Friday, September 28, 2007

Geotechnical Requirements Needed Because Public Safety Is Involved

Source : The Business Times, 28 September 2007

I REFER to the report, 'More accountability, stricter regulation with building bill' (BT, Sept 21).

The statement, 'it is understood that despite a PE and a geotechnical specialist being involved with the construction work on the Nicoll Highway, it still collapsed', is misleading and requires clarifications.

There are several new requirements in the Building Control (Amendment) Bill on the design, construction and supervision of temporary earth retaining structures (Ters, in short).

The Bill mandates that the geotechnical aspects of the design of Ters have to be carried out by a geotechnical engineer and independently checked by a geotechnical accredited checker. The geotechnical engineer for the design also has to monitor and supervise the Ters during construction and ensure that it is suitably modified to meet any unforeseen circumstances or changed ground conditions.

Furthermore, Ters are now to be treated like permanent works and the plans are to be submitted to the Commissioner of Building Control for approval. These elements were not in place prior to the Nicoll Highway incident. These geotechnical requirements in the Bill are necessary since public safety is involved.

The report also mentioned that some members of the Institution of Engineers Singapore (IES) questioned the need for a geotechnical engineer to undertake the geotechnical aspects of piling works for buildings exceeding 30 storeys. In our extensive consultations with members of the engineering profession, we found that the vast majority of engineers supported this requirement.

Tan Guan, who is chairman of the civil and structural practices committee of the Association of Consulting Engineers, Singapore (Aces), had expressedly supported the proposal during the industry consultations. In addition, this proposal is not unique to Singapore and is also practised elsewhere, like Hong Kong.

Nonetheless, we value the feedback from the engineering profession and we have accepted the suggestion for the detailed requirements on geotechnical inputs to be calibrated according to the complexity of the foundation designs.

For example, for simple piling systems, only basic geotechnical inputs like having the ground investigation report containing geotechnical design parameters would be required.

BCA will continue to work with the industry to finalise the provisions in the regulations.

We need to take a balanced approach towards ensuring construction safety and managing cost. While the new rule would add to construction cost, the increase is only marginal.

Ong See Ho,
Commissioner of Building Control,
Building and Construction Authority

Hearing For Horizon Towers Lawsuit Adjourned

Source : The Straits Times, Friday, September 28, 2007

THE lawsuit against the owners of Horizon Towers has been put on the backburner for now, after they extended the deadline for the estate’s collective sale.

The consortium behind the suit, led by developer Hotel Properties (HPL), had the High Court hearing adjourned yesterday.

Its move followed a decision by the owners last week to extend the sale deadline until Dec 11 - a move that has taken some of the heat out of the stand-off, although another legal challenge looms today based on the initial sale process.

The consortium - comprising HPL, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - signed a deal in February to buy the 99-year leasehold Leonie Hill estate for $500 million. But some owners complained that the price was too low, and their mounting opposition culminated in the Strata Titles Board (STB) throwing out the sale deal, albeit over procedural errors, on Aug 3.

That decision comes under scrutiny today, with the owners asking the High Court to overturn the STB ruling.

The consortium has also filed an affidavit asking that it be allowed to participate in the appeal hearing.

If the appeal succeeds, the STB might have to reassess the Horizon Towers deal. If the STB’s original decision is allowed to stand, it could spell the end of the sale.

The stakes are high. The HPL-led group, represented by law firm Allen & Gledhill, claims that the owners of 177 units who backed the deal have breached the sale contract. It has sued the sellers for $800 million to $1 billion in lost profits arising from the alleged breach. This means that if a sale is not eventually completed - under the original terms - the owners of each unit would have to cough up more than $5 million.

The consortium had indicated that it would drop the case once the sale goes through at the $500 million price. The deadline extension has raised hopes that this might be achieved as it would allow any errors to be corrected and a fresh application to be filed.

Horizon Towers : All Eyes On Appeal Against STB Decision

Source : The Business Times, 28 Sep 2007

Meanwhile, HPL suit against sellers is officially stayed.

The twists and turns in the Horizon Towers saga never seem to end: even as one legal showdown was averted yesterday, another dramatic court session is set to take place.

Legal proceedings against the majority sellers of Horizon Towers were officially stayed yesterday - when the High Court granted an application to adjourn the hearing of a lawsuit which Hotel Properties Ltd (HPL) and its partners brought against the sellers.

HPL, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority had sued former members of the development’s sales committee for millions of dollars - and asked that all 272 owners who signed the deal also be bound by any judgement that may be made.

The buyers blamed the sellers for the en bloc sale not going through. The Strata Titles Board had, in August, rejected the application filed by Horizon Towers for a collective sale order - on the grounds that it was defective.

The STB’s decision came just days before the sale completion deadline, which meant there was no time to appeal the decision or file a fresh appeal.

The majority sellers finally agreed last week to meet the buyers’ demands to extend the sale completion deadline - and HPL and its partners reciprocated by applying for an adjournment of the legal proceedings against the sellers.

However, with the suit not withdrawn, the threat of legal action still hangs over the majority sellers. No date has yet been fixed for the next hearing.

All eyes are now on the next major court session: this morning’s hearing of the appeal against the STB’s decision, in the High Court before Justice Choo Han Teck.

The appeal will be between the majority sellers - represented by Tan Rajah & Cheah - and the minority sellers, who didn’t agree to the en bloc sale.

The majority sellers say STB was ‘wrong in law’ to have dismissed their application. The board had rejected the application, without considering its merits, because it had three incomplete or missing pages.

But the majority sellers say these three missing pages were around at the time of the application, but were later not submitted due to a clerical error.

Today’s session is expected to be a dramatic one, with HPL and its partners having applied to intervene - that is, participate - at this hearing. The buyers will be represented by Allen & Gledhill.

Another group of 13 Horizon Towers owners - who form part of the majority who agreed to the collective sale - have also applied to be parties to the appeal, on the grounds that they ‘have an interest in the outcome of these proceedings’.

This group of 13 owners, which includes local singer Ho Yeow Sun and her husband Kong Hee - are represented by Rajah & Tann.

Judge Choo will hear the two applications to intervene first, before hearing the appeal against the STB’s decision.

Compulsory Annuity And CPF Members' Rights

Source : The Straits Times, Sept 28, 2007

IN RESPONSE to a Nominated MP's comment that making annuities compulsory amounts to an interference with CPF members' own money, Member of Parliament Josephine Teo said in her letter ('MP tells why she fully supports CPF reforms'; ST, Sept 25) that 'Government's job is to intervene where necessary'.

The implication seems to be that it is Government's job to spend CPF members' funds if Government deems it wise to do so.

In my opinion, this is a question that one should not be so quick to answer.

I have no doubt that the intentions of the current Government are noble and I even support the objectives.

However, there is a bigger, fundamental question at stake here. Do CPF funds belong to CPF members? If they do then, surely, members have a right to decide how to spend them.

To draw an analogy, is it the job of Government to step in and manage the personal bank accounts of citizens? Some are careless with savings. But even with the best of intentions, can it be the job of Government to take citizens' personal funds and manage them more prudently for them? Every man has the basic autonomous right to deal with his property as he chooses.

So the fundamental question is this: Just because it is CPF funds, does Government have the right to decide how they should be spent on behalf of CPF members, even against the wishes of the members?

An affirmative answer would be unprecedented and would mark a definitive change in the nature of members' rights over their CPF funds. The significance of that decision should at least be appreciated. There is more at stake here than whether an annuity is a good idea.

Apart from the compromise to the property rights of CPF members, consider the situation if a weak government should make bad decisions on how CPF funds should be spent. It will be CPF members who will have to pay the cost of such bad decisions which they had no say in.

If purchase of an annuity is the best way forward for CPF members then it would be best if Government educates and convinces the people to do so voluntarily, rather than take the admittedly easier option of making it compulsory at the expense of the rights of CPF members.

Sometimes it is worth compromising efficiency for propriety.

Thomas Mathew Koshy

Buying Frenzy Drives Asian Bourses To Record Highs

Source : The Straits Times, Sept 28, 2007

STI has climbed by 752 points in the five weeks since its sub-prime low point

THE sub-prime crisis that sent global markets crashing last month looked like a minor blip yesterday after a buying frenzy drove key regional bourses to record highs.

Singapore, Hong Kong and Australia finished at all-time highs, wiping out the red ink that deluged markets last month and left investors fearing months of bloodletting.

In just five weeks, the Straits Times Index (STI) has rocketed an astounding 752 points, or 25 per cent, since its sub-prime low-point on Aug 17.

Hong Kong has had an even more impressive resurgence - soaring almost 40 per cent since the Aug 17 low.

'The party is back in full swing. My clients are buying across the board,' said Singapore brokerage dealer Francis Lee.

The investor stampede back to the market sent the STI up 64.68 points, or 1.77 per cent, to 3714.77, trumping the old record of 3,665.13 set on July 24.

Yesterday's charge was ignited partly by regional speculation that China's state-owned funds like China Investment Corp are on the prowl with billions to invest.

This is part of Beijing's strategy to diversify out of the weakening dollar.

But the biggest driver was hope that the United States Federal Reserve would make further cuts in interest rates before the end of the year.

Giant investment banks such as Morgan Stanley are expecting the Fed to ease rates by another half percentage point to forestall any slowdown in the US economy.

This would be on top of the half-percentage point cut last Tuesday which propelled the sharp rebound, first on Wall Street and then globally.

The US aim is to bolster its jittery financial markets and faltering housing sector, both battered by the crisis over sub-prime home loans.

These mortgages - made to borrowers with doubtful credit histories - have been bundled up into complex financial instruments and sold on to various institutions around the globe. But growing doubts over their viability hit banks from Frankfurt to Sydney last month and sparked panic among investors.

Nevertheless, the strength of the rebound is so powerful that analysts believe the regional bull-run is still very much on track, despite continuing concerns over the US mortgage market.

'The trend has remained the same in the past four years, since the current rally started in March 2003. Whether it is a 10 per cent or 15 per cent correction, we can expect new highs to be recorded after that,' said Mr Najeeb Jarhom, AmFraser Securities' research head.

And after pulling out US$2.6 billion (S$3.87 billion) in a single week during last month's meltdown, foreigners have been pouring money back into Asian equities, noted Citigroup analyst Elaine Chu.

Last week, investors placed US$982 million in funds investing exclusively in Asian equities. This followed the US$1.6 billion invested the previous week.

JPMorgan Private Bank's senior portfolio manager, Mr Elan Cohen, expects the partying in regional equities markets to continue.

'Investors are now more sanguine about putting money back into Asian equities, as they can look forward to the Fed rates cut to stimulate economic growth,' he said.

All Condo, Club Pools Should Have Lifeguards

Source : The Straits Times, Sep 28, 2007

National Water Safety Council says it's the best way to ensure prompt help in emergencies

THE National Water Safety Council has called on all condominiums and clubs to hire lifeguards for their swimming pools.

The 18-member council, formed by the Ministry of Community Development, Youth and Sports to take the lead in promoting and enhancing water safety, believes this is the best way to ensure help is immediately at hand, should someone be in danger of drowning.

The call comes in the wake of the death of 10-year-old Jonathan Chow Kin Mun, who drowned in the pool of Palm Gardens condominium, in Choa Chu Kang, earlier this month.

The council, set up in April, is working with the Building & Construction Authority and other agencies to develop a building code for water facilities.

This will help developers design and develop safer pools, and guide those who manage and operate them.

Dr Teo Ho Pin, council chairman and MP for Bukit Panjang, said having lifeguards at private pools will ensure trained people are present at emergencies.

However, Mr Francis Zhan, former president of the Association of Management Corporations In Singapore (Amcis), said having lifeguards is not viable, as pools in condominiums are not used for the greater part of the day.

Amcis is an umbrella body that brings together condominium management corporations.

He added: 'It would be affordable for each family if the estate has more than 700 units like, say, Mandarin Gardens or Maplewood.

'But if the condominium comprises fewer than 100 units, then each household has to fork out an additional $200 to $300 to pay the salaries of the lifeguards.'

A resident of Westmere in Jurong East said fewer than five people swim in his condo's pool on weekdays, and the number does not go beyond 20 at weekends.

'It would not only be boring for the lifeguard who won't stay in the job for long, but residents would feel it is a waste of their money,' he said.

He added that children are not allowed at the pool unaccompanied.

Mr Zhan suggested a more cost-effective alternative is to set up closed-circuit TV cameras at the pool, linked to the different units, so if the children go swimming, parents can monitor them on TV.

He added: 'Security guards of the condos should also be trained in life-saving skills and perhaps paid a little more as a result.'

There are currently 1,388 licences issued for swimming pools here. They include those at condominiums, clubs, hotels and public pools run by the Singapore Sports Council.

Katong Mall Goes On Sale Amid Controversy

Source : The Straits Times, Sep 28, 2007

Minority owners say process to sell en bloc too fast; no chance to air views

'LESS STRINGENT': Minority owners of Katong Mall are upset that the collective sale process was conducted under the old rules and not the stricter ones due to kick in next month. -- ST PHOTO: FRANCIS ONG

KATONG Mall is up for a collective sale but angry minority owners claim they have been left out of the process.

More than 35 disgruntled owners said the sale agreement was drawn up so fast that they did not get a chance to air their views.

They are also upset that the sale process was conducted under the old rules and not the stricter ones due to kick in next month.

Owner Jeannette Aruldoss, 44, a lawyer, told The Straits Times that the process was 'done too quickly. We welcome the idea of the sale, but we want it done by the new rules'.

The revised law requires sale committee members to be elected at a general meeting and allows a five-day cooling off period for owners after signing a sale deal.

Three firms own 72 per cent of the 258-unit mall at the junction of East Coast and Joo Chiat Roads - Elysium, a holding company, and property developers Nustavino and Habitat Properties. The three have common investors. The rest of the mall is divided among about 100 owners.

The majority owners backed a sale and needed only a further 8 per cent for the required 80 per cent. This was confirmed on Wednesday.

The first time minority owners heard of a sale initiative was in a July 6 letter from property firm Jones Lang LaSalle (JLL) stating that five owners, holding about 74 per cent of the shares, had already volunteered for a sale committee.

At an Aug 6 meeting to discuss the sale, JLL said a process for collecting signatures would start the next day.

Minority owners met JLL on Sept 6 to express their concerns and to set up a meeting with the sale committee.

They did not hear from JLL until Sept 11, when it told them that the required 80 per cent level had been reached.

They were unconvinced and tried repeatedly to arrange a meeting with the sale committee - personally and through JLL - but to no avail.

JLL marketing agent Stella Hoh told The Straits Times yesterday that she did tell minority owners on Sept 11 that they had achieved the 80 per cent 'subject to lawyer's verification of signatures'.

Confirmation came only on Wednesday.

Owner Lim Earn San, 60, said he was shocked at the speed of the sale, adding that the minority owners were not given any room for negotiations over the terms of the sale agreement.

The appointment of the marketing agent and lawyers was also done by the majority owners without consulting the minority owners, he said.

Mr Lim, who also owns a unit at Katong Shopping Centre, said the approach to the sale of the two malls, 'couldn't be more different'.

Owners at Katong Shopping Centre are following the new rules, having known of the changes since March, he said, adding: 'Why can't Katong Mall do the same?'

Some minority owners also fear a conflict of interest as two majority owners are in the property industry. But Ms Hoh said JLL had told the owners that the sale will be done by public tender and that any interested buyers related to the collective sale agreement 'are required by law to declare their interests'.

Three sale committee members declined to comment.

The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. An independent expert estimated its sale price to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.

JLL figures show that units have sold at a range of $300 psf to $800 psf this year.

All eyes are now on its upcoming sale launch. 'We'll see how it goes, but if we're not convinced the sale was done in good faith, we'll take our concerns to the Strata Titles Board,' said minority owner Robert Ong.


The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. Its sale price is estimated to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.

Looking back

KATONG Mall is a building with a beleaguered past.

Built in 1983, the former Katong People's Complex was known as the 'prison with pipes' due to its exterior of gigantic pipes and steel structures.

The surburban mall struggled initially with poor traffic and flagging businesses and in 1994, a woman, Madam Mona Koh, was shot there by an unknown gunman. She became paralysed after the incident.

A year later, the complex underwent a $12 million revamp and became Katong Mall.

Its flamboyant developer was Mr Ho Kok Cheong - who was also behind People's Park Complex.

He was declared bankrupt in the 1990s and was infamously involved in a massive corporate fraud in 2005.

Collyer Quay Makeover

Source : The Straits Times, Sep 28, 2007

One Fullerton part of big revamp; exciting new dining, nightlife possibilities opening up

COLLYER Quay and the surrounding corridor of properties are set for big changes under developer Sino Land's multimillion-dollar makeover plan.

Among the first to be revamped will be One Fullerton, though it is one of the newest buildings on the waterfront.

Sino Land's plans call for the building to get a new set of tenants offering exciting dining and nightlife possibilities - all by August or September next year, to ride on the National Day festivities.

It is a popular vantage point for the National Day Parade, which is now held on a floating amphitheatre across the bay.

But the big ace up the developer's sleeve is that the top floor of One Fullerton has the perfect vista onto the hairpin turn of the proposed F1 race track.

The company said it will explore how it can best use its prime waterfront vantage.

Ms Sulian Tan-Wijaya, the new general manager of The Fullerton Heritage, now the name for Sino Land's clutch of properties in the area, said: 'There are tremendous opportunities to create special events and promotions in the precinct.'

Sino Land, controlled by the family of property magnate Ng Teng Fong, won the tender for the Collyer Quay corridor amid much public interest. It put in the highest bid at $165.8 million for the land. The group already owns the iconic Fullerton Hotel and Waterboat House.

The Fullerton Heritage project will preserve the distinctive architecture of the area - including historic Clifford Pier and the Customs Harbour Branch Building.

Upmarket restaurant and luxury retailers are meant to fill the area, which will be rebuilt with outdoor decks and spaces for cafes.

The plans also include a six-storey luxury boutique hotel with 100 rooms with 'full sea views'.

Revellers will be able to party on the water itself as the blueprint calls for a floating plaza with space for a nightspot and several private 'pods' for shops or exclusive parties.

The Straits Times understands that the development will also have berths for small boats that will ply the bay.

The Fullerton Heritage is set to grow alongside a string of attractions around the promontory of the Singapore River. This includes the new Marina Bay downtown and financial centre; the Marina Bay Sands integrated resort (IR); the Garden at Marina South; the Singapore Flyer, and the Esplanade Theatres by The Bay.

Together, they will cater to about 50,000 well-heeled executives working in the area, as well as about 20,000 residents in the upcoming residential projects, including The Sail, which will sit right next to the Sino Land development area.

Mr Donald Han, managing director of property consultancy Cushman & Wakefield, told The Straits Times that market interest has been keen, especially in the upmarket Clifford Pier.

The Fullerton Heritage had several factors going for it, he said. For one thing, it would be an architectural showcase, especially with the efforts to preserve Clifford Pier.

But more importantly, it would have one of the longest, and most sought-after waterfronts in Singapore: 'It's a view to die for.'

With its multiple buildings, Sino Land can create the draw for a critical mass of visitors, he said. 'I think of it as the last link, almost, in the entire rejuvenation masterplan for the Marina Bay area.'

When told of the plans, undergraduate Kenny Tan, 21, wondered if it would be too much of a good thing: 'Hopefully, it doesn't end up as a white elephant with all the competition from the new IR and downtown.'

But shipping executive Simon Lee, 37, said that he could envision it as the new place to see and be seen.

Foreign Population In S'pore Crosses 1m Mark

Source : The Straits Times, Sep 28, 2007

Highest jump in at least seven years helps lift total population here to 4.68 million

FOREIGNERS are coming here in unprecedented numbers, contributing to the largest swell in Singapore's population in more than two decades.

The foreign population, which includes professionals, workers, students and their family members, was an estimated 1,005,500 in June this year - crossing the one million mark for the first time.

This is a 14.9 per cent rise over a year ago and represents the highest jump in at least seven years, according to the Department of Statistics.

The previous year's increase was 9.7 per cent.

The number of Singaporeans and permanent residents here also grew 1.8 per cent, the same as the previous year.

These increases lifted Singapore's total population to 4,680,600 as of June this year - a 4.4 per cent rise over the previous year.

This is also the largest increase since 1982's 4.5 per cent.

The figures, from the Department's annual report on population trends released yesterday, also covered statistics for marriages, divorces, births and deaths.

Economist Song Seng Wun said the surge in the number of foreigners reflects the nation's broad- based economic recovery.

'Foreigners are lapping up job opportunities for sectors across the board, from financial services to teaching to construction,' he said.

External factors figure too.

'Many neighbouring countries, such as Indonesia and Malaysia, have been on a strong growth path, so their companies have been setting up shop here as a base for regional expansion,' he added.

Liberal immigration policies also play a part, said consultant demographer G. Shantakumar.

'We are attracting not just workers, but also students, in the hope of getting more foreigners to settle down here,' he noted.

One newly-arrived professional is 36-year-old China national Hu Yen. The accountant said career prospects are better here and he is hoping his wife and son can join him.

'My wife's an accountant too, so she can find a job here. And my son will benefit from the education system,' said Mr Hu, who arrived two weeks ago.

Singaporean Thomas Gan, 56, an operations officer, said there is no harm having more foreigners if jobs are aplenty, especially those that locals do not want to take up. 'But the aged and uneducated who compete with foreigners for jobs will feel the pinch.'

Asked about the effects that an influx of foreigners might have on social cohesiveness, sociologist Paulin Straughan said she did not see an adverse impact.

But she cautioned against negative stereotyping, such as saying foreigners usurp high-paying jobs, as this could lead to a less cohesive society.

'We need to be careful, and not grow a culture of resentment among locals,' she said.

The annual report also showed that the total fertility rate rose a notch to 1.26 last year. While this is up from 1.25 a year earlier, it is still far below the 2.1 figure needed to replace the population.

US May Have To Bid Farewell To Good Times

Source : The Business Times, September 28, 2007

The house of cards is falling amid soaring oil prices, diving home sector and credit crunch

IT will be recalled as a Golden Economic Age, the Greenspan Era, or the Goldilocks Economy - but one thing is clear: The good days of doing-away-with-the-business-cycle and spending-like-there-is-no-tomorrow are probably over as far as the US economy is concerned.

End of the Goldilocks Economy: The good days of Americans spending-like-there-is-no-tomorrow and maxing out on their credit cards on luxury items at establishments in places like the high-end Santana Row shopping area in San Jose, California, are most probably over

Indeed, it is becoming obvious that Americans will have to say 'bye, bye' to an age when consumers could take out huge mortgage loans to pay for new homes and spend the weekends shopping for the latest plasma televisions - made in China - as they maxed out on their credit cards.

The era when financial institutions could juggle new and increasingly complex ('exotic') financial products that made it possible to extend more credit to the consumers and businesses, including packages of mortgages to those who had already maxed out on all their credit cards, are well and truly over.

And the time when the government could expand its current account deficit (6.2 per cent of US GDP in 2006) on military adventures in Mesopotamia and on tax breaks for financial speculators and real estate magnates - and have all of that financed by China - has gone.

And, yes, it's also an end to the years during which the US Federal Reserve Board could print more money to ensure that the good times of low interest rates, low prices, and cheap money will continue to roll.

For much of the post-Cold War era and the ensuing years of globalisation, with the former members of the communist bloc, China and other emerging markets joining the global economy, Americans benefited from the rewards of economic liberalisation abroad and at home.

Hence, global trade liberalisation, including the creation of the World Trade Organization (WTO) and the accession of China and other new economies into it, made it possible for American consumers to spend more time in shopping malls buying very cheap Made-in-China socks and shoes, televisions and computers, and a lot of toys.

In turn, the Chinese - as well as the South Koreans and Japanese - used up the money they made exporting their cheap products to the United States to purchase US treasury bills and stakes in American companies and help the US to run its huge current account deficit and maintain its low real interest rates.

While the Chinese were saving and the Americans were spending, the de-regulation of the American economy, including its banks and other financial institutions in the 1990s, made it possible for whiz-kids in the hedge funds to come up with all the various exotic financial instruments that made it possible to provide more credit to American consumers and businesses.

US financial institutions stoked up a real estate boom that provided cheap mortgages to American buyers who could then commute from their new homes in the 'exurbs' to their work in cheap SUVs and who could fill their cars with cheap gas, thanks to the low global energy prices, made possible by Saudi Arabia and other oil-producing states that the American military helped protect.

The process of globalisation combined with the high-tech boom of the 1990s, including the above-mentioned new financial products together with the intervention by Alan Greenspan's Fed in the form of pumping money during financial crises, helped protect the American economy against potential shocks and created expectations that it was possible to moderate the business cycle for eternity.

And it all sounded like a good deal. This American Empire of Debt made life good for most Americans. It enriched the money men and women and the members of the emerging class of globe-trotting yuppies while making it possible for the members of the middle class to finance their shopping for televisions, home buying and vehicle driving.

The bursting of the high-tech bubble, the bearish mood on Wall Street and the terrorist attacks on Sept 11, 2001, created the sense that the economic chickens were coming home to roost. But the Fed's intervention in the form of rate cuts helped keep the economy going with just a mild recession.

It also lifted spirits in Wall Street as low interest rates kept the credit bubble afloat even as energy prices were going up - as a result of the booming Chinese economy and the instability in the Middle East - while the US budget and trade deficit were expanding - thanks to the military intervention in the Middle East and the growing imports from China.

It was not surprising that with falling interest rates and low inflation, Americans felt that despite recession and war, they were getting richer.

But the combination of high energy prices, a collapsing housing market and a credit crunch have finally brought down the house of cards in the form of falling home prices, collapsing mortgage firms and anxious financial markets.

Even if the recent rate cuts by Ben Bernanke's Fed helps lessen the turmoil in the markets, it is becoming clear that the mood among American consumers and businesses is changing as the economy is getting ready for a major slowdown.

There are no signs that the housing market is recovering or that borrowing costs will stop rising. And there are growing fears that the rate cuts could actually backfire, by igniting inflation pressures and by putting downward pressure on the US dollar that has already been sliding against the euro and other major currencies in the last six years.

While some investors will probably take advantage of new investment vehicles to exploit the decline in the value of the US currency, and American exporters will benefit from a weak US dollar in selling their products abroad, the falling dollar is probably the most dramatic sign of a weakening American economy.

A weak US currency would put upward pressure on prices in the United States and increase the risk of inflation. Most worrying is the possibility that foreigners, including the Chinese, will be less inclined to buy and even keep their dollar reserves which - as you recall - helped finance the American borrowing and spending, and by extension the US current deficit and allowed the good times to roll.

Little India Site Fetches $265m Top Bid

Source : The Straits Times, Sept 28, 2007

A PLOT in Little India drew two bids when its tender closed yesterday.

Singapore HealthPartners put in the higher offer for the 1.36ha site at $265.3 million.

This works out to $431 per sq ft (psf) of gross floor area and is 11 per cent more than the other bid submitted by Hiap Hoe Superbowl, which offered $238 million, or $386.40 psf of gross floor area.

The Government firmly pushed out the site - located at the junction of Rangoon and Race Course Roads - earlier this year after it received little interest from developers.

It was first offered as a 'white' site in August last year, which meant it could be used to build homes, shops, offices or hotels.

The site, however, failed to attract takers eight months after it was first offered, prompting the Government to extend its use to hospital development.

The Government stipulated that 40 per cent of the site's total floor area - potentially 615,965 sq ft - should still be given over to hotel rooms.

Even then, no developers came forward. This prompted the Government to offer the site for sale outright in July.

Property consultants said yesterday it is likely that the winning bidder will build a development with both hotel rooms and hospital rooms or medical suites on the site.

At least 550 hotel rooms can be built on it, estimated Mr Li Hiaw Ho of property consultancy CB Richard Ellis.

These rooms can 'complement the hospital or medical suites' by serving medical tourists, foreign medical consultants or family members accompanying patients, he said.

Mr Li added that this hospital-hotel hybrid model is likely to prove successful, given Singapore's twin aims of boosting tourism and health care.

SHP's $265.3m Bid Wins Race Course Site

Source : The Business Times, September 28, 2007

A CONSORTIUM that includes several prominent doctors has put in the highest bid for a hospital cum hotel site in Race Course Road - $265.3 million or $431 per square foot per plot ratio (psf ppr).

The consortium, called Singapore HealthPartners Pte Ltd (SHP), includes doctors Charles Chan, Leslie Lam and Maurice Choo. A major shareholder in Singapore HealthPartners (SHP) is Berjaya Leisure (Cayman) Ltd, which is thought to be linked to Berjaya Leisure Capital led by Malaysian businessman Vincent Tan. There are 38 shareholders in total.

Directors of SHP contacted by BT declined to comment on the company's plans for the 13,625 sq m site but a medical centre cum hotel seems likely.

The site has a maximum permissible gross floor area of 57,225 sq m and at least 40 per cent of this must be used as a hotel.

CBRE Research executive director Li Hiaw Ho believes that a hotel with 550 rooms could be built. 'Accompanying family members of patients can also patronise the hotel,' he said.

Mr Li also highlighted that it was recently announced that $2 billion would be needed to expand Singapore's health care infrastructure.

'The development of this site as a hospital cum medical centre targeting medical visitors would contribute to Singapore's efforts at becoming a medical hub for the region,' he said, adding that according to the Singapore Tourism Board, more than 150,000 international patients come to Singapore each year for a whole range of medical care.

Average occupancy of hotels was also at a high of 89.4 per cent in August, Mr Li noted.

Whether more government land sale sites could go to the medical sector is not known.

Interestingly, the Race Course Road site was initially not expected to be for hospital use.

The site was first made available for sale in August 2006 as a white site for possible commercial, office, residential and/or hotel use. Then in April this year, the Urban Redevelopment Authority (URA) said in a statement: 'In line with increased interest in hospital development, URA has been working with the Ministry of Health and EDB (Economic Development Board) to review new sites for hospital development.'

Istithmar Plans Asian Real Estate Vehicle

Source : The Business Times, September 28, 2007

The joint venture with a global financial partner will be based in S'pore

FRESH from its recent $1.69 billion purchase of the prime development site at Beach Road, Dubai World Group's (DWG) investment arm, Istithmar, said that it is planning to set up a major joint venture Asian real estate operation to be based in Singapore.

Dr Yu: 'Asia is the most important area of focus for us'

The group's chief investment officer, Yu Lai Boon, said that the joint venture would be undertaken in partnership with a Singapore-based global financial company.

DWG has recently diversified its portfolio with several high-profile investments worldwide, including stakes in European aerospace giant EADS, the Barneys New York retail chain, and the MGM Mirage entertainment company and half of its CityCenter development.

Asked if the company's one-third stake in the Beach Road site had to do with the softening of the real estate market in the Middle East, Dr Yu said that it had been invited to participate by its joint venture (JV) partner, City Developments Ltd (CDL). Dr Yu added: 'Asia is the most important area of focus for us.'

Istithmar's new real estate vehicle will be its second after the announcement in June of a US$50 million hotel joint venture with CDL, called Tune Hospitality Investments.

Istithmar also has a stake in the CDL Hospitality Trusts, and in the past year has made seven real estate investments in the region.

DWG's real estate portfolio is currently worth US$60 billion in terms of asset and development value. In Asia, it is committing US$30 billion in India alone and expects to expend the same amount in China, Dr Yu said.

And apart from Singapore, it also has investments in Vietnam and Thailand.

The third partner in the South Beach development is the El Ad Group (EAG), run by Israeli billionaire Yitzhak Tshuva.

EAG may be an as-yet unfamiliar name here, but it is no stranger to CDL. Apart from buying The Plaza Hotel in New York from CDL executive chairman Kwek Leng Beng and his partner in 2004, EAG is also a joint venture partner with CDL on its upcoming Leonie Hill luxury condo development.

With the global economy still in the throes of a credit crunch, real estate investments here had been expected to slow down. Yet, EAG president and CEO Miki Naftali said: 'The quality and range of our properties have tended to insulate us from pressures associated with the so-called global credit crisis.'

He added that 'credit remains available to us'.

EAG has a real estate portfolio worth over US$7 billion, and it expects to invest in Asia 'as part of our worldwide strategy of adding value'.

Mr Naftali also said that it is seeking opportunities to introduce the iconic Plaza brand here, as well as in Tokyo, Shanghai and Beijing.

Other investors from the Middle East that have made an impression here this year include Emirates Investment Group, which has a stake in the upcoming Ritz-Carlton Residences in Cairnhill, and Kuwait Finance House, which bought two blocks at Reflections @ Keppel Bay.

S'pore Property Seen As Top Buy In Asia-Pac

Source : The Business Times, September 28, 2007

Sentiment strongest in rental apartment, office, hotel/resort, retail sectors: survey

SHANGHAI, Singapore and Tokyo have emerged as the top three most promising Asia-Pacific cities for real estate investment prospects, according to a report from the US-based Urban Land Institute (ULI) and the accountancy firm PricewaterhouseCoopers (PwC).

'Sentiment was strong among survey participants to either buy or hold all types of properties in Shanghai, Singapore and Tokyo, rather than sell properties, illustrating the cities' strong popularity with the investment community,' a news release by PwC and ULI said.

For Singapore, the strongest sentiment for buying property was in the rental apartment sector, followed by the office, hotel/ resort, retail and indus- trial/distribution property.

The report, Emerging Trends in Real Estate Asia Pacific 2008, is the second annual investor survey from ULI and PwC. It shows that Singapore has jumped from fourth to second placing for investment prospect rankings, and from ninth to third spot for development rankings. Singapore is ranked first for city risk ratings.

One respondent in the survey said Singapore was 'certainly one of the markets in the area that provides a very stable legal and tax environment, and property rights that are beyond question. And it therefore is certainly one of the markets where many, especially Westerners, are very comfortable.'

The report was based on interviews and surveys with more than 190 professionals, including investors, developers, property company representatives, lenders, brokers and consultants.

The survey covered 20 cities. Shanghai was in the top position in the latest 2008 investment prospect ranking, up from second spot in the earlier ranking. Tokyo maintained its third position, while Osaka, which was first in the 2007 ranking, moved down to fourth position. Hong Kong was ranked fifth in the latest survey, moving up six positions.

While Singapore moved from fourth to second spot in investment prospect, sell recommendations increased for office, retail, and hotel/resort from 0 per cent in the 2007 report issued last year to 19 per cent, 13 per cent and 13 per cent respectively in the latest 2008 report.

Buy recommendations for industrial/distribution property increased from 35 per cent to 44 per cent.

The 2008 survey also shows that the growing Asia-Pacific real estate market still offers opportunities for investors and developers next year. Asia-Pac real estate executives' response remains strong on overall economic and market fundamentals, regardless of interest rate increases.

High levels of equity capital continue to pour into the Asia-Pacific property pool. For 2008, the hotels sector tops the list of real estate performance prospects, followed by the office sector.

PwC's tax partner in Singapore, David Sandison, said: 'It's expected that even greater amounts of capital will be flooding Asia Pacific real estate markets in 2008. The real challenge for investors will lie in finding the right assets against the backdrop of yield compression and scrutiny by regional governments and tax authorities.'

The strongest sentiment for buying in Singapore was for rental apartments, with about 53 per cent of respondents recommending a buy, 34 per cent hold and 13 per cent sell.

For office space, 52 per cent advised buying, 29 per cent hold and 19 per cent sell.

The survey also showed that 48.5 per cent recommended buying hotel & resort property, 38 per cent advised holding, and 13 per cent, selling. For retail property, 45 per cent advised buying, 41 per cent holding and 13 per cent selling.

In the industrial/distri- bution sector, about 44 per cent of respondents recommended buying, 42 per cent holding and 14 per cent, selling.

ULI is a global education and research institute championing responsible leadership in land use to enhance the total environment.

Collective Sale Site Flipped For 100% Profit

Source : The Business Times, September 28, 2007

Bought for $73m one year back, Emerald Mansion site sold for $148m

The Cheong family, which bought Emerald Mansion through a collective sale last year for $73 million or $931 psf per plot ratio, recently sold the District 9 freehold property for double that amount, or around $148 million or $1,888 psf ppr, sources say.

Emerald Mansion: The $1,888 psf ppr price is a new high for the Cairnhill area, surpassing the $1,788 psf ppr that Char Yong Gardens fetched in June this year

The unit land price of $1,888 psf ppr is a new high for residential land in the Cairnhill area, surpassing the $1,788 psf ppr that Char Yong Gardens fetched in June this year.

BT understands that the new buyer of Emerald Mansion is a joint venture comprising a property fund managed by LaSalle Investment Management, and a local contractor - with the latter taking a minority stake.

No development charge is payable for the 29,810 sq ft site, which can be redeveloped up to its current gross floor area of 78,401 sq ft, which reflects a plot ratio of about 2.63. This is higher than the 2.1 plot ratio indicated for the site under Master Plan 2003.

BT understands that the original collective sale to the Cheong family - which has a substantial stake in International Plaza at Anson Road and is related to SC Global chairman and CEO Simon Cheong - was completed just a few months ago.

DTZ Debenham Tie Leung is believed to have brokered the latest sale of Emerald Mansion to the LaSalle Investment Management fund. DTZ declined to comment on the deal.

Based on LaSalle Investment Management's $1,888 psf ppr acquisition cost of Emerald Mansion, the breakeven cost for a new apartment development on the site could be about $2,400 psf, according to market watchers. The site can be developed into around 55 apartments averaging 1,500 sq ft.

The developer of a project on the Emerald Lodge site next door is said to be eyeing an average price of about $3,000 psf in an upcoming launch.

Last month, LaSalle Investment Management clinched a 99-year leasehold commercial plot next to International Plaza at a state tender. Its winning bid of $237.2 million reflects a unit land price of $941 psf ppr.

The real estate money management firm, which is part of the Jones Lang LaSalle group, bid on behalf of its LaSalle Asia Opportunity III Fund, and is planning a 20-storey office development with about 200,000 sq ft net lettable area.

Marina Rising - And Its Prices Follow Suit

Source : The Business Times, September 28, 2007

SUTL's One°15 banks on rising affluence and the IR effect to keep afloat

Asia's most luxurious and modern marina will officially open tomorrow and, in keeping with the sudden rush of demand for the high life, it will raise its membership prices for the eighth time.

Ready to set sail: 'This will become one of the world's most well-integrated waterfront lifestyle communities,' said Mr Tay, who has invested about $75 million into the facility which sits on a 30-year leased site.

Nestled within the Sentosa Cove enclave with a range of private members club facilities, One°15 Marina has been steadily attracting the well-heeled not just from Singapore, but around the world to join up as members.

Currently, some 60 per cent of its 2,800 members are Singaporeans or residents, while the rest are expatriates and other foreigners, some coming from as far as Spain and the US.

And with demand picking up steadily since its launch in April 2005, One°15 Marina will be raising its membership price to $43,888 from tomorrow - compared to $38,888 now. This is a far cry from the initial launch price of $23,888 for an individual transferable membership.

And with membership capped at 4,000, Arthur Tay, the 50-year-old businessman and founder of One°15 Marina Club, expects to gradually hike up the joining fee to $60,888 by the time the integrated resorts are fully operational. Meanwhile, the club is also looking at term memberships to accommodate ocean-lovers who may be here only for a few years.

'This will become one of the world's most well-integrated waterfront lifestyle communities,' said Mr Tay, who has invested about $75 million into the facility which sits on a 30-year leased site.

'We already have 204 completed berths, and will have 270 berths when fully completed, including 10 berths for mega yachts of up to 220 feet in length.'

Mega yachts are fully fitted luxury super vessels of over 80 feet in length which cruise the world's oceans with their high net worth owners. There are some 7,000 of these around the world worth some US$107 billion, mostly in Europe and the United States.

Asian are said at present to own less than 100, with about 10 owned by Singaporeans and Singapore residents. But this is expected to grow rapidly in tandem with the changing wealth demographics. The club also has several boats for rent, including four houseboats which provide accommodation.

Mr Tay feels that Singaporeans should get off their bottoms and move on to see how their little island is rapidly transforming into the Monaco of the east.

Sitting in the luxurious living room of his $22 million, 116-foot mega yacht Hye Seas II (named partly after his father), Mr Tay feels that, with growing affluence, Singaporeans are increasingly demanding better cars, more expensive watches, bigger homes - and classier marinas.

Spread over some 14.2 hectares of water and 1.7 hectares of land, One°15 - built by Mr Tay's SUTL Group of companies and named after its strategic location of one degree, 15 minutes north of the Equator in nautical terms - seems to fit the bill.

Cash is not a problem. The club is already raking in some $1 million in revenue each month from its services, including not only food and beverage but other services being provided to yacht owners like bunkering. And when it reaches its targeted membership of 4,000, it would have taken in more than $140 million from entrance fees alone.

Mr Tay is unfazed by the fact that the only two other major privately-owned marinas in Singapore have not enjoyed much success. Almost two years ago, NATSTEEL-owned Raffles Marina revealed that it was not in a position to redeem $27.7 million worth of unsecured notes it owed 1,701 members. With a loss of $32 million in 2004, and liabilities exceeding assets by $30.4 million, it was forced to restructure by getting members to swap their debentures for equity and a second membership. This came on the heels of the collapse of Ponggol Marina under debt of some $18 million, leaving its members losing millions of dollars more.

So why should One°15 Marina work?

'Marinas are not new in this part of the world, but it is a shame they've gone to sleep in Singapore,' Mr Tay said. 'Today, Singapore is a medical hub, financial hub and a tourism hotspot. As its people become more affluent, their lifestyle demands and expectations will also rise,' he added.

Mr Tay also does not discount taking the holding company public one of these days. 'We need to do this only when we need capital for expansion, whether here or elsewhere.'

The company is already talking to the government about opening up marinas on some of the other islands around Singapore.

At the same time it is looking overseas, especially Vietnam. 'There are also some other marinas in the region asking us to manage their properties, or look at some other form of collaboration,' said Mr Tay.