Source : The Straits Times, Sep 12, 2007
Fed officials say there is a risk of broader downturn; comments set stage for rate cut
WASHINGTON - TWO senior Federal Reserve officials said on Monday that the turmoil in housing and mortgage lending has begun to threaten the overall US economy.
Their statements set the stage for a likely cut in the Fed's benchmark interest rate next week.
Fed governor Frederic Mishkin told a group of investors on Monday that the risk of a broader downturn 'cannot, in my view, be ruled out'.
Mr Mishkin said inflation pressures had become less of a problem - a judgment that, if embraced by other Fed officials, would remove a major argument against lowering interest rates.
Fed Bank of San Francisco president Janet Yellen said a housing downturn and tighter credit were likely to cause 'significant downward pressure' on consumer spending and, thus, on economic growth.
Even if investors overcome some of their fears, mortgage rates are likely to remain higher on a long-term basis and could continue to push housing prices down, she said.
'Should the decline in house prices occur in the context of rising unemployment, the risks could be significant,' she added.
Her comments highlighted a point recently stressed by Fed chief Ben Bernanke, that officials do not plan to wait for irrefutable statistical evidence of an economic downturn.
Rather, they are ready to act on warning signs, including anecdotal business reports, that the probabilities of a downturn are too high to ignore.
In response to the comments, Fed watchers said it seems likely that an interest rate cut will take place.
However, they said it is not clear if Mr Bernanke and his colleagues are ready to cut as much as investors expect, and many economists say they must, to keep the United States out of a recession.
The contrasting remarks made by two other Fed officials indicated that there may be some divide among the policymakers themselves as to what to do next week.
Dallas Fed president Richard Fisher said on Monday that the bleak jobs report was merely a 'discordant note', and that he was still unpersuaded about a broader downturn.
Philadelphia Fed president Charles Plosser said earlier last Saturday that policymakers should not put too much stress on the loss of jobs last month, and that he had not made up his mind yet on a rate cut.
The scope of remarks may reflect a debate inside the US central bank over whether to lower the benchmark rate on Tuesday by a quarter-percentage point, or a half-point, as some investors expect.
Meanwhile, market conditions have turned investors jittery.
On Monday, European Central Bank president Jean-Claude Trichet warned of 'hectic behaviour' in the global economy and urged central bankers to keep a close eye on the US for signs of an economic slowdown.
'This is no time for complacency. The current situation calls for close observation and monitoring,' said Mr Trichet at a gathering in Basel, Switzerland, of the world's top central bankers, including US Federal Reserve chairman Ben Bernanke and the Bank of Japan governor Toshihiko Fukui.
A survey by the US National Association for Business Economics, meanwhile, lists a recession as the greatest risk to the US economy over the next year, outpacing inflation as the biggest concern by a two-to-one margin.
The economists forecast a half-point cut in the federal funds rate by the end of the first quarter of 2008, up from May's forecast of a quarter-point cut.
NEW YORK TIMES, REUTERS, BLOOMBERG NEWS
Wednesday, September 12, 2007
US Home Sales Not Likely To Recover Next Year
Source : The Straits Times, September 12, 2007
Moody's says slump may last till 2009 as buyers struggle to get mortgages
(NEW YORK) The US housing slump will probably last until 2009 and home sales will take a 'substantial hit' in the next several months as borrowers struggle to get mortgages, Moody's Investors Service said.
'The downturn is more severe and more protracted than we had expected,' Joseph Snider, a credit officer at Moody's, said. Home sales will be hurt by the lack of sub-prime and Alt-A mortgage lending and the difficulty borrowers with good credit are having obtaining mortgages, Moody's said on Monday.
A glut of new and existing homes for sale is prompting potential buyers to wait for prices to fall before purchasing.
The Moody's forecast contrasts with the National Association of Home Builders, which expects housing to begin rebounding in mid-to-late 2008. It also came as Federal Reserve Bank of San Francisco president Janet Yellen said the economy is under 'downward pressure' from turmoil in credit and housing markets.
The worst housing market in 16 years has sent a Standard & Poor's measure of 16 US homebuilders down 49 per cent this year.
Moody's said on Monday it has taken 38 negative ratings actions on the 22 US homebuilders it rates over the past year and more downgrades are possible. Builders may also begin violating credit agreements and banks may tighten restrictions placed on companies.
'Tighter lending and credit standards, diminished consumer home-buying confidence, rising cancellation rates, and falling home prices - especially in the most reliable strong real estate markets prior to 2006 - have exacerbated the industry's woes and further deepened our year-long negative view,' the report said.
A recovery for housing could be hastened should the Federal Reserve take 'frequent and concerted action', the report said. Moody's said it doesn't expect that kind of action to occur unless the economy heads into a recession.
Mr Snider said that Moody's had estimated there might be a second-half housing recovery in 2008. That forecast has now 'been pushed back some', he said.
Meanwhile, Fannie Mae and Freddie Mac, the biggest sources of money for US home loans, adopted rules intended to discourage the funding of high-risk sub-prime mortgages, the Office of Federal Housing Enterprise Oversight said.
The rules require Fannie Mae and Freddie Mac to buy home loans from originators that 'help prevent abuses' in mortgage lending, Ofheo said on Monday.
The two companies can only purchase home loans after verification of the borrowers' income and ability to adjust to higher interest rates, according to the guidelines. -- Bloomberg
Moody's says slump may last till 2009 as buyers struggle to get mortgages
(NEW YORK) The US housing slump will probably last until 2009 and home sales will take a 'substantial hit' in the next several months as borrowers struggle to get mortgages, Moody's Investors Service said.
'The downturn is more severe and more protracted than we had expected,' Joseph Snider, a credit officer at Moody's, said. Home sales will be hurt by the lack of sub-prime and Alt-A mortgage lending and the difficulty borrowers with good credit are having obtaining mortgages, Moody's said on Monday.
A glut of new and existing homes for sale is prompting potential buyers to wait for prices to fall before purchasing.
The Moody's forecast contrasts with the National Association of Home Builders, which expects housing to begin rebounding in mid-to-late 2008. It also came as Federal Reserve Bank of San Francisco president Janet Yellen said the economy is under 'downward pressure' from turmoil in credit and housing markets.
The worst housing market in 16 years has sent a Standard & Poor's measure of 16 US homebuilders down 49 per cent this year.
Moody's said on Monday it has taken 38 negative ratings actions on the 22 US homebuilders it rates over the past year and more downgrades are possible. Builders may also begin violating credit agreements and banks may tighten restrictions placed on companies.
'Tighter lending and credit standards, diminished consumer home-buying confidence, rising cancellation rates, and falling home prices - especially in the most reliable strong real estate markets prior to 2006 - have exacerbated the industry's woes and further deepened our year-long negative view,' the report said.
A recovery for housing could be hastened should the Federal Reserve take 'frequent and concerted action', the report said. Moody's said it doesn't expect that kind of action to occur unless the economy heads into a recession.
Mr Snider said that Moody's had estimated there might be a second-half housing recovery in 2008. That forecast has now 'been pushed back some', he said.
Meanwhile, Fannie Mae and Freddie Mac, the biggest sources of money for US home loans, adopted rules intended to discourage the funding of high-risk sub-prime mortgages, the Office of Federal Housing Enterprise Oversight said.
The rules require Fannie Mae and Freddie Mac to buy home loans from originators that 'help prevent abuses' in mortgage lending, Ofheo said on Monday.
The two companies can only purchase home loans after verification of the borrowers' income and ability to adjust to higher interest rates, according to the guidelines. -- Bloomberg
Ritz-Carlton Residences In Singapore A First In Asia
Source : The Strait Times, 04 September 07
WELL-HEELED fans of the Ritz-Carlton's luxury accommodation will soon be able to buy homes in Singapore that come stamped with the five-star hotel brand.
Asia's first Ritz-Carlton Residences will be launched for sale in Singapore late next month, with 56 apartment units and two penthouses up for grabs.
The 36-storey tower will be built in Cairnhill Road on the former Horizon View site, and will be completed by early 2010.
Residents will enjoy a 24-hour concierge service, housekeeping and sommelier service. All the staff will be trained and managed by Ritz-Carlton.
While the apartment prices have not yet been finalised, Ritz-Carlton's vice-president of international hotel development, Mr Shawn Hill, said the hotel's branded apartments usually fetch up to 50 per cent more than comparable non-branded homes.
'Typically, comparing against non-branded residential properties, we see a 20 to 50 per cent premium over the highest-end homes in each market,' he told The Straits Times.
There are currently 32 other Ritz-Carlton Residences around the world, including in New York, Boston, Hawaii and the Bahamas. Similar projects are in the pipeline in Europe and the Middle East, Mr Hill said.
In Asia, Singapore was chosen for the residences' debut over cities such as Kuala Lumpur and Tokyo, where Ritz-Carlton has service apartments.
'We chose Singapore because we consider it to be a pace-setter in the region, and it's a highly sought-after city to live in,' explained MrHill.
'Singapore, as a city, has some of its own branding and a very strong international appeal. It represents a high quality of living as well as stability.'
But the group is also looking at building more of such homes in other 'gateway cities' in Asia, including Hong Kong, Shanghai, Tokyo, Ho Chi Minh City and Jakarta, Mr Hill added.
The Singapore project is a partnership between Ritz-Carlton and Hayden Properties - a 50:50 joint venture between real estate firm KOP Capital and Emirates Investment Group unit Emirates Tarian Capital.
Hayden, which was set up last October, is also the developer behind the luxury project at 37 Scotts Road that boasts a garage in every apartment.
The Ritz-Carlton Residences in Singapore will offer units in three sizes. The three-bedroom units will be 2,800 sq ft while the four-bedders will be 3,100 sq ft and the penthouses will weigh in at more than 5,000 sq ft.
Each unit will have designer fittings and appliances. The property will also have a lap pool, library, wine cellar, and a kitchen and entertainment area managed by the Ritz-Carlton.
Monthly maintenance fees for the apartments may add up to between $2,000 and $3,000, said Ms Ong Chih Ching, Hayden's founder and lead director.
She said the trend of hotel-branded residences is set to grow in Asia, as homebuyers become more affluent.
'Apart from the luxurious hardware that you will see in buildings, the other thing that buyers will look for is service. A lot of the hotel chains have good reputations for their service.'
Other hotel-branded residences in Singapore include Four Seasons Park and St Regis Residences.
Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, agreed that more co-branded apartments will emerge, and not just involving hotels.
'The co-branding trend includes architects, designers, fashion labels such as Armani and Versace, and these will put Singapore on the world map.'
He expects foreigners to make up most of the buyers of the Ritz-Carlton apartments. These could 'definitely fetch a minimum' of $4,000 per sq ft, which is at least 20 per cent more than current prices in Cairnhill, he said.
--------------------------------------------------------------------------------
Luxury living
*Ritz-Carlton Residences in Singapore will offer 56 apartment units and two penthouses.
*The 36-storey tower in Cairnhill will be completed by early 2010.
*Residents will enjoy a 24-hour concierge service, housekeeping and sommelier service.
*Similar projects are in the pipeline in Europe and the Middle East.
*The group is also eyeing other 'gateway cities' in Asia such as Hong Kong, Shanghai, Tokyo,
*Ho Chi Minh City and Jakarta.
WELL-HEELED fans of the Ritz-Carlton's luxury accommodation will soon be able to buy homes in Singapore that come stamped with the five-star hotel brand.
Asia's first Ritz-Carlton Residences will be launched for sale in Singapore late next month, with 56 apartment units and two penthouses up for grabs.
The 36-storey tower will be built in Cairnhill Road on the former Horizon View site, and will be completed by early 2010.
Residents will enjoy a 24-hour concierge service, housekeeping and sommelier service. All the staff will be trained and managed by Ritz-Carlton.
While the apartment prices have not yet been finalised, Ritz-Carlton's vice-president of international hotel development, Mr Shawn Hill, said the hotel's branded apartments usually fetch up to 50 per cent more than comparable non-branded homes.
'Typically, comparing against non-branded residential properties, we see a 20 to 50 per cent premium over the highest-end homes in each market,' he told The Straits Times.
There are currently 32 other Ritz-Carlton Residences around the world, including in New York, Boston, Hawaii and the Bahamas. Similar projects are in the pipeline in Europe and the Middle East, Mr Hill said.
In Asia, Singapore was chosen for the residences' debut over cities such as Kuala Lumpur and Tokyo, where Ritz-Carlton has service apartments.
'We chose Singapore because we consider it to be a pace-setter in the region, and it's a highly sought-after city to live in,' explained MrHill.
'Singapore, as a city, has some of its own branding and a very strong international appeal. It represents a high quality of living as well as stability.'
But the group is also looking at building more of such homes in other 'gateway cities' in Asia, including Hong Kong, Shanghai, Tokyo, Ho Chi Minh City and Jakarta, Mr Hill added.
The Singapore project is a partnership between Ritz-Carlton and Hayden Properties - a 50:50 joint venture between real estate firm KOP Capital and Emirates Investment Group unit Emirates Tarian Capital.
Hayden, which was set up last October, is also the developer behind the luxury project at 37 Scotts Road that boasts a garage in every apartment.
The Ritz-Carlton Residences in Singapore will offer units in three sizes. The three-bedroom units will be 2,800 sq ft while the four-bedders will be 3,100 sq ft and the penthouses will weigh in at more than 5,000 sq ft.
Each unit will have designer fittings and appliances. The property will also have a lap pool, library, wine cellar, and a kitchen and entertainment area managed by the Ritz-Carlton.
Monthly maintenance fees for the apartments may add up to between $2,000 and $3,000, said Ms Ong Chih Ching, Hayden's founder and lead director.
She said the trend of hotel-branded residences is set to grow in Asia, as homebuyers become more affluent.
'Apart from the luxurious hardware that you will see in buildings, the other thing that buyers will look for is service. A lot of the hotel chains have good reputations for their service.'
Other hotel-branded residences in Singapore include Four Seasons Park and St Regis Residences.
Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, agreed that more co-branded apartments will emerge, and not just involving hotels.
'The co-branding trend includes architects, designers, fashion labels such as Armani and Versace, and these will put Singapore on the world map.'
He expects foreigners to make up most of the buyers of the Ritz-Carlton apartments. These could 'definitely fetch a minimum' of $4,000 per sq ft, which is at least 20 per cent more than current prices in Cairnhill, he said.
--------------------------------------------------------------------------------
Luxury living
*Ritz-Carlton Residences in Singapore will offer 56 apartment units and two penthouses.
*The 36-storey tower in Cairnhill will be completed by early 2010.
*Residents will enjoy a 24-hour concierge service, housekeeping and sommelier service.
*Similar projects are in the pipeline in Europe and the Middle East.
*The group is also eyeing other 'gateway cities' in Asia such as Hong Kong, Shanghai, Tokyo,
*Ho Chi Minh City and Jakarta.
RBA Injects Extra Cash Into Market
Source : The Business Tims, September 12, 2007
.jpg)
Despite the RBA widened the types of assets it accepts as collateral when lending to financial institutions, it has had little success in restraining interbank rates.
SYDNEY - Australia's central bank injected a modest amount of extra cash into the banking system on Wednesday as it struggled to temper a spike in money market rates caused by an ongoing global credit crunch.
Credit market woes have led to a near strike among lenders while borrowers are scrambling to find fresh sources of funding for one month and beyond.
The Reserve Bank of Australia (RBA) added A$900 million (US$750 million) to the banking system on Wednesday, above the market's estimated cash need of A$816 million.
The extra addition should see commercial banks' accounts with the RBA expand from the current A$4.31 billion, well above the A$750 to A$850 million range seen before the global credit squeeze started to bite.
The central bank has been providing the banking system with extra cash for the past month in an attempt to break a logjam in lending and limit upward pressure on some key market rates.
The RBA even widened the types of assets it accepts as collateral when lending to financial institutions, yet it has had little success in restraining interbank rates.
On Wednesday, three-month bank bill rates were up at 7.08/10 per cent and unusually far above the RBA's 6.5 per cent cash rate. -- REUTERS
.jpg)
Despite the RBA widened the types of assets it accepts as collateral when lending to financial institutions, it has had little success in restraining interbank rates.SYDNEY - Australia's central bank injected a modest amount of extra cash into the banking system on Wednesday as it struggled to temper a spike in money market rates caused by an ongoing global credit crunch.
Credit market woes have led to a near strike among lenders while borrowers are scrambling to find fresh sources of funding for one month and beyond.
The Reserve Bank of Australia (RBA) added A$900 million (US$750 million) to the banking system on Wednesday, above the market's estimated cash need of A$816 million.
The extra addition should see commercial banks' accounts with the RBA expand from the current A$4.31 billion, well above the A$750 to A$850 million range seen before the global credit squeeze started to bite.
The central bank has been providing the banking system with extra cash for the past month in an attempt to break a logjam in lending and limit upward pressure on some key market rates.
The RBA even widened the types of assets it accepts as collateral when lending to financial institutions, yet it has had little success in restraining interbank rates.
On Wednesday, three-month bank bill rates were up at 7.08/10 per cent and unusually far above the RBA's 6.5 per cent cash rate. -- REUTERS
ECB Pumps US$104b Into Banking System
Source : The Business Times, September 12, 2007
FRANKFURT - The European Central Bank said on Wednesday it would pump 75 billion euros (US$104 billion) into the euro money markets via an exceptional three-month liquidity tender.
In a move aimed at giving the markets a bit more air, the ECB said it made the sum available at a marginal or lowest rate of 4.35 per cent and a weighted average rate of 4.52 per cent.
The rates were high compared with the ECB's present main interest rate of 4.0 per cent and the sum also exceeded the bank's normal refinancing amount of 50 billion euros.
Last Thursday, the bank had already made another three-month injection of liquidity into euro money markets, where rates have risen owing to uncertainty about the impact of the US high-risk home loan crisis on the global economy. -- AFP
FRANKFURT - The European Central Bank said on Wednesday it would pump 75 billion euros (US$104 billion) into the euro money markets via an exceptional three-month liquidity tender.
In a move aimed at giving the markets a bit more air, the ECB said it made the sum available at a marginal or lowest rate of 4.35 per cent and a weighted average rate of 4.52 per cent.
The rates were high compared with the ECB's present main interest rate of 4.0 per cent and the sum also exceeded the bank's normal refinancing amount of 50 billion euros.
Last Thursday, the bank had already made another three-month injection of liquidity into euro money markets, where rates have risen owing to uncertainty about the impact of the US high-risk home loan crisis on the global economy. -- AFP
IMF Predicts 'Moderate' US Slowdown
Source : The Business Times, September 12, 2007
LONDON - The US home loan crisis will cause just a modest slowdown of the American economy and have a limited impact on the rest of the world, the International Monetary Fund's chief economist said on Wednesday.
'We've seen a shock that has spread to other industrialised countries faster than expected,' said Simon Johnson. 'It's an important wake-up call for all of us.'
But, repeating an IMF analysis made earlier this month, he insisted that the economic fundamentals remained good and that the sub-prime loan crisis' 'effects on the real economy remain limited'. It will result in only 'a moderate slowdown in the US,' where poor economic data have fuelled fears of a recession, and 'will have a small effect on global growth'.
Rising US home foreclosures and a persistent housing slump have triggered a US credit crunch which has unsettled global markets and raised concerns about a possible US economic slowdown.
The credit crunch has spread across the world, with the European and other central banks pumping tens of billions of dollars into the money markets so that commercial banks can continue to extend the credit on which the global economy depends.
Mr Johnson said that 'the extent of European banks' exposure (to the US sub-prime crisis) was a surprise' but that the 'European economy remains strong'.
He said that 'we don't really understand why this (the sub-prime crisis) is continuing' but that 'central banks are ready to provide liquidity to the system and that keeps the banks comfortable in the short run'.
The IMF last week said it was scaling back its projections for economic growth in the United States and Europe following the turmoil on global stock markets tied to the US housing downturn.
It did not reveal how much it expected to trim its growth estimates, but said fresh assumptions would likely be released in mid-October ahead of the IMF and World Bank annual meetings. -- AFP
LONDON - The US home loan crisis will cause just a modest slowdown of the American economy and have a limited impact on the rest of the world, the International Monetary Fund's chief economist said on Wednesday.
'We've seen a shock that has spread to other industrialised countries faster than expected,' said Simon Johnson. 'It's an important wake-up call for all of us.'
But, repeating an IMF analysis made earlier this month, he insisted that the economic fundamentals remained good and that the sub-prime loan crisis' 'effects on the real economy remain limited'. It will result in only 'a moderate slowdown in the US,' where poor economic data have fuelled fears of a recession, and 'will have a small effect on global growth'.
Rising US home foreclosures and a persistent housing slump have triggered a US credit crunch which has unsettled global markets and raised concerns about a possible US economic slowdown.
The credit crunch has spread across the world, with the European and other central banks pumping tens of billions of dollars into the money markets so that commercial banks can continue to extend the credit on which the global economy depends.
Mr Johnson said that 'the extent of European banks' exposure (to the US sub-prime crisis) was a surprise' but that the 'European economy remains strong'.
He said that 'we don't really understand why this (the sub-prime crisis) is continuing' but that 'central banks are ready to provide liquidity to the system and that keeps the banks comfortable in the short run'.
The IMF last week said it was scaling back its projections for economic growth in the United States and Europe following the turmoil on global stock markets tied to the US housing downturn.
It did not reveal how much it expected to trim its growth estimates, but said fresh assumptions would likely be released in mid-October ahead of the IMF and World Bank annual meetings. -- AFP
Hotels Appeal To The Five Senses
Source : The Business Times, September 12, 2007
But with all this demand on a guest's perception, there is a risk of inducing sensory overload
The new lobby: The goal is to create a memorable experience that guests can smell, hear and feel
THE next time you walk into a hotel, close your eyes, listen and inhale. There may even be a water fountain you can run your fingers through or a treat you can taste. That is because the latest trend in hotel design is to appeal to all five of a guest's senses, offering what may be described as a 'sensory stay'. From infusing the lobby with a light fragrance to playing a customised soundtrack that changes throughout the day, the goal is to create a memorable experience that guests can smell, hear and feel - not just bombard them with visual stimulation.
'The future of hotel branding is when there are no logos, no advertisements blasting, but I can just feel I'm there,' said Martin Lindstrom, author of Brand Sense, which explores the notion of sensory branding. Retailers were among the first to use music and scent to influence customer behaviour - diffusing a chocolate smell, for instance, to entice customers to buy candy - but the hospitality industry is pursuing a more subtle agenda.
'They want to create a point of difference,' Mr Lindstrom said, explaining that a well-chosen playlist or fragrance not only creates a pleasant experience at the hotel, but can also evoke positive memories through CDs or scented shampoos guests take away.
'If you had that shampoo at home,' he said, 'it would release the whole emotional feeling you had during your journey.' (As for whether a work trip involves happy emotions, Mr Lindstrom says a pampering hotel stay is often considered one of the benefits of business travel and sometimes inspires a return visit on vacation.)
Some of the hotel chains that have created signature scents are Westin Hotels and Resorts, whose white tea aroma spawned a line of retail products and appeared in fragrance strips as part of an advertising campaign; Omni Hotels, which infuses its lobbies with a lemongrass and green tea scent; and the Morgans Hotel Group, owner of boutique hotels, like the Royalton in New York City, each with a unique fragrance.
These scents can be delivered through heating and cooling systems or toaster-size devices provided by companies like ScentAir, which works with a number of hotels. A fan blows air over a cartridge holding custom-scented oil. Most hotels are careful not to overpower guests.
'The scent is subtle, so it's not like people walk in and say, 'Wow, that lemongrass and green tea really smells great',' said Caryn Kboudi, a spokeswoman for Omni Hotels. 'They might notice the lobby smells great or it smells fresh.' Hotels have also taken pains to avoid fragrances that may provoke an allergic reaction, which is why Westin stayed away from florals or citrus, said Sue Brush, senior vice-president for the brand. Ms Brush said that guests had not reported any problems, emphasising that the scent was dispersed only in public areas.
Omni has taken its sensory branding initiative beyond the lobby, adding blueberry-scented stickers to newspapers distributed to guests and outfitting some hotels with in-room 'sensation bars' stocked with items like eucalyptus bath salts. Like many hotels, Omni is also paying more attention to the music played in public spaces, developing playlists that are customised for each property, as well as the time of day.
'We realised that when business travellers are getting out the door in the morning, we need to be putting a little bit of beat in their step,' Ms Kboudi said, explaining that this has led to a move away from classical music or jazz during the morning shift. 'At night, then we go into something that's a little bit softer and slower, a little more mellow.'
Allen Klevens, chief executive of Prescriptive Music, a consulting business that helps clients develop these types of soundtracks, said hotels are looking to distinguish themselves by shunning the ubiquitous sound of smooth jazz and even playing tunes guests do not necessarily recognise.
'If you hear music such as Sheryl Crow or Dave Matthews, that's a familiar sound to most people,' Mr Klevens said. 'But to really create a vibe or that feeling of being different, you're not going to know that artist, you're not going to know that sound, but you're going to say, 'Wow, where can I get that CD?' In fact, guests can sometimes buy a CD or download the songs online. Marriott sells its Revive Spa Collection at shopmarriott.com, while various Westin playlists are available for download at westinmusic.com.
But with all this emphasis on appealing to guests' five senses, there is a risk of inducing sensory overload. 'The sound needs to add value to the customer experience,' said Julian Treasure, author of the book Sound Business and head of the Sound Agency, a consulting business based in London. 'I have visited a number of boutique hotels where you feel there is a little bit of self-indulgence going on.' Mr Treasure said companies should examine the entire 'soundscape' of their hotels - not just the music playing in the background, but also the noise reverberating around rooms built with hard materials like wood and granite. And when it comes to sound design, he said he did not think guest rooms should be off-limits.
'At the moment, the only way you can change the soundscape is to turn on the television, which isn't everyone's cup of tea,' he said. In fact, some hotels do offer in-room audio channels that play soothing sounds like ocean waves as well as music, and more are giving guests ways to listen to their own tunes. -- AP
But with all this demand on a guest's perception, there is a risk of inducing sensory overload
The new lobby: The goal is to create a memorable experience that guests can smell, hear and feel THE next time you walk into a hotel, close your eyes, listen and inhale. There may even be a water fountain you can run your fingers through or a treat you can taste. That is because the latest trend in hotel design is to appeal to all five of a guest's senses, offering what may be described as a 'sensory stay'. From infusing the lobby with a light fragrance to playing a customised soundtrack that changes throughout the day, the goal is to create a memorable experience that guests can smell, hear and feel - not just bombard them with visual stimulation.
'The future of hotel branding is when there are no logos, no advertisements blasting, but I can just feel I'm there,' said Martin Lindstrom, author of Brand Sense, which explores the notion of sensory branding. Retailers were among the first to use music and scent to influence customer behaviour - diffusing a chocolate smell, for instance, to entice customers to buy candy - but the hospitality industry is pursuing a more subtle agenda.
'They want to create a point of difference,' Mr Lindstrom said, explaining that a well-chosen playlist or fragrance not only creates a pleasant experience at the hotel, but can also evoke positive memories through CDs or scented shampoos guests take away.
'If you had that shampoo at home,' he said, 'it would release the whole emotional feeling you had during your journey.' (As for whether a work trip involves happy emotions, Mr Lindstrom says a pampering hotel stay is often considered one of the benefits of business travel and sometimes inspires a return visit on vacation.)
Some of the hotel chains that have created signature scents are Westin Hotels and Resorts, whose white tea aroma spawned a line of retail products and appeared in fragrance strips as part of an advertising campaign; Omni Hotels, which infuses its lobbies with a lemongrass and green tea scent; and the Morgans Hotel Group, owner of boutique hotels, like the Royalton in New York City, each with a unique fragrance.
These scents can be delivered through heating and cooling systems or toaster-size devices provided by companies like ScentAir, which works with a number of hotels. A fan blows air over a cartridge holding custom-scented oil. Most hotels are careful not to overpower guests.
'The scent is subtle, so it's not like people walk in and say, 'Wow, that lemongrass and green tea really smells great',' said Caryn Kboudi, a spokeswoman for Omni Hotels. 'They might notice the lobby smells great or it smells fresh.' Hotels have also taken pains to avoid fragrances that may provoke an allergic reaction, which is why Westin stayed away from florals or citrus, said Sue Brush, senior vice-president for the brand. Ms Brush said that guests had not reported any problems, emphasising that the scent was dispersed only in public areas.
Omni has taken its sensory branding initiative beyond the lobby, adding blueberry-scented stickers to newspapers distributed to guests and outfitting some hotels with in-room 'sensation bars' stocked with items like eucalyptus bath salts. Like many hotels, Omni is also paying more attention to the music played in public spaces, developing playlists that are customised for each property, as well as the time of day.
'We realised that when business travellers are getting out the door in the morning, we need to be putting a little bit of beat in their step,' Ms Kboudi said, explaining that this has led to a move away from classical music or jazz during the morning shift. 'At night, then we go into something that's a little bit softer and slower, a little more mellow.'
Allen Klevens, chief executive of Prescriptive Music, a consulting business that helps clients develop these types of soundtracks, said hotels are looking to distinguish themselves by shunning the ubiquitous sound of smooth jazz and even playing tunes guests do not necessarily recognise.
'If you hear music such as Sheryl Crow or Dave Matthews, that's a familiar sound to most people,' Mr Klevens said. 'But to really create a vibe or that feeling of being different, you're not going to know that artist, you're not going to know that sound, but you're going to say, 'Wow, where can I get that CD?' In fact, guests can sometimes buy a CD or download the songs online. Marriott sells its Revive Spa Collection at shopmarriott.com, while various Westin playlists are available for download at westinmusic.com.
But with all this emphasis on appealing to guests' five senses, there is a risk of inducing sensory overload. 'The sound needs to add value to the customer experience,' said Julian Treasure, author of the book Sound Business and head of the Sound Agency, a consulting business based in London. 'I have visited a number of boutique hotels where you feel there is a little bit of self-indulgence going on.' Mr Treasure said companies should examine the entire 'soundscape' of their hotels - not just the music playing in the background, but also the noise reverberating around rooms built with hard materials like wood and granite. And when it comes to sound design, he said he did not think guest rooms should be off-limits.
'At the moment, the only way you can change the soundscape is to turn on the television, which isn't everyone's cup of tea,' he said. In fact, some hotels do offer in-room audio channels that play soothing sounds like ocean waves as well as music, and more are giving guests ways to listen to their own tunes. -- AP
HDB Launches Design, Build And Sell Site At Ang Mo Kio
Source : The Business Times, September 12, 2007
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THE Housing and Development Board has launched a third Design, Build and Sell Scheme (DBSS) site for sale. The latest site, which is at Ang Mo Kio Street 52, is the second to be launched for sale this year.
The site area is 16,789.1 sq m (180,716 sq ft), with an allowable gross floor area of 58,761.85 sq m (632,506 sq ft). It is close to the Ang Mo Kio town centre with its MRT station, bus interchange and the AMK Hub.
Noting the attractive location of the new site, Savills Singapore director of marketing and business development Ku Swee Yong said that he believes the site could fetch between $110 million and $125 million or about $170 to $200 per square foot per plot ratio (psf ppr).
The development is targeted at HDB upgraders or en bloc sale downgraders, and Mr Ku said that he expects a good take-up because the stock of vacant HDB flats has fallen of late.
Mr Ku highlighted that recent suburban condominiums like The Parc condominium in the West Coast and The Soleil at Novena had sold well, 'even though this is traditionally a quiet month for property sales'.
The successful developer will be required to build a minimum of 30 per cent of the flats with a floor area of 95 sq m or less - equivalent to flats of four rooms or smaller.
CBRE Research estimated that the site can yield more than 500 units. CBRE added: 'Given the established residential environment in Ang Mo Kio, together with the known popularity of DBSS units, we expect a good response from mid-sized developers and joint venture of contractors and developers.'
Upon building completion, the successful developer will hand over the entire development site to the HDB for lease administration, and to the Town Council for maintenance of the common areas and car parks.
The tender will close at noon on Tuesday, Nov 27.
The second DBSS site, at Boon Keng Road, was awarded in June. It sold for $233.74 psf ppr - double the $113.64 psf ppr price for the first DBSS site in Tampines sold in Jan 2006.
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THE Housing and Development Board has launched a third Design, Build and Sell Scheme (DBSS) site for sale. The latest site, which is at Ang Mo Kio Street 52, is the second to be launched for sale this year. The site area is 16,789.1 sq m (180,716 sq ft), with an allowable gross floor area of 58,761.85 sq m (632,506 sq ft). It is close to the Ang Mo Kio town centre with its MRT station, bus interchange and the AMK Hub.
Noting the attractive location of the new site, Savills Singapore director of marketing and business development Ku Swee Yong said that he believes the site could fetch between $110 million and $125 million or about $170 to $200 per square foot per plot ratio (psf ppr).
The development is targeted at HDB upgraders or en bloc sale downgraders, and Mr Ku said that he expects a good take-up because the stock of vacant HDB flats has fallen of late.
Mr Ku highlighted that recent suburban condominiums like The Parc condominium in the West Coast and The Soleil at Novena had sold well, 'even though this is traditionally a quiet month for property sales'.
The successful developer will be required to build a minimum of 30 per cent of the flats with a floor area of 95 sq m or less - equivalent to flats of four rooms or smaller.
CBRE Research estimated that the site can yield more than 500 units. CBRE added: 'Given the established residential environment in Ang Mo Kio, together with the known popularity of DBSS units, we expect a good response from mid-sized developers and joint venture of contractors and developers.'
Upon building completion, the successful developer will hand over the entire development site to the HDB for lease administration, and to the Town Council for maintenance of the common areas and car parks.
The tender will close at noon on Tuesday, Nov 27.
The second DBSS site, at Boon Keng Road, was awarded in June. It sold for $233.74 psf ppr - double the $113.64 psf ppr price for the first DBSS site in Tampines sold in Jan 2006.
Fed Officials See Threat To Growth In Sub-Prime Mess
Source : The Business Times, September 12, 2007
Concrete risks of broader slump pose downward pressure on economic activitye
WASHINGTON) Three senior Federal Reserve officials said on Monday that the turmoil in housing and mortgage lending had begun to threaten the overall economy, a condition policy makers have said is the crucial test for deciding whether to lower interest rates at their meeting next Tuesday.
A Fed governor, Frederic Mishkin, told an audience in Manhattan that the risk of a broader downturn 'cannot, in my view, be ruled out' and 'poses an important downside risk to economic activity'.
In unusually direct language for a Fed policy maker, Mr Mishkin said that inflation pressures had become less of a problem - a judgment that, if embraced by other Fed officials, would remove a major argument against lowering interest rates.
'I believe that the risks to the inflation outlook have become more balanced,' he said, 'given the greater downside risks to real growth'. Mr Mishkin is a relatively new member of the Fed board, but he was a well-known specialist in monetary policy at Columbia University with longstanding ties to the chairman of the Federal Reserve, Ben Bernanke. In 1997, while Mr Mishkin and Mr Bernanke were university professors, they wrote a book that called on central banks to base policy around a public target for inflation.
In speeches on Monday, two other Fed officials sent a similar message. Janet Yellen, president of the Federal Reserve Bank of San Francisco, predicted that the housing decline would probably continue and would impose 'significant downward pressure' on consumer spending.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, admitted that an unexpectedly bleak unemployment report on Friday made him more worried about a slump. Neither Mr Lockhart nor Ms Yellen are currently voting members of the Federal Open Market Committee, which sets interest rates. But both sit in on the meetings.
On Wall Street, the debate among analysts was no longer about whether the Fed would reduce rates but by how much.
Several analysts predicted that the central bank will lower the Federal funds rate, for overnight loans between banks, by half of a percentage point, to 4.75 per cent from 5.25 per cent. Until a few days ago, most analysts were betting on a quarter-point cut.
Fed officials in their comments said nothing about how much they wanted to lower rates.
In Monday's speeches, given before the central bank begins a week-long silent period ahead of its policy meeting, several made it clear they now see concrete risks of a downturn.
In Atlanta, Mr Lockhart went so far as to retreat from a more optimistic stance he had taken a few days ago. He said last Thursday that he had not seen any 'conclusive signs of weakness in the broader economy'. On Monday, he delivered the same speech but acknowledged that he had been jolted by last Friday's surprisingly dismal report that the economy had shed 4,000 jobs in August.
In her speech, Ms Yellen said that a housing downturn and tighter credit were likely to cause 'significant downward pressure' on consumer spending and thus on economic growth.
'The financial market turmoil seems likely to intensify the downturn in housing,' she predicted. Even if investors overcome some of their fears, mortgage rates are likely to remain higher on a long-term basis and could continue to push housing prices down. -- NYT
Concrete risks of broader slump pose downward pressure on economic activitye
WASHINGTON) Three senior Federal Reserve officials said on Monday that the turmoil in housing and mortgage lending had begun to threaten the overall economy, a condition policy makers have said is the crucial test for deciding whether to lower interest rates at their meeting next Tuesday.
A Fed governor, Frederic Mishkin, told an audience in Manhattan that the risk of a broader downturn 'cannot, in my view, be ruled out' and 'poses an important downside risk to economic activity'.
In unusually direct language for a Fed policy maker, Mr Mishkin said that inflation pressures had become less of a problem - a judgment that, if embraced by other Fed officials, would remove a major argument against lowering interest rates.
'I believe that the risks to the inflation outlook have become more balanced,' he said, 'given the greater downside risks to real growth'. Mr Mishkin is a relatively new member of the Fed board, but he was a well-known specialist in monetary policy at Columbia University with longstanding ties to the chairman of the Federal Reserve, Ben Bernanke. In 1997, while Mr Mishkin and Mr Bernanke were university professors, they wrote a book that called on central banks to base policy around a public target for inflation.
In speeches on Monday, two other Fed officials sent a similar message. Janet Yellen, president of the Federal Reserve Bank of San Francisco, predicted that the housing decline would probably continue and would impose 'significant downward pressure' on consumer spending.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, admitted that an unexpectedly bleak unemployment report on Friday made him more worried about a slump. Neither Mr Lockhart nor Ms Yellen are currently voting members of the Federal Open Market Committee, which sets interest rates. But both sit in on the meetings.
On Wall Street, the debate among analysts was no longer about whether the Fed would reduce rates but by how much.
Several analysts predicted that the central bank will lower the Federal funds rate, for overnight loans between banks, by half of a percentage point, to 4.75 per cent from 5.25 per cent. Until a few days ago, most analysts were betting on a quarter-point cut.
Fed officials in their comments said nothing about how much they wanted to lower rates.
In Monday's speeches, given before the central bank begins a week-long silent period ahead of its policy meeting, several made it clear they now see concrete risks of a downturn.
In Atlanta, Mr Lockhart went so far as to retreat from a more optimistic stance he had taken a few days ago. He said last Thursday that he had not seen any 'conclusive signs of weakness in the broader economy'. On Monday, he delivered the same speech but acknowledged that he had been jolted by last Friday's surprisingly dismal report that the economy had shed 4,000 jobs in August.
In her speech, Ms Yellen said that a housing downturn and tighter credit were likely to cause 'significant downward pressure' on consumer spending and thus on economic growth.
'The financial market turmoil seems likely to intensify the downturn in housing,' she predicted. Even if investors overcome some of their fears, mortgage rates are likely to remain higher on a long-term basis and could continue to push housing prices down. -- NYT
Slower Asean Growth Seen Next Year
Source : The Business Times, September 12, 2007
(SINGAPORE) Investment bank Morgan Stanley has cut its forecasts for next year's economic growth in Singapore and the rest of the Asean region, saying that what were once 'rising risks' from the US housing slowdown and sub-prime mortgages crisis have 'become reality'.
The US bank does say, though, that the effects of the downturn will not be as bad as in some previous crises.
Morgan Stanley's US economists now expect 'a deeper and longer housing recession' to squeeze consumer and business spending, meaning that US growth is likely to average just 2 per cent over the next six quarters - 0.6 of a point below estimates made just a month ago.
'We believe this will weigh on external demand and business investment growth for the Asean region,' the bank says in an Asean Economics report. But Asean growth will slow less than proportionately as the region is headed for a 'soft decoupling' from the US, it says.
The US share in Asean exports has fallen, and domestic demand has picked up of late, it notes.
Still, it has cut Asean 2008 GDP growth to 5.6 per cent, from an earlier estimate of 5.9 per cent, and from a projected 6 per cent pace for 2007.
Going by trade linkages, the impact of a US slowdown will be most severe for Singapore, it says, followed by Malaysia, and least severe for Indonesia and the Philippines.
The US bank has cut its 2008 GDP growth forecasts for Singapore and Indonesia by 0.4 of a point each to 6.1 and 5.9 per cent. Its estimate of Singapore's growth this year is 7.7 per cent, within the official 7-8 per cent band.
For Malaysia, the 2008 growth forecast has been lowered by 0.3 of a point to 5.5 per cent. The estimates for the Philippines and Thailand have been reduced by 0.2 of a point each to 5.6 and 4.8 per cent respectively.
'We believe that if the US economy goes through a soft landing, the Asean region will see a soft decoupling (ie, GDP growth decelerates but in less than proportionate manner).
'The key risk to this outlook is the potential significant turbulence in the US financial markets transmitting to Asean financial markets.'
(SINGAPORE) Investment bank Morgan Stanley has cut its forecasts for next year's economic growth in Singapore and the rest of the Asean region, saying that what were once 'rising risks' from the US housing slowdown and sub-prime mortgages crisis have 'become reality'.
The US bank does say, though, that the effects of the downturn will not be as bad as in some previous crises.
Morgan Stanley's US economists now expect 'a deeper and longer housing recession' to squeeze consumer and business spending, meaning that US growth is likely to average just 2 per cent over the next six quarters - 0.6 of a point below estimates made just a month ago.
'We believe this will weigh on external demand and business investment growth for the Asean region,' the bank says in an Asean Economics report. But Asean growth will slow less than proportionately as the region is headed for a 'soft decoupling' from the US, it says.
The US share in Asean exports has fallen, and domestic demand has picked up of late, it notes.
Still, it has cut Asean 2008 GDP growth to 5.6 per cent, from an earlier estimate of 5.9 per cent, and from a projected 6 per cent pace for 2007.
Going by trade linkages, the impact of a US slowdown will be most severe for Singapore, it says, followed by Malaysia, and least severe for Indonesia and the Philippines.
The US bank has cut its 2008 GDP growth forecasts for Singapore and Indonesia by 0.4 of a point each to 6.1 and 5.9 per cent. Its estimate of Singapore's growth this year is 7.7 per cent, within the official 7-8 per cent band.
For Malaysia, the 2008 growth forecast has been lowered by 0.3 of a point to 5.5 per cent. The estimates for the Philippines and Thailand have been reduced by 0.2 of a point each to 5.6 and 4.8 per cent respectively.
'We believe that if the US economy goes through a soft landing, the Asean region will see a soft decoupling (ie, GDP growth decelerates but in less than proportionate manner).
'The key risk to this outlook is the potential significant turbulence in the US financial markets transmitting to Asean financial markets.'
Ang Mo Kio Condo Site Sets Record
Source : The Business Times, September 12, 2007
Far East's $202.9m winning bid means suburban project may eventually launch at over $1,100 psf
(SINGAPORE) A plum condominium site in the heart of Ang Mo Kio has set a new record for suburban land prices, fetching some $601 per square foot per plot ratio (psf ppr).
And when the project is eventually launched, it could set a record for private home prices outside the central areas, analysts said.
Yesterday, HDB said that Far East Organization put in the top bid for the 0.6-ha mass market condo site at Ang Mo Kio Avenue 8. The developer beat 13 other bidders with its bullish offer of $202.9 million - which works out to $601 psf ppr .
'The price is probably the highest paid for a suburban site in recent years,' said Donald Han, managing director of property firm Cushman & Wakefield.
Analysts said that Far East's bid for the 99-year leasehold site beat market predictions that the top bid would be around $500 psf ppr.
Far East's break-even cost for the site is now estimated to be in the region of $900-$1,000 psf, which means that units in the project could eventually be launched at $1,100-$1,200 psf - a record for private home prices in the suburbs.
'If Far East can achieve prices of around $1,200 psf for the project, then yes, it will be a record for the suburban areas,' said Ku Swee Yong, Savills Singapore's director of marketing and business development.
By comparison, units in other projects in the vicinity - albeit in less attractive locations - are mostly going for around $400-$600 psf.
Far East's bid was 11.8 per cent higher than the next highest bid of $538 psf ppr put in by Chip Eng Seng.
The bid was 68.9 per cent higher than the lowest bid of $356 psf ppr bid jointly put in by Wing Tai Holdings and United Engineers.
Far East also beat out other big names such as CapitaLand, Hong Leong Group and Frasers Centrepoint.
Experts said that the high prices and large number of bids signalled that developers had confidence in the strengthening suburban residential market - notwithstanding the US sub-prime mortgage fears that rattled stock markets here.
The plot also drew strong interest due to its good location. It is situated right next to Ang Mo Kio MRT station, and is just 15 minutes away from Orchard by train.
'With an increase of 4.2 per cent in overall HDB resale prices in the past six months, more HDB households would be poised to upgrade to this conveniently located private development,' said Li Hiaw Ho, executive director at CB Richard Ellis' research unit.
Units in the project could be sought-after by HDB upgraders in the Bishan and Toa Payoh estates - where HDB resale prices command a premium - as well as Ang Mo Kio itself, Mr Li said.
In addition, the project may also prove to be attractive to private homeowners in Serangoon and the Thomson/Upper Thomson Road areas, he added.
The site, which was on the government's reserve list, was launched in July after an unnamed developer bid $102 million, or $302 psf ppr area for it.
Far East's $202.9m winning bid means suburban project may eventually launch at over $1,100 psf
(SINGAPORE) A plum condominium site in the heart of Ang Mo Kio has set a new record for suburban land prices, fetching some $601 per square foot per plot ratio (psf ppr).And when the project is eventually launched, it could set a record for private home prices outside the central areas, analysts said.
Yesterday, HDB said that Far East Organization put in the top bid for the 0.6-ha mass market condo site at Ang Mo Kio Avenue 8. The developer beat 13 other bidders with its bullish offer of $202.9 million - which works out to $601 psf ppr .
'The price is probably the highest paid for a suburban site in recent years,' said Donald Han, managing director of property firm Cushman & Wakefield.
Analysts said that Far East's bid for the 99-year leasehold site beat market predictions that the top bid would be around $500 psf ppr.
Far East's break-even cost for the site is now estimated to be in the region of $900-$1,000 psf, which means that units in the project could eventually be launched at $1,100-$1,200 psf - a record for private home prices in the suburbs.
'If Far East can achieve prices of around $1,200 psf for the project, then yes, it will be a record for the suburban areas,' said Ku Swee Yong, Savills Singapore's director of marketing and business development.
By comparison, units in other projects in the vicinity - albeit in less attractive locations - are mostly going for around $400-$600 psf.
Far East's bid was 11.8 per cent higher than the next highest bid of $538 psf ppr put in by Chip Eng Seng.
The bid was 68.9 per cent higher than the lowest bid of $356 psf ppr bid jointly put in by Wing Tai Holdings and United Engineers.
Far East also beat out other big names such as CapitaLand, Hong Leong Group and Frasers Centrepoint.
Experts said that the high prices and large number of bids signalled that developers had confidence in the strengthening suburban residential market - notwithstanding the US sub-prime mortgage fears that rattled stock markets here.
The plot also drew strong interest due to its good location. It is situated right next to Ang Mo Kio MRT station, and is just 15 minutes away from Orchard by train.
'With an increase of 4.2 per cent in overall HDB resale prices in the past six months, more HDB households would be poised to upgrade to this conveniently located private development,' said Li Hiaw Ho, executive director at CB Richard Ellis' research unit.
Units in the project could be sought-after by HDB upgraders in the Bishan and Toa Payoh estates - where HDB resale prices command a premium - as well as Ang Mo Kio itself, Mr Li said.
In addition, the project may also prove to be attractive to private homeowners in Serangoon and the Thomson/Upper Thomson Road areas, he added.
The site, which was on the government's reserve list, was launched in July after an unnamed developer bid $102 million, or $302 psf ppr area for it.
When Good News Doesn't Excite
Source : The Business Times, September 12, 2007
BANKS here should be cheering record loans growth; instead, they have borne the brunt of the sub-prime debacle.
According to a DBS Group Research note, banks' loans growth has hit an all-time high, rising nearly 11 per cent from a year ago. Consumer loans - in particular, housing loans - grew the strongest since August 2005.
Normally, this would have been enough to send bank stocks soaring. However, banks have seen their shares fluctuate wildly with every mere mention of any exposure to the sub-prime market through investments in collateralised debt obligations, or CDOs. Investors are shying away from picking up bank shares should there be more repercussions from the crisis in the US.
To be fair, banks here have been quick off the mark to announce how much they hold in direct exposure to the sub-prime market.
Now the issue is to find out how much they hold in terms of non-direct exposure to CDOs through special investment vehicles or bank-sponsored conduits which hold asset-backed commercial paper, which is a type of corporate debt. Banks are responsible for the assets if there are no investors in the commercial paper. These vehicles have invested in CDOs and thus pose a risk to the banks too.
Last month, DBS stock fell after investors learned about DBS's increased exposure to CDOs through a $1.4 billion asset-backed commercial paper conduit called Red Orchid Secured Assets.
DBS's total exposure to CDOs of $2.4 billion was almost double its original amount disclosed earlier. Its bank spokesman clarified that it had not included the $1.1 billion in its previous estimate of $1.3 billion of direct exposure to CDOs, because the vehicle was fully funded by short-term commercial paper sold to third-party investors. The risk of the CDOs rested with those investors, not DBS.
However, with the turbulence in credit markets spreading to commercial paper, there was a risk that DBS would have to make up any shortfall in funding if it failed to find buyers for the commercial paper, which is due for renewal soon. This would mean DBS would bear the risk of the underlying CDOs equivalent to the level of funding it needs to add.
Other banks, UOB and OCBC, have come out to say that they have no such similar special conduits invested in CDOs.
Although numerous analyst reports have also come out to say that Asian banks' exposure to the sub-prime market is manageable, and that the local banks have been very transparent about their CDO holdings, the race is on for banks here to find out exactly how much they are exposed to, especially indirectly.
As DBS's case had earlier shown, it was not in the line of fire since the risk of the CDOs belonged to investors holding the commercial paper. But as the contagion effect quickly spreads, banks find themselves in a hot spot as they have to provide back-up funding. As sub-prime fears threaten to overwhelm other issues, it seems banks' share prices are now dependent on how timely and comprehensive their information is on risks they may face in the sub-prime space.
BANKS here should be cheering record loans growth; instead, they have borne the brunt of the sub-prime debacle.
According to a DBS Group Research note, banks' loans growth has hit an all-time high, rising nearly 11 per cent from a year ago. Consumer loans - in particular, housing loans - grew the strongest since August 2005.
Normally, this would have been enough to send bank stocks soaring. However, banks have seen their shares fluctuate wildly with every mere mention of any exposure to the sub-prime market through investments in collateralised debt obligations, or CDOs. Investors are shying away from picking up bank shares should there be more repercussions from the crisis in the US.
To be fair, banks here have been quick off the mark to announce how much they hold in direct exposure to the sub-prime market.
Now the issue is to find out how much they hold in terms of non-direct exposure to CDOs through special investment vehicles or bank-sponsored conduits which hold asset-backed commercial paper, which is a type of corporate debt. Banks are responsible for the assets if there are no investors in the commercial paper. These vehicles have invested in CDOs and thus pose a risk to the banks too.
Last month, DBS stock fell after investors learned about DBS's increased exposure to CDOs through a $1.4 billion asset-backed commercial paper conduit called Red Orchid Secured Assets.
DBS's total exposure to CDOs of $2.4 billion was almost double its original amount disclosed earlier. Its bank spokesman clarified that it had not included the $1.1 billion in its previous estimate of $1.3 billion of direct exposure to CDOs, because the vehicle was fully funded by short-term commercial paper sold to third-party investors. The risk of the CDOs rested with those investors, not DBS.
However, with the turbulence in credit markets spreading to commercial paper, there was a risk that DBS would have to make up any shortfall in funding if it failed to find buyers for the commercial paper, which is due for renewal soon. This would mean DBS would bear the risk of the underlying CDOs equivalent to the level of funding it needs to add.
Other banks, UOB and OCBC, have come out to say that they have no such similar special conduits invested in CDOs.
Although numerous analyst reports have also come out to say that Asian banks' exposure to the sub-prime market is manageable, and that the local banks have been very transparent about their CDO holdings, the race is on for banks here to find out exactly how much they are exposed to, especially indirectly.
As DBS's case had earlier shown, it was not in the line of fire since the risk of the CDOs belonged to investors holding the commercial paper. But as the contagion effect quickly spreads, banks find themselves in a hot spot as they have to provide back-up funding. As sub-prime fears threaten to overwhelm other issues, it seems banks' share prices are now dependent on how timely and comprehensive their information is on risks they may face in the sub-prime space.
Reits And Oil Stocks Soar
Source : TODAY, Wednesday, September 12, 2007
But STI’s trading volume still thin as investors remain cautious
WEAKNESS in Wall Street and a sharp fall in China shares failed to dent sentiment at the Singapore Exchange, with real estate investment trusts (Reits) and marine and oil-related stocks boosting the Straits Times Index (STI).
Trading volume remained thin, however, reflecting a still cautious stance amid a murky global economic outlook.
The STI closed up 1.5 per cent at 3,494.57, below a two-month high of 3,500. Winners outnumbered losers 465 to 311. Volume was thin at 2.8 billion shares, but was higher than Monday’s 2.4 billion shares.
Chinese share prices closed 4.51 per cent lower after data showed inflation had spiked in August, raising expectations of more interest rate hikes, dealers there said.
Investors are also awaiting next Tuesday’s meeting of the United States Federal Reserve as leading US economists foresee softening growth that will lead the Fed to cut interest rates.
Some investors believe Asia is well-placed to weather a slowdown.
“Markets here can withstand the rout better than the rest of the world (given) Asia’s contribution to the global economy,” DMG Partners dealing director Gabriel Yap said.
Singapore Reits soared during the day, following bullish reports on their prospects by UBS and Citigroup. UBS selected Capita-Mall Trust and CapitaCommercial Trust among its top picks. Citigroup upgraded Ascendas Reit to “Buy” from “Hold”, saying its valuation looked attractive.
Shares of CapitaMall Trust closed up 4.7 per cent at $3.60, while CapitaCommercial closed at $2.72, up 4.6 per cent. Ascendas Reit ended 3.6 per cent higher at $2.60.
Marine and oil-related stocks closed up on bargain hunting and growth prospects. KeppelCorp added 1.5 per cent to $13.20, while its smaller rival SembCorp Marine climbed 2.5 per cent to $4.54. Singapore Petroleum, a refiner and explorer, rose 3.3 per cent to $6.20.— AGENCIES
But STI’s trading volume still thin as investors remain cautious
WEAKNESS in Wall Street and a sharp fall in China shares failed to dent sentiment at the Singapore Exchange, with real estate investment trusts (Reits) and marine and oil-related stocks boosting the Straits Times Index (STI).
Trading volume remained thin, however, reflecting a still cautious stance amid a murky global economic outlook.
The STI closed up 1.5 per cent at 3,494.57, below a two-month high of 3,500. Winners outnumbered losers 465 to 311. Volume was thin at 2.8 billion shares, but was higher than Monday’s 2.4 billion shares.
Chinese share prices closed 4.51 per cent lower after data showed inflation had spiked in August, raising expectations of more interest rate hikes, dealers there said.
Investors are also awaiting next Tuesday’s meeting of the United States Federal Reserve as leading US economists foresee softening growth that will lead the Fed to cut interest rates.
Some investors believe Asia is well-placed to weather a slowdown.
“Markets here can withstand the rout better than the rest of the world (given) Asia’s contribution to the global economy,” DMG Partners dealing director Gabriel Yap said.
Singapore Reits soared during the day, following bullish reports on their prospects by UBS and Citigroup. UBS selected Capita-Mall Trust and CapitaCommercial Trust among its top picks. Citigroup upgraded Ascendas Reit to “Buy” from “Hold”, saying its valuation looked attractive.
Shares of CapitaMall Trust closed up 4.7 per cent at $3.60, while CapitaCommercial closed at $2.72, up 4.6 per cent. Ascendas Reit ended 3.6 per cent higher at $2.60.
Marine and oil-related stocks closed up on bargain hunting and growth prospects. KeppelCorp added 1.5 per cent to $13.20, while its smaller rival SembCorp Marine climbed 2.5 per cent to $4.54. Singapore Petroleum, a refiner and explorer, rose 3.3 per cent to $6.20.— AGENCIES
Annuities : Means To Lifelong Income
Source : TODAY, Wednesday, September 12, 2007
Annuity helps one to better budget; here’s how to make the concept more palatable
Letter from TONY NG LYE HOCK
HAVING been a life insurance advisor for the last 23 years has helped me appreciate the magic and beauty of annuities. It is really an important instrument to help us continue to live with pride and dignity when we live too long.
I would like to take this “annuity sharing” period to share some of my personal views as to why the take up rate is not well received. The payout is deemed to be unattractive when compared to past annuity policies and/or the interest given by the CPF Board.
Most people also do not believe they will live long enough to enjoy the money. And there are not enough statistics, education and information to enlighten the insuring public that living beyond 80 or 85 in the future is realistic. A number also do not have enough to set aside the money required.
But in reality, annuity is an important tool for lifelong income. Some of your investments may fail you or because of poor budgeting, your cash may deplete faster than anticipated; at least you still have an annuity for support.
Some, if not most individuals do not know how to manage their money. For whatever reasons, they squander the money upon retirement. Annuity helps one to “budget” better because the amount received is fixed and regular. Locking away money will prevent “others” from preying on your money — this gives you a good reason to tell them that you have no money.
I have a few suggestions on how the Government can make the annuity concept more palatable for the public.
It will be a good gesture if the Government could lead by contributing a certain percentage to the CPF member’s retirement account. Risk sharing and pooling must be deemed to be shouldered by all stakeholders.
The compulsory annuity can be modelled after the Medishield concept implemented by the Health Ministry together with insurers. The minimum amount can be administered by the CPF Board while the enhancement is done by insurers. Only with economies of scale and avoiding “cherry picking” will this be sustainable in the long term.
The Government should also provide more education and statistics to the insuring public about longevity, for instance, the estimated number of citizens, say above age 75 or 80, that are alive annually.
Insurers can be given incentives to come up with better schemes, and those who purchase an annuity earlier can also be given incentives such as annuity bonus or annuity vouchers.
I am sure with proper education, incentives and flexibility, the public will learn to appreciate, understand and embrace the importance of having an annuity.
Annuity helps one to better budget; here’s how to make the concept more palatable
Letter from TONY NG LYE HOCK
HAVING been a life insurance advisor for the last 23 years has helped me appreciate the magic and beauty of annuities. It is really an important instrument to help us continue to live with pride and dignity when we live too long.I would like to take this “annuity sharing” period to share some of my personal views as to why the take up rate is not well received. The payout is deemed to be unattractive when compared to past annuity policies and/or the interest given by the CPF Board.
Most people also do not believe they will live long enough to enjoy the money. And there are not enough statistics, education and information to enlighten the insuring public that living beyond 80 or 85 in the future is realistic. A number also do not have enough to set aside the money required.
But in reality, annuity is an important tool for lifelong income. Some of your investments may fail you or because of poor budgeting, your cash may deplete faster than anticipated; at least you still have an annuity for support.
Some, if not most individuals do not know how to manage their money. For whatever reasons, they squander the money upon retirement. Annuity helps one to “budget” better because the amount received is fixed and regular. Locking away money will prevent “others” from preying on your money — this gives you a good reason to tell them that you have no money.
I have a few suggestions on how the Government can make the annuity concept more palatable for the public.
It will be a good gesture if the Government could lead by contributing a certain percentage to the CPF member’s retirement account. Risk sharing and pooling must be deemed to be shouldered by all stakeholders.
The compulsory annuity can be modelled after the Medishield concept implemented by the Health Ministry together with insurers. The minimum amount can be administered by the CPF Board while the enhancement is done by insurers. Only with economies of scale and avoiding “cherry picking” will this be sustainable in the long term.
The Government should also provide more education and statistics to the insuring public about longevity, for instance, the estimated number of citizens, say above age 75 or 80, that are alive annually.
Insurers can be given incentives to come up with better schemes, and those who purchase an annuity earlier can also be given incentives such as annuity bonus or annuity vouchers.
I am sure with proper education, incentives and flexibility, the public will learn to appreciate, understand and embrace the importance of having an annuity.
Real Estate Work Is No Walk In The Park
Source : TODAY, Wednesday, September 12, 2007
Letter from K SUDHAKARAN
I READ with interest the barrage of letters against real estate agents (“Rein in unscrupulous agents”, Sept 10). Such views just represent one side of the story.
Housing is a basic need and a very emotional issue, especially in this active property market. Given that an agent’s task is to manage the expectations and the needs of the owner/landlord and buyer/tenant, there will always be parties who feel aggrieved when decisions do not go their way.
But let us not forget that the real estate agent’s authority to act by a real estate agent comes from the landlord/owner or tenant/ buyer and often, an agent is only a messenger of a decision made by the person he is acting for.
A real estate agent is also faced with indecisive and difficult sellers or buyers who can be more transparent about their needs or be genuine about their intentions. So don’t always shoot the messenger.
This is not to suggest that there are no errant agents.
Some agents may devise unlawful or morally incorrect methods to improve their commission. The transacting parties must therefore confront such agents and complain to the relevant authorities.
But then again, is there a perfect market for any business? From the hawker to the banker, there will always be persons acting outside accepted boundaries.
The reality is that the real estate business is not a stroll in the park.
Real estate work often involves time, costs and loads of disappointment that buyers or sellers venturing out on their own are unable to grapple with.
A real estate agent is able to take this load of your mind for a fee. This is business.
Letter from K SUDHAKARAN
I READ with interest the barrage of letters against real estate agents (“Rein in unscrupulous agents”, Sept 10). Such views just represent one side of the story.
Housing is a basic need and a very emotional issue, especially in this active property market. Given that an agent’s task is to manage the expectations and the needs of the owner/landlord and buyer/tenant, there will always be parties who feel aggrieved when decisions do not go their way.
But let us not forget that the real estate agent’s authority to act by a real estate agent comes from the landlord/owner or tenant/ buyer and often, an agent is only a messenger of a decision made by the person he is acting for.
A real estate agent is also faced with indecisive and difficult sellers or buyers who can be more transparent about their needs or be genuine about their intentions. So don’t always shoot the messenger.
This is not to suggest that there are no errant agents.
Some agents may devise unlawful or morally incorrect methods to improve their commission. The transacting parties must therefore confront such agents and complain to the relevant authorities.
But then again, is there a perfect market for any business? From the hawker to the banker, there will always be persons acting outside accepted boundaries.
The reality is that the real estate business is not a stroll in the park.
Real estate work often involves time, costs and loads of disappointment that buyers or sellers venturing out on their own are unable to grapple with.
A real estate agent is able to take this load of your mind for a fee. This is business.
Colin Ng & Partners Says Its Lawyer Absconded With $32,484
Source : The Business Times, 11 Sep 2007
A SINGAPORE law firm has reported the disappearance of one of its lawyers, along with a quantity of a client’s money. Unknown to his employer, legal assistant Victor Tan, had been made bankrupt last month.
Medium-sized law firm Colin Ng & Partners (CNP) yesterday said that legal assistant Victor Tan, who is not a partner, had apparently absconded with the sum of $32,484 which a foreign client had sent in relation to a property transaction.
‘Victor Tan did not deposit the cash into the firm’s clients’ account nor informed anyone in the firm that he had received the cash from the client. This is a violation of the firm’s policies and procedures,’ the law firm said in a statement to the press.
‘In this case, Victor Tan apparently arranged by himself to meet the client alone and did not inform anyone when he received the cash directly from the client. As the monies were never placed into the firm’s account nor made known to anyone else in the firm, the firm’s accounts department was unaware of the same and therefore not in the position to monitor the same,’ CNP said.
The firm said that it was only when the matter was made aware to the partners on Sept 3 that it was also discovered that Mr Tan, who is in his 40s, had been made a bankrupt on Aug 17. He joined the firm in March, 2005.
‘Upon learning of the above, the firm had also on the same day, consulted The Law Society of Singapore and on 4 September 2007, the firm made a police report. Police investigations are still pending.
‘The firm had also on 4 September 2007 terminated Victor Tan’s employment with the firm as the firm takes a strict and serious view against such misconduct on the part of its staff,’ CNP said.
The firm said that it has in place stringent systems and processes to safeguard monies placed in its clients’ account. These systems and processes are in line with the Legal Profession (Solicitor Accounts) Rules, Legal Profession (Deposit Interest) Rules and Legal Profession (Solicitors Trust Accounts) Rules and are strictly implemented and monitored, it said.
In this latest case of a disappearing lawyer, CNP’s client did not suffer any loss and her property matter has been completed.
In an earlier case, clients of lawyer David Rasif are now fighting it out in the courts to recover the $10 million or so that he disappeared with.
And last month, another lawyer, from the firm of Sim & Wong, allegedly left town with $68,000 from the account of a client at a previous firm.
A SINGAPORE law firm has reported the disappearance of one of its lawyers, along with a quantity of a client’s money. Unknown to his employer, legal assistant Victor Tan, had been made bankrupt last month.
Medium-sized law firm Colin Ng & Partners (CNP) yesterday said that legal assistant Victor Tan, who is not a partner, had apparently absconded with the sum of $32,484 which a foreign client had sent in relation to a property transaction.
‘Victor Tan did not deposit the cash into the firm’s clients’ account nor informed anyone in the firm that he had received the cash from the client. This is a violation of the firm’s policies and procedures,’ the law firm said in a statement to the press.
‘In this case, Victor Tan apparently arranged by himself to meet the client alone and did not inform anyone when he received the cash directly from the client. As the monies were never placed into the firm’s account nor made known to anyone else in the firm, the firm’s accounts department was unaware of the same and therefore not in the position to monitor the same,’ CNP said.
The firm said that it was only when the matter was made aware to the partners on Sept 3 that it was also discovered that Mr Tan, who is in his 40s, had been made a bankrupt on Aug 17. He joined the firm in March, 2005.
‘Upon learning of the above, the firm had also on the same day, consulted The Law Society of Singapore and on 4 September 2007, the firm made a police report. Police investigations are still pending.
‘The firm had also on 4 September 2007 terminated Victor Tan’s employment with the firm as the firm takes a strict and serious view against such misconduct on the part of its staff,’ CNP said.
The firm said that it has in place stringent systems and processes to safeguard monies placed in its clients’ account. These systems and processes are in line with the Legal Profession (Solicitor Accounts) Rules, Legal Profession (Deposit Interest) Rules and Legal Profession (Solicitors Trust Accounts) Rules and are strictly implemented and monitored, it said.
In this latest case of a disappearing lawyer, CNP’s client did not suffer any loss and her property matter has been completed.
In an earlier case, clients of lawyer David Rasif are now fighting it out in the courts to recover the $10 million or so that he disappeared with.
And last month, another lawyer, from the firm of Sim & Wong, allegedly left town with $68,000 from the account of a client at a previous firm.
Q3 May See Slowdown In Private Home Sales
Source : The Business Times, 12 Sept 2007
But new launches may accelerate activity again, say market watchers.
Private home sales are expected to slow this quarter - the result of the twin effects of the US sub-prime woes which made the headlines in August and the just-ended Hungry Ghost month.
But the pace of activity is expected to pick up again as developers step up launches and confidence recovers, say property market watchers.
Fresh price benchmarks may still be set for projects offering compelling propositions, but developers are likely to tread carefully before upping prices.
CB Richard Ellis (CBRE) estimates that the total number of new private homes sold by developers in the primary market during Q3 will be 3,500-4,000 units including sales from ongoing projects. This is lower than the 5,129 units sold in Q2 and 4,783 units transacted in Q1 this year.
Activity also decelerated in the secondary market in Q3. ‘Whereas the first and second quarters saw resale volumes of 4,645 units and 6,514 units respectively, it is likely that Q3 figures will be lower, probably in the region of 4,000 to 4,500 units,’ CBRE executive director Li Hiaw Ho says.
‘Anecdotal evidence suggests that subsale activities have been muted as investors become more cautious,’ Mr Li added. Subsales as a percentage of total private housing sales are likely to fall below the 7.4 per cent and 9.7 per cent in Q1 and Q2, he predicts.
Subsales, often used as a gauge of speculative activity, involve projects that have yet to receive a Certificate of Statutory Completion, while resales, which are also secondary-market transactions, cover completed developments.
But the current slowdown in activity is not such a bad thing, says DTZ Debenham Tie Leung executive director Ong Choon Fah.
‘The market has been going up quite dramatically. It’s good that people step back and evaluate their positions before moving on. This window also creates an opportunity for people to enter the market. When the market is so hot, everytime you put in an offer at the seller’s asking price, he raises his price,’ she says.
Ong Chong Hua, executive director of Ho Bee Investment, also describes the current slowdown as ‘a healthy consolidation after a robust period of growth in sales volumes as well as prices’.
‘Activity will start picking up slowly and I think confidence will come back, as developers start launching more projects. Buyers will be cautious but underlying demand is still strong. The share market seems to have consolidated and strong economic fundamentals are still in place for Singapore and the Asian region,’ he said.
Among the projects expected to be released soon are MCL Land’s Hillcrest Villas cluster terrace homes along Dunearn Road, Ho Bee’s Turquoise condo at Sentosa Cove, Bukit Sembawang’s Paterson Suites and SC Global’s Hilltops in so said to have Cairnhill. CapitaLand is albegun selling Latitude at Jalan Mutiara at around $2,800 per square foot on average.
Projects that are slated for launch in Q4 include Lippo’s condo on Sentosa Cove, Ritz-Carlton Residences at Cairnhill, and the second phase of Marina Bay Financial Centre.
Says DTZ’s Mrs Ong: ‘Sales activity may be slow for the next couple of months, but this will depend on the type of projects launched and their price points. If developers release projects that are targeted at home owners, demand is still very much there. But if they’re targeting investors or want to set benchmark prices, buyers will take a longer time to consider.’
Ho Bee’s Mr Ong said: ‘Developers will definitely be more cautious in moving up prices and trying to set benchmarks all the time. They will test the waters.
‘But I don’t think anybody will cut prices because fundamentals are still strong. There’s still a shortage of homes, with a lot of those who sold their homes in en bloc sales looking for replacement properties.’
CBRE’s executive director (residential) Joseph Tan reckons that the market could still see benchmark prices if the right kind of products are offered, such as branded residences.
Looking to the final quarter of 2007, the residential market will remain active as the government’s projected economic growth rate of 7 to 8 per cent for 2007 remains on track. ‘If developers sell around 3,000 to 4,000 units in Q4, then the total number of new homes sold in 2007 will be a new record of 17,000 to 18,000 units,’ CBRE’s Mr Li said.
This will be significantly higher than the 11,147 units sold in the primary market last year.
But new launches may accelerate activity again, say market watchers.
Private home sales are expected to slow this quarter - the result of the twin effects of the US sub-prime woes which made the headlines in August and the just-ended Hungry Ghost month.
But the pace of activity is expected to pick up again as developers step up launches and confidence recovers, say property market watchers.
Fresh price benchmarks may still be set for projects offering compelling propositions, but developers are likely to tread carefully before upping prices.
CB Richard Ellis (CBRE) estimates that the total number of new private homes sold by developers in the primary market during Q3 will be 3,500-4,000 units including sales from ongoing projects. This is lower than the 5,129 units sold in Q2 and 4,783 units transacted in Q1 this year.
Activity also decelerated in the secondary market in Q3. ‘Whereas the first and second quarters saw resale volumes of 4,645 units and 6,514 units respectively, it is likely that Q3 figures will be lower, probably in the region of 4,000 to 4,500 units,’ CBRE executive director Li Hiaw Ho says.
‘Anecdotal evidence suggests that subsale activities have been muted as investors become more cautious,’ Mr Li added. Subsales as a percentage of total private housing sales are likely to fall below the 7.4 per cent and 9.7 per cent in Q1 and Q2, he predicts.
Subsales, often used as a gauge of speculative activity, involve projects that have yet to receive a Certificate of Statutory Completion, while resales, which are also secondary-market transactions, cover completed developments.
But the current slowdown in activity is not such a bad thing, says DTZ Debenham Tie Leung executive director Ong Choon Fah.
‘The market has been going up quite dramatically. It’s good that people step back and evaluate their positions before moving on. This window also creates an opportunity for people to enter the market. When the market is so hot, everytime you put in an offer at the seller’s asking price, he raises his price,’ she says.
Ong Chong Hua, executive director of Ho Bee Investment, also describes the current slowdown as ‘a healthy consolidation after a robust period of growth in sales volumes as well as prices’.
‘Activity will start picking up slowly and I think confidence will come back, as developers start launching more projects. Buyers will be cautious but underlying demand is still strong. The share market seems to have consolidated and strong economic fundamentals are still in place for Singapore and the Asian region,’ he said.
Among the projects expected to be released soon are MCL Land’s Hillcrest Villas cluster terrace homes along Dunearn Road, Ho Bee’s Turquoise condo at Sentosa Cove, Bukit Sembawang’s Paterson Suites and SC Global’s Hilltops in so said to have Cairnhill. CapitaLand is albegun selling Latitude at Jalan Mutiara at around $2,800 per square foot on average.
Projects that are slated for launch in Q4 include Lippo’s condo on Sentosa Cove, Ritz-Carlton Residences at Cairnhill, and the second phase of Marina Bay Financial Centre.
Says DTZ’s Mrs Ong: ‘Sales activity may be slow for the next couple of months, but this will depend on the type of projects launched and their price points. If developers release projects that are targeted at home owners, demand is still very much there. But if they’re targeting investors or want to set benchmark prices, buyers will take a longer time to consider.’
Ho Bee’s Mr Ong said: ‘Developers will definitely be more cautious in moving up prices and trying to set benchmarks all the time. They will test the waters.
‘But I don’t think anybody will cut prices because fundamentals are still strong. There’s still a shortage of homes, with a lot of those who sold their homes in en bloc sales looking for replacement properties.’
CBRE’s executive director (residential) Joseph Tan reckons that the market could still see benchmark prices if the right kind of products are offered, such as branded residences.
Looking to the final quarter of 2007, the residential market will remain active as the government’s projected economic growth rate of 7 to 8 per cent for 2007 remains on track. ‘If developers sell around 3,000 to 4,000 units in Q4, then the total number of new homes sold in 2007 will be a new record of 17,000 to 18,000 units,’ CBRE’s Mr Li said.
This will be significantly higher than the 11,147 units sold in the primary market last year.
Big Fall In Hungry Ghost Month Auctions This Year
Source : The Business Times, 12 Sept 2007
Market conditions cited for sale of only 10 out of 131 properties offered.
OF the 131 properties put up for sale by auction during this year’s Hungry Ghost month, just 10 were sold - for a total value of $9.56 million - new data from property firm Colliers International shows.
This figure is one of the lowest seen in the past 10 years. The Hungry Ghost month was from Aug 13 to Sept 10 this year.
Colliers attributed the low sales volume to the current property market condition, factors affecting the world economy and new government policies - rather than buyers holding back their purchases during the Hungry Ghost month.
‘Given the good property market performance, many sellers have raised their expectations and upped their asking price; this is especially so for properties with en bloc potential,’ said Grace Ng, Colliers’ auctioneer. ‘This, coupled with the newly announced rules governing en bloc sales as well as the stockmarket turmoil amidst the US sub-prime woes, has caused a slowdown in the market as buyers took a cautious stand.’
Just three residential properties were sold during the Hungry Ghost month this year, generating a total sale value of $4.07 million - a far cry from last year’s $108.41 million, which was mainly contributed by the sales of 12 bungalow parcels in Sentosa Cove.
The number of properties put up for auction during the Hungry Ghost month this year - at 131 - was also a substantial 64 per cent drop compared to last year’s Hungry Ghost month.
Last year, the market saw a total of 359 properties being put up for auction sale as the Hungry Ghost month was spread across two calendar months.
Colliers also said that the total number of repossessed properties seen at auction sale during the Hungry Ghost month this year was only 43 - the lowest figure since 1998.
‘This decline is largely due to the buoyant economy and robust property market,’ the firm said. ‘Owners who faced difficulties servicing their loans were able to dispose of their properties in the open market before their bank or financial institution had a chance to repossess their properties.’
However, the auction method continued to be popular with owners for selling their properties during the Hungry Ghost month.
Colliers’ data shows that this year, some 88 properties were put up by owners for auction sale during the period.
This is the second highest number registered in a decade after 2006.
‘The continued high number of owners choosing auction to dispose of their properties indicates that the market is maturing, with an increasing number of property owners becoming less mindful of conventional taboos,’ Ms Ng said.
Market conditions cited for sale of only 10 out of 131 properties offered.
OF the 131 properties put up for sale by auction during this year’s Hungry Ghost month, just 10 were sold - for a total value of $9.56 million - new data from property firm Colliers International shows.
This figure is one of the lowest seen in the past 10 years. The Hungry Ghost month was from Aug 13 to Sept 10 this year.
Colliers attributed the low sales volume to the current property market condition, factors affecting the world economy and new government policies - rather than buyers holding back their purchases during the Hungry Ghost month.
‘Given the good property market performance, many sellers have raised their expectations and upped their asking price; this is especially so for properties with en bloc potential,’ said Grace Ng, Colliers’ auctioneer. ‘This, coupled with the newly announced rules governing en bloc sales as well as the stockmarket turmoil amidst the US sub-prime woes, has caused a slowdown in the market as buyers took a cautious stand.’
Just three residential properties were sold during the Hungry Ghost month this year, generating a total sale value of $4.07 million - a far cry from last year’s $108.41 million, which was mainly contributed by the sales of 12 bungalow parcels in Sentosa Cove.
The number of properties put up for auction during the Hungry Ghost month this year - at 131 - was also a substantial 64 per cent drop compared to last year’s Hungry Ghost month.
Last year, the market saw a total of 359 properties being put up for auction sale as the Hungry Ghost month was spread across two calendar months.
Colliers also said that the total number of repossessed properties seen at auction sale during the Hungry Ghost month this year was only 43 - the lowest figure since 1998.
‘This decline is largely due to the buoyant economy and robust property market,’ the firm said. ‘Owners who faced difficulties servicing their loans were able to dispose of their properties in the open market before their bank or financial institution had a chance to repossess their properties.’
However, the auction method continued to be popular with owners for selling their properties during the Hungry Ghost month.
Colliers’ data shows that this year, some 88 properties were put up by owners for auction sale during the period.
This is the second highest number registered in a decade after 2006.
‘The continued high number of owners choosing auction to dispose of their properties indicates that the market is maturing, with an increasing number of property owners becoming less mindful of conventional taboos,’ Ms Ng said.
Property Boom Far From Over: Kwek Leng Beng
Source : The Business Times, 12 Sept 2007
CITY Developments executive chairman Kwek Leng Beng believes that the property boom here is far from over, despite the current financial market turmoil.
Mr Kwek: 'Crisis means opportunity. I'm a bottom-fisher, I like to go in when the market is bad'
‘The boom actually just started in 2005, and if you’re thinking of a relapse, I don’t think that is possible,’ he told chief executives yesterday at the Forbes Global CEO Conference.
‘Sub-prime has to some extent affected Singapore … there’s a psychological fear of what will happen.’
But ‘our banks are still lending a lot of money’, Mr Kwek noted. ‘They’re a little bit more cautious, but we have plenty of liquidity.
‘The banking and financial systems here are very well controlled … they are well regulated and the central bank has taken action to pre-empt crises like what you’ve seen in sub-prime.’
The property tycoon, who is also chairman of Millennium & Copthorne Hotels, was speaking at a panel discussion on global real estate trends.
He said that, after adjusting for inflation, high-end residential property prices have risen only about 10 per cent in real terms from their lowest level over the past decade, ‘which is not alarming’.
He said: ‘My advice is, look at it realistically - crisis means opportunity. I’m a bottom-fisher, I like to go in when the market is bad.
‘I believe there’s still a lot of upside. The mid-end is still 19 per cent below the peak of ‘96.’
In addition, he said Singapore had introduced a lot of initiatives over the past 10 years to attract foreigners to live and work here, which has fuelled demand for property.
‘You may say it’s very dull, but we are going to have the integrated resorts, Formula One, and a host of other events that will make Singapore an exciting city to live, work and play.’
Other panellists were also optimistic on the prospects for further growth in property development in China, India, and the Middle East.
Vincent Lo, the chairman and chief executive of Hong Kong-based Shui On Group, who was also on the panel, said he was ‘very bullish’ on the property market in China. ‘We have waiting lists for our office space till 2010.’
Kushal Pal Singh, chairman of DLF Group, the largest real estate developer in India, said there remained a ‘huge gap between demand and supply’ of residential property there.
Hayan Merchant, chief executive of Dubai-based Ruwaad Holdings, said the current pace of development in Dubai and the United Arab Emirates more generally was ‘unprecedented’.
The property, hospitality and tourism investment and development company is looking at moving into Asia ‘in the next three to five years’, Mr Merchant told reporters in a separate briefing. He said Ruwaad was looking particularly at Singapore, Malaysia, China and India for expansion opportunities.
CITY Developments executive chairman Kwek Leng Beng believes that the property boom here is far from over, despite the current financial market turmoil.
Mr Kwek: 'Crisis means opportunity. I'm a bottom-fisher, I like to go in when the market is bad' ‘The boom actually just started in 2005, and if you’re thinking of a relapse, I don’t think that is possible,’ he told chief executives yesterday at the Forbes Global CEO Conference.
‘Sub-prime has to some extent affected Singapore … there’s a psychological fear of what will happen.’
But ‘our banks are still lending a lot of money’, Mr Kwek noted. ‘They’re a little bit more cautious, but we have plenty of liquidity.
‘The banking and financial systems here are very well controlled … they are well regulated and the central bank has taken action to pre-empt crises like what you’ve seen in sub-prime.’
The property tycoon, who is also chairman of Millennium & Copthorne Hotels, was speaking at a panel discussion on global real estate trends.
He said that, after adjusting for inflation, high-end residential property prices have risen only about 10 per cent in real terms from their lowest level over the past decade, ‘which is not alarming’.
He said: ‘My advice is, look at it realistically - crisis means opportunity. I’m a bottom-fisher, I like to go in when the market is bad.
‘I believe there’s still a lot of upside. The mid-end is still 19 per cent below the peak of ‘96.’
In addition, he said Singapore had introduced a lot of initiatives over the past 10 years to attract foreigners to live and work here, which has fuelled demand for property.
‘You may say it’s very dull, but we are going to have the integrated resorts, Formula One, and a host of other events that will make Singapore an exciting city to live, work and play.’
Other panellists were also optimistic on the prospects for further growth in property development in China, India, and the Middle East.
Vincent Lo, the chairman and chief executive of Hong Kong-based Shui On Group, who was also on the panel, said he was ‘very bullish’ on the property market in China. ‘We have waiting lists for our office space till 2010.’
Kushal Pal Singh, chairman of DLF Group, the largest real estate developer in India, said there remained a ‘huge gap between demand and supply’ of residential property there.
Hayan Merchant, chief executive of Dubai-based Ruwaad Holdings, said the current pace of development in Dubai and the United Arab Emirates more generally was ‘unprecedented’.
The property, hospitality and tourism investment and development company is looking at moving into Asia ‘in the next three to five years’, Mr Merchant told reporters in a separate briefing. He said Ruwaad was looking particularly at Singapore, Malaysia, China and India for expansion opportunities.
Plenty Of Upside Left In Mid-Tier Property Market: Kwek Leng Beng
Source : The Straits Times, 12 Sept 2007
DESPITE woes in the United States’ housing market, there is still plenty of zing in Singapore’s red-hot property market.
Banks are still lending a lot of cash and mid-tier homes are still on offer at prices below 1996’s peak, says Mr Kwek Leng Beng, executive chairman of leading developers City Developments and Hong Leong Group.
‘I believe that there is still a lot of upside. At the mid-tier, prices are still less than 90 per cent of the peak in 1996,’ he told delegates yesterday at the Forbes Global CEO Conference.
His bullish view was echoed by his counterparts from other parts of Asia, including China, India and the Middle East.
They agreed that real estate remains hot property in their countries even as problems in the US have thrown global financial markets into a tizzy.
‘The (Shanghai) market is very strong because the inherent demand is just tremendous,’ said Hong Kong developer Shui On Group chief executive (CEO) Vincent Lo.
Residences next to the hip Xintiandi area are commanding prices of up to US$10,000 (S$15,236) per sq m, he said, adding that the waiting list for office space in the city stretches to 2010.
In the United Arab Emirates (UAE), property development is growing at unprecedented rates, said Dubai 9 Group managing director Hayan Merchant, noting that 26.5 per cent out of the world’s 130,000 cranes are in the UAE.
About 30 million sq ft of office space will be added in Dubai next year, he said, while another 42 million sq ft - equivalent to all the office space in downtown San Francisco - will come online the following year.
Singapore’s boom should continue even though psychological fears over the ongoing global credit crunch may take a little of the fizz out, said Mr Kwek. He said that lenders in Singapore are a little more cautious but there is still plenty of liquidity.
He added that historic prices over the past 10 years imply that the ‘right’ selling price for top-end properties should be about $3,600 per sq ft on average.
‘We are doing about $4,000. It’s about 10 per cent up, which is not alarming.’
The Government’s efforts to make Singapore a ‘global city’ that attracts foreigners to live here will help sustain the property bull run, he said.
He said that last weekend, he had met a group of foreigners, some of whom were developers, visiting Singapore for the first time. After four or five days, they started asking about buying high-end condominiums and office blocks.
‘All the real estate sectors - industrial, retail, commercial and residential - have kicked off. And this has to do with growing interest in Singapore as a global city.’
DESPITE woes in the United States’ housing market, there is still plenty of zing in Singapore’s red-hot property market.
Banks are still lending a lot of cash and mid-tier homes are still on offer at prices below 1996’s peak, says Mr Kwek Leng Beng, executive chairman of leading developers City Developments and Hong Leong Group. ‘I believe that there is still a lot of upside. At the mid-tier, prices are still less than 90 per cent of the peak in 1996,’ he told delegates yesterday at the Forbes Global CEO Conference.
His bullish view was echoed by his counterparts from other parts of Asia, including China, India and the Middle East.
They agreed that real estate remains hot property in their countries even as problems in the US have thrown global financial markets into a tizzy.
‘The (Shanghai) market is very strong because the inherent demand is just tremendous,’ said Hong Kong developer Shui On Group chief executive (CEO) Vincent Lo.
Residences next to the hip Xintiandi area are commanding prices of up to US$10,000 (S$15,236) per sq m, he said, adding that the waiting list for office space in the city stretches to 2010.
In the United Arab Emirates (UAE), property development is growing at unprecedented rates, said Dubai 9 Group managing director Hayan Merchant, noting that 26.5 per cent out of the world’s 130,000 cranes are in the UAE.
About 30 million sq ft of office space will be added in Dubai next year, he said, while another 42 million sq ft - equivalent to all the office space in downtown San Francisco - will come online the following year.
Singapore’s boom should continue even though psychological fears over the ongoing global credit crunch may take a little of the fizz out, said Mr Kwek. He said that lenders in Singapore are a little more cautious but there is still plenty of liquidity.
He added that historic prices over the past 10 years imply that the ‘right’ selling price for top-end properties should be about $3,600 per sq ft on average.
‘We are doing about $4,000. It’s about 10 per cent up, which is not alarming.’
The Government’s efforts to make Singapore a ‘global city’ that attracts foreigners to live here will help sustain the property bull run, he said.
He said that last weekend, he had met a group of foreigners, some of whom were developers, visiting Singapore for the first time. After four or five days, they started asking about buying high-end condominiums and office blocks.
‘All the real estate sectors - industrial, retail, commercial and residential - have kicked off. And this has to do with growing interest in Singapore as a global city.’
Deadline For Horizon Towers Majority Sellers Lapses On Tue
Source : Channel NewsAsia, 11 September 2007
Owners of units at Horizon Towers had till September 11 to decide on their next move, in the botched en bloc sale.
Channel NewsAsia understands that some owners have written to the buyers, to say that they are prepared to give in to the buyers' demand to extend the sales agreement by another four months.
This was one of the demands made by Hotel Properties (HPL) and its partners, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority.
But under the Sales and Purchase Agreement, the majority sellers of Horizon Towers are not legally obliged to extend the sales contract, even at the request of the buyer.
Allen and Glenhill, lawyers representing the buyers, were not able to confirm whether any letters were received.
It's not clear if the buyers had indeed received letters from some of the sellers.
HPL and its partners are set to sue the 255 owners for up to $4 million each, once the deadline lapses.
A hearing is expected on September 28.
And if that happens, it's believed to be the first time en bloc buyers are taking the sellers to court.
The Leonie Hill Condominium came under the limelight recently for the legal tussle between buyers and sellers.
84% of the owners had signed an agreement with HPL Properties for the en bloc sale of Horizon Towers in February this year for $500 million.
But the sale fell through when the Strata Titles Board threw out the application due to a technicality.
Buyers of the development then sued the owners for failing to put the forms through.
They also alleged that Horizon Towers sellers are now backing out of the deal. - CNA /ls
Owners of units at Horizon Towers had till September 11 to decide on their next move, in the botched en bloc sale. Channel NewsAsia understands that some owners have written to the buyers, to say that they are prepared to give in to the buyers' demand to extend the sales agreement by another four months.
This was one of the demands made by Hotel Properties (HPL) and its partners, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority.
But under the Sales and Purchase Agreement, the majority sellers of Horizon Towers are not legally obliged to extend the sales contract, even at the request of the buyer.
Allen and Glenhill, lawyers representing the buyers, were not able to confirm whether any letters were received.
It's not clear if the buyers had indeed received letters from some of the sellers.
HPL and its partners are set to sue the 255 owners for up to $4 million each, once the deadline lapses.
A hearing is expected on September 28.
And if that happens, it's believed to be the first time en bloc buyers are taking the sellers to court.
The Leonie Hill Condominium came under the limelight recently for the legal tussle between buyers and sellers.
84% of the owners had signed an agreement with HPL Properties for the en bloc sale of Horizon Towers in February this year for $500 million.
But the sale fell through when the Strata Titles Board threw out the application due to a technicality.
Buyers of the development then sued the owners for failing to put the forms through.
They also alleged that Horizon Towers sellers are now backing out of the deal. - CNA /ls
CityDev Says Its Investment In South Beach Project Will Hit S$2.73b
Source : Channel NewsAsia, 11 September 2007
City Developments (CityDev) says its new project at Beach Road will cost at least S$2.73 billion.
The figure was revealed by Executive Chairman Kwek Leng Beng at the Forbes Global CEO Conference on Tuesday.
CityDev and its partners edged out six other contenders for the mixed site at Beach Road with an aggressive bid that promises to add more buzz to the Marina area.
The South Beach development is set to change the landscape at the Marina area.
Related Video Link - http://tinyurl.com/2rqfpn
CityDev says its investment in South Beach project will hit S$2.73b
CityDev and its partners are investing billions of dollars into the project which will stand out not only for its design, but also for its eco-friendly features.
Its subsidiary Scottsdale Properties has partnered Dubai World's Istithmar and US-based El-Ad to build the mixed development by 2012.
The Singapore developer is excited to be working with world-renowned names.
Mr Kwek said: "They came in because they knew me and they wanted a local partner and this is the Plaza owner, the new Plaza owner as well as Dubai World. They came in for the first time and I'm glad that we are able to target these two partners to create more good opportunities for investors all over the world."
As for the current property boom in Singapore, the CityDev chief said it is nowhere near the end of the cycle.
Mr Kwek said: "Prices mean opportunity, as the Chinese say, as Mr Forbes also said last night, and I am a bottom fisher. I like to go in when the market is bad. And I believe there's still a lot of upside. The mid-end is still below 19 per cent from the peak of 1996, and therefore I believe there is a lot of upside."
He added that though the high-end market looked like it has gone up some 70 per cent since the boom started in 2005, that is only 10 per cent in real terms.
Speaking to Channel NewsAsia, he said there is a silver lining to the recent market turmoil. "There was frenzy buying before but with the sub-prime, it's natural that our Singaporean as well as some overseas investors... will be a little bit more cautious. This is good - a win-win situation for the buyers because then they do not need to chase after runaway prices.
"It's good for the developer if they want to think in terms of sustainability as most of them would want to think of sustainability. It's good for the government because the market corrected itself, I think they're much relieved."
Market watchers have speculated that the consortium may bring in the Barneys New York retail brand through one of its partners Istithmar, and although Mr Kwek said 'anything is possible', he also revealed that they are looking at bringing in a 7-star luxury resort brand One & Only. - CNA/ch
City Developments (CityDev) says its new project at Beach Road will cost at least S$2.73 billion. The figure was revealed by Executive Chairman Kwek Leng Beng at the Forbes Global CEO Conference on Tuesday.
CityDev and its partners edged out six other contenders for the mixed site at Beach Road with an aggressive bid that promises to add more buzz to the Marina area.
The South Beach development is set to change the landscape at the Marina area.
Related Video Link - http://tinyurl.com/2rqfpn
CityDev says its investment in South Beach project will hit S$2.73b
CityDev and its partners are investing billions of dollars into the project which will stand out not only for its design, but also for its eco-friendly features.
Its subsidiary Scottsdale Properties has partnered Dubai World's Istithmar and US-based El-Ad to build the mixed development by 2012.
The Singapore developer is excited to be working with world-renowned names.
Mr Kwek said: "They came in because they knew me and they wanted a local partner and this is the Plaza owner, the new Plaza owner as well as Dubai World. They came in for the first time and I'm glad that we are able to target these two partners to create more good opportunities for investors all over the world."
As for the current property boom in Singapore, the CityDev chief said it is nowhere near the end of the cycle.
Mr Kwek said: "Prices mean opportunity, as the Chinese say, as Mr Forbes also said last night, and I am a bottom fisher. I like to go in when the market is bad. And I believe there's still a lot of upside. The mid-end is still below 19 per cent from the peak of 1996, and therefore I believe there is a lot of upside."
He added that though the high-end market looked like it has gone up some 70 per cent since the boom started in 2005, that is only 10 per cent in real terms.
Speaking to Channel NewsAsia, he said there is a silver lining to the recent market turmoil. "There was frenzy buying before but with the sub-prime, it's natural that our Singaporean as well as some overseas investors... will be a little bit more cautious. This is good - a win-win situation for the buyers because then they do not need to chase after runaway prices.
"It's good for the developer if they want to think in terms of sustainability as most of them would want to think of sustainability. It's good for the government because the market corrected itself, I think they're much relieved."
Market watchers have speculated that the consortium may bring in the Barneys New York retail brand through one of its partners Istithmar, and although Mr Kwek said 'anything is possible', he also revealed that they are looking at bringing in a 7-star luxury resort brand One & Only. - CNA/ch
Horizon Still Murky
Source : TODAY, Wednesday, September 12, 2007
Condo owners in last-ditch try for sale application
.bmp)
GROUPS of Horizon Towers majority owners have separately written to Hotel Property Ltd and its partners, expressing their willingness to extend the sale deadline so as to allow another collective sale application for the botched $500-million deal.
But their actions yesterday, which met a deadline set by the buyers, will not be enough to stave off the $1-billion lawsuit for the consortium’s loss of profits.
TODAY understands that what the buyers want is a collective commitment from the 255 sellers in the form of a formal resolution passed at a general meeting. As of press time yesterday, they had not received such a commitment. The case is set to go before the High Court on Sept 28.
The Horizon Towers deal fell through last month, after the Strata Titles Board refused to grant a collective sale order on the basis of a defective application. The buyers then sued the majority owners for failing to file a proper application.
Last Friday, a meeting of the majority owners aimed at coming up with a response to the lawsuit ended in disarray when the remaining sale committee members resigned.
Lawyer Shriniwas Rai, who represented five majority owners, said another meeting would be held on Sunday. Besides trying to form a new sale committee, the majority owners would seek to pass a resolution to extend the sale deadline. While they would have busted the buyers’ deadline, he said his clients hope the consortium “would be accommodating”. He told TODAY: “Many owners are hoping the High Court can give a resolution and we can move forward.
Condo owners in last-ditch try for sale application
.bmp)
GROUPS of Horizon Towers majority owners have separately written to Hotel Property Ltd and its partners, expressing their willingness to extend the sale deadline so as to allow another collective sale application for the botched $500-million deal.But their actions yesterday, which met a deadline set by the buyers, will not be enough to stave off the $1-billion lawsuit for the consortium’s loss of profits.
TODAY understands that what the buyers want is a collective commitment from the 255 sellers in the form of a formal resolution passed at a general meeting. As of press time yesterday, they had not received such a commitment. The case is set to go before the High Court on Sept 28.
The Horizon Towers deal fell through last month, after the Strata Titles Board refused to grant a collective sale order on the basis of a defective application. The buyers then sued the majority owners for failing to file a proper application.
Last Friday, a meeting of the majority owners aimed at coming up with a response to the lawsuit ended in disarray when the remaining sale committee members resigned.
Lawyer Shriniwas Rai, who represented five majority owners, said another meeting would be held on Sunday. Besides trying to form a new sale committee, the majority owners would seek to pass a resolution to extend the sale deadline. While they would have busted the buyers’ deadline, he said his clients hope the consortium “would be accommodating”. He told TODAY: “Many owners are hoping the High Court can give a resolution and we can move forward.
Spaceport : Lost In Transit?
Source : TODAY, Wednesday, September 12, 2007
Lack of local investment means Singapore may lose out to UAE in spaceport deal
PLANS for Singapore to be home to the world’s first commercial spaceport in 2009 have been grounded for now — because of a death of local investment.
Instead, the United Arab Emirates (UAE) will lay claim to the honour.
Singapore will have to wait at least “another year or two” to get a spaceport after a similar facility opens in the emirate of Ras Al Khaimah, which is an hour’s drive from Dubai — the Republic’s main rival in its aim of attracting the rich.
Even then, the Singapore project is “not a done deal”, Space Adventures’ president and chief executive officer Eric Anderson told reporters on the sidelines of the Forbes Conference yesterday.
“We have a plan; we don’t have financing. We are still looking for local financial partners,” Mr Anderson said.
In February last year, Space Adventures — a Virginia-based adventure tourism firm —announced, to much fanfare, plans to build the spaceports in the UAE and Singapore at the cost of US$265 million ($404 million) and US$130 million respectively.
At the time of the announcement, the UAE spaceport had already received clearance from the emirate’s rulers and the UAE Department of Civil Aviation. Ras Al Khaimah’s Crown Prince Sheikh Saud Bin Saqr Al Qasimi also pledged US$30 million to the project.
For Singapore, the negotiations between Space Adventures and the authorities began in 2003 through the Singapore Tourism Board.
Spaceport Singapore — a consortium comprising firms Octtane, Batey, Lyon Capital, DP Architects, ST Medical and KPMG Corporate Finance — was set up with the target of being the first commercial spaceport. Space Adventures agreed to commit US$10 million to the venture.
Upon completion, the spaceport — which is to be located on two hectares of land adjacent to Changi airport — is also slated to offer a wide range of space and high-altitude experiences for those hankering after a taste of astronaut training.
The sub-orbital flights themselves, which cost about $100,000 per person, will take passengers on a parabolic flight some 100km above the Earth.
However, to date, the Civil Aviation Authority of Singapore (CAAS) has not granted the approval. It was “studying the regulatory requirements ... to ensure that these activities can be carried out safely”, said a CAAS spokesman, who added that local investment was not a requirement.
But Mr Anderson told TODAY that as far as he was aware, regulatory approval was “not an issue” at this point.
He declined to give a definite time frame as to when the UAE and Singapore spaceports would be completed, but confirmed that suborbital flights would not be launched from Singapore by 2009 — although the building of the training centre at Changi would be on track for completion.
While he remained “absolutely” confident that the project could take off here, Mr Anderson said his firm was also looking at other Asian locations for its spaceport,
including China, Japan and Korea.
Mr Anderson added: “The first of these spaceports that will get the first vehicles will be in the Middle East. It will take another year or two to build the vehicles required (for the next spaceport).
“Singapore remains a possibility. We are trying to get it done as soon as possible.” Maintaining that there was “significant investor interest”, the consortium’s managing director Michael Lyon, founder of Lyon Capital, told TODAY by email that they have not given up hope of pipping the UAE.
Said Mr Lyon: “We are still seeking to complete fundraising. Singapore can be first if funding can be quickly completed.”
Octtane’s founder Nick Marrett said that so far, two thirds of the “over US$100 million” needed has been raised, and the consortium feels more confident now as compared to a year ago, since there are “commitments on the table”.
He said: “We are looking to raise the final third. Ideally, it should come from local investors but we are speaking to overseas investors as well. The bottom line is, the spaceport which gets the funding first will launch first.”
Lack of local investment means Singapore may lose out to UAE in spaceport deal
PLANS for Singapore to be home to the world’s first commercial spaceport in 2009 have been grounded for now — because of a death of local investment.
Instead, the United Arab Emirates (UAE) will lay claim to the honour.
Singapore will have to wait at least “another year or two” to get a spaceport after a similar facility opens in the emirate of Ras Al Khaimah, which is an hour’s drive from Dubai — the Republic’s main rival in its aim of attracting the rich.
Even then, the Singapore project is “not a done deal”, Space Adventures’ president and chief executive officer Eric Anderson told reporters on the sidelines of the Forbes Conference yesterday.
“We have a plan; we don’t have financing. We are still looking for local financial partners,” Mr Anderson said.
In February last year, Space Adventures — a Virginia-based adventure tourism firm —announced, to much fanfare, plans to build the spaceports in the UAE and Singapore at the cost of US$265 million ($404 million) and US$130 million respectively.
At the time of the announcement, the UAE spaceport had already received clearance from the emirate’s rulers and the UAE Department of Civil Aviation. Ras Al Khaimah’s Crown Prince Sheikh Saud Bin Saqr Al Qasimi also pledged US$30 million to the project.
For Singapore, the negotiations between Space Adventures and the authorities began in 2003 through the Singapore Tourism Board.
Spaceport Singapore — a consortium comprising firms Octtane, Batey, Lyon Capital, DP Architects, ST Medical and KPMG Corporate Finance — was set up with the target of being the first commercial spaceport. Space Adventures agreed to commit US$10 million to the venture.
Upon completion, the spaceport — which is to be located on two hectares of land adjacent to Changi airport — is also slated to offer a wide range of space and high-altitude experiences for those hankering after a taste of astronaut training.
The sub-orbital flights themselves, which cost about $100,000 per person, will take passengers on a parabolic flight some 100km above the Earth.
However, to date, the Civil Aviation Authority of Singapore (CAAS) has not granted the approval. It was “studying the regulatory requirements ... to ensure that these activities can be carried out safely”, said a CAAS spokesman, who added that local investment was not a requirement.
But Mr Anderson told TODAY that as far as he was aware, regulatory approval was “not an issue” at this point.
He declined to give a definite time frame as to when the UAE and Singapore spaceports would be completed, but confirmed that suborbital flights would not be launched from Singapore by 2009 — although the building of the training centre at Changi would be on track for completion.
While he remained “absolutely” confident that the project could take off here, Mr Anderson said his firm was also looking at other Asian locations for its spaceport,
including China, Japan and Korea.
Mr Anderson added: “The first of these spaceports that will get the first vehicles will be in the Middle East. It will take another year or two to build the vehicles required (for the next spaceport).
“Singapore remains a possibility. We are trying to get it done as soon as possible.” Maintaining that there was “significant investor interest”, the consortium’s managing director Michael Lyon, founder of Lyon Capital, told TODAY by email that they have not given up hope of pipping the UAE.
Said Mr Lyon: “We are still seeking to complete fundraising. Singapore can be first if funding can be quickly completed.”
Octtane’s founder Nick Marrett said that so far, two thirds of the “over US$100 million” needed has been raised, and the consortium feels more confident now as compared to a year ago, since there are “commitments on the table”.
He said: “We are looking to raise the final third. Ideally, it should come from local investors but we are speaking to overseas investors as well. The bottom line is, the spaceport which gets the funding first will launch first.”
Plunge In August Auction Sales Partly Due To US Sub-Prime Woes
Source : The Straits Times, Sep 12, 2007
Total value hits $11m, one-fifth of previous month's showing: Colliers
SALES of properties on auction here plummeted last month, in one of the first signs that the global credit crunch may be taking a toll on Singapore's property market.
Only $10.79 million of properties were sold under the hammer in the month, less than one-fifth of what was fetched in each of June and July, said property firm Colliers International, one of the biggest auctioneers here.
Since March, the value of properties sold via auction each month has ranged from $33 million to $108 million. But this plunged last month, said Colliers, which released a report on auction sales yesterday.
In previous years, August has traditionally been a slow month for property sales due to the Hungry Ghost Festival.
But superstitious buyers were not the reason auction sales turned in an exceptionally poor showing in this year's hungry ghost month, which stretched from Aug 13 to Monday.
Colliers said the nosedive in sales was mainly due to the recent stock market volatility caused by United States sub-prime mortgage worries, new government policies, and higher asking prices by sellers.
'Given the good property market performance, many sellers have raised their expectations and upped their asking prices, especially for properties with en bloc potential,' said Ms Grace Ng, Colliers' auctioneer and deputy managing director.
She added that these properties have also become less appealing, thanks to the newly announced rules governing collective sales, which will make it more difficult for developments to sell en bloc.
In addition, the 'stock market turmoil amid the US sub-prime woes' has also contributed to the 'slowdown in the market, as buyers take a cautious stand', Ms Ng said.
Only 10 properties were sold via auction in this year's hungry ghost month, less than one-tenth of the 131 that were put up for sale in the period.
The properties that were sold fetched $9.56 million in all - a tiny fraction of the $133.86 million achieved in last year's double hungry ghost month and 'one of the lowest seen in the past 10 years', Colliers added.
Although the hungry ghost month typically sees fewer property sales due to superstitious buyers and sellers, the firm said this is unlikely to be the reason for the plunge in auction sales of property.
Indeed, the number of properties put up for auction by their owners in the period surged to 88, the highest level in at least a decade.
On the other hand, the number of repossessed properties - traditionally the main source of supply for auction sales - fell to 43, down from 239 last year and the lowest level since 1998. This was largely due to the buoyant economy and climbing property prices, said Colliers.
All this shows that auction sales in the hungry ghost month were being moved more by market conditions than superstitious beliefs, the firm added.
But Ms Ng was quick to point out that the firm is still receiving plenty of inquiries about auction properties from potential buyers.
'The inquiries are still there, but people are thinking twice before jumping in,' she said. 'They may be taking a step back and reassessing the prices.'
Colliers also noted that while auction sales may have plunged in the hungry ghost month, other segments of the property market appeared to still be going strong.
For instance, the total number of homes sold in the period is 'still at a very healthy level', although it has been falling since May, the firm said.
Total value hits $11m, one-fifth of previous month's showing: Colliers
SALES of properties on auction here plummeted last month, in one of the first signs that the global credit crunch may be taking a toll on Singapore's property market.
Only $10.79 million of properties were sold under the hammer in the month, less than one-fifth of what was fetched in each of June and July, said property firm Colliers International, one of the biggest auctioneers here.
Since March, the value of properties sold via auction each month has ranged from $33 million to $108 million. But this plunged last month, said Colliers, which released a report on auction sales yesterday.
In previous years, August has traditionally been a slow month for property sales due to the Hungry Ghost Festival.
But superstitious buyers were not the reason auction sales turned in an exceptionally poor showing in this year's hungry ghost month, which stretched from Aug 13 to Monday.
Colliers said the nosedive in sales was mainly due to the recent stock market volatility caused by United States sub-prime mortgage worries, new government policies, and higher asking prices by sellers.
'Given the good property market performance, many sellers have raised their expectations and upped their asking prices, especially for properties with en bloc potential,' said Ms Grace Ng, Colliers' auctioneer and deputy managing director.
She added that these properties have also become less appealing, thanks to the newly announced rules governing collective sales, which will make it more difficult for developments to sell en bloc.
In addition, the 'stock market turmoil amid the US sub-prime woes' has also contributed to the 'slowdown in the market, as buyers take a cautious stand', Ms Ng said.
Only 10 properties were sold via auction in this year's hungry ghost month, less than one-tenth of the 131 that were put up for sale in the period.
The properties that were sold fetched $9.56 million in all - a tiny fraction of the $133.86 million achieved in last year's double hungry ghost month and 'one of the lowest seen in the past 10 years', Colliers added.
Although the hungry ghost month typically sees fewer property sales due to superstitious buyers and sellers, the firm said this is unlikely to be the reason for the plunge in auction sales of property.
Indeed, the number of properties put up for auction by their owners in the period surged to 88, the highest level in at least a decade.
On the other hand, the number of repossessed properties - traditionally the main source of supply for auction sales - fell to 43, down from 239 last year and the lowest level since 1998. This was largely due to the buoyant economy and climbing property prices, said Colliers.
All this shows that auction sales in the hungry ghost month were being moved more by market conditions than superstitious beliefs, the firm added.
But Ms Ng was quick to point out that the firm is still receiving plenty of inquiries about auction properties from potential buyers.
'The inquiries are still there, but people are thinking twice before jumping in,' she said. 'They may be taking a step back and reassessing the prices.'
Colliers also noted that while auction sales may have plunged in the hungry ghost month, other segments of the property market appeared to still be going strong.
For instance, the total number of homes sold in the period is 'still at a very healthy level', although it has been falling since May, the firm said.
Third Site For Condo-Like Public Flats In Ang Mo Kio
Source : The Straits Times, Sep 12, 2007
A PLUM site close to amenities in Ang Mo Kio has been earmarked for the third public housing project to be designed, built and sold by private developers.
The site, which analysts estimate can fit about 550 flats, and blocks that rise up to about 36 storeys, will be launched for tender by the HDB today. The tender closes on Nov 27.
Already, property analysts expect strong demand from developers, and later, by home-hunters. This comes after red-hot demand when the first public-private project went on sale in Tampines last year.
The 1.7ha plot in Ang Mo Kio Street 52 is a stone's throw from Ang Mo Kio town centre and the recently-opened commercial and transport complex Ang Mo Kio Hub.
Some of the flats will appeal to homebuyers on lower budgets. The developer that snags the Ang Mo Kio site will have to reserve at least 30 per cent of the project for four-room or smaller units.
Property analysts say the site is set to be a winner. It is near the leafy Ang Mo Kio Town Garden East, as well as Ang Mo Kio MRT station and a host of shops in the mature town.
Property agency Propnex's chief executive, Mr Mohamed Ismail said: 'This is a sure-sell location.'
Dennis Wee Properties director Chris Koh expects the land to fetch $125 million, while Savills Singapore's director of marketing and business development Ku Swee Yong predicted a range of $100 million to $125 million.
Mr Mohamed expects the flats there to go for between $350,000 and $400,000 each.
The land parcel has a 103-year lease, and the developer will have to complete the project within four years of buying the land. The apartments will come with elderly-friendly features, as seen in new HDB flats now.
Under the hybrid scheme launched two years ago, developers design, build, price and sell flats built according to the broad rules of public housing. This means that common spaces have to be easy to maintain, that buyers have to meet ethnic quotas, and that only family units can buy the flats, for example.
Interest in these flats has been keen so far because they are located in mature estates and come with fittings more commonly found in private housing, such as bay windows.
The first batch of 616 Tampines units, being developed by Sim Lian Land, received close to 6,000 applications last year. Most were five-room units in blocks up to 17 storeys high, priced at between $308,000 and $450,000.
The second batch of about 700 flats in Boon Keng Road will be launched for sale later this year by a consortium led by Hoi Hup Realty. It will comprise three 40-storey blocks.
A PLUM site close to amenities in Ang Mo Kio has been earmarked for the third public housing project to be designed, built and sold by private developers. The site, which analysts estimate can fit about 550 flats, and blocks that rise up to about 36 storeys, will be launched for tender by the HDB today. The tender closes on Nov 27.
Already, property analysts expect strong demand from developers, and later, by home-hunters. This comes after red-hot demand when the first public-private project went on sale in Tampines last year.
The 1.7ha plot in Ang Mo Kio Street 52 is a stone's throw from Ang Mo Kio town centre and the recently-opened commercial and transport complex Ang Mo Kio Hub.
Some of the flats will appeal to homebuyers on lower budgets. The developer that snags the Ang Mo Kio site will have to reserve at least 30 per cent of the project for four-room or smaller units.
Property analysts say the site is set to be a winner. It is near the leafy Ang Mo Kio Town Garden East, as well as Ang Mo Kio MRT station and a host of shops in the mature town.
Property agency Propnex's chief executive, Mr Mohamed Ismail said: 'This is a sure-sell location.'
Dennis Wee Properties director Chris Koh expects the land to fetch $125 million, while Savills Singapore's director of marketing and business development Ku Swee Yong predicted a range of $100 million to $125 million.
Mr Mohamed expects the flats there to go for between $350,000 and $400,000 each.
The land parcel has a 103-year lease, and the developer will have to complete the project within four years of buying the land. The apartments will come with elderly-friendly features, as seen in new HDB flats now.
Under the hybrid scheme launched two years ago, developers design, build, price and sell flats built according to the broad rules of public housing. This means that common spaces have to be easy to maintain, that buyers have to meet ethnic quotas, and that only family units can buy the flats, for example.
Interest in these flats has been keen so far because they are located in mature estates and come with fittings more commonly found in private housing, such as bay windows.
The first batch of 616 Tampines units, being developed by Sim Lian Land, received close to 6,000 applications last year. Most were five-room units in blocks up to 17 storeys high, priced at between $308,000 and $450,000.
The second batch of about 700 flats in Boon Keng Road will be launched for sale later this year by a consortium led by Hoi Hup Realty. It will comprise three 40-storey blocks.