Wednesday, August 29, 2007

Developer Wing Tai Posts 200% Jump In Full-Year Profit

Source : Channel NewsAsia, 29 August 2007

SINGAPORE : Developer Wing Tai Holdings has reported a sharp jump in full-year profits.

Net profit for the year ended June came in at S$382 million, or three times more when compared to a year ago.

Revenue climbed 10 percent to S$982 million.

Wing Tai attributed the increase to strong sales of its residential properties in Singapore.

It is planning to launch several residential projects this year.

These include Helios Residences along Cairnhill Circle, L'viv on Newton Road and Belle Vue Residences on Oxley Walk. - CNA/ch

HDB Offers Toa Payoh Commercial Site For Sale By Tender

Source : Channel NewsAsia, 29 August 2007

SINGAPORE : The Housing and Development Board (HDB) has put up a commercial site along Lorong 6 Toa Payoh for sale by tender.

The 1,400 square metre site is being offered for sale under the Confirmed List of the Government Land Sales Programme.

It has a maximum gross floor area of about 4,200 square metres.

The 99-year leasehold site is located near the HDB Hub.

Property consultant CB Richard Ellis expects the successful bidder to devote 100 percent of the maximum gross floor area for retail use.

It expects to see bids of between S$600 and S$700 per square foot per plot ratio. - CNA/ch

DBS Shares Weighed Down By US Sub-Prime Mortgage Woes

Source : Channel NewsAsia, 29 August 2007

SINGAPORE : Shares of DBS Group, the largest lender in Southeast Asia, remained under pressure Wednesday on investors' concerns over its exposure to the troubled US sub-prime mortgage market, dealers said.

At the close, DBS was off 1.5 percent or 30 cents at S$19.50 while the main Straits Times Index was 0.25 percent lower, or 8.34 points, at 3,334.66.

DBS announced Monday its exposure to collateralised debt obligations (CDOs) almost doubled to S$2.4 billion because the bank had to inject funds into an asset-backed commercial paper conduit following recent market volatility.

CDOs are securities backed by a range of assets including bonds, loans and their derivatives, including corporate loans, high-grade mortgages, sub-prime mortgages, car loans and credit card debt.

Losses from them are not likely to be realised unless the banks encounter defaults or are forced to sell the debt securities before maturity.

The Singapore bank said Monday it had "minimal exposure" to the troubled US mortgage market despite almost doubling its CDOs to S$2.4 billion.

"DBS has one of the strongest capital positions of banks operating in Asia and we have minimal exposure to the US sub-prime mortgage market," said group chief financial officer Jeanette Wong.

Most analysts were confident the CDO exposure would have limited impact on DBS's earnings although US investment bank Goldman Sachs downgraded its rating on the lender from "buy" to "neutral".

"It's so insignificant really when you look at it. It's going to have a negligible effect," David Lum, a banking analyst with Daiwa Institute of Research, told AFP.

He is still maintaining an "outperform" rating on DBS even after the Monday announcement.

Goldman Sachs, which downgraded its rating, said there were "no visible near-term catalysts to mitigate its (DBS') CDO exposure overhang".

"While we believe DBS' strong fundamentals remain largely intact and recent share price correction a tad overdone, (the) CDO/US sub-prime problem will likely be a slow motion, long-tailed headwind with worse-than-expected ultimate losses, in our view," it said.

Merrill Lynch, which has a "buy" recommendation on DBS, said the CDOs will "have a moderate impact" on the bank's profits.

"Therefore, the drop in DBS's market value of several times its gross CDO exposure exaggerates the likely damage to its long-term earnings power or capital ratios," it said.

Global markets have taken a beating in recent weeks due to concern about the US sub-prime mortgage market, in which housing loans were extended to borrowers with patchy pasts who are now defaulting.

The market woes have triggered fears of a global liquidity crunch as exposed investors scramble to cover their losses. - AFP/ch

Lian Beng Wins S$58.5m Deal For Marina Bay Sands IR Project

Source : Channel NewsAsia, 29 August 2007

SINGAPORE : Main-board listed Lian Beng Group has clinched a S$58.5 million contract for construction works at the Marina Bay Sands Integrated Resort.

Under the terms of the contract, Lian Beng will provide a wide spectrum of services related to the construction of the basement of all three towers of the hotel parcel.

Work on the project will be carried out in two phases.

This is expected to be completed within 22 weeks.

With this latest contract, the building construction company's orderbook now stands at about S$375 million. - CNA/ch

Some Home Owners May Ramp Up En Bloc Sales Process: Experts

Source : Channel NewsAsia, 29 August 2007

Picture (Left) : Neptune Court

Home owners could scramble to secure the required number of signatures to seal their en bloc deals in the weeks ahead, according to industry watchers.

This is due to the impending changes to the collective sales legislation aimed at adding more transparency to the process.

Owners at Pacific Mansions are still working out a deal with some four to five potential buyers.

Pacific Mansions has 288 apartment units.

The new rules, which may kick in as early as October, will not apply to this development but its sales committee hopes business can be done by that time.

82 percent of residents have already agreed to proceed with the collective sale and the committee says all processes are in order.

If successful, each unit stands to pocket over S$3 million.

The sales committee feels the change in legislation is timely, but could affect the range of property available for en bloc sales.

Dick Tay, Chairman, Pacific Mansions Sales Committee, says: "In future, developments like this will be very difficult to go on en bloc because there are high number of owners in a big estate like this, and also, the process will mean that it will be a longer process for the sales committee to go through."

With the clock ticking down to the new rules, insiders say some owners at Neptune Court are not confident they will get their deal in time.

Currently, only around 40 per cent of residents have agreed to sell, but the sales committee is not in a rush.

Still, industry players expect some negotiations to speed up in some cases.

S K Phang, Lawyer, Phang & Co, says: "They have substantial signings already, whether it is 30, 40, 50 or 60 per cent, so they will try and race towards the 80 percentile requirement before the rules come into effect."

Nicholas Mak, Property Analyst, Knight Frank, says: "If the current sales committees in some of the en bloc sales sites...are not able to launch their collective sales tender before the deadline, they may even have to be dissolved. (Under the new rules) You have to have the Collective Sales Agreement witnessed by lawyers and consensus hurdle will be based not just on share value, but also one the floor area."

So experts hope the authorities will consider granting exemptions for cases where 40 or 50 percent of approval has been secured.

For now, many owners are waiting for the amendments to be debated in Parliament next month.

This, they say, will provide a clearer picture of the changes to the legislation and whether there are any additional rules to abide by. - CNA/ch

Asian Shares Tumble Amid Renewed US Credit Fears

Source : Channel NewsAsia, 29 August 2007

Picture : Chengdu Stock Exchange in China

TOKYO: Asian share prices fell sharply Wednesday as anxiety returned over the health of the US economy, raising new fears of a global credit squeeze, dealers said.

Stock markets in Tokyo, Hong Kong and other key Asian financial capitals were down more than two per cent in early trade, a sharp U-turn for markets that had been stabilising after chaos earlier this month.

The fresh turmoil was triggered by a double whammy of bad news from the United States.

A research group said consumer confidence in the world's largest economy had slipped in August, while minutes released by the Federal Reserve hinted at deeper than expected housing market woes.

"Asian markets were facing selling pressure as most Asian economies are heavily dependent on the US economy," said Hirokazu Fujiki, strategist at Okasan Securities in Tokyo.

"We still need more time to check how badly the sub-prime loan issue is actually affecting consumer sentiment and corporate earnings in the United States," he said.

"The bearish tone is likely to continue on global markets, including Asia, for the time being."

Global markets have taken a beating in recent weeks due to concern about the US sub-prime mortgage market, in which housing loans were extended to borrowers with patchy pasts who are now defaulting.

The market woes have triggered fears of a global liquidity crunch as exposed investors scramble to cover their losses.

The trouble is especially worrisome for Japan, the world's second largest economy, as it maintains super-low interest rates in a monetary policy designed to stimulate the economy and fight deflation.

The turmoil has led to a sharp rise in the yen as dealers dump so-called "carry trades" -- in which they borrowed in Japan to invest in higher-yielding markets.

The Tokyo Stock Exchange's benchmark Nikkei-225 index was down 2.6 per cent in morning trade Wednesday, dipping below the symbolic 16,000-point level for the first time in a week.

Video game maker Nintendo, which is particularly sensitive to prices of its products overseas, nosedived 3,200 yen or 5.90 percent in the morning session to 51,000 yen.

Hong Kong share prices fell 2.20 per cent in early trade, Singapore was down 2.55 per cent and Jakarta tumbled 3.20 per cent.

"Looks like the problems are getting deeper than first anticipated," Fraser Securities research head Najeeb Jarhom said in Singapore.

Seoul opened 2.15 per cent softer before slightly rebounding.

"The market is being swayed by external leads like fresh worries over the troubled US subprime mortgage market," SK Securities analyst Won Jong-Hyuck said.

Australian shares were down 1.69 percent, with banking stocks taking a particular bruising.

"Every time we say we should buy on dips but when we get the dips it looks scary -- we don't buy even though there's reason to," Bell Potter Securities private client advisor Stuart Smith said, adding that economic fundamentals were still strong.

The Chinese market, which has weathered the sub-prime crisis better than most regional bourses, was down only modestly in early trade amid concern that the domestic issue of an initial 80 billion dollars would drain liquidity. - AFP/ac

Marina Barrage Gets World's Biggest Water Pumps

Source : The Straits Times, Aug 29, 2007

TWO years after it was launched, the Marina Barrage looks set to be in operation by year's end.

Already, 80 per cent of the construction work is completed.

Marking this milestone, PUB, Singapore's water agency, unveiled the world's biggest water pump facility at the dam.

The Marina Barrage will be Singapore's 15th reservoir to store 10 per cent of the country's current water demand.

Related Video Link -
Marina Barrage - The finish line is near

Two years after it was launched, the Marina Barrage at Marina Bay - which will create Singapore's biggest reservoir - will be up and running by year's end.

Already, 80 per cent of the construction work is completed and to mark this milestone, PUB, Singapore's water agency, unveiled the world's biggest water pump facility at the dam.

It will also act as a tidal barrier and relieve flooding in low-lying areas like Chinatown, Boat Quay, Jalan Besar and Geylang.

But apart from its functionality, the Marina freshwater basin will also serve as a recreational and tourist attraction, when the public can enjoy water sports, concerts and even walk along the Barrage.

Keeping the basin's water levels steady are seven water pumps and nine crest gates.

The pumps, each weighing 28,000 kilograms is equal to the weight of 400 men.

These drainage pumps will discharge water from the reservoir to the sea in the event of heavy rain and high tide.

Based on Singapore's annual rainfall pattern, PUB estimates that up to three pumps would be used five times a year.

Said PUB's director of 3P Network, Mr Yap Kheng Guan: 'With the pumps and gates, sea water will not become an influence in our drains and canals.'

The Marina Barrage is expected to be up and running by the end of this year.

The public will also be able to visit the Visitor Centre by July next year.

Bank Stocks Hit By Sub-Prime Worries Again

Source : The Business Times, August 29, 2007

Attention also shifts to impact on their fee income

(SINGAPORE) Banks here were hit yesterday by renewed concerns over their exposure to collateralised debt obligations or CDOs, after Goldman Sachs downgraded its stock ratings on DBS and OCBC, sending their share prices lower.

But analysts BT spoke to said the main worry for now was the impact of the current financial market turmoil on the fee income of all three banking groups, rather than potential losses from CDOs. These instruments are securities backed by batches of loans, which may include sub-prime or high-risk mortgages.

Separately, Merrill Lynch analyst Andrew Maule in Singapore yesterday issued a 'buy' call on DBS, saying the recent fall in its share price 'exaggerates the likely damage to its long-term earnings power or capital ratios'.

Last week, DBS said its direct exposure to CDOs could rise by $1.1 billion if it were required to top up funding for a special-purpose vehicle it manages, causing its share price to fall.

In a statement on Monday, DBS said the vehicle has had to draw on funds from the bank following the market volatility in recent weeks. But it said there had been no change to its exposure to US sub-prime mortgages, as none of the CDOs in the vehicle has direct exposure to them.

David Lum at the Daiwa Institute of Research said: 'Given the disclosed exposures so far, it should be nothing to worry about.' He has an 'outperform' rating on all three banks, as of Monday.

Both DBS and OCBC were downgraded by Goldman Sachs from 'buy' to 'neutral' in separate reports yesterday, citing ongoing concerns over their CDO exposure.

United Overseas Bank (UOB) was already rated 'neutral' by the investment bank's research team in its last update on Aug 16.

For OCBC, there are 'no visible near-term catalysts to mitigate its CDO exposure overhang, which would make it difficult for the stock to outperform the broader market', the report said.

Meanwhile, 'DBS has one of the highest exposures among Asia ex-Japan financials, and it is the only Singapore bank yet to make any form of related provisions'.

Shares in all three banks fell yesterday as part of a slide in the broader market. DBS ended 2.9 per cent lower at $19.80, while UOB fell 2.4 per cent to $20.50. OCBC's shares were down 1.2 per cent at $8.50.

Earlier this week, JP Morgan analyst Sunil Garg, who is based in Hong Kong, downgraded the weighting of Singapore banks in its model portfolio of financial sector stocks in Asia from 7.3 per cent to zero.

The investment bank said financial institutions that have been 'too liquid, searched for yield and operated in sophisticated environments are most at risk' from the current fallout in financial markets stemming from the sub-prime mortgage market in the US.

'Singapore banks and Taiwan insurers appear to be the most at risk, and we see no merit in owning these stocks.'

Pauline Lee at Kim Eng Securities said her main concern now was slower fee income growth in the second half of the year and beyond, and how much the current market turmoil would affect demand for the banks' services and products.

Non-interest income - which includes gains from the banks' proprietary trading and risk management activities, as well as fees from investment banking, wealth management and securities brokerage - made up some 40 per cent of their total income in the second quarter.

While the market volatility 'should benefit the stockbroking subsidiaries, it could have a negative impact on investment banking', said Tay Chin Seng at Macquarie Research in a report earlier this week. He also said that the banks' CDO exposures were 'unlikely to have a significant impact' on their earnings.

A separate strategy note by Citigroup earlier in the week said banks here were trading at 'attractive valuations'. Citigroup said: 'We believe that local banks' exposure to sub-prime loans is relatively small compared to their asset bases and poses little threat to their financial position.'

Wing Tai's FY07 Profit Triples To $382m

Source : The Business Times, August 29, 2007

SINGAPORE - Property and retail group Wing Tai Holdings on Wednesday said net profit tripled for its financial year ended June 30 due to strong luxury homes sales. The firm said it earned $381.8 million net profit, up from $128 million a year ago.

The company said that it would continue to expand its overseas business, which accounted for about 16 per cent of revenue in the previous financial year.

Related link:
Wing Tai's financial statements

Wing Tai, which started off as a Hong Kong clothing manufacturer in the 1950s before branching out into Singapore real estate, competes with other luxury residential developers such as City Developments and Allgreen Properties. -- REUTERS

Hot Pick: Pasir Panjang & West Coast Road

Savills Singapore Predicts and Reasons for its latest ‘Hot Pick’.

Within 18 months, we believe that prices for condominiums in the Pasir Panjang and West Coast Road area will achieve:

-S$1,200-$1,800psf for Pasir Panjang Road, from Keppel Bay area to Alexandra Road junction

-S$900-$1,300psf for Pasir Panjang Road, from Alexandra Road to Clementi Road junction

-S$800-$1,100psf for West Coast Road at Clementi Road junction to Jalan Buroh area


-Price gradient of this stretch of Pasir Panjang Road to West Coast Road is rather steep, given that the S$2,000psf levels have already been achieved in Sentosa Cove and Keppel Bay areas.

-Several billion dollars of investments will be poured into research and development in the Science and Engineering Research Institutes, Science Parks, National University of Singapore and Biopolis/Fusionpolis. Many high-income, knowledge-based workers reside in this enclave. Good-quality residential units within a few kilometres will see strong demand, and rentals and capital values will rise hand in hand.

-Proximity to high-value industries, logistics and petro-chemical firms stretched from Alexandra Road to the Jurong Islands.

-With the opening of Genting’s Resorts World on Sentosa in 2010 and the expected 45,000 jobs that it will provide, the demand in Pasir Panjang and West Coast could remain strong for the next five years.

Owners Eager To Push Pending Collective Sales

Source : The Business Times, Wed, Aug 29, 2007

(SINGAPORE) Ahead of proposed changes to the Land Titles (Strata) Act, property agents and owners of affected en bloc sites are eager to push pending sales as they may soon face bigger hurdles when the amendments become law.

Changes in en bloc sale legislation, expected to be passed in early October, are aimed at providing more transparency and safeguards to ensure all stakeholders get a fair deal.

But this means owners that want to sell en bloc will have to follow new rules, which could mean higher costs and a prolonged process.

Jones Lang LaSalle's regional director and head of investments, Lui Seng Fatt, estimated there are some 50 en bloc sites already launched by tender or expression of interest in the market, with about half of these not having obtained consent from owners holding at least 80 per cent of share value. 'They would have strong incentives to get through. Otherwise, if the new law kicks in... they would have higher hurdles to clear,' Mr Lui said.

The amendment will mean that the majority consent is to be based on the area of the units in the development. This is in addition to the current requirement for consent from owners holding at least 80 per cent of share values for developments more than 10 years old, or 90 per cent for developments less than 10 years old.

En bloc deals that have not taken the area of units in the development in their definition of majority consent will have to redraft their collective sale agreement (CSA) if they fail to reach the market before the new legislation is passed. 'If we don't achieve the 80 per cent consent we'll have to restart the exercise,' said Jeremy Lake, executive director of investment properties CB Richard Ellis.

'That's extremely time-consuming, so it makes more sense to try to achieve the 80 per cent as quickly as possible. And for projects that are far away from it with no chance of achieving 80 per cent before the legislation sets in, we will have to review the situation.' Mr Lake said the new legislation will encourage owners who have been 'sitting on the fence' about selling en bloc to decide sooner rather than later.

CBRE has about five en bloc applications that have not passed the 80 per cent mark, with the level of consent obtained so far averaging 50 per cent. DTZ Debenham Tie Leung revealed that six of the en bloc deals it is handling are at various stages of signature collection, with some close to achieving 80 per cent consent.

Credo Real Estate has seven or eight projects that have not reached 80 per cent. These consultancies said that while the amendments to en bloc sale legislation will enhance clarity and transparency, they will add to costs and slow the pace of sales. For instance, owners will have to spend more hiring lawyers to witness the signing of CSAs and obtaining valuation reports, said Credo managing director Karamjit Singh.

These consultancies have received calls from concerned sellers who want to discuss the implications of the new legislation on existing en bloc procedure. DTZ director Shaun Poh said: 'We would probably need to reassess the situation right now. For those close to the 80 per cent mark, I would advise them to hold a meeting with our lawyers to discuss the salient points of the new legislation and encourage them to push through the 80 per cent mark.' For those far from achieving the minimum consent requirement, DTZ will meet sales committees to help them make informed decisions and redraft CSAs if need be.

While there could be a rush to collect signatures for en bloc sites ahead of the changes to the Land Titles Act, this could be followed by a lull as prospective sellers mull over the new en bloc requirements. 'I think the bottle-neck will clear once this new legislation becomes standard operating procedure but I can see that temporarily, it will slow down the pipeline,' Mr Lui of JLL said.

S'pore Cheaper Than HK, Tokyo

Source : AsiaOne News, Wed, Aug 29, 2007

Despite rising property costs and wages, Singapore remains cheaper than regional global cities such as Hong Kong and Tokyo, Trade and Industry Minister Lim Hng Kiang has said.

He quoted studies which showed that Singapore remains cheaper than other global cities in the region.

A survey on global office market rentals by consultants CB Richard Ellis showed that Singapore was 30 per cent cheaper than Hong Kong, and 50 to 60 per cent cheaper than Tokyo.

Mr Lim cautioned however: "'We have to maintain vigilance over our costs, as excessive cost increases will dampen our growth prospects."

He was speaking in Parliament yesterday and addressing MPs' concerns about the impact of rising business costs on the Republic's economic competitiveness.

Citing as examples London and New York, which are thriving hubs despite their high costs, Mr Lim said "competitiveness is more than offering low costs alone", but also about value creation.

This empowers Singapore with attributes that economies in the region cannot easily replicate, such as its livability.

Mr Lim also pointed out that in the past three years, the consumer price index has increased at an annual rate of 1 per cent, while overall unit labour cost actually declined at an annual average rate of 2.2 per cent.

"However, in recent quarters, we have seen increases in property prices and rentals, as well as wages," he added.

He cited recent moves to release land for temporary office space as well as provide more public flats for rental.

The Ministry of National Development (MND) also released additional information on property prices and rents 'to allow the public and businesses to make more informed decisions on property purchases and rentals'.

The Government is also looking at ways to help more Singaporeans capitalize on the strong employment market and rejoin the workforce.

Addressing media reports of "sky-high" office rentals, Mr Lim said although the median prime office rent in the second quarter was $9.50 per sq ft per month, the median rent in other locations, accounting for about 80 per cent of office space here, was less than half of that

Asian Stocks Tumble On Worries Over US Economy

Source : The Straits Times, Aug 29, 2007

Investors dumped risky assets on Wednesday on renewed fears about the health of the US economy, Asia's top export market, sending regional stocks down and driving the yen and safe-haven government bonds higher.

'The main worry for us about the ongoing US subprime crisis is really the impact on the US consumer,' said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.

'Falling consumer sentiment there is a big concern, and it's going to inevitable hit shares in exporters such as autos.'

Shares fell sharply on Wednesday morning after US stocks tumbled overnight on worries over the health of the American economy.

The benchmark Straits Times Index lost 73.80 points or 2.2 per cent to 3,269.20 at 12.30pm, tracking falls in key regional markets.

In the broader market, losers beat gainers 659 to 127 in a turnover of 1,092.7 million shares.

Malaysian stocks fell with the key Kuala Lumpur Composite Index down 22.77 points to 1,256.18 at the lunch break.

Losers outperformed gainers 786 to 51 while 114 counters were unchanged. Turnover was at 543.2 million valued at RM981.5 million (S$431.8 million).

Blue chips fell 2.3 per cent as sliding global equities amid heightening credit worries prompted investors to cash in recent gainers like heavyweight China Life.

Hong Kong-listed shares in mainland companies, or H shares, tumbled 4.1 per cent.

Aluminum Corp of China, Jiangxi Copper Co Ltd and other China plays which had rallied in recent sessions on anticipation that their wide discounts to Shanghai-traded A-share counterparts would attract an influx of mainland investors.

Mainlanders last week were given the green light to invest directly in Hong Kong stocks.

'It's pretty much the usual stuff,' said Jackson Wong, investment manager at Tanrich Securities.

'The A-H discount shares are all down, but I think there's still buying power. The (mainland investment) scheme is a huge catalyst for these stocks to hold up.'

The benchmark Hang Seng Index fell 544.19 points to 22,819.57 by lunch. The China Enterprises Index of Hong Kong-listed mainland companies had shed 572.42 points to 13,377.23.

Mainboard turnover slowed to HK$59.4 billion (S$11.6 billion), down sharply from Tuesday morning's HK$75.9 billion.

Chinese stocks fell sharply on Wednesday, dragged down by a sharp drop in the Hong Kong share market and concern that domestic money market liquidity might tighten in coming months.

The Shanghai Composite Index ended the morning down 1.91 per cent at 5,095.294, after dropping as much as 2.53 per cent at one stage. Falling Shanghai stocks outnumbered gainers by 645 to 205.

Turnover in Shanghai A shares remained active at 91.3 billion yuan (S$18.5 billion), up from Tuesday's 89.1 billion yuan, showing considerable interest in taking profits on the index's gain of more than 90 per cent this year.

'After the index touched 5,200 points and rose for seven straight days, it's time to pull back. Investors are getting nore cautious,' said Zhang Qi, analyst at Haitong Securities, noting that articles in major business newspapers had started warning more of risks in the market.

Some traders think the index will probably pull back in coming days to technical support around 4,900, where it briefly peaked in mid-August, although cash-flush mutual funds are expected to prevent any steep or extended slide.

Japanese stocks slid nearly three per cent on Wednesday as a strong yen sparked sales of exporters such as Sony Corp after worries about the US economy set off a Wall Street tumble, but later recouped some losses.

A few shares, such as Isuzu Motors Ltd, bucked the trend, largely due to individual factors - in the case of Isuzu, upbeat mid-term financial targets - as a wait-and-see mood spread out of concern about yen movements.

The benchmark Nikkei average lost 274.66 points or 1.69 per cent to 16,012.83, while the broad Topix index fell 1.71 per cent to 1,557.55. -- REUTERS

En Bloc Blues - A Windfall Worth Waiting For?

Source : The Straits Times, August 29, 2007 Wednesday

Pay a little bit more and wait a little longer. That will be the scenario in the collective sales property market with the proposed changes to the Land Titles (Strata) Act expected in October.

But according to the head of a leading property agency, the measures will not pour cold water on the en bloc fever.

Jermyn Chow throws the spotlight on one development that's in the midst of taking the plunge.

Related Video Link -
En bloc blues - a windfall worth waiting for?

POSB Gets A Boost With $35m Makeover

Source : The Straits Times, Aug 29, 2007

Branches have been refurbished as DBS recognises branding power of 'People's Bank'

DBS Bank is giving POSB a $35-million makeover as part of a major push to revitalise the much-loved 'People's Bank'.

The cash is being spent refurbishing POSB's 49 branches, adding a new one in Suntec City and on a multi-million-dollar ad campaign - and all by the end of the year.

The move marks the biggest commitment by DBS to develop POSB since the banks merged in 1998.

It is also a signal that it has belatedly recognised the enduring branding power of the 130-year-old bank and the strength of its affections among Singaporeans.

'We realised that we actually have a huge, powerful brand in our franchise', said DBS marketing and communications head Karen Ngui.

'I think, perhaps, we might have underestimated the huge amount of equity and the huge amount of emotional engagement that Singaporeans have with POSB.'

The bank is also a money-maker. Despite rising competition for mass market banking, POSB is at its most profitable and continues to grow its already large customer base.

The revamp, which began two years ago, dwarfs previous investments in the brand. In 2001, DBS said it would pump $1 million into the franchise. It went on to spend a further $5 million to $10 million a few years later.

Much of the latest investment has gone into transforming POSB's branches into modern outfits.

They are typically two to three times bigger than in the past, with a floor area of about 2,000sqft.

This allows them to feature more spacious waiting areas, while plasma TVs keep queuing customers entertained and 'menu boards' like those in fast-food restaurants display details about bank services.

So far, 47 branches have been retrofitted, with just outlets in Boon Lay and Woodlands to go under the hammer and saw.

A series of emotive ads will also hit TV screens soon. Focusing on POSB's 'bank next door' image, they will revive that other female national icon - the POSB Girl.

'As the population ages and dies, brands like POSB will die, unless you rejuvenate it,' said DBS regional consumer banking head Edmund Koh.

POSB attracted 100,000 new customers last year, bumping up the total amount of its deposits by 10 per cent.

Currently, about 3.2 million individuals have POSB accounts, and a total of $32 billion in savings is deposited in them.

POSB customers are not just saving but are using credit cards, taking out home loans and buying investment products.

This has helped the bank record its highest profit margins as its costs are now equivalent to 60 per cent of its income, down from 99 per cent in the early years after the merger, said Mr Koh.

'This bank will operate optimally at about 48 to 50 per cent and it will do it very soon,' he said, adding that cross-selling will be key to achieving this.

Analysts said POSB is a very valuable franchise and a strong source of funds. 'Customers of POSB have been customers for a long time. To change branding to DBS would be dangerous,' said an analyst from a foreign bank.

Human resource executive Danny Goh, 30, who has been saving with POSB since young, is glad that the bank is getting a new lease of life. 'The blue and yellow colours, the key symbol, these are all icons, things that I grew up with.'

Said Mr Koh: 'Our unwritten social contract is: We serve everybody. Nobody will be turned away from POSB unless there is criminal intent.'

Collective Sale Market Seen Slowing On Proposed Changes

Source : The Straits Times, Aug 29, 2007

New rules will address minority concerns over sale price, transparency

EXCEPTION: The amended Land Titles (Strata) Act - likely to take effect in October - will apply to all projects except those where the 80 per cent to 90 per cent majority consent has already been obtained. -- BT FILE PHOTO

THE property fever that has gripped Singapore for the past year will likely cool in the wake of proposed changes to rules on collective sales.
The new rules - likely to apply in early October - will make collective sales a lengthier, more complex procedure, say industry experts.

'The market will eventually adapt, but the process will definitely be more long-winded and cumbersome, which should diminish the number of projects which come to market successfully,' said Mr Jeremy Lake of consultancy CB Richard Ellis.

Lawyer S.K. Phang said Singapore's rules on collective sales are already one of the most comprehensive in the world, but 'the latest amendments - so far the most far-reaching in their effects - tighten them further'.

Sales have already been tapering off.

Other pressures have come from a recent hike in development charges that developers pay and a jittery stock market that has unnerved investors.

The new rules come amid seemingly growing resentment among minority owners - those who did not vote for a sale - with the sale process.

Many of their issues, apart from the sale price, concern transparency, with some owners complaining that they are being kept in the dark.

The changes, including a five-day cooling-off period, will help address these concerns, but the changes are still pro-sale, said a lawyer.

Some industry players are not happy with the short transition period for the proposed changes.

Once the amended Land Titles (Strata) Act takes effect, it will apply to all projects except those where the 80 per cent or 90 per cent required majority consent has already been obtained.

Owners are seen rushing to get the 80 per cent approval before the new rules come into effect or risk having to restart the whole sale process under the new law.

The last few signatures, however, are often the hardest to nail, observers say, so those who have not yet signed have even more reasons to resist.

'The short transitional period may undo some ongoing collective sales, which are in the process of obtaining the required percentages of consensus,' said Dr Phang.

Estates that have just formed sales committees or started collecting signatures will have to start again at a higher cost. A benefit is that the owners of these estates will be able to monitor the sale process better.

'The new rules will give owners a chance to be involved,' said a collective sale seller. 'If not, the sales committees kind of run the show on their own.'

Mr Nicholas Mak of consultancy Knight Frank said: 'The requirement to have a vote to set up a sales committee means very committed people are required to sit on the committee, as they will face greater responsibility and accountability.'

Some speculators looking to set up a sales committee or just buying into older properties hoping for a quick gain through the collective sale process could be deterred.

There will be a higher risk that the sale will not succeed and, even if it does, the specuators' cash will be tied to the property for a longer period.

The proposals could also deter those who are not serious about a collective sale but are just testing the market to see their property's worth.

'If the new regulations can weed out such people, that would be a positive effect,' said Mr Mak.

If fewer estates come to the market, their success rate could rise, said a consultant.

Storage Boom As Rents Rise

Source : The New Paper, August 29, 2007

PAY a hundred per cent more rent or move out.

(Left)Mrs Kylie Jones and her daughter, Tayla, 3, at their self-storage unit at Lock+Store. They are among a growing number of expatriates renting unit at self-storage facilities. -- Pictures: ADELINE ONG

That was a reality check for an expatriate, who wanted to be known as Mr Tony, in the soaring property market.

He decided to take up the 'halfway house' option and move in temporarily with a friend.

But he had to contend with all his belongings and furniture from his packed two-bedroom apartment.

To solve the problem, the Head of Strategic Partner Development at a global telecommunications firm decided to rent self-storage space for $600 a month.

Other than some clothing and a few personal items, everything that Mr Tony, 44, owns is now stored away.

He is not alone.

Companies which provide self-storage facilities are reporting a rise in rentals by foreigners as rising rental prices force more of them to downsize.

One of the companies, Lock+Store, has double the number of expatriate clients compared to nine months ago.

About 10 to 20 per cent of its 1,200 units at Tanjong Pagar Distripark are now rented by expatriates, said its general manager, Mr Lee Seng Chee.

Overall, business has grown at least 60 per cent in the last year, said Mr Lee.

Lock+Store general manager, Mr Lee Seng Chee, pointing out one of the smaller self-storage units.

He added: 'A large part of the surge is due to the number of expatriates who are downsizing due to the booming rental market, and companies not increasing housing allowances by as much.'

But the rise is also due to the number of expatriates relocating temporarily due to work, he added, as well as the increasing popularity of self-storage facilities.

Market leader Storhub has seen the jump in expatriate numbers mainly at its Changi outlet. From having eight foreigners from March to May, it registered 15 from June to August.

Its vice-president for marketing, Mr Anthony Chua, attributed it to the increasing popularity of homes in the East with expatriates.

Mr Chua added: 'They normally furnish their homes very well, so when they move to smaller places, they have no choice but to find somewhere to store their bulkier furniture.'

Another major player, Store-It!, has seen its foreign clientele rise from 10 to 15 per cent in the past year.

In Mr Tony's case, he had signed a two-year lease and paid $2,100 a month for his apartment at Valley Park condominium at River Valley Road.

When the contract came up for renewal earlier this year, the landlord raised it to $4,000 a month and offered only a year-long lease.

Mr Tony said: 'The rent situation has gone through the roof. From what I've seen, rents have effectively doubled. I know of friends who either bite the bullet and pay more or they move out of town.'

Mr Tony, who hails from the UK and has worked in Singapore for 21/2 years, said he no longer finds it worth renting and has decided to buy a place.

Homemaker Kylie Jones, 34, has not had to downgrade. Yet she rents a 14 sq m unit at Lock+Store as her five-bedroom semi-detached house is not large enough to keep all her family's belongings.

She counts herself lucky to have signed a three-year lease in January 2006 because in the past year, she has seen rental prices in her Bukit Timah area skyrocket.

While Mrs Jones is paying $6,300 a month, a neighbour who moved in three months ago, is paying twice the amount.

Mrs Jones said: 'It is ludicrous. Many expatriates come on a package and their companies are not increasing their salary to meet the increase in rent.

'People I know are finding that they have to move into smaller places as rents are eating into their savings. Quite a few are looking to move to the East Coast area.'

She added that a few of her expat friends, who foresee that they will have to downgrade, have asked her about her experience of using the storage facility.

Lock+Store's Mr Lee said self-storage has not only become a necessity for some expatriates but is also part of their lifestyle.

Mr Lee added: 'Expatriates are more used to renting self-storage facilities, and as word spreads, more in the expat community are using it. They use it as an extension of their home.'

Most of its clients are from the US, Australia, Germany, UK and France. It is adding another 580 units soon, and has plans to build a new facility in the east to cope with rising demand

HDB : Barrier-Free Accessibility

Source : TODAY, Wednesday, August 29, 2007

Ensuring barrier-free accessibility (BFA) in HDB estates is key to providing a quality lifestyle for Singapore’s ageing population.

Incorporating BFA features into the living environment will benefit not only the elderly, but also the less mobile, allowing them to move freely within their estates, from block to block, within the precinct and beyond the precinct boundary. It will also have a meaningful and immediate impact on the daily lives of HDB residents.


In December 2005, the Jurong Town Council, together with HDB, LTA and NParks transformed the precinct into a barrier-free one. Twenty-four blocks were provided with ramps connecting them to the void decks/lift lobbies, car parks, driveways, park connectors and bus stops.


And more HDB estates have been following suit. All Town Councils have a BFA implementation masterplan to ensure that all HDB estates are barrier-free by 2011. HDB has been working closely with the Town Councils to implement the BFA measures in the selected precincts.


Most Town Councils have completed their pilot projects. BFA works are being done in phases for the remaining precincts. HDB residents can look forward to all precincts in HDB towns and estates being BFA-ready by 2011.

The Industrial Community Portal

Source : TODAY, Wednesday, August 29, 2007


HBiz launched the “MyTransactions” module on in April 2007 which allows HBiz users to view their transactional status and history online.

The transactions logged include those for renewal, change of tenancy, assignment, and subletting. The new self-help facility allows users to monitor the status of their applications filed online at their own time and convenience.

Another new module “My Tenancy/Lease Info” was made available for HBiz members since May 2007 to view their business information online. Tenancy/lease information such as Contractual Rent, GIRO Reference Number, Rental Deposit Amount, Date of Tenancy Commencement, and Mode of Business are all made available on a single page for viewing by the HDB industrialists upon login.

Visit for more information.

Parking Made Easy With Electronic Parking System (EPS)

Source : TODAY, Wednesday, August 29, 2007

With Electronic Parking System (EPS) now implemented in 53 carparks islandwide, parking has become hassle-free.

The EPS pilot project started off in two carparks in 2003 and has been expanded to 53 HDB carparks, with more to come. There are five established service providers who manage and operate the EPS carparks 24 hours a day.

Using a closed-circuit television and intercom system linked to their control centres, they are able to operate the EPS remotely, monitor vehicular movement and communicate with motorists.

The system also dispenses receipts for motorists who need parking fee reimbursement from their respective companies. With no changes to the current parking rates, motorists can even benefit from the 10-minute grace period provided.

And motorists pay less in comparison to coupon parking as they are only charged for the actual parking duration on a per-minute basis.

Median Rent From Subletting Of Flat

Source : TODAY, Wednesday, August 29, 2007

If you wish to rent an HDB flat from the open market and do not know the market rents, you may check out the median rents available at HDB InfoWEB to help you with flat hunting and rent negotiation. Visit and look under HOME OWNERS>HDB Housing Market Statistics. The list of median subletting rents is based on information provided by flat owners who sublet their flats. It is meant as a
reference only.

Use CPF Only As A Cushion For Retirement

Source : TODAY, Wednesday, August 29, 2007

Also, resist temptation of cutting contributions during economic downturns

THE Prime Minister announced sweeping changes to the Central Provident Fund (CPF) scheme at last Sunday’s National Day Rally. The past week has seen more details being disclosed, and Minister for Manpower Ng Eng Hen will make a ministerial statement in Parliament next month.

The changes are far-reaching, even more so than the graduated increases in the Minimum Sum (to reach $120,000 by 2013) announced in August 2003. They are aimed at helping Singapore’s ageing population be financially independent in its old age, together with other measures such as the proposed re-employment legislation.

The latest announcements have once again focused attention on the primary objective of the CPF scheme, as a compulsory long-term retirement savings scheme. This is welcome, as CPF has over the years taken on other functions, ranging from housing payments to funding education to the management of healthcare costs.

Indeed, in the past year, CPF seems to have taken on an increasingly significant role as a policy instrument with a key role in accomplishing the Government’s different objectives, in particular to manage the consequences of the widening income gap and to address the issue of an ageing population.

The Workfare Income Supplement scheme introduced this year is heavily linked to the CPF scheme, especially for casual workers. The CPF also plays an important role in the Additional Housing Grant, which aims to strengthen the role of housing as a crucial pillar in the Government’s policy response to the widening income gap and the ageing population. When a grant recipient sells his flat, the grant amount must be paid into the homeowners’ CPF accounts.

The key consideration seems to be that CPF is a useful vehicle to ensure that grants and assistance provided to people are not misused, since CPF funds may only be used for certain specified purposes. This is especially important for retirement planning, where a long-term view is necessary in ensuring that funds generate the necessary returns for funding retirement.

Indeed, the Government’s own calculations demonstrate the power of compound interest over the long run. As the Prime Minister noted in his speech, it could mean up to $20,000 more in interest. Similarly, deferring the draw-down age for the Minimum Sum by one year means that the Minimum Sum can last for two extra years down the road.

That being the case, I would urge the Government to refrain in future from using CPF as a tool to manage the economy, specifically by cutting the CPF contribution rate (in particular, the employer’s contribution rate) when times are bad so as to preserve our cost-effectiveness. This is because of the disruptive effect on people’s long-term plans resulting from such changes, especially when the reductions are amplified over time.

Over the past 20 years, the Government has repeatedly cut the CPF contribution rate whenever the economy was doing badly. The rate hit a high of 50 per cent (25 per cent for employers and 25 per cent for employees) in the 1980s, but was cut sharply to 35 per cent (10 per cent to 25 per cent) in 1986 in the wake of the 1985 recession.

By 1994, the rate had been restored to 40 per cent (20 per cent-20 per cent) for those aged 55 and below. But the Asian financial crisis in 1997-1998 saw the Government cutting the contribution rate to 30 per cent (10 per cent-20 per cent). This was restored to 36 per cent (16 per cent-20 per cent) in 2001.

Although the Government had promised to restore the rate to 40 per cent, then-Prime Minister Goh Chok Tong announced in 2003 that 40 per cent was unsustainable and that moving forward, the CPF contribution rate would float between 30 per cent and 36 per cent.

He also announced a 3-percentagepoint cut in the rate, to preserve Singapore’s cost- competitiveness. This was only partially restored earlier this year, through a 1.5- percentage-point increase that took effect in July.

These swings in the CPF contribution rate would surely have adversely affected most people’s retirement planning to varying degrees. That is to say nothing about the impact on their servicing of housing loans, or even education. For the middle and upper classes, all this would have been seriously compounded by the reduction in the CPF salary ceiling from $6,000 to $4,500.

While I accept that it is important to ensure that Singapore remains competitive and that it is always better for Singaporeans to have jobs than be unemployed, the ageing population — and its financial self-sustainability — is a pressing issue that ill increasingly preoccupy us in years to come. Changes in the CPF contribution rate affect everybody, and can have exaggerated repercussions over time. It is about time that we resist the temptation to tinker with the rate, however hard the economic going gets.

The writer is a Nominated Member of Parliament and corporate counsel, commenting in his personal capacity.

Plots Released For Landed Housing

Source : TODAY, Wednesday, August 29, 2007

More land has been released for landed housing —the first time the Government has done so since 2001.

Yesterday, the Urban Redevelopment Authority (URA) launched 12 land parcels, at the junction of Sembawang Road and Andrews Avenue, for sale by public auction.

Knight Frank’s research director Nicholas Mak estimated the land value at as much as $250 per square foot, and the breakeven cost per house at between $870,000 and $930,000 for terrace houses, and about $1.6 million for detached houses.

Mr Mak said the URA’s move could reflect a change in the Government’s thinking—providing variety instead of purely maximising land use through condominium projects. He added: “Maybe it’s due to feedback that there’s a demand for land properties.”

En Bloc: New Frenzy In Offing?

Source : TODAY, Wednesday, August 29, 2007

Or will rule changes draw out time to close a deal, ask analysts

AS PROPERTY stocks fell yesterday in reaction to the proposed new rules on collective sales, less certain is what kind of impact the changes will have on the dampened en bloc fervour.

With Singaporeans spooked by the United States’ sub-prime woes, only one en bloc sale has been lodged so far this month, according to data from Savills Singapore— a far cry from April’s high of 20 and last month’s six. In all, 62 deals worth a total of $10.9 billion have been announced this year.

Now, enter the proposed new legislation unveiled on Monday, which could take effect in October.

Some industry players are apprehensive that the extra requirements, such as requiring lawyers to witness the signing of Collective Sale Agreements (CSAs), could draw out the time taken to launch a site for sale.

But others believe the new rules could re-ignite the frenzy that had just calmed.

Chesterton International’s research director Colin Tan felt the changes could reduce the “controversies” in an en bloc deal and actually speed up the process.

“There’s more transparency and fewer grouses and, ultimately, fewer grounds of appeal. Once concluded, the sale completion, including the hearing of appeals, would be much faster,” said Mr Tan.

But Dennis Wee Realty’s head of investment, Mr Daniel Ong, argued that some “illogical” changes would cause deals to bust their deadlines.

A CSA lapses if a sale committee cannot garner majority consent within a year.

Said Mr Ong: “Many owners call the sale committee members out of the blue and say, ‘You want to take my signature? Come to my house now, or I’ll be away for the next three months.’ How are you going to get the lawyer to be around?”

And by giving owners a fiveday “cooling off” period during which they can change their minds, owners would “ding-dong”, Mr Ong added.

“They should require the sale committee to set a date when it’s compulsory for all residents to gather and listen to the lawyer explain the CSA,” he said. This way, those absent “cannot turn around and say they are unaware of the terms and conditions”.

Nevertheless, some residents in the midst of en bloc transactions welcomed the changes.

Mr Harry Chia told TODAY the sale committee for his Bukit Timah apartment complex had “pre-empted, in a way” the new legislation — the committee, marketing agent and lawyer were appointed at a general meeting. As a result, the en bloc process begun last month has been “very smooth”, he said.

Meanwhile, some owners at Neptune Court objecting to an en bloc bid, launched in May, are planning to hold out until the new laws kick in. TODAY understands the sale committee is halfway towards achieving the required 80- per-cent majority consent.

Said unit owner Philip Williams: “I think residents would be happier following the new guidelines set out by the Government.”

Another resident added: “Currently, the regulations surrounding the sale committee are nebulous or, in fact, non-existent.”

Sands IR: The Glitz, The Glamour, The Spiralling Cost

Source : TODAY, Wednesday, August 29, 2007

AT US$3.6 billion ($5.5 billion), it was touted as one of the costliest casino- resorts ever, out-glitzing even the newlyopened Venetian Macao (picture).

Now, the development bill for the Marina Bay Sands integrated resort (IR) could swell further — by as much as US$1.44 billion.

A spike in the cost of building materials, sparked by the Indonesian sand ban in January, as well as refinements to development’s design, could push up the tab by “20 to 40 per cent”, Las Vegas Sands president and CEO William Weidner yesterday told the Singapore media visiting Macau.

Said Mr Weidner: “My cost people keep on discussing concrete and some of the sand issues that you all face in Singapore. We’re struggling, quite frankly, to stay within our budget.

“It’s a very, very complicated and sophisticated building … as wonderful as the idea is, now that we try to execute it in concrete and steel, it’s a bit of a challenge. But we’ll get there. We’re looking for means and methods to construct it more efficiently.”

Back in February, when construction on the IR began, the casino operator was hopeful the sand supply issue would be a “temporary glitch” and that the Singapore Government would find a long-term solution.

The Las Vegas-based operator meets regularly with the Republic’s authorities. Said Mr Weidner: “There are several issues that still need to be resolved.”

Some $700 million worth of contracts have been awarded. A whopping $1-billion contract to build the IR’s three 50-storey hotel towers — which will go to a multi-national corporation — will be announced soon, revealed Marina Bay Sands’ vice-president George Tanasijevich.

The IR is due to open in 2009 and already, talks are ongoing with organisers to host about 20 major events up to 2013, he added.

Sands was the first foreign player to enter Macau’s gaming scene in 2004.

The US$265-million Macao Sands got its money back — and more — by raking in US$400 million in revenue within a year.

So, is Las Vegas Sands expecting its latest property — the US$2.4-billion Venetian Macao, touted as the world’s second-largest building — to break even within 12 months? More like five years, Sands’ billionaire chairman Sheldon Adelson told AFP.

More than 3,000 guests and 1,200 media turned up for yesterday’s star-studded opening of the Venetian Macao, which is modelled — on a larger scale — on Sands’ The Venetian in Las Vegas, complete with canals, gondolas and a fake sky.

In addition to more than 850 gaming tables, there are 3,000 luxury suites, a 15,000-seat stadium and 350 shops. The new resort reportedly employs 5 per cent of the territory’s workforce of 450,000.

In the crowd was Singapore Tourism Board deputy chairman and chief executive Lim Neo Chian, who described the new resort as “very impressive”. He said: “By the time the Marina Bay Sands IR opens in Singapore, Las Vegas Sands will have invaluable experience and insight into the Asian market — enabling them to make Marina Bay Sands, which is very different in design to their two Macau resorts, an even better proposition.”

The Venetian Macao is the first casino built on the Cotai Strip, a complex of hotels that will have more than 1 million sq ft of gambling space, 3 million sq ft of retail and almost 20,000 hotel rooms.

With the target being the huge numbers of nouveau riche gamblers who pour daily across the border from mainland China, Mr Weidner yesterday announced plans for a Las Vegas Sands ferry service from Macau to Hong Kong and Shenzhen. A new terminal is being built near the Macau airport, as are 10 new ferries that will cast off between October and March.

Last year, gaming revenues in Macau totalled US$7.2 billion — overtaking the Las Vegas Strip for the first time.

Cairnhill Crest

Cairnhill Crest is located in the Cairnhill district of Singapore. The luxurious residential development comprises 3 towers, offering one-to four-bedroom units. It also boasts a clubhouse designed by the renowned architect, Norman Foster. Cairnhill Crest can be accessed via Orchard Road and is nearby Orchard MRT Station.

Quite simply one of Singapore's most desired freehold addresses, Cairnhill Crest is an oasis of tranquility ensconced in prime district 9. Surrounded by lush vegetation, Cairnhill Crest is based around a unique garden concept, where you'll find the greenery of landscaped English lawns complemented by modern tropical gardens. The contemporary elegance of Cairnhill Crest blends perfectly with the old-world charm of the conserved terraced houses and bungalows that pepper Cairnhill and Emerald Hill. The result is a stunning blend of pedigree and heritage.

A sheltered cove of lush foliage and spreading trees, Cairnhill Crest sits comfortably framed by Orchard Road, Clemenceau Avenue and Scotts Road. This enviable location gives residents easy access to Orchard, Somerset and Newton MRT stations, top schools, premier club like the American and Tanglin Clubs as well as the finest shopping, dining and entertainment hubs of Singapore such as Takashimaya and Paragon Shopping Centres.

Cairnhill Crest offers a full complement of luxurious amenities benefiting its glamorous status. The attentive services, lush landscaping, and comprehensive facilities including an opulent Residents Club, simply take your breath away. Lift lobbies on each floor are fitted with imported marble tiles and a grand crystal chandelier. Top international brands such as Miele and Poggenpohl create a modern, stylish, and highly functional living environment that pleases the senses and adds aesthetic value to your home.

Location : Cairnhill Circle (District 9)

Map Source :

Tenure : Freehold
Year of Completion : 2004
Site Area : 157,000 sqft
Total Units : 248 in Three 20-Storey Towers

Unit Types:
2 BR ~ 1,927 - 1,938 sq ft (ground floor)
3 BR + study ~ 1,701 - 1,733 sq ft
3 BR + study ~ 2,637 - 2,971 sq ft (ground floor)
4 BR ~ 1,970 - 2,013 sq ft
4 BR ~ 2,960 sq ft (ground floor)
5 BR maisonettes ~ 3,466 sq ft
7 BR maisonettes ~ 3,940 - 4,026 sq ft
Penthouses ~ 2,422 - 3,057 sq ft (3 BR)
Penthouses ~ 2,669 - 2,691 sq ft (4 BR)

Rental Price : Average $7.5/psf
Purchase Price : From $2400/psf

-Lap Pool
-Wading Pool
-Social Hall
-Hydro-Spa Pool
-Champagne Pool
-Garden Pavilion
-Lotus & Lily Pond
-Putting Greens
-Basketball Practice Court
-Fitness Stations
-Tennis Court
-Children's Playground
-BBQ Corner
-24 Hours Security
-Covered Car Park

Expected Impact Of US Sub-Prime Woes On Stock Markets Overblown

Source : The Straits Times, Aug 29, 2007

Real problem is lack of transparency by banks in dealing with the risk: UBS banker

A TOP banker with one of Europe's leading financial institutions was in Singapore this week with a message for investors still rattled over volatile markets: It's not as bad as it looks.

Zurich-based Dr Klaus Wellershoff, a member of UBS Group's managing board and global head of its wealth management research, said the fragile United States real estate market would not have the impact on global financial institutions that many are predicting.

Even if defaults on US home loans rise to US$200 billion (S$304 billion) or US$300 billion as borrowers fail to pay up, the amount would still be much smaller than the US$2.5 trillion loss in value suffered by global equities market in the past three weeks.

And this, said Dr Wellershoff, is the real problem - the lack of trust and transparency in dealing with a problem where the 'underlying risk is relatively small'.

'What is disconcerting is not the sub-prime market, where loans are made to individuals with poor credit history, but the contagion that problem has spread to other asset-backed instruments,' he said.

Repackaging the bonds does not multiply the risk, as it is like discharging a small spray of water. 'You find some contamination everywhere, but it is never going to be as big as the initial risk.'

But the fear of any form of contamination has led to an absurd situation where even triple- A-rated banks 'do not trust each other - to the extent that they wonder if the other party is more involved in the issue'.

Even though US banks have probably suffered bigger losses, European institutions have also grabbed headlines as the US sub-prime crisis unfolded.

Dr Wellershoff said: 'Europeans are too honest for this world. The two German banks that suffered losses are very minor institutions. The actual losses are not that big.'

Still, he observed that while central banks managed to stave off a global liquidity crisis by pumping billions to prop up the banking system, there is a real crisis in the US real estate market and it is far from over.

Dr Wellershoff believes the US Federal Reserve will cut interest rates to ease the pain of the country's construction sector.

'Construction activity has shrunk by one-third. It is not a slowdown in growth rate anymore and it is a crisis and so it is fair to assume that the Fed will act on it,' he said.

Cutting US interest rates will not cause the unwinding of yen carry trades where investors borrow massively in yen to buy higher-yielding assets. 'Investors who indulge in yen carry trades don't buy US government bonds. They buy something that yields higher returns...A cut in US interest rates will yield more investment opportunities,' he said.

As US interest rates fall, the returns of the equity market may improve, and this should be lucrative for carry trade investors, Dr Wellershoff added.

Property Stocks Slip On Fears Over New Rules

Source : The Straits Times, August 29, 2007


Investors worried over impact on land-banking; office market retains shine

RESIDENTIAL property stocks took a beating yesterday as investors got the jitters over tougher en bloc legislation that could slow land-banking.

City Developments slipped 40 cents or 2.6 per cent to $14.70, CapitaLand lost five cents or 0.7 per cent to $7.40 and Keppel Land shed five cents or 0.6 per cent to $7.90.

The counters were hit in a lacklustre market, as the benchmark Straits Times Index slid 45.44 points or 1.3 per cent to 3,343.

CIMB-GK property analyst Donald Chua said property firms were sold on worries the government could take further measures to contain prices.

'Investors are sitting back to wait and see what policy comes out and how it affects the market,' he said. 'But even if you look at the en bloc legislation, it has no real impact on fundamentals.'

Other analysts also said proposed changes to en bloc sale rules are unlikely to have a major impact on developers, with the pace of such sales having already slowed because of higher asking prices.

Winston Liew of OCBC Investment Research said the dispute between en bloc sellers at Horizon Towers and buyers including Hotel Properties Ltd has been a dampener. 'And these changes to legislation are just further impediments that have been put in place to reduce the rate of en bloc developments.'

OCBC has a 'hold' call on CapitaLand and Keppel Land while keeping a 'buy' call on City Developments given its exposure to the office market and substantial pre-sold projects that reduce earnings risk.

Some analysts feel the new legislation will not hit developers' earnings too hard. 'It's a tweaking of rules but not very prohibitive,' said Macquarie Research Equities analyst Soong Tuck Yin said. 'The pace of land-banking depends more on pricing than the rules.'

CIMB-GK's Mr Chua said: 'The property market is still strong and prices for the past half-year have consistently surprised on the upside. But at current levels, we don't think investors are willing to take much risk, so the bullish view of further physical price appreciation may be halted for the moment.'

He is more upbeat about the office market, with rents expected to keep going up amid the supply crunch. The highest current office rent of about $18.50 per sq ft per month is expected to breach $20 for prime space by this year, Mr Chua said.

He reckons the residential sector is expected to 'take a step back' to see whether demand is sustained.

Among developers, he favours those that have aggressively built up landbanks at lower prices, such as Ho Bee Investment and CityDev. He has a 'buy' rating on both stocks in view of current low valuations caused by the recent market correction.

Markets Slide On Proposed Changes To En Bloc Law

Source : TODAY, Wednesday, August 29, 2007

Singapore property stocks fell yesterday, hurt by the Government's proposed changes to laws on collective property sales.

The Singapore Property Equities Index fell 1.13 per cent to 1445.27. CapitaLand fell 0.7 per cent to S$7.40, while luxury developer Wheelock Properties slid 3.8 per cent to $2.56.

Analysts attributed the falls to proposals aimed at making the en bloc sales process clearer and fairer. By October, such sales may require a public tender and a five-day "cooling-off" period, during which owners can withdraw from their sale agreements.

"It would take longer to do en bloc transactions (with the amendments)," said DBS Vickers property analyst Wallace Chu.

UOB Kay-Hian said the additional safeguards would make en bloc processes "more difficult in general", and with fewer en bloc sales, property price increases could slow.

CIMB-GK property analyst Donald Chua said the moves come on top of earlier government measures such as higher land development charges, which were "perceived to be cooling the (property) market". Concerns about the sub-prime mortgage meltdown in the global credit markets, while not directly related to property stocks, also drove down investor sentiments, he said.

"The physical property market was already expected to cool down, and investors are now just taking a step back to reassess what are the stocks that still have value," he said.

He does not expect property stock prices to recover to previous highs until sentiment recovers, and provided that more clarity on the sub-prime impact emerges and there are no draconian measures from the Government. "But office property will still be going strong, as they rely on fundamentals, while the residential-sector is more sentiment-driven," he said.

'The Panic Of 1907' Versus The Sub-Prime Crisis

Source : The Straits Times, Aug 29, 2007

(SINGAPORE) The unfolding of the sub-prime crisis that has jarred financial markets in the last two months 'has a long way to run', said Robert Bruner, dean of the University of Virginia's Darden School of Business and co-author of the book The Panic of 1907.

In a close parallel to recent events, the book chronicles and analyses a liquidity crunch that hit Wall Street almost exactly 100 years ago, which led to the formation of the Federal Reserve System.

Speaking in an interview with BT yesterday, Dr Bruner compared the situation then to contemporary affairs. He said today's crisis is 'still early in the process', though the next couple months is likely to provide information and other signals that could bring matters to a head.

One reason is that hedge funds - the influential wild cards of hot money in today's financial system - must report on a monthly or quarterly basis, and they are due to do so in August or September.

If funds with major loans from established financial institutions reveal huge losses, it would cause widespread fears about the institutions' soundness, and institutional depositors, the 'hot money' in the system, would shift their capital into US Treasury bonds, said Dr Bruner. 'We could see a prominent institution perhaps not collapse but sold under involuntary conditions.'

Although the sub-prime mortgage sector is only a fraction of the credit market, 'what's important is not the total supply of credit but the behaviour at the margin', he said. This refers to corners of the world's financial systems that contain risks investors are not aware of - such as with Thailand's banks in 1997 or Russia's sovereign debt in 1998.

Today, it refers to to hedge funds that are 'by and large well-run but from whom we see periodic collapses', like with Long Term Capital Management in 1998 and Amaranth last year.

'We don't have any transparency about the global hedge fund industry and have no way of knowing what difficulties may lurk,' he said.

The Fed's meeting on Sept 18 to discuss the benchmark interest rate will provide another important signal. 'If they raise rates, they are saying the crisis has passed. If they lower, its clearly a signal that things are a lot worse than we imagine,' said Dr Bruner.

So far, the Fed has played a cautious game and save its most potent weapon, though it has lowered the discount rate - at which it makes short-term loans to banks - and signalled it is willing to throw liquidity into the market. The Fed is the 'best informed player in the US capital markets right now' but 'may not have many more options', Dr Bruner said. He expects Asian markets to remain robust, especially in sectors with sufficient liquidity. But economies like China and Japan also depend on the willingness of the US consumer to keep spending, he said.

'We are at the very beginning of what is the heavy consumer spending season of the entire year, from now till end of the calendar year. We will know probably in the next 30 days how buoyant the US consumer feels.'

A few recent statistics, such as lower demand for boxcar shipments from the West Coast to the Midwest, and lower shipments from Asia, suggest that importers are stocking at a lower rate, he said.

Macau's Grandest

Source : The Straits Times, Aug 29, 2007

TALL ORDER: Street performers entertain guests at the official opening of the Venetian Macau, which boasts an artificial sky in the retail area to give visitors the impression of walking through the streets of Venice at dusk. -- PHOTO: LIANHE ZAOBAO

MACAU - THE Venetian Macau, the sister development to Singapore's upcoming Marina Bay Sands, opened its doors to the public with great fanfare last night.

The extent of the transformation of what was once a virtual wasteland gives some idea of what Singaporeans can expect in 2009, when its own Marina Bay development is completed.

The US$2.4 billion (S$3.7 billion), 3,000 all-suite resort is the biggest integrated resort (IR) in Asia to date. An artificial sky in the retail area gives the impression of walking through the streets of Venice at dusk.

The 3,000-long guest list at the official opening included celebrities such as Diana Ross and Taiwan pop sensation Zhang Hui Mei.

Among the invited guests at the 7pm opening was Singapore Tourism Board chief Lim Neo Chian, who was impressed at this sneak peek of what could be on offer at the Singapore development.

The Venetian Macau is the first of six resort hotel developments Las Vegas Sands has planned for the the Cotai Strip, which consists of 80ha of reclaimed land connecting the islands of Taipa and Coloane.

Las Vegas Sands chief executive officer Sheldon Adelson believes that the Venetian Macau represents the beginning of the transformation of the ex-Portuguese enclave, now a Special Administrative Region of China, into 'Asia's Las Vegas'.

By offering a wide range of entertainment and services in addition to gambling at the Venetian Macau, Las Vegas Sands hopes to increase the current average stay of visitors from 1.1 days to a more leisurely 3.5 days.

The Venetian Macau boasts the world's largest gaming space at 546,000 sq ft. This is about half the size of Singapore's VivoCity.

But it represents merely 5 per cent of the total gross floor area of the resort, which includes a 15,000-seat performance arena, over a million sq ft of convention and meeting facilities and a 1,800-seat theatre for Cirque du Soleil shows.

Among the first people to enter the resort after it was declared open was 60-year-old Hong Kong housewife Madam Ko. She came on a special day tour to witness the opening and immediately hit the gaming floor to try her luck at the jackpot machines.

She said in Cantonese: 'I hope that this new place will bring me some luck.'

A third of the 360 retail shops were also open until midnight.

Mr Lim said: 'By the time the Marina Bay Sands IR opens in Singapore, Las Vegas Sands will have invaluable experience and insight into the Asian market, enabling the company to make Marina Bay Sands an even better proposition.

Marina Bay Sands to cost up to $2.1b more

Source : The Strait Times, 29 August 2007

DESPITE an almost 40-per-cent rise in the projected cost of Singapore's Marina Bay Sands project, Las Vegas Sands reiteiterated yesterday that it remains committed to the massive resort project, which is expected to transform the Marina Bay area.
Updating the Singapore media on the sidelines of the opening of The Venetian Macau yesterday, Las Vegas Sands president William Weidner and Marina Bay Sands general manager George Tanasijevich said costs are expected to rise by up to US$1.4 billion (S$2.1 billion) - a significant increase on the original US$3.6 billion price tag.

'We are struggling quite frankly to stay within budget', Mr Weidner said.

The two attributed the higher cost to recent increases in construction prices, including the cost of sand, as well as various refinements to the design.

But Mr Weidner hastened to add that construction is on track and the company expects to award a $1-billion contract for structural work on the three 50-storey hotel towers 'in a matter of days'.

A third of the funding for the project has already been secured.

Mr Tanasijevich said the company has been in talks with over 500 parties representing over 1,000 retail brands for the 1.2 million sq ft of retail space.

The group has also been in discussions to bring up to 20 business events, conventions and exhibitions to the Singapore property. Some, he said, are looking at booking ahead up to 2013.

Tender For Anson Road Site Closed

Source : The Strait Times, 29 August 2007

THE tender for a 99-year-old office plot on Anson Road closed yesterday with local-based Firstoffice lodging the highest bid of $237.2 million.
It outbid Mapletree Lighthouse Trust trustee VivoCity, which offered $201.7 million, and Winglow Investment, which bid $159.8 million.

The Firstoffice price works out to $941 per sq ft per plot ratio (psf ppr), which is below the $1,021 psf ppr a Mapletree Investments unit paid for a larger plot nearby last month.

Mapletree also had to beat four rival bidders for that plot; only three bidders contested the latest tender.

But industry experts say this is not an indication that the property boom is starting to lose its fizz.

For one, the earlier site is 39,733 sq ft compared with the latest plot's 27,281 sq ft.

Property consultancy Knight Frank's head of research and consultancy, Mr Nicholas Mak, said the two locations also differed in their appeal.

'The latest site is triangular in shape and one side faces a carpark and a large exhaust pipe from International Plaza.

'Even if the owners choose to build higher, the occupants would still end up looking into the offices of International Plaza just 20m away.'

CBRE Research executive director Li Hiaw Ho said: 'Based on the highest bid submitted, the break-even cost for the site is likely to be around $1,700 to $1,800 psf ppr.

'This would provide the successful bidder with a stabilised yield of around 4.5 per cent to 5 per cent based on a gross rent of about $9 to $10 psf each month.'

The site was launched for tender by the Urban Redevelopment Authority (URA) on July 4.

URA said that a decision on the award of the tender will be made once the bids have been evaluated. It will be announced later.

Firstoffice is owned by Homerun 28, which is based in Mauritius.

The Singapore firm's directors include Australian Andrew Heithersay, who lives in Hong Kong, Singapore permanent resident Ian Mackie and Singaporean Woo May Poh.

URA To Auction 12 Sembawang Sites For Landed Homes

Source : The Business Times, 29 August 2007

FOR the first time in six years, the Urban Redevelopment Authority is offering small sub-divided landed housing plots for sale. It will auction 12 on 99-year leasehold tenure at Sembawang Road/Andrews Avenue on Oct 30.

The plots, in Phase 1 of a new landed housing estate called Sembawang Green, can be developed into a total of 57 homes - 42 terrace houses, 14 semi-detached homes and a bungalow. The sale is aimed at encouraging wider participation by smaller developers and even individuals wanting to build dream homes opposite Sembawang Park and near Sembawang Beach. The approach is similar to that taken by URA for Kew Drive in 1993-1994 and Eastwood Park in 1995-1996, both in the Bedok area, and Chuan Green in 1997-2001. The Sembawang plots range in area from 4,243 sq ft (for a two semi-detached house development), to 43,694 sq ft (for a 23 terrace-home project). All 12 plots can be developed up to three storeys.

Knight Frank director Nicholas Mak expects the terrace plots to fetch $220-250 psf of land area and the semi-detached and bungalow plots around $180-200 psf. These reflect breakeven costs of $870,000 to $930,000 per terrace house, $1.025 million to $1.1 million per semi-D and $1.5-1.6 million per bungalow.

CB Richard Ellis executive director (residential) Joseph Tan expects the terrace plots to fetch $220 to $250 psf of land area, the semi-D plots $240 to $270 psf and the sole bungalow site $260-$300 psf. Based on these bid ranges, the terrace houses could sell for about $1.0-1.1 million, the semi-Ds for $1.4-1.5 million and the bungalow for $2.6-2.8 million, according to Mr Tan.

The plots are next to the established landed housing estates of Straits Garden and Sembawang Straits Estate. URA has already put in infrastructure. A URA spokeswoman said the authority will decide on the number of phases for Sembawang Green and the number of homes in each phase after the auction of the Phase 1 plots.

LaSalle Makes Top Bid For Anson Road Site

Source : The Business Times, 29 August 2007

LASALLE Investment Management (LIM) was the top bidder yesterday for a 99-year leasehold commercial plot next to International Plaza, with a bid of $237.2 million or $941 psf of potential gross floor area.

LIM, which bid on behalf of its LaSalle Asia Opportunity III Fund, is planning a 20-storey office development with about 200,000 sq ft net lettable area. 'It'll be a Grade A, 'Gold Standard' building,' said LIM regional director Andrew Heithersay.

LIM managing director (Asia Pacific) Ian Mackie said: 'We may or may not take a joint venture partner for the development.' The office development, near Tanjong Pagar MRT station, will target occupiers looking for cheaper accommodation close to downtown, he added. The project may be completed around late 2009.

LIM's top bid for the 27,281 sq ft plot was 7.8 per cent lower than the $1,021 psf per plot ratio that Mapletree Investments paid for a bigger site across the road last month. The price was lower as the latest site is 'inferior in shape and size, resulting in an office development with a much smaller floor plate of around 12,000 sq ft - compared with 22,000 sq ft for the earlier site - as well as lower efficiency', said an analyst.

A Mapletree unit was the second highest bidder at yesterday's tender, at $800 psf ppr - 15 per cent below LIM's price. The only other bidder, Wing Tai, offered $634 psf ppr.

CB Richard Ellis estimates that LIM's bid reflects a break-even cost of $1,700-1,800 psf. 'This would provide the successful bidder with a stabilised yield of around 4.5 to 5.0 per cent, based on a gross monthly rent of $9 to $10 psf,' it said.

However, industry sources suggest LIM is looking at a $13 psf average monthly rent. The Anson Road site will be the maiden Singapore investment for the LaSalle Asia Opportunity III Fund, which is planning to make about US$12 billion worth of acquisitions over the next three to four years. 'Singapore remains one of our primary target markets. We're interested in all sectors - office, retail, industrial, residential and hotel,' Mr Heithersay said.

Earlier acquisitions here by LIM for its other funds include the collective sale of Rainbow Gardens at Toh Tuck Road, and Swissotel Merchant Court hotel, as well as stakes in two hotels opening next year - Crowne Plaza Changi Airport and Ibis Bencoolen Street.

LIM, part of the Jones Lang LaSalle group and a leading real estate money management firm, yesterday also announced an A$738 million (S$926 million) acquisition, on behalf of Asia Property Fund, of a 50 per cent stake in the Westfield Doncaster mall development in Melbourne.

Marina Bay IR To Cost More Than The US$2.4b Venetian Macao

Source : The Business Times, 29 August 2007

Ready for business: A replica of St Mark's Square at the Venetian Macao, which officially opened yesterday. The resort will host 44 major events over the next 2 years, the largest one expected to attract 30,000 visitors.

GAMING and resorts operator Las Vegas Sands' newly opened US$2.4 billion Venetian Macao in the Chinese territory may be the biggest single structure in Asia, and it may be the second biggest building in the world.

But its Marina Bay Sands (MBS) integrated resort in Singapore will be more expensive - especially now that costs could escalate by as much as 40 per cent to hit some S$5.2 billion, or about US$3.4 billion.

Speaking at a press conference here yesterday at the official opening of the Venetian Macao, Las Vegas Sands COO William Weid-ner said that it had been 'struggling to stay on budget', but rising construction costs coupled with the refinement of design on the complicated curving structure of the hotel towers is likely to push up the overall cost of the Singapore project by between 20 and 40 per cent.

Sands beat three other bidders in a hard-fought campaign last year to clinch the licence for the Marina Bay integrated resort. The cost of MBS had previously been estimated at S$5.05 billion including S$1.3 billion for the land. Taking away the land value and factoring in a 40 per cent rise in project cost, the Marina Bay resort could come to about S$5.2 billion.

Mr Weidner was nevertheless optimistic about the opening date of the Singapore project. 'If we keep our noses to the ground, we can open in late 2009,' he said.

So far, Sands says it has awarded S$700 million in construction contracts for the Singapore project. A S$1 billion contract will soon be awarded to build the hotels.

Mr Weidner said that Sands was in discussions with the Singapore government on construction costs but did not disclose details. 'The government knows where we stand,' he said.

Unlike most casino business models, Sands will also depend on the meetings, incentives, conventions and exhibitions (Mice) business.

Giving an update, Mr Weidner said it has currently 20 major events booked at MBS up to the year 2013. For the Venetian Macao, 44 major events have been booked for the next two years, with the largest expected to attract 30,000 visitors.

But Mr Weidner does not expect the North Asia market to eat into the South Asia market. He added: 'When they see what is available (at the Venetian Macao), it will be much easier to sell Singapore.'

Selling Macau as more than just a casino destination has not been tested in the Chinese territory but Sands hopes to attract visitors to extend their stay with attractions that include a 15,000-seat arena, a US$150 million Cirque du Soleil show and a one million sq ft mall with 350 shops.

The number of visitors to Macau has been increasing; up to 26 million people are estimated to visit the territory this year.

Indeed, demand for travel to Macau has become so intense that the Chinese government decided to place some travel restrictions on its nationals earlier this year.

Macau has benefited from a surge in mass market players from China and, interestingly, Sands' first casino in Macau - the smaller Sands Macao - was targeted largely at this market. It was so successful that it recouped its investment within a year.

The much more expensive Venetian Macao will be targeted at the leisure and Mice segment. Although Mr Weidner would not say when it would break even, he said it expects a yield of over 20 per cent per year on its investment. He added that Sands could sell some of its assets, including the mall.

Sands will also be looking to grow its premium-play segment which currently makes up 60 per cent of its gaming revenue.

Another strategy is to expand within Asia.

Also speaking at the press conference, Sands CEO and chairman Sheldon Adelson said that it would open other integrated resorts in Asia if allowed. But he added: 'This is not a race.'

Noting that China alone hosted 60 million Mice delegates in 2003, Mr Adelson said, 'There are only so many events you can hold in onebuilding.'