Tuesday, September 11, 2007

Partners Sought For S'pore Space Venture

Source : The Business Times, September 11, 2007

SINGAPORE - A proposed Singapore spaceport, announced last year, has yet to get off the ground because the company is still looking for local partners to finance it, a US space travel company said on Tuesday.


Eric Anderson, president and chief executive officer of Space Adventures, said his company has received interest from potential space travellers across the region - including Japan, China and Malaysia - but the Singapore project has yet to take flight because the company still needs local partners.

'There is not enough local support... we are still looking for local partners to help finance the Singapore project but it certainly remains a possibility and we are still working through it right now,' Mr Anderson said at the Forbes Global CEO Conference.

Space Adventures, which first made its name by sending US millionaire Dennis Tito into space in 2001, announced 18 months ago plans to develop the Singapore spaceport for suborbital space flights along with educational and tourist attractions.

It said the project, costing at least US$115-million, was being undertaken with a Singapore consortium.

The announcement last year came shortly after Space Adventures said it planned a commercial spaceport in the United Arab Emirates (UAE).

An official of the Singapore Tourism Board last year expressed optimism that the spaceport in the city-state would quickly become a reality.

But on Tuesday Mr Anderson said Singapore is one of several Asian countries being looked at by his company, which is also planning a facility in the United Arab Emirates.

'We are still looking at different locations but we've been working pretty heavily in the Emirates and also in Asia,' he said.

'It hasn't happened yet and we're obviously looking at a lot of other options but somewhere in Asia is a critical market for us and hopefully in the next few months we would find the right place to do it.'

The suborbital spaceflight offered by Space Adventures allows the traveller to fly 100km above earth and experience weightlessness for about five minutes just like an astronaut, its website said.

Mr Anderson declined to reveal the identities of the wealthy Asian individuals who have expressed interest in space travel but he said price is not an issue for the world's high-flyers.

The space ride can cost US$100,000-US$200,000, he said.

'I have had five clients who went to space... they all said it was worth every penny and more,' he said.

'We have a lot of people waiting to go.' -- AFP

HDB Offers AMK Site For Tender Under DBSS

Source : Channel NewsAsia, 11 September 2007

SINGAPORE: The HDB has put up a new site for tender under the Design, Build and Sell Scheme (DBSS).

Located at Ang Mo Kio St 52, it has an area of 16,789.1 square metres and an allowable gross floor area of 58,761.85 square metres.

Building height is restricted to 110 metres or about 30 storeys.

This is the third site offered for tender under the DBSS and the smallest so far.

The first site in Tampines Ave 6 was 21,000 sqm in size and sold in January last year.

The second site at Boon Keng Road covered 18,394 sqm and was successfully sold in June this year.

The latest site is close to the Ang Mo Kio Town Centre and the MRT station, bus interchange and the new AMK Hub.

It is also near popular schools like Presbysterian High, CHIJ St Nicholas School, Nanyang Polytechnic and Anderson Junior College.

Tender packets are available at the Procurement Office at the HDB Hub from 12 September.

Tender will close on 27 November at 12 noon.

DBSS was launched in 2005 as part of the government's move to gradually open up the public housing building programme to the private sector.

The objective is to make the Singapore public housing programme more responsive to the needs and aspirations of Singaporeans.

HDB says market competition will also result in greater innovation in building and design, greater choice of flats, and better value for money for flat buyers.

Under DBSS, the private sector will undertake the entire public housing development process, from the tendering of the land to the designing, building and selling of the flats.

The successful tenderer who is awarded the site has 48 months from the date of award to complete the project.

The tenderer will also have the flexibility to design and price the DBSS flats as well as decide on the terms of payment for the flats.

But the project will still be subject to the relevant legislation and rules to preserve the character of public housing and ensure building quality and safety.

Like flats developed by HDB, flats sold under DBSS come with a 99-year lease and will be offered to buyers under the same HDB eligibility conditions.

Upon the completion of the building of the flats, the successful tenderer will hand over the entire development site to HDB for lease administration, and to the Town Council for maintenance of the common areas and car parks.

World Growth Seen Slowing In Next 18 Months

Source : The Business Times, Tue, Sep 11, 2007

GLOBAL economic growth will probably slow over the next 18 months before picking up again, a top economist at Credit Suisse said last week.

Jonathan Wilmot, chief global strategist in the group's investment banking division, said: 'The world economy has been growing too fast for the past few years - it's hard to keep growing at the same pace.

'We do need a period of slower economic growth to relieve the strains on commodity prices and inflation pressures generally.'

The current financial market turmoil could trigger the slowdown, he said. Otherwise a 'policy-induced correction' by central bankers later will probably be necessary.

But Mr Wilmot is optimistic about equities in the longer term. 'I'm a bit cautious for September, not wildly optimistic over the next 18 months, but still bullish over three years or more,' he said.

Mr Wilmot, who is based in London, was in Singapore early last week as a guest speaker at a conference on the Asian fund management industry.

He said that if consumer spending in the US were to slow gradually, it would be good for growth in Asia. 'If the US grows more slowly, that leaves more room for Asia and Europe.'

But he warned that 'if US consumer spending goes into recession, Asia will feel it very acutely'.

John Lipsky, a senior official at the International Monetary Fund, has warned in recent weeks that the current financial market turmoil is likely to hit global economic growth.

Last week, Jean-Philippe Cotis, chief economist of the Organisation for Economic Cooperation and Development or OECD, also warned that economic prospects in the US, Europe and Japan have become 'less buoyant and more uncertain'.

'That's partly why markets are praying' for the US Federal Reserve to cut its main interest rate target to prevent a 'catastrophic decline' in US consumer spending, Mr Wilmot said.

The main worry now for the US economy is that 'if housing prices keep falling for long enough' the housing slump will lead to a sharp fall in broad consumer spending, he said. But he expects the US central bank 'would be able to react in time' to any signs of a potential recession.

Since the end of July, financial markets worldwide have been roiled by violent swings in share prices and a sudden reluctance by institutional investors and banking groups to lend money to one another.

Rising defaults and delays on mortgage payments by low-income home owners in the US earlier this year prompted a sharp fall in the value of financial securities backed by those payments. This in turn triggered a string of hedge fund collapses and losses by big banking groups that were forced to sell their investments in such securities at a hefty discount or to mark down their value.

The distrust and uncertainty in financial markets has led to a mutually-reinforcing cycle of falling prices across a range of risky assets, especially debt securities, and reluctance by private investors to inject new funds to help companies and banks raise capital.

As a result, central banks worldwide have had to pump money into the banking system to keep borrowing costs stable.

Some economists have warned of further trouble ahead in countries such as the UK which have also seen a sharp run-up in property prices in recent years. But Mr Wilmot said that although 'there is a squeeze developing in the property market in the UK', any difficulties UK home owners may face in meeting their mortgage payments would be 'much less important for the global economy'.

KepLand In Deal To Develop Luxury Homes In Jeddah

Source : The Business Times, Tue, Sep 11, 2007

KEPPEL Land and Saudi Arabian wealth management company Saudi Economic and Development Co (Sedco) will invest $760 million to jointly develop about 1,000 luxury apartments in Jeddah, Saudi Arabia, the two companies said yesterday.

Waterfront living: The development along the corniche in Jeddah will comprise three high-rise towers with sea-facing apartments.

KepLand will hold a 51 per cent stake in the project, with an investment cost of $387.6 million. Sedco will own the other 49 per cent.

The development, on a 3.6 ha site along the corniche waterfront in Jeddah, will comprise three high-rise towers with sea-facing apartments.

Development will be undertaken in phases according to demand. The project will target high-end buyers and is expected to be launched in 2008.

'We are excited that our first foray into Saudi Arabia is a landmark waterfront development in Jeddah,' said Kevin Wong, KepLand's managing director.

'This development will enable Keppel Land to quickly establish its track record and open other opportunities in Saudi Arabia and other fast-growing markets in the Middle East.'

Located on the west coast of Saudi Arabia by the Red Sea, Jeddah, with a population of 3.4 million, is the gateway to the two holy mosques of Makkah and Medinah.

The development site is a five-minute drive from Red Sea Mall - a 240,000 sq m shopping mall being developed by Sedco and other partners, which will be the largest retail hub in Saudi Arabia when completed at end-2007.

'With strong economic growth and accelerated economic reforms in Saudi Arabia, Jeddah has enjoyed high growth in the real estate sector in recent years,' said Ang Wee Gee, KepLand's director for regional investments.

KepLand's shares closed five cents lower at $7.70 yesterday. The company's stock has climbed 11.6 per cent so far this year.

US Space Tourism Company Short Of Financing, Partners For Singapore Spaceport

Source : AsiaOne News, Sep 11, 2007

SINGAPORE (AP) -- More than a year after the project was first announced, U.S. company Space Adventures Ltd. said Tuesday it was still seeking local partners and financing for a Singapore-based spaceport to launch suborbital tourism flights.

The company said in February last year it was forming a venture with a Singapore-based consortium to build a US$115 million facility in the Southeast Asian city-state.

"It's not a done deal. We have a plan, we don't have financing, there's not enough local support," said Eric Anderson, president and chief executive of Virginia-based Space Adventures Ltd., on the sidelines of a business conference in Singapore.

Anderson said the company was also looking at a number of other Asian locations for its spaceport, including China, Japan and Korea, but remained confident of the Singapore project's success. He did not provide a timeframe for the project.

The flights to be offered at the spaceport would travel about 100 kilometers (60 miles) above ground, but would not reach speeds needed to sustain a continuous orbit around the Earth.

The flights would offer up to five minutes of continuous weightlessness, while "gazing at the blackness of space set against the horizon of Earth," the company said. The spaceport also will provide training for space tourists at an astronaut training center.

The project will be partially funded by the Crown Prince of Ras Al-Khaimah in the United Arab Emirates, Sheik Saud Bin Saqr Al Qasimi, the company said.

World's Best Schools, Right Here In S'pore

Source : The New Paper, September 11, 2007

Insead and Chicago Business School placed in top 10 of Forbes' rankings

TWO foreign business schools with campuses in Singapore have been ranked among the world's best.

WHAT : Surveys of 18,500 alumni from 102 MBA programmes
REPLIES : 22 per cent
HOW : Compares their salaries pre- and post-MBA


French school Insead is No2 in the Forbes' latest rankings of foreign business schools, under the one-year Master of Business Administration (MBA) programme category.

Insead is the only foreign business school with two full-fledged campuses in different countries - one in France and one in Singapore.

Chicago Business School, which operates a Singapore campus offering the Executive MBA, is No7 in the listings of top US business schools.

It was assessed based on its two-year MBA programme in the US, which costs a total of about US$90,000 ($137,500).

The international curriculum for the school, which also has a campus in London, runs for 21 months and costs up to US$120,000.

RETURN ON INVESTMENT

The rankings, in the 3Sep issue of Forbes' magazine, was conducted based on the return on investment that graduates of the class of 2002 received after leaving school. The list (see graphic) is compiled every two years.

The research team sent surveys to 18,500 alumni of 102 MBA programmes, and received replies from 22 per cent, or 4,070of them.

It compares their salaries before they went on the MBA programme and post-MBA.

The top US school in this listing is Dartmouth College (Tuck School of Business), followed by Stanford; while the top foreign business schools for a two-year and one-year programmes are Spain's IESE and Switzerland's IMD respectively.

Insead's MBA - which lasts 10 months and costs 48,800 euros ($101,300 for students here as well) - is even ranked above the MBA programmes offered by leading English universities, Cambridge and Cranfield.

In previous rankings (2005), Chicago was No 3 on the list of top US schools, while Insead was the top foreign business school.

Dean of Insead's MBA Programme Antonio Fatas told The New Paper: 'The comparison with two-year programmes clearly shows the financial advantage of the one-year programme in terms of rate of return.'

Insead MBA graduate Gregory Mittman, 37, said that Insead has an 'uncanny way of recruiting people who are very bright, very unpretentious and a lot of fun'.

GOOD MIX

There is also no dominant group of students, who are from all parts of the world, he said.

Mr Mittman, a Canadian, was a lawyer and a freelance consultant before he took the MBA programme in Singapore in 2003.

He moved here, with his girlfriend (now wife), specifically to do the programme.

He also took up the option of doing part of his course in Insead's other campus in Fontainebleau, near Paris. He spent six months there. Now, he is working in a telco infrastructure company in Singapore as a director of business development.

Ms Rebekah France, 30, who had completed her Insead MBA in Singapore, is now working here in a shipping company as the general manager of marketing & human resources.

Current MBA student Mac Wang, 29, chose Insead because he wanted to be in Asia. An Australian, he had worked in Adelaide in IT project management and also in London as a product manager.

What attracted him to Insead Singapore was 'the full campus in Asia'. In his work group alone, he said there is a French, a Portuguese, a Spaniard and an Indian - all with different working experiences.

One of his coursemates is Miss Cintia Tavella, 28, who used to live in Barcelona, Spain. The business administration and law bachelor degree holder said: 'I love it here.

'It so happened that my sister just moved to India. And my mother (who is in Barcelona) asked: 'What's going on in Asia?' And I told her: 'Everything is going on in Asia!'

--------------------------------------------------------------------------------
HOW THE SCHOOLS ARE RANKED
TOP FOREIGN BUSINESS SCHOOLS

Two-year programmes
1) IESE (Spain)
2) London (UK)
3) Manchester (UK)

One-year programmes
1) IMD (Switzerland)
2) Insead (France and S'pore)
3) Cambridge - Judge Business School (UK)

THE TOP US BUSINESS SCHOOLS
1) Dartmouth College (Tuck School of Business)
2)Stanford
3) Harvard
4) Virginia (Darden School of Business)
5) Pennsylvania (Wharton School)
6) Columbia
7) Chicago
8) Yale
9) Northwestern (Kellogg School of Management)
10) Cornell (The Johnson School)

F1: Sight, Sound And Power

Source : TODAY, Tuesday, September 11, 2007

BMW’s F1 Team Pit Lane Park could make a pit-stop here









COME September next year, Singapore will be bustling with all things Formula 1. And if things go well, Singaporeans could get up close and personal with the BMW team if the German carmaker brings the BMW Sauber F1 Team Pit Lane Park here.

“The Pit Lane Park brings people closer to the brand. They can experience Formula 1 up close. We don’t do it in every location, but we do around eight to 10 of these parks a year,” said Mr Torsten Müller-Ötvös, BMW’s senior vice-president for central marketing and brand management.

In April, some 40,000 F1 fans in Kuala Lumpur (picture) were treated to a display of F1 brakes, wings and engines. There were also driving simulators for those eager to put pedal to metal. In the Pit Stop Challenge, F1 enthusiasts could attempt to change an F1 car tyre in less than 10 seconds. F1 and Formula BMW cars and bikes were also on hand for burnouts and donuts at a 90-metre-long track.

“BMW has a history in motor sports. It belongs to the brand. If we are going to be in it, we have to be at the pinnacle of the sport — Formula 1,” said Mr Müller-Ötvös.

The high-tech wizardry used in today’s F1 cars will eventually find its way into BMW road cars. The excitement generated by the sight and sound of such technology is something traditional advertising cannot replicate.

“People leave the place smiling. They smell the rubber, the exhaust. It involves their senses, that is the total F1 experience,” said Mr Müller-Ötvös.

That is what he calls experiential branding and marketing.

“I’m not saying that conventional advertising isn’t necessary, but we need experiential marketing. Give them the BMW experience, that is how you bring a premium brand into people’s minds,” said Mr Müller-Ötvös.

A Barter Of Banking Licences?

Source : TODAY, Tuesday, September 11, 2007

S’pore may approve 3 Indian banks’ applications, while India considers the same

THE Monetary Authority of Singapore (MAS) said yesterday it is working with its Indian counterpart to review banking licence applications from institutions from both countries.

The MAS was responding to an Economic Times report on Sunday that said MAS may soon announce a decision to grant full banking licences to three Indian banks — State Bank of India (SBI), Bank of India (BoI) and Bank of Baroda (BoB). Getting a full banking licence would allow these banks to open more branches and offer retail banking services.

The Indian paper also quoted a senior finance ministry official as saying, “we are told that SBI, BoI and BoB will be granted qualifying full banking status. That means we will also grant the same status to three banks from Singapore to operate in India.”

In a statement, the MAS said: “The Reserve Bank of India and MAS are working closely to review the applications by banks to be set up or to expand in the respective jurisdiction. This will help enhance economic connectivity between India and Singapore.”

Once details are settled, appropriate announcements would be made, it added.

DBS Group Holdings opened a representative office in 1994 and upgraded that to a full bank in 1995, said a DBS spokesperson. It now has banking licences for Mumbai and New Delhi.

UOB said the bank has made a submission to open a branch in Mumbai, subject to approval from Indian regulatory authorities, while OCBC said they have not applied for an Indian banking licence. “While we will continue to review opportunities in India, our current focus takes the form of an offshore proposition. Despite our lack of branch presence in India today, we have been actively pursuing business opportunities there, focussed on the financing of trade flows between Singapore and India through partnerships with Indian financial institutions,” said Ms Koh Ching Ching, OCBC’s head of group corporate communications

Keppel Land Join Sedco Delevop Luxury Homes In Jeddah

Source : TODAY, Tuesday, September 11, 2007

Keppel Land, Singapore’s third-largest developer by assets, and Saudi Economic & Development (Sedco) will jointly develop luxury waterfront homes in Jeddah, Saudi Arabia.

Keppel Land and Sedco will invest $760 million to build three high-rise towers along Jeddah’s Corniche waterfront.

The development, comprising about 1,000 apartments, is expected to launch next year.

Keppel Land will hold 51 per cent of the equity in the joint venture.

Annuities: Who Will Be Exempted?

Source : TODAY, Tuesday, September 11, 2007

Will lower income be the only ones left to buy annuities?

Letter from LEONG SZE HIAN

















I REFER to media reports that perhaps not all Singaporeans will need to buy compulsory annuities when they turn 55 years old.

Those with chronic diseases may be excluded, since they may not live long enough to enjoy the life insurance payouts. This was a possibility raised by the Minister in charge of ageing issues, Mr Lim Boon Heng, in response to a question raised at a seminar organised by the Community Development Councils on Sunday.

In a recent announcement that Medisave will be made available for the treatment of more chronic illnesses, the Ministry of Health estimated there are about 1 million people with the four chronic illnesses —diabetes, high blood pressure, high cholesterol and stroke.

Does this mean that a rather large number of people may be exempted from buying the Central Provident Fund (CPF) compulsory annuity?

For example, studies in the United States and the Netherlands have found that high blood pressure at the age of 50 shaved five years off one’s life.

Mr Lim also remarked: “There are also some people who are already buying annuities — do we need to have double coverage? The answer obviously is ‘no’. So those who are adequately covered and the policy which they bought fulfils a certain requirement may also be exempted.”

Currently, hardly anyone buys an annuity before age 55 because I believe most insurance companies do not sell them to people at a young age.

So, is the Minister referring to those who already have a life insurance policy with cash values that can be converted to a life annuity? Will we see insurance companies coming out with new life annuity plans for people below age 55?

Maybe some people might like to buy a deferred age 85 life annuity whenever a child is born, as the premium will be extremely low since the payout will only occur if their child is alive 85 years later. I estimate the one-time single premium for such an annuity to be less than $200.

The original intention was to get Singaporeans from all walks of life to share in the pooling of risk.

Now, is it possible that more affluent Singaporeans with, say, $3,000 of life insurance policy cash values at age 55 may be exempted from the compulsory annuity?

Would those who buy them come mainly from the lower-income group?

It is this group who would have less in their CPF Minimum Sum and thus find the premium less affordable, resulting in even lower CPF withdrawal amounts at age 55 and from 65 to 85.

Taking these into consideration, have any studies been done to show whether the life expectancy of the lower-income may generally be lower?

Beware The Grey Areas

Source : TODAY, Tuesday, September 11, 2007

Possible exemptions from annuities plan: Analysts on the issues involved

THOSE with private plans may be exempted from the proposed compulsory annuities scheme, but there’s a catch: It could cause the pool of those insured to shrink.

And judging by the lessons of Eldershield — which is being revised as a result —this could make the annuities scheme unsustainable in the long run, warned a health economist.

On Sunday, Minister in the Prime Minister’s Office Lim Boon Heng signalled that the Government might consider exemptions for the chronically sick and those already adequately covered under comparable schemes.

This could encourage cherry picking by private insurers, cautioned Associate Professor Phua Kai Hong of the Lee Kuan Yew School of Public Policy. “This means hat the rich, or those with private insurance, can opt out and what you will be left with is the poor re-insuring themselves,” he told TODAY.

“What you want is a risk pool that is large as possible” as this spreads out the risk evenly, he added. But if the government scheme “is left with just high-risk groups, while private insurers cherry-pick and make a profit, the scheme will run into the red”.

Instead, Assoc Prof Phua suggested that everyone — save the terminally ill or the disabled —buy into a basic scheme and buy additional riders from private insurers. This way, he said, the private sector will not be able to market annuities that take advantage of the public one.

Also, instead of allowing those who can afford private insurance to opt out, Assoc Prof Phua said he was all for favouring “the disadvantaged” — such as those with conditions that impair their earning power and are already squeezed by medical bills.

Most agree that exempting those with terminal or disabling illnesses from the compulsory annuities scheme is reasonable. Already, Central Provident Fund (CPF) policy allows them to withdraw their funds regardless of age.

The annuities scheme seeks to cover members should they outlive their CPF savings when they hit the age of 85.

But there still remain some medical grey areas. “Where is the standard? We need well-defined specifications for a doctor to determine the prognosis, such as for terminal cancer,” said Prof Phua.

As for chronic illness cases being exempted, Dr Lily Neo, an MP for Jalan Besar GRC, said there would have to be present “complications that shorten the life span”— such as diabetes that has resulted in renal failure, or hypertension that has led to stroke.

And then there are the exceptional medical cases who outlive their illnesses. MP for Sembawang GRC, Dr Lim Wee Kiak, said: “No doctor can tell you, 100 per cent, what survival rates are.” He added that medical assessments would have to be tweaked according to changing treatment modalities.

Meanwhile, some of the severely disabled want the choice of opting into the annuities scheme — and tapping the monthly payouts at an earlier age, especially when they are no longer able to work.

The lifespan of such patients is reduced and most do not expect to live until they are 85.

The Disabled People’s Association hopes the Government will put in place a sliding rule system based on the various disabilities and lifespans and allow them to draw down payouts sooner. BizLink Centre, a job agency for the disabled, said it would include these and other suggestions in its report to the Manpower Ministry, reported Channel NewsAsia.

Warming Up To Free Legal Aid

Source : TODAY, Tuesday, September 11, 2007

Popularity of pro bono services growing among non-profit organisations

THERE weren’t exactly snaking queues when this legal aid scheme was officially launched last year. In fact, there were more law firms offering aid under Project Law Help, than non-profit organisations seeking advice.

While the tables have not exactly turned, it seems that more non-profit organisations, charities and voluntary welfare organisations (VWOs) are now seeking pro bono, or free, non-litigation advice.

Lawyer Sean La’Brooy, who chairs the Law Society’s Project Law Help committee, told TODAY that there are “about eight to nine VWOs” waiting to join the scheme.

Piloted in September 2004, Project Law Help was aimed at providing free non-litigation commercial advice to non-profit organisations that could not otherwise afford it. Successful applicants are then matched with law firms.

For example, All Saints Home— one of the 13 VWOs on board the scheme — gets legal advice in settling terms and conditions for its residents and also in contractual arrangements with its suppliers.

All Saints Home’s client and community relations manager Surin Lee told TODAY the free counsel is “very good. VWOs can’t really afford if, every time we have a question, we need to seek legal advice”.

The advice provided to VWOs includes the legal constraints on fund raising activities, review of legal documents and copyright issues. Also raised last year, Mr La’Brooy noted, were issues such as corporate governance — following various scandals in the charity sector — and social workers’ legal duties.

There are now 16 law firms involved with Project Law Help, double the number when the project was piloted in 2004.

Mr La’Brooy, a lawyer with Wong Partnership, expects more non-profit organisations to come on board. Project Law Help was expanded earlier this year to include social enterprises.

Senior Minister of State for Law and Home Affairs Ho Peng Kee yesterday opened the Law Society’s pro bono office to make legal aid available to people who cannot afford to pay for it.

Associate Professor Ho said: “No one in Singapore should be bereft of someone to turn to if they should need legal advice or help, including those who cannot afford to pay for it.”

The new pro bono office at the Subordinate Courts will administer the society’s pro bono programmes — Project Law Help and the Criminal Legal Aid Scheme —and will also work with the Legal Aid Bureau to develop new schemes.

Two pilot community legal clinics have also been launched, as part of a new pro bono initiative by the Ministry of Law and the Law Society, with the support of the Singapore Academy of Law and the North-West and South-East Community Development Councils.

To date, 70 people have signed up for basic legal advice and information, said pro bono services office director Lim Tanguy. All slots for this week’s four clinics have been filled and his office is beginning to take appointments for next week.

Mr Lim said his office would monitor the response before deciding to expand the community legal clinics.

S’pore Revving Up

Source : TODAY, Tuesday, September 11, 2007

Casinos will help it shed its ‘museum’ image: PM























SINGAPORE’S two casinos, which will be completed by 2010 as part of integrated resorts in Marina Bay and Sentosa, will not dominate the city-state’s diversified economy and will help the island shed its “museum” image, Prime Minister Lee Hsien Loong said.

“The casinos are not going to be Singapore,” said Mr Lee in an interview with Bloomberg during the Asia-Pacific Economic Cooperation meeting in Sydney. “This is not going to be like Macau, where the casinos are the economy.”





Singapore will also play host next year to what is likely to be Formula 1’s first Grand Prix to be held at night — part of its move to tap an increase in global travel.

“We are not a museum, we are a living city, we have to evolve,” said Mr Lee. “This is not 1950s Singapore, this is Singapore in the 21st century. Our policies have to change.”

The Government expects to double the number of overseas visitors to 17 million annually and triple tourism receipts to $30 billion by 2015.

Singapore, which will impose a $100 daily levy on citizens and Permanent Residents entering the casinos, is studying rules and procedures in countries where casinos are permitted to curb problem gambling, money-laundering and other vices, Mr Lee said.

Singapore’s US$134 billion ($204 billion) economy is forecast to grow as much as 8 per cent this year, from 7.9 per cent in 2006. Last month Mr Lee forecast annual growth for the next five to 10 years of between 4 and 6 per cent.

“In the short term, we hope to be at the higher end of that range, maybe even do better if we are lucky,” he said.

“If Asia is prospering and we make ourselves competitive, then we can grow in Asia.”

China and India, the world’s two fastest-growing major economies, are spurring growth around the region, he added. “This is an entire continent on the rise.”

The region’s developing nations are almost twice as reliant on exports as the rest of the world, with 60 per cent of their sales abroad ultimately destined for the United States, Europe and Japan.

While Singapore’s expansion is not as dependent on US growth, the island still isn’t “decoupled” from the world’s largest economy, said Mr Lee. “We are a little less dependent … If the US economy goes down, it will still affect us, but we are somewhat buffered.” — BLOOMBERG

Going Green On The Beach

Source : TODAY, Tuesday, September 11, 2007

Eco-features mark upcoming Beach Road development















SKY gardens, sunken courtyards, slant-sided towers and a huge environmental canopy — these will be the hallmarks of a whole new street block that will be springing up across from Raffles Hotel.

Come 2012 or so, the South Beach development will boast premium office space, two luxury hotels, exclusive city residences and high-end retail space with a total gross floor area of 146,827 sq m.

This idea for a “revolutionary eco-quarter” — plus a $1.69-billion bid — helped the City Developments Limited-led consortium beat six rivals to the prized site tender awarded by the Urban Redevelopment Authority (URA).

At stake was a strategic 3.5-ha land parcel bounded by Beach Road, Bras Basah Road, Nicoll Highway and Middle Road. The site includes four conservation buildings — the former NCO Club building and part of the former Beach Road Camp — and is next to the upcoming Circle Line Esplanade MRT station.

The consortium’s concept proposal impressed evaluators with its green approach.

For instance, a pedestrian “green axis” sweeps upwards from the basement MRT station exit through multi-tiered gardens. The block layout features alleyways reminiscent of the nearby Seah Street area, tiered gardens, cafes and shops.

Two towers, each more than 40 storeys high, will include louvres and slanting facades designed to direct air flow down to street levels. A filter canopy will provide pedestrians shelter from the sun while inducing cooling air currents.

According to Mr Li Hiaw Ho, the executive director of CB Richard Ellis, “at least 500,000 sq ft of new office space” and “about 700 to 800 hotel rooms” can be expected.

“This significant addition of office space and hotel rooms will address the present tight availability situation in the office market and the accommodation shortage for Mice visitors as well as spectators to the future F1 races,” he said.

The winning consortium comprises CDL subsidiary Scottsdale Properties, Istithmar Beach Road Fze — owned by Dubai World, whose investments include the iconic Palm in Dubai — and Elad Group Singapore.

The tender, launched in March, was awarded through a “two-envelope” system, where the bids were first evaluated based on their concept proposals before the bid prices were made known.

The URA said proposals were assessed on their contribution to the city’s skyline profile, the provision of attractive public spaces and high-quality architecture. Stipulated conditions included the use of at least 40 per cent of the total gross floor area for office use and 30 per cent for hotel use.

The CDL consortium was one of two shortlisted concept proposals, and its winning bid was $300,000 higher than that of Ocean and Capital Properties Private Limited and Billion Rise Limited.

Said CDL’s managing director Kwek Leng Joo: “Singapore has evolved into a true ‘world’ city that is able to attract international investors, exclusive hotel and retail brands. South Beach is designed with the clear intent of bringing economic benefits to complement the rapid growth of our city-state.”

Public Can Use Median Rent As A Guide Before Agreeing To Rent

Source : TODAY, Tuesday, September 11, 2007

Letter from Foo-Ho Yoke Ming
Deputy Director (Branch Operations) for Director (Housing Administration) Housing & Development Board

I refer to the letter from Mr Ricky Teo, “Rents seem different” (Sept 5).
P.S : Under Comments, in the Label "Median Rent From Subletting Of Flat" Wednesday, August 29, 2007

In July 2007, HDB released figures on median sub-letting rent, as an additional guide and help to prospective tenants and those interested to rent out their flats.

The median rent is a central measure of overall rents in the respective towns.

It excludes the influence of outlier cases and is closer to the typical rent paid.

In view of the wide range of flats available for sub-letting, some flats with special attributes will command a premium above the median level.

Conversely, other flats with less favourable attributes will command a lower rent, below the median level.

The public could use the median rent as a guide and do their own research before entering into a rental agreement.

The rent figures are based on the amounts agreed between flat-owners and sub-tenants as indicated in their sub-letting application to HDB.

It is not estimated rents by the flat- owners.

Say Goodbye To The Goblin … Sub-Prime Spook Was Exaggerated, Could Vanish By Halloween: Analyst

Source : TODAY, Tuesday, September 11, 2007

IT was the “goblin” that wreaked havoc on markets the world over but come Oct 31, investors may be celebrating Halloween for more reasons than one.

The goblin that is the impact of the United States sub-prime mortgage problems could go away as early as then, and growth would return by year-end in time for Christmas, said Mr Ken Fisher, CEO of Fisher Investment.

Saying the sub-prime spook had been exaggerated, Mr Fisher likened it to the scare caused by the Y2K millennium bug and the avian flu warnings, where the perceived risks were greater than the actual threat to the global economy.

“The fact is, if every sub-prime mortgage that could possibly default defaulted, the most it could do is slow down US gross domestic product some,” Mr Ken Fisher, CEO of Fisher Investment told the media on the sidelines of the Forbes Global CEO Conference here yesterday.

“The US economy may slow down, but so what? Because the US is the biggest economy, they tend to think that when the US gets a cold, the world is going to get pneumonia. This, today, is wrong,” said Mr Fisher, a long-running Forbes Magazine columnist with a reputation for accurately forecasting market trends such as the bursting of the dotcom bubble in March 2000.

He could well be proven right again. The International Monetary Fund (IMF) is reportedly raising its world economic growth forecast upwards to 5.3 per cent from the 5.2 per cent it indicated in July.

This is even as it expects the US economy to grow at a slower 1.9 per cent, versus July’s forecast of 2 per cent, according to Financial Times Deutschland, citing unnamed sources.

The IMF expects global growth next year to be 5.2 per cent, and US growth to pick up speed to 2.8 per cent. As for China, the forecast this year has been raised from 11.2 per cent to 11.5 per cent.

With the US’ GDP of US$13 trillion ($19.8 trillion) contributing to only about a third of the US$42 trillion global GDP, the shrinking US economy should actually be led by the performance of the larger non-US economies combined, Mr Fisher said.

Even so, the two economic powerhouses — China and India — would still be affected by a big slowdown in the US economy, said Nobel Laureate Michael Spence, speaking separately on the sidelines of the conference.

But things could be different in 10 years, he added.

“In 1981, when China grew at 9 to 10 per cent, it didn’t make a bit of a difference to the global economy — it was a tiny little economy. Now it is rather large,” said Prof Spence, who won the Nobel Prize in 2001 for economics and is Professor Emeritus of management with the Stanford Graduate School of Business.

The 10 per cent growth enjoyed by China last year is equal to about 2 per cent of the US GDP, and the professor believes that at current exchange rates, the Chinese economy could be worth up to US$4 trillion in the next three to four years.

While the longer term outlook may still be healthy, Mr Tharman Shanmugaratnam, Minister for Education and Second Minister for Finance, warned at a separate event yesterday: “The re-pricing of risk in financial markets is probably not over. There is also increased uncertainty in the near term for the US economy, which could impact the outlook in Asia.”

Speaking at the opening ceremony of a new office for SG Private Banking, he added: “It is too early to say what the economic impact in Asia will be. Should the US economy slow down sharply, Asia will certainly feel the drag.”

BH Global To Buy Penjuru Land For $2.5m

Source : The Business Times, 11 Sept 2007

BH Global Marine, a supply chain management company, has entered into an option agreement to purchase a property at 10 Penjuru Lane for $2.5 million.

The land, which has area of about 11,700 square metres, is adjacent to BH Global’s headquarters at 8 Penjuru Lane and will add on to the existing land area of 8,533 sq m.

The lease period is extendable up to 2049 subject to lessor JTC’s terms and conditions. A warehouse as well as office blocks will be built on the premises.

Indonesian Group Set To Take Over Shining Corp

Source : The Business Times, 11 Sept 2007

AN INDONESIAN group is poised to take over Sesdaq-listed building contractor and buildings materials supplier Shining Corporation and turn it into a property developer in Singapore, with a focus on high-end residential projects.

Shining Corporation said yesterday it has entered into an agreement for British Virgin Island-incorporated Citipoint Asia Real Estate Capital, which is owned by Indonesia’s GoldenFlowerGroup, to invest up to about $42 million in the company for a 69.2 per cent stake.

Citipoint is a special purpose vehicle wholly owned by Indonesian Nico Po who, together with his Indonesian father Po Sun Kok, control the GoldenFlowerGroup, whose interests range from apparel manufacturing to financial services and real estate. In Singapore, the group’s investment holdings include MacDonald House, an office building along Orchard Road, and 51 apartment units at Suite@Central, also in the Orchard Road area. A recent en-bloc acquisition of residential land at 55 Devonshire Road is set to launch the group into the development of high-end residential apartments.

Under the placement agreement announced by Shining yesterday, Citipoint will invest $21.75 million through the subscription of 167.3 million new shares in Shining at 13 cents apiece. A further injection of up to $20 million is expected through the issue of up to 155.65 million free warrants to Citipoint at an exercise price of 13 cents a share.

The 167.3 million placement shares will give Citipoint an equity stake of 53.7 per cent. If the warrants are fully exercised, the stake will go up to 69.2 per cent of the enlarged capital.

The deal is subject to certain conditions to be met by March 31, 2008. They include: a whitewash waiver to exempt Nico Po from a general offer; the approval of the Singapore Exchange; a requirement for Shining to maintain a net tangible asset of $12 million by Dec 31, 2007; and the approval by Shining shareholders.

In a statement, Nico Po said: ‘I am excited by the prospects of securing a majority stake in Shining Corporation Ltd.’

He added that with the enlarged capital base and access to the GoldenFlowerGroup’s real estate expertise, he hoped the company would be able to leverage its potential to be a high-end residential property developer.

Tan Kay Kiang, Shining Corporation’s chairman added: ‘The Singapore property and construction market has seen considerable growth in recent years.’

He added that the company has increasingly felt the need to have an increased market capitalisation and larger financial resources for growth in this market.

In view of the new thrust, certain business divisions of Shining will be divested.

Questions For KepLand To Address

Source : The Business Times, 11 Sept 2007

MORE than a month after Keppel Land’s sale of its one-third stake in One Raffles Quay (ORQ) to its listed trust K-Reit Asia, questions are still being raised about the site’s pricing. KepLand sold its share in ORQ for $941.5 million, which works out to some $2,109 per square foot (psf).

While KepLand has described the price as fair and pointed out that the sale comes with significant long-term strategic benefits for it, some analysts and shareholders are still wondering if KepLand could have got a better deal if it had sold to a third party.

When the deal was first announced, analysts pointed out that the price appeared to be on the low-end of the range, considering ORQ’s prime Grade A status. Nearby, 1 Finlayson Green was sold to a UK property fund at a considerably higher $2,650 psf in June.

The company’s share price has slipped some 8.3 per cent to $7.70 from $8.40 when the deal was announced on July 30. While part of the fall can be attributed to a broad market pull-back, the overall property index has fallen by a smaller 3.5 per cent

At the heart of the matter is a series of discounts offered by KepLand to K-Reit. KepLand says that the effective price for its one-third ORQ stake comes to between $2,882-$3,052 psf. But the actual price paid by K-Reit was much lower. For starters, the trust received a 10-15 per cent discount as it was only being sold a minority stake in the project.

In addition, a discount of $150 psf was given as K-Reit faces potential tax exposure from its ORQ stake. The stake sold to K-Reit was in ORQ’s North Tower, which is classified as ‘trading property’ - unlike the South Tower. Profit on the sale of trading properties is subject to tax.

Both reasons for the discounts have come under market scrutiny. For one, some shareholders and analysts have questioned the rationale for the 10-15 per cent discount. Said one analyst BT spoke to: ‘Why 10-15 per cent? Why not 5 per cent?’

KepLand, on its part, said that a 10-15 per cent discount is ‘within market range for a sizeable transaction with minority rights and limited financing options’ - but there is no full agreement in the market on that. Similarly, there are questions as to why the North Tower was classified as a trading property.

KepLand needs to explain its rationale to shareholders and analysts quickly. The developer has already met with some institutional investors to explain the pricing, BT understands.

But more of an effort has to be made, especially when it comes to retail investors, who have been left somewhat in the dark. This is especially urgent as KepLand will soon have to hold an extraordinary general meeting to obtain shareholders’ approval for the sale.

Keppel Land owns about 40 per cent of K-Reit. And most analysts BT spoke to agree on one thing - that the sale is positive for KepLand from a strategic long-term view as there is a recurrent stream of fee income which would not be the case if the stake had been sold to a third party.

An analysis by Goldman Sachs, for example, shows that the net benefit to a developer is roughly the same from selling to a sponsored Reit or from selling to a third party at a price that is nearly 20 per cent more. But more investors need to be convinced of that. And the rationale for the discounts has to be explained better.

Shophouse Sales Treble As Firms Seek Cheaper Rentals

Sep 11, 2007

33 units worth $308m sold so far this year but prices and rents are also rising, says consultancy

SHOPHOUSE sales have been shooting through the roof recently, as escalating office costs drive smaller businesses to seek out cheaper alternatives.

The number of shophouses that have changed hands so far this year is already more than treble that in an average year, according to new figures from property consultancy CB Richard Ellis (CBRE).

And as demand for shophouses soars, the sale prices and rents of such properties are also quickly climbing, added the company.

Its figures show that since January, 33 shophouses have been sold for a combined $308.2 million.

This is a huge jump from just two years ago, when only 10 such properties were sold. Their total value: a mere $85.1 million.

The booming demand is mainly coming from smaller firms that are being squeezed by soaring office rents, said Mr Li Hiaw Ho, executive director of CBRE Research.

Singapore's strong economy and appealing business environment have prompted many companies to start a new business or expand their existing operations, he said.

But this comes at a time when office space is in acute short supply, thus driving up office rents and values continuously over the last year.

'While multinational corporations, especially the banking and financial institutions, seek the prestige of prime office locations and are willing to pay a premium for it, small and medium- sized companies are feeling the pinch,' said Mr Li.

'To ease their expenditure on rents and with their options running out, some companies have creatively sought alternative spaces such as shophouses.' The types of firms that use shophouses range from creative agencies and architectural practices to recruitment companies and financial advisers, he added.

But with more firms turning to shophouses as an substitute for offices, the cost of this space is starting to increase, according to CBRE data.

A row of eight shophouses in Telok Ayer Street sold for $18.6 million in November 2005. In March this year, they changed hands again - for almost double the price, at $35 million.

In Tras Street, four units with a total strata area of 6,311 sq ft were sold en bloc for $7.7 million in November last year. But two months ago, a single 3,618 sq ft unit right across the road managed to fetch $9.42 million.

Rents are also on the rise. In the prime shophouse areas downtown - including Tras Street, Boon Tat Street, Amoy Street and Telok Ayer - current asking rents are between $5 and $6 per sq ft (psf) a month, said CBRE.

This has doubled from the beginning of the year, it added.

In the fringe areas, such as Beach Road, monthly rents are also up, from $2 to $3 psf earlier this year to between $3 and $5 psf currently.

However, Mr Li notes that while the rises seem 'hefty', the rents are 'reasonable considering the prime location'. Prime office buildings are now asking about $12 psf per month in the Central Business District, and $6 to $8 psf in the fringe areas.

'For the same amount of space, companies renting shophouses are paying about 50 to 60 per cent less in rental compared to a prime office building,' he said. 'This is extremely attractive, especially for small or medium-sized companies which are able to operate without the glossy facade and facilities of a prime office building.'

Such facilities include security features and reserved parking lots. But 'the savings in rents and building maintenance often more than make up for it', added Mr Li.

Lifestyle Hub At One-North Could Boost Housing Prices, Retail Rents

Source : The Business Times, September 11, 2007

THE upcoming integrated development at one-north is expected to generate more interest in the area and drive up housing prices and retail rents there, market watchers said.

On Sunday, property giant CapitaLand and New Creation Church's Rock Productions said they will be investing some $660 million to build a lifestyle hub in one-north, JTC Corporation's science hub. The project will be located right next to Buona Vista MRT station.

The hub, which will be the biggest retail development by far in the area once it comes up by 2011, will push up residential prices and rents as well as rentals for retail space in the vicinity, experts said.

'You probably will see residential and retail prices going up in the area,' said Mavis Seow, CB Richard Ellis' executive director for retail services.

'The Holland area is already a very much sought after location. Once the project is developed, it will only get better.'

Rents in the Holland Village area are now between $8 and $15 per square foot per month (psf pm), she said.

CapitaLand, which will invest some $380 million, will own the retail and entertainment component of the project, which will have some 180,000-200,000 sq ft of net lettable area.

Rock Productions will invest $280 million. The company, which is the business arm of the 16,000-strong New Creation Church, will manage the hub's civic and cultural zone, which will include a 5,000-seat state-of- the-art theatre. The civic and cultural zone will have a gross floor area of some 323,000 sq ft in all.

Pua Seck Guan, chief executive of CapitaLand's retail arm, said that in line with the developer's asset-light strategy, the retail and entertainment component could eventually be injected into the developer's listed real estate investment trust (Reit) CapitaMall Trust.

'The hub will not be a traditional shopping mall,' he said. 'As the developer, we will take the risk - until investors are convinced it is sustainable - before selling.'

The mall will have mostly F&B and entertainment units as is the case with Clarke Quay, Mr Pua said. The retail component will be smaller than in CapitaLand's other malls.

Possible tenants could include a gourmet supermarket, trade services catering to people living and working in one-north, and even a dance club, he said.

The hub is however guaranteed some footfall from New Creation Church's congregation, said Matthew Kang, director of Rock Productions.

New Creation Church will be the theatre's 'anchor tenant' and will hold both its Sunday and weekday service there.

At present, the church uses the Rock Auditorium at Suntec City, which seats about 1,400 people.

'We wanted to look for a place to move to; the congregation was getting bigger,' Mr Kang said.

The Green Route To En Bloc Redevelopment

Source : The Business Times, September 11, 2007

Demolition is wasteful and not environmentally friendly, says Hillcrest MD

THE property boom here prompted Hong Kong- based Hillcrest Capital to buy the 34-unit Anderson Green in February for $112 million in February. But instead of tearing it down to build a new condo, it will gut it, then reuse the existing structure.

Let it stand: Taking a leaf from HK, Anderson Green's new owners will reuse the existing structure

Hillcrest managing director Lyon Lau says: 'It is not environmentally friendly to demolish a perfectly fine building only to rebuild something similar.

'Although the concept of alteration and addition might be new to Singapore, in Hong Kong it has been practised widely.'

More than 160 residential buildings have been sold en bloc for redevelopment here in the past two years, but many are still structurally sound.

Going green:The concept of alteration & addition might be new to S'pore, but it's practised widely in HK, says Hillcrest's MD Lyon Lau

Architect Tai Lee Siang, president of the Singapore Institute of Architects (SIA), says: 'Buildings are designed to stand for as long as the materials they are built of allow them to stand. This can be hundreds of years or less than a week - think of cardboard houses.'

Most of the buildings that have been sold are about 20 years' old, but the sites they sit on can house bigger and taller projects, so it makes business sense to demolish them.

Anderson Green, which will be relaunched for sale as 21 Anderson, is already built up to its maximum potential, so strictly speaking the decision to not demolish was not completely for the love of the environment.

But perhaps what is really not sustainable are periodic increases in plot ratios.

The National University of Singapore's Assistant Professor Hee Limin (Department of Architecture, School of Design and Environment) says: 'In a way our planning system encourages this redevelopment.'

According to her, it's a shame that economic forces 'control' the landscape. And these economic forces do not take all factors into consideration.

There is also a cost implication in the 'embodied energy' in buildings, she says. This refers not only to the energy it uses once it is up and running, but the resources exhausted to build and possibly recycling it.

The study of a 'life cycle' of a building is still relatively new. But considering US National Institute of Standards and Technology figures, which reveal that building construction consumes 40 per cent of the raw stone, gravel and sand used and 25 per cent of the virgin timber used worldwide each year, the price of a new building is actually considerably higher.

City Developments Ltd (CDL) recently won the Building and Construction Authority's Green Mark Platinum award and is probably the greenest developer in Singapore. Its general manager Eddie Wong concedes: 'While there are negative environmental and social impacts from en bloc redevelopment, we must also be mindful of the tremendous positive effects of such redevelopment'.

He highlights a reduction in long-term energy consumption through more energy-efficient buildings.

CDL does recycle some building debris, but recycling or reusing a whole building is a different matter.

The most environmentally friendly solution would be to not demolish buildings at all, but 'economic forces' are not likely to support this.

Pioneer architect Tay Kheng Soon of Akitek Tenggara says the simplest solution would be to allow the transfer of development rights.

'Owners of a site that has been given increased plot ratio should be able to sell to a developer who wants higher plot ratio on another site. This would also require a masterplan that allows for plot ratio increases above those pegged at a certain level. All in all, it requires a more sophisticated planning process than the present one.'

Other ways suggested by Mr Tay include rating existing buildings based on heritage. 'The lower the rating, the more demolition is permitted. Correspondingly, a higher-rated property will enjoy a property tax rebate to balance out the benefits.'

SIA's Mr Tai adds: 'The attitude of keeping and maximising the value of old buildings for urban renewal requires a complete change of mindset. This is not always possible as it is human nature to yearn for growth, change and improvement.'

The Building and Construction Authority is encouraging the use of recycled materials in construction.

It promotes the use of Eco-concrete made from recycled material used in pilot projects for non-structural works such as pavement slabs in housing estates, linkways and park connectors.

KSH Wins Deal To Build Boutique Hotel

Source : The Business Times, September 11, 2007

The project will be part of Marina Bay's newest lifestyle hub

KSH Holdings, a construction and property development group, yesterday said it has won a contract to build a luxury boutique hotel at Clifford Pier.

The contract, which BT understands is worth close to $120 million, is awarded by Hong-Kong listed property group Sino Land, the sister company of Singapore property giant Far East Organization.

The Clifford Pier hotel will be part of Marina Bay's newest lifestyle hub, and will offer a wide mix of complementary uses, including F&B, retail and entertainment outlets, KSH said.

Work on the project will start this month and is expected to be completed within 20 months.

In December last year, Sino Land won the hotly contested site at Collyer Quay. The site also includes the single-storey Clifford Pier and the former two-storey Customs Harbour Branch Building.

Then Sino Land, which is controlled by the family of property magnate Ng Teng Fong, put in the two highest bids out of the three short-listed.

The winning tender of $165.8 million was anchored by a luxury boutique hotel featuring about 120 rooms with 'full sea views'.

KSH said that under the terms of the contract, it will provide a range of services for the building of the six-storey hotel, including conserving Clifford Pier and the former Customs Harbour Branch Building.

The new contract brings the total value of construction contracts secured by the company since the beginning of this year to $279 million. The contract also brings the existing order books of the company's construction business to a new high of $405 million.

'Going forward, we are confident that this mega project will further enhance our track record and put us in an excellent position to secure prestigious projects of higher contract values,' said Choo Chee Onn, KSH's executive chairman.

The company also said that its fully owned subsidiary Kim Seng Heng Engineering Construction recently secured three new contracts with a combined value of $63.9 million.

KSH's shares gained 3 cents to close at $1.12 yesterday.

US Economy Easing But May Pick Up Next Year: Forbes

Source : The Straits Times, Sep 11, 2007

Slowdown won't hurt rest of world much due to strong global growth: Media baron













CLOSELY LINKED WORLD: Mr Forbes dismisses suggestions of a decoupling of growth between regions, as global markets are even more tied together and worldwide supply chains become more complex. -- ST PHOTO: CHEW SENG KIM

THE United States economy is slowing down this quarter and next but a recession is unlikely as growth may rebound next year, Mr Steve Forbes told an audience of top executives here yesterday.

Mr Forbes, president and chief executive of top business magazine Forbes, said the fundamentals for expansion are still in place.

They include a productivity boom, strong US consumer balance sheets and strong corporate balance sheets, he said at the Forbes Global CEO Conference gala dinner held at the Ritz-Carlton Millenia hotel.

The US sub-prime housing loans crisis will also 'quickly pass', he said, but only if the US Federal Reserve cuts interest rates by a full percentage point at its meeting next Tuesday.

It must also maintain liquidity - the 'oxygen and life blood' of financial markets - in the system to make sure the markets do not 'seize up', he added.

All this will be good news for the global economy, as it is still vulnerable to a slowdown in the US economy, which makes up about 30 per cent of the world's total.

'We are more integrated than ever before, so if the US economy is in trouble, it will have global impact,' he said.

But 'the global economy is growing even more powerfully than ever', so there 'won't be a repeat of the Asian financial crisis of 1997', he said.

He dismissed notions of a decoupling of growth between regions, asserting that global markets are 'in fact more tied together', as global supply chains become more complex and risks are spread across markets.

Still, a US economic slowdown may force China to raise its own consumption, which is 'not a bad thing for China and the rest of the world', said Mr Ronnie Chan, chairman of Hang Lung Properties, a property developer in China.

China is 'not spending enough' relative to its economic output, so higher consumption would help to address the trade imbalance that China has with key countries such as the US, he said. He was one of five panellists who spoke at the gala dinner, on issues that drive or derail global economic growth.

He noted that China's 'systematic weaknesses' in the use of technology, corporate governance and social institutions have been overlooked by the world. These may trigger a slowdown in China.

Another key concern for the global economy was oil prices, which rose above US$75 per barrel recently. Dr Gary Ross, chief executive of Pira Energy Group, predicted that 'prices will continue to be very high, and rise even higher next year'.

'The fundamentals are still there for expansion - there is a productivity boom, there are strong US consumer balance sheets and corporate balance sheets are in strong condition overall.' MR FORBES, on the upbeat outlook

US Sub-Prime Woes Just A Correction, Experts Say

Sep 11, 2007

THE sub-prime mortgage crisis in the United States that battered the world's bourses recently is just a correction that has a few months left, at most.

So say two financial experts who are in town for the Forbes Global CEO Conference taking place this week.

Best-selling author and Forbes magazine portfolio strategy columnist Ken Fisher said at a press conference yesterday that he expects a resurgence in takeovers and mergers-and-acquisition activities as early as next month.

He said: 'What people are not talking about at the moment is the fact that earnings yields are actually higher than bond yields.'

This, coupled with average corporate borrowing rates that are lower now than three months ago in all segments except for 'junk' firms, meant that such firms will become prime targets for takeovers by other companies, he added.

'People believe there is a credit crunch, but we are actually seeing cash- hoarding in anticipation of a real crunch.

'I believe we will see the resumption of a bull market in a few months, with heightened takeover activity as early as Halloween.'

Nobel laureate Professor Michael Spence backed Mr Fisher's optimism. A dramatic impact from the sub-prime crisis on the global economy is unlikely, he said.

He cautioned, however, that while the sub- prime crisis was caused by 'irresponsible lending abetted by liquidity flows', there are also 'underlying structural problems' that go beyond it.

These structural issues include information gaps in a complicated global economic system where 'people don't really know who is at risk'.

NICHOLAS FANG, GRACE NG

Bulls May Resume Charge Soon?

Source : The Business Times, September 11, 2007

THE next bull market in equities is just around the corner despite the current turmoil in financial markets, a top US investment manager said here yesterday.

According to Ken Fisher, founder and chief executive officer of private money management firm Fisher Investments, which looks after US$35 billion of assets, investors should be 'aggressive' in buying shares.

He recommends that the materials, industrials and energy stocks but not big blue chips. And he expects 'a big up-move ahead later in the year tied to takeovers and share buy-backs'.

He also reckons the current uncertainty in the financial markets is encouraging companies and investors to hoard cash, which 'at some point comes out'.

Mr Fisher, who writes a regular investment column for Forbes magazine, is in town for the three-day Forbes Global CEO Conference which started yesterday.

Another guest speaker at the conference, Prof Michael Spence, who won the 2001 Nobel Prize for economics, said that the problems in the US sub-prime mortgage market are unlikely to have an 'excessive impact' on the global economy or Asia. 'I don't think Asian countries are particularly vulnerable now,' he told reporters.

Mr Fisher argued that despite fears of a credit crunch, the cost of borrowing for an average company with a triple-B credit rating is still cheaper than in June, before the current financial market turbulence started. 'The only part of the world where the rates have gone up is at the junk-end.'

On average, corporate earnings yields, or a company's earnings per share as a proportion of its share price, are still above 6 per cent for a typical company that trades at 15 times earnings per share, he said. This compares with after-tax borrowing costs of about 4 per cent for an average company with a triple-B credit rating.

The difference in borrowing costs and earnings yields still makes it highly attractive for companies to issue debt and buy back their own shares or acquire other companies, which Mr Fisher predicts will drive the next round of share price increases once investor confidence returns, which he expects will happen by Christmas.

Meanwhile, with investors demanding higher returns for staking money on 'junk' or high-risk bonds, smaller companies with poor credit ratings will be less able to defend themselves against a takeover by borrowing to raise cash, he said. 'Sub-prime actually sets the stage for the next level of takeovers.'

Rather than buying blue chip shares, he advises investors to look at 'companies that seem a little junkier' because these are the most likely to see their share price rising when the takeover wave resumes.

Horizon Towers Canvassing For Sales Committee

Source : The Business Times, September 11, 2007

Third time lucky? If the majority sellers succeed in getting a new committee, it will be the third for the Horizon Towers sale

(SINGAPORE) Some majority sellers of Horizon Towers who have been trying to find volunteers to form a new sales committee are understood to have found five - just enough to meet the quorum needed.

With a handful of willing candidates, they are trying to arrange for a meeting to be held on Sunday to discuss the election of a new committee, a source said.

The remaining three members of the previous sales committee of nine quit in a meeting last Friday. The others quit in the days leading up to the meeting as pressure mounted, along with threats of legal suits. If the majority sellers succeed in getting a new committee together, it will be the third for the Horizon Towers sale.

At the meeting on Friday, the majority sellers were supposed to decide on how to respond to a lawsuit brought by Hotel Property Ltd (HPL) and its partners after the en bloc sale of their Leonie Hill property fell through last month.

The Strata Titles Board (STB) refused to grant a collective sale order, saying that Horizon Towers had filed a defective application.

HPL and its partners are suing the majority sellers for failing to file properly.

However, sellers that BT spoke to said that the meeting was more focused on the issue of finding enough volunteers to form a sales committee, rather than deciding on the next course of action.

A lawyer that BT spoke to said that under the current Land Titles (Strata) Act, which governs en bloc sales, there is no mention of needing a sales committee for a collective sale to go through.

He said that having a sales committee is more of a practical issue, as it would be impossible to manage such a big en bloc sale without one.

However, under proposed new rules, an en bloc sales committee must be set up and its members elected at an extraordinary general meeting convened by the estate's management corporation.

This will apply to all projects which have yet to obtain the required majority consent from owners at the time the amendments are passed by Parliament, most likely this quarter.

HPL and its partners have given the majority sellers up to today to extend the en bloc sale completion deadline to Dec 11 and 'do everything necessary to obtain the collective sales order'.

Should they lose their case, each of the 255 owners of 173 units who signed off on the en bloc sale may be liable for about $4 million.

Pinetree Condo Put Up For Sale

Source : The Business Times, September 11, 2007

Indicative price for the 12-year-old freehold site in Balmoral Park is $140m to $150m

PINETREE Condominium in Balmoral Park has been put up for sale by tender with an indicative price of $140 million to $150 million.

Pinetree Condominium: Based on a sale at $140 million, the 41,361-square-foot property will cost about $2,100 per square foot per plot ratio

The freehold residential redevelopment site in district 10, which is about 12 years old, was put up for sale through an expression-of-interest exercise in April last year.

The indicative price then was about $59 million. This represents an increase in price by about 11/2 times.

More than 80 per cent of the owners have now agreed to the collective sale.

The block is being marketed by Jones Lang LaSalle, whose regional director and head of investments Lui Seng Fatt said: 'There have not been many collective sale sites in the exclusive Balmoral Park area and with the recent hike in development charge, Pinetree Condominium, which has no development charge, will be an attractive site for developers to consider.'

Mr Lui said there would be no development charge payable as the current gross floor area is maximised.

Based on a sale at $140 million, the 41,361-square-foot property, which can have an estimated gross floor area of up to 66,178 square feet, will cost about $2,100 per square foot per plot ratio (psf ppr).

Mr Lui added that the site can be combined with the adjoining landed properties to form a total potential land area of approximately 68,633 sq ft, which would yield a total combined gross floor area of 109,800 sq ft.

Based on this size, a developer could build a new development consisting of 70 to 80 luxury apartment units. Mr Lui estimates a break-even price of about $3,100 psf.

Some benchmark prices in the same area include those of The Solitaire, which has had a few transactions done above $2,200 psf, and Orange Grove Residences, which had transactions ranging from $2,100 to $2,350 psf.

Asia Still Looking Rosy In Medium Term: Tharman

Source : The Business Times, September 11, 2007

(SINGAPORE) The repricing of risk sparked by the crisis in sub-prime debt in the US is not over, but there is no reason to downgrade Asia's economic prospects in the medium term, said Tharman Shanmugaratnam, Second Minister for Finance. Speaking yesterday at the opening of SG Private Banking's new office, he pointed out that the current turbulence does not alter the basic story of an 'ascendant Asia'.

'It introduces significant near term uncertainty, both for the markets and for economic growth, but it does not alter the picture of an increasingly dynamic and resilient Asia in the coming years and decades.'

He said that the growth of SG Private Bank, along with that of the private banking industry, reflected a few fundamentals. One of these is the emergence of Asia as the big story in the global economy. 'Global investors have good reason to believe Asia will continue to outperform other regions for at least another two decades to come.'

Mr Tharman said the fallout in Asia has so far been limited. MSCI Asia ex-Japan is down 1.6 per cent since mid-July and is still up 24 per cent in the current year. Excluding China, Asian markets are up 22 per cent since the start of the year, and 45 per cent since the middle of last year.

Credit bond spreads in Asia have widened but the correction has been healthy and spreads remain below their historical levels. Average credit spreads in Asia recently rose by 100 basis points over US Treasuries to reach about 234 basis points currently. But they remain well below the 400 basis points seen between 2000 and 2003.

He said that there is increased uncertainty over the US near-term outlook, which could impact Asia. But Asian producers will continue to make productivity strides, and Asian consumers will provide an independent growth engine. 'Global investors will, therefore, continue to seek out higher returns in Asia.'

Steve Forbes, Forbes magazine publisher, said in an address that Forbes has a great affinity with private banking as it monitors private wealth. Forbes publishes annual listings of the world's wealthiest individuals. Asia's 160 billionaires, he said, now account for 17 per cent of the world's wealthiest, compared with a share of 14.5 per cent a year ago. This represents several hundred individuals, with assets of over US$650 billion. 'The current crisis is a temporary one. We had a far worse one 10 years ago. The long-term dynamics are very positive,' he said. Forbes is hosting its Global CEO conference in Singapore, bringing together top CEOs with a combined net worth of US$130 billion.

SG's new office is at One Raffles Quay. SG chief executive for private banking Pierre Baer said the move is part of efforts to stay 'at the forefront of this robust trend (in wealth creation), but at no compromise to our service quality'. The office is also its regional hub.

Fund Flows Into Asia Now Outpace Redemptions: Citi

Source : The Business Times, September 11, 2007

Bulk of inflows in past 2 weeks goes to North Asian funds

(SINGAPORE) Funds flowing into the Asian region in the past two weeks have surpassed redemptions in late July and August period, when equity markets suffered sharp losses on concerns of a global credit crunch, according to a Citigroup report yesterday.

Inflows totalled US$2.9 billion in the past two weeks, while year-to-date, net inflows to Asian funds, which are long strategy, came to US$4.7 billion. This is less than half the amount taken in over the same period last year.

Investors, spooked by sub-prime fears in the US, redeemed their investments into funds, leading to the carnage in stock markets.

Some market watchers speculate that inflows into Asia are coming back due to weak prospects in the US, so most of the funds are flowing into Asia. Others believe that the selling in the recent months has been overdone.

The bulk of the inflows went to country and regional funds in North Asia, accounting for 67 per cent of the total inflows. This compares with 56 per cent the week before, said the report.

Hong Kong funds garnered the most proceeds, US$343 million, among all the country funds in terms of dollars and a proportion of asset size.

For the week of Aug 30, inflows to Singapore country funds were US$1.9 million. This compares to the past four-week total of outflows of US$131.5 million.

The report highlighted that foreign investors were net buyers in most markets except Korea. Foreign net sell of Korean equities came up to US$18.4 billion over the past three months, the biggest in history. 'The good news is that selling pressure seems to be subsiding. In the week ended last Wednesday, net sell decreased for the second week to US$426 million from US$3.2 billion at the peak three weeks ago,' noted Citigroup analyst Elaine Chu in the report.

Foreign investors resumed buying last week in countries such as the Philippines, Taiwan, India, Indonesia and Thailand.

Even though strong inflows in the past two weeks have helped restore the uptrend of Asian fund flows, given the increasing volatility of Asian markets, flows are likely to become more volatile as well, said the report.

The report also noted that inflows to Global Emerging Market funds finally resumed after six weeks of redemptions. Year-to-date, net outflows are down to US$367 million, compared with US$4.7 billion inflows a year ago.

International funds, unlike their Asian and GEM counterparts, recorded net redemptions in the week starting Aug 30. 'From a short-term perspective, flows are still heading south,' noted Ms Chu in the report.

Tharman Upbeat On Asia's Economic Growth

Sources : The Straits Times, Sep 11, 2007

THE fallout in Asia from the United States sub-prime mortgage crisis has so far been limited, said Second Minister for Finance Tharman Shanmugaratnam, who is bullish on Asia's economic growth prospects.

In July and last month, global stock markets were battered amid rising defaults by US sub-prime borrowers - those with low income or a bad credit history. This led to a wider credit crunch.

Mr Tharman, who is also Education Minister, said: 'Asian markets have been volatile, but the MSCI Asia ex-Japan is down only 1.6 per cent since mid-July, when the sub-prime problem erupted and is still up 24 per cent for the year.'

This is an index measure for the overall performance of Asian bourses.

'Bank lending too...has not been tightened significantly,' he said yesterday, at the opening of French bank SG Private Banking's office at One Raffles Quay.

He noted that while the current credit crisis adds some short-term uncertainty, it does not 'alter the picture of an increasingly dynamic and resilient Asia in the coming years and decades'.

'The reasons for the increased volatility in Asian markets appear to have little to do with the exposure of Asian institutions to the sub-prime problem. Asian banks and investors are generally believed to have limited exposure to US sub-prime...as liquidity dries up elsewhere, investors have in many instances sold Asian assets to raise cash.'

Despite the recent market volatility, he was bullish about Asia's medium-term prospects, especially for the growth of the private banking sector in Singapore.

He noted that the Republic's financial markets are gaining more breadth and depth.

For example, Singapore is playing a lead role in the trading of over-the-counter (OTC) commodity derivatives in Asia - particularly in energy and increasingly in metals.

Last year, about US$600 billion (S$915.3 billion) of OTC trades were done out of Singapore, accounting for 8 per cent of global volume.

The Singapore Exchange has also seen strong growth, with a market capitalisation of more than $720 billion, up 69 per cent from 2005.

However, Mr Tharman also warned that the repricing of risk in financial markets is 'probably not over', adding that 'economic forecasts for the US economy are being scaled down, compared to expectations just two months ago'.

'It's too early to say what the economic impact on Asia will be. Should the US economy slow down sharply, Asia will certainly feel the drag.'

Size Of Winning Bid Colours Green Project

Source : The Business Times, September 11, 2007

CityDev consortium clinches deal while a bigger bid fails to make the cut
















(SINGAPORE) As a new symbol of environmentally-friendly architecture was unveiled yesterday, green became the topic of discussion in more ways than one. The award of the former NCO Club/Beach Road camp grounds to a City Developments consortium was accompanied by a tinge of envy as observers pointed out that the winning land bid of nearly $1.69 billion is believed to be around $500 million lower than the top bid, which was not even short-listed under the two-envelope tender.

The Urban Redevelopment Authority chose to first evaluate the various concepts before looking at the money on the table.

CityDev and its partners Istithmar (part of the Dubai World Group) and El-Ad Group are expected by market watchers to invest a total sum of $2.5 billion or more in the project. They plan to develop two towers (45- and 42-storeys high) - that are expected to house two luxury hotels, offices and apartments - and restore four conservation buildings (for retail and hotel-related uses like function rooms).

The cutting-edge green features in the Foster & Partners-designed scheme include slanting facades for the towers to catch winds and direct air flow to ground-level spaces, a canopy covering open areas, linking conservation buildings with two high-rise towers and providing shelter from the elements and drawing air currents to cool the area beneath it. And water will be collected off the towers and the canopy to flow into a holding tank underground, instead of being wasted.

The development, to be called South Beach, is set to become a 'revolutionary New Eco-Quarter in Singapore' when it is completed by 2012, CityDev said.

Still, the price of the winning bid came under some scrutiny.

Of the seven bids on the table, only two - that of the CityDev consortium and a joint venture between Keppel Land and Cheung Kong Holdings - made it past the concept evaluation stage. That is when URA moved onto the second stage of the two-envelope process to award the tender to the higher bidder.

The Keppel Land-Cheung Kong bid was worth $1.39 billion while the CityDev consortium's bid of $1.69 billion was comfortably higher and clinched the deal for it. The winning bid for the 3.5 hectare plot with a 99-year leasehold tenure worked out to $1,069 per square foot of potential gross floor area.

The top bid, believed to be more than $2 billion, had come from one of the other five who tendered but did not make it past the concept stage. They included: a JV between Pontiac Land Group and Morgan Stanley; CapitaLand; another JV between Keppel Land and Cheung Kong; and two bids by Overseas Union Enterprise.

URA said that overall, the CityDev consortium's concept proposal offers a 'compelling and attractive scheme' that would create a 'truly distinctive development and an exemplary showcase of 'green' architecture in Singapore'.

CityDev executive chairman Kwek Leng Beng said: 'We are confident that South Beach will elevate Singapore's unique branding as a global city and help attract more prominent investors from all over the world.'

CityDev, Istithmar and El-Ad will each hold a one-third stake in the project. CityDev is no stranger to its partners. El-Ad is a US property investment group controlled by Yitzhak Tshuva, to whom CityDev's hotel arm Millennium & Copthorne Hotels sold its stake in The Plaza hotel in New York in August 2004. City e-Solutions, a hospitality business unit of CityDev's parent Hong Leong Group, and Istithmar are partners in a venture that plans to open no-frills hotels in Southeast Asia under Tony Fernandes's Tune Hotels.Com brand.

The development on the 3.5 hectare Beach Road site will be directly next to the Circle Line Esplanade MRT Station and will also be linked by an underground pedestrian network to the existing City Hall MRT Interchange Station. The site can be developed into a maximum gross floor area of 1.58 million sq ft. CB Richard Ellis executive director Li Hiaw Ho reckoned that the developers will sell the apartments to help part-finance the project.

URA said the attractive first-storey layout in the winning scheme includes a series of internal streets, sunken courtyards and tiered gardens lined with shops, and food and beverage outlets. It said the development will be potentially able to achieve a Green Mark Platinum rating, the highest here for buildings that feature energy-efficient, water-efficient and environmentally-friendly design.

'The undulating geometry of the environmental filter canopy is designed to help induce cooling air currents through the spaces below' and the canopy as well as building facades will incorporate photovoltaic cells (solar cells), it added.

Eco-Friendly Project For Iconic Site In Beach Road

Source : The Straits Times, Sep 11, 2007

CDL-led consortium wins tender for hotly contested site with $1.68b bid















NEW ADDITION TO SKYLINE: The development will integrate two new towers with restored military buildings. The buildings, which have an environmentally friendly design, will also be connected to the new Esplanade MRT station. -- PHOTO: URA

SINGAPORE'S fast changing city skyline is set for an eye-catching addition after a consortium was awarded a large, hotly contested Beach Road site, with a winning bid of $1.689 billion.

The new development, called South Beach, features two striking towers, 45 storeys and 42 storeys tall, plus the original conserved military buildings of the old Beach Road Camp which will be restored.

The project will boast premium office space, two hotels, shops and city residences.

Competition to develop the 3.5ha site - seen by some as the last major iconic site in town - was fierce but was won by a consortium led by City Developments (CDL).

The futuristic design, with environmentally friendly features, is by renowned British architects Foster & Partners.

The winning bid works out to $1,068.6 per square foot of potential gross floor area and was the higher of two tender submissions earlier shortlisted by the Urban Redevelopment Authority (URA) for their acceptable concept proposals.

Keppel Land and partner Hong Kong's Cheung Kong Holdings lost out with their bid of $1.386 billion.

CDL, which tendered via Scottsdale Properties, tied up with Dubai World's Istithmar Beach Road FZE and Elad Group Singapore, with equal stakes. US-based El-Ad Group, which bought New York's landmark Plaza Hotel from CDL executive chairman Kwek Leng Beng and his partner in 2004, is owned by Israeli billionaire Yitzhak Tshuva.

Said Mr Kwek: 'We are confident that South Beach will elevate Singapore's branding as a global city and help attract more prominent investors all over the world.'

CDL said the 99-year leasehold development, which has a gross floor area of 146,827 sq m, will be built by 2012.

The office space will be substantial as URA requires the developers to set aside at least 40 per cent of the space for office use. At least 30 per cent of the space must be for hotel rooms.

'Given its strategic location, South Beach is designed with a clear intent to bring economic benefits to complement the rapid growth of our city-state,' said CDL's managing director Kwek Leng Joo.

The consortium's proposal adopted environmental design and green technology to create a distinctive, high-quality development that fits in well with the tropical climate and the urban context.

A key feature of the winning design is a large 'environmental filter' canopy that covers the open spaces and ties together the new and conservation buildings within the site.

The first storey is laid out with a series of internal streets, which will enhance street level vibrancy and allow pedestrians to move about easily.

'The concept is a big step forward in strengthening Singapore's stand as an environmentally friendly city,' said Singapore Institute of Architects' president Tai Lee Siang.

When the Beach Road tender closed in July, the URA received seven submissions from major developers and firms. Five were rejected even though some of them came with higher bids.

For instance, the Lippo Group, which had tendered through Overseas Union Enterprise, submitted two bids above the winner's price.

'It's a good price for the CDL consortium because this is the last iconic site in Singapore,' said Mr Ku Swee Yong of property consultancy Savills Singapore. 'And hotel room rates and office leasing rates have been showing strong growth.'

Mr Li Hiaw Ho, executive director of CBRE research, said the site will add at least 500,000 sq ft of new office space and about 700 to 800 hotel rooms. It would relieve an office space shortage and offer rooms for visistors to the Formula One race, he said.