Changi Park Shaping Up As Financial Backroom Hub

Source : The Business Times, January 28, 2008

URA studying plans for Changi Business Park as part of 2008 Master Plan Review

OCBC could soon follow Credit Suisse, Citibank and DBS to Changi Business Park to form a growing alternative financial hub there. And with prime land going for about $60 psf and rentals at between just $4-$5 psf per month, it does seem to make sense.

In response to a query by BT, OCBC head of operations (group operations and technology division) Eugene Sng said: 'We are currently assessing the feasibility of Changi Business Park as an alternative location to house our operations units.'

A-Reit has also revealed that Credit Suisse has committed to take up about a quarter of its new 200,000 sq ft HansaPoint@CBP building, scheduled to get its TOP (temporary occupation permit) in February.

A-Reit is already developing a built-to-suit building for Citibank and Tan Ser Ping, CEO of the reit manager said: 'A-Reit continuously evaluates all potential investment opportunities, both in acquisitions and developments. The outlook for properties in the business and science parks and hi-tech industrial sector is especially strong.'

While business parks are still categorised as industrial space, where at least 60 per cent of the space must be an approved 'predominant activity' like R&D, a check with JTC's website reveals that financial backroom operations now constitutes an approved predominant activity.

The Urban Redevelopment Authority does appear to have new plans for CBP. In response to a BT query, URA said: 'We are studying the plans for the area as part of our Master Plan 2008 Review. More details will be made available later this year.'

CBP is a 66.54 ha business park which currently comprises about 61 development plots. A JTC spokesman said that about 50 per cent has already been allocated. Depending on location and plot ratio, the 30-year leasehold land is leased for about $28.50 to $57 psf.

JTC said that land rents are revised quarterly with a 5.5 per cent annual adjustment escalation cap over the preceding year's rent.

And unlike the Government Land Sales programme, there is no public tender for business park sites and prices are fixed. JTC added: 'All the land plots in CBP are prepared land which can be allocated immediately to companies that can meet our criteria.'

Not surprising then, Cushman & Wakefield (C&W) managing director Donald Han expects that between two to five more sites at CBP could be allocated this year. Already, Mr Han reveals that C&W has three clients looking for possible sites for built-to-suit buildings. Two are from the financial sector.

One of the advantages of built-to-suit premises in a business park is that the potential tenant can specify its own needs. 'As land cost is less, you could have bigger workstations or provide special amenities like a gym and childcare facilities for your staff,' he said.

And for developers, attractive yields of between 5-7 per cent are achievable, added Mr Han, although only JTC approved developers need apply.

The demand for such alternative space was brought about by the severe space crunch in the city. While this may be remedied by a new surge of supply coming onstream around 2010, Colliers International director (industrial) Tan Boon Leong believes that as long as rents remain 'competitive', business park space will remain a viable option.

He added: 'Based on a lease period of 10 years, the developer could recoup 70-80 per cent of its initial investment from its tenant. If the tenant then chooses to move out, the developer can then afford to lease the space out at a lower rent. It's a win win for both developer and tenant.'

Mr Tan does not, however, expect CBP to be a dedicated backroom for the financial sector.
Business environments change and he noted: 'CBP was originally targeted for the aerospace sector.'

Savills Singapore director of commercial services June Chua added that alternative sites in the Alexandra area are also popular. At Comtech, where Deutsche Bank, HSBC and American Express have taken space, rents are equally competitive at around $4.50 psf per month.

Competition for tenants should also increase as Ms Chua expects more industrial grade buildings to be retrofitted and made available for backroom offices as office rents rise.

On the future of the central business district (CBD), Ms Chua believes there will always be businesses who cannot afford to be out of the CBD, despite high rents. 'They may however, be more selective in the future, when more space becomes available,' she said.

Dubai Plans Singapore, China Hotel Projects

Source : The Business Times, January 28, 2008

It intends to open at least 3 non-gambling resorts with the MGM brand of its US partner

Dubai World, the state-owned investment group that agreed to invest as much as US$5.1 billion in MGM Mirage, plans to open at least three hotels in the Middle East and Asia with its United States partner.

Dubai World plans 'to take the brands of MGM for non-gaming hotels in Dubai, Singapore and China', chairman Sultan bin Sulayem said in an interview at the World Economic Forum in Davos, Switzerland. 'I assume we'll be investing, though they can join us if they want.'

Istithmar , an investment unit of Dubai World, agreed in September to pay US$1.1 billion with partners City Developments and Elad Group for rights to build a hotel and commercial development near Singapore's Raffles Hotel.

A five-star hotel on that site will probably be an MGM project, Mr Sultan said on Friday. A Chinese site is 'being investigated'.

He did not provide further details on the plans.

In October, Las Vegas-based MGM, the casino operator majority owned by billionaire Kirk Kerkorian, said it is in talks with Dubai to collaborate on resorts in the Middle East, Singapore, Vietnam and Beijing.

MGM opened a casino last month in Macau with Pansy Ho, daughter of Chinese gambling mogul Stanley Ho. Macau is the only location in China where casinos are legal.

Elsewhere, Mr Sultan also said that real estate and banks offer good acquisition opportunities after the US sub-prime mortgage crisis made assets cheaper.

'Banks give good opportunities' and Dubai World's board is assessing potential investments, he said. Real estate assets in the US, Europe and Australia are 'very attractive', he said.

He also disclosed that the Dubai government supports the United Arab Emirates' dollar peg and will resist a currency revaluation.

Mr Sultan is also a member of the Executive Council that advises Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, who is also vice-president and prime minister of the UAE.

Central banks in six Gulf Cooperation Council states, including Saudi Arabia and the UAE, are under pressure to revalue their currencies as the dollar declines, stoking inflation to record levels. Kuwait was the first to drop its peg in May, choosing a basket of currencies instead.

The dollar has dropped in five of the past six years, weakening by 8 per cent on a trade-weighted basis in 2007.

'To change is very risky,' Mr Sultan said. 'It's important to continue with the dollar despite its weakness.'

UAE. central bank governor Sultan bin Nasser al-Suwaidi said recently that the federation will not drop the 30-year-old system of pegging the dirham to the dollar and doesn't see a need to revalue the currency because rising rents are the prime cause of inflation. The central bank governors of Saudi Arabia, Qatar, Oman and Bahrain have also said they have no intention of revaluing or dropping their pegs.

Qatar 'might' revalue its currency and a change in currency regime is 'under discussion' as the riyal is undervalued against the dollar by 30 per cent, Qatar Prime Minister Sheikh Hamad bin Jasim bin Jaber al-Thani said in an interview in Davos on Thursday.

'If we suddenly change, do you think anyone will trust our currency?' 'It's a matter of credibility for the dirham,' said Mr Sultan.

BBR Wins $95.3m Ascendas Contract

Source : The Business Times, January 29, 2008

The office tower construction deal brings BBR’s order book to $517.9m

BBR Holdings has won a $95.3 million contract from Ascendas (Tuas) to build an office tower at the International Business Park in Jurong East.

Piling works begin next month and the tower is expected to be completed by August next year.

The turnkey design-and-build contract was secured through BBR’s wholly owned subsidiary Singapore Piling & Civil Engineering, the company’s construction arm.

The deal brings BBR’s current order book to $517.9 million, the company said.

BBR’s chief executive officer Andrew Tan said having an in-house specialist engineering division meant the company could execute its own bored piling and post-tensioning work.

‘This means that we will have better control over the construction schedule and will be in a better position to manage our costs,’ he said.

The project features two 12-storey tower blocks linked by a sky bridge. The site area is 17,858 square feet. When completed, the towers will yield 41,970 square metres of gross floor area.

The building has been designed to meet the BCA Green Mark GoldPPLUS rating, said BBR. The BCA Green Mark evaluates a building for its environmental impact and performance.

Recently, BBR won a $189.6 million contract from the Urban Redevelopment Authority to construct a common services tunnel in Singapore’s downtown core.

It has also secured a $6 million contract from the Land Transport Authority to upgrade vehicular bridges at seven locations in Singapore.

BBR has also ventured into property development and is now involved in two condominium projects at Nassim Hill and Holland Hill.

BBR shares closed trading yesterday at seven cents, down half a cent.

Markets Bank On More Cuts As Fed Debates Recession Odds

Source : The Straits Times, Jan 30, 2008

WASHINGTON - AMID high expectations for another rate cut to help shore up an economy battered by housing and credit ills, the Federal Reserve was set to conclude a two-day policy meeting on Wednesday.

The Federal Open Market Committee was set to announce a decision around 1915 GMT (3.15am Thursday Singapore time). Most analysts were expecting a cut in the federal funds rate, with many predicting a half-point reduction.

The meeting was expected to see heated debate on the economic outlook in view of a global stock market swoon and heightened recession fears that prompted the Fed to slash rates by 0.75 per centage points in an emergency move last week.

Last Tuesday's rate move placed the federal funds rate at 3.5 per cent, and was the fourth cut since Sept 18, when the rate was 5.25 per cent.

The cuts in the federal funds rate, used for overnight interbank loans, can help lower a wide range of borrowing costs for consumers and businesses, and as such can help spur economic activity.

David Kotok, chief investment officer at Cumberland Advisors, said the Fed has sent a signal that it would cut by another 50 basis points this week through its special auction aimed at improving financial market liquidity.

The Federal Reserve said on Tuesday its auction resulted in US$30 billion (S$42.8 billion) in bids accepted at an interest rate of 3.123 per cent. The minimum bid rate was 3.1 per cent.

Mr Kotok said the Fed would be in an awkward position if it fails to lower its federal funds rate below the rate of the auction.

'To be consistent, the Fed must cut the fed funds rate by at least 50 basis points on January 30,' he said in a note to clients.

'If it cuts less than 50, it will have created a bidding situation in which US$30 billion was potentially loaned at a subsidy rate and not a penalty rate.'

Heightened fears of recession
The meeting comes amid heightened fears of recession in the world's largest economy, which has been buffeted by the worst housing slump in decades that has spilled over to the financial sector.

The International Monetary Fund said in a report on Tuesday that the US economy will slow but stopped short of projecting a recession. It predicted growth averaging 1.5 per cent for 2008 in an update of its twice-yearly World Economic Outlook.

The latest US economic data on Tuesday was mixed, potentially complicating the task for the Fed.

One report showed orders for durable manufactured goods surged 5.2 per cent in December, suggesting the factory sector is not as weak as some had anticipated.

'How will the Fed balance this report? It might make it cut rates by less but I still expect a rate cut,' said Robert Brusca at FAO Economics.

Merrill Lynch economist David Rosenberg said the durable goods figures 'suggest that the business sector is holding in relatively well' but that he still expected a half-point cut.

'We still believe that a 50 basis-point cut is the most likely outcome as the Fed's main concern is the deepening housing recession,' Mr Rosenberg said.

Joel Naroff of Naroff Economic Advisors said the Fed has put itself in a box where it may be forced to cut even though some members may be opposed, and before the Fomc sees data on US payroll growth in January in a report due Friday.

'When the Fed announced the emergency move last week, I didn't think the Fed wanted to cut again this week,' Mr Naroff said.

'Instead of satisfying the market beast, it only added to the blood thirst and another 50 to 75 basis-point reduction was immediately priced in. Now the Fed is in a bind. It will not have the January employment report before the decision is made and as I have argued consistently, it is all about jobs. What happens if there is a decent jobs report?'

Meanwhile the Conference Board's survey of consumer confidence fell 2.7 points to an index reading of 87.9, suggesting upcoming weakness in consumer spending, a key driver of the economy.

Mr Naroff said the survey seems to imply 'that households may be reacting to the stories about a recession being imminent rather than seeing it in their own workplace.' -- AFP

Global Growth To Be Weakest In 5 Years: IMF

Source : The Straits Times, Jan 30, 2008

WASHINGTON - THE International Monetary Fund on Tuesday lowered its 2008 global growth outlook, citing a US slowdown and financial market turmoil that have put emerging economies at risk.

It warned that the global economy will deliver the weakest performance in five years as US-originated financial strains intensify.

The global economy is poised to grow 4.1 per cent this year, down 0.3 percentage points from a previous estimate, the IMF report said.

The US economy, the world's largest, will expand by 1.5 per cent, 0.4 points lower, the IMF said in an update of its twice-yearly World Economic Outlook.

'The financial market strains originating in the US sub-prime sector - and associated losses on bank balance sheets - have intensified, while the recent steep sell-off in global equity markets was symptomatic of rising uncertainty,' the IMF said.

'Tilted to the downside'
'The overall balance of risks to the global growth outlook is still tilted to the downside.'

The main risk is that the ongoing financial market turmoil would further reduce activity in the advanced economies and 'create more significant spillovers into emerging market and developing economies'.

The United States, where the crisis in sub-prime, or risky, mortgages rippled into the financial markets in August, is the 'epicentre' of the global slowdown, the Fund said.

To illustrate the momentum of the growth slowdown in the US economy, the Fund predicted fourth-quarter year-on-year expansion of 0.8 per cent this year compared with 2007.

That would follow an estimated 2007 fourth-quarter growth pace of 2.6 per cent from the same period in 2006.

The Fund already had lowered its 2008 global growth estimates in October from a July forecast. This latest update of the World Economic Outlook (WEO) initially had been scheduled to be published on Friday, but was delayed because of rapidly changing economic circumstances.

Slowdown in Q4 US growth
A notable slowdown in US economic growth in the fourth quarter primarily was seen in indicators showing weakening manufacturing, housing, employment and consumer spending.

Growth has slowed in western Europe and confidence generally has deteriorated. The IMF predicted growth of 1.6 per cent in the 15-nation eurozone this year, down 0.5 percentage point from the previous estimate.

In Japan, growth was seen slowing by 0.2 percentage point to 1.5 per cent as growth has been dampened by a tightening in building standards and sentiment has faltered.

China, India see strong growth
China and India continued to lead the robust expansion of the emerging market and developing economies but growth was expected to decelerate in those economies amid the overall slowdown to a 6.9 per cent pace, 0.2 per cent lower than the prior estimate.

In China, growth was forecast to ease to 10 per cent this year from an estimated 11.4 per cent to 10 per cent, 'which should help alleviate overheating concerns,' the Fund said.

The IMF warned that emerging market economies face elevated risks in the financial turmoil.

Emerging markets
'Emerging market countries that are reliant on capital inflows could be directly affected, although strong momentum from domestic demand in countries - such as China and India - provides some upside potential,' Simon Johnson, IMF research director, said at a news conference.

Central banks in the advanced economies are the 'first line of defence' in the battle against the financial disruptions, he said.

Mr Johnson deemed 'appropriate' the European Central Bank's policy of holding interest rates unchanged, challenged by certain eurozone countries, as well as the repeated rate cuts by the Federal Reserve, which is considering a monetary move on Tuesday and Wednesday. - AFP

Get Ready For Higher ERP Rates

Source : The Electric New Paper, January 30, 2008

ELECTRONIC Road Pricing rates for cars at 14 gantries will be up by 50 cents from this coming Monday.

The latest rate hike is part of the Land Transport Authority's quarterly review to achieve optimal traffic flow on expressways and roads, said a spokesman.

The expressways affected: Bukit Timah Expressway, the CTE gantry north of Braddell Road and the Pan-Island Expressway (Adam Road).

ERP rates are also up at nine gantries at Orchard, YMCA and Fort Canning Tunnel gantries.

Motorcyclists will pay 15 cents to 25 cents more.

Increases for heavy good vehicles and very heavy goods vehicles, small and big buses are between 75 cents and $1.

The rates for the other 48 gantries remain unchanged.

Time To Raise $8,000 Ceiling?

Source : The Electric New Paper, January 30, 2008

More families exceed income limit set 14 years ago. Households earning $8,000 or more a month

If your household earns more than $8,000 a month, it's...
# No new HDB flats
# No subsidised housing loans
# No maximum $40,000 grant to buy resale flats

IT'S been 14 years since the HDB last raised its income ceiling for new flats from $7,000 to $8,000.

Many things have changed since 1994 - isn't it time for the ceiling to shift too?

Data from the General Household Survey shows that the proportion of resident households earning $8,000 and above every month has nearly doubled from 10.85 per cent in 1995 to 19.9 per cent in 2005.

This means that the proportion of households qualifying to buy new flats shrank by roughly 9 percentage points.

Flat values have also jumped since then.

Consider this. Back then, a new four-room HDB flat in Woodlands would cost you about $96,000, compared to $183,000 for a new four-room unit at nearby Yishun today.

Home-buyer Seline Wee, 29, wants the ceiling to be raised.

SANDWICH CLASS

Ms Wee, a teacher, is getting married to her auditor boyfriend next year.

She said: 'Our combined income is just slightly above the $8,000 ceiling and we feel we're being penalised for it.

'Now we can't buy a new flat and we've to dig deep for either a high-priced resale place or condo, which means possibly spending beyond our means.

'The income ceiling rule has not been changed for so long but income levels and property prices have increased since then.'

A household earning above $8,000 a month also cannot get subsidised housing loans and housing grants of up to $40,000 to buy resale flats.

Knight Frank's research director Nicholas Mak thinks the policy should be reviewed regularly because of inflation, the increase in income and property prices.

He explained: 'This ceiling has to be reviewed regularly or otherwise you're cutting out a certain proportion of the population who can make use of the subsidy.

'On one hand, the Government is restricting the amount of CPF you can spend on housing. On the other hand, they're keeping the income ceiling low, and preventing some in the sandwich class who don't want to over-invest in property from buying new flats.'

Mr Sing Tien Foo, deputy head of the NUS' department of real estate, said that the income ceiling is an eligibility measure to make sure Singaporeans can afford public housing.

To lift this cap, the Government has to look at market conditions and see whether public housing has gone beyond the affordability of Singaporeans.

He said: 'A solution would be a discreet review. If income levels have gone up, is it only applicable to certain groups? And is this change in income cyclical or a permanent structural change?'

Lifting the cap may have widespread effects, he added.

'How big is this sandwich class? By lifting the ceiling, the demand for new flats may surge and their prices may be adjusted higher.

'The resale market will also be affected. Is that the best solution?' he asked.

While some may argue that executive condos (EC) fulfil this niche with its $10,000 ceiling, Mr Mak said that these sites tend to be fewer in number.

HDB announced that there would be a supply of 7,000 new flats available from last November to June this year.

And another 3,200 flats will be built under the Design, Build and Sell Scheme (DBSS) and EC schemes.

Mr Eric Cheng, executive director of HSR Property group, thinks that $8,000 is a fair gauge because those earning more than that can easily afford private property.

Based on a couple's combined income of $8,000, they can easily buy a $700,000 private property on a 35-year loan.

He calculated that the monthly instalment of around $2,300 would be quite affordable.

'If you bring the ceiling higher, there'll be increased demand for new flats and the resale market will be affected. Now, the resale market is quite balanced,' he said.

The Housing Board said it has no plans to raise the income ceiling now as the vast majority of Singaporean families qualify for subsidised public housing.

Said a HDB spokesman: 'At the current $8,000 income ceiling, about 8 in 10 Singaporean families are eligible to buy subsidised public housing.

'Given our limited public housing budget, it is important that we target our housing subsidies to those who need it most.'

HDB said that higher income households exceeding the income ceiling have other housing options, including the purchase of resale HDB flats, which are not subject to any income ceiling.

And first-timer families with household incomes of up to $10,000 can also consider buying new EC units with a housing grant of $30,000.

Condo Site Facing Reservoir Launched

Source : The Business Times, January 30, 2008

THE Housing & Development Board (HDB) has launched the tender for a 99-year-leasehold site at the corner of Yishun avenues 1 and 2 that fronts Lower Seletar Reservoir and is near Singapore Orchid Country Club/Golf Course.

The plot, which is about 10 minutes' walk from Khatib MRT Station, is expected to fetch bids in the range of $200-$300 per square foot (psf) of potential gross floor area, property consultants say.

The 2.7 hectare site has a 2.1 plot ratio, allowing a maximum gross floor area of 609,163 square feet, enough for a condo with about 500 apartments averaging 1,200 sq ft.

CB Richard Ellis executive director Li Hiaw Ho said that a condominium on this site would be able to enjoy scenic views of the reservoir and golf club.

As the suburban market is expected to strengthen this year, Mr Li expects the site to draw keen interest from developers.

'Demand is likely to come from Housing & Development Board flat upgraders and people who work in the northern part of Singapore. Units in Orchid Park Condominium nearby are being sold in the secondary market at around $550 psf, while new freehold units in the vicinity such as The Sensoria and Northwood were sold at prices ranging from $600 psf to $650 psf.

'Based on a selling price of $600 psf to $650 psf, it is expected that the tender bids for the site will range from $200 to $240 psf per plot ratio.'

Credo Real Estate managing director Karamjit Singh places the fair value of the plot even higher, at $280-$300 psf ppr, and reckons that the top bid may surpass that, given the plot's attractions. Assuming this higher price range, the breakeven cost for a new condo would be around $600-$610 psf and the project is likely to command an average price in the high-$600 psf range, he added.

The tender closes on March 25. It is part of the confirmed list, under which the government launches land parcels for tender according to a pre-stated schedule regardless of demand.

KepLand Revenue, Profit Hit Record

Source : The Business Times, January 30, 2008

FY2007: boost from residential sales and revaluation and restructuring surplus

KEPPEL Land's turnover crossed the billion-dollar mark in 2007 to hit a record $1.4 billion, a rise of 48.5 per cent from the previous year's $948 million.

The 12-month period ended Dec 31, 2007, saw profit after tax and minority interests (Patmi) more than trebled from $200.3 million to a record $779.7 million. This was bolstered by strong residential sales, a net gain on revaluation of investment properties of $343.6 million, and a rise of $100.5 million under an item which includes corporate restructuring surplus and enbloc property sales. The latter $100.5 million gain was after taking into consideration a $235.2 million surplus from the restructuring of its one-third interest in One Raffles Quay and $89 million in offsets to account for the diminution in value of the group's Myanmar hotels and the fall in the value of rupiah relating to its prior investments.

Full-year earnings per share came to 108.3 cents, up from 2006's 27.9 cents. Q4 Patmi rose from $81.2 million to $572.3 million while turnover climbed 8.6 per cent to $371.4 million.

Announcing its financial results yesterday, KepLand group CEO Kevin Wong also said that it was proposing a final one-tier dividend of 8 cents per share and a special dividend of 12 cents to 'reward shareholders for their support'. The proposed dividends amount to $144 million.

Patmi from property trading made up 35 per cent or $274.9 million of the total 2007 Patmi. Mr Wong said this was driven by profit contribution from Singapore developments including Marina Bay Residences, Reflections at Keppel Bay and Park Infinia at Wee Nam.

Contributions from overseas business made up 39.6 per cent while Singapore business contributed 60.4 per cent, up from 36.4 per cent in the previous year. For the year ahead, Mr Wong said that overseas contributions from residential properties will likely increase to about 50 per cent, in light of the weakening US economy. 'Our projects are mostly in China and Vietnam, and the subprime effect on these two countries will be less.'

He added that most of its development projects in these two countries were targeted at the mid- to high-end market which was supported by 'genuine buyers'. He also said the newly instituted capital gains tax in Vietnam should add stability to the market there. 'Demand for housing in these two countries is coming from a very low base,' he added.

In 2007, Keppel Land acquired eight residential sites in Vietnam with a total of 22,225 potential units for sale. Three developments are expected to be launched this year.

Other overseas launches for 2008 include a 1,000 unit residential development in Jeddah, Saudi Arabia, while two mega developments with over 8,000 units in Shanghai and Shenyang, China, is expected to be launched in 2009.

Mr Wong said it will continue to look for potential development sites and these will likely be in China, Vietnam and the Middle-East. Highlighting Keppel Land's low gearing of 0.41 per cent, and the possibility of borrowing to fund future acquisitions, he also said: 'We can gear up.'

At the end of the trading day yesterday, Keppel Land shares closed 2 cents higher at $6.45 per share.

Market Conditions Delay Marina Bay Suites Launch

Source : The Business Times, January 30, 2008

KepLand targets after Chinese New Year, but within first quarter

The launch of Marina Bay Suites has been postponed, with 'market conditions' cited as the cause by Keppel Land group chief executive Kevin Wong.

Later date: The launch of the 221-unit Marina Bay Suites will be after the Chinese New Year, sometime within the first quarter, says Keppel Land group CEO Kevin Wong

The news comes as a surprise as the consortium developing it - Keppel Land, Cheung Kong Holdings/Hutchinson Whampoa and Hongkong Land, had earlier said that the launch would be around end-January, before the Chinese New Year.

The consortium also said then that over 600 potential buyers, half of them foreigners, had registered their interest in buying into the 221-unit luxury development, priced at around $3,000 psf.

However, at a press conference to announce the company's full-year financial results yesterday, Mr Wong said that the launch would now be after the Chinese New Year - within the first quarter of 2008. He also said that units would be 'progressively released in tandem with market conditions'.

Keppel Land's other launches, including the next phase of Reflections at Keppel Bay, The Tresor and Madison Residences, will all be staggered to follow the launch of Marina Bay Suites to ensure that they do not coincide.

For Reflections at Keppel Bay, which has 400 units remaining, Mr Wong said that its launch would be around mid-2008.

Adopting the cautiously optimistic tone already shared by other developers, he said: 'If everything picks up in the second half of the year, then we will be back in business.'

His announcement follows Wing Tai deputy chairman Edmund Cheng's comment on Monday that it would monitor global markets 'to see how things pan out before we launch anything'. Wing Tai projects that have yet to be launched include Belle Vue Residences and L'Viv.

Earlier this month, City Developments also said that depending on construction schedules, and if the opportunity arose, it could consider short-term leases for Lucky Tower, which it acquired through a collective sale in May 2006.

Keppel Land's Mr Wong does expect prices in the high-end sector to be affected if a recession takes hold of the United States economy. 'But we expect mid to mass-market prices to go up steadily,' he added.

Mr Wong, who said that Keppel Land saw a default rate of about 5 per cent on its projects during the last property slump in the mid-1990s, added: 'There will be some (if there is a recession in 2008) but the percentage will be fairly low.'

Commenting on the postponement of the Marina Bay Suites launch, Knight Frank director (research and consultancy) Nicholas Mak said that 'developers are all watching each other now, but someone has to take the plunge first to test the water'.

'Because of the thin volume at the moment, the market is looking for direction. But we must bear in mind that the volume and price increases in 2007 was out of the ordinary.'

Mr Mak also highlighted that developments with licences to sell will increase as the year progresses. 'If developers wait for prices to go up, everybody could be launching at the same time.'

New US Home Sales Drop By Record 26%

Source : The Straits Times, Jan 29, 2008

WASHINGTON - SALES of new homes in the United States plunged by a record amount last year, while prices posted their weakest showing in 16 years, demonstrating the troubles builders were facing with a huge backlog of unsold homes.

The Commerce Department reported yesterday that sales of new homes dropped 26.4 per cent last year to 774,000. That marked the worst year on record, surpassing the old mark of 23.1 per cent in 1980.

The US government reported that the median price of a new home barely budged last year, edging up a slight 0.2 per cent to $246,900, the poorest showing since prices fell 2.4 per cent during the 1991 housing downturn. The new report reinforced the view that housing was currently undergoing its worst downturn in more than two decades, with the slump threatening to surpass in some ways the severe housing recession of the early 1980s.

The housing weakness has dragged down overall growth and sent shockwaves through the rest of the US economy including the financial sector, which is dealing with billions of dollars in losses in subprime mortgages.- ASSOCIATED PRESS

Condominium Housing Site At Yishun Ave 1 And 2 Up For Sale

Source : Channel NewsAsia, 29 January 2008

A 27,000 square metre site at Yishun Avenue 1/Avenue 2 has been offered for sale under the confirmed list of the government land sales programme.

The 99-year leasehold site by the Housing and Development Board has been set aside for condominium housing.

It can yield up to 56,600 square metres in gross floor area.

The sale of the site is in line with the government's plan to offer more housing choices in Yishun.

This is part of the "Remaking Our Heartland" plans to rejuvenate communities in middle-aged towns and estates. - CNA/ms

Keppel Land Posts Full-Year Earnings Of S$779m

Source : Channel NewsAsia, 29 January 2008

Keppel Land has surpassed market expectations, with full-year earnings hitting a record S$779 million in 2007.

This is up sharply from just S$200 million the previous year - boosted by strong sales at its high-end luxury residential projects.

With money in the bank, Keppel Land is eyeing greater overseas expansion in 2008.

Reflections at Keppel Bay and Marina Bay Residence are just two of the projects that have helped Keppel Land achieve record earnings last year.

Not only was net income at a record high, turnover also hit its highest ever at S$1.4 billion.

Kevin Wong, Group Chief Executive Officer, Keppel Land Limited, said, "2007 is a record year, in terms of price increase as well as number of units taken up. Looking ahead, we see that the high-end market direction will probably be dependant on the outcome of the US sub-prime problem, but (as for) the middle and mass market segment, we expect prices to continue to go up steadily."

The numbers include gains from the sale of its one-third stake in One Raffles Quay, as well as appreciation in the value of its office portfolio.

All in, Keppel sold more than 760 residential units in Singapore last year - a new record for the company.

Keppel Land also saw an 82 percent jump in earnings from property trading.

Overseas markets such as China and Vietnam contributed to 40 percent of total earnings.

However, Keppel Land is seeking to drive this up to 50 percent this year.

Mr Wong said, "Firstly, we spend on the shareholders - 12 cents. Secondly, what we will be doing is we would go where the market is, and Vietnam is a good place to expand; China again is a good place to expand, and we have started on some projects in Middle East, but there is no hard and fast route."

Keppel Land is paying out a final dividend of 8 cents a share and a special dividend of 12 cents a share. - CNA/ms

Tans Up The Ante In Bid For Straits Trading

Source : The Business Times, January 29, 2008

Revised offer of $6.50 suggests they're ready for bidding war with Lees

The family of the late Tan Chin Tuan has upped the ante in the contest with OCBC Bank's Lee family for Straits Trading Company.

The Tans, through private vehicle Cairns Pte Ltd, yesterday announced a revised offer of $6.50 a share, up 80 cents from their original offer of $5.70.

And in remarks read by some as a dig at their bidding rival, Chew Gek Khim, granddaughter of the late Tan Chin Tuan, said: 'Our significant offer price revision of 14 per cent is a reflection of our regard for the company and management of Straits Trading.' Ms Chew is a director of Cairns.

In comparison with the 14 per cent increase, the Lees, who control OCBC, had last week countered the Tans' $5.70 bid with only a marginally higher offer of $5.76.

Cairns has also taken the unusual step of sending letters to Straits Trading's substantial shareholders OCBC and Great Eastern Holdings (GEH) and announced that, should OCBC and GEH accept the offer, Cairns and parties acting in concert with it would own 49.73 per cent of Straits Trading.

OCBC and GEH own 6.21 per cent and 19.92 per cent of Straits Trading respectively.

The bold moves have not gone unnoticed by the market, with one unnamed trader saying the tenacity reflects the nature of the two families involved.

The Lees and Tans are illustrious business households in Singapore, with ties that date back more than half a century. The late Mr Tan Chin Tuan made his fortune working for the Lee family at OCBC.

The late Lee Kong Chian, patriarch and philanthropist, managed OCBC from 1938 to 1964, then handed the reins to Mr Tan from 1964 to 1983.

The two families are now vying for control of the company from which Mr Tan retired as chairman in 1992 at the age of 84. Straits Trading has interests in property, hotels and one of the world's largest tin smelters.

Given their history, all bets are on the Lees fighting hard to keep Straits Trading in their stable of companies - and on another counter-offer being made to out-do the Tans.

The likelihood of a counter-offer also depends much on whether current bids still undervalue Straits Trading - which most analysts believe they do.

Gabriel Yap, of Phillip Securities, says: 'The original offer of $5.70 undervalued Straits Trading's assets, especially with the new Straits Trading building coming on stream at a time when its neighbour, 6 Battery Road, was already achieving rent of $16.70 psf and is now asking $18 to $22 psf. And the current scarcity in the supply of office space is going to be a theme until about 2010. Not to mention, Straits Trading also has other undervalued assets.'

He adds: 'Both the Lee and Tan families belong to the Old Rich, whose businesses are now run by very smart descendants. You'll note that these offers were made only after the market pulled back substantially after five years of a firm uptrend. If the Lees think the $6.50 offer undervalues the company's assets, in light of the current operating environment, I would not be surprised if a counter-offer is made.'

Mr Yap also thinks the Tan family will have the stomach for an all-out bidding war, with its coffers likely to be padded by the impending sale of its stake in retailer Robinson & Co.

Clearly, the shareholders of Straits Trading will benefit the most. The company's share price shot up 11 per cent or 67 cents to close at $6.56 yesterday after news of Cairns' revised offer broke. And the price is set to rise further, should a counter-offer come from the Lees.

Ms Chew referred to the rise in Straits Trading's share price since Cairns made its initial $5.70 offer: 'Since Jan 4, the date preceding the announcement of our offer, the share price has risen significantly as against the broader decline of the market,' she said. 'We have therefore enhanced shareholder value significantly through our offers.'

Sing$ At 11-Year Highs

Source : The Business Times, January 29, 2008

The Singapore dollar rose to 11-year highs against the US dollar on Tuesday while traders bet on another US interest rate cut this week to try to ward off a US recession, dealers said.

The dollar was at 1.4195 against the greenback, down slightly from 1.4187 earlier, and against 1.4244 on Monday.

'The local currency is stronger because of the falling US dollar,' said Joseph Tan, a strategist at Fortis Bank.

The greenback came under pressure after the US Commerce Department on Monday said that sales of new homes across the United States fell 4.7 per cent in December from the prior month.

Property sales across the US declined last year and banks revealed hefty losses tied to ailing mortgage investments, leading to widespread fears for the US economy.

Mr Tan said the Monetary Authority of Singapore (MAS) - the republic's de facto central bank - also wants to tolerate a stronger Singapore dollar to hedge against rising inflation.

'We are not in any danger of intervention from the MAS at this stage,' he said.

The MAS conducts monetary policy through the local currency rather than by setting interest rates.

The Singapore dollar is traded against a basket of currencies of the city's major trading partners within an undisclosed trading band known as the nominal effective exchange rate (Neer).

Details of the trading band are not made public to prevent speculation in the Singapore dollar.

Most analysts expect the US Federal Reserve, the US central bank, to trim at least another quarter point off its key federal funds interest rate when it meets on Tuesday and Wednesday.

The rate is currently 3.50 per cent after the Fed slashed it by 0.75 percentage points in an emergency move aimed at calming global financial markets roiled by fears of a widening US recession. -- AFP

Keppel Land Q4 Profit Jumps 7 Times

Source : The Business Times, January 29, 2008

Keppel Land, Singapore's third-biggest developer by market value, posted a seven-fold rise in fourth quarter net profit on Tuesday driven by strong home sales and property divestment gains.

KepLand, which derives the bulk of its income selling apartments in Asian countries including Singapore, China, Vietnam, and India, earned $572.3 million (US$404 million) in the October-December period, up from $81.2 million reported a year ago.

The quarterly results beat the mean forecast of $302 million from a Reuters poll of four analysts, lifted by soaring home prices in Asia and the divestment of an office building to property trust K-Reit Asia which the developer spun off in 2006.

Shares of KepLand fell 12.3 per cent in the last quarter compared with a 23.1 per cent drop for CapitaLand and a 12.3 per cent fall for City Developments, underperforming a 6 per cent drop in the broader Straits Times Index. -- REUTERS