The Radiant Face Of Singapore

Source : The Business Times, May 20, 2008

BUILDING FOR TOMORROW

From the Republic's early days, the buildings that define its skyline reflect a nation that is increasingly vibrant

IF a country had a face, it would be the skyline of its city. Like a portrait on a sky-blue canvas, it is the profile of a nation - as visually unique as the individuals who inhabit it. And, like a face, it reflects the character and spirit of its people too.

Impressive edifices: An upcoming marquee project is the Marina Bay Financial Centre, a $2b complex of residential and commercial buildings. The Marina Bay Sands IR will also be a ground-breaking development in many ways

The economic success story of Singapore is not just recorded in the history books, but literally etched in stone. Well, concrete anyway. Soaring office towers decked out in glass and steel gleam proudly, shoulder-to-shoulder, scraping the sky above the Central Business District (CBD). But despite the rush to build on increasingly limited and expensive land, Singapore hasn't become as suffocating a concrete jungle as many other developed cities. For all the human activity that is part and parcel of a bustling cosmopolitan city, Singapore's business district is surprisingly well-ordered and efficient.

The brain behind the city's pleasant face is the Urban Redevelopment Authority (URA). Since the mid-1970s it has been tasked with striking a balance between designing an aesthetically distinctive yet land-efficient cityscape. Beyond figuring out how to make the most of limited land, it also sees 'the need for the CBD to be attractive and distinctive'. Indeed, the number of postcards that promote Singapore's photogenic skyline to the world bear testament to the efficacy of URA's work over the years.

Changing profile: Singapore's skyline in 1977 and 1997. The city hasn't become as suffocating a concrete jungle as many other developed urban areas
What is also notable is how young - compared with other developed cities - Singapore's cityscape is.

A significant early development that contributed to the definition of its skyline came about a couple of decades ago in 1986 with the completion of OUB Centre at Raffles Place. The tower, which has 63 floors and is 280 metres high, was the tallest building outside the United States at the time of its opening.

Today, 22 years later, it still stands as an icon, sharing the title of Singapore's tallest building with two other structures - UOB Plaza One and Republic Plaza, the former having been completed in 1992 and the latter three years later. Together they comprise a triumvirate of titans that stand as towering witnesses to the economic growth of the nation.

But bigger plans are afoot for an island with ambitions bigger than its land mass. Reclamation has been actively pursued to meet the infrastructural demands of a burgeoning economy for decades. Between 1960 and 1990, 51.5 sq km of land was reclaimed, accounting for almost 10 per cent of Singapore's total land area at the time. By 2030, it is estimated that another 100 sq km will have been added.

The swathe of land that houses the buildings in the Marina Bay area is, in fact, reclaimed. Comprising 3.6 sq km of prime real estate, it is the focal point of existing and future developments that will cement Singapore's status as a financial and business hub. Set picturesquely by the waterfront, the area is set to evolve into what URA terms a 'Garden City by the Bay'.

It is envisioned as a round-the-clock microcosm of cosmopolitan living, with a vibrant lifestyle and leisure component that will complement its business environment.

One way URA hopes to infuse more vibrancy in the area is to designate certain zones 'white sites', which means developers can mix commercial, retail and residential components within a single project.

But while many of these new buildings will have a premium view of the bay area and encompass a mix of lifestyle and business facilities, they will not soar as high as the other buildings in the vicinity. This is another deliberate feature - planners do not want to obstruct the view of earlier developments.

Graduating arrangement

In fact, a glance at a picture of Singapore's existing skyline reveals that very trend. The result is a dynamic yet uncluttered and h+armoniously graduating arrangement of heights that do not have to vie for the best view.

One significant development now being built that will acquire some height and prominence in the cityscape is The Sail @ Marina Bay, a luxury condominium which, at 70 stories tall, will be among the 10 tallest residential buildings in the world when it is completed next year. Comprising two distinctively sail-shape towers that are bound to become iconic fixtures of the future skyline, it will provide 1,100 apartments with a splendid view of the bay area.

Another upcoming marquee project is the Marina Bay Financial Centre, a $2 billion complex of residential and commercial buildings that will peak at 55 stories. When it is eventually up, it is expected to add a considerable 150,000 sq ft of Grade A office space, effectively doubling what is currently available in Singapore. The first phase is expected to be ready by 2010.

In fact, when the entire Marina Bay area is fully developed and integrated with the existing financial district, it will be twice the size of London's famous Canary Wharf financial district and will provide a combined total of 2.82 million sq m of office space, equalling what is available in Hong Kong's main business centre.

The most prominent - and anticipated - of these new developments will, no doubt, be the Marina Bay Sands integrated resort that is set to open for business next year. It will be a ground-breaking project in many ways.

A drive across Benjamin Sheares Bridge, which overlooks the expansive site, reveals an orchestra of cranes and a flurry of construction work - an impressive sign of the scale of things to come.

Its one-of-a-kind Sky Park - a two-acre stretch of landscaped gardens that will be perched atop and bridge its three 50-storey hotel towers - will offer breathtaking views of the entire city. When completed, it will offer six million sq ft of retail and entertainment space, 3,000 hotel rooms and a plethora of lifestyle and leisure activities.

While it may not be the tallest upcoming structure, it will undoubtedly be deemed the crown jewel on the eventual skyline. Certainly, at an estimated cost of more than $5 billion, it is likely to be one of the most expensive projects of its kind in the world.

With Singapore's expanding skyline gradually taking form, the fact that each new storey of every eventual building represents a business opportunity is not lost on the different businesses involved in the building industry.

A significant portion of the investment pouring into the city will go to them, as developers continue dreaming up more impressive edifices to meet those increasing demands.

In fact, the total amount generated by the construction and building industry here is expected to hit a whopping $55 billion by 2011.

Last year, the industry grew by almost 10 per cent and awarded $19 billion of contracts.

International building centre

While its position as a financial and leisure hub continues to solidify, Singapore is also becoming a centre for the international building and construction industry.

With such an array of opportunities available and its reputation for business efficiency, almost everyone in the industry's supply chain is finding some reason to do business here. They are either directly involved in the local industry or use it as a regional hub to reach out to larger markets in the region.

A good example is the upcoming BEX Asia 2008 exhibition, when building material and equipment suppliers from around the world showcase their latest products and technologies in Singapore. The event, from May 21-23 at Suntec Singapore, is expected to attract prominent industry players, both local and international.

And so, as developers build bigger and taller, they will continue to redefine Singapore's skyline in the process. From the smattering of grey monoliths that sprouted up in the early days of the economic boom to the myriad glistening peaks and pinnacles that scrape our skies today - and those that will join them in the future - the skyline represents the face of a nation which, as it matures, begins to look increasingly radiant.

Post-Crisis US Economy Seen Settling Lower

Source : The Business Times, May 20, 2008

Productivity gains will be weaker, joblessness higher

(NEW YORK) A normal US economy is likely to look a lot different, and worse, after the credit crisis is over and financial markets settle down.

Companies will continue to struggle to raise cash for expansion and innovation as investors and lenders remain focused on conserving capital. Workers, too, may have less flexibility to go after new opportunities, because many will be stuck where they are - in homes worth less than the balances on their mortgages.

'Once you've made terrible, overly optimistic errors, that paralyses you for some time,' says economist Paul Samuelson, a Nobel laureate.

The bottom line: The US may have to get used to a new definition of normal, characterised by weaker productivity gains, slower economic growth, higher unemployment and a diminished financial services industry.

Long-term growth in the US may drop to 2 per cent to 2.5 per cent a year from the 3 per cent rate of the last 15 years, according to Peter Hooper, chief economist at Deutsche Bank Securities in New York and a former Federal Reserve official.

Even after markets recover, 'the cost of risk capital is likely to be significantly higher than during the credit bubble', he says.

A record three-quarters of US banks that the Fed surveyed last month said that they were charging corporate borrowers a higher premium over what the lenders pay for funds. More than half reported a tightening in lending standards.

Behind the stricter terms: loans and investments made during the credit boom that went sour. Banks and financial institutions worldwide have racked up more than US$340 billion in credit losses and asset writedowns since the start of last year. David Rubenstein, managing director of the Washington-based private equity firm Carlyle Group, says that there is more to come, telling reporters on May 12 that 'enormous losses' have yet to be recognised.

'Credit conditions are more likely to tighten further in the near term than ease,' says Andrew Tilton, an economist at Goldman Sachs Group Inc in New York.

Citigroup Inc chief executive officer Vikram Pandit told shareholders on May 9 that he plans to get rid of about US$400 billion of assets over the next three years after the biggest US bank lost US$5.1 billion for the first quarter.

Companies also face a tougher borrowing environment in the bond market. The spread that investors charge over Treasury securities for high-yield bonds has narrowed since the height of the credit crisis in mid-March. Still, at 663 basis points, it is well above the 495-point average since 1985.

And it is likely to remain higher, says John Lonski, chief economist at Moody's Investors Service Inc in New York. He sees the spread averaging about 600 basis points next year.

Companies are also issuing fewer high-yield bonds, and he forecasts a drop of more than 40 per cent this year, to US$80 billion. 'Next year, we'd do very well to reach US$100 billion,' he says. In 2006, before the onset of the credit crisis, more than US$150 billion in new junk bonds were sold.

Equity capital is also harder to come by. Initial public offerings for fledgling businesses fell to the lowest level in almost five years in the first quarter, the National Venture Capital Association reported.

Less risk-taking can mean a less-vibrant economy, says Mr Samuelson, 93, an emeritus professor at the Massachusetts Institute of Technology in Cambridge, Massachusetts. 'What you could lose are some new ideas that would otherwise get to be practical and get their chance,' he says.

Even well-established companies may have a hard time retrenching. Wall Street analysts say. General Electric Co chief executive officer Jeffrey Immelt might have difficulty selling slow-growing financial services assets, including GE's credit card unit. The Fairfield, Connecticut-based company might even sell its century-old appliance business.

Workers too are feeling the fallout from the credit crisis. The share of respondents in a May 1-8 Bloomberg/Los Angeles Times poll who described themselves as financially secure fell to the lowest level since 1992.

The declining value of houses - the biggest asset for many Americans - has a lot to do with their pessimism. The median price for a single-family home fell 7.7 per cent in the first quarter, the biggest drop in at least 29 years, according to the National Association of Realtors. -- Bloomberg

Kwok Family Woes Now Tabloid Fodder

Source : The Business Times, May 20, 2008

Sun Hung Kai chairman files writ against brothers

A FAMILY feud at Sun Hung Kai Properties, one of Hong Kong's biggest developers, is shaping up to become a feisty legal battle for boardroom control.

The woes of the Kwok family have taken a dramatic twist after the chairman of Sun Hung Kai Properties, who took leave of absence in February, filed a writ against the company and his brothers.

Feuding for boardroom control: (from left) Raymond Kwok, vice-chairman and managing director of Sun Hung Kai Properties; Walter Kwok, chairman and chief executive; and Thomas Kwok, vice-chairman and managing director

At the time, Sun Hung Kai Properties said Walter Kwok was taking leave of absence due to ongoing personal and business overseas trips and planned to resume his duties.

Eager to return, Walter Kwok Ping-sheung has secured an injunction preventing a board vote that would see him ousted altogether, challenging an attempt by his two brothers to gain control of the company.

It is believed that cracks first began showing in the family when a friendship between Mr Kwok and a woman became the source of discontent in the family ranks over her role in the company and the advice she was giving the elder sibling.

In the writ, Mr Kwok disputes claims by his brothers that he is medically unfit to return to the helm of the company. He also listed a number of disagreements over company management. The executive claims that measures he took to boost corporate governance at the company led to discord.

The elder Kwok detailed an agreement between himself, his mother and his siblings prior to his leave of absence which outlined the process by which he would resume his role at the company.

He claims that an attempt by his brothers to permanently remove him is contrary to this agreement. As part of the deal, he was expected to produce two medical reports showing he was fit to return to work.

The ongoing saga and the prospect of the personal lives of the Kwok family being aired in public have put an otherwise modest family on the front page of every tabloid in the city. The family is well known for its conservative public presence and values, as well as its good standing in the community.

The family manages to stay relatively low key in a city where tycoons are treated like movie stars.

Walter Kwok took over as Sun Hung Kai group chairman in November 1990 following the death of his father, Kwok Tak-seng.

Today, the Kwok brothers are third on Forbes' list of the richest people in Greater China, with an estimated net worth of US$14 billion.

Walter Kwok remains an executive director on a number of other boards of listed companies, as well as a standing committee member of the National Committee of the Chinese People's Political Consultative Conference.

However the incident has become fodder for the press, with both sides speaking publicly about their actions. During the weekend, the press followed family members to a number of engagements in which they spoke of acting for the good of the company.

The English-language Standard quoted rival sibling Thomas Kwok as saying that the decision to attempt to oust Walter Kwok was beneficial to both the company and its shareholders.

He dubbed it a 'painful decision to make'.

The newspaper cited sources as saying that the brothers disagreed with a number of their sibling's management decisions, some of which were made without consulting them.

It had previously been reported that the brothers were unhappy that although the daily operations are mainly overseen by the younger siblings, Walter Kwok had been taking an aggressive stance on business matters recently.

The female friend of Walter Kwok had moreover never been employed by the company, but started to show ambitions in certain parts of Sun Hung Kai's business.

According to sources, this involved a desire to be put in charge of the company's China operations.

The tycoon was reportedly one of several billionaires kidnapped by notorious gangster Cheung Tze-keung, otherwise known as 'Big Spender', in 1997. These reports have never been confirmed by the family.

US Entered Recession In Q1: Merrill

Source : The Business Times, May 20, 2008

NEW YORK - The United States economy is currently in a recession that began last quarter, Merril Lynch said.

The call comes despite the fact that gross domestic product grew 0.6 per cent in the January-March period, a meagre but still-positive rate.

GDP readings are subject to sharp revisions and, due to their quarterly nature, tend to lag other indicators like spending and confidence, according to Mr David Rosenberg, the bank's chief economist for North America.

'Last week's data flow confirmed that a recession began in the first quarter of this year,' Mr Rosenberg said in a research note on Monday.

'How can there be a recession with real GDP growth still positive? Well, this happened in the first quarter of 1980, the third quarter of 1990 and initially, the first quarter of 2001. And, all were the onset of official recessions,' Mr Rosenberg said. -- REUTERS

BOJ Revises Up View On Housing Investment

Source : The Business Times, May 20, 2008

TOKYO - The Bank of Japan (BOJ) upgraded its view on housing investment in its monthly report released on Tuesday, saying it has been recovering moderately.

The BOJ had said in last month's report that there were signs of recovery in housing investment although it remained at low levels.

The central bank kept its assessment unchanged that the nation's economy is slowing mainly due to the effects of high energy and raw material costs.

Japan's gross domestic product grew 0.8 per cent in January-March from the previous quarter, beating market expectations for a 0.6 per cent increase thanks to strong exports that weathered a US downturn.

Housing investment also rebounded in the first quarter.

Firms shrank from investment in the quarter as they braced for slowing global growth and high energy costs to hit the world's No 2 economy, the data released last Friday showed. -- REUTERS