condo project before the latest revisions in DC rates took effect on March 1, 2007 rates.
When Wing Tai announced its acquisition of Ardmore Point in October last year at $201 million, the DC was assumed to be $31 million, reflecting an all-in unit land price of $1,369 per square foot per plot ratio.
With a lower DC, the unit land price is lower and, as a result, Wing Tai’s breakeven cost for the new project on the plot will also be lower. This translates to a bigger profit margin for the listed property group.
The company declined to comment.
The 60,533-square-foot freehold site is zoned for residential use with a 36-storey maximum height. It could be developed into a new condo with about 108 units averaging 1,800 square feet. Wing Tai has not given details of the project, except to say recently that it is slated for launch early next year.
The application for the collective sale of Ardmore Point by its majority owners was made to the Strata Titles Board in late November last year. Two owners objected but the case was settled following a mediation in January this year.
Market sources say one area of dispute could have been the higher-than-expected development baseline which Wing Tai now enjoys. The sale, brokered by CB Richard Ellis, was approved on Jan 27.
The $31 million DC quantum indicated earlier was an estimate, made without a development baseline search with the Urban Redevelopment Authority (URA).
Property agents told BT that a common reason agents do not make any application to URA to confirm the development baseline is the high costs involved ranging anywhere from about $4,000-$10,000 for engaging the services of an architect to estimate the gross floor area (GFA) of the existing development and then recomputing it from the old definition of GFA to the current definition.
This is required by URA if the existing development on the site was approved before Sept 1, 1989. Based on the information provided, URA will process the application for $1,500.
A seasoned property consultant told BT that for very important collective sales cases, his firm may decide to take a business risk and first pay for the costs involved in verifying the development baseline, but with an undertaking from the en bloc sales committee that the amount would be deducted from sale proceeds of all owners upon the successful sale of the property.
However, if a sale fails to materialise, then the property consultancy firm runs the risk of being saddled with the costs. Another alternative would be to ask members of the en bloc sales committee to bear the costs first and claim them from the remaining owners later.
Yet another solution would be to state explicitly in the sale and purchase agreement with the developer buying the site as to how any difference in actual development baseline/DC will be split between owners and developer.
Some quarters argue that if the developer makes an unconditional offer for a site - that is, one not tied to a specific redevelopment approval from the authorities or to a certain development baseline/DC - then the developer would have a stronger case for not being obligated to agree to share any DC saving with the sellers, just as the owners would not want to accept a lower price in the event that the developer has to bear a higher DC.
Source: The Business Times, 02 April 2007
The Maple by YTL Land a winner
The Maple by YTL Land a winner
YTL Land & Development Bhd's first residential project in Sentul West, The Maple, is a stunner!
The two slender 30-storey towers that rise above the old Sentul area in Kuala Lumpur have been turning heads since they were completed in July last year.
However, it is more than just two tall handsome buildings that have attracted the city folk. The magic in this entire development is of course the 35-acre lush green park that is the icing on the Sentul West “cake”.
Imagine you are oblivious of your surroundings and your blindfolds are removed. Hey presto! You are standing on a tranquil park with three-lined trails, moats, aerial walkways and a mini forest that are so lovely and surreal.
“Am I in St James Park or Hyde Park?” You may wonder as you spot a gaggle of white, fat ducks waddling on a pond towards a pontoon with a boat tied to it. Willow trees droop low on the water's edge while your eyes feast on the rolling greens with sculptures like a metal “crane” or wooden “deer” dotting the landscape.
Except for a row of “skeletal” concrete pillars that look like a war relic and seems to contradict the park’s 18th century English gardens charm, everything is near perfect.
The cool breeze brushes your cheek and you wake up realising these were no dreams. This was how I felt when YTL Group deputy managing director Datuk Yeoh Seok Kian recently showed me around The Maple, the park and the koi centre. Colourful koi fishes, some two feet long, swam in a pond at a Japanese Restaurant as well as in 36 tanks.
Yeoh, who fed the ducks with pieces of bread, said the ducks, birds and the peaceful environment reminded him of his childhood days when everything was so carefree.
Indeed, Yeoh’s pride in the Sentul project is understandable, as the YTL Group has put in so much effort into it.
Through the freehold Sentul West and Sentul East development, it is setting a new benchmark in city living by creating an exclusive green haven for the resident. These include expatriates, shoe couturier Datuk Jimmy Choo, a renowned CNN International anchorwoman, international celebrities and some members of royalty.
Sentul West, with 186 acres, celebrates the outdoors with exclusive residences, offices and shops amidst pristine lakes bordering the park (formerly a golf course) while Sentul East, with 108 acres, will be more vibrant and attuned to the young.
YTL has transformed an old railway workshop in Sentul West’s Festival Plaza into the Kuala Lumpur Performing Arts Centre (KLPac). Many concerts, music festivals, theatrical shows and art exhibitions have been held at the KLPac since it was opened on May 25, 2005.
Yeoh said another old railway yard would be turned into an art exhibition area.
Meanwhile, the 318-unit Maple is a 3.2-acre sanctuary boasting of four themed gardens: a maze (cut out figures of animals peeping out from the maze), spice garden (herbs and spices), water garden and a meditative garden (for Taichi/yoga) reminiscent of Kyoto’s famed Ryoanji Temple with a mass of white stones (islands) surrounded by a “sea” of pebbles.
One of The Maple’s highlights is the 25-metre infinity edge cantilevered lap pool where, from afar, it looks like the water meets the sky above a canopy of trees.
This pool is furnished with outdoor beds and special “floating decks”.
The bottom of the infinity edge of the pool is made of glass. People below can see the swimmer above.
Other outdoor amenities include a lie-down jacuzzi, barbecue area with open lawn, two squash courts, two tennis courts, a basketball court, gymnasium and clubhouse. There are three swimming pools. The recreational deck (sitting above the car park) is huge.
Buyers have started moving into their luxury 3+1 room apartments. With only six corner units on each floor, the three standard types of 1,535 sq ft, 1,569 sq ft and 1,707 sq ft were priced from RM547,000 to RM1.4mil, comparable to properties in Mont’ Kiara.
The recent completion of the Sentul Link and the Duta-Segambut Link has boosted The Maple’s appeal with easier connectivity to various parts of the Klang Valley.
I was told that the latest sale of The Maple had hit RM400 psf, almost double that of the initial price!
If you are fed up of living in a concrete jungle, then you should move to The Maple (there are about 20 units left unsold) where you currently share the park with residents of the Sang Suria apartments (an uncompleted project revived by YTL) next door.
However, Sentul West will have about 4,000 luxury condo units and about 20,000 residents. The park may be quite crowded then.
YTL Land & Development Bhd's first residential project in Sentul West, The Maple, is a stunner!
The two slender 30-storey towers that rise above the old Sentul area in Kuala Lumpur have been turning heads since they were completed in July last year.
However, it is more than just two tall handsome buildings that have attracted the city folk. The magic in this entire development is of course the 35-acre lush green park that is the icing on the Sentul West “cake”.
Imagine you are oblivious of your surroundings and your blindfolds are removed. Hey presto! You are standing on a tranquil park with three-lined trails, moats, aerial walkways and a mini forest that are so lovely and surreal.
“Am I in St James Park or Hyde Park?” You may wonder as you spot a gaggle of white, fat ducks waddling on a pond towards a pontoon with a boat tied to it. Willow trees droop low on the water's edge while your eyes feast on the rolling greens with sculptures like a metal “crane” or wooden “deer” dotting the landscape.
Except for a row of “skeletal” concrete pillars that look like a war relic and seems to contradict the park’s 18th century English gardens charm, everything is near perfect.
The cool breeze brushes your cheek and you wake up realising these were no dreams. This was how I felt when YTL Group deputy managing director Datuk Yeoh Seok Kian recently showed me around The Maple, the park and the koi centre. Colourful koi fishes, some two feet long, swam in a pond at a Japanese Restaurant as well as in 36 tanks.
Yeoh, who fed the ducks with pieces of bread, said the ducks, birds and the peaceful environment reminded him of his childhood days when everything was so carefree.
Indeed, Yeoh’s pride in the Sentul project is understandable, as the YTL Group has put in so much effort into it.
Through the freehold Sentul West and Sentul East development, it is setting a new benchmark in city living by creating an exclusive green haven for the resident. These include expatriates, shoe couturier Datuk Jimmy Choo, a renowned CNN International anchorwoman, international celebrities and some members of royalty.
Sentul West, with 186 acres, celebrates the outdoors with exclusive residences, offices and shops amidst pristine lakes bordering the park (formerly a golf course) while Sentul East, with 108 acres, will be more vibrant and attuned to the young.
YTL has transformed an old railway workshop in Sentul West’s Festival Plaza into the Kuala Lumpur Performing Arts Centre (KLPac). Many concerts, music festivals, theatrical shows and art exhibitions have been held at the KLPac since it was opened on May 25, 2005.
Yeoh said another old railway yard would be turned into an art exhibition area.
Meanwhile, the 318-unit Maple is a 3.2-acre sanctuary boasting of four themed gardens: a maze (cut out figures of animals peeping out from the maze), spice garden (herbs and spices), water garden and a meditative garden (for Taichi/yoga) reminiscent of Kyoto’s famed Ryoanji Temple with a mass of white stones (islands) surrounded by a “sea” of pebbles.
One of The Maple’s highlights is the 25-metre infinity edge cantilevered lap pool where, from afar, it looks like the water meets the sky above a canopy of trees.
This pool is furnished with outdoor beds and special “floating decks”.
The bottom of the infinity edge of the pool is made of glass. People below can see the swimmer above.
Other outdoor amenities include a lie-down jacuzzi, barbecue area with open lawn, two squash courts, two tennis courts, a basketball court, gymnasium and clubhouse. There are three swimming pools. The recreational deck (sitting above the car park) is huge.
Buyers have started moving into their luxury 3+1 room apartments. With only six corner units on each floor, the three standard types of 1,535 sq ft, 1,569 sq ft and 1,707 sq ft were priced from RM547,000 to RM1.4mil, comparable to properties in Mont’ Kiara.
The recent completion of the Sentul Link and the Duta-Segambut Link has boosted The Maple’s appeal with easier connectivity to various parts of the Klang Valley.
I was told that the latest sale of The Maple had hit RM400 psf, almost double that of the initial price!
If you are fed up of living in a concrete jungle, then you should move to The Maple (there are about 20 units left unsold) where you currently share the park with residents of the Sang Suria apartments (an uncompleted project revived by YTL) next door.
However, Sentul West will have about 4,000 luxury condo units and about 20,000 residents. The park may be quite crowded then.
Wanted: Land in Iskandar region
Wanted: Land in Iskandar region
MAH Sing Group Bhd chief executive Datuk Leong Hoy Kum said the time was right to “strike” and that the company was in the process of raising capital to fund the expansion of its property division.
Leong said the combination of Government support, better economic times as well as an “air of optimism” in the property sector, especially in the Iskandar Development Region (IDR) has made Mah Sing proactive in looking for more land in south Johor and Kuala Lumpur.
“We plan to acquire more prime land that Mah Sing can value-add to by building niche and high-end commercial and residential houses. The IDR has definitely caught our interest because of the region's high growth potential,” he said.
The company currently has just over 500 acres of land bank but Leong said it was never the policy of the company to buy huge parcels of land.
“We are more interested in quality land in good location with good capital gains and high yield potential,” he noted.
Leong said Mah Sing was no stranger in south Johor.
The property developer has been developing residential homes in the area since 2000, including Austin Perdana in Tebrau.
Mah Sing's other property projects include Hijauan Residence (Cheras), Duta Perdana (Puchong), Kemuning Residence (Shah Alam), Sri Pulai Perdana (Skudai), Sierra Perdana (Tebrau-Plentong) and a commercial project in Mount Kiara.
An analyst with CIMB Securities said Mah Sing was unique due to its quick “turnaround model” which allowed the company to register quicker return on equity, compared with most of the other property developers.
He said most property developers had target prices pegged to their revised net asset value, however, this was not the case with Mah Sing.
“For Mah Sing, we have tagged a 20% discount to the targeted property sector price earnings of 18 times to reflect the company's strong earnings growth and consistent ability to secure strategically located land bank at reasonable prices,” he said.
Mah Sing reported a return on equity (ROE) of 21%, which made the company one of the best performers among property developers (in terms of ROE).
Another property developer that has a firm footing in the IDR is Mulpha International Bhd.
Executive chairman Lee Seng Huang said the company's Leisure Farm Resort in south Johor would benefit from the strong Government support and allocation under the Ninth Malaysia Plan to develop the IDR.
“We believe Leisure Farm Resort will present itself as one of the prime residential areas in the region,” Lee said, adding that over the years, the company had dedicated a lot of effort to unlock values in the Malaysian property market.
He said Mulpha was pleased that its Leisure Farm Resort development had started to produce results from years of hard work.
Lee said Mulpha also had sizeable land bank, especially in Gelang Patah, Johor, with over 700 acres of land there yet to be developed.
“Mulpha’s concept is only to build when the time is right and not just build for the sake of earning revenue,” he noted.
Other property developers that have a presence in south Johor include SP Setia Bhd, UEM Land Sdn Bhd (the property unit of UEM World Bhd) and Gamuda Land Bhd.
UEM Land and Gamuda Land have formed a 50:50 partnership to jointly develop Horizon Hills, which has 12 precincts worth RM2.6bil in Nusajaya.
The Horizon Hills project would be the residential nucleus of Nusajaya, one of the five key flagship zones for other developments in the IDR.
UEM World managing director and chief executive officer Datuk Ahmad Pardas Senin said: “We hope the first phase – The Gateway - scheduled to be completed by year end will act as a catalyst to further accelerate other developments in the IDR.
“The township will consist of 5,787 housing units, an 18-hole golf course, a signature resort club and themed gardens,” he said.
Gamuda group managing director Datuk Lin Yun Ling said the township would be developed in 11 phases and would take eight to nine years to complete.
An official spokesperson from SP Setia said the company had purchased huge land parcels in south Johor before the Asian financial crisis in 1997.
She said SP Setia was now benefiting from the upswing in property demand and property appreciation in south Johor as a result of the Government’s initiatives to make the region an economic powerhouse.
“Many of SP Setia's property development projects there have now been revived,” she said.
MAH Sing Group Bhd chief executive Datuk Leong Hoy Kum said the time was right to “strike” and that the company was in the process of raising capital to fund the expansion of its property division.
Leong said the combination of Government support, better economic times as well as an “air of optimism” in the property sector, especially in the Iskandar Development Region (IDR) has made Mah Sing proactive in looking for more land in south Johor and Kuala Lumpur.
“We plan to acquire more prime land that Mah Sing can value-add to by building niche and high-end commercial and residential houses. The IDR has definitely caught our interest because of the region's high growth potential,” he said.
The company currently has just over 500 acres of land bank but Leong said it was never the policy of the company to buy huge parcels of land.
“We are more interested in quality land in good location with good capital gains and high yield potential,” he noted.
Leong said Mah Sing was no stranger in south Johor.
The property developer has been developing residential homes in the area since 2000, including Austin Perdana in Tebrau.
Mah Sing's other property projects include Hijauan Residence (Cheras), Duta Perdana (Puchong), Kemuning Residence (Shah Alam), Sri Pulai Perdana (Skudai), Sierra Perdana (Tebrau-Plentong) and a commercial project in Mount Kiara.
An analyst with CIMB Securities said Mah Sing was unique due to its quick “turnaround model” which allowed the company to register quicker return on equity, compared with most of the other property developers.
He said most property developers had target prices pegged to their revised net asset value, however, this was not the case with Mah Sing.
“For Mah Sing, we have tagged a 20% discount to the targeted property sector price earnings of 18 times to reflect the company's strong earnings growth and consistent ability to secure strategically located land bank at reasonable prices,” he said.
Mah Sing reported a return on equity (ROE) of 21%, which made the company one of the best performers among property developers (in terms of ROE).
Another property developer that has a firm footing in the IDR is Mulpha International Bhd.
Executive chairman Lee Seng Huang said the company's Leisure Farm Resort in south Johor would benefit from the strong Government support and allocation under the Ninth Malaysia Plan to develop the IDR.
“We believe Leisure Farm Resort will present itself as one of the prime residential areas in the region,” Lee said, adding that over the years, the company had dedicated a lot of effort to unlock values in the Malaysian property market.
He said Mulpha was pleased that its Leisure Farm Resort development had started to produce results from years of hard work.
Lee said Mulpha also had sizeable land bank, especially in Gelang Patah, Johor, with over 700 acres of land there yet to be developed.
“Mulpha’s concept is only to build when the time is right and not just build for the sake of earning revenue,” he noted.
Other property developers that have a presence in south Johor include SP Setia Bhd, UEM Land Sdn Bhd (the property unit of UEM World Bhd) and Gamuda Land Bhd.
UEM Land and Gamuda Land have formed a 50:50 partnership to jointly develop Horizon Hills, which has 12 precincts worth RM2.6bil in Nusajaya.
The Horizon Hills project would be the residential nucleus of Nusajaya, one of the five key flagship zones for other developments in the IDR.
UEM World managing director and chief executive officer Datuk Ahmad Pardas Senin said: “We hope the first phase – The Gateway - scheduled to be completed by year end will act as a catalyst to further accelerate other developments in the IDR.
“The township will consist of 5,787 housing units, an 18-hole golf course, a signature resort club and themed gardens,” he said.
Gamuda group managing director Datuk Lin Yun Ling said the township would be developed in 11 phases and would take eight to nine years to complete.
An official spokesperson from SP Setia said the company had purchased huge land parcels in south Johor before the Asian financial crisis in 1997.
She said SP Setia was now benefiting from the upswing in property demand and property appreciation in south Johor as a result of the Government’s initiatives to make the region an economic powerhouse.
“Many of SP Setia's property development projects there have now been revived,” she said.
Strong increase in prices over the next two years
Strong increase in prices over the next two years
MOST brokerages believe there would be strong land price appreciation in the Iskandar Development Region (IDR) over the next two to three years.
A local broker said Johor land prices were coming off from a lower base, compared with properties in Penang and Kuala Lumpur.
“Land appreciation in Johor has under-performed, compared with land in Kuala Lumpur and Penang. This is largely due to high oversupply,” he said.
“The entry of international property developers, operators and investors will change the IDR’s property landscape significantly. Real estate of international standards will see the creation of new demand and give property values a boost in Johor, especially in the IDR.”
An analyst with TA Securities concurs. He said real estate in the IDR was expected to appreciate sharply by 300% to RM30psf from RM7.50psf in the next two to three years.
“Given the IDR’s huge potential to attract international investors, we believe land value there should at least match that of Bayan Lepas in Penang. Even at RM30psf, land prices in the IDR would still be well below that of Singapore,” he said.
The analyst expects to see exponential growth in land prices in the IDR – compounded annual growth rate of about 51% for the next four years – with the entry of international developers.
He said early investors including local property developers were advised to seize the opportunity to buy sizable land or increase their land bank in the IDR. These land parcels would be most attractive to international developers, operators and foreign investors.
The analyst said since the IDR master plan was revealed in November last year, the asking price for raw land has been on an up-trend.
“New price benchmarks were recently set for industrial land (RM21psf) and commercial land (RM65psf) in Nusajaya, way above the RM7.50psf transacted for mixed-development land in the last two years,” he said.
A Singapore property analyst said while the Government's move to create an economic hub in south Johor was commendable, it would take time before land valuations in the IDR came close to that of Singapore's.
“Undeniably, there will be some Singaporeans and foreigners who will be interested in investing or living in the IDR but by and large, most would have a wait-and-see attitude,” he said.
He said while lower land prices was a consideration, many investors also wanted to make sure (before investing) that the IDR truly developed into a pro-business region with good infrastructure and delivery systems that businessmen could count on. “It also has to be a place that's fun and enjoyable for people to stay or visit and this has to be seen first,” he said.
The foreign analyst said the level of success of the IDR would depend on many factors, and would require the full support of local developers, the public and retail players in the property market as well as foreign participation – in terms of injection of investment as well as expertise.
Government incentives to attract FDIs into IDR:
# Exemption from corporate income tax for 10 years
# Exemptions from withholding tax on royalty and technical fee payments to non-residents for ten years
# Exemption from FIC rules
# Unrestricted employment of foreign employees
# Freedom to source capital globally
For latest Bursa Malaysia indices, charts and other information click here
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MOST brokerages believe there would be strong land price appreciation in the Iskandar Development Region (IDR) over the next two to three years.
A local broker said Johor land prices were coming off from a lower base, compared with properties in Penang and Kuala Lumpur.
“Land appreciation in Johor has under-performed, compared with land in Kuala Lumpur and Penang. This is largely due to high oversupply,” he said.
“The entry of international property developers, operators and investors will change the IDR’s property landscape significantly. Real estate of international standards will see the creation of new demand and give property values a boost in Johor, especially in the IDR.”
An analyst with TA Securities concurs. He said real estate in the IDR was expected to appreciate sharply by 300% to RM30psf from RM7.50psf in the next two to three years.
“Given the IDR’s huge potential to attract international investors, we believe land value there should at least match that of Bayan Lepas in Penang. Even at RM30psf, land prices in the IDR would still be well below that of Singapore,” he said.
The analyst expects to see exponential growth in land prices in the IDR – compounded annual growth rate of about 51% for the next four years – with the entry of international developers.
He said early investors including local property developers were advised to seize the opportunity to buy sizable land or increase their land bank in the IDR. These land parcels would be most attractive to international developers, operators and foreign investors.
The analyst said since the IDR master plan was revealed in November last year, the asking price for raw land has been on an up-trend.
“New price benchmarks were recently set for industrial land (RM21psf) and commercial land (RM65psf) in Nusajaya, way above the RM7.50psf transacted for mixed-development land in the last two years,” he said.
A Singapore property analyst said while the Government's move to create an economic hub in south Johor was commendable, it would take time before land valuations in the IDR came close to that of Singapore's.
“Undeniably, there will be some Singaporeans and foreigners who will be interested in investing or living in the IDR but by and large, most would have a wait-and-see attitude,” he said.
He said while lower land prices was a consideration, many investors also wanted to make sure (before investing) that the IDR truly developed into a pro-business region with good infrastructure and delivery systems that businessmen could count on. “It also has to be a place that's fun and enjoyable for people to stay or visit and this has to be seen first,” he said.
The foreign analyst said the level of success of the IDR would depend on many factors, and would require the full support of local developers, the public and retail players in the property market as well as foreign participation – in terms of injection of investment as well as expertise.
Government incentives to attract FDIs into IDR:
# Exemption from corporate income tax for 10 years
# Exemptions from withholding tax on royalty and technical fee payments to non-residents for ten years
# Exemption from FIC rules
# Unrestricted employment of foreign employees
# Freedom to source capital globally
For latest Bursa Malaysia indices, charts and other information click here
Ads by Google
Malaysia Property Search
Malaysia Properties for Sale / Rent
Housing Projects in Every State
www.fullhouse.com.my
Stock Markets
Professional Stock Charting &
Analysis. Stock Prices Online!
www.SaxoCapitalmarkets.sg
Foreign Investment
Learn How to Double Your Money in
China Without Buying Chinese Stocks
www.DailyWealth.com/China_Report
Property values in south Johor rising
Property values in south Johor rising
By DANNY YAP
PROPERTY values in the Iskandar Development Region (IDR), south Johor is set to rise, propelled by strong Government support for the property sector and overall buoyant economy and stock market.
Most analysts are optimistic that the IDR would be a key growth driver for the Malaysian economy as a lot of government and private funds would be invested into the region over time to make it a vibrant and international economic hub.
An analyst with UOB Kay Hian said the Government planned to develop the IDR into an “emerging special economic zone” in the likes of Shenzhen, Dubai and Mumbai where the best brains around the world come to live, work and do business.”
The analyst said the IDR has the potential to attract international developers because of three main reasons – its proximity to Singapore, the entry of international theme park (ITP) operators and government policy changes to attract greater foreign direct investments.
The analyst said the Government’s initial projections show that the IDR could attract about RM370bil in investments over 20 years.
“In the nearer term, the IDR is supposed to attract RM50bil in investments within the next five years, of which RM20bil will be in committed developments. The Government plans to invest RM12.2bil, mostly in infrastructure works to spur the initial developments in the IDR under the Ninth Malaysia Plan,” he said.
With so many goodies thrown in, it's not surprising that many property developers are eager to jump on the bandwagon to kick-start property projects (commercial and residential) or new townships – case in point Nusajaya – in the IDR.
In fact most of the established property players such as UEM World Bhd, SP Setia Holdings Bhd and Gamuda Bhd have already started some property development projects in the IDR.
Moreover, the analyst said reputable foreign multinational investors and companies like Flextronics International (Netherlands), OSI System Inc (US) and JST Connectors (Japan), have started to relocate or set up their manufacturing and logistic bases in south Johor, especially in areas with large land parcels at relatively low prices.
He said rising foreign direct investments (FDIs) was expected to lead to various spin-offs for Johor’s economy and create new demand for properties, especially high-end properties.
“The IDR's proximity to Singapore is akin to Shenzhen's situation. The latter is able to capitalise on Hong Kong's emergence as a global player,” he said, adding that the IDR could leverage on the republic's transformation into a global city.
“Singapore, next to south Johor, is fast emerging as an international financial and services hub. Moreover, its new international resort (in Marina Bay and Sentosa Island) is projected to create 100,000 new jobs and is expected to attract 17 million tourists to the island by 2010 (from nine million currently).
“The IDR, being so close is likely to experience some spillover effect in terms of visitors and workers,” said the analyst.
He added that the introduction of two Free Access Zones (FAZ) – IDR Johor Baru FAZ and Nusajaya FAZ – to allow seamless movement of people across the border with no limit on duration of stay would further encourage more people to settle there.
As such, UOB Kay Hian believes large landlords at the southern tip of the IDR will be prime beneficiaries.
It will have the biggest price upside, given the limited real estate supply, compared with the abundant supply of plantation land in mid-northern Johor.
“The super prime locations in south Johor are those within a 10km radius of the Johor causeway and Second Link.
“Those closest to the bridges leading to Singapore and sea or river-fronting properties would maximise on the potential commercial value – especially when developments of international standards are undertaken – as well as those closest to the ITP operators and FAZs in Johor Baru and Nusajaya,” said the analyst.
He cited real estate owned by UEM World Bhd (10,336acres), Mulpha International Bhd (800 acres) and Tebrau Teguh Bhd (1,012 acres) Khazanah Nasional Bhd (5,500 acres) and the Johor Royal family (1,000 acres) as potentially the most attractive pieces of land in terms of value appreciation.
By DANNY YAP
PROPERTY values in the Iskandar Development Region (IDR), south Johor is set to rise, propelled by strong Government support for the property sector and overall buoyant economy and stock market.
Most analysts are optimistic that the IDR would be a key growth driver for the Malaysian economy as a lot of government and private funds would be invested into the region over time to make it a vibrant and international economic hub.
An analyst with UOB Kay Hian said the Government planned to develop the IDR into an “emerging special economic zone” in the likes of Shenzhen, Dubai and Mumbai where the best brains around the world come to live, work and do business.”
The analyst said the IDR has the potential to attract international developers because of three main reasons – its proximity to Singapore, the entry of international theme park (ITP) operators and government policy changes to attract greater foreign direct investments.
The analyst said the Government’s initial projections show that the IDR could attract about RM370bil in investments over 20 years.
“In the nearer term, the IDR is supposed to attract RM50bil in investments within the next five years, of which RM20bil will be in committed developments. The Government plans to invest RM12.2bil, mostly in infrastructure works to spur the initial developments in the IDR under the Ninth Malaysia Plan,” he said.
With so many goodies thrown in, it's not surprising that many property developers are eager to jump on the bandwagon to kick-start property projects (commercial and residential) or new townships – case in point Nusajaya – in the IDR.
In fact most of the established property players such as UEM World Bhd, SP Setia Holdings Bhd and Gamuda Bhd have already started some property development projects in the IDR.
Moreover, the analyst said reputable foreign multinational investors and companies like Flextronics International (Netherlands), OSI System Inc (US) and JST Connectors (Japan), have started to relocate or set up their manufacturing and logistic bases in south Johor, especially in areas with large land parcels at relatively low prices.
He said rising foreign direct investments (FDIs) was expected to lead to various spin-offs for Johor’s economy and create new demand for properties, especially high-end properties.
“The IDR's proximity to Singapore is akin to Shenzhen's situation. The latter is able to capitalise on Hong Kong's emergence as a global player,” he said, adding that the IDR could leverage on the republic's transformation into a global city.
“Singapore, next to south Johor, is fast emerging as an international financial and services hub. Moreover, its new international resort (in Marina Bay and Sentosa Island) is projected to create 100,000 new jobs and is expected to attract 17 million tourists to the island by 2010 (from nine million currently).
“The IDR, being so close is likely to experience some spillover effect in terms of visitors and workers,” said the analyst.
He added that the introduction of two Free Access Zones (FAZ) – IDR Johor Baru FAZ and Nusajaya FAZ – to allow seamless movement of people across the border with no limit on duration of stay would further encourage more people to settle there.
As such, UOB Kay Hian believes large landlords at the southern tip of the IDR will be prime beneficiaries.
It will have the biggest price upside, given the limited real estate supply, compared with the abundant supply of plantation land in mid-northern Johor.
“The super prime locations in south Johor are those within a 10km radius of the Johor causeway and Second Link.
“Those closest to the bridges leading to Singapore and sea or river-fronting properties would maximise on the potential commercial value – especially when developments of international standards are undertaken – as well as those closest to the ITP operators and FAZs in Johor Baru and Nusajaya,” said the analyst.
He cited real estate owned by UEM World Bhd (10,336acres), Mulpha International Bhd (800 acres) and Tebrau Teguh Bhd (1,012 acres) Khazanah Nasional Bhd (5,500 acres) and the Johor Royal family (1,000 acres) as potentially the most attractive pieces of land in terms of value appreciation.
Urban fixed-asset investment to grow 23% in 2007
Urban fixed-asset investment to grow 23% in 2007
(AFX News )
Updated: 2007-04-02 14:38
China's urban fixed-asset investment is expected to grow by 23.0 percent this year, slower than the 24.5 percent expansion in 2006, the research arm of the country's economic planning agency said.
Related readings:
Investment shows signs of recovery
Urban fixed asset investment up
Investment cools slightly in 2006
State-owned enterprises invest US$131b in fixed assets
In a report published on the official China Securities Journal, overall fixed-asset investment growth is likely to slow to 21 percent this year from 24 pct in 2006 due to tighter policies on credit and land, as well as a decline in foreign direct investment because of a unified corporate income tax.
Investment in the manufacturing and real estate sectors are forecast to increase by about 27 percent and 25 percent, respectively, according to the report.
Investment in the transportation sector is expected to grow by about 29 percent, while investment in power is seen rising by 12 percent.
(AFX News )
Updated: 2007-04-02 14:38
China's urban fixed-asset investment is expected to grow by 23.0 percent this year, slower than the 24.5 percent expansion in 2006, the research arm of the country's economic planning agency said.
Related readings:
Investment shows signs of recovery
Urban fixed asset investment up
Investment cools slightly in 2006
State-owned enterprises invest US$131b in fixed assets
In a report published on the official China Securities Journal, overall fixed-asset investment growth is likely to slow to 21 percent this year from 24 pct in 2006 due to tighter policies on credit and land, as well as a decline in foreign direct investment because of a unified corporate income tax.
Investment in the manufacturing and real estate sectors are forecast to increase by about 27 percent and 25 percent, respectively, according to the report.
Investment in the transportation sector is expected to grow by about 29 percent, while investment in power is seen rising by 12 percent.
Sunday, April 1, 2007
The tight office supply situation may ease as a result of two 99-year leasehold sites being offered by the government - a reserve site on Anson Rd
The tight office supply situation may ease as a result of two 99-year leasehold sites being offered by the government - a reserve list site on Anson Road, behind the Icon condo, and a confirmed list plot at Tampines Regional Centre.
The first offers an opportunity to develop a prime office building in the Tanjong Pagar area, at the gateway to the Central Business District, with good-size floor plates of about 18,300 sq ft.
The second is in an established back-office hub for financial institutions and business support services.
CB Richard Ellis expects the Anson Road site to contribute about 330,000 sq ft of offices and the Tampines plot about 300,000 sq ft.
The Anson Road plot, being on the reserve list, will only be launched for tender if a developer undertakes to bid at a minimum price acceptable to the state.
CBRE expects the site to be awarded for about $850-$900 psf of potential gross floor area, translating to an absolute land bid of $326 million to $345 million.
CBRE executive director Li Hiaw Ho said this is the second reserve-list commercial plot at Anson Road that is open for application.
Knight Frank director (consultancy and research) Nicholas Mak predicts the site will fetch $850-$950 psf ppr. Based on the lower end of this range, the breakeven cost for a new office project could be $1,790 psf.
Assuming that monthly gross rents for new office space in the location rise from the current $8 psf to $10 psf by the time the development is completed, the net yield could work out to about 5.4 per cent.
Mr Mak reckons the site will appeal to mid-size developers, tie-ups between funds and developers, and joint ventures between funds and contractors.
But he points to one drawback - the plot’s triangular shape, which means that while the side facing Anson Road has good frontage, the other two sides are without much of a view.
As for the Tampines plot, Mr Mak predicts a slightly lower bid of $750-$850 psf per plot ratio. ‘This site is likely to be fairly popular, with about four to six bids,’ he said.
CBRE’s Mr Li reckons the Tampines site could be awarded in excess of $500 psf ppr, working out to over $180 million. The tender for this plot closes on May 15.
While the two sites announced yesterday will help ease the office shortage, the plot that CBRE’s Mr Li and other market watchers are waiting for is at Central Boulevard, just behind the One Shenton condo. This could be potentially developed into about 930,000 sq ft of offices and is slated for launch only in May.
‘In view of the critical shortage of office supply, the market is also hoping that the government would accelerate the land sales programme,’ Mr Li said.
CBRE figures show Grade A office rent has risen 20.8 per cent since the end of last year to an average $10.55 psf a month now.
The increase over the year-ago period has been a staggering 75.8 per cent, which has sparked concerns in some quarters about Singapore losing its competitiveness.
Source: The Business Times, 21 March 2007
The first offers an opportunity to develop a prime office building in the Tanjong Pagar area, at the gateway to the Central Business District, with good-size floor plates of about 18,300 sq ft.
The second is in an established back-office hub for financial institutions and business support services.
CB Richard Ellis expects the Anson Road site to contribute about 330,000 sq ft of offices and the Tampines plot about 300,000 sq ft.
The Anson Road plot, being on the reserve list, will only be launched for tender if a developer undertakes to bid at a minimum price acceptable to the state.
CBRE expects the site to be awarded for about $850-$900 psf of potential gross floor area, translating to an absolute land bid of $326 million to $345 million.
CBRE executive director Li Hiaw Ho said this is the second reserve-list commercial plot at Anson Road that is open for application.
Knight Frank director (consultancy and research) Nicholas Mak predicts the site will fetch $850-$950 psf ppr. Based on the lower end of this range, the breakeven cost for a new office project could be $1,790 psf.
Assuming that monthly gross rents for new office space in the location rise from the current $8 psf to $10 psf by the time the development is completed, the net yield could work out to about 5.4 per cent.
Mr Mak reckons the site will appeal to mid-size developers, tie-ups between funds and developers, and joint ventures between funds and contractors.
But he points to one drawback - the plot’s triangular shape, which means that while the side facing Anson Road has good frontage, the other two sides are without much of a view.
As for the Tampines plot, Mr Mak predicts a slightly lower bid of $750-$850 psf per plot ratio. ‘This site is likely to be fairly popular, with about four to six bids,’ he said.
CBRE’s Mr Li reckons the Tampines site could be awarded in excess of $500 psf ppr, working out to over $180 million. The tender for this plot closes on May 15.
While the two sites announced yesterday will help ease the office shortage, the plot that CBRE’s Mr Li and other market watchers are waiting for is at Central Boulevard, just behind the One Shenton condo. This could be potentially developed into about 930,000 sq ft of offices and is slated for launch only in May.
‘In view of the critical shortage of office supply, the market is also hoping that the government would accelerate the land sales programme,’ Mr Li said.
CBRE figures show Grade A office rent has risen 20.8 per cent since the end of last year to an average $10.55 psf a month now.
The increase over the year-ago period has been a staggering 75.8 per cent, which has sparked concerns in some quarters about Singapore losing its competitiveness.
Source: The Business Times, 21 March 2007
The storm before the calm
CHRIS ARCHIBOLD looks at the likelihood that MNCs may find S’pore less attractive as office rents continue to surge
The office market in Singapore has changed dramatically in the past two to three years. In mid-2004, Singapore office rents were in a trough caused by the Sars outbreak; less than three years later business sentiment is strong in Singapore and across Asia. This has driven demand for office space.
The market bottomed out in mid-2004 and saw strong rental growth in 2005 and record growth in 2006. In 2005, Grade A Raffles Place rents rose 23 per cent and last year the market saw a dramatic rental spike of 63 per cent.
Most major Grade A buildings currently have occupancy rates of over 95 per cent. This scarcity of space, coupled with high demand and a lack of future supply (supply projections are well below market norms), will cause a serious space crunch over the next few years. This is likely to continue to drive rents northwards.
This phenomenon has been brought about by three key factors - the lack of new office supply coming to the market, the rapid expansion of the financial sector and the recovery of the regional and domestic economies.
The lack of supply is a result of the conservative sentiment among developers in Singapore around the Sars period which has meant that the amount of space currently being developed speculatively is well below the average annual supply rates.
Singapore has traditionally seen a five- to six-year property market cycle (three years up and three down) but due to the lack of supply and high demand, this cycle is likely to see an abnormally extended rental growth period. Given the traditional six-year cycle, and the fact that the market bottomed out in mid-2004, the peak should be around mid-2007. However, under current circumstances, rents are projected to continue to grow for the next two to three years. Our property clock shows that the Singapore market has just completed the fastest rent rise phase of the cycle but still has a number of years of growth.
The two impending integrated resort developments are also likely to have a positive impact on Singapore real estate. Developments of this scale will increase employment opportunities both in terms of the development process and the jobs created within the resorts.
These developments are aimed at drawing both tourists viewing the various attractions and business people using the convention facilities, and will raise Singapore’s exposure to the international community. The impact is likely to be increased business activity, boosting Singapore’s attractiveness for foreign investors.
Given the impending supply crunch and rising rents over the next few years the question on everyone’s lips is: ‘At what point does Singapore become unattractive to further foreign investment and the job opportunities associated with it?’
To answer this we need to review two fundamental issues - price and supply.
Taking price first, average Grade A rents in Q4 ‘06 were around $9.60 per sq ft per month (see chart). This is still below the market peaks of $11.15 in 1990 and $10.40 in 1996.
Given that a number of the prime Grade A Raffles Place buildings transacted deals at around $12.50 psf per month in the first two months of 2007, this points to the previous benchmarks being breached this year. Our research shows further rental increases in 2008 and 2009 with more record rentals likely to be set.
If this proves to be the case, will it deter investment in Singapore by the major MNCs? To answer this you need to look at where the expansion is coming from and the motivation behind it. A good barometer is the take-up of space in the latest core CBD developments. The majority of space in the latest developments has been filled by the expanding banking and finance community. Much of this expansion is coming from the US and Europe so it could be argued that Singapore’s competitiveness is judged against occupancy cost in those cities.
If you look at pure rental costs in London and New York against their counterparts in Asia, Singapore still compares favourably, and it is cheaper than its major Asian financial centre competitors, ie, Hong Kong and Tokyo. Thus, inward investment is likely to eye Singapore as a favourable location at the present time. This is on top of the other locational factors, such as living environment, business transparency, communications and tax structure, in which Singapore also fares well.
That said, Singapore’s rental competitiveness may well change over the next couple of years as the market is likely to continue to see increases whereas some of Singapore’s regional competitors such as Hong Kong and Shanghai are likely to see downward pressure on rents due to upcoming supply.
The higher rentals are causing many occupiers - both SMEs and MNCs - to relocate from the CBD to more cost-effective premises. But as the growth is caused by positive business sentiment the higher costs are unlikely to stop tenants from expanding. Rather, they may review their occupancy standards and workplace strategies.
Future supply is a cause of real concern as there is little coming to the market over the next few years. If there is physically nowhere to expand, MNCs may be forced to look elsewhere. They are by their very nature able to move business units around the region.
Given the supply crunch and demand boom, the authorities have taken various actions to alleviate the situation and plan for future occupation. These initiatives include the announcement of new regional and sub-regional centres in areas such as Jurong, the release of new land sites and making space available in various government properties.
While these initiatives will prove useful there are issues in terms of their impact. The release of new land sites and the announcement of new regional and sub-regional centres will not provide space for a number of years due to the length of time needed to construct new premises.
Existing space freed up from government properties will provide immediate relief but this is limited in scale. Also, in most cases the space is not suitable for MNCs which are looking for new, regular-shaped efficient office space.
The supply crunch is going to be an issue for the Singapore office market for the next two to three years and this could be exacerbated if projects are delayed due to lack of building materials and competition for labour with so many projects under construction at one time.
With increasing demand and a scramble for space, we are likely to see MNCs continuing to pre-commit to future new developments earlier than has traditionally been the norm, restacking their current premises with higher density work spaces or relocating business units to other countries.
Another way of easing pressure on existing supply may be to loosen regulations on the occupation of high-tech buildings. This would bring more immediate opportunities to conventional office users and may encourage more developers to build new supply.
The speed to market of high-tech supply can be faster than that of pure office space because many of these buildings are built on green field sites in business parks (such as Changi Business Park) where there is easy site access (unlike the constrained sites in the CBD) and no demolition or site clearance is necessary. The buildings are also lower and therefore faster to build.
The writer is regional director, head of markets, at Jones Lang LaSalle
Source: The Business Times
The office market in Singapore has changed dramatically in the past two to three years. In mid-2004, Singapore office rents were in a trough caused by the Sars outbreak; less than three years later business sentiment is strong in Singapore and across Asia. This has driven demand for office space.
The market bottomed out in mid-2004 and saw strong rental growth in 2005 and record growth in 2006. In 2005, Grade A Raffles Place rents rose 23 per cent and last year the market saw a dramatic rental spike of 63 per cent.
Most major Grade A buildings currently have occupancy rates of over 95 per cent. This scarcity of space, coupled with high demand and a lack of future supply (supply projections are well below market norms), will cause a serious space crunch over the next few years. This is likely to continue to drive rents northwards.
This phenomenon has been brought about by three key factors - the lack of new office supply coming to the market, the rapid expansion of the financial sector and the recovery of the regional and domestic economies.
The lack of supply is a result of the conservative sentiment among developers in Singapore around the Sars period which has meant that the amount of space currently being developed speculatively is well below the average annual supply rates.
Singapore has traditionally seen a five- to six-year property market cycle (three years up and three down) but due to the lack of supply and high demand, this cycle is likely to see an abnormally extended rental growth period. Given the traditional six-year cycle, and the fact that the market bottomed out in mid-2004, the peak should be around mid-2007. However, under current circumstances, rents are projected to continue to grow for the next two to three years. Our property clock shows that the Singapore market has just completed the fastest rent rise phase of the cycle but still has a number of years of growth.
The two impending integrated resort developments are also likely to have a positive impact on Singapore real estate. Developments of this scale will increase employment opportunities both in terms of the development process and the jobs created within the resorts.
These developments are aimed at drawing both tourists viewing the various attractions and business people using the convention facilities, and will raise Singapore’s exposure to the international community. The impact is likely to be increased business activity, boosting Singapore’s attractiveness for foreign investors.
Given the impending supply crunch and rising rents over the next few years the question on everyone’s lips is: ‘At what point does Singapore become unattractive to further foreign investment and the job opportunities associated with it?’
To answer this we need to review two fundamental issues - price and supply.
Taking price first, average Grade A rents in Q4 ‘06 were around $9.60 per sq ft per month (see chart). This is still below the market peaks of $11.15 in 1990 and $10.40 in 1996.
Given that a number of the prime Grade A Raffles Place buildings transacted deals at around $12.50 psf per month in the first two months of 2007, this points to the previous benchmarks being breached this year. Our research shows further rental increases in 2008 and 2009 with more record rentals likely to be set.
If this proves to be the case, will it deter investment in Singapore by the major MNCs? To answer this you need to look at where the expansion is coming from and the motivation behind it. A good barometer is the take-up of space in the latest core CBD developments. The majority of space in the latest developments has been filled by the expanding banking and finance community. Much of this expansion is coming from the US and Europe so it could be argued that Singapore’s competitiveness is judged against occupancy cost in those cities.
If you look at pure rental costs in London and New York against their counterparts in Asia, Singapore still compares favourably, and it is cheaper than its major Asian financial centre competitors, ie, Hong Kong and Tokyo. Thus, inward investment is likely to eye Singapore as a favourable location at the present time. This is on top of the other locational factors, such as living environment, business transparency, communications and tax structure, in which Singapore also fares well.
That said, Singapore’s rental competitiveness may well change over the next couple of years as the market is likely to continue to see increases whereas some of Singapore’s regional competitors such as Hong Kong and Shanghai are likely to see downward pressure on rents due to upcoming supply.
The higher rentals are causing many occupiers - both SMEs and MNCs - to relocate from the CBD to more cost-effective premises. But as the growth is caused by positive business sentiment the higher costs are unlikely to stop tenants from expanding. Rather, they may review their occupancy standards and workplace strategies.
Future supply is a cause of real concern as there is little coming to the market over the next few years. If there is physically nowhere to expand, MNCs may be forced to look elsewhere. They are by their very nature able to move business units around the region.
Given the supply crunch and demand boom, the authorities have taken various actions to alleviate the situation and plan for future occupation. These initiatives include the announcement of new regional and sub-regional centres in areas such as Jurong, the release of new land sites and making space available in various government properties.
While these initiatives will prove useful there are issues in terms of their impact. The release of new land sites and the announcement of new regional and sub-regional centres will not provide space for a number of years due to the length of time needed to construct new premises.
Existing space freed up from government properties will provide immediate relief but this is limited in scale. Also, in most cases the space is not suitable for MNCs which are looking for new, regular-shaped efficient office space.
The supply crunch is going to be an issue for the Singapore office market for the next two to three years and this could be exacerbated if projects are delayed due to lack of building materials and competition for labour with so many projects under construction at one time.
With increasing demand and a scramble for space, we are likely to see MNCs continuing to pre-commit to future new developments earlier than has traditionally been the norm, restacking their current premises with higher density work spaces or relocating business units to other countries.
Another way of easing pressure on existing supply may be to loosen regulations on the occupation of high-tech buildings. This would bring more immediate opportunities to conventional office users and may encourage more developers to build new supply.
The speed to market of high-tech supply can be faster than that of pure office space because many of these buildings are built on green field sites in business parks (such as Changi Business Park) where there is easy site access (unlike the constrained sites in the CBD) and no demolition or site clearance is necessary. The buildings are also lower and therefore faster to build.
The writer is regional director, head of markets, at Jones Lang LaSalle
Source: The Business Times
Micro-market office rents past 1996 highs in Q1
Office rents in five micro-markets in the first quarter of this year surpassed their 1996 highs, says Colliers International. And if they continue to rise, Singapore’s competitiveness could be eroded.
‘While not widespread, an increasing number of firms are already known to be considering relocating their non-core operations out of Singapore,’ Colliers director for research and consultancy Tay Huey Ying said yesterday.
She declined to name them but said they include companies in business and services such as accounting and law. ‘The big international banks and financial institutions are still resilient to rising rents because they still see bright business prospects in Singapore.’
According to Colliers, gross monthly average Grade A office rent in Raffles Place jumped 23.5 per cent from end-2006 to $10.63 per square foot (psf) in Q1 this year. And the firm expects a further increase of ‘at least another 30 per cent over the next three quarters’.
The figure of $10.63 psf exceeds the 1996 high of $9.77 psf by 8.8 per cent. However, gross monthly rent for Grade A office space in Marina/City Hall have risen even more - to $9.72 psf as of March 2007, or 14.4 per cent above their $8.50 level in 1996.
The other office micro-markets in which rents have surpassed their 1996 highs are for Grade A office space on Orchard Road and Grades A and B space in Shenton Way/Tanjong Pagar.
Office supply is extremely tight, Ms Tay said. Islandwide, Grade A and B occupancy averaged 96.4 per cent in Q1, up from 95.6 per cent in the preceding quarter and 91.8 per cent in Q1 2006. ‘This has given rise to the sweltering pace at which office rents are being revised, as landlords are seen raising their asking rents almost on a weekly basis,’ she said.
Colliers has also noticed a narrowing of gap between asking prices and rents at which deals are signed, reflecting the strength and negotiating power of landlords. ‘This is most prominent in the Grade A Orchard micro-market, where the gap has narrowed from 36 per cent in Q1 2004 to a mere 3 per cent this quarter,’ Ms Tay said.
Supply is expected to remain extremely tight because of limited new stock in the next two years, she said. ‘This will limit tenants’ choice and they will need to look at other alternatives to meet their requirements. A solution, which some companies have already adopted, is streamlining operations and moving back-room operations to out-of-town locations. However, the supply in these locations is also fast declining.
‘The other option is for companies to consider leasing shophouses or utilise those old government premises offered by the Singapore Land Authority.’
Source: The Business Times, 24 March 2007
‘While not widespread, an increasing number of firms are already known to be considering relocating their non-core operations out of Singapore,’ Colliers director for research and consultancy Tay Huey Ying said yesterday.
She declined to name them but said they include companies in business and services such as accounting and law. ‘The big international banks and financial institutions are still resilient to rising rents because they still see bright business prospects in Singapore.’
According to Colliers, gross monthly average Grade A office rent in Raffles Place jumped 23.5 per cent from end-2006 to $10.63 per square foot (psf) in Q1 this year. And the firm expects a further increase of ‘at least another 30 per cent over the next three quarters’.
The figure of $10.63 psf exceeds the 1996 high of $9.77 psf by 8.8 per cent. However, gross monthly rent for Grade A office space in Marina/City Hall have risen even more - to $9.72 psf as of March 2007, or 14.4 per cent above their $8.50 level in 1996.
The other office micro-markets in which rents have surpassed their 1996 highs are for Grade A office space on Orchard Road and Grades A and B space in Shenton Way/Tanjong Pagar.
Office supply is extremely tight, Ms Tay said. Islandwide, Grade A and B occupancy averaged 96.4 per cent in Q1, up from 95.6 per cent in the preceding quarter and 91.8 per cent in Q1 2006. ‘This has given rise to the sweltering pace at which office rents are being revised, as landlords are seen raising their asking rents almost on a weekly basis,’ she said.
Colliers has also noticed a narrowing of gap between asking prices and rents at which deals are signed, reflecting the strength and negotiating power of landlords. ‘This is most prominent in the Grade A Orchard micro-market, where the gap has narrowed from 36 per cent in Q1 2004 to a mere 3 per cent this quarter,’ Ms Tay said.
Supply is expected to remain extremely tight because of limited new stock in the next two years, she said. ‘This will limit tenants’ choice and they will need to look at other alternatives to meet their requirements. A solution, which some companies have already adopted, is streamlining operations and moving back-room operations to out-of-town locations. However, the supply in these locations is also fast declining.
‘The other option is for companies to consider leasing shophouses or utilise those old government premises offered by the Singapore Land Authority.’
Source: The Business Times, 24 March 2007
Office rentals in 4 prime areas reach record highs
An acute supply crunch has sent office rentals in four central Singapore areas to record highs - surpassing even 1996’s lofty peaks, a survey from Colliers International has found.
At Raffles Place, the average monthly gross rent of top quality, or Grade A, space continued to grow, rising 23.5 per cent in the first quarter of the year to reach $10.63 per sq ft (psf). This tops the 1996 high of $9.77 psf in the area, which holds the Singapore record for high office rents.
Already, prime buildings such as Republic Plaza, Singapore Land Tower and 6 Battery Road are apparently asking for $14 psf to as much as $15 psf for advance bookings, market sources said.
The asking rent at Republic Plaza was just about $13 psf earlier this year, after a deal there was sealed at about $12.50 psf last December.
While the average monthly gross rent in Grade B buildings at Raffles Place has also risen, they are still below the 1996 peak.
In the Shenton Way/Tanjong Pagar area, however, rents of both Grade A and Grade B buildings have risen above 1996 levels, said Colliers.
A similar surge has been posted by the rents of Grade A buildings such as Millenia Tower in the Marina/City Hall area and Ngee Ann City in the Orchard area.
Rents in other areas such as Beach Road, Tampines regional centre and HarbourFront have also risen but remain well below the 1996 peak.
Occupancy levels of Grade A and B office space islandwide in the first quarter are now averaging a near capacity 96.4 per cent, said Colliers’ director for research and consultancy, Ms Tay Huey Ying.
‘This has given rise to the sweltering pace at which office rents are being revised, as landlords are seen to be raising their asking rents almost on a weekly basis.’
With office supply expected to remain extremely tight in the next two years, tenants’ choices will be limited, she said.
‘A solution, which some companies have already adopted, is streamlining operations and moving back-room operations to out-of-town locations.’
Companies can also consider leasing shophouses or using old government premises offered by the Singapore Land Authority, Ms Tay said.
Already, demand is spilling over into the industrial market, where buildings that are sometimes used as offices - though they are not designed for that purpose - are seeing strong demand, market watchers said.
Last week, Cushman & Wakefield said Singapore’s gross rents for prime industrial space rose about 20 per cent last year to around $1.25 psf per month on average.
Industrial buildings that are used as offices are fetching higher rents, some around $2 psf, market watchers said.
Looking ahead, office rents of Grade A office space in Raffles Place are expected to rise by at least another 30 per cent over the next three quarters, said Ms Tay.
However, she cautioned that a continued rent hike could erode Singapore’s competitiveness.
‘While not widespread, an increasing number of firms are already known to be considering relocating their non-core operations out of Singapore.’
Source: The Straits Times, 24 March 2007
At Raffles Place, the average monthly gross rent of top quality, or Grade A, space continued to grow, rising 23.5 per cent in the first quarter of the year to reach $10.63 per sq ft (psf). This tops the 1996 high of $9.77 psf in the area, which holds the Singapore record for high office rents.
Already, prime buildings such as Republic Plaza, Singapore Land Tower and 6 Battery Road are apparently asking for $14 psf to as much as $15 psf for advance bookings, market sources said.
The asking rent at Republic Plaza was just about $13 psf earlier this year, after a deal there was sealed at about $12.50 psf last December.
While the average monthly gross rent in Grade B buildings at Raffles Place has also risen, they are still below the 1996 peak.
In the Shenton Way/Tanjong Pagar area, however, rents of both Grade A and Grade B buildings have risen above 1996 levels, said Colliers.
A similar surge has been posted by the rents of Grade A buildings such as Millenia Tower in the Marina/City Hall area and Ngee Ann City in the Orchard area.
Rents in other areas such as Beach Road, Tampines regional centre and HarbourFront have also risen but remain well below the 1996 peak.
Occupancy levels of Grade A and B office space islandwide in the first quarter are now averaging a near capacity 96.4 per cent, said Colliers’ director for research and consultancy, Ms Tay Huey Ying.
‘This has given rise to the sweltering pace at which office rents are being revised, as landlords are seen to be raising their asking rents almost on a weekly basis.’
With office supply expected to remain extremely tight in the next two years, tenants’ choices will be limited, she said.
‘A solution, which some companies have already adopted, is streamlining operations and moving back-room operations to out-of-town locations.’
Companies can also consider leasing shophouses or using old government premises offered by the Singapore Land Authority, Ms Tay said.
Already, demand is spilling over into the industrial market, where buildings that are sometimes used as offices - though they are not designed for that purpose - are seeing strong demand, market watchers said.
Last week, Cushman & Wakefield said Singapore’s gross rents for prime industrial space rose about 20 per cent last year to around $1.25 psf per month on average.
Industrial buildings that are used as offices are fetching higher rents, some around $2 psf, market watchers said.
Looking ahead, office rents of Grade A office space in Raffles Place are expected to rise by at least another 30 per cent over the next three quarters, said Ms Tay.
However, she cautioned that a continued rent hike could erode Singapore’s competitiveness.
‘While not widespread, an increasing number of firms are already known to be considering relocating their non-core operations out of Singapore.’
Source: The Straits Times, 24 March 2007
Cruise terminal in Marina South ready in 6 years
With the cruise business in Asia heating up, the snail’s crawl so far to develop a cruise terminal at Marina South looks to have been finally given the nod by the authorities — but it may take up to six years before its docks are ready for operations.
A representative from the Singapore Tourism Board (STB) had said that “the cruise terminal in Marina South would be ready (by) 2012, 2013″ during a trade event two weeks ago in Miami, the Singapore Cruise Centre’s (SCC) president Cheong Teow Cheng told Today. He was also a participant at the same four-day event, called the Seatrade Cruise Shipping Convention.
The SCC, which has been “unwavering” in its interest in this new terminal ever since the site was earmarked more than six years ago, will be keen to participate in this development, Mr Cheong added.
In fact, in 2003, the Urban Redevelopment Authority’s Public Spaces and Urban Waterfront Master Plan identified the proposed cruise terminal alonsgside other passenger and ferry terminals to form the Maritime Hub at Marina South.
A preliminary site study conducted in Marina South in the second half of last year on tidal movement and how passing vessels can affect cruise vessels docked at the site have wrapped up. It is believed to be the first such study the STB has carried out in the area.
When contacted, the tourism board’s director (Sightseeing and cruise) Dayne Lim would only say that “we are planning and in discussion with the related government agencies and cruise industry partners toward the development of the new cruise terminal at Marina South over the next five years”.
Yesterday, the SCC and iCell Network rolled out the free wireless programme, Wireless@SG, for passengers at three terminals that the former operates: the international passenger terminal and regional ferry terminal at HarbourFront, and the Tanah Merah regional ferry terminal.
This move makes the SCC’s terminals the first entry points in Singapore, as well as the first cruise and ferry terminals in the region, to provide free Internet connectivity to its passengers.
In the pipeline are VOIP services that will allow users to make low-cost international calls in the second half of this year, as well as a digital concierge service for users to customise the information they wish to receive on WiFi-enabled devices such as like laptops and mobile phones. These initiatives — along with other systems upgrading at the SCC terminals — add up to some $2.5 million, Mr Cheong said.
“The SCC recognises the challenges and IT demands of tomorrow and is taking pro-active steps to not just stay relevant, but also to stay ahead of the needs of the future.”
Source: Today, 30 March 2007
A representative from the Singapore Tourism Board (STB) had said that “the cruise terminal in Marina South would be ready (by) 2012, 2013″ during a trade event two weeks ago in Miami, the Singapore Cruise Centre’s (SCC) president Cheong Teow Cheng told Today. He was also a participant at the same four-day event, called the Seatrade Cruise Shipping Convention.
The SCC, which has been “unwavering” in its interest in this new terminal ever since the site was earmarked more than six years ago, will be keen to participate in this development, Mr Cheong added.
In fact, in 2003, the Urban Redevelopment Authority’s Public Spaces and Urban Waterfront Master Plan identified the proposed cruise terminal alonsgside other passenger and ferry terminals to form the Maritime Hub at Marina South.
A preliminary site study conducted in Marina South in the second half of last year on tidal movement and how passing vessels can affect cruise vessels docked at the site have wrapped up. It is believed to be the first such study the STB has carried out in the area.
When contacted, the tourism board’s director (Sightseeing and cruise) Dayne Lim would only say that “we are planning and in discussion with the related government agencies and cruise industry partners toward the development of the new cruise terminal at Marina South over the next five years”.
Yesterday, the SCC and iCell Network rolled out the free wireless programme, Wireless@SG, for passengers at three terminals that the former operates: the international passenger terminal and regional ferry terminal at HarbourFront, and the Tanah Merah regional ferry terminal.
This move makes the SCC’s terminals the first entry points in Singapore, as well as the first cruise and ferry terminals in the region, to provide free Internet connectivity to its passengers.
In the pipeline are VOIP services that will allow users to make low-cost international calls in the second half of this year, as well as a digital concierge service for users to customise the information they wish to receive on WiFi-enabled devices such as like laptops and mobile phones. These initiatives — along with other systems upgrading at the SCC terminals — add up to some $2.5 million, Mr Cheong said.
“The SCC recognises the challenges and IT demands of tomorrow and is taking pro-active steps to not just stay relevant, but also to stay ahead of the needs of the future.”
Source: Today, 30 March 2007
Sunny outlook for Singapore hotel industry
Underpinned by buoyant tourism markets and the positive macroeconomic environment, major hotel markets across Asia, including Singapore, had a stellar year in 2006. Strong investor appetite for hotel assets in the region led to record levels of transaction activity with Singapore, Hong Kong and Japan emerging as the most favoured investment destinations.
Last year also witnessed the successful listing of two pure lodging real estate investment trusts (REITs) in Singapore - the Ascott Residence Trust and CDL Hospitality Trust. Given the inherent capricious nature of the tourism/lodging industry, their successful listing and subsequent market performance signalled investors’ confidence in the hospitality industry.
With economic and tourism prospects expected to stay robust, hotels in Singapore and Asia can expect to enjoy further growth in 2007.
Intense rivalry
Singapore welcomed a record 9.7 million international visitors in 2006 and the Singapore Tourism Board (STB) is working towards a new high of 10.2 million visitors this year and ultimately 17 million arrivals by 2015.
To achieve the targets, Singapore has to keep its tourism and hospitality industries competitive. Its efforts to revamp the tourism sector are essential in the light of the intense rivalry in the region: Hong Kong launched Disneyland in 2005; Beijing will host the Summer Olympics in 2008; Shanghai and Delhi will respectively host the World Expo and Commonwealth Games in 2010, while Macau is transforming into Asia’s very own Las Vegas complete with integrated casino/entertainment facilities and world-class hotels.
Many markets, including Hong Kong, Macau, Shanghai and Bangkok, are also competing with Singapore for the lucrative MICE (meetings, incentives, conventions and exhibitions) business. Additionally, emerging markets like Vietnam, Cambodia and India are fast becoming choice tourist destinations.
Singapore has embarked swiftly on steps to diversify and strengthen its tourism offerings. The two upcoming integrated resorts with gaming elements - Marina Bay Sands will provide world-class MICE facilities, while Resorts World Sentosa will feature a Universal Studios theme park - cater to distinct yet complementary clientele.
The construction of the Singapore Flyer and the remake of Sentosa are also progressing smoothly. The iconic VivoCity, with an eclectic mix of retail, entertainment and lifestyle concepts, including St James Power Station, as well as the revitalised Clarke Quay, has injected greater vibrancy into the local leisure scene.
For the first time, Singapore may also host the Formula 1 Grand Prix in 2008, the third-most watched sporting event in the world after the Olympics and World Cup.
With travel becoming more accessible due to the growing popularity of low-cost carriers (LCCs), Singapore responded with its first budget terminal in 2006. The move is in line with the government’s strategy to strengthen Singapore’s position as an aviation hub and regional epicentre for the low cost airline network.
In anticipation of an expanding and more diversified tourist profile, the government has released more hotel sites for development to supplement the existing hotel stock. Five land parcels were sold in 2006 under the Government Land Sales programme, with another eight hotel sites being placed on the reserve list for the first half of 2007 and at least another three more confirmed sites that include a hotel component.
While the cost of travelling is decreasing, room rates are increasing which is likely to result in higher demand growth in the mid-scale hotel segment.
Higher hotel rates
Strong demand in the wake of limited supply has allowed hoteliers to raise rates in 2006 by an average 20 per cent on the year, sometimes at the expense of occupancy levels. Market conditions are expected to remain robust and when considered in combination with the limited new supply, average daily rates (ADR) has the potential to increase a further 10 to 15 per cent in 2007.
A comparison of ADR across major five-star hotel markets in Asia showed that Hong Kong remained the rate leader in 2006, achieving an ADR of US$312. At US$148 Singapore’s ADR is nearly half of that of Hong Kong. This suggests that there is further upside potential for room rates in Singapore, particularly considering the limited supply of new luxury grade hotels.
Around 14,000 new rooms could be added to the market from 2007 onwards from new projects under construction/proposed (including the two integrated resorts) as well as the announced government hotel sites. The increase in room inventory will be easily absorbed by the additional demand the STB aims to attract - its 17 million visitor arrivals target for 2015 is almost 75 per cent higher than the 9.7 million achieved in 2006. The current stock of around 38,000 hotel rooms is already achieving an average occupancy in excess of 80 per cent, indicating strong underlying market demand. Within 2007, prominent completions include the 299-room St Regis and the 120-room Amara Sanctuary Resort Sentosa.
The Singapore investment market reached a record for hotel transactions during 2006 with eight hotel-related transactions surpassing US$1.2 billion. Investors remain very bullish about hotel investments in Singapore with marketed assets attracting unparalleled interests.
The upturn in hotel trading performance and overwhelmingly positive outlook are driving investor demand. Investors polled in Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey in December 2006 expressed strong optimism in the short and medium-term hotel trading performance of hotels in Singapore. In fact, investors are most upbeat about Singapore’s hotel sector over the next 24 months outside of China and
India.
While regional players remain dominant, there is a growing presence of US, European and Middle Eastern investors who are looking to park their funds in Asia. Singapore is an attractive destination given its high market transparency, favourable business and investment environment, sound governance, low barriers to entry and stable political outlook.
While the supply of hotel assets is expected to remain constrained in Singapore as they remain tightly held by local families, there are still opportunities to purchase both existing hotels and government hotel land sites in 2007. The crux is speed and timing as underlying demand for hotel assets/land remains strong. Reflecting their medium- to long-term confidence in Singapore’s tourism and hotel industry, hotel assets/land placed in the market for sale in 2006 were quickly snapped up. In total, investors walked away with over $1.5 billion worth of investments in seven hotel-related transactions during 2006/early 2007 - a historic high.
Bright days ahead
Growing indifference towards threats of terrorism and avian flu in Asia, active intra-regional business exchanges, more affordable air travel fuelled by the proliferation of LCCs in Asia, and a generally more affluent population in the region will continue to be key contributing factors towards the sustained tourism growth in Asia, including Singapore. Other demand drivers include China and India’s burgeoning outbound travel markets and high-yield travellers from Russia and the Middle East.
In the medium to long term, the diversification of Singapore’s tourism and accommodation product offerings will also enhance the industry’s sustainability and competitiveness in the region, by providing visitors with an experience that is ‘Uniquely Singapore’.
The writer is the executive vice-president, Jones Lang LaSalle Hotels
Source: The Business Times
Last year also witnessed the successful listing of two pure lodging real estate investment trusts (REITs) in Singapore - the Ascott Residence Trust and CDL Hospitality Trust. Given the inherent capricious nature of the tourism/lodging industry, their successful listing and subsequent market performance signalled investors’ confidence in the hospitality industry.
With economic and tourism prospects expected to stay robust, hotels in Singapore and Asia can expect to enjoy further growth in 2007.
Intense rivalry
Singapore welcomed a record 9.7 million international visitors in 2006 and the Singapore Tourism Board (STB) is working towards a new high of 10.2 million visitors this year and ultimately 17 million arrivals by 2015.
To achieve the targets, Singapore has to keep its tourism and hospitality industries competitive. Its efforts to revamp the tourism sector are essential in the light of the intense rivalry in the region: Hong Kong launched Disneyland in 2005; Beijing will host the Summer Olympics in 2008; Shanghai and Delhi will respectively host the World Expo and Commonwealth Games in 2010, while Macau is transforming into Asia’s very own Las Vegas complete with integrated casino/entertainment facilities and world-class hotels.
Many markets, including Hong Kong, Macau, Shanghai and Bangkok, are also competing with Singapore for the lucrative MICE (meetings, incentives, conventions and exhibitions) business. Additionally, emerging markets like Vietnam, Cambodia and India are fast becoming choice tourist destinations.
Singapore has embarked swiftly on steps to diversify and strengthen its tourism offerings. The two upcoming integrated resorts with gaming elements - Marina Bay Sands will provide world-class MICE facilities, while Resorts World Sentosa will feature a Universal Studios theme park - cater to distinct yet complementary clientele.
The construction of the Singapore Flyer and the remake of Sentosa are also progressing smoothly. The iconic VivoCity, with an eclectic mix of retail, entertainment and lifestyle concepts, including St James Power Station, as well as the revitalised Clarke Quay, has injected greater vibrancy into the local leisure scene.
For the first time, Singapore may also host the Formula 1 Grand Prix in 2008, the third-most watched sporting event in the world after the Olympics and World Cup.
With travel becoming more accessible due to the growing popularity of low-cost carriers (LCCs), Singapore responded with its first budget terminal in 2006. The move is in line with the government’s strategy to strengthen Singapore’s position as an aviation hub and regional epicentre for the low cost airline network.
In anticipation of an expanding and more diversified tourist profile, the government has released more hotel sites for development to supplement the existing hotel stock. Five land parcels were sold in 2006 under the Government Land Sales programme, with another eight hotel sites being placed on the reserve list for the first half of 2007 and at least another three more confirmed sites that include a hotel component.
While the cost of travelling is decreasing, room rates are increasing which is likely to result in higher demand growth in the mid-scale hotel segment.
Higher hotel rates
Strong demand in the wake of limited supply has allowed hoteliers to raise rates in 2006 by an average 20 per cent on the year, sometimes at the expense of occupancy levels. Market conditions are expected to remain robust and when considered in combination with the limited new supply, average daily rates (ADR) has the potential to increase a further 10 to 15 per cent in 2007.
A comparison of ADR across major five-star hotel markets in Asia showed that Hong Kong remained the rate leader in 2006, achieving an ADR of US$312. At US$148 Singapore’s ADR is nearly half of that of Hong Kong. This suggests that there is further upside potential for room rates in Singapore, particularly considering the limited supply of new luxury grade hotels.
Around 14,000 new rooms could be added to the market from 2007 onwards from new projects under construction/proposed (including the two integrated resorts) as well as the announced government hotel sites. The increase in room inventory will be easily absorbed by the additional demand the STB aims to attract - its 17 million visitor arrivals target for 2015 is almost 75 per cent higher than the 9.7 million achieved in 2006. The current stock of around 38,000 hotel rooms is already achieving an average occupancy in excess of 80 per cent, indicating strong underlying market demand. Within 2007, prominent completions include the 299-room St Regis and the 120-room Amara Sanctuary Resort Sentosa.
The Singapore investment market reached a record for hotel transactions during 2006 with eight hotel-related transactions surpassing US$1.2 billion. Investors remain very bullish about hotel investments in Singapore with marketed assets attracting unparalleled interests.
The upturn in hotel trading performance and overwhelmingly positive outlook are driving investor demand. Investors polled in Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey in December 2006 expressed strong optimism in the short and medium-term hotel trading performance of hotels in Singapore. In fact, investors are most upbeat about Singapore’s hotel sector over the next 24 months outside of China and
India.
While regional players remain dominant, there is a growing presence of US, European and Middle Eastern investors who are looking to park their funds in Asia. Singapore is an attractive destination given its high market transparency, favourable business and investment environment, sound governance, low barriers to entry and stable political outlook.
While the supply of hotel assets is expected to remain constrained in Singapore as they remain tightly held by local families, there are still opportunities to purchase both existing hotels and government hotel land sites in 2007. The crux is speed and timing as underlying demand for hotel assets/land remains strong. Reflecting their medium- to long-term confidence in Singapore’s tourism and hotel industry, hotel assets/land placed in the market for sale in 2006 were quickly snapped up. In total, investors walked away with over $1.5 billion worth of investments in seven hotel-related transactions during 2006/early 2007 - a historic high.
Bright days ahead
Growing indifference towards threats of terrorism and avian flu in Asia, active intra-regional business exchanges, more affordable air travel fuelled by the proliferation of LCCs in Asia, and a generally more affluent population in the region will continue to be key contributing factors towards the sustained tourism growth in Asia, including Singapore. Other demand drivers include China and India’s burgeoning outbound travel markets and high-yield travellers from Russia and the Middle East.
In the medium to long term, the diversification of Singapore’s tourism and accommodation product offerings will also enhance the industry’s sustainability and competitiveness in the region, by providing visitors with an experience that is ‘Uniquely Singapore’.
The writer is the executive vice-president, Jones Lang LaSalle Hotels
Source: The Business Times
Singapore’s aim to be world class has exceeded past standards: Kishore
Singapore as a garden city, a water city and a place where the East meets West.
These are three areas which a leading academic believes will give the Singapore national brand global recognition.
Professor Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy made these points at a lecture organised by the Singapore Chinese Chamber of Commerce and Industry (SCCCI) on Wednesday.
Singapore must develop greater self-confidence in its own judgement, argued the country’s well-known critic and former ambassador to the United Nations.
And he finds it puzzling that Singapore is still aspiring to be world class when, in many areas, it has exceeded world-class standards.
He said: “In the past, it was good for Singapore to copy the best practices of others. But today, at Singapore’s stage of development, it has really got to think twice before copying from others.
“Today, many western cities, including London, believe every good city must have a ferris wheel to show the tourists. So Singapore decides it must have a ferris wheel. Do we really have to copy others?”
Even though Singapore has attained world-class standards in several areas, there is always the word of caution not to become complacent.
That is because the world is always facing new challenges and Singapore and Singaporeans must always continue to adapt to these challenges to ensure that the national flag is always flying high internationally.
And Professor Kishore believes Singapore’s neighbours will benefit by engaging the republic.
He said: “One of Singapore’s greatest challenges is to demonstrate to its neighbours that the old image of Singapore as being a parasite of the region is wrong and that Singapore actually adds value to the region and doesn’t subtract value.
“If Singapore is removed from the map of Southeast Asia, the impact will not be felt just on Singapore, it will be felt by the whole region.”
That the Malaysian government has asked Singapore to participate in the Iskandar Development Region is a very positive sign, said Professor Kishore, as it indicates Singapore can contribute to its success.
Source: Channel NewsAsia
These are three areas which a leading academic believes will give the Singapore national brand global recognition.
Professor Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy made these points at a lecture organised by the Singapore Chinese Chamber of Commerce and Industry (SCCCI) on Wednesday.
Singapore must develop greater self-confidence in its own judgement, argued the country’s well-known critic and former ambassador to the United Nations.
And he finds it puzzling that Singapore is still aspiring to be world class when, in many areas, it has exceeded world-class standards.
He said: “In the past, it was good for Singapore to copy the best practices of others. But today, at Singapore’s stage of development, it has really got to think twice before copying from others.
“Today, many western cities, including London, believe every good city must have a ferris wheel to show the tourists. So Singapore decides it must have a ferris wheel. Do we really have to copy others?”
Even though Singapore has attained world-class standards in several areas, there is always the word of caution not to become complacent.
That is because the world is always facing new challenges and Singapore and Singaporeans must always continue to adapt to these challenges to ensure that the national flag is always flying high internationally.
And Professor Kishore believes Singapore’s neighbours will benefit by engaging the republic.
He said: “One of Singapore’s greatest challenges is to demonstrate to its neighbours that the old image of Singapore as being a parasite of the region is wrong and that Singapore actually adds value to the region and doesn’t subtract value.
“If Singapore is removed from the map of Southeast Asia, the impact will not be felt just on Singapore, it will be felt by the whole region.”
That the Malaysian government has asked Singapore to participate in the Iskandar Development Region is a very positive sign, said Professor Kishore, as it indicates Singapore can contribute to its success.
Source: Channel NewsAsia
Singapore tops global study as city most conducive for business
Singapore has topped a list of 11 global cities as the place most conducive for doing business.
This was according to a recent study by PricewaterhouseCoopers and the Partnership for New York City.
Out of a total of nine indicators used for assessment, Singapore scored well in three of them which were demographic advantages, safety and security, and ease of doing business.
The other six indicators were intellectual capital, technology IQ and innovation, transportation assets, financial clout, cost and lifestyle assets.
The other cities in the study were Atlanta, Chicago, Frankfurt, London, Los Angeles, New York, Paris, Shanghai, Tokyo and Toronto.
Source: Channel NewsAsia, 20 March 2007
This was according to a recent study by PricewaterhouseCoopers and the Partnership for New York City.
Out of a total of nine indicators used for assessment, Singapore scored well in three of them which were demographic advantages, safety and security, and ease of doing business.
The other six indicators were intellectual capital, technology IQ and innovation, transportation assets, financial clout, cost and lifestyle assets.
The other cities in the study were Atlanta, Chicago, Frankfurt, London, Los Angeles, New York, Paris, Shanghai, Tokyo and Toronto.
Source: Channel NewsAsia, 20 March 2007
Singapore voted as world’s best place to live in: survey
Expatriates have voted Singapore as the best place to live in the world.
Singapore was rated tops for its excellent infrastructure and facilities.
Its cosmopolitan make-up, low crime rate, socio-political stability and favourable climate also make the country a very favourable location for foreigners.
The Location Ranking Survey, which was conducted by ECA International, compares living standards in 254 locations globally.
Respondents also chose ranked categories such as climate, air quality, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety and political tensions.
Other top locations were Australia, New Zealand, Japan and Canada.
The least favourable place in the world to live in is Baghdad, followed by Kabul and Karachi.
Source: Channel NewsAsia
Singapore was rated tops for its excellent infrastructure and facilities.
Its cosmopolitan make-up, low crime rate, socio-political stability and favourable climate also make the country a very favourable location for foreigners.
The Location Ranking Survey, which was conducted by ECA International, compares living standards in 254 locations globally.
Respondents also chose ranked categories such as climate, air quality, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety and political tensions.
Other top locations were Australia, New Zealand, Japan and Canada.
The least favourable place in the world to live in is Baghdad, followed by Kabul and Karachi.
Source: Channel NewsAsia
Singapore a viable investment option: renowned architect
Singapore is a viable investment option with room for creativity to flourish, according to world-renowned architect Daniel Libeskind.
He said this to Channel NewsAsia on the sidelines of the MIPIM real estate fair in Cannes.
Mr Libeskind, the brainchild behind the “Reflections at Keppel Bay” project, said he was prepared to explore new projects in Singapore.
One of the pull factors was the positive interaction with government agencies, who were “enlightened” about urban designs and set high standards.
As a result, he was able to create Reflections - a mixed high-and-low-rise project to be ready in 2009.
Showflats are being constructed and sales of the 1,100 apartments could start in several months.
Mr Libeskind added that he considered Singapore a global city with diverse architecture and plurality of ideas.
He said, “Singapore is coming into the 21st century in a very powerful way, it’s a place which depends on creativity, and I see it. And I think as long as a place has ambition, as long as it doesn’t devolve into some local interest or decisions made in a secret boardroom, as long as it’s out in the open, it’s something that people have access to, then it would be good, and I think Singapore is a good example of a dynamic way forward.”
Source: Channel NewsAsia
He said this to Channel NewsAsia on the sidelines of the MIPIM real estate fair in Cannes.
Mr Libeskind, the brainchild behind the “Reflections at Keppel Bay” project, said he was prepared to explore new projects in Singapore.
One of the pull factors was the positive interaction with government agencies, who were “enlightened” about urban designs and set high standards.
As a result, he was able to create Reflections - a mixed high-and-low-rise project to be ready in 2009.
Showflats are being constructed and sales of the 1,100 apartments could start in several months.
Mr Libeskind added that he considered Singapore a global city with diverse architecture and plurality of ideas.
He said, “Singapore is coming into the 21st century in a very powerful way, it’s a place which depends on creativity, and I see it. And I think as long as a place has ambition, as long as it doesn’t devolve into some local interest or decisions made in a secret boardroom, as long as it’s out in the open, it’s something that people have access to, then it would be good, and I think Singapore is a good example of a dynamic way forward.”
Source: Channel NewsAsia
Singapore goes all out to impress at world’s largest real estate fair
Singapore is going all out to trumpet its attractions as a city to invest, visit, work and live in at the world’s largest annual real estate and city development fair here this week.
National Development Minister Mah Bow Tan will lead the Singaporean group, which includes a record number of government bodies and private companies keen to showcase the country’s strengths.
The Marche International des Professionals de L’Immobilier, which starts today, is a four-day gathering of city planners, leading real estate developers, architects and investors.
A total of 25,000 delegates from 74 countries will be attending, with exhibitions covering almost 24,000 sq m.
While Singapore has had a presence at the show in previous years, this will mark its largest gathering of public and private bodies, all under a 200 sq m Singapore Pavilion.
Last year, for example, there were just three Singaporean entities. This year, there will be four private firms and three public bodies attending.
‘We are diversifying our economy to drive our future economic growth,’ said an Urban Redevelopment Authority (URA) spokesman.
‘Property is one of the key sectors we have identified,’ she said, adding that a Singapore presence at the show is important to showcase investment opportunities to the world and increase interaction with foreign developers and investors.
The Singaporean real estate investment opportunities on offer include Marina Bay and city centre sites such as Outram Park, while the Singapore Tourism Board will highlight the ‘vibrant tourism zones’ of Orchard Road and the Southern Waterfront.
The URA spokesman said the HDB will also be there to ‘enhance recognition of Singapore’s excellent standards of public housing and contribute towards the aspiration to be a premier global city’.
The HDB will showcase the redevelopment of Clementi Town Centre, which it describes as an estate where housing, educational, recreational and transport facilities have been seamlessly integrated.
Private companies, including City Developments and Keppel Corp, will be showing off their iconic upcoming developments.
‘We hope that by showcasing such exquisite properties, potential buyers will look at Singapore as a good place to invest,’ said City Developments’ group general manager Chia Ngiang Hong.
Meanwhile, Mr Mah will also join a panel discussion with the mayors of Montreal and Stuttgart on how cities can combine growth with a high quality of life.
And 30 key players from North America, Europe, Australia, Asia and the Middle East will be having dinner with the minister, as the Government seeks to ‘establish new contacts, strengthen existing networks and share with these decision-makers the exciting development opportunities in Singapore’.
During his trip to Europe, Mr Mah will also lead URA officials on visits to Paris, Valencia and Madrid, to garner best practices from these cities.
Source: The Straits Times, 13 March 2007
National Development Minister Mah Bow Tan will lead the Singaporean group, which includes a record number of government bodies and private companies keen to showcase the country’s strengths.
The Marche International des Professionals de L’Immobilier, which starts today, is a four-day gathering of city planners, leading real estate developers, architects and investors.
A total of 25,000 delegates from 74 countries will be attending, with exhibitions covering almost 24,000 sq m.
While Singapore has had a presence at the show in previous years, this will mark its largest gathering of public and private bodies, all under a 200 sq m Singapore Pavilion.
Last year, for example, there were just three Singaporean entities. This year, there will be four private firms and three public bodies attending.
‘We are diversifying our economy to drive our future economic growth,’ said an Urban Redevelopment Authority (URA) spokesman.
‘Property is one of the key sectors we have identified,’ she said, adding that a Singapore presence at the show is important to showcase investment opportunities to the world and increase interaction with foreign developers and investors.
The Singaporean real estate investment opportunities on offer include Marina Bay and city centre sites such as Outram Park, while the Singapore Tourism Board will highlight the ‘vibrant tourism zones’ of Orchard Road and the Southern Waterfront.
The URA spokesman said the HDB will also be there to ‘enhance recognition of Singapore’s excellent standards of public housing and contribute towards the aspiration to be a premier global city’.
The HDB will showcase the redevelopment of Clementi Town Centre, which it describes as an estate where housing, educational, recreational and transport facilities have been seamlessly integrated.
Private companies, including City Developments and Keppel Corp, will be showing off their iconic upcoming developments.
‘We hope that by showcasing such exquisite properties, potential buyers will look at Singapore as a good place to invest,’ said City Developments’ group general manager Chia Ngiang Hong.
Meanwhile, Mr Mah will also join a panel discussion with the mayors of Montreal and Stuttgart on how cities can combine growth with a high quality of life.
And 30 key players from North America, Europe, Australia, Asia and the Middle East will be having dinner with the minister, as the Government seeks to ‘establish new contacts, strengthen existing networks and share with these decision-makers the exciting development opportunities in Singapore’.
During his trip to Europe, Mr Mah will also lead URA officials on visits to Paris, Valencia and Madrid, to garner best practices from these cities.
Source: The Straits Times, 13 March 2007
New Redas chief pledges to help build a global city
Simon Cheong, who is taking over as president of the Real Estate Developers Association of Singapore (Redas), hopes to help the industry body and its members ‘build Singapore into a global city’.
The 49-year-old founder, chairman and CEO of SC Global Developments takes the helm at Redas from Pontiac Land chairman Kwee Liong Keng, who was president for the maximum two consecutive terms allowed. Each term is for two years.
‘I’m very happy Simon Cheong is willing to lead the association. With new ideas, he will bring Redas to new heights,’ Mr Kwee said yesterday.
Mr Cheong, a former St Joseph’s Institution boy, said: ‘I am deeply humbled to have been voted in as president of Redas. I would like to thank Mr Kwee and all past presidents of Redas for leaving me with a solid foundation to build on.’
The former real estate banker turned high-end residential developer is known as a savvy investor. Other top office bearers on the new Redas executive committee are City Developments group general manager Chia Ngiang Hong and Frasers Centrepoint CEO Lim Ee Seng, who have been elected first and second vice-presidents respectively.
Eddie Yong of Far East Organization has been elected honorary secretary and Khor Thong Meng of Allgreen Properties honorary assistant secretary.
CB Chng of Wing Tai is honorary treasurer and Ng Chee Seng of Bukit Sembawang honorary assistant treasurer. The seven-member exco was voted in by the 15 members of the elected management committee. The exco was formalised yesterday.
Redas said that this year it introduced a new election system of secret balloting for office bearers, and those who secured the most votes for the respective positions were elected.
Mr Cheong is expected to outline his vision for Redas at a Chinese New Year gathering on Feb 26 to be attended by National Development Minister Mah Bow Tan. Redas, set up in 1959, has about 300 members.
Mr Kwee has also had earlier stints as Redas president - 1983-1985 and 1987-1989. He is highly respected within the association, listening to various groups before making decisions that are generally accepted, BT understands. ‘He has this ability to introduce modern business concepts while existing in a traditional Chinese organisation,’ an industry observer said.
The affable, Bandung-born Mr Kwee has a BSc, majoring in textile management and marketing from Philadelphia University.
Mr Cheong is married and a father of three. He has a BSc in civil engineering and a Master of Business Administration, both from George Washington University. He held key positions in real estate banking at Citibank and CS First Boston before setting up SC Global Pte Ltd in early 1996.
In 1999, he bought a majority stake in the former ANAHotels as a listed shell company from the-then DBS Land, and later renamed the listed entity as SC Global Developments.
Source: The Business Times
The 49-year-old founder, chairman and CEO of SC Global Developments takes the helm at Redas from Pontiac Land chairman Kwee Liong Keng, who was president for the maximum two consecutive terms allowed. Each term is for two years.
‘I’m very happy Simon Cheong is willing to lead the association. With new ideas, he will bring Redas to new heights,’ Mr Kwee said yesterday.
Mr Cheong, a former St Joseph’s Institution boy, said: ‘I am deeply humbled to have been voted in as president of Redas. I would like to thank Mr Kwee and all past presidents of Redas for leaving me with a solid foundation to build on.’
The former real estate banker turned high-end residential developer is known as a savvy investor. Other top office bearers on the new Redas executive committee are City Developments group general manager Chia Ngiang Hong and Frasers Centrepoint CEO Lim Ee Seng, who have been elected first and second vice-presidents respectively.
Eddie Yong of Far East Organization has been elected honorary secretary and Khor Thong Meng of Allgreen Properties honorary assistant secretary.
CB Chng of Wing Tai is honorary treasurer and Ng Chee Seng of Bukit Sembawang honorary assistant treasurer. The seven-member exco was voted in by the 15 members of the elected management committee. The exco was formalised yesterday.
Redas said that this year it introduced a new election system of secret balloting for office bearers, and those who secured the most votes for the respective positions were elected.
Mr Cheong is expected to outline his vision for Redas at a Chinese New Year gathering on Feb 26 to be attended by National Development Minister Mah Bow Tan. Redas, set up in 1959, has about 300 members.
Mr Kwee has also had earlier stints as Redas president - 1983-1985 and 1987-1989. He is highly respected within the association, listening to various groups before making decisions that are generally accepted, BT understands. ‘He has this ability to introduce modern business concepts while existing in a traditional Chinese organisation,’ an industry observer said.
The affable, Bandung-born Mr Kwee has a BSc, majoring in textile management and marketing from Philadelphia University.
Mr Cheong is married and a father of three. He has a BSc in civil engineering and a Master of Business Administration, both from George Washington University. He held key positions in real estate banking at Citibank and CS First Boston before setting up SC Global Pte Ltd in early 1996.
In 1999, he bought a majority stake in the former ANAHotels as a listed shell company from the-then DBS Land, and later renamed the listed entity as SC Global Developments.
Source: The Business Times
Foreign cities to get a taste of Malaysian cuisine
Foreign cities to get a taste of Malaysian cuisine
By Marina Emmanuel
March 31 2007
MALAYSIA Tourism Promotion Board's (Tourism Ministry) plans to offer upmarket Malaysian cuisine around the world via its 'Malaysia Kitchen' programme is set to see restaurants mushrooming in cities such as Beijing, Hyderabad, Dubai, Frankfurt and Moscow this year.
The programme, which is a concept based on five-star restaurants offering Malaysian cuisine, will see Tourism Malaysia's investment arm - Pempena Sdn Bhd - and its three partners investing some RM40 million in the new eateries.
Pempena holds a 45 per cent stake in Malaysian Restaurant Co Ltd - which operates the swanky Awana Chelsea restaurant in London's Sloane Avenue, while entreprenuer- cum-restauranter Low Chin Meng holds a 35 per cent share and Coca Restaurant UK Ltd the remaining stake.
"We expect the RM3 million Awana Beijing to open next month, followed by another RM3 million restaurant in Hyderabad, India, in May," Low, who is also Malaysian Restaurant director and LCL Corp Bhd managing director, said in Dubai last week.
He said that the Awana name will likely be retained for all the new restaurants, including the one in Dubai where the company is set to invest between RM6 million and RM8 million and open it for business by August.
"For the Frankfurt and Moscow restaurants, we have earmarked between RM12 million and RM15 million to open each outlet," Low said.
The company is eyeing Malaysian expatriates living in the various foreign cities as potential customers.
Low said on LCL's part, it has a ready market for the Malaysian restaurants in Dubai and Hyderabad, where it is engaged in refit projects and has a sizeable Malaysian workforce stationed in both cities.
"Since it is Visit Malaysia Year (VMY) 2007, we can think of no better way in promoting tourism to foreigners living in these locations than via our own cuisine," he added.
The Awana Chelsea restaurant in London was opened in November 2005.
Pempena holds a 45 per cent stake in the restaurant and as of last year had invested RM3.7 million in the outlet, which has a paid-up capital of RM8.2 million.
The outlet currently rakes in about STG100,000 (RM679,000) a week.
By Marina Emmanuel
March 31 2007
MALAYSIA Tourism Promotion Board's (Tourism Ministry) plans to offer upmarket Malaysian cuisine around the world via its 'Malaysia Kitchen' programme is set to see restaurants mushrooming in cities such as Beijing, Hyderabad, Dubai, Frankfurt and Moscow this year.
The programme, which is a concept based on five-star restaurants offering Malaysian cuisine, will see Tourism Malaysia's investment arm - Pempena Sdn Bhd - and its three partners investing some RM40 million in the new eateries.
Pempena holds a 45 per cent stake in Malaysian Restaurant Co Ltd - which operates the swanky Awana Chelsea restaurant in London's Sloane Avenue, while entreprenuer- cum-restauranter Low Chin Meng holds a 35 per cent share and Coca Restaurant UK Ltd the remaining stake.
"We expect the RM3 million Awana Beijing to open next month, followed by another RM3 million restaurant in Hyderabad, India, in May," Low, who is also Malaysian Restaurant director and LCL Corp Bhd managing director, said in Dubai last week.
He said that the Awana name will likely be retained for all the new restaurants, including the one in Dubai where the company is set to invest between RM6 million and RM8 million and open it for business by August.
"For the Frankfurt and Moscow restaurants, we have earmarked between RM12 million and RM15 million to open each outlet," Low said.
The company is eyeing Malaysian expatriates living in the various foreign cities as potential customers.
Low said on LCL's part, it has a ready market for the Malaysian restaurants in Dubai and Hyderabad, where it is engaged in refit projects and has a sizeable Malaysian workforce stationed in both cities.
"Since it is Visit Malaysia Year (VMY) 2007, we can think of no better way in promoting tourism to foreigners living in these locations than via our own cuisine," he added.
The Awana Chelsea restaurant in London was opened in November 2005.
Pempena holds a 45 per cent stake in the restaurant and as of last year had invested RM3.7 million in the outlet, which has a paid-up capital of RM8.2 million.
The outlet currently rakes in about STG100,000 (RM679,000) a week.
KL Kepong expands downstream activities
KL Kepong expands downstream activities
By Sharen Kaur
sharen@nstp.com.my
April 2 2007
PLANTATION group Kuala Lumpur Kepong Bhd (KLK) is expanding its downstream operations, including investing in new state-of-the-art technologies for the extraction of vitamin E tocotrienols from palm oil.
In nature, vitamin E occurs as tocopherols and tocotrienols, which differ in their structures.
While all edible oils contain tocopherols, tocotrienols are abundant only in palm and rice bran oil.
The palm tocotrienols have unique physiological and health properties that are not apparent with tocopherols.
Research has demonstrated that tocotrienols can reduce blood cholesterol levels and protect against the risk of coronary heart disease.
KLK chairman Datuk Seri Lee Oi Hian said tocotrienols are present in palm oil in significant quantity, and it has been proven in the market to lower cholesterol and work as an antioxidant.
He said KLK is working with a US-based cancer research institute on the effectiveness of tocotrienols in the prevention of cancer.
He also said tocotrienols have other proven health attributes and research collaborations with leading research institutes are on-going to discover other new possibilities which can help prevent the onset of degenerative diseases.
"Industry players already have plantations that have invested in the extraction of tocotrienols from palm oil for sale to nutraceutical companies worldwide," he told Business Times.
Lee, who is also the chairman of the Malaysian Palm Oil Council (MPOC), said many trials are going on now to prove that the product can work as antioxidant, anti-cholesterol and possibly, anti-cancer.
"Consumers with marginally high cholesterol have started taking this natural antioxidant. It is basically already in the palm oil they consume everyday because of its high content in palm oil," he added.
MPOC chief executive officer Tan Sri Datuk Dr Yusof Basiron said the attributes of palm oil is still not fully appreciated by the consumer.
Yusof said tocotrienols are very effective vitamin E isomers that helps protect the body against oxidative deterioration from the aging process and it is 50 to 60 per cent more effective than the normal vitamin E tocopherols.
He said in the palm cooking oil we consume daily, there is at least 450-500 mg of tocotrienols in each kilogram of oil.
"These vitamin E tocotrienols present a unique niche market whose potentials are only now being discovered. Already the palm tocotrienols command a much higher price than tocopherols," he said.
Yusof added that tocotrienols are much in demand in the nutraceutical (nutrition supplement and health products) and functional food markets.
By Sharen Kaur
sharen@nstp.com.my
April 2 2007
PLANTATION group Kuala Lumpur Kepong Bhd (KLK) is expanding its downstream operations, including investing in new state-of-the-art technologies for the extraction of vitamin E tocotrienols from palm oil.
In nature, vitamin E occurs as tocopherols and tocotrienols, which differ in their structures.
While all edible oils contain tocopherols, tocotrienols are abundant only in palm and rice bran oil.
The palm tocotrienols have unique physiological and health properties that are not apparent with tocopherols.
Research has demonstrated that tocotrienols can reduce blood cholesterol levels and protect against the risk of coronary heart disease.
KLK chairman Datuk Seri Lee Oi Hian said tocotrienols are present in palm oil in significant quantity, and it has been proven in the market to lower cholesterol and work as an antioxidant.
He said KLK is working with a US-based cancer research institute on the effectiveness of tocotrienols in the prevention of cancer.
He also said tocotrienols have other proven health attributes and research collaborations with leading research institutes are on-going to discover other new possibilities which can help prevent the onset of degenerative diseases.
"Industry players already have plantations that have invested in the extraction of tocotrienols from palm oil for sale to nutraceutical companies worldwide," he told Business Times.
Lee, who is also the chairman of the Malaysian Palm Oil Council (MPOC), said many trials are going on now to prove that the product can work as antioxidant, anti-cholesterol and possibly, anti-cancer.
"Consumers with marginally high cholesterol have started taking this natural antioxidant. It is basically already in the palm oil they consume everyday because of its high content in palm oil," he added.
MPOC chief executive officer Tan Sri Datuk Dr Yusof Basiron said the attributes of palm oil is still not fully appreciated by the consumer.
Yusof said tocotrienols are very effective vitamin E isomers that helps protect the body against oxidative deterioration from the aging process and it is 50 to 60 per cent more effective than the normal vitamin E tocopherols.
He said in the palm cooking oil we consume daily, there is at least 450-500 mg of tocotrienols in each kilogram of oil.
"These vitamin E tocotrienols present a unique niche market whose potentials are only now being discovered. Already the palm tocotrienols command a much higher price than tocopherols," he said.
Yusof added that tocotrienols are much in demand in the nutraceutical (nutrition supplement and health products) and functional food markets.
F&N eyes Indian real estate sector
F&N eyes Indian real estate sector
SINGAPORE: Singapore beverages and property group Fraser & Neave (F&N), brewer of Tiger beer, is in talks to enter the Indian real estate sector, a company official said yesterday.
F&N, which already owns a brewery in India through its Asia Pacific Breweries unit, said it was focusing on residential and serviced apartments in Indian cities like Mumbai, New Delhi, Bangalore, Hyderabad and Chennai, but had yet to conclude a transaction.
"We are currently discussing potential opportunities with various parties and hopefully we can close our first deal in due course," company spokesman Hui Choon Kit said.
He declined to be more specific about the potential partners or the size of the investment. - Reuters
SINGAPORE: Singapore beverages and property group Fraser & Neave (F&N), brewer of Tiger beer, is in talks to enter the Indian real estate sector, a company official said yesterday.
F&N, which already owns a brewery in India through its Asia Pacific Breweries unit, said it was focusing on residential and serviced apartments in Indian cities like Mumbai, New Delhi, Bangalore, Hyderabad and Chennai, but had yet to conclude a transaction.
"We are currently discussing potential opportunities with various parties and hopefully we can close our first deal in due course," company spokesman Hui Choon Kit said.
He declined to be more specific about the potential partners or the size of the investment. - Reuters
Investment shows signs of recovery
Investment shows signs of recovery
(China Daily)
Updated: 2007-03-23 14:36
Has investment rebounded as some policy-makers fear?
Investment in fixed assets has continued at a strong pace this year despite the tightening measures the authorities have adopted.
Urban fixed-asset investment amounted to 653.5 billion yuan ($84 billion) in the first two months of this year, up 23.4 percent compared to the same period last year, according to the National Bureau of Statistics (NBS).
The growth rate was 0.6 percentage points less than that for all of last year and 3.2 percentage points less than the rate in the first two months of last year.
However, the growth rate in the two months preceding that period was only 18 percent, suggesting that investment growth has been gaining momentum.
"Although the rebound in urban fixed-asset investment growth is not as serious as the one a year ago, the current rebound, when combined with the signs of an acceleration in credit growth, industrial output and exports, is still likely to trigger new tightening measures in the coming weeks," noted Qu Hongbin, an economist at HSBC.
Banks extended 982 billion yuan ($126.7 billion) worth of new loans in the first two months of this year, representing a year-on-year increase of 37 percent. Meanwhile, industrial output surged 18.5 percent, and exports grew 41.5 percent compared with a year earlier.
In response, the People's Bank of China, the country's central bank, raised interest rates by 27 basis points last weekend.
This preemptive rate-hike sends out a clear signal that the central bank is concerned that fixed-asset investment could once again pick up pace.
Investment in projects authorized by the central government increased by 21.7 percent, while local government-approved projects grew by 23.6 percent year-on-year, according to the NBS.
Investment in railways and real estate saw the biggest year-on-year increases, climbing 97.2 percent and 24.3 percent respectively. Meanwhile, the growth of investment in coal mining slowed from a year-on-year rate of 27.2 percent last December to 2.3 percent in the first two months this year.
"More needs to be done to bring credit growth under better control," said Qu. "These measures should help stop credit and investment from accelerating further."
(China Daily)
Updated: 2007-03-23 14:36
Has investment rebounded as some policy-makers fear?
Investment in fixed assets has continued at a strong pace this year despite the tightening measures the authorities have adopted.
Urban fixed-asset investment amounted to 653.5 billion yuan ($84 billion) in the first two months of this year, up 23.4 percent compared to the same period last year, according to the National Bureau of Statistics (NBS).
The growth rate was 0.6 percentage points less than that for all of last year and 3.2 percentage points less than the rate in the first two months of last year.
However, the growth rate in the two months preceding that period was only 18 percent, suggesting that investment growth has been gaining momentum.
"Although the rebound in urban fixed-asset investment growth is not as serious as the one a year ago, the current rebound, when combined with the signs of an acceleration in credit growth, industrial output and exports, is still likely to trigger new tightening measures in the coming weeks," noted Qu Hongbin, an economist at HSBC.
Banks extended 982 billion yuan ($126.7 billion) worth of new loans in the first two months of this year, representing a year-on-year increase of 37 percent. Meanwhile, industrial output surged 18.5 percent, and exports grew 41.5 percent compared with a year earlier.
In response, the People's Bank of China, the country's central bank, raised interest rates by 27 basis points last weekend.
This preemptive rate-hike sends out a clear signal that the central bank is concerned that fixed-asset investment could once again pick up pace.
Investment in projects authorized by the central government increased by 21.7 percent, while local government-approved projects grew by 23.6 percent year-on-year, according to the NBS.
Investment in railways and real estate saw the biggest year-on-year increases, climbing 97.2 percent and 24.3 percent respectively. Meanwhile, the growth of investment in coal mining slowed from a year-on-year rate of 27.2 percent last December to 2.3 percent in the first two months this year.
"More needs to be done to bring credit growth under better control," said Qu. "These measures should help stop credit and investment from accelerating further."
BLVD unit sets record $3,205 psf price for Orchard Rd area
Two homes in the Orchard Road area have sold at prices that have broken past records in the prime district.
The Straits Times understands that a Singapore permanent resident has forked out more than $6.5 million for an apartment at The Boulevard Residence (BLVD).
The unidentified buyer paid $3,205 per sq ft (psf) for the 2,034 sq ft three-bedroom unit at Cuscaden Walk, said market sources.
This surpasses the price high set just a week earlier, by a unit in the Beaufort on Nassim at Nassim Hill that fetched $3,200 psf.
The prices achieved by these two sales outstrip the last-known Orchard Road record of $3,050 psf. That was held by City Developments’ St Regis Residences, the first residential development here to cross the $3,000 psf mark.
But these pricey units still fall short of the $3,450 psf yardstick set by a penthouse unit at Marina Bay Residences late last year.
However, property consultants say that the latest sales lend weight to earlier predictions that Orchard Road homes will soar to new price heights this year.
‘This year, most of the new launches in the Orchard Road area will start at $3,000 psf,’ said Mr Ku Swee Yong, director of marketing and business development at property consultancy Savills Singapore.
He said that the high prices would be partially supported by the displaced owners of ‘at least 40 different estates that have gone en bloc in the Orchard Road area’.
Mr Ku was unsurprised by the high price of the BLVD apartment, noting that the project’s developer, SC Global, builds for the luxury end of the market.
The BLVD, for instance, includes imported marble finishings, concierge and valet services, as well as a private elevator for each unit.
The freehold development was completed in 2005 and is almost fully sold. Only two of its 42 units are left - one an individually customised super-penthouse that has not yet been released for sale.
Average prices of BLVD units transacted over the last 12 months have hovered at around $2,200 psf, with one apartment believed to have been sold earlier this year for $2,850 psf.
At the Beaufort on Nassim, 12 of its 30 units have been sold at prices starting from $2,300 psf.
The project is being developed by Hong Kong’s HKR International, which also owns The Sentosa Resort and Spa, formerly known as The Beaufort, on Sentosa.
Source: The Straits Times, 13 February 2007
For more information or to register your interest, email allieds88@gmail.com
The Straits Times understands that a Singapore permanent resident has forked out more than $6.5 million for an apartment at The Boulevard Residence (BLVD).
The unidentified buyer paid $3,205 per sq ft (psf) for the 2,034 sq ft three-bedroom unit at Cuscaden Walk, said market sources.
This surpasses the price high set just a week earlier, by a unit in the Beaufort on Nassim at Nassim Hill that fetched $3,200 psf.
The prices achieved by these two sales outstrip the last-known Orchard Road record of $3,050 psf. That was held by City Developments’ St Regis Residences, the first residential development here to cross the $3,000 psf mark.
But these pricey units still fall short of the $3,450 psf yardstick set by a penthouse unit at Marina Bay Residences late last year.
However, property consultants say that the latest sales lend weight to earlier predictions that Orchard Road homes will soar to new price heights this year.
‘This year, most of the new launches in the Orchard Road area will start at $3,000 psf,’ said Mr Ku Swee Yong, director of marketing and business development at property consultancy Savills Singapore.
He said that the high prices would be partially supported by the displaced owners of ‘at least 40 different estates that have gone en bloc in the Orchard Road area’.
Mr Ku was unsurprised by the high price of the BLVD apartment, noting that the project’s developer, SC Global, builds for the luxury end of the market.
The BLVD, for instance, includes imported marble finishings, concierge and valet services, as well as a private elevator for each unit.
The freehold development was completed in 2005 and is almost fully sold. Only two of its 42 units are left - one an individually customised super-penthouse that has not yet been released for sale.
Average prices of BLVD units transacted over the last 12 months have hovered at around $2,200 psf, with one apartment believed to have been sold earlier this year for $2,850 psf.
At the Beaufort on Nassim, 12 of its 30 units have been sold at prices starting from $2,300 psf.
The project is being developed by Hong Kong’s HKR International, which also owns The Sentosa Resort and Spa, formerly known as The Beaufort, on Sentosa.
Source: The Straits Times, 13 February 2007
For more information or to register your interest, email allieds88@gmail.com
$3,000 psf price seen at Parkview Éclat
Chyau Fwu Group has unveiled plans for its upcoming super-luxury condominium on Grange Road, called Parkview Éclat, with prices expected to be around $3,000 per square foot (psf).
Construction costs will be $500-$600 psf for Chyau Fwu, which owns the Art Deco-inspired office building Parkview Square at Bugis. This is almost double the industry average construction costs of $300 psf.
Eddie Chow, a senior executive at Chyau Fwu, said that none of the units has yet been sold, as a sales licence has not yet been received.
Prices have not been confirmed either, but Mr Chow said that Chyau Fwu was comfortable with the projected $3,000 psf price for super-luxury condominiums, adding that the group ‘is not in a hurry to sell’.
The most expensive feature in each of the 35 ‘limited edition’ units will be the private 3m by 8m pool on the balcony.
Unit sizes start at 3,000 square feet with the penthouse topping 10,000 sq ft.
As with Parkview Square, Parkview Éclat is designed by James Adams, best known for his designs for Forum Casino at Ceasars Palace, MGM Grand Casino in Detroit and Galaxy Casino and Resort in Macau. However, being a residential development, Parkview Éclat will be more subdued.
Mr Adams said: ‘Respect for subtlety is important.’
n pricing, recent caveats lodged reveal that average prices for super-luxury developments are still below $3,000 psf. St Regis Residences did complete another sale at $3,050 psf in December 2006 but the average price for units in that month was $2,672 psf.
Vincent Chong, director (residential) at Colliers International, said: ‘With the latest launch of The Beaufort at Nassim already hitting $3,200 psf, we feel that it is possible for the good units in Parkview Éclat to achieve $3,000 psf.’
Vivian Sze, assistant general manager of HKR International, developer of Beaufort at Nassim, says it has already sold 12 units and the average selling price is $2,600-$2,700 psf.
Savills Singapore director of marketing and business development Ku Swee Yong believes Parkview Éclat may not achieve an average launch price of $3,000 psf, but reckons instead that the upcoming Orchard Turn could - because ‘they already have enough people who want to buy’.
Also on Orchard Turn, Tay Huey Ying, director (research and consultancy) at Colliers, said: ‘If the project is launched while market optimism is still high and buying frenzy is still very much alive, the average launch price for Orchard Turn could possibly reach $3,000 psf and the penthouses or units on the high floors could even hit $3,500 psf and above.’
Construction costs will be $500-$600 psf for Chyau Fwu, which owns the Art Deco-inspired office building Parkview Square at Bugis. This is almost double the industry average construction costs of $300 psf.
Eddie Chow, a senior executive at Chyau Fwu, said that none of the units has yet been sold, as a sales licence has not yet been received.
Prices have not been confirmed either, but Mr Chow said that Chyau Fwu was comfortable with the projected $3,000 psf price for super-luxury condominiums, adding that the group ‘is not in a hurry to sell’.
The most expensive feature in each of the 35 ‘limited edition’ units will be the private 3m by 8m pool on the balcony.
Unit sizes start at 3,000 square feet with the penthouse topping 10,000 sq ft.
As with Parkview Square, Parkview Éclat is designed by James Adams, best known for his designs for Forum Casino at Ceasars Palace, MGM Grand Casino in Detroit and Galaxy Casino and Resort in Macau. However, being a residential development, Parkview Éclat will be more subdued.
Mr Adams said: ‘Respect for subtlety is important.’
n pricing, recent caveats lodged reveal that average prices for super-luxury developments are still below $3,000 psf. St Regis Residences did complete another sale at $3,050 psf in December 2006 but the average price for units in that month was $2,672 psf.
Vincent Chong, director (residential) at Colliers International, said: ‘With the latest launch of The Beaufort at Nassim already hitting $3,200 psf, we feel that it is possible for the good units in Parkview Éclat to achieve $3,000 psf.’
Vivian Sze, assistant general manager of HKR International, developer of Beaufort at Nassim, says it has already sold 12 units and the average selling price is $2,600-$2,700 psf.
Savills Singapore director of marketing and business development Ku Swee Yong believes Parkview Éclat may not achieve an average launch price of $3,000 psf, but reckons instead that the upcoming Orchard Turn could - because ‘they already have enough people who want to buy’.
Also on Orchard Turn, Tay Huey Ying, director (research and consultancy) at Colliers, said: ‘If the project is launched while market optimism is still high and buying frenzy is still very much alive, the average launch price for Orchard Turn could possibly reach $3,000 psf and the penthouses or units on the high floors could even hit $3,500 psf and above.’
Upcoming condo launches to look out for
With the positive property market outlook, developers are set to line up a slew of condominium launches in the coming months, particularly soon after Chinese New Year.
The launches, likely to hit the market in the next two months, range from the mid-range to the luxury end.
Two high-profile launches are Keppel Land’s Reflections at Keppel Bay and CapitaLand’s The Orchard Residences at the prime Orchard Turn site.
The 1,160-unit Reflections is designed by renowned architect Daniel Libeskind, who designed Berlin’s famous Jewish Museum.
Both are highly anticipated as they are regarded as unique projects, in hip or upcoming locations. Market watchers say they could set benchmark prices for their areas.
But some are concerned that the growth in prices of new Orchard Road properties may be limited somewhat by the increasing high-end supply in the area. Numerous collective sales were done in the Orchard Road area last year at relatively high prices.
Next month, home buyers can look forward to the first two residential projects at one-north, the $15 billion 200-ha research hub, which can accommodate about 20,000 residential units.
The 405-unit One North Residences by a joint venture between UOL Group and privately-held Kheng Leong could be pushed out in mid-March.The other is United Engineers’ 368-unit One Rochester, which is part of a mixed development that includes a hotel, service apartment block and a retail complex. It has units ranging from 770 sq ft to 2,900 sq ft, though most are 1,500 sq ft three-bedders.
Both projects could cost about $800 to $850 per sq ft (psf) or more, said market watchers.
One North appears suitable for families and long-term living while One Rochester could attract more short-term lessees, they say.
UOL is likely to release its 180-unit Pavillion 11 at Minbu Road soon. This project could be priced about $1,000 psf on average, market sources said.
CapitaLand may also release its 350-unit Meyer Road project at prices ranging from $1,300 to $1,500 psf.
Home buyers with more money can look to Kim Seng Road, where the Lippo group could soon launch its 252-unit The Trillium at up to $1,800 psf, market sources say. Nearby, the 175-unit Tribeca was released last November at $1,420 psf.
In Grange Road, Chyau Fwu Group aims to launch its 35-unit Parkview Eclat next month, largely at $3,000 psf on average.
Mr Ku Swee Yong, property consultancy Savills Singapore’s director of marketing and business development, said potential speculators have to consider carefully their choices.
‘You have to choose a project in a locality that has hype and consider whether the hype will continue into the future.’
The project should also be of a certain size - with 100 units or more - to generate enough interest and buzz, he said.
PropNex’s senior division director Eric Cheng said he has been seeing more and more property hunters hoping to make a quick profit, rather than buying for their own use or investment.
And some of them have just enough money for the down payment, which is very risky should they fail to find a buyer within a short time. ‘Buyers should exercise prudence,’ he warned.
The launches, likely to hit the market in the next two months, range from the mid-range to the luxury end.
Two high-profile launches are Keppel Land’s Reflections at Keppel Bay and CapitaLand’s The Orchard Residences at the prime Orchard Turn site.
The 1,160-unit Reflections is designed by renowned architect Daniel Libeskind, who designed Berlin’s famous Jewish Museum.
Both are highly anticipated as they are regarded as unique projects, in hip or upcoming locations. Market watchers say they could set benchmark prices for their areas.
But some are concerned that the growth in prices of new Orchard Road properties may be limited somewhat by the increasing high-end supply in the area. Numerous collective sales were done in the Orchard Road area last year at relatively high prices.
Next month, home buyers can look forward to the first two residential projects at one-north, the $15 billion 200-ha research hub, which can accommodate about 20,000 residential units.
The 405-unit One North Residences by a joint venture between UOL Group and privately-held Kheng Leong could be pushed out in mid-March.The other is United Engineers’ 368-unit One Rochester, which is part of a mixed development that includes a hotel, service apartment block and a retail complex. It has units ranging from 770 sq ft to 2,900 sq ft, though most are 1,500 sq ft three-bedders.
Both projects could cost about $800 to $850 per sq ft (psf) or more, said market watchers.
One North appears suitable for families and long-term living while One Rochester could attract more short-term lessees, they say.
UOL is likely to release its 180-unit Pavillion 11 at Minbu Road soon. This project could be priced about $1,000 psf on average, market sources said.
CapitaLand may also release its 350-unit Meyer Road project at prices ranging from $1,300 to $1,500 psf.
Home buyers with more money can look to Kim Seng Road, where the Lippo group could soon launch its 252-unit The Trillium at up to $1,800 psf, market sources say. Nearby, the 175-unit Tribeca was released last November at $1,420 psf.
In Grange Road, Chyau Fwu Group aims to launch its 35-unit Parkview Eclat next month, largely at $3,000 psf on average.
Mr Ku Swee Yong, property consultancy Savills Singapore’s director of marketing and business development, said potential speculators have to consider carefully their choices.
‘You have to choose a project in a locality that has hype and consider whether the hype will continue into the future.’
The project should also be of a certain size - with 100 units or more - to generate enough interest and buzz, he said.
PropNex’s senior division director Eric Cheng said he has been seeing more and more property hunters hoping to make a quick profit, rather than buying for their own use or investment.
And some of them have just enough money for the down payment, which is very risky should they fail to find a buyer within a short time. ‘Buyers should exercise prudence,’ he warned.
Big Four vary mainland strategies
Big Four vary mainland strategies
Raymond Wang
Friday, March 30, 2007
Key developers in Hong Kong are adopting different strategies to replenish their land banks in China, in particular main and second-tier cities where they have a strong presence.
New World China Land (0917), one of the earliest entrants to the mainland real estate market, intends to focus on developing its existing cheaper land bank in the next couple of years.
But the mainland property arm of New World Development (0017) has no plans to accelerate the pace of new and large-scale land acquisitions as its existing land reserve of 15 million square meters is sufficient for development until 2014, according to NWD senior manager of corporate affairs Aldous Chiu.
Henderson Land Development (0012), controlled by Lee Shau-kee, however, aims to more than double its land bank to more than 14 million sq m this year.
NWD's Chiu said capital spending of affiliate New World China Land for fiscal 2008 would be mainly construction expenditure .
Between 2 billion yuan (HK$2.02 billion) and 3 billion yuan, or 2,000 yuan to 3,000 yuan per sq m, will be spent on property developments for the financial year ending June 30, 2008.
In fiscal 2006, the company acquired several new projects in mid-western China, saying the decision was based on its positive view of the property market in that region, shrugging off concerns over central government measures to cool the sector.
Lower land costs in these secondary cities will translate into better margins, it added. It will speed up the pace of developing these projects.
New World China Land also expects fiscal 2008 to be another bumper year amid more property completions and healthy margins after more than doubling its net profit to HK$406.4 million for the six months to December.
The company said its projects slated for completion in fiscal 2008 will jump by half in terms of gross floor area.
Developers can only book income from property sales after projects are completed.
Project completions in fiscal 2008 will increase to as much as 1.2 million sq m from more than 800,000 sq m in the current year ending June 30, 2007, Chiu said.
New projects with a total gross floor area of 187,200 sq m were completed in the first six months to December 2006, with a further 630,000 sq m scheduled for completion in the second half ending June 2007.
Its margins recently rose to about 33 percent from about 21 percent in fiscal 2005.
Henderson Land, meanwhile, has redefined its strategy in the mainland, saying that apart from developing prime sites in Beijing, Shanghai and Guangzhou, it also focused on second-tier cities with good growth potential.
The company plans to splash out 7.5 billion yuan to replenish its mainland land bank this year with a potential total buildable floor area of 7.7 million sq m.
The developer said the group is in the final stages of acquiring several sites, for which agreements have been reached.
With formalities for these land purchases likely to be completed before the end of June, the group's mainland land bank will more than double to over 14 million sq m of gross floor area from the present 6.8 million sq m.
Henderson did not identify the location of its latest land acquisitions.
It has also joined forces with Singapore-based Temasek Holdings to acquire a riverside residential site in Xian, Shaanxi province, for 1.72 billion yuan.
Recently, Henderson also won a plot in Suzhou, Jiangsu province, with a bid of 865 million yuan.
Cheung Kong (Holdings) (0001) and Sun Hung Kai Properties (0016), Hong Kong's largest developers by sales and market capitalization, also want to buy more land in the mainland.
Cheung Kong deputy chairman Victor Li Tzar-kuoi said the company has a strong presence in both first-tier and second-tier cities and will continue to increase its holdings.
"In just Shanghai alone, the land bank from our two recent projects is already over 1 million square meters," Li added. He said contribution from properties in the mainland was not substantial last year, as projects have yet to be completed.
"Contributions will increase in 2007. All of our projects in China are making money," Li said, adding that including its share in associate Hutchison Whampoa (0013), Cheung Kong's mainland land bank exceeds 10 million sq m.
Meanwhile, SHKP also intends to step up the pace of its property investment in China where its investments now account for about 10 percent of its total assets.
"We hope our China investments will account for 15 percent of our total assets in the next few years when new projects are completed," SHKP chairman Walter Kwok Ping-sheung said.
The company has committed over HK$22 billion to new China projects.
SHKP owns an attributable 2 million sq m of gross floor area in the mainland, comprising completed investment properties and properties under development.
"We are emphasizing quality of our projects more rather than the size of our land bank," Kwok said.
Raymond Wang
Friday, March 30, 2007
Key developers in Hong Kong are adopting different strategies to replenish their land banks in China, in particular main and second-tier cities where they have a strong presence.
New World China Land (0917), one of the earliest entrants to the mainland real estate market, intends to focus on developing its existing cheaper land bank in the next couple of years.
But the mainland property arm of New World Development (0017) has no plans to accelerate the pace of new and large-scale land acquisitions as its existing land reserve of 15 million square meters is sufficient for development until 2014, according to NWD senior manager of corporate affairs Aldous Chiu.
Henderson Land Development (0012), controlled by Lee Shau-kee, however, aims to more than double its land bank to more than 14 million sq m this year.
NWD's Chiu said capital spending of affiliate New World China Land for fiscal 2008 would be mainly construction expenditure .
Between 2 billion yuan (HK$2.02 billion) and 3 billion yuan, or 2,000 yuan to 3,000 yuan per sq m, will be spent on property developments for the financial year ending June 30, 2008.
In fiscal 2006, the company acquired several new projects in mid-western China, saying the decision was based on its positive view of the property market in that region, shrugging off concerns over central government measures to cool the sector.
Lower land costs in these secondary cities will translate into better margins, it added. It will speed up the pace of developing these projects.
New World China Land also expects fiscal 2008 to be another bumper year amid more property completions and healthy margins after more than doubling its net profit to HK$406.4 million for the six months to December.
The company said its projects slated for completion in fiscal 2008 will jump by half in terms of gross floor area.
Developers can only book income from property sales after projects are completed.
Project completions in fiscal 2008 will increase to as much as 1.2 million sq m from more than 800,000 sq m in the current year ending June 30, 2007, Chiu said.
New projects with a total gross floor area of 187,200 sq m were completed in the first six months to December 2006, with a further 630,000 sq m scheduled for completion in the second half ending June 2007.
Its margins recently rose to about 33 percent from about 21 percent in fiscal 2005.
Henderson Land, meanwhile, has redefined its strategy in the mainland, saying that apart from developing prime sites in Beijing, Shanghai and Guangzhou, it also focused on second-tier cities with good growth potential.
The company plans to splash out 7.5 billion yuan to replenish its mainland land bank this year with a potential total buildable floor area of 7.7 million sq m.
The developer said the group is in the final stages of acquiring several sites, for which agreements have been reached.
With formalities for these land purchases likely to be completed before the end of June, the group's mainland land bank will more than double to over 14 million sq m of gross floor area from the present 6.8 million sq m.
Henderson did not identify the location of its latest land acquisitions.
It has also joined forces with Singapore-based Temasek Holdings to acquire a riverside residential site in Xian, Shaanxi province, for 1.72 billion yuan.
Recently, Henderson also won a plot in Suzhou, Jiangsu province, with a bid of 865 million yuan.
Cheung Kong (Holdings) (0001) and Sun Hung Kai Properties (0016), Hong Kong's largest developers by sales and market capitalization, also want to buy more land in the mainland.
Cheung Kong deputy chairman Victor Li Tzar-kuoi said the company has a strong presence in both first-tier and second-tier cities and will continue to increase its holdings.
"In just Shanghai alone, the land bank from our two recent projects is already over 1 million square meters," Li added. He said contribution from properties in the mainland was not substantial last year, as projects have yet to be completed.
"Contributions will increase in 2007. All of our projects in China are making money," Li said, adding that including its share in associate Hutchison Whampoa (0013), Cheung Kong's mainland land bank exceeds 10 million sq m.
Meanwhile, SHKP also intends to step up the pace of its property investment in China where its investments now account for about 10 percent of its total assets.
"We hope our China investments will account for 15 percent of our total assets in the next few years when new projects are completed," SHKP chairman Walter Kwok Ping-sheung said.
The company has committed over HK$22 billion to new China projects.
SHKP owns an attributable 2 million sq m of gross floor area in the mainland, comprising completed investment properties and properties under development.
"We are emphasizing quality of our projects more rather than the size of our land bank," Kwok said.
Tokyo's tallest skyscraper an aesthetic focus
Tokyo's tallest skyscraper an aesthetic focus
Kimiko de Freytas-Tamura
Friday, March 30, 2007
Tokyo today opens to the public its tallest skyscraper, featuring top-notch shops, restaurants and even a hospital as the metropolis tries to project a slicker, sexier image than its rising Asian rivals.
Tokyo Midtown, built on what used to be the Defense Agency headquarters, is the latest giant urban complex to transform the downtown area of the world's most populous city.
Rising 248 meters, the central tower of the pentagonal complex is the city's tallest structure apart from the uninhabited Tokyo Tower.
Besides 132 shops and restaurants, the new site features a Ritz-Carlton - the most expensive hotel in an already expensive city - and a medical center affiliated with Baltimore's prestigious Johns Hopkins University.
It also includes the Suntory Museum, the second major new art gallery to open in Tokyo this year, and pricey condominiums.
The designers said Tokyo Midtown is meant to show a more sensitive, aesthetically aware side of Japan, the world's second largest economy.
"Through Midtown, we aim to turn Tokyo into the center of intellectual creativity for business and culture in Japan, Asia and the world," said Hiromitsu Iwasa, head of Mitsui Real Estate in charge of the project. "We also want this area to be the centre from which Japanese values and aesthetic sense will be sent out to the world," he said.
A consortium of six companies built the 69,000 square-meter complex at a cost of 370 billion yen (HK$24.46 billion).
Rooms at the Ritz-Carlton will cost up to 2.1 million yen a night for suites at the top of the tower with a view of Mount Fuji.
"We will have no shortage of people coming in the doors," said Simon Cooper, president of the US-based Ritz-Carlton company, noting Japan's passion for luxury goods.
"It's the nightclub syndrome: the newest club is going to get visitors. Our challenge is to make that visit so exquisite that they want to come back."
In one corner of Tokyo Midtown is the 21-21 Design Site, Japan's first institute dedicated to studying the creative process of design.
"Japan is essentially known as an economic powerhouse, and we want to show the world another face - one of design and aesthetics," said architect Tadao Ando, who developed 21-21 with fashion designer Issey Miyake.
Miyake hopes the institute will help change a society "solely focused on consumption."
AGENCE FRANCE-PRESSE
Kimiko de Freytas-Tamura
Friday, March 30, 2007
Tokyo today opens to the public its tallest skyscraper, featuring top-notch shops, restaurants and even a hospital as the metropolis tries to project a slicker, sexier image than its rising Asian rivals.
Tokyo Midtown, built on what used to be the Defense Agency headquarters, is the latest giant urban complex to transform the downtown area of the world's most populous city.
Rising 248 meters, the central tower of the pentagonal complex is the city's tallest structure apart from the uninhabited Tokyo Tower.
Besides 132 shops and restaurants, the new site features a Ritz-Carlton - the most expensive hotel in an already expensive city - and a medical center affiliated with Baltimore's prestigious Johns Hopkins University.
It also includes the Suntory Museum, the second major new art gallery to open in Tokyo this year, and pricey condominiums.
The designers said Tokyo Midtown is meant to show a more sensitive, aesthetically aware side of Japan, the world's second largest economy.
"Through Midtown, we aim to turn Tokyo into the center of intellectual creativity for business and culture in Japan, Asia and the world," said Hiromitsu Iwasa, head of Mitsui Real Estate in charge of the project. "We also want this area to be the centre from which Japanese values and aesthetic sense will be sent out to the world," he said.
A consortium of six companies built the 69,000 square-meter complex at a cost of 370 billion yen (HK$24.46 billion).
Rooms at the Ritz-Carlton will cost up to 2.1 million yen a night for suites at the top of the tower with a view of Mount Fuji.
"We will have no shortage of people coming in the doors," said Simon Cooper, president of the US-based Ritz-Carlton company, noting Japan's passion for luxury goods.
"It's the nightclub syndrome: the newest club is going to get visitors. Our challenge is to make that visit so exquisite that they want to come back."
In one corner of Tokyo Midtown is the 21-21 Design Site, Japan's first institute dedicated to studying the creative process of design.
"Japan is essentially known as an economic powerhouse, and we want to show the world another face - one of design and aesthetics," said architect Tadao Ando, who developed 21-21 with fashion designer Issey Miyake.
Miyake hopes the institute will help change a society "solely focused on consumption."
AGENCE FRANCE-PRESSE
Over 80% of One North Residences sold in 3 days
All but 70 units of the 405-unit One North Residences have been snapped up in just three days at private previews.
It is the first condominium to be marketed at the $15 billion 200ha research hub one-north at Buona Vista.
Units were sold at prices ranging from about $550,000 to $2.4 million. The highest transaction was done yesterday at over $1,000 per sq ft (psf), market watchers said.
On average, prices are now hovering around $885 psf, up from $850 psf on Tuesday.
Most of the buyers - possibly around 80 to 90 per cent - are Singaporeans, market watchers said.
As of last night, around 70 units were unsold, most of them one-bedroom units, now priced at about $950 psf.
The soft launch of One North Residences was planned for tomorrow. Sales started on Tuesday with a staff preview, when directors, staff and other buyers picked up 60 units and prices were raised by 2 to 5 per cent, said market sources.
These buyers included those on an elite list, such as senior civil servants and prominent businessmen.
Wednesday was reserved for the bulk purchasers, including funds interested in buying several units at one ago.
Invited home buyers packed the show-flat yesterday, picking up many more units of the 99-year leasehold condo.
All the nine penthouses ranging from 1,970 sq ft to 3,251 sq ft, as well as all the two-bedroom units have been sold.
The condo will be developed by a joint venture between UOL Group, Low Keng Huat and privately-held Kheng Leong.
While its apartments come in a wide range of sizes, most of them are the one- and two-bedroom apartments, ranging from 592 sq ft to 1,259 sq ft.
There are also 85 single-level and duplex small-office, home-office units, which range from 517 sq ft to 1,281 sq ft, and 20 shops.
Market watchers say some home buyers bought to speculate, while others bought into the area’s prospect as a thriving research hub.
The condo is marketed by Knight Frank and Savills Singapore.
Next up at one-north is the 368-unit One Rochester, which developer United Engineers expects to release for sale in mid-April.
The condo is part of a mixed development that includes a block of about 300 hotel rooms and service apartments, and a retail podium with about 100,000 sq ft of space.
The hotel rooms, service apartments and shops are only for lease.
Source: The Straits Times, 09 March 2007
It is the first condominium to be marketed at the $15 billion 200ha research hub one-north at Buona Vista.
Units were sold at prices ranging from about $550,000 to $2.4 million. The highest transaction was done yesterday at over $1,000 per sq ft (psf), market watchers said.
On average, prices are now hovering around $885 psf, up from $850 psf on Tuesday.
Most of the buyers - possibly around 80 to 90 per cent - are Singaporeans, market watchers said.
As of last night, around 70 units were unsold, most of them one-bedroom units, now priced at about $950 psf.
The soft launch of One North Residences was planned for tomorrow. Sales started on Tuesday with a staff preview, when directors, staff and other buyers picked up 60 units and prices were raised by 2 to 5 per cent, said market sources.
These buyers included those on an elite list, such as senior civil servants and prominent businessmen.
Wednesday was reserved for the bulk purchasers, including funds interested in buying several units at one ago.
Invited home buyers packed the show-flat yesterday, picking up many more units of the 99-year leasehold condo.
All the nine penthouses ranging from 1,970 sq ft to 3,251 sq ft, as well as all the two-bedroom units have been sold.
The condo will be developed by a joint venture between UOL Group, Low Keng Huat and privately-held Kheng Leong.
While its apartments come in a wide range of sizes, most of them are the one- and two-bedroom apartments, ranging from 592 sq ft to 1,259 sq ft.
There are also 85 single-level and duplex small-office, home-office units, which range from 517 sq ft to 1,281 sq ft, and 20 shops.
Market watchers say some home buyers bought to speculate, while others bought into the area’s prospect as a thriving research hub.
The condo is marketed by Knight Frank and Savills Singapore.
Next up at one-north is the 368-unit One Rochester, which developer United Engineers expects to release for sale in mid-April.
The condo is part of a mixed development that includes a block of about 300 hotel rooms and service apartments, and a retail podium with about 100,000 sq ft of space.
The hotel rooms, service apartments and shops are only for lease.
Source: The Straits Times, 09 March 2007
Into the China market
Into the China market
Danny Chung
Friday, March 30, 2007
Grosvenor, a British-based property development and management company, is pressing ahead with investment plans for China, undeterred by government-imposed curbs to cool the property sector.
Head of investment John So Li-chuan, who hails from San Diego, California, is not put off by the various measures introduced last year by the authorities, such as restrictions on foreign ownership and taxes on short-term holding of properties.
"If anything, it's strengthened our conviction. From Grosvenor's standpoint, we have a long-term focus," he said.
The government's moves are understandable, concerned as it is to prevent overheating in the property sector, which could damage the overall economy.
"From an opportunistic standpoint, it actually makes it more interesting to enter the market now because you're getting the speculators and froth out of the market," So said.
Grosvenor does real estate business as a developer, an investor and a fund manager.
In the past, Grosvenor has concentrated mainly on the luxury residential sector in Asia but it is only natural to target retail as well, So said, pointing to the company's extensive retail presence in the United Kingdom and Europe as a developer and investor.
In fact, which sectors it goes into will depend on the investment vehicle.
As a developer, it will focus on residential initially and then go into retail in the medium to long term.
On the investment side, it will focus mainly on retail and residential.
Office and industrial will be considered if it meets Grosvenor's criteria but is expected to be only a minor portion of the firm's business.
Grosvenor has invested about US$1.5 billion (HK$11.7 billion) in Asia, of which about two-thirds is in Japan and the remainder in Hong Kong.
"It is very skewed towards Japan and that has been a focus for us in the past three or four years where we have seen the recovery of Japan coming through," So said.
But in the coming 12 to 18 months, growth is expected to come more from China and Hong Kong. The long-term objective of the portfolio is for China, Hong Kong and Japan to get one third of investment each.
Grosvenor aims to set up a China fund by late 2007 which will focus mainly on retail and residential.
"We do think they dovetail quite nicely in terms of branding [of Grosvenor]," So said.
The newest and latest malls being built in China are of good quality "but in terms of location, they've kind of missed out."
On the other hand, five- to 10-year-old malls on top of subway stations offer prospects of good returns with repositioning and refurbishment.
So far, initial response has been encouraging to the planned US$250 million fund.
"There is a fair amount of interest from Japanese investors," So said. But will Grosvenor refuse some investors' applications if it turns out to be oversubscribed?
So said he hopes not because it is difficult to turn money away and he does not want to disappoint investors.
"This is something we have had to do in Japan [turn investors away]. Obviously investors are very understanding," he said.
Grosvenor's active projects include a 50-50 joint venture with local listed developer Asia Standard International Group (0129) at Castle Peak Road, Yau Kam Tau, near the Ting Kau Bridge.
The two partners bought the site in November 2004 for HK$261 million.
On completion in 2008, the high-rise residential block will offer 200,000 square feet of residential space for sale.
Grosvenor first invested in Asia Standard in 1999 and currently its stake stands at 14.78 percent.
So was coy when asked about the performance of this investment.
"Put it this way. Investments never turn out as you expect them," So said.
In his experience, investments in general have a "guarantee 100 percent of the time" that they will not hit targets.
Still Grosvenor is "very pleased" with its partnership with Asia Standard.
"If you look at Grosvenor Place [a joint venture with Asia Standard in Repulse Bay], we wouldn't have been able to do that without Asia Standard. Conversely Asia Standard may not have been able to it without us," So said.
The award-winning luxury residential project at Repulse Bay, completed in September 2003, was sold in April 2004 for HK$940 million to a local private company.
In China, Grosvenor is currently wrapping up a deal to buy a residential building in Shanghai which it plans to refurbish later this year.
So declined to give exact details other than say it is in a good location near international schools and office districts.
"In terms of quality, it has deteriorated so that's why we were interested in purchasing it. We feel there is a lot of upside we can add by essentially redoing the entire property," So said.
Danny Chung
Friday, March 30, 2007
Grosvenor, a British-based property development and management company, is pressing ahead with investment plans for China, undeterred by government-imposed curbs to cool the property sector.
Head of investment John So Li-chuan, who hails from San Diego, California, is not put off by the various measures introduced last year by the authorities, such as restrictions on foreign ownership and taxes on short-term holding of properties.
"If anything, it's strengthened our conviction. From Grosvenor's standpoint, we have a long-term focus," he said.
The government's moves are understandable, concerned as it is to prevent overheating in the property sector, which could damage the overall economy.
"From an opportunistic standpoint, it actually makes it more interesting to enter the market now because you're getting the speculators and froth out of the market," So said.
Grosvenor does real estate business as a developer, an investor and a fund manager.
In the past, Grosvenor has concentrated mainly on the luxury residential sector in Asia but it is only natural to target retail as well, So said, pointing to the company's extensive retail presence in the United Kingdom and Europe as a developer and investor.
In fact, which sectors it goes into will depend on the investment vehicle.
As a developer, it will focus on residential initially and then go into retail in the medium to long term.
On the investment side, it will focus mainly on retail and residential.
Office and industrial will be considered if it meets Grosvenor's criteria but is expected to be only a minor portion of the firm's business.
Grosvenor has invested about US$1.5 billion (HK$11.7 billion) in Asia, of which about two-thirds is in Japan and the remainder in Hong Kong.
"It is very skewed towards Japan and that has been a focus for us in the past three or four years where we have seen the recovery of Japan coming through," So said.
But in the coming 12 to 18 months, growth is expected to come more from China and Hong Kong. The long-term objective of the portfolio is for China, Hong Kong and Japan to get one third of investment each.
Grosvenor aims to set up a China fund by late 2007 which will focus mainly on retail and residential.
"We do think they dovetail quite nicely in terms of branding [of Grosvenor]," So said.
The newest and latest malls being built in China are of good quality "but in terms of location, they've kind of missed out."
On the other hand, five- to 10-year-old malls on top of subway stations offer prospects of good returns with repositioning and refurbishment.
So far, initial response has been encouraging to the planned US$250 million fund.
"There is a fair amount of interest from Japanese investors," So said. But will Grosvenor refuse some investors' applications if it turns out to be oversubscribed?
So said he hopes not because it is difficult to turn money away and he does not want to disappoint investors.
"This is something we have had to do in Japan [turn investors away]. Obviously investors are very understanding," he said.
Grosvenor's active projects include a 50-50 joint venture with local listed developer Asia Standard International Group (0129) at Castle Peak Road, Yau Kam Tau, near the Ting Kau Bridge.
The two partners bought the site in November 2004 for HK$261 million.
On completion in 2008, the high-rise residential block will offer 200,000 square feet of residential space for sale.
Grosvenor first invested in Asia Standard in 1999 and currently its stake stands at 14.78 percent.
So was coy when asked about the performance of this investment.
"Put it this way. Investments never turn out as you expect them," So said.
In his experience, investments in general have a "guarantee 100 percent of the time" that they will not hit targets.
Still Grosvenor is "very pleased" with its partnership with Asia Standard.
"If you look at Grosvenor Place [a joint venture with Asia Standard in Repulse Bay], we wouldn't have been able to do that without Asia Standard. Conversely Asia Standard may not have been able to it without us," So said.
The award-winning luxury residential project at Repulse Bay, completed in September 2003, was sold in April 2004 for HK$940 million to a local private company.
In China, Grosvenor is currently wrapping up a deal to buy a residential building in Shanghai which it plans to refurbish later this year.
So declined to give exact details other than say it is in a good location near international schools and office districts.
"In terms of quality, it has deteriorated so that's why we were interested in purchasing it. We feel there is a lot of upside we can add by essentially redoing the entire property," So said.
More foreigners pay millions for homes here
More foreigners than ever are forking out millions to buy a residential property in Singapore.
Last year, they snapped up nearly 5,000 units, which represented a 23 per cent market share, property consultants said.
And as the luxury property boom gained pace in the final quarter of last year, their buying spree hit an all-time high. For the first time, their market share hit 26 per cent, beating the previous all-time high of 24 per cent in 1995.
Before the market started to bounce back in 2005, foreign homebuyers made up less than 20 per cent of all buyers in Singapore.
Indonesians bought the most private residential properties here last year, accounting for about 23.7 per cent of foreign buyers, based on statistics compiled by Knight Frank. Malaysians took second place with 22.7 per cent.
Indians came third, with 8.4 per cent, followed by Britons, with 8 per cent. Buyers from China took up 7.7 per cent. Next came Australians, with 5 per cent.
Other significant foreign buyer groups came from the United States, Taiwan and Hong Kong.
More foreigners are also buying landed homes, particularly in the prime districts, even though they need approval to buy.
Some of them have benefited from recent collective sales and are looking for a landed home with their proceeds, said an agent covering the landed market.
He has worked with British and Indian clients who have no problems with paying a 1 per cent deposit for a house costing up to $10 million, even before obtaining approval to buy.
The home-buying budgets of many foreigners run to several millions of dollars.
Fourth-quarter caveats lodged showed that nearly half of the foreign buyers bought homes for between $1 million and $5 million, said Knight Frank.
About 38 per cent bought homes costing $500,000 to $1 million. An elite group of 5 per cent bought posh homes costing $5 million or more, it said.
Source: The Sunday Times, 01 April 2007
Last year, they snapped up nearly 5,000 units, which represented a 23 per cent market share, property consultants said.
And as the luxury property boom gained pace in the final quarter of last year, their buying spree hit an all-time high. For the first time, their market share hit 26 per cent, beating the previous all-time high of 24 per cent in 1995.
Before the market started to bounce back in 2005, foreign homebuyers made up less than 20 per cent of all buyers in Singapore.
Indonesians bought the most private residential properties here last year, accounting for about 23.7 per cent of foreign buyers, based on statistics compiled by Knight Frank. Malaysians took second place with 22.7 per cent.
Indians came third, with 8.4 per cent, followed by Britons, with 8 per cent. Buyers from China took up 7.7 per cent. Next came Australians, with 5 per cent.
Other significant foreign buyer groups came from the United States, Taiwan and Hong Kong.
More foreigners are also buying landed homes, particularly in the prime districts, even though they need approval to buy.
Some of them have benefited from recent collective sales and are looking for a landed home with their proceeds, said an agent covering the landed market.
He has worked with British and Indian clients who have no problems with paying a 1 per cent deposit for a house costing up to $10 million, even before obtaining approval to buy.
The home-buying budgets of many foreigners run to several millions of dollars.
Fourth-quarter caveats lodged showed that nearly half of the foreign buyers bought homes for between $1 million and $5 million, said Knight Frank.
About 38 per cent bought homes costing $500,000 to $1 million. An elite group of 5 per cent bought posh homes costing $5 million or more, it said.
Source: The Sunday Times, 01 April 2007
Government moves to deal with CBD office space crunch
The government will move to tackle the office space crunch in the Central Business District, National Development Minister Mah Bow Tan said yesterday.
Acknowledging an ‘imbalance’ between supply and demand, he said the authorities will likely step up the pace of government land sales (GLS) in the CBD. ‘I think the quantum will have to be stepped up as we see a tightening up of supply,’ Mr Mah said.
The government has also set an ambitious target for further development of Marina Bay and the new downtown, which Mr Mah said could begin from as early as 2009.
To deal with the immediate office space crunch, the government is considering releasing state land for short-term use, he said.
The Urban Redevelopment Authority confirmed later that it is exploring whether vacant sites can be used for ‘transient offices’.
‘They would be basic but proper office accommodation that can be constructed quickly - for example, one year - and would be on land on short tenures,’ a spokesman said. ‘This is still under study and we have not firmed up the details yet.’
Mr Mah, speaking yesterday at the ground-breaking ceremony for a new bridge that will span the mouth of Marina Bay, painted broad strokes of how the rest of Marina Bay will take shape.
The first site to be released - a white site with an office space requirement, on Central Boulevard - will be launched for sale in May, he said.
Another key site is the stretch between the upcoming Marina Bay Sands and Marina Bay Financial Centre. Mr Mah said this choice plot will complete the loop of developments around Marina Bay when completed, but it will only be available when other construction work ends around 2009.
Other sites that will then come on stream will extend from Marina Bay and wrap around the Garden at Marina South.
The existing CBD will also be extended southwards into what is being called the Central sub-zone.
The as-yet-unnamed bridge, which will cost $82.9 million, will provide direct road access between Marina Centre and the new Bayfront at Marina South.
Mr Mah said that the bridge is part of $2 billion to be spent on infrastructure developments there, including the critical common services tunnel. ‘In turn, we have attracted about $10 billion of investments to date,’ he said.
Land likely to be released for development this year includes a boutique hotel site next to the Marina Bay Sands, the international cruise terminal site and the central promontory site. All are likely to go through a Request for Concept stage.
Mr Mah said he wants to reassure the business community that office space will be made available. State buildings vacated by the government could be an immediate source, he said. ‘It may not be used for MNC head offices, but it can certainly be used for back-end office for financial institutions.’
The government has moved some of its offices out of the CBD but Mr Mah said there are ‘one or two’ left.
He also said the authorities will ‘encourage’ users to make better use of existing sites, but did not elaborate on whether the government will make it more attractive for owners of old office buildings to redevelop them.
With the pace of construction likely to be maintained or stepped-up, Mr Mah reiterated that sand supplies are not a concern because the authorities are finding new sources.
He said the supply and price of sand will not affect the building of the integrated resorts, and he does not expect any delay to the opening dates.
Mr Mah did, however, say the government is close to finalising details on how it will help contractors involved with government contracts who face cash flow problems because of higher construction costs. The government said earlier it would pay for 75 per cent of the additional costs for public-sector contractors.
Details are expected within the month, Mr Mah said. ‘In principle, we will make progress payments. If we can help contractors with cash flow payments, we will do so.’
Source: The Business Times, 31 March 2007
Acknowledging an ‘imbalance’ between supply and demand, he said the authorities will likely step up the pace of government land sales (GLS) in the CBD. ‘I think the quantum will have to be stepped up as we see a tightening up of supply,’ Mr Mah said.
The government has also set an ambitious target for further development of Marina Bay and the new downtown, which Mr Mah said could begin from as early as 2009.
To deal with the immediate office space crunch, the government is considering releasing state land for short-term use, he said.
The Urban Redevelopment Authority confirmed later that it is exploring whether vacant sites can be used for ‘transient offices’.
‘They would be basic but proper office accommodation that can be constructed quickly - for example, one year - and would be on land on short tenures,’ a spokesman said. ‘This is still under study and we have not firmed up the details yet.’
Mr Mah, speaking yesterday at the ground-breaking ceremony for a new bridge that will span the mouth of Marina Bay, painted broad strokes of how the rest of Marina Bay will take shape.
The first site to be released - a white site with an office space requirement, on Central Boulevard - will be launched for sale in May, he said.
Another key site is the stretch between the upcoming Marina Bay Sands and Marina Bay Financial Centre. Mr Mah said this choice plot will complete the loop of developments around Marina Bay when completed, but it will only be available when other construction work ends around 2009.
Other sites that will then come on stream will extend from Marina Bay and wrap around the Garden at Marina South.
The existing CBD will also be extended southwards into what is being called the Central sub-zone.
The as-yet-unnamed bridge, which will cost $82.9 million, will provide direct road access between Marina Centre and the new Bayfront at Marina South.
Mr Mah said that the bridge is part of $2 billion to be spent on infrastructure developments there, including the critical common services tunnel. ‘In turn, we have attracted about $10 billion of investments to date,’ he said.
Land likely to be released for development this year includes a boutique hotel site next to the Marina Bay Sands, the international cruise terminal site and the central promontory site. All are likely to go through a Request for Concept stage.
Mr Mah said he wants to reassure the business community that office space will be made available. State buildings vacated by the government could be an immediate source, he said. ‘It may not be used for MNC head offices, but it can certainly be used for back-end office for financial institutions.’
The government has moved some of its offices out of the CBD but Mr Mah said there are ‘one or two’ left.
He also said the authorities will ‘encourage’ users to make better use of existing sites, but did not elaborate on whether the government will make it more attractive for owners of old office buildings to redevelop them.
With the pace of construction likely to be maintained or stepped-up, Mr Mah reiterated that sand supplies are not a concern because the authorities are finding new sources.
He said the supply and price of sand will not affect the building of the integrated resorts, and he does not expect any delay to the opening dates.
Mr Mah did, however, say the government is close to finalising details on how it will help contractors involved with government contracts who face cash flow problems because of higher construction costs. The government said earlier it would pay for 75 per cent of the additional costs for public-sector contractors.
Details are expected within the month, Mr Mah said. ‘In principle, we will make progress payments. If we can help contractors with cash flow payments, we will do so.’
Source: The Business Times, 31 March 2007
Heartland Mall’s 4th floor sold for $8.5m at auction
The fourth level of Heartland Mall near Kovan MRT Station was sold for $8.5 million on Thursday at a DTZ Debenham Tie Leung auction. According to some auction regulars present, the buyers are believed to be members of the Cheong family who developed International Plaza on Anson Road and who still have some units there.
The family members are believed to be cousins of Simon Cheong of SC Global Developments fame. The other star attraction at the auction - Jurong Reptile Park - was withdrawn after receiving a top offer of $860,000. But immediately after the auction, an individual is said to have made an offer of over $1 million and negotiations are expected to take place. The investor is expected to continue leasing out the retail outlets at the park. However, he may remove the reptiles and introduce some new sports and recreational attraction.
The 206,304-square-foot site has a remaining lease of about nine years. The park - formerly known as Jurong Crocodile Paradise - drew four bidders. The opening price of $1.8 million sought by DTZ auctioneer Shaun Poh found no takers. Instead, there was a counter offer by a bidder at $600,000, and bidding continued until it reached a high of $860,000, at which point the property was withdrawn.
The property was put up for sale by liquidator Stone Forest Corporate Advisory Pte Ltd.
The fourth floor of Heartland Mall drew just one bid - of $8.5 million - from the Cheong family. But that was good enough for seller Wang Lei Investment, understood to be linked to the company that owns karaoke chain Kbox. The space comprises six units adding up to 21,131 square feet of lettable area. Five of the units are leased until August 2012 to private schools, at a combined monthly rental of about $67,200. This reflects a net yield of just over 8 per cent. The four-storey mall stands on a site with a remaining lease of 76 years.
Wang Lei bought the six units for $6.8 million from mortgagee Maybank last year.
Source: The Business Times, 31 March 2007
The family members are believed to be cousins of Simon Cheong of SC Global Developments fame. The other star attraction at the auction - Jurong Reptile Park - was withdrawn after receiving a top offer of $860,000. But immediately after the auction, an individual is said to have made an offer of over $1 million and negotiations are expected to take place. The investor is expected to continue leasing out the retail outlets at the park. However, he may remove the reptiles and introduce some new sports and recreational attraction.
The 206,304-square-foot site has a remaining lease of about nine years. The park - formerly known as Jurong Crocodile Paradise - drew four bidders. The opening price of $1.8 million sought by DTZ auctioneer Shaun Poh found no takers. Instead, there was a counter offer by a bidder at $600,000, and bidding continued until it reached a high of $860,000, at which point the property was withdrawn.
The property was put up for sale by liquidator Stone Forest Corporate Advisory Pte Ltd.
The fourth floor of Heartland Mall drew just one bid - of $8.5 million - from the Cheong family. But that was good enough for seller Wang Lei Investment, understood to be linked to the company that owns karaoke chain Kbox. The space comprises six units adding up to 21,131 square feet of lettable area. Five of the units are leased until August 2012 to private schools, at a combined monthly rental of about $67,200. This reflects a net yield of just over 8 per cent. The four-storey mall stands on a site with a remaining lease of 76 years.
Wang Lei bought the six units for $6.8 million from mortgagee Maybank last year.
Source: The Business Times, 31 March 2007
Imbalance seen in CBD space supply, demand
The redevelopment and regeneration of the Central Business District (CBD) is well under way, but it may not be happening fast enough.
According to a report by DTZ Debenham Tie Leung, average annual take-up of office space has been 1.8 million square feet for the last 10 years. Yet, the property firm notes that potential supply for 2007 is estimated at 612,000 sq ft.
In 2008 and 2009, supply will dip below 500,000 sq ft and will only pick up in 2010 to 2.15 million sq ft.
And already, the repercussions are being felt.
In its Global Office Occupancy Costs Survey 2007, DTZ shows that rents in Singapore rose 65 per cent year on year, the highest increase across all 134 locations surveyed, to US$7,860 per workstation per year.
As a result, Singapore climbed 41 places on DTZ’s survey list to 55th spot globally, and was up six places to ninth position in the Asia-Pacific region.
There does appear to be an imbalance of supply and demand, and as DTZ executive director Ong Choon Fah says: ‘The government can programme development.’
For Mrs Ong, the pace of redevelopment in the CBD could have been faster but as she also points out: ‘Crystal ball-gazing is not easy.’
‘It’s a combination of planning and market forces,’ she added.
Perhaps one of the best examples of this paradox is One Raffles Quay (ORQ).
A consortium of Keppel Land, Cheung Kong Holdings and Hongkong Land bought the site in March 2001 for $462 million, or $290 per square foot per plot ratio (psf ppr), at a time when, as Mrs Ong remembers, the property market was ‘very bad’. Indeed, the site had previously been offered for sale in 1997 and there were no takers. The expected price of between $600 million and $800 million was also not achieved.
Mrs Ong says that the acquisition was seen as ‘contrarian’ at the time. But ORQ is now fully leased and achieving top rents, spurring redevelopment and a rash of acquisitions by foreign funds of buildings, most recently Temasek Tower.
Also contrarian was City Developments Ltd (CDL), which in 2002 bought the site for its hugely successful The Sail @ Marina Bay for $227.10 psf ppr - 22 per cent lower than the price paid for neighbouring ORQ.
Looking back, CDL group general manager Chia Ngiang Hong said: ‘CDL purchased the white site which is now being developed into The Sail at a time when no other developer was willing to venture into building a residential development at Marina Bay.’
CDL is now redeveloping One Shenton (the former Robina House) into a high-end condominium with a retail component, and has also expressed interest in the UIC Building next door, which is for sale at about $830 million or $1,150 psf ppr (inclusive of development charge and lease top-up).
Developers now appear to be making up for lost time, and demand for development sites is high.
‘Older buildings are often strategically located in prime areas that render them ideal for redevelopment. As such, although the older buildings purchased via en bloc acquisitions are not immediately available due to longer lead time required for planning process, their conversion may yield better returns,’ Mr Chia said.
The spate of current redevelopments, including the government land sales site at Collyer Quay and Overseas Union House, can be attributed to the ‘programming of development’ by the Urban Redevelopment Authority (URA).
Some, like the redevelopment of Natwest Centre into a condominium called The Clift by Far East Organization, was prompted by a URA initiative to bring more critical mass into an otherwise quiet downtown at night.
Plot ratio incentives are also important.
A spokesman for the URA said: ‘A number of existing office buildings in the CBD, in particular in the Shenton Way and Cecil Street areas, have not yet maximised their full development potential under the current Master Plan 2003.’
The pace of redevelopment has certainly picked up since 2003. Keppel Land is the latest to take advantage of the Master Plan and will soon announce plans for the redevelopment of Ocean Building.
‘There are merits in redeveloping Ocean Building and these include the opportunity to add about 100,000 sq ft of gross floor area which has not been utilised,’ a spokesman for Keppel Land said.
‘Furthermore, it will become increasingly challenging for the building, which is about 33 years old, to attract and retain top-quality tenants. By redeveloping Ocean Building we will be able to effectively maximise the potential of the site.’
Mrs Ong for one welcomes the government’s initiatives to address the issue of supply in the CBD, including the release of more development sites. She says that it is important to maintain the current ‘momentum of development’, not least because it allows the older parts of the CBD to regenerate.
She notes: ‘In the 1970s, when the government started releasing sites in Shenton Way, it stimulated the regeneration of the old Raffles Place.’
Source: The Business Times, 31 March 2007
According to a report by DTZ Debenham Tie Leung, average annual take-up of office space has been 1.8 million square feet for the last 10 years. Yet, the property firm notes that potential supply for 2007 is estimated at 612,000 sq ft.
In 2008 and 2009, supply will dip below 500,000 sq ft and will only pick up in 2010 to 2.15 million sq ft.
And already, the repercussions are being felt.
In its Global Office Occupancy Costs Survey 2007, DTZ shows that rents in Singapore rose 65 per cent year on year, the highest increase across all 134 locations surveyed, to US$7,860 per workstation per year.
As a result, Singapore climbed 41 places on DTZ’s survey list to 55th spot globally, and was up six places to ninth position in the Asia-Pacific region.
There does appear to be an imbalance of supply and demand, and as DTZ executive director Ong Choon Fah says: ‘The government can programme development.’
For Mrs Ong, the pace of redevelopment in the CBD could have been faster but as she also points out: ‘Crystal ball-gazing is not easy.’
‘It’s a combination of planning and market forces,’ she added.
Perhaps one of the best examples of this paradox is One Raffles Quay (ORQ).
A consortium of Keppel Land, Cheung Kong Holdings and Hongkong Land bought the site in March 2001 for $462 million, or $290 per square foot per plot ratio (psf ppr), at a time when, as Mrs Ong remembers, the property market was ‘very bad’. Indeed, the site had previously been offered for sale in 1997 and there were no takers. The expected price of between $600 million and $800 million was also not achieved.
Mrs Ong says that the acquisition was seen as ‘contrarian’ at the time. But ORQ is now fully leased and achieving top rents, spurring redevelopment and a rash of acquisitions by foreign funds of buildings, most recently Temasek Tower.
Also contrarian was City Developments Ltd (CDL), which in 2002 bought the site for its hugely successful The Sail @ Marina Bay for $227.10 psf ppr - 22 per cent lower than the price paid for neighbouring ORQ.
Looking back, CDL group general manager Chia Ngiang Hong said: ‘CDL purchased the white site which is now being developed into The Sail at a time when no other developer was willing to venture into building a residential development at Marina Bay.’
CDL is now redeveloping One Shenton (the former Robina House) into a high-end condominium with a retail component, and has also expressed interest in the UIC Building next door, which is for sale at about $830 million or $1,150 psf ppr (inclusive of development charge and lease top-up).
Developers now appear to be making up for lost time, and demand for development sites is high.
‘Older buildings are often strategically located in prime areas that render them ideal for redevelopment. As such, although the older buildings purchased via en bloc acquisitions are not immediately available due to longer lead time required for planning process, their conversion may yield better returns,’ Mr Chia said.
The spate of current redevelopments, including the government land sales site at Collyer Quay and Overseas Union House, can be attributed to the ‘programming of development’ by the Urban Redevelopment Authority (URA).
Some, like the redevelopment of Natwest Centre into a condominium called The Clift by Far East Organization, was prompted by a URA initiative to bring more critical mass into an otherwise quiet downtown at night.
Plot ratio incentives are also important.
A spokesman for the URA said: ‘A number of existing office buildings in the CBD, in particular in the Shenton Way and Cecil Street areas, have not yet maximised their full development potential under the current Master Plan 2003.’
The pace of redevelopment has certainly picked up since 2003. Keppel Land is the latest to take advantage of the Master Plan and will soon announce plans for the redevelopment of Ocean Building.
‘There are merits in redeveloping Ocean Building and these include the opportunity to add about 100,000 sq ft of gross floor area which has not been utilised,’ a spokesman for Keppel Land said.
‘Furthermore, it will become increasingly challenging for the building, which is about 33 years old, to attract and retain top-quality tenants. By redeveloping Ocean Building we will be able to effectively maximise the potential of the site.’
Mrs Ong for one welcomes the government’s initiatives to address the issue of supply in the CBD, including the release of more development sites. She says that it is important to maintain the current ‘momentum of development’, not least because it allows the older parts of the CBD to regenerate.
She notes: ‘In the 1970s, when the government started releasing sites in Shenton Way, it stimulated the regeneration of the old Raffles Place.’
Source: The Business Times, 31 March 2007
Government to release more sites for office use to meet demand
The government is set to release more sites for office use through its land sales programme to meet increasing demand.
Besides land sales, National Development Minister Mah Bow Tan said the government would also consider releasing existing sites.
And this includes freeing up vacated government office sites in the city area.
In land-scarce Singapore, releasing space for office use requires careful planning.
To meet the growing demand, the Central Boulevard and Beach Road sites have been released.
The National Development Minister said if those sites are not enough, more downtown sites would be put up for sale.
And if there is still a need for space after that, the government will consider providing “transition office space”.
Mr Mah said: “I think all of these moves will deal not just with the immediate problem but also with the longer term issue of supply and demand.
“Rest assured that there is sufficient space for expansion of the commercial sector and the office sector in the longer run. But we need to deal with the immediate term as well and this is what I want to emphasise.”
He was speaking to reporters after the groundbreaking ceremony for a new bridge at Marina Bay.
The bridge will be built at a cost of S$90 million (US$59 million).
When completed in 2009, it will be open to vehicles and pedestrians who will enjoy a 3.5km walking route around the bay.
Mr Mah said: “I think the bridge groundbreaking ceremony that we have today is another significant development in the series of development that we are seeing around the bay.
“We already have the flyer; we’ve the IR (Integrated Resort), BFC (Business and Financial Centre), the Sail and Collyer Quay. So the bridge is, in a way, starting to tie up all these developments together and when it is completed, it will physically tie everybody together.”
The bridge is part of the government’s S$2 billion (US$1.3 billion) investment in infrastructure to develop the area.
To make Marina Bay more vibrant, a series of sporting events will be held there every year.
Source: Channel NewsAsia, 30 March 2007
Besides land sales, National Development Minister Mah Bow Tan said the government would also consider releasing existing sites.
And this includes freeing up vacated government office sites in the city area.
In land-scarce Singapore, releasing space for office use requires careful planning.
To meet the growing demand, the Central Boulevard and Beach Road sites have been released.
The National Development Minister said if those sites are not enough, more downtown sites would be put up for sale.
And if there is still a need for space after that, the government will consider providing “transition office space”.
Mr Mah said: “I think all of these moves will deal not just with the immediate problem but also with the longer term issue of supply and demand.
“Rest assured that there is sufficient space for expansion of the commercial sector and the office sector in the longer run. But we need to deal with the immediate term as well and this is what I want to emphasise.”
He was speaking to reporters after the groundbreaking ceremony for a new bridge at Marina Bay.
The bridge will be built at a cost of S$90 million (US$59 million).
When completed in 2009, it will be open to vehicles and pedestrians who will enjoy a 3.5km walking route around the bay.
Mr Mah said: “I think the bridge groundbreaking ceremony that we have today is another significant development in the series of development that we are seeing around the bay.
“We already have the flyer; we’ve the IR (Integrated Resort), BFC (Business and Financial Centre), the Sail and Collyer Quay. So the bridge is, in a way, starting to tie up all these developments together and when it is completed, it will physically tie everybody together.”
The bridge is part of the government’s S$2 billion (US$1.3 billion) investment in infrastructure to develop the area.
To make Marina Bay more vibrant, a series of sporting events will be held there every year.
Source: Channel NewsAsia, 30 March 2007
Cruise terminal in Marina South ready in 6 years
With the cruise business in Asia heating up, the snail’s crawl so far to develop a cruise terminal at Marina South looks to have been finally given the nod by the authorities — but it may take up to six years before its docks are ready for operations.
A representative from the Singapore Tourism Board (STB) had said that “the cruise terminal in Marina South would be ready (by) 2012, 2013″ during a trade event two weeks ago in Miami, the Singapore Cruise Centre’s (SCC) president Cheong Teow Cheng told Today. He was also a participant at the same four-day event, called the Seatrade Cruise Shipping Convention.
The SCC, which has been “unwavering” in its interest in this new terminal ever since the site was earmarked more than six years ago, will be keen to participate in this development, Mr Cheong added.
In fact, in 2003, the Urban Redevelopment Authority’s Public Spaces and Urban Waterfront Master Plan identified the proposed cruise terminal alonsgside other passenger and ferry terminals to form the Maritime Hub at Marina South.
A preliminary site study conducted in Marina South in the second half of last year on tidal movement and how passing vessels can affect cruise vessels docked at the site have wrapped up. It is believed to be the first such study the STB has carried out in the area.
When contacted, the tourism board’s director (Sightseeing and cruise) Dayne Lim would only say that “we are planning and in discussion with the related government agencies and cruise industry partners toward the development of the new cruise terminal at Marina South over the next five years”.
Yesterday, the SCC and iCell Network rolled out the free wireless programme, Wireless@SG, for passengers at three terminals that the former operates: the international passenger terminal and regional ferry terminal at HarbourFront, and the Tanah Merah regional ferry terminal.
This move makes the SCC’s terminals the first entry points in Singapore, as well as the first cruise and ferry terminals in the region, to provide free Internet connectivity to its passengers.
In the pipeline are VOIP services that will allow users to make low-cost international calls in the second half of this year, as well as a digital concierge service for users to customise the information they wish to receive on WiFi-enabled devices such as like laptops and mobile phones. These initiatives — along with other systems upgrading at the SCC terminals — add up to some $2.5 million, Mr Cheong said.
“The SCC recognises the challenges and IT demands of tomorrow and is taking pro-active steps to not just stay relevant, but also to stay ahead of the needs of the future.”
Source: Today, 30 March 2007
A representative from the Singapore Tourism Board (STB) had said that “the cruise terminal in Marina South would be ready (by) 2012, 2013″ during a trade event two weeks ago in Miami, the Singapore Cruise Centre’s (SCC) president Cheong Teow Cheng told Today. He was also a participant at the same four-day event, called the Seatrade Cruise Shipping Convention.
The SCC, which has been “unwavering” in its interest in this new terminal ever since the site was earmarked more than six years ago, will be keen to participate in this development, Mr Cheong added.
In fact, in 2003, the Urban Redevelopment Authority’s Public Spaces and Urban Waterfront Master Plan identified the proposed cruise terminal alonsgside other passenger and ferry terminals to form the Maritime Hub at Marina South.
A preliminary site study conducted in Marina South in the second half of last year on tidal movement and how passing vessels can affect cruise vessels docked at the site have wrapped up. It is believed to be the first such study the STB has carried out in the area.
When contacted, the tourism board’s director (Sightseeing and cruise) Dayne Lim would only say that “we are planning and in discussion with the related government agencies and cruise industry partners toward the development of the new cruise terminal at Marina South over the next five years”.
Yesterday, the SCC and iCell Network rolled out the free wireless programme, Wireless@SG, for passengers at three terminals that the former operates: the international passenger terminal and regional ferry terminal at HarbourFront, and the Tanah Merah regional ferry terminal.
This move makes the SCC’s terminals the first entry points in Singapore, as well as the first cruise and ferry terminals in the region, to provide free Internet connectivity to its passengers.
In the pipeline are VOIP services that will allow users to make low-cost international calls in the second half of this year, as well as a digital concierge service for users to customise the information they wish to receive on WiFi-enabled devices such as like laptops and mobile phones. These initiatives — along with other systems upgrading at the SCC terminals — add up to some $2.5 million, Mr Cheong said.
“The SCC recognises the challenges and IT demands of tomorrow and is taking pro-active steps to not just stay relevant, but also to stay ahead of the needs of the future.”
Source: Today, 30 March 2007
Property now makes up 70% of Sim Lian’s business
SimLian Group says property development now accounts for 70 per cent of its business. And it has at least two residential launches lined up.
Going on sale today is the 338-unit Carabelle on the former Hin Seng Garden site at West Coast Way, which Sim Lian acquired in March 2005.Unit sizes range from 883 to 2,207 sq ft and the average price is $638 psf.
Later this year, Sim Lian will launch a 95-unit development off Surrey Road.
It also plans to launch a residential development in Telok Kurau in 2008, and has projects in Johor and Kuala Lumpur.
In October last year, Sim Lian launched the Housing and Development Board’s pilot project for its Design Build and Sell Scheme (DBSS) - the 616-unit Premiere@Tampines, where 5,000 people visited the showflat.
Sim Lian has not decided whether to bid for HDB’s second DBSS parcel at Bendemeer Road. But the group’s executive director Diana Kuik is nevertheless bullish about the mid-tier and mass-market property segments.
Noting that prices at the high end have ‘forced many out of Districts 9, 10 and 11′, she said there are ‘opportunities’ in the mid-tier and mass segments.
Buyers in these segments have also become more discerning. So for Carabelle, Sim Lian intends to offer spa baths with hydrojets.
The group’s construction arm, Sim Lian Construction, was awarded an $85.3 million contract last week to build an entertainment development at Victoria Street.
Despite rising construction costs and increasing competition for labour, Ms Kuik is also upbeat about the construction sector. ‘After eight years of downturn, a lot of the construction firms are now looking at better profit margins,’ she said.
Source: The Business Times, 30 March 2007
Going on sale today is the 338-unit Carabelle on the former Hin Seng Garden site at West Coast Way, which Sim Lian acquired in March 2005.Unit sizes range from 883 to 2,207 sq ft and the average price is $638 psf.
Later this year, Sim Lian will launch a 95-unit development off Surrey Road.
It also plans to launch a residential development in Telok Kurau in 2008, and has projects in Johor and Kuala Lumpur.
In October last year, Sim Lian launched the Housing and Development Board’s pilot project for its Design Build and Sell Scheme (DBSS) - the 616-unit Premiere@Tampines, where 5,000 people visited the showflat.
Sim Lian has not decided whether to bid for HDB’s second DBSS parcel at Bendemeer Road. But the group’s executive director Diana Kuik is nevertheless bullish about the mid-tier and mass-market property segments.
Noting that prices at the high end have ‘forced many out of Districts 9, 10 and 11′, she said there are ‘opportunities’ in the mid-tier and mass segments.
Buyers in these segments have also become more discerning. So for Carabelle, Sim Lian intends to offer spa baths with hydrojets.
The group’s construction arm, Sim Lian Construction, was awarded an $85.3 million contract last week to build an entertainment development at Victoria Street.
Despite rising construction costs and increasing competition for labour, Ms Kuik is also upbeat about the construction sector. ‘After eight years of downturn, a lot of the construction firms are now looking at better profit margins,’ she said.
Source: The Business Times, 30 March 2007
Foreign buying extends to landed homes in prime areas
An increasing number of landed homes in Singapore are going to foreign buyers, especially in the prime districts.
Foreigners (including permanent residents) picked up 105 landed homes in Districts 9, 10 and 11 last year, which was 66.7 per cent higher than 2005 and the highest figure since 1995, the earliest date included in the Urban Redevelopment Authority’s Realis caveats database, an analysis by DTZ Debenham Tie Leung shows.
UK nationals were the biggest buyers of prime district landed homes last year, with 18 purchases. Other major buyers were Australians, Americans, Malaysians and Indians.
DTZ highlighted that buyers from India have increased their share of landed home purchases in prime districts from three or fewer transactions a year in the past to 11 in 2006. Similarly, Australians increased their purchases from four transactions in 2005 to 13 last year.
These various nationalities bought prime district landed homes predominantly in District 10.
Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.
Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under Singapore Land Authority. Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.
Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made or will be able to make adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to under 48 hours under a special fast-track approval scheme.
The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).
Foreign buyers may acquire an unlimited number of non-landed private homes - condominiums and apartments.
The only foreigners who may buy HDB flats on the resale market are PRs.
‘So there are regulations in place to guard against foreigners speculating in landed homes or buying landed homes excessively in Singapore as landed properties are a relatively scarce commodity in Singapore,’ observes DTZ executive director Ong Choon Fah.
But the trend of foreign buying of landed homes is set to continue, she predicts. ‘We have to accept it, if we want to be a global city, and if we want to open our doors to attract talent to our shores,’ she said.
The 105 landed properties that foreigners bought in the prime districts last year gave them a 15.8 per cent share of total landed home purchases in these locations in 2006, up from a 12.1 per cent share in 2005.
Islandwide, foreigners bought 249 landed homes last year, up 65 per cent from 2005. The 2006 figure represented 7.2 per cent of the total landed homes that changed hands in Singapore in that year.
Foreigners’ share of landed home purchases last year, whether in the prime districts or elsewhere, is significantly lower than the 23 per cent of overall private home buying they carried out last year.
Source: The Business Times, 30 March 2007
Foreigners (including permanent residents) picked up 105 landed homes in Districts 9, 10 and 11 last year, which was 66.7 per cent higher than 2005 and the highest figure since 1995, the earliest date included in the Urban Redevelopment Authority’s Realis caveats database, an analysis by DTZ Debenham Tie Leung shows.
UK nationals were the biggest buyers of prime district landed homes last year, with 18 purchases. Other major buyers were Australians, Americans, Malaysians and Indians.
DTZ highlighted that buyers from India have increased their share of landed home purchases in prime districts from three or fewer transactions a year in the past to 11 in 2006. Similarly, Australians increased their purchases from four transactions in 2005 to 13 last year.
These various nationalities bought prime district landed homes predominantly in District 10.
Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.
Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under Singapore Land Authority. Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.
Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made or will be able to make adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to under 48 hours under a special fast-track approval scheme.
The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).
Foreign buyers may acquire an unlimited number of non-landed private homes - condominiums and apartments.
The only foreigners who may buy HDB flats on the resale market are PRs.
‘So there are regulations in place to guard against foreigners speculating in landed homes or buying landed homes excessively in Singapore as landed properties are a relatively scarce commodity in Singapore,’ observes DTZ executive director Ong Choon Fah.
But the trend of foreign buying of landed homes is set to continue, she predicts. ‘We have to accept it, if we want to be a global city, and if we want to open our doors to attract talent to our shores,’ she said.
The 105 landed properties that foreigners bought in the prime districts last year gave them a 15.8 per cent share of total landed home purchases in these locations in 2006, up from a 12.1 per cent share in 2005.
Islandwide, foreigners bought 249 landed homes last year, up 65 per cent from 2005. The 2006 figure represented 7.2 per cent of the total landed homes that changed hands in Singapore in that year.
Foreigners’ share of landed home purchases last year, whether in the prime districts or elsewhere, is significantly lower than the 23 per cent of overall private home buying they carried out last year.
Source: The Business Times, 30 March 2007
Reflections at Keppel Bay
Location: Keppel Bay/Sentosa (D 3)
Developer: Keppel Land
Detail: 6 tower blocks (combination of 41 storeys / 24 storeys) and 11 blocks of low rise villas (6/7/8 storeys)
Tenure: 99-years leasehold
Site Area: 84,000 sq m
Expected TOP: 2011
Units Types:
1 br + study ~ 732 – 800 sqft
2 bedroom & 2bedroom + study ~ 743 – 1,001 sqft & 947 – 1,335 sqft
3 bedroom ~ 1,109 – 2,142 sqft
4 bedroom & 4 bedroom + study ~ 1,938 – 2,831 sqft & 2,530 – 2,874 sqft
Penthouses ~ 3,488 – 12,900 sqft
Price: expected $1500psf onwards
Remarks: The development is designed by renowned architect Daniel Libeskind - who is designing the masterplan for New York’s Ground Zero site - the six glass towers offer panoramic views of Sentosa, the city and Mount Faber, while the 11 villa blocks are situated less than 150 metres from the Keppel Bay shoreline.
PREVIEW SOON!!!
Call +65 987578808 or email- allieds88@gmail.com for more information or to register your interest.
Developer: Keppel Land
Detail: 6 tower blocks (combination of 41 storeys / 24 storeys) and 11 blocks of low rise villas (6/7/8 storeys)
Tenure: 99-years leasehold
Site Area: 84,000 sq m
Expected TOP: 2011
Units Types:
1 br + study ~ 732 – 800 sqft
2 bedroom & 2bedroom + study ~ 743 – 1,001 sqft & 947 – 1,335 sqft
3 bedroom ~ 1,109 – 2,142 sqft
4 bedroom & 4 bedroom + study ~ 1,938 – 2,831 sqft & 2,530 – 2,874 sqft
Penthouses ~ 3,488 – 12,900 sqft
Price: expected $1500psf onwards
Remarks: The development is designed by renowned architect Daniel Libeskind - who is designing the masterplan for New York’s Ground Zero site - the six glass towers offer panoramic views of Sentosa, the city and Mount Faber, while the 11 villa blocks are situated less than 150 metres from the Keppel Bay shoreline.
PREVIEW SOON!!!
Call +65 987578808 or email- allieds88@gmail.com for more information or to register your interest.
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