Saturday, May 26, 2007

Sentosa Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition

Sentosa Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition but so they will be seen to be transparent and fair, a Parliamentary committee has recommended, following findings of lapses by the Auditor-General.

In its latest report, presented to Parliament on Thursday, the Public Accounts Committee (PAC) says SDC has taken measures to redress deficiencies but PAC takes the view that the inherent weakness of SDC’s land sales by private treaty - one of the two modes of sale - was not fully addressed.

‘Direct negotiation with a prospective buyer may not result in the best price as compared with an auction, especially in a rising market,’ says the eight-member committee chaired by Cedric Foo. It is also open to abuse as information on reserve price, for example, could be leaked, PAC adds.

The additional controls of not providing board directors with privileged information will not prevent public perception of conflict of interest, says PAC, because directors and ex-directors taking part in SDC land sales will still have access to more background information than others.

PAC recommends that SDC further review its land sale guidelines and procedures so sales ‘not only comply with the principles of fair competition, maximising total returns to the government and transparency, but are also seen as such by the public’.

The committee further suggests that the Auditor-General undertake ‘a more regular audit’ of the Economic Development Board, following the Auditor-General’s findings of lapses in governance structure and financial operations in its first audit of EDB.

Apparently, EDB’s budget of $105 million for the year under review (2005/2006) was not submitted to its board for approval, and the board had also delegated power to staff to grant loans and to borrow without reporting back - practices against the law. EDB says it has taken prompt action to address the mistakes.

Other lapses unearthed in the Auditor-General’s audits of ministries and statutory boards in financial year 2005/2006 include procurement irregularities in the Ministry of Defence, inaccurate records of state land and buildings, unfair payment practices and false accounting information in the Ministry of Information, Communications and the Arts, circumvention of internal controls in a Foreign Affairs overseas mission, and weak access controls in several government agencies.

Source: The Business Times, 26 May 2007

33% gains for prime London property

Prime central London property prices are growing at their fastest in almost 30 years - and at three times the rate of the wider British market, figures show.

The value of the best properties in central London has risen by more than 33 per cent in the 12 months to end-April, according to estate agent Knight Frank’s prime property index.

That is the fastest rate of growth since mid-1979 and means prices in central London are rising at three times the UK average.

A property worth just 100,000 pounds in 1976 would now be worth more than 4.1 million pounds, the index shows.

Knight Frank said demand had been supported by growing numbers of overseas buyers and money spent on property by City bankers.

Over the past year, Belgravia and Knightsbridge have seen the strongest market, with prices surging by more than 40 per cent.

Head of residential research Liam Bailey said: ‘London’s traditional spring market rush starts earlier and earlier every year. For the past two years, the season has opened in December rather than March, and has run on well into May.

‘The early part of 2007 saw an incredibly active market, with price growth totalling nearly 11.9 per cent in the first quarter.’

He said, even after 18 months of strong price appreciation, the pace of growth was yet to slow and, if anything, had quickened.

In the six months to end-April, monthly price growth averaged 2.8 per cent, against 1.7 per cent in the same period last year.

‘The strong performance of the top end of the market can be attributed, at least in part, to the continuing health of the City economy and the bonus season,’ said Mr Bailey.

‘However, it is our experience that, whilst there have been growing numbers of deals completed by City workers, it is the influx of overseas buyers - European, Russian, Indian and increasingly Middle Eastern - which is the key to the substantial price growth seen in many areas of central London,’ Mr Bailey said.

Knight Frank data shows that the supply of available property fell by more than 50 per cent in the first quarter of 2007, compared to a 17 per cent rise last year.

Looking forward, Mr Bailey believed stock shortages would continue to buoy the market.

Higher transaction costs - stamp duty, in particular - mean people are moving less often, while the introduction of home information packs (HIPs) this summer is also likely to cause a drop in supply, he said.

The controversial packs - designed to make the home-buying process more efficient, cut the number of transactions that fall through and encourage homeowners to reduce energy consumption - are due to come into force in England and Wales on June 1, but have met fierce opposition.

HIPs are expected to cost sellers around 500 (S$1,520) and estate agents have been reporting a rush to complete deals ahead of their introduction.

The Knight Frank prime central London residential index charts the value of property at the top end of the market: flats and penthouses with an average value of 2.5 million and houses valued at close to 5 million.

Source: The Business Times, 24 May 2007

Record US$56m deal for NY condo

In an era of ever more expensive apartments in Manhattan, a triplex penthouse condominium in the Plaza Hotel has gone into contract for US$56 million, in what would quite likely be the most expensive Manhattan apartment sale to date when it closes later this year, according to several real estate executives briefed on the transaction.

The condominium combines two separate apartments, one a duplex, the other a triplex, for more than 9,200 square feet of living space. The apartment will also have an inside lift entrance and a terrace of more than 500 sq ft, much of it overlooking Central Park, according to real estate executives who reviewed the offering plan.

The buyer was said to be a London-based businessman in the oil business. He signed the contract to buy the apartment, even though the developer, El Ad Properties, headed by Miki Naftali, would not combine the apartments into a single unit until the sale was completed, the executives said.

The contract, said to have been signed in December, is one of several lucrative contracts signed in the conversion of the hotel, at Central Park South and Fifth Avenue, providing 180 luxury condominium apartments and 152 slightly less expensive condominium hotel rooms.

Last week, the online edition of The New York Observer reported a sale at the Plaza in excess of US$50 million, but brokers familiar with the building could not confirm whether that report referred to the same sale or a second sale in the same price range.

The highest apartment price reported to date in Manhattan had been a US$45 million contract said to have been signed by Daniel Loeb, a hedge fund manager, for 15 Central Park West, a condominium building under construction opposite the west side of Central Park. The price for the Plaza penthouse is higher, and it is larger, but at a square-foot cost of about US$6,100 it is comparable to prices at 15 Central Park West.

Lloyd Kaplan, a spokesman for El Ad Properties, said sales in the Plaza were strong, with 85 per cent of the units in contract. Officials at Stribling & Associates, the sales agent for the building, declined to comment.

The buyer was represented by Elizabeth Lee Sample and Brenda Powers of Brown Harris Stevens, who also declined to comment. They are also the brokers for an even more expensive offering, the 16-room penthouse atop the Pierre Hotel, at Fifth Avenue and 61st Street, with an asking price of US$70 million.

Source: The Business Times, 24 May 2007

New Jersey’s ‘intermodal ports’ give industrial sector a boost

For decades, New Jersey developers have been recycling worn-out warehouses near the Hudson River into chic condos and fashionable retail centres. In cities like Hoboken, Jersey City and Weehawken, the value of a view of the Manhattan skyline across a mile-wide stretch of water overwhelms a site’s value as a functional place to store and repackage goods.

Nevertheless, the warehouse and distribution business has remained vital to the New Jersey economy - and the US’s.

New Jersey is a linchpin in the national supply chain of roads, rails, airports and ports. It has 1.4 billion square feet of industrial real estate, the equal of the Chicago area market and surpassed only by the Los Angeles-Southern California market.

Now momentum is building to expand the industrial market further, with an emphasis on development near shipping ports. One of the anticipated new crop of ‘intermodal ports’, capable of receiving and distributing shipped goods by all means of transport, is being built near the loading docks in Carteret.

The Portfields Initiative, a joint project of the Port Authority of New York and New Jersey and the New Jersey Economic Development Authority, created a list of 17 brownfield sites in the state that could be cleaned up and turned into intermodal ports.

The Carteret site is a former landfill and the first such iPort under construction.

There are 60 million consumers with a collective purchasing power of more than US$1 trillion within overnight delivery range of New Jersey, according to real estate company Cushman & Wakefield, which established a national industrial brokerage division a couple of months ago.

In recent years the amount of cargo moving through the New York-New Jersey waterfront has risen rapidly - 57 per cent from 2000 to 2005, and 9 per cent last year, according to Frank McDonough, president of the New York Shipping Association.

Mr McDonough and other industry representatives, real estate brokers, the Public Service Electric & Gas utility company and municipal officials helped work on the iPort Initiative.

Mindy Lissner, an industrial real estate specialist with CB Richard Ellis, said: ‘The iPort Initiative provides various types of support to developers taking on these sites, some of which are current landfills or former industrial sites that may be contaminated, and turning them into state-of-the-art distribution centres.’

She said iPort 12 was singular among properties on the market in the region because it offers a state-of-the-art structure combined with proximity to a port, rail lines, Newark Liberty International Airport and also Manhattan.

It also offers the benefits of urban enterprise and foreign-trade-zone status, providing tax breaks on goods moved through its doors, as part of the iPort Initiative.

‘There are two big things driving growth in the industrial sector,’ Ms Lissner said. ‘The first is that as the country shifts from manufacturing to a service economy, more and more products are being imported. And they are increasingly entering through the North-east, after labour strikes in the West created logjams at the ports and caused some shifts in paths of transport.’

Another reason for growth in the industrial sector of New Jersey, Ms Lissner said, is the lower rents than in New York.

New Jersey’s average industrial rents hover at US$5 to US$6 a square foot annually, compared with something more than twice that in New York, according to brokers.

The asking rent at iPort 12 will be US$8.50 psf.

‘We think we can get it - especially given the sometimes ridiculous rents they’re getting in New York,’ said one official.

Ms Lissner did not sound quite as certain. ‘It depends on the individual company’s situation,’ she said. ‘If you’re faced with a US$12 per square foot rent in the Bronx, and your labour is there, and your customers, would you move toward Newark for a better and newer building, and pay US$6 per square foot? The answer is yes.

‘But would you move to Newark for a better and newer building and pay US$9 per square foot? Maybe.’

Still, she and other brokers predict an upturn in rents in New Jersey - unless the many iPort projects all come to fruition in a relatively short period of time.

‘If all the construction gets built,’ she said, ‘that could flood the market with space and exert downward pressure on rents.’

Source: The Business Times, 24 May 2007

New $1b Reit may float by year-end - Century Square, Hougang Mall, Tiong Bahru Plaza and White Sands

A new real estate investment trust owning more than $1 billion worth of assets, including suburban shopping centres - Century Square, Hougang Mall, Tiong Bahru Plaza and White Sands - could be floated here as early as Q4 this year.

Pramerica Real Estate Investors (Asia) chief executive officer Victoria Sharpe told BT that the fund manager is considering spinning off the assets in Asian Retail Mall Fund (ARMF), as one of the options for an exit strategy for investors in the fund.

The assets in ARMF, valued at slightly over $1 billion, include the Central Plaza office block next to Tiong Bahru Plaza mall. Pramerica Asia - formerly known as GRA Singapore - manages the ARMF and its sequel fund ARMF II. ARMF, which has a total equity size of $320 million, is fully invested, and ARMF II, with US$400 million equity size, is nearly 80 per cent invested.

The second fund’s property portfolio includes Liang Court Shopping Centre, which is undergoing a $45 million refurbishment, and a new $450 million mall, Tampines 1, being built next to Tampines MRT Station.

The two funds have some common investors, including Pramerica-linked entities, three big Dutch pension funds and Singapore-listed Guthrie GTS. NTUC FairPrice invested in the first fund but not the second. The second fund also has some new investors.

Pramerica Asia also manages Asia Property Investment Fund (ASPF) with an equity of 655 million euros (S$1.35 billion) which is fully invested. This is a Pan Asian fund with a property portfolio in markets including Japan, China, Singapore, Korea, Hong Kong, India and Thailand. The fund has a half share in the Jurong Point extension development and Centris residential project in Singapore.

Investors in the fund include German insurance companies and pension funds, as well as investors from the Gulf region.

These three funds - ARMF, ARMF II and ASPF - hold eight properties in Singapore, with about 1.7 million sq ft net lettable area, valued at more than $2.4 billion. Singapore is the biggest of the firm’s Asian investment markets. Pramerica Asia is currently raising capital for ASPF II with a target equity size of one billion euros, which it expects to finish raising by the end of this year, Ms Sharpe said.

The follow-on fund will probably target the same Asian countries for property acquisitions, she said.

Pramerica Asia-managed funds generally have gearing of about 60 to 70 per cent.

Source: The Business Times, 24 May 2007

4 of Asia’s top 10 property investment sales in Singapore

Singapore accounted for four of the 10 biggest property investment sales deals across Asia in the first three months of this year, according to CB Richard Ellis.

These were the $1.04 billion sale of Temasek Tower - which was ranked the top deal in Asia in Q1 - and the collective sales of Gillman Heights ($548 million), Horizon Towers ($500 million) and Anderson 18 ($477.7 million), which were ranked fourth, sixth and seventh.

‘That four of the 10 largest real estate investment deals in Asia are Singapore properties is a very clear signal that investors are confident of Singapore’s strong economic fundamentals,’ CB Richard Ellis (CBRE) executive director (investment properties) Jeremy Lake said yesterday. ‘Property funds and overseas institutional investors anticipate further capital value and rental appreciation.’

The firm’s updated estimate of Q1 2007 investment sales in Singapore is $11.16 billion. ‘If the pace continues for the rest of the year, we’ll see $44 billion for the whole of 2007, which would be higher than the $29.92 billion achieved for 2006,’ said Mr Lake.

The $11.16 billion figure for Q1 is an 86 per cent increase from a year earlier, due mainly to the large number of development sites sold this time around. The residential sector accounted for 62 per cent of Q1 2007 investment sales, followed by the office sector at 27 per cent.

CBRE only includes transactions of at least $5 million as investment sales, and these include land, en bloc sales and strata-titled units such as office units and apartments.

Source: The Business Times, 24 May 2007

Keeping one’s cool in a hot property market

The last time the government asked the Real Estate Developers’ Association of Singapore (Redas) for help to cool the property market, sweeping anti-speculation measures followed.

So it’s not surprising that the Urban Redevelopment Authority’s (URA) announcement on Tuesday that it has asked Redas to help make property pricing more transparent has an ominous ring to it.

In 1996, then Prime Minister Goh Chok Tong approached Redas with suggestions on how it could cool the over-heated property market. These include setting aside a certain number of units in new developments for sale to the public instead of private previews.

Redas followed up by setting a new guideline for developers to offer at least 70 per cent of all available units for sale to the public. The guideline, which was finally announced on May 19, 1996, was a largely self-regulatory one and has also long since lapsed.

At the time, the measure had little bite because a few days earlier, on May 15, the government announced a package of anti-speculation measures that put an end to a bull run that had gone unabated for 10 years (with the exception of a blip in 1990 due to the Gulf War).

The latest news that URA wants Redas to facilitate the reporting of detailed sales data monthly is also likely to be self-regulatory. If the government really wanted to impose any new measures, it would not need the endorsement of any professional body.

But based on Monday’s comments by Minister of National Development Mah Bow Tan in Parliament, where he said that the number of sub-sales was ’still lower than that in 1996′, major reform does not seem imminent.

The latest proposed measure could, of course, simply be an effort to streamline reporting procedures and should not be met with too much objection except that a certain segment of the market thrives with a very narrow margin of opportunity that manages to go unregulated.

This margin can actually be measured in time - it is about three weeks long, or the time it takes to exercise an option to buy a property.

Speculators who operate within this three-week margin are often not reflected in the number of sub-sale transactions reported quarterly by URA because, aided by over-zealous real estate agents armed with blank cheques, they move too fast and are almost invisible.

The period in which sub-sales are logged, on the other hand, can stretch from the day a caveat is lodged to the time a development is completed two to three years later.

As such, figures for sub-sale transactions are indeed low, almost too low considering the level of activity in the market.

Another serious implication of selling within the time frame of exercising an option is that the prices influence overall market sentiment, which is currently extremely bullish.

Given the nature of property speculation, speculators tend not to care about purchase price as the intention is to make a quick profit anyway. Left unchecked, prices can easily be inflated.

A check with the URA revealed that options are indeed taken into account. A URA spokesman said: ‘For the data compiled by URA on the number of uncompleted private residential units sold by developers, a unit is considered to be sold when an option to purchase the unit is issued by the developer to a buyer. If there are buyers who do not exercise the option to purchase, URA will revise the number of units sold accordingly in the following period. However, other than some exceptional cases, we observed that the majority of buyers do exercise the option to purchase issued by developers.’

URA did clarify that its property price index is computed based on the information on prices in the caveats lodged by purchasers after they have exercised the options to purchase private residential units, and not prices reflected in options.

Getting developers to report the number of options granted should not be a problem. Getting them to reveal the number returned every month could be more tricky. Then again, nobody wants to see the return of the draconian measures of May 15, 1996.

So far, some measures to cool the market have already been put in place. They include the withdrawal of stamp duty concessions and the cut in the withdrawal amount of Central Provident Fund savings. These appear not to have cooled the market much.

Source: The Business Times, 24 May 2007

Paramount Hotel site being sold for $200m

Paramount Hotel and Paramount Shopping Centre are up for sale at an indicative price of $200 million through a public tender exercise.

The property has a combined land area of about 102,710 square feet and a plot ratio of 3.0 with a maximum gross floor area of 308,130 sq ft. At the indicative asking price, this works out to about $650 per square foot per plot ratio.

The site is being marketed by Cushman & Wakefield, whose managing director Donald Han said it can be developed into a retail and hotel development with 450-600 rooms.

Perhaps even more attractive to potential developers is the fact that the site is under the government’s ’safeguard list’. This means there is a possibility of converting the site to residential development instead.

Indeed, Mr Han believes that based on current prices for new property launches in the East Coast area, this could prove to be the better option. ‘Prices for recent residential projects like CapitaLand’s The Seafront on Meyer and GuocoLand’s The View @ Meyer transacted between $1,500 and $1,800 psf, reflecting a new high in the Katong, Meyer and Amber Road residential enclave,’ he said.

Based on the possible redevelopment of the site into a condominium with a plot ratio of about 2.1, Mr Han estimates that a developer might pay $830 psf per plot ratio for the site. ‘The breakeven cost could be around $1,100 psf,’ he added.

There is also potential for a hotel development. ‘The property is situated next to Grand Mercure Roxy Hotel, which is operated by the Accor Group. Accor recently announced that they will be relocating their Asian headquarters from Sydney to Singapore to take advantage of the growing tourism market in Singapore and in the region,’ noted Mr Han.

Source: The Business Times, 24 May 2007

Two commercial sites at Balestier up for en bloc sale

Invvestors looking for hotel development sites have just been given a choice of three properties in the Balestier/Lavender area.

The Urban Redevelopment Authority (URA) yesterday made available for application a 99-year leasehold reserve list site at Jellicoe Road opposite Lavender MRT Station.

And the freehold Ruby Plaza and adjoining Balestier Towers are being offered for collective sale.

Realtorhub Real Estate, which is marketing the two adjoining properties through separate sale exercises, said the joint owners expect bids above $670 per square foot of potential gross floor area.

Based on this unit land price, the price for Ruby Plaza would be at least $79 million and that for Balestier Towers at least $60.3 million.

Ruby Plaza is on a 39,493 sq ft site and Balestier Towers on 29,986 sq ft. Both sites are zoned for commercial and residential use with a 3.0 plot ratio - the ratio of maximum potential gross floor area to land area - under Master Plan 2003.

Ruby Plaza has received outline planning permission for hotel use and Realtorhub believes the same permission will probably be given for Balestier Towers.

Realtorhub director Daniel Ng believes developers could also seek URA permission to redevelop the sites into a medical centre, to capitalise on strong demand for such space.

As for the 45,408 sq ft hotel site at Jellicoe Road being offered by URA, CB Richard Ellis executive director Li Hiaw Ho reckons it can be developed into a hotel with about 400 rooms.

He estimates the site could fetch slightly more than $420 psf per plot ratio achieved for the tender of URA hotel site at Belilios Road this week.

This is because the Jellicoe Road plot has a better location and easy access to the MRT.

Source: The Business Times, 24 May 2007

A mall with fresh concepts each month

Tenants at a mall being developed next to Tampines MRT Station will have to refresh their concepts every five or six months - and this will be written into their lease agreements.

The move is part of Tampines 1’s plans to offer shoppers something new each month. The plan is to divide tenants into roughly five groups, and each group will have five to six months to come up with a new concept. Once they do, the next 20 per cent of the tenants will have another five-six months to refresh their offerings under a rolling programme.

‘The idea is that each month we’ll be able to advertise ‘This Month’s Specials’ for Tampines 1,’ said Michael Leong, CEO of AsiaMalls Management, which is responsible for the retail planning, marketing and later property management of the mall.

AsiaMalls is 50 per cent owned by Guthrie GTS and 50 per cent by Asian Retail Mall Fund (ARMF). A sequel fund, ARMF II, is developing the Tampines project.

AsiaMalls is also working with Architects 61 and Fitch Design to come up with some iconic features - such as water features, lighting or display - that will be regularly updated, to provide visual attractions at the mall.

Tampines 1, which will have about 260,000 square feet of net lettable space, will comprise two basement levels, including a carpark, and five levels above ground. The mall is slated for completion in early 2009.

It will have a food court/food hall, supermarket and gym and spa with a lap pool big enough for water aerobics.

It will have a cluster of double-storey restaurants on the upper levels. There will also be a bookstore and mid-to-upper-mid international and local fashion brands.

Source: The Business Times, 24 May 2007

En bloc deals hit $6.38b - nearly topping all of last year’s

A total of 39 collective sale sites have been sold for some $6.38 billion since the start of this year, up to May 15 - just 18 per cent shy of the $7.75 billion record achieved last year, show latest figures from Jones Lang LaSalle.

The property consulting firm’s regional director and head of investments, Lui Seng Fatt, expects the momentum of en bloc sales to continue for the rest of this year, predicting a $10 billion figure being hit for the full year, assuming prices hold.

Mr Lui attributes the buoyant collective sales figure so far this year to the trend of mega sites being sold, as well as rising unit land prices as developers race to replenish their high-end residential landbanks in the face of strong sales of their luxury housing projects.

‘In addition, several new players from overseas are coming in, mostly foreign funds partnering local developers,’ he said.

These include the likes of Morgan Stanley Real Estate Fund, Qatar Investment Authority and Forum Partners.

The current benchmark price for residential land, of $1,735 psf per plot ratio, was set when Overseas Union Enterprise exercised an option to buy The Parisian at Angullia Park in January this year. This is almost double the $876 psf ppr fetched for Habitat II in the prime Ardmore/Draycott area in September 2005. ‘Following the quantum jump in land prices achieved over the past 12 to 24 months, prices could still go up but further increases are likely to be more moderate,’ Mr Lui reckons. ‘Current price levels will comfortably hold for the rest of the year.’

Market watchers expect more big en bloc sale sites to be transacted in the coming months. Farrer Court, with a whopping 838,488 sq ft land area and $1.2 billion reserve price, was launched just last week. More billion dollar sites are expected to be offered, including The Claymore.

Among the big transactions so far this year are Leedon Heights ($835 million), Gillman Heights (sold for $548 million), Horizon Towers ($500 million) and Tampines Court ($405 million).

JLL’s analysis shows that the $6.38 billion worth of en bloc sale transactions sealed in the first four and a half months of this year included 39 transactions, whereas the $7.75 billion for the whole of last year covered a much larger number of deals - 62.

That shows that the size of deals has shot up, as there have been more mega sites as well as the increase in unit land prices.

Source: The Business Times, 24 May

Singapore office rents the 5th fastest growing globally

The latest evidence of fast escalating office rentals in Singapore is provided by a CB Richard Ellis report which shows that office rents on the island are the fifth fastest growing globally. The report, issued yesterday, compared percentage change in occupation costs over a 12-month period for 176 cities worldwide.

Rents in Singapore jumped 53.6 per cent year-on-year to US$67.97 per square foot per annum (or S$8.60 psf per month) in the study dated May 2007 and based on Q1 2007 data. CBRE’s survey also shows that 90 per cent of the office markets monitored reflected positive growth in the 12 months to Q1 2007.

Abu Dhabi reported the highest year-on-year rental rise globally (up 102.9 per cent), followed by New Delhi (79.1 per cent), Sofia, Bulgaria (62.9 per cent), Edmonton (60.1 per cent) and Singapore (53.6 per cent). Mumbai took the sixth place (45.1 per cent).

The US$67.97 psf annual rental figure for Singapore makes it the 24th most expensive office market globally as of May 2007, up from 37th placing in November last year and 43rd spot in May last year.

London’s West End was the world’s most expensive office market in the latest survey, with annual rental of US$241.22 psf, followed by the City of London (US$165.72 psf), and Tokyo’s Inner and Outer Central Five Wards.

CBRE executive director (office services) Moray Armstrong, while acknowledging that increases in cost base are always going to be an issue for occupiers, reasons that ‘the more immediate concern is the lack of office space, which is placing constraints on business expansion’.

‘I don’t think we are at the pivotal point where Singapore is becoming uncompetitive and businesses are starting to re-think expansion plans. After all, the driver for this strong office demand is an economy that’s performing extremely well and a city that MNCs and international banks are excited about,’ he added.

‘Of course, things could change at some point if exponential rental growth continues unabated. But the government’s policy reaction is already in play - with the Urban Redevelopment Authority’s plans to release temporary office sites, additional office plots and other measures. And the private sector, that is developers and investors, are gearing up to build future offices.’

Singapore still has huge tracts of prime developable land, especially in the Marina Bay area. ‘So its position as an attractive place for accommodating business growth is assured,’ Mr Armstrong reckons.

Source: The Business Times, 25 May 2007

Singapore offers best options for ‘Qatar, Mideast investors’

Singapore offers best options for ‘Qatar, Mideast investors’Published: Friday, 25 May, 2007, 01:33 PM Doha Time

By Pratap John

Fernandez (right) and Ong speaking to Gulf Times yesterday
DOHA: Investors from Qatar and the Middle East have growing opportunities in Singapore, which offers a diverse range of financial products, a senior official from the city state has said.
Singapore’s bond, equity, derivatives and commodities markets and asset management and insurance portfolios can be very attractive for the region’s investors, according to Angelina Fernandez, director (Communications) of the Monetary Authority of Singapore.
Islamic investors have the option of picking up Shariah-compliant products, especially in the equity market, she told Gulf Times yesterday.
“Qataris and other regional investors with investable surplus can look for rewarding opportunities in Singapore. Their investments will be secure in the city state’s well-regulated environment,” said Fernandez, who was on a short business tour in Qatar.
Assets under management (AUM) in Singapore totalled S$720bn at the end of 2005. AUM has grown five fold since 1998. Over 80% of the assets managed are sourced from outside the city state.
Singapore has over 100 hedge fund managers, she pointed out.
Singapore’s bond market has had a five fold growth since 1996, Fernandez said. The outstanding amount of corporate bonds stood at S$137bn as of December 2005.
In the equity market, Singapore has as many as 715 companies listed on the Singapore Stock Exchange (SGX), which has a market capitalisation of over S$662bn, as of March 2007. Foreign companies account for 33% of listings.
Some 16 real estate investment trusts worth S$25bn have been listed on the SGX as of March 2007, she said.
Fernandez said Singapore is the second largest over the counter (OTC) derivatives centre in Asia. It is the eighth largest warrant trading centre in the world with some 435 warrants listed on the SGX with a trading volume of S$142mn as of March 2006.
In the commodities market, Singapore is one of the world’s top oil refining centres, top bunker port and the Asia-Pacific centre for the pricing and trading of oil and rubber. About 20% of the world’s physical oil trade and half of the world’s rubber trade is done out of Singapore.
As many as 16 of the top 25 reinsurers are based in Singapore, which is now Asia’s reinsurance hub. The number of direct insurers is 71. It is also the largest Asia-Pacific domicile for captive insurance companies.
Fernandez who was accompanied by her colleague, Jacqueline Ong, said Singapore is also a major private banking centre in Asia.
“Our socio-political stability, sound economic fundamentals and the well-regulated financial sector make us an attractive location for wealth management,” she said.
Asia is rapidly growing in private wealth with the Asia–Pacific market estimated to grow at 7% a year to reach $10.6tn by 2010, according to a Merrill Lynch World Wealth Report. A better economic outlook is prompting foreign investors to allocate a larger portion of their portfolios to Asia.
Quoting a World Bank report Fernandez said, “It takes an entrepreneur just over six working days to get a new business going in Singapore, with low start-up costs. Overall, taking into account other factors, including business licensing, taxes, credit legal rights and investor protection, Singapore has about the most business-friendly regulation in the world.”

Foreign investors to invest in realty firm

Foreign investors to invest in realty firm
Published by Newsroom May 25th, 2007 in Newsbytes.
Mumbal: A clutch of foreign investors led by the Government of Singapore Investment Corp. Pte (GIC), billionaire investor George Soros and Morgan Stanley will acquire stakes cumulatively worth Rs683 crore in Anant Raj Industries.

GIC, which manages Singapore’s foreign exchange reserves, and or Its associate entities will pick up 3514 lakh shares in the domestic real-estate developer for about Rs432 crore, Anant Raj Industries informed the BSE. Besides, Morgan Stanley Dean Witter will acquire 13.65 lakh shares for Rsl68 crore and Soros’ hedge fund Quantum (M) Ltd will acquire 6.80 lakh shares for Rs83.60 crore, it added.

All the investors will acquire the stakes at the price of 1,22951 per share (determined as per SEBI (DIP) Guidelines) on preferential basis to the registered

One last post from WorldChanging, this one on urban gardens in Singapore.

One last post from WorldChanging, this one on urban gardens in Singapore.

A growing culture of urban gardening in Singapore and other major cities in Asia may hold the key to reducing city temperatures, Reuters reports. Apartment dwellers who tire of endless rows of concrete buildings have resorted to planting vegetables in boxes, trees in troughs, and even lawns on concrete yards. Gardeners boast of the visual aesthetics of the gardens, but the vegetation itself has the added benefit of blocking the sun’s rays and lowering temperatures through evapotranspiration, according to experts.

The high-rise gardening movement started small but is growing, participants say. “I thought I was the only one—the only odd nut, the only crazy person interested in growing vegetables,” said Wilson Wong, a Singaporean who started a website where fellow urbanites can share advice and arrange nursery shopping trips and plant swaps. Furn Li, who transformed his concrete balcony into a garden featuring aquatic life, giant tropical ferns, and white pebbles, won Singapore’s first “apartment gardener of the year” award last year. And Hong Kong resident Arthur Van Langenberg has written the book Urban Gardening, documenting his lush urban garden that showcases hundreds of plants and several tree varieties.

The government of Singapore is recognizing the importance of urban gardens as well. In April, it unveiled its first “green” housing estate, integrating walls of vegetation into the architecture itself. “From the scientific point of view, every plant produces a cooling effect,” explained the walls’ designer, Professor Nyuk Hien Wong with the National University of Singapore. “If you look at it as one individual unit doing that, it may not be that significant. But if everybody is doing it, there may be a very big impact,” he said.

Singapore and Dubai: boosting the bond

Singapore and Dubai: boosting the bond
BY LUCIA DORE (Assistant Editor, Business)

26 May 2007

DUBAI — The similarities between Dubai and Singapore are clear. Both are city-states, strategically located geographically and outward-looking philosophically.

Of the comparison, Teo Swee Lian, deputy managing director, prudential supervision of the Monetary Authority of Singapore (MAS) says: "I think maybe it is that we are geographically small looking to do things beyond our borders. In the case of Singapore, because it is so small and has no natural resources except for its people and location, we have to run that much faster, and have to be that much more innovative to stay ahead of the curve, and that really has been the impetus to our growth."

There are other similarities besides. Both have low, or zero, tax structures, are staunch supporters of free trade, and are progressively restructuring and diversifying their economies. Both are strengthening their services sectors, focusing on key areas such as tourism, healthcare, education and financial services, and both are positioning themselves as financial services hubs.

Singapore is also a hub for innovative equity products, including real estate investment trusts (REITS), business trusts, derivatives and exchange traded funds (ETFs). Singapore has 16 listed REITs and five listed business trusts with a total market capitalisation of about $20 billion. Singapore is also positioning itself to be a hub to raise capital for Asian real estate and infrastructure companies — a position Dubai may well be considering for the Middle East.

Singapore has also experienced a boom in property prices, and dealt with the subsequent slowdown — a scenario that Dubai may face some day soon. MAS dealt with the situation this way. "In the mid-to late 90s we did notice a high amount of credit growth in the financial sector going towards housing and there was rapid growth in house prices. We took some measures to take a little bit of air out of it and, because of that, when the property markets did crash in the midst of the Asian crisis, Singapore corrected about 40 per cent from peak to trough," says Lian. In contrast, the correction in Hong Kong was about 70 per cent. "The reason we were able to have a little less of that correction is that we had let some of the air out," she says. Over the last two years, the real estate market in Singapore has bounced back, "though it is a slightly different phenomenon this time,” says Lian. “There are more foreign buyers coming in."

Why? "I do think that globally there is a much greater awareness of real estate amongst international investors,” she says. “People now look for a portfolio of investments. It used to be considered an alternative asset class but now it is more mainstream." The result is that house prices have increased more steeply at the high end. "It's not uniform across all real estate sectors in Singapore. It is really only at the high end. It tends to be either rich individuals or funds that are buying properties as a portfolio investment," says Lian.

Economically, Dubai and Singapore are growing strongly and steadily. According to MAS, average growth for Southeast Asia was 5.7 per cent in 2006, with Singapore and Malaysia leading the way with 6.6 and 6 per cent, respectively. Asia's stock markets have grown steadily and are setting record highs. Corporate profitability and balance sheets are much stronger than a decade ago and the region’s banking system has become more robust.

With both economies going from strength to strength, both strongly supporting free trade, and both experiencing booming real estate and construction sectors, interaction between the two economies, and their wider regions, is likely to accelerate. Singapore and the UAE signed a framework agreement in March 2005, which should lead to a full free trade agreement between the two countries. In August that year, Singapore signed the Comprehensive Economic Co-operation Agreement (CECA) with India and since then trade and investments between the two countries have grown robustly. India was Singapore's 12th largest trading partner in 2006 with bilateral trade of almost $13.3 billion. More of such alliances, designed to benefit both economies, and regions, are likely.

Iskandar draws investors’ interests

Iskandar draws investors’ interests

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OSAKA: Japanese investors continue to regard Malaysia as an important investment destination, showing particular interest in southern Johor’s Iskandar Development Region (Iskandar).

Several business and corporate leaders have said this directly to Prime Minister Datuk Seri Abdullah Ahmad Badawi during his five-day working visit to Japan.

In view of their interest in Iskandar, Abdullah wants Khazanah Nasional Bhd, which is driving the project, to come to Japan to promote and explain the dynamic growth region to the Japanese investment community.

"I also took the opportunity (in meetings with Japanese captains of industry) to sell Iskandar. Some said they are prepared to come for a first-hand look and briefing. This is a good sign," he said here today at the end of his visit.

Iskandar is a 2,217 sq km area that sprawls across several districts including Johor Baru, Kulai, Kota Tinggi and Pontian and is just across the Causeway from Singapore.
Khazanah Nasional, as the government’s investment agency, is developing it along the lines of the special zone of Shenzhen in China which is adjacent to Hong Kong.

Abdullah said although not many Japanese investors met him on this trip, all who did described Malaysia as an attractive investment destination for them.

"They did not mention China or India at all, they only spoke about Malaysia. They continue to have full confidence in investing in Malaysia," he added.

Abdullah said he encouraged Japanese investors to expand their Malaysian investments into the high technology sector as there was now stiff competition from China and India for basic manufacturing activities.

"It’s better that we align towards state-of-the-art and advanced technologies.

"We can provide the specialist training for our workers and university graduates to meet the specific demands of this sector," he said.

Abdullah also told officials of the Malaysian Embassy in Japan to establish closer rapport with private sector leaders in this country.

"From before, our relations with government leaders have always been close but we want our relationship with the private sector to also rise to this level," he said. — Bernama

Chinese investors keen on Iskandar

JOHOR BARU: Investors from China are increasingly eyeing business opportunities in the Iskandar Development Region,with a flurry of visits by top executives in recent weeks.

Among the list of high-profile foreign players keen to invest in Iskandar is the China Shipping Group.

The company, with a fleet of 123 vessels, is the eighth largest container shipping company in the world. It is looking for new opportunities in the logistics sector.

Senior executives of the company, who were on a fact-finding mission to Iskandar last Thursday, had also expressed interest in real estate development in the region.

Sources said the company was keen to develop large-scale warehousing facilities in the Port of Tanjung Pelepas and Senai Airport.

Hui Wing-mau, chairman of China-based property developer Shimao Group, who was ranked the ninth richest man in China by Forbes magazine recently, also visited Iskandar last Sunday.

The billionaire was said to have plans to invest in waterfront projects.

Hui, who was personally briefed by Johor Menteri Besar Datuk Abdul Ghani Othman, was reportedly impressed with the size and scope of the development.

Investors from Middle Eastern countries, especially the United Arab Emirates, Bahrain and Qatar, have also been accessing the viability and economic feasibility of Iskandar.

Bull run produces eight new tycoons

Bull run produces eight new tycoons

PETALING JAYA: Thanks to the bull run in the stock market, eight new faces joined the ranks of Forbes Asia's 2007 Malaysia Rich List, which named the 40 richest people in the country.

Asian stock markets are now trading at record highs with Malaysia being the third best performing bourse in the region behind China and Vietnam.

The buoyant outlook on the oil and gas, plantation, timber, construction and property sectors has definitely benefited the players.

The eight new entries to the Forbes Asia list are mainly from these industries. They are Ong Beng Seng (ranked 12th), Yaw Chee Ming (15th), Raja Datuk Seri Eleena Raja Azlan Shah (25th), Datuk Mokhzani Mahathir (28th), Datuk Lin Yun Ling (34th), Tan Sri Liew Kee Sin (35th), Lee Swee Eng (36th) and Tan Sri Khoo Kay Peng (39th).

Forbes Asia based the second annual list on the tycoons' fortunes in their holdings in listed companies as well as estimates of their wealth in privately held companies.

Ong, who currently resides in Singapore, has investments in luxury hotels, real estate and steel.

He controls the Singapore-listed Hotel Properties Ltd (HPL) that owns a portfolio of properties in the region, including the Hotel Concorde Kuala Lumpur and the franchise for Hard Rock Cafe (all Asia, excluding Japan).

HPL's share price has appreciated more than 260% in the past 12 months.

Mokhzani and Lee, on the other hand, are involved in the oil and gas industry. Mokhzani, the son of former Prime Minister Tun Dr Mahathir Mohamad, owns Kencana Petroleum Bhd, which was listed last December.

Since then, the shares have appreciated some 334% from its listing price of 41 sen. Mokhzani is also involved in the distribution of Porsche cars in Malaysia.

Lee founded KNM Group Bhd, an oil and gas company that has showed significant growth since its listing four years ago.

His wealth grew as KNM shares soared more than 778% from its listing price of RM1.48 per share.

He has about 32% interest in the company.

Meanwhile, Yaw and his family own timber company Samling Global Ltd, which his father founded. The company made its debut listing on the Hong Kong stock exchange earlier this year. It has since appreciated 29%.

The firm timber prices have continued to buoy Samling's earnings, which are mainly derived from its Malaysian listed entity, Lingui Developments Bhd.

Lingui recently reported its third quarter results, which saw revenue rising 41% to RM1.3bil during the first nine months ended March 31.

Eleena and Lin are shareholders of the same construction company - Gamuda Bhd.

Eleena is the largest individual shareholder with 8.6% stake while Lin, who is also the company's managing director, has 5.8% interest.

Gamuda is part of a concession that was awarded the double-tracking railway project in 2003. Its market capitalisation in the past 12 months has increased by RM4.85bil.

Liew of SP Setia Bhd made his fortune from property development. His flagship company is one of the biggest property players in the country.

The slew of incentives by the Government to revive the property market will definitely bode well for SP Setia, which owns several prominent property projects like Duta Tropika and Duta Nusantara at Sri Hartamas, Setia Alam and Setia Eco Park in Shah Alam, as well as Setia Tropika and Setia Indah in Johor.

Meanwhile, Khoo heads the MUI group that has interests in the Asia-Pacific, Australia and the United States.

The conglomerate also holds the Malaysian franchise of notable British retailer Laura Ashley.

Friday, May 25, 2007

KL in the spotlight

KL in the spotlight
By Pete Wong


One week after the abolishment of real property gains tax (RPGT) was announced on April 1, The Avare, a premium project in the Kuala Lumpur City Centre (KLCC) registered a four-fold increase in sales, while other high-end properties around the city saw a similar increase in interest. Foreign investors, especially Singaporeans, are again giving Malaysian property strong consideration and this is partly due to the recent government incentives to boost the property market.

It started with the announcement last December allowing foreign investors to snap up Malaysian properties above RM250,000 without having to seek Foreign Investment Committee (FIC) approval. On April 1, the government announced the abolishment of real property gains tax (RPGT), which means investors no longer have to pay a 30 per cent tax on profits if they dispose of their properties within five years.

On April 13, the government again announced a slew of incentives to reduce red tape and simplify application procedures for property development. Furthermore, Malaysia´s economy registered a growth rate of 5.9 per cent in 2006 and analysts say that the growth prospects are expected to remain favourable in 2007 and beyond.

But is it all smooth sailing from here on? Some industry watchers have cautioned that Malaysia has a history of reversing policies during a change in leadership, with policies set up by an incumbent minister rarely outliving the minister´s tenure in office.

Dr Jeyapalan Kasipillai, a Professor at Monash University Sunway Campus and Council Member of the Malaysian Institute of Taxation, said the RPGT has not really been abolished but merely "exempted", and that it would be easy for the authorities to re-introduce the RPGT Act when the need arises to stem unwarranted speculation and curb excessive rise in real property prices.

"A lot still needs to be done to attract foreign investors,” said property agent Jenny Liew. “Our whole business climate needs to be more conducive for foreign investors. Our financial offerings like loan facilities and Internet services are nowhere close to what is being offered in Singapore or Hong Kong, for example. Some service counters at government departments are still unmanned and I’ve seen foreigners fume with disbelief at the long queues and slow processing time for official applications."

KL leads the way
The KL property sector is arguably the most-promising market to invest in when comparing with other areas in Malaysia such as Penang, Johor and even the nearby, high-tech Cyberjaya city. In the last few years, property values in KL have go up by as much as 10-15% annually, depending on location. The price of commercial land in the fast-developing township of Mutiara Damansara (Petaling Jaya), for example, has seen values rise from about RM100psf just a few years ago to almost RM300psf today.

KL typically leads the way in Malaysia when comparing increase in property values. This is due to the fact that the city is growing in population and that when expatriates relocate to Malaysia, they’re usually based in the capital.

Location is still a very important factor to consider when investing in KL. “I have come across foreign owners whose units were left untenanted for one to two years simply because they bought on the wrong side of the city,” Liew said. “Some areas in the city have a notorious reputation while others may not have good access roads.”

Buyers unfamiliar with Kuala Lumpur are advised not to be misled by location maps offered by the developers, which are often not drawn to scale. It’s important to make a visit to any potential site location and assess the traffic conditions, as some places in KL are notorious for their congestion. Some low-lying areas are also prone to seasonal flooding during the monsoon seasons. Talk to locals living around the vicinity to get a better idea.

KLCC: Twin Towers, top views
The Kuala Lumpur City Centre, commonly known as KLCC, generally refers to the part of KL with a view of the Petronas Twin Towers and is best compared to the Orchard Road area in Singapore.

However, it’s worth noting that while Orchard Road is a trendy shopping district served by an efficient public transport network, KLCC doesn’t yet have quite the same glitz and glamour. Aside from the new high-end residential units being developed, the area mostly features office units and hotels. Traffic congestion can be bad during office hours and the area can get rather quiet in the evenings when the office workers have gone home, although this is expected to change once a few of the residential developments are complete.

While the saving grace for this location is the ‘sexy’ view of the city skyline with the Petronas Twin Towers as the jewel in the crown, the prudent investor has to ask, how often can one look at the Twin Towers and does the view really justify the price? Is the infrastructure, especially the traffic conditions, going to be better anytime soon? Just some points worth considering.

Having an apartment with a great view of the Twin Towers has certainly driven up prices in the vicinity. Last year, some units at OneKL, developed by One KLCC, were sold at a record high of RM1,600psf, recognised as the highest rate recorded in Malaysia. Overall, the average price around the KLCC vicinity is now around RM800psf, while new launches can top RM1,000psf.

Mont’ Kiara: Up and coming
Investors are particularly drawn to the Mont’ Kiara area as it’s popular among expatriates and rental demand is high. There are three international schools in the vicinity and many restaurants and pubs catering to expatriates are located in the adjacent Desa Sri Hartamas township. But the growing popularity and increasing population is not good news for everyone.

“Mont’ Kiara is not the quiet residential suburb that it used to be,” said Madam Chia, who has lived in the area since 1998. “The main road is constantly being repaired due to heavy vehicles going to the many project sites in the area. And as more people move in, the traffic congestion gets even worse, especially during peak hours.”

With the completion of several new condominium projects in the area over the next few years, thousands of new units will be added. To date, there is only one main access road to the area. Although a smaller access road has been built, it neither leads directly to the city nor the main highways.

Developers, however, are confident that Mont’ Kiara will retain its popularity and enjoy strong demand for years to come. “Mont’ Kiara has a proven track record for consistent returns and high rental yields,” said Lim Ech Chan, COO of Ireka Land.

“The Mont’ Kiara and Sri Hartamas areas have recently been gazetted as an ´international zone´ in the KL masterplan. This will bring increased attention to the areas and the local authority will continue to promote and develop this area. Besides KLCC, Mont’ Kiara is the only other address for high-end development and the prices here are only a quarter of those in KLCC.”

New launches at the Mont´ Kiara area are between RM500-600psf. Ireka Land has several upcoming projects in the area including One Mont Kiara, a modern integrated development comprising a business hub, a 33-storey office block, 17-storey office tower and a 250,000sqft neighbourhood retail mall. Another project slated for soft-launch in June 2007 is Seni Mont’ Kiara, a high-end condominium project with private lift lobbies.

"We don’t believe there will be an over-supply situation,” Lim added. “The overwhelming response to recent launches is a good testament to that.”

In and around
So, what other areas are there to look at besides prime locations like KLCC and Mont’ Kiara? Reasonably priced properties in well-known residential areas in KL will always be in demand. About 90% of units at Beringin Residence, a gated residential project comprising 20 three-storey terrace townhouses and 16 three-storey semi-detached villas, were sold within months of their launch last June, mainly through word-of-mouth publicity. The project is located at Damansara Heights, an affluent suburban neighbourhood adjacent to Bangsar and Mont´ Kiara.

An upcoming hotspot to look out for is the Sri Hartamas and Persiaran Dutamas areas. Sri Hartamas property values have risen largely due to its proximity to Mont´ Kiara, while Persiaran Dutamas is now directly linked to Mont´ Kiara by a new road. The French International School is in the vicinity, yet property prices here are similar to those in Mont´ Kiara almost a decade ago. Mont´ Kiara is expected to expand in geographical size to incorporate these adjacent areas, where property prices are still very low by comparison.

“Besides Mont’ Kiara, Mutiara Damansara is another area with a growing population,” said Dato´ Michael Yam, Managing Director of Sunrise Berhad, which has several high-end projects in the Mont’ Kiara area. “Combined with adjacent Bandar Utama and Damansara Perdana, it has the critical mass to ensure it won’t fail.

“The Saujana-Glenmarie-Tropicana area is also a green belt of largely landed homes within striking distance of the KL and Petaling Jaya urban centres. The jigsaw puzzle-like development is beginning to fall into place, with increasing population and more amenities being available. As all these growing suburban nodes are in the north-east segment of Kuala Lumpur, the gravity of growth appears to be very much heading towards the Jelutong-Sungai Buloh corridor."

Overall, the jury is still out on whether property prices in KL will find a comfortable level for both developers and investors amid increasing competition, new government incentives and the prevailing positive sentiments.

Datuk Leong Hoy Kum, President of Mah Sing Group, said that expediting the approval process (by the government) would lead to lower holding cost and these savings could in turn be passed on to property buyers. But according to property insiders, building materials, particularly steel bars and cement, are set to go up by around 25 per cent, which could offset such potential cost benefits.

Meanwhile, some analysts believe that exempting property transactions from RPGT may spur greater market speculation, resulting in an inflation of property values. As the saying goes, any time is a good time to buy if you’re buying for the right reasons.

GIC and Sumitomo in US$1.2bil property JV

GIC and Sumitomo in US$1.2bil property JV

SINGAPORE: Government of Singapore Investment Corp's property arm, GIC Real Estate, said it has formed a joint venture with Japan's Sumitomo Corp to invest up to 150 billion yen (US$1.2bil) in Japanese property.

GIC RE said in a statement that the joint venture would invest in existing retail property and in projects under development in Japan over the next two years. It also plans to buy under-performing assets with a view to turning them around.

“The target markets for the joint venture are the metropolitan areas of Tokyo, Osaka, Nagoya and other major cities,” GIC RE said in a statement.

GIC RE added that Sumitomo would be the asset manager for the joint venture and be responsible for sourcing, development and operations.

GIC RE manages a multi-billion dollar portfolio of property in 30 countries, putting it among the world's 10 biggest real estate investors.

Its parent, known as the GIC, invests Singapore's foreign exchange reserves in stocks, bonds, real estate and other assets. – Reuters

Microsoft urges Singapore to be centre for innovation in Asia

Microsoft urges Singapore to be centre for innovation in Asia

Singapore, May 24: Microsoft CEO Steve Ballmer has urged Singapore to become the "nerve centre for innovation" in Asia.

Singapore needs to commercialise ideas, respect intellectual property and cherish its people, he told professionals from the information technology industry, the Straits Times reported Thursday.

Ballmer said there would be new types of computer interactions in the future, like voice or even gestural commands, and that nurturing people with passion and aspiration is an important factor in the growth of innovation.

He added that nurturing good people should complement technological leaps forward.

His speech at the Info-communications Development Authority Wednesday was also attended by political and government leaders.

--- IANS

Lippo Karawaci launches US$667 mln property project in Jakarta

Lippo Karawaci launches US$667 mln property project in Jakarta

Jakarta (ANTARA News/Asia Pulse) - Listed property company PT Lippo Karawaci (JSX:LPKR) will launch a Rp6 trillion (US$667 million) property project in South Jakarta this year.

The project over a 12-hectare plot of land will include three luxury apartment towers, a 29-floor hotel of Aryaduta Regency, a 250-bed hospital of Siloam Hospital, a convention center and an private school to be run by the Pelita Harapan Group.

Funding for the project is from the real estate investment trust (REIT) it issued in Singapore in December, 2006, the company said.

Business in Asia Today - May 24, 2007
published by Asia Pulse

Lend Lease raises $556m fund to own Asian shops

Lend Lease raises $556m fund to own Asian shops
Email Print Normal font Large font Carolyn Cummins Commercial Property Editor
May 24, 2007

AdvertisementGLOBAL property group Lend Lease has strengthened its wholesale funds business with the completion of a $S700 million ($556 million) capital raising to fund its new Asian Retail Investment Fund.

Overall, ARIF has raised $S325 million through its second and final offer, adding to the $S375 million raised in December.

The group launched ARIF last November through its investment management business to help drive a $1.1 billion shopping centre development in Singapore.

The seed asset was a 75 per cent stake in the Somerset Central shopping centre on Singapore's premier Orchard Road shopping strip worth $S617.2 million.

ARIF bought the stake from Lend Lease, which has retained 25 per cent but may sell a further 15 per cent to the fund.

Lend Lease chief executive Greg Clarke has made no secret that the group wants to radically beef up its investment management division, which delivered a 46 per cent growth in funds under management to $10.2 billion for the six months to December 31, 2006.

There are now five funds under the investment management umbrella, which is run by finance director Steve McCann.

In February this year, at the group's half-year result, Mr McCann said it was planning to add more to the cache including a vehicle that could buy some of Lend Lease's United Kingdom retail assets.

This could include the group's 30 per cent stake in the Bluewater complex in Kent.

Lend Lease is also exploring the option of creating a residential fund worth as much as £1.5 billion ($3.6 billion) to take over the housing component of the 2012 London Olympic village that it is building.

Earlier this year, Mr McCann said: "With the ARIF launched during the half, we have begun to add to our offer in South-East Asia and, given the number of projects in the group's UK development pipeline, we plan to launch new funds."

In addition to Singapore the group will target assets in Taiwan, Malaysia and Thailand.

Wholesale funds have become the next phase for listed property groups, whereby they can retain a portion of direct ownership as well as generating fees through its management of the fund.

Lend Lease has forecast a profit of about $399 million for the year to June 30, compared with $354.2 million for 2005-06.

Property analysts at Macquarie Equities said Lend Lease has the potential to undergo further re-ratings.

A bad time to say goodbye

A bad time to say goodbye
By Lee U-Wen, TODAY | Posted: 25 May 2007 1016 hrs

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Will the smiles remained?

SINGAPORE: The courtship went on for two years but the marriage that followed lasted just three years, ending in a shocking split on Wednesday.

When the news broke out that the University of New South Wales (UNSW) would be shutting down its Singapore campus next month, it was difficult to make sense of it all, coming just three months after the Australian institute opened its doors with much fanfare.

UNSW Asia blamed poor enrolment for its first two intakes this year - about 300 students enrolled, way below the target of 780.

With commitments to a A$700 million($879 million) 20-ha campus due to go up in Changi, the university pulled the plug now as it was not willing to continue pumping in millions of dollars.

Much has been, and will be, said, as one digests the fallout from the closure, but what sticks out like a sore thumb is the poor timing of the announcement.

The worst hit are the 148 students from the university’s pioneer intake — 100 of them Singapore residents — who have been told they still have to hand in all their projects and sit for examinations in just three weeks’ time.

What frame of mind will these youth be in as they enter the examination hall? Surely, there could have been some consideration from the management to bite the bullet for another month or so and then break the bad news after the exams were over?

The consolation offered to the students — guaranteed spots in UNSW Sydney and scholarships to help fund their travel and living costs — is a magnanimous gesture, but one that will only hide, not heal, the wounds.

As the shattered students and lecturers pick up the pieces and plot their next move, what’s clear is that UNSW Asia’s departure has left a blot on Singapore’s private education landscape.

With the benefit of hindsight, perhaps the relentless pursuit of an Australian university to establish a home here was not such a wise move, after all.

Australia’s proximity to Singapore could have made it less appealing to study at a local branch of an Australian university.

Without disrespect to UNSW, or any other Australian university, perhaps having a top-ranked European or American school — less accessible to students here — would have attracted the desired number of foreign students.

UNSW’s sudden exit — two years after Britain’s Warwick University chose not to come here because of concerns over creative freedom — has also raised the question of whether other foreign universities will leave Singapore out of their expansion plans.

I don’t think this will happen. Singapore has done well in attracting world-class schools, including New York University’s Tisch School of the Arts, University of Nevada, Las Vegas and DigiPen Institute of Technology.

The Economic Development Board (EDB), which drives the global schoolhouse initiatives, believes it will still reach its target of attracting 150,000 foreign students by 2015.

While the EDB admitted that the UNSW Asia saga was a “setback”, I would like to think that there are some valuable lessons that we all can learn from this incident.

What the stakeholders should recognise and act upon quickly is that a lot of hard work — five years’ worth, no less — has already been put into the UNSW Asia project, and this should not go to waste.

The EDB has said that the closure will not mean that it would no longer work with the school. As I see it, the most logical way to continue the relationship would be to allow UNSW Asia to continue the research work it had planned in Singapore, in areas such as solar energy, and membrane and water technologies.

Or, the university could explore the model used by other foreign schools, which rent space in centrally located buildings for classes, while building their reputation and exposure.

Expansion can come later. Now’s not the time to point fingers but to see how all parties can salvage a broken relationship that started off with such promise. - TODAY/fa

New 'buzz' in S'pore but economic growth is still biggest draw: SM

New 'buzz' in S'pore but economic growth is still biggest draw: SM
Posted: 25 May 2007 2121 hrs

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Senior Minister Goh Chok Tong

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New 'buzz' in S'pore but economic growth is still biggest draw: SM

SINGAPORE : Senior Minister Goh Chok Tong has said that there is a new "buzz" about Singapore, and people around the world are taking notice.

Speaking at the Singapore International Chamber of Commerce's 170th Anniversary on Friday, Mr Goh said that besides turning Singapore into a "cool and happening" place, the biggest draw would still be its economic growth.

Formula One Grand Prix cars running laps around the Marina Bay area next year will be just one of many events that will put Singapore firmly on the global landscape.

Mr Goh said, "Two weeks ago, I attended the Gala Dinner for Merrill Lynch's inaugural 'Pan Asia Rising Stars Conference'. Several foreign bankers and business executives I met - some had not visited Singapore for many years, and a few were here for the first time, told me that they were surprised and excited by the 'buzz' in Singapore.

"It is not just the business 'buzz' of the financial industry, the Integrated Resorts, the sizzling property market, and so on. It is also the glitz of our nightlife and our arts, culture and restaurant scene."

Senior Minister Goh said that 10 years ago, it was quite a different story.

Without warning, the Asian Financial Crisis happened, then it was the bust.

This was followed by the September 11 attacks in the US.

The world economy slowed and Singapore went into recession with 23,000 jobs lost within a year.

Just as Singapore was recovering, the country was gripped by SARS.

Mr Goh said Singapore kept its cool and came up with painful but necessary economic restructuring policies. And it worked.

He said, "In 2006, our GDP was S$210 billion, 55 percent bigger than in 1998. Annual growth rate over the past three years averaged 8 percent, double the figure for the period between 1997 and 2002. This year, jobs are chasing after people."

Mr Goh believes that keeping good talent and having good governance will be key for Singapore in sustaining economic growth.

He said these two factors would be the best strategy to face future challenges. - CNA/ms

Investing in Bintan

Investing in Bintan
By John Higginson

Bintan island is best known as Singapore’s most convenient resort destination, but the Indonesian island is now set to incorporate luxury residences following the launch of the Banyan Tree Residences in Bintan and the release of the masterplan for the Lagoi Bay mixed-use development.

Bintan is less than an hour’s ferry ride from Singapore and just 35 minutes from neighbouring Batam island.

The Banyan Tree Residences in Bintan (pictured) are one of several launched by Singapore-listed Banyan Tree Holdings Ltd, which also announced properties in its resorts in Phuket and Bangkok in Thailand, Lijiang in China and the Seychelles.

Banyan Tree Residences is targeting the type of top-tier travellers and investors that frequent the Group’s range of 21 hotels and resorts in city, beach and mountain resort locations, as well as its 58 spas and two golf courses, including the Greg Norman-designed 18-hole layout in Bintan.

“Everyone’s moving to branding to differentiate their residences, but Banyan Tree is a pioneer in the fact that we only sell residences once our resorts are operational, so potential buyers can see and know exactly what they’re getting. We don’t sell real estate to finance the building of the development,” Paul Chong, Assistant Vice President, Business Development, Banyan Tree Hotels and Resorts, told Property Report.

“Branded properties usually charge a 25-30% premium, but investors should make sure they know what they’re paying for, and in this sense Banyan Tree has established its reputation for delivery quality and luxury. Banyan Tree is vertically integrated, so all our architects, interior designers and marketing work side by side.” Banyan Tree Residences have been conceptualised and designed by Architrave Design and Planning, Banyan Tree’s in-house architectural arm.

The Banyan Tree Residences concept is to allow investors to buy their own villa, townhouse or apartment that becomes part of the inventory of these exclusive resorts. Owners receive an annual guaranteed return of 6% per annum for six years, with options to renew or share in revenues generated by the property.

“Banyan Tree Residences enable investors to diversify their portfolios while receiving guaranteed returns, without worrying about managing the property when they’re not there,” explained Richard Skene, Assistant Vice President, Banyan Tree Residences. “Of course all of our owners enjoy the lifestyle benefits which have become synonymous with the Banyan Tree Hotels and Resorts brand.”

Owners are entitled to 60 days’ complimentary use of their residence every year, membership at the exclusive Banyan Tree Residence Club and access to the Banyan Tree Private Collection, Asia’s first Destination Club. Banyan Tree properties include maintenance, cleaning, landscaping and security, while owners enjoy access to hotel amenities and services.

Open exhibitions of Banyan Tree Residences will be held in London on June 1-2, then in Hong Kong on the weekend of June 16-17 at The Landmark Mandarin Oriental Hotel.

Lagoi Bay targets investors
Bintan is also the subject of fresh interest from investors and resort operators following the release of the masterplan for Lagoi Bay. An integrated resort development, Lagoi Bay will feature further resorts but also residences, shopping outlets, restaurants, and entertainment and sea-sports facilities.

Situated on the island’s north coast, Lagoi Bay is located within Bintan Resorts, the expansive integrated beach resort destination that currently includes 10 resorts, including Banyan Tree and Angsana. The Lagoi Bay site, a 15-minute drive from the international ferry terminal, is about 1,300 hectares in size.

A total of 33 sites ranging from 2,000sqm to 19 hectares (190,000sqm) is being offered in the first phase for a variety of uses, including residential, resort and commercial developments. All sites have close proximity to the beach and road access, and will be served by power, potable water, telecommunications, sewer lines and solid waste collection.

With the number of visitor arrivals to Bintan island targeted to reach one million by 2012 from the current 320,000 and growing awareness of Bintan as a resort destination, occupancy and average daily rates are both expected to rise, increasing the potential for investors to generate significant returns.

“Given its close proximity to Singapore, Bintan is well positioned to tap into the more than 9 million leisure and business visitors who come to Singapore annually. This number is expected to reach 17 million by 2015,” said BG (Ret) Chin Chow Yoon, Vice President Director, PT Bintan Resort Cakrawala, a subsidiary of Gallant Venture and the master developer, planner and operator of Lagoi Bay.

“With Bintan Resorts’ efficient and modern infrastructure and wide range of world-class attractions ranging from award-winning golf courses, miles of white beaches to brand-name spas, we’re confident the Lagoi Bay development will provide an opportunity for investors seeking to tap into the global demand for an international-standard resort destination.”

The new Lagoi Bay site is expected to receive strong interest from developers looking to build on Bintan’s strong tourism infrastructure, where the top-class resorts offer golf, spa, watersports, and nature and culture tours. Bintan is also building on not just visitors from Singapore, but tourists looking for both city and beach resort attractions during their visit, Bintan acting as a ‘twin destination’.

China's Ninth Richest Man Makes Surprise Visit To IDR

China's Ninth Richest Man Makes Surprise Visit To IDR

JOHOR BAHARU, May 25 (Bernama) -- China-based property developer and chairman of the Shimao Group, Hui Wing-mau, ranked the ninth-richest man in China by Forbes magazine recently, has made a surprise visit to southern Johor's Iskandar Development Region (IDR).

Danga Bay Sdn Bhd, a key developer within the IDR, said in a statement here today that the billionaire, one of China's wealthiest entrepreneurs and biggest real estate tycoons, is reportedly keen on investing in a waterfront project in the IDR.

Hui was personally briefed on the shape of things to come in the IDR by Johor Menteri Besar Datuk Abdul Ghani Othman last Sunday, and was reportedly impressed with the size and scope of the development.

"This location is superb for a world-class project," he told Ghani through his interpreter and personal aide, Joseph Tong, adding that the Shimao Group is open to investment opportunities in the IDR.

Several local and foreign companies have already indicated interest to invest more than RM10 billion in the IDR over the next five years.

The IDR, spread over 2,217 sq km and three times the size of neighbouring Singapore, is expected to draw some US$105 billion (US$1 = RM3.39) in total investments over 20 years - making it Malaysia's most ambitious project ever.

Interest in the IDR remains strong, last month seeing 20 business groups, individuals and corporations visiting Nusajaya in Gelang Patah and the Danga Bay Integrated Waterfront City to feel the pulse of the rapid developments taking place.

On Thursday, a 25-member delegation from the Associated Chinese Chambers of Commerce & Industry Malaysia (ACCCIM) and 13 senior official of the Singapore Chinese Chamber of Commerce & Industry (SCCCI) visited the IDR.

The statement said Middle Eastern investors, especially from the United Arab Emirates, Bahrain and Qatar, have also been flying into Johor to assess the viability of investing in the IDR.

"The IDR masterplan is very attractive. We would like to participate in this exciting development," the statement quoted a spokesman of the Barwa Group of Qatar as saying after a visit here on March 30.

The group is on the lookout to invest US$1 billion in tourism and real estate projects in Asia.

Fund managers tracking listed companies with projects in the IDR are also among the regular visitors here to evaluate the status and future business prospects of the firms they monitor.

Counters such as UEM World Bhd, Ekovest Bhd and Tebrau Teguh Bhd have seen share prices spike by over 40 percent on Bursa Malaysia in recent months, with the uptrend expected to continue until the end of the year.

CIMB Bank, OSK Holdings Bhd, Debt Capital Market & Investment Bank (Singapore), BNF Paribas and Citibank Corp have had their fund managers visit the IDR of late.

Making the list later this month will be fund managers from ECM Libra Avenue, Deutsche Bank (Singapore and New York), AXA Framlington (UK) and Fidelity Investments.

In its report after a two-day visit in mid-March, CIMB described investment opportunities in the IDR as exciting, noting especially that the Danga Bay Integrated Waterfront City will be a crowd puller.

The IDR has also hosted visits by special interest groups in recent weeks like Umno, MCA, Singapore Chamber of Commerce & Industry, Malaysian Indian Business Association and the Singapore International Chamber of Commerce & Industry.

Additionally, business tycoons from Singapore, Indonesia, South Korea, Japan, Thailand, Europe and the US have also made visits and discreet enquiries to size up business opportunities in the region.


Wednesday, May 23, 2007

Banks, insurers feel the office space crunch

More banks and insurers are setting up shop here for the first time, in a market where suitable office space is costing a premium - if any can be found.

While small boutique outfits are still able to find prime office space to rent, larger banks looking for a place big enough to house its entire operations are finding it much harder.

‘It’s almost impossible to find space at Raffles Place or nearby,’ a senior banker at Nomura Singapore told BT. Earlier this year, the bank, which wants to double its wealth management staff strength here from its current 100, had been looking for an office space that could accommodate all its employees but gave up after a fruitless search.

He said the bank is now converting meeting rooms into offices and reorganising the space in the five floors it occupies in the Six Battery Road building at Raffles Place to accommodate more people.

There are now 111 commercial banks and 164 insurance companies operating here, according to data from the Monetary Authority of Singapore’s (MAS) website, compared with 108 banks and 144 insurers as at end-March last year. The number of firms licensed for broad fund management activities has also increased, from 92 to 100.

An MAS spokesman said: ‘We have seen good growth in the Singapore financial sector in the last few months, with expansion in the areas of investment banking, fund management and regional business processing operations. The demand for office space from the financial sector has thus increased and MAS is working with relevant authorities such as URA (the Urban Redevelopment Authority), to address the increased demand.’

On Monday, URA said it would stop allowing the conversion of office space in central areas including the Central Business District, Raffles Place and Marina Bay for other uses until end-2009, to ease the shortage.

Last week, Bank Hapoalim Switzerland, the Zurich-based private banking arm of Israel’s largest bank opened its first branch in Asia here, occupying half of the 49th floor of Republic Plaza in Raffles Place.

‘We did actually bid for another site in the Raffles Place area, but another organisation came and took the whole floor,’ said Rami Lador, the bank’s Singapore chief executive. Because the bank started as a limited boutique outfit, with less than a dozen staff, ‘perhaps it was easier’ to find suitable office space, he said. Larger banks like Nomura looking for a place big enough to house its entire operations are finding it much harder.

About three-quarters of the space at the new One Raffles Quay (ORQ) building has been rented out to financial sector firms. Swiss banking giant UBS recently took up 12 floors and will begin moving staff there in the second half of the year. It already occupies a dozen floors at Suntec Tower Five.

Barclays Wealth, the private banking arm of UK banking group Barclays plc, recently moved its Singapore office from Capital Square on Church Street to ORQ, where it occupies three floors together with Barclays Capital, the group’s investment banking arm.

Citigroup - recently rebranded as Citi - now occupies some 900,000 sq ft of space in Singapore, including retail, middle and back-office space. This is an increase of about 10 per cent from last year, said Adam Rahman, its country corporate affairs director.

And last month, Standard Chartered Bank said it would lease up to 500,000 sq ft of space at the first phase of the upcoming Marina Bay Financial Centre, which is expected to be ready in early 2010. It already occupies an estimated 400,000 sq ft across eight locations here, including its main Six Battery Road office.

A report published earlier this month by Jones Lang LaSalle said rents for prime Grade A office space rose 25.9 per cent over the first quarter and more than doubled over the year. The vacancy of Grade A office space halved to 0.4 per cent in the first quarter, from 0.8 per cent in the fourth quarter of last year, according to CB Richard Ellis. Knight Frank projects Grade A office rents to rise by 50-60 per cent this year.

Source: The Business Times, 23 May 2007

Sunday, May 20, 2007

These days, it appears that almost every private housing project is an en-bloc potential or in talks over an en-bloc deal.

These days, it appears that almost every private housing project is an en-bloc potential or in talks over an en-bloc deal.

Recently, some residents have been locked in battles over pricing.

The residents of Watten estate condo have a different headache. They can’t agree who should sell it for them.

So now, there are two sales committee, and two property firms trying to sell the 24-year-old estate in Bukit Timah.

This is likely to be a first, said industry watchers we spoke to.

The race is now for the pre-requisite 80 percent mandate.

One group, represented by DTZ Debenham Tie Leung, has proposed a straight cash payout.

The other group, represented by Dennis Wee Realty, is proposing a hybrid deal with the option of cash or a replacement unit from the potential developer.

There are 104 units in this freehold estate, with sizes ranging from 1,001sqft for the three-bedroom units to 2,500sqft for the townhouses.

A 1,001sqft unit there was sold for $640,000 last August, according to a URA caveat search.

In January this year, a similiar-sized unit was sold for $738,000 - a $100,000 jump in just five months.

The tussle between the two sales committee has made some of the residents there see red.

A resident, who wanted to be known only as Mr Chew, said he voted for the en-bloc a few months ago and is still awaiting the outcome.

The 60-year-old retiree bought his 2,500 sqft place about 10 years ago for about $1 million.

He said: ‘The first sales committee was set up earlier this year, and because of some conflict, the committee split up.’

Now, there are two committees and two agencies trying to get a piece of the en-bloc pie. It is a strange situation to be in and it’s quite confusing.’

Mr Chew voted for the en-bloc because of the payout and also to avoid paying more to upkeep his unit, such as the repairing of leaks and repainting of the place.

He signed with the first sales committee.

Other residents The New Paper spoke to also questioned the need for two different groups.

A committee was set up last year to put the place up for sale.


It split up soon after when they couldn’t agree on the sales method.

The two different camps started talking to residents in January this year.

So far, about 65 percent of the residents have signed the collective sales agreement (CSA) with the first committee, said DTZ.

The legal requirement is that, for properties more than 10 years old, 80 percent of the owners must sign the CSA before the sale can go through.

A member of this committee, which declined to be named, said: ‘This situation has indeed created some confusion among the residents.

‘ Our reasoning is that we get cash from the en-bloc and, if we’re interested, we can always buy a unit from the developer next time.

‘There’s no need to ask for a replacement unit now. We’d rather the developer give us a straight payout.’

Some of the residents we spoke to were unaware of the existence of two committees.

Others were confused as to who were doing what when The New Paper approached them.

All of those we spoke to didn’t want to be named, because they didn’t want to be seen as taking sides in this conflict.

There were three previous attempts to put the estate up for sale, dating back to the 1990s. But they all failed because they couldn’t get the necessary numbers.

The other sales committee, with en-bloc lawyer SKPhang of Phang & Co to aid them, was also set up earlier this year.

Dr Phang explained: ‘Owners who opt for the exchange would be allocated new units of the same sizes as their existing units. The value of the new units at current market value exceeds their share of the sale proceeds in a cash
He also helped all 20 owners of Paterson Lodge in the Orchard Road area work out such an exchange deal last year, according to a Straits Times report in February.

Dennis Wee Realty’s investment sales director Jimmy Teng said they’ve so far garnered about 15 per cent of the votes.

They placed an advertisement in the Business Times on 8May, requesting responses from developers on the hybrid proposal.

Said Mr Teng: ‘The estate has tried going en-bloc a few times before but has never been successful because some of the owners didn’t want to sell.

‘One reason is because the replacement units are expensive due to rising property prices.

‘Hence, our suggestion of a replacement unit from the developer.’

Dr Phang said they have recently received a notification of interest from a developer offering to enter into a ‘hybrid’ deal with the owners.

A 3,057sqft unit in a development nearby was sold for $2.7 million just last month.

There is currently no legislation which governs the formation of sales committees, said the Strata Titles Board. Estates can have as many as they want.

But when there’s more than one sales committee, residents can only sign the CSA with one party, said CB Richard Ellis’ executive director (investment properties) Jeremy Lake.

He said it’s unusual to have two different camps trying to market one project and he has not encountered such a situation before.

He added: ‘It’s hard enough to get 80per cent to agree, let alone two different camps. I suppose each camp will try to get their own signatures but this is distracting for the owners.

‘Already, expectations are hard to manage in this market.’

Source: The Newpaper, 19 May 2007
Savills Singapore has announced the commencement of an expressions of interest exercise for the collective sale of Trendale Tower.

The 25-year-old freehold development sits on a 21,709-sq-ft plot at 79 Cairnhill Road.

“Subject to approval from the relevant authorities, the redevelopment site will have a permissible gross floor area of 6,753.2 sq m, exceeding the permissible plot ratio of 2.8 as indicated in the 2003 Master Plan. Therefore, no development charges are payable,” said Savills in a statement.

A new development comprising 36 apartment units averaging 2,000 sq ft each can be built on this site. The project will also be subjected to a height restriction of 36 storeys.

“The aggressive bidding for prime residential sites reinforces bullish views developers have of the residential market going forward,” said Mr Steven Ming, director of investment sales at Savills Singapore.

Trendale Tower, he added, provides boutique and mid-sized developers with an opportunity to develop it into an ultra-luxurious apartment block.

Trendale Tower is situated in the Scotts and Cairnhill area and is within walking distance of both the Newton and Orchard MRT stations.

Trendale Tower has an indicative price guide of $160 million, and Savills estimates that a new luxury development on the site could fetch about $3,400 psf to $3,500 psf.

The expressions of interest exercise closes on June 20 at 3pm.

Across town, Colliers International successfully sold Fairways Condominium collectively for $244.3 million to Bukit Sembawang View. The figure works out to $785psf per plot ratio, and that includes the development charge and state land alienation cost.

Owners of the 108 apartments and townhouses will get between $1.35 million and $4.3 million each, reflecting a collective sale premium of more than 60 per cent.

Source: Weekend Today, 19 May 2007
Real estate services firm C B Richard Ellis has announced the public tender sale of Pasir Panjang Village.

Located at the junction of South Buona Vista Road and Pasir Panjang Road, the freehold Pasir Panjang Village consists of a row of 14 conserved two-and-a-half-storey shophouses that are adjacent to the Village Centre.

The 22,000-sq-ft site is zoned for both commercial and residential use. With a gross plot ratio of 3.0 in the 2003 Master Plan, there is a possibility of maximising the plot ratio to convert it into a boutique hotel, given its proximity to Sentosa.

Pasir Panjang Village is surrounded by residential developments and is across the road from Pasir Panjang Distripark. It is also a short drive from the Pasir Panjang Wholesale Centre, West Coast Car Mart, the Science Park and the National University of Singapore.

“The asking price of Pasir Panjang Village is $30 million. At this price, the potential buyer can expect a return of above 3-per-cent yield, which is quite attractive, compared to the banks’ fixed deposit rates and current yield payouts by some listed Reits,” said Mr Charles Hoon, director of investment properties at C B Richard Ellis.

The company has also announced the public tender sale of 18 Howard Road.

The freehold industrial 42,800-sq-ft site is located at the corner of Howard Road and MacTaggart Road, off MacPherson Road. Zoned for Business 1 in the 2003 Master Plan, it lies within a well-established industrial estate near the future site of the Tai Seng MRT station.

The asking price for 18 Howard Road is $18 million, or $164 per square foot (psf) per plot ratio. Potential developers can expect a breakeven price of slightly above $300psf.

“The industrial sector is currently laggard and has great potential for future growth, compared to the office, retail and industrial sectors where prices are close to the previous peak of 1996/1997.

“Optimism in the industrial sector is also fuelled by expectations that the economy is set to grow by five per cent for the next five years,” said Mr Hoon.

C B Richard Ellis is the sole marketing agent for both properties. The tender exercises for 18 Howard Road closes on June 12 at 3pm. The tender for Pasir Panjang Village closes on June 13 at 3pm.

Source: Weekend Today, 19 May 2007
Soilbuild Group Holding’s latest condominium project, Montebleu, is sold out, with an overseas institutional investor acquiring 37 out of the 151 units of the project in Novena.

The freehold, 34-storey development at Minbu Road attracted local buyers as well as overseas buyers and investors.

“Considering the many developments available in the Novena district, the take-up rate has been excellent. We achieved average prices of nearly $1,000 per square foot (psf), with some units reaching a high of $1,250,” said Mrs Kellie Liew, executive vice-president of projects at HSR International.

The 37 apartments acquired by the overseas institutional investor were sold at an average price of $1,050 psf.

“We are pleased that our latest and largest project, Montebleu, has received such strong response from overseas and local investors seeking exclusive projects in choice locations,” said Mr Low Soon Sim, executive director, Soilbuild.

Sitting on a 58,673-sq-ft plot, Montebleu is set to be one of Novena’s tallest landmarks.

It has one- to five-bedroom apartments, including executive suites and three penthouses.

These units range in size from 570 sq ft to 2,896 sq ft.

The apartments come with balconies, bay windows, dry and wet kitchens, designer wardrobes, en suite baths and quality sanitary ware.

This is the second development Soilbuild has fully sold this year.

The high-end One Tree Hill Residence on Grange Road, was sold out at the beginning of this year.

Source: Weekend Today, 19 May 2007
I am all in favour of collective property sales in land-scarce Singapore, but measures should be put in place to check the frenzy we are witnessing now. This, in my opinion, is not healthy for the economy and not healthy for the fabric of Singapore.

When we buy an apartment, the price we negotiate reflects the view, layout, floor level and prestige factors such as in the case of a penthouse. But we are not able to negotiate the share value allocated to the apartment, which is set by the developer and approved by the Commissioner of the Buildings Management Unit.

Share values were established purely for the apportionment of running costs in a development. They may be fair for the apportionment of running costs, but it in no way follows that they are a fair reflection of the respective stake owners have made in a development. Therefore, they should not be taken into consideration in the calculation of price or in important collective-sale decisions.

When it comes to valuing apartments, marketing agents do not take into consideration floor levels or prestige factors. This means the apartment on the second level will get the same price as one on the 20th level. This is not the practice in the real world. Is this fair?

Hopefully, amendments to legislation will incorporate the following:

Valuations must give due recognition to different floors;

Voting rights in collective-sale decisions should be weighted according to the size of the flat, not the share value allocated to it as is currently the case. This is because we have no say in the allocation of share value but we have a say in the size of our apartment.

A bigger say must be given to owner-occupiers as they will need to acquire a replacement property and may suffer a loss; and

The bar should be raised from the current 80 to 85 per cent. This will still allow steady growth in prices - which we all desire - but will moderate the current feverish pace of collective sales.

Collective sales can be a useful engine of growth in the key property sector of our economy. But now that they have become so important and so frequent, it is vital that the upcoming review of legislation corrects certain imbalances which have become apparent.

Magdeline Goei (Ms)

Source: The Straits Times, 19 May 2007