SPEECH BY MS GRACE FU HAI YIEN, MINISTER OF STATE FOR NATIONAL DEVELOPMENT, AT THE CONSTRUCTION & PROPERTY PROSPECTS 2007 SEMINAR, 23 JANUARY 2007, 9.30 AM AT ORCHARD HOTEL
Mr John Lim, Chairman BCA,
Dr John Keung, CEO BCA,
Mr Kwee Liong Keng, President of REDAS,
Distinguished guests,
Good morning.
Improved Prospects for Construction Industry
1 The construction industry has turned around. Driven by strong demand, total construction contracts hit $16.1 billion in 2006. This is a 40% increase over 2005 and a considerable improvement from the demand of between $10 billion and $11.5 billion in the three preceding years.
2 We expect 2007 to be an even better year for the industry. Propelled by the launch of major developments, such as the Integrated Resorts and the Business and Financial Centre, construction demand is likely to reach between $17 and $19 billion this year.
A World Class Built Environment, A Distinctive Global City
3 This recovery spells an exciting time for the construction industry, which plays an integral role in shaping Singapore’s landscape.
4 In line with this, BCA has adopted the vision of “The best built environment for Singapore, our distinctive global city” to guide the organization in the long run. It has also redefined its mission as “We shape a safe, high quality, sustainable and friendly built environment” to reflect its strategic focus
Initiatives To Improve Our Built Environment
5 To realise our shared vision of delivering the best built environment to enhance Singapore’s position as a distinctive global city, BCA will work closely with the industry on several key initiatives under the four focus areas. Let me elaborate.
Enhancing Building Safety
6 Singapore’s built environment is known for its high safety standards, governed by a robust regulatory system. We will continue to enhance the regulatory framework to meet changing needs. We are enhancing the Building Control Act to include licensing of builders, and to enhance the safety of underground construction. In addition, an international panel of experts will be engaged to help review the building control framework.
Improving Construction Quality
7 Over the years, BCA has helped to raise the quality of our built environment through various initiatives, such as the implementation of the CONQUAS and Quality Mark schemes. A quality built environment has helped Singapore distinguish itself from other cities, and enabled our local firms to establish a strong brand name overseas. To build on these successes, BCA is stepping up efforts to promote wider adoption of these quality schemes in a wider range of projects.
Promoting Green Buildings
8 I had about a month ago, announced several policies and incentives to promote the development of environmentally sustainable buildings. This includes setting aside $70 million under the Green Mark Incentive Scheme and MND Research Fund, to encourage our buildings to go green. BCA will continue to promote the Green Mark scheme and generate greater awareness and demand for green buildings through public education. I strongly encourage all developers, building owners and designers to join us on this journey to create sustainable developments.
Ensuring User-Friendliness
9 The industry must also play its role in making Singapore an inclusive society, by making our built environment elderly-friendly and enabling our elderly to “age in place”. BCA is strengthening the Code of Barrier-Free Accessibility (BFA). It has recently launched the Universal Design Award for Built Environment, in collaboration with the Singapore Institute of Architects and the Handicaps Welfare Association.
10 BCA has also mapped out a 5-year Barrier-Free Accessibility Upgrading Program. For a start, BCA is working with public agencies to take the lead in reviewing and improving the accessibility of their buildings, where possible. For existing private sector buildings, the Government is making plans to set aside about $40 million over the next five years to co-fund voluntary upgrading on barrier-free accessibility. More details will be released in the next few months.
Transforming the Industry for Challenges Ahead
11 As the industry advances and prepares itself for the challenges ahead, it needs to enhance its capacity and know-how. Let me now touch on three areas that BCA and the industry must work on, on this transformation journey.
Adequacy and Professionalism of Manpower
12 The projected uptake in construction volume has posed some challenges to the industry. The industry is experiencing a surge in manpower demand at all levels, from professionals, supervisors to tradesmen. The Government is aware of the manpower situation, and has taken a proactive review of our policies to ensure adequate manpower resources for the industry.
13 For a start, MOM has waived Man-Year Entitlement (MYE) requirements for foreign tradesmen who have worked here for at least six years. This could potentially free up more than 40,000 foreign tradesmen from the MYE quota. To facilitate the skill certification and entry of additional foreign workers, BCA is also setting up more Overseas Testing Centres in the source countries.
14 To accommodate the higher demand for professional and technical workers, MOM has raised the S-pass quota from 5% to 10% in October last year. BCA will also be relaxing its regulatory requirements to enlarge the pool of qualified site supervisory staffs. With these measures, firms will have greater access to qualified manpower resources to cope with the increase in construction volume.
15 On the local front, BCA is working with the industry and institutes of higher learning to organise job fairs to attract graduating students into the industry. BCA will also be introducing the Construction Registration of Tradesmen (CoreTrade) scheme to build up a core of localised trade foremen and tradesmen. BCA is working with the Workforce Development Authority (WDA), NTUC, self-help groups and the industry to build up this core of localised workers.
BCA Academy of the Built Environment
16 In line with its emphasis to develop a professional workforce and promote adoption of innovative technologies, BCA plans to revamp its training institute, the Construction Industry Training Institute (CITI), into the BCA Academy of the Built Environment. The new Academy will be a dedicated one-stop training, design and technology hub for the built environment. Besides stepping up training in the four identified strategic areas, the new Academy will also focus on test-bedding new technologies and designs for the built environment. A gallery to showcase BCA's efforts and the industry’s achievements will also be set up within the Academy.
Managing Increased Demand in Basic Construction Materials
17 With the vibrant global and regional level of construction activities, demand for basic construction materials has also gone up. We can therefore expect prices of construction materials to rise in tandem. Our construction industry should turn this challenge into an opportunity by proactively exploring innovative technologies to enhance supply resilience of materials and mitigate any price impacts due to demand surge. The industry should look beyond our traditional supply sources of raw materials, to ensure that basic materials can be procured from diverse sources at competitive prices, so as to be more resilient to demand and supply fluctuations. The industry should also explore and adopt alternative construction methods and materials to reduce the demand for imported raw materials. For example, the industry can explore the use of more pre-cast or semi-finished products, which could be efficiently manufactured in other markets, and the use of products such as dry walls and structural steel in place of concrete.
Conclusion
18 Developing a world-class built environment requires close partnership among all the stakeholders. As regulators, developers, building owners, designers and builders, you play a vital role in realising our shared vision to make Singapore a distinctive global city, a great place to live, work and play.
19 I wish all of you success in the year ahead. Thank You.
Tuesday, January 23, 2007
Tuesday, January 16, 2007
The southern appeal
The southern appeal
INVESTORS who held on to their shares in UEM World Bhd for years in the fervent belief that the tide would eventually turn for the group have been vindicated.
In fact, it would hardly be considered a stretch to say that the stock has taken on a life of its own over the last few weeks. Assuming an investor had bought the shares at the start of the year, he would have made a tidy gain of more than 130%.
UEM is said to be well-positioned to benefit from the anticipated appreciation in Johor land values
This, in part, could be based on the fact that several research houses have come out with reports to highlight the company's encouraging prospects given the government's push to develop the Iskandar Development Region (IDR) into a major economic powerhouse. (UEM World owns about 10,000 acres of land in Bandar Nusajaya, which is an integral component of the IDR.)
UOB-Kay Hian Research reckons the IDR has all the makings of the next super-cycle performer on Bursa Malaysia.
“(The IDR) is a strong super-cycle performer candidate because it is a new investment theme, the government is involved, policy changes are likely to take place and mega infrastructure contracts that have been budgeted under the Ninth Malaysia Plan (9MP) are likely to be awarded,” it says.
Recent land deals in the state have also served to highlight the potential value of the vast tract of land owned by UEM World in Nusajaya, Johor.
The sale of commercial land in Nusajaya by SP Setia Bhd was transacted at RM65 per sq ft. UEM Land, a wholly owned unit of UEM World, managed to sell five parcels of industrial land to Singapore's HG Metal Manufacturing Ltd at RM21psf.
This has given rise to hope that UEM World's land in the vicinity could be worth a lot more than what industry observers initially reckoned it would fetch.
Some observers now say they would not be surprised if more foreign investors make a beeline for land in Johor. They say the stark price differential between Malaysia and Singapore for residential, commercial and industrial land would make foreigners willing to fork out anywhere between RM20 and RM30 psf for land in Johor.
Re-rating catalysts
UOB-Kay Hian says it is likely that companies owning land in the state, like UEM World, Tebrau Teguh Bhd and Mulpha International Bhd, would see their revised net asset values (RNAV) rise over the next few years as land values appreciate more on the back of policy changes.
“For UEM World, if land prices increase to RM20 psf (or equal to Klang-Shah Alam levels), its RNAV could rise to RM8.35,” UOB-Kay Hian points out.
A foreign investment research house has come up with a RNAV-based target price of RM5 for UEM World shares. Based on last Thursday's closing price of RM4.08, this means the shares could still enjoy an upside of more than 20%.
The valuation is based on RNAV as the bulk of UEM World's worth is derived from its undeveloped land bank. In Johor, the group has about 10,000 acres of undeveloped land, making UEM World one of the largest owners of land in the IDR.
The foreign research house notes in a report dated Feb 6 that UEM World is well positioned to benefit from the anticipated appreciation in Johor land values. It reckons that every RM1 psf rise in land value would boost the investment bank's RNAV for UEM World by 5%.
“The Government’s focus on developing southern Johor and possible capital management initiatives at group level are conducive factors to drive the potential re-rating of UEM World. We believe the catalysts will come from appreciating land values in Johor and potential capital management initiatives as UEM World may look to dispose of some of its non-core assets,” it says.
It is unlikely that UEM World would distribute cash given that it requires capital for the development of Nusajaya. However, the foreign house says it is possible that the company would make a distribution in specie of its holdings in some of its non-core assets like Cement Industries of Malaysia Bhd and Pharmaniaga Bhd.
This level of optimism among analysts about UEM World is fairly new. This time last year, the group still had its work cut out to convince analysts that it is truly positioned for growth.
Many had come away from a media/analyst briefing not altogether convinced that Nusajaya would take off in as big a way as had been suggested by UEM World chief Datuk Ahmad Pardas Senin.
Since then, however, the development of the Southern Corridor has received the government's endorsement.
It is now one of the major plans that would determine the overall success of the 9MP.
UEM World's investment case has also been enhanced by measures taken to address its debt burden. Last October, the group unveiled a plan to raise RM1.94bil via a de-gearing exercise. This involves the sale of land to Khazanah Nasional Bhd.
The plan would simultaneously help UEM World raise financing to accelerate the development of Nusajaya and get Khazanah actively involved in the development of key projects in the vicinity of the group’s existing land bank.
INVESTORS who held on to their shares in UEM World Bhd for years in the fervent belief that the tide would eventually turn for the group have been vindicated.
In fact, it would hardly be considered a stretch to say that the stock has taken on a life of its own over the last few weeks. Assuming an investor had bought the shares at the start of the year, he would have made a tidy gain of more than 130%.
UEM is said to be well-positioned to benefit from the anticipated appreciation in Johor land values
This, in part, could be based on the fact that several research houses have come out with reports to highlight the company's encouraging prospects given the government's push to develop the Iskandar Development Region (IDR) into a major economic powerhouse. (UEM World owns about 10,000 acres of land in Bandar Nusajaya, which is an integral component of the IDR.)
UOB-Kay Hian Research reckons the IDR has all the makings of the next super-cycle performer on Bursa Malaysia.
“(The IDR) is a strong super-cycle performer candidate because it is a new investment theme, the government is involved, policy changes are likely to take place and mega infrastructure contracts that have been budgeted under the Ninth Malaysia Plan (9MP) are likely to be awarded,” it says.
Recent land deals in the state have also served to highlight the potential value of the vast tract of land owned by UEM World in Nusajaya, Johor.
The sale of commercial land in Nusajaya by SP Setia Bhd was transacted at RM65 per sq ft. UEM Land, a wholly owned unit of UEM World, managed to sell five parcels of industrial land to Singapore's HG Metal Manufacturing Ltd at RM21psf.
This has given rise to hope that UEM World's land in the vicinity could be worth a lot more than what industry observers initially reckoned it would fetch.
Some observers now say they would not be surprised if more foreign investors make a beeline for land in Johor. They say the stark price differential between Malaysia and Singapore for residential, commercial and industrial land would make foreigners willing to fork out anywhere between RM20 and RM30 psf for land in Johor.
Re-rating catalysts
UOB-Kay Hian says it is likely that companies owning land in the state, like UEM World, Tebrau Teguh Bhd and Mulpha International Bhd, would see their revised net asset values (RNAV) rise over the next few years as land values appreciate more on the back of policy changes.
“For UEM World, if land prices increase to RM20 psf (or equal to Klang-Shah Alam levels), its RNAV could rise to RM8.35,” UOB-Kay Hian points out.
A foreign investment research house has come up with a RNAV-based target price of RM5 for UEM World shares. Based on last Thursday's closing price of RM4.08, this means the shares could still enjoy an upside of more than 20%.
The valuation is based on RNAV as the bulk of UEM World's worth is derived from its undeveloped land bank. In Johor, the group has about 10,000 acres of undeveloped land, making UEM World one of the largest owners of land in the IDR.
The foreign research house notes in a report dated Feb 6 that UEM World is well positioned to benefit from the anticipated appreciation in Johor land values. It reckons that every RM1 psf rise in land value would boost the investment bank's RNAV for UEM World by 5%.
“The Government’s focus on developing southern Johor and possible capital management initiatives at group level are conducive factors to drive the potential re-rating of UEM World. We believe the catalysts will come from appreciating land values in Johor and potential capital management initiatives as UEM World may look to dispose of some of its non-core assets,” it says.
It is unlikely that UEM World would distribute cash given that it requires capital for the development of Nusajaya. However, the foreign house says it is possible that the company would make a distribution in specie of its holdings in some of its non-core assets like Cement Industries of Malaysia Bhd and Pharmaniaga Bhd.
This level of optimism among analysts about UEM World is fairly new. This time last year, the group still had its work cut out to convince analysts that it is truly positioned for growth.
Many had come away from a media/analyst briefing not altogether convinced that Nusajaya would take off in as big a way as had been suggested by UEM World chief Datuk Ahmad Pardas Senin.
Since then, however, the development of the Southern Corridor has received the government's endorsement.
It is now one of the major plans that would determine the overall success of the 9MP.
UEM World's investment case has also been enhanced by measures taken to address its debt burden. Last October, the group unveiled a plan to raise RM1.94bil via a de-gearing exercise. This involves the sale of land to Khazanah Nasional Bhd.
The plan would simultaneously help UEM World raise financing to accelerate the development of Nusajaya and get Khazanah actively involved in the development of key projects in the vicinity of the group’s existing land bank.
The URA has received two bids for the 99-year leasehold hotel site at Sinaran Drive.
The URA has received two bids for the 99-year leasehold hotel site at Sinaran Drive.
The top bidder, Glory Realty, offered S$131.1 million or S$501 per square foot per plot ratio.
According to property agents CB Richard Ellis, this was close to the highest bid placed by Republic Hotels & Resorts Limited for a hotel site at Mohamed Sultan Road last year.
Meanwhile, CBRE Research said that in view of the location, the top bid received was an indication of the buoyant interest in the hotel market.
With its proximity to Thomson Medical Centre and Tan Tock Seng Hospital, the site is seen as suitable for a hotel catering to the growing medical tourist market.
Source: Channel NewsAsia, 16 January 2007
The top bidder, Glory Realty, offered S$131.1 million or S$501 per square foot per plot ratio.
According to property agents CB Richard Ellis, this was close to the highest bid placed by Republic Hotels & Resorts Limited for a hotel site at Mohamed Sultan Road last year.
Meanwhile, CBRE Research said that in view of the location, the top bid received was an indication of the buoyant interest in the hotel market.
With its proximity to Thomson Medical Centre and Tan Tock Seng Hospital, the site is seen as suitable for a hotel catering to the growing medical tourist market.
Source: Channel NewsAsia, 16 January 2007
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