Monday, October 15, 2007

Fewer Properties Launched And Sold In September: URA

Source : Channel NewsAsia, 15 October 2007

The property market has taken a big tumble in the month of September.

According to latest statistics from the Urban Redevelopment Authority (URA), property developers launched and sold fewer units in September than in the previous month.

There were just 570 new units released for sale, down from 1,885 in August or a drop of 70 percent.

And in terms of transactions, only 529 units changed hands - also down by 70 percent from 1,731 in the previous month.

The numbers suggest that investor confidence was hit amid the turmoil in the financial markets.

Meanwhile, the median selling price also took a hit - of 28 per cent - from S$1,328 to S$960 psf.

Property watchers say the drop was due to the sub-prime credit woes in the US.

Nicholas Mak, Director, Consultancy and Research, Knight Frank, said: "Investors' confidence also evaporated. As a result developers held back many of their launches.

"And also some buyers, especially those who are from the high-end property segment... were also adopting a wait-and-see attitude. Everybody was waiting for the sky to clear, for clearer signals to come out before proceeding with their investments."

The numbers were among the lowest since the URA started releasing monthly figures in June. Still, there were some developments that managed to buck the downtrend.

Mr Mak said: "For example, Hill Crest Villa located at Bukit Timah. It's landed cluster housing development and sold at record prices at roughly about S$865 psf. This is quite high for such a development.

"And also another development is Scotts Square at Scotts Road, where roughly about 12 units were reported to be sold over S$4,000 psf in the month of September."

Looking ahead, analysts say they expect the numbers to rebound in October.

Knight Frank noted that August was an exceptional month in terms of units launched and sold; and there are more developments expected in the pipeline.

Analysts say this latest URA report will not affect en bloc activities significantly. However, players in the en bloc market will be observing next month's report closely to see if the numbers go up. - CNA/ch

UOB's New Fund Aims For Stable Long-Term Returns

Source : The Business Times, October 15, 2007

It provides exposure to Asian stocks and debt securities

TO help investors manage market volatility better, United Overseas Bank is offering a new fund called the United Asia Active Allocation Fund or Triple A Fund.

Targeted at investors in Singapore, Malaysia and Thailand, the Triple A Fund aims for stable long-term returns through active asset allocation.

By adopting a portfolio diversification strategy, the fund provides exposure to Asian equities, stock-related securities and debt securities.

'The Triple A Fund is designed for investors who want to maximise their returns under varying market conditions,' said Thio Boon Kiat, managing director and chief investment officer of UOB Asset Management (UOBAM), which jointly developed the fund with UOB.

'Unlike most balanced funds that stay within a pre-set asset allocation, the Triple A Fund is actively managed.'

It will tap into three Asian-focused funds that are managed by UOBAM - United Asia Fund, United Asian Growth Opportunities Fund and UOB Optimix Asian Bond Fund.

The United Asia Fund invests in shares listed or traded on the stock exchanges of Hong Kong, Taiwan, Indonesia, Malaysia, Thailand, the Philippines, Singapore and other Asian countries.

The United Asian Growth Opportunities Fund invests in small capitalisation stocks and stock-related securities issued by corporations in the Asia-Pacific region (excluding Japan), while the UOB Optimix Asian Bond Fund invests in high-yielding debt securities issued by Asian corporations, financial institutions, governments and their agencies.

Being traded on a daily basis, the Triple A Fund is designed to respond quickly to changes in market conditions and to maximise returns for investors' portfolio.

It aims to provide investors with a potential dividend of 5 per cent per annum of the net asset value per unit of the fund through regular quarterly distribution and there may also be capital gains, depending on its performance.

Eddie Khoo, executive vice-president of UOB's personal financial services, noted that the Triple A Fund taps on UOB's regional consumer banking network and UOBAM's expertise to offer wealth management solutions to customers in Singapore, Malaysia and Thailand.

'Moving on, we will be offering investors in Malaysia and Thailand more options with regional product offerings that will be made available in Singapore through our regional consumer banking network in these countries,' Mr Khoo added.

For investors in Singapore, the minimum subscription amount for the Triple A Fund is S$1,000 or US$1,000.

US$80b Fund Planned To Mop Up Bad Mortgage Loans

Source : The Business Times, October 15, 2007

US Treasury, global banks talking to find way out of looming credit crunch

(WASHINGTON) Major banks including Citigroup are looking at setting up a roughly US$80 billion fund to buy ailing mortgage securities and other assets, sources said.

Representatives from the US Treasury have organised discussions among top global banks in a bid to prevent the crunch from further hurting the global economy, the sources said.

Financial institutions are growing increasingly concerned that a certain type of investment funds linked to banks may have to dump billions of dollars of repackaged loans onto financial markets.

A fire-sale of assets could lift borrowing costs globally, trigger big losses from investors and force banks to further write down some holdings on their balance sheets. Such sales could trigger huge losses for banks, and, in the worst-case scenario, tip the US or Europe into recession.

The fund is the latest response to a global credit hangover after at least three years of easy credit that fuelled massive mortgage lending in the US and spurred record levels of leveraged buyouts.

'Banks made unwise business decisions, and now they're scrambling to save themselves,' said Steve Persky, chief executive at Dalton Investments in Los Angeles.

Citigroup, JPMorgan Chase & Co and Bank of America Corp are involved in the discussions, according to people familiar with the situation. The three banks declined to comment.

Though the US Treasury is involved in the discussions, taxpayer money is not expected to be used, they said.

The Financial Services Authority, the UK market regulator, has suggested British banks consider participating in the fund, The Wall Street Journal reported on Saturday, citing a person familiar with the situation.

Details concerning the fund the banks are setting up, including its size, are still being hammered out and may change as other banks and investors become involved, sources said. The fund that is being contemplated would bail out funds known as 'structured investment vehicles' or SIVs.

SIVs bought assets like mortgage securities from banks, and financed their purchases using short-term debt known as commercial paper. They make money by earning more from their investments than they have to pay to fund them.

But if SIVs cannot sell commercial paper, they must sell their assets, and many of the assets do not trade often and would be hard to sell.

The idea for a fund was first broached at a meeting at the US Treasury on a Sunday in mid-September in Washington, DC, according to a person familiar with the details of the meeting.

That meeting was led by Robert Steel, US undersecretary for domestic finance, and Anthony Ryan, US assistant secretary for financial markets.

The informal meeting lasted four-and-a-half hours as banks came up with ideas to jump-start the short-term lending markets. Outstanding commercial paper has dropped since the summer.

According to the US Federal Reserve, there was US$1.865 trillion in commercial paper outstanding in the week ended Oct 10, down from US$2.187 trillion outstanding in July. -- Reuters

Businesses Roll With Stronger S$ But Some Brace For A Crunch

Source : The Business Times, October 15, 2007

Singapore companies keep firm eye on competitiveness as US dollar slides

Some are thinking of shifting their operations to cheaper locations like China and Vietnam. But for most businesses here, the strengthening Singapore currency and weakening American dollar have not made more than a dent on their cost competitiveness - at least not yet.

The falling US$ is very much what's needed to correct the troubling global imbalances fed by excessive consumption in the US and Europe, says Nizam Idris, an economist and currency strategist at UBS bank in Singapore.

Even as the Sing dollar shot up to a 10-year high against the greenback at $1.463 last week, industry sources say it's still early days to assess the impact on the economy here.

'For now, businesses have not felt the pinch. The economy is doing well,' says one industry leader.

Just last week, the Ministry of Trade and Industry (MTI) released estimates showing the economy expanded by a blistering 9.4 per cent in the third quarter, trumping analysts' forecast.

The government seems not particularly concerned about the falling US dollar, the common currency for global trade and business. More concerned about inflation, the Monetary Authority of Singapore is moving to raise slightly the pace of appreciation for the trade-weighted Singapore dollar.

That is good news for local businesses that are importing a lot. 'The drop in value of the US dollar is beneficial in the sense that it becomes cheaper for us to buy fuel which is quoted in US dollars,' says Tammy Tan, spokeswoman for transport group Comfort Delgro.

MTI has declined to comment, but BT understands government planners are keeping a close watch on the local currency's movements - especially against the US dollar.

The Singapore Tourism Board, keen to draw more visitors, says it is too soon to say if tourism would be affected by the stronger Sing dollar.

The Singapore Chinese Chamber of Commerce and Industry (SCCCI) expects local retailers and service providers in the tourist trade to be affected by a dip in tourist spendings.

Small exporters who ship their goods direct to the US will also be among the hardest affected, it says.

'A strong Singapore dollar will definitely affect the price competitiveness of our exports done in Singapore dollars,' says Chew Ker Yee, vice-president for business at Wangi Industrial, a provider of surface finishing and optical thin-film coating solutions. His company is moving its operations to lower cost countries like China and Vietnam, where 'the local currency appreciation against the US dollar is not as steep'.

Erman Tan, chief executive of Asia Polyurethane, a chemical exporter, finds his costs rising in tandem with the falling US dollar.

Even companies not dealing with the US are feeling the effect, because they have to convert revenues mostly in the US dollar to the Singapore currency.

Miline International, which ships its plywood to Australia, Malaysia, Thailand and the United Kingdom, has sustained 'book losses' of 16 per cent in the past four years, when the Singapore dollar climbed from $1.69 to $1.45 against the greenback. 'A stronger Sing dollar will not benefit us as we trade 100 per cent in US dollars,' says Mikell Koh, Miline's managing director. Homegrown technology company Aztech Systems is in similar straits, but says the losses which the company sustains 'will not be significant to the group's operations'. Still, Aztech is considering hedging to ease the effect of the falling US dollar, says Herman So, its vice-president for finance.

Some businesses, like logistics provider Lorenzo International, worry that if the greenback keeps tumbling and hence boosting the Sing dollar, profit margins will be squeezed.

Says Raju Chellam, vice-president of market research firm Access Markets International in the Asia-Pacific region: 'If the US dollar continues its slide, we may need to re-negotiate with our local partners to accept payment in US dollars, instead of in local currency.'

On the other hand, Victor Loh, CEO of the VicPlas Group, a producer of building plastics and medical devices, is fretting that clients may seek to pay in US dollars if the greenback keeps falling.

But there are also gains to be made in cheaper imports and lower inflation. This is seldom mentioned among businesses, lest they have to pass the gains to customers.

Nizam Idris, an economist and currency strategist at UBS bank in Singapore, says the falling US dollar is very much what's needed to correct the troubling global imbalances fed by excessive consumption in the US and Europe.

In any case, he says that in real trade weighted terms, the Sing dollar has not strengthened much against its trading partners.

Similarly, Fortis Bank strategist Joseph Tan also does not expect the weakness of the US dollar to affect Singapore's trade 'so starkly'.

He says Singapore's chief competitors in Asia have also seen their currencies appreciate - some even more - against the greenback, leaving Singapore's competitiveness relatively unscathed.

But Mr Tan is concerned that the falling US dollar, along with the recent cut in the Fed rate, is exporting US inflation to the rest of the world.

While a strong Sing dollar could hit exports, the SCCCI does not see any long-term harm to Singapore's competitive edge.

'For most large corporations, the rising Sing dollar is unlikely to have a major impact as these companies leverage on niche manufacturing capabilities and efficient supply-chain and logistics management to compete globally,' it says.

The more immediate concern for many businesses is the recent sharp hike in residential and commercial rentals, according to SCCCI.

Says an expatriate businessman: 'This almost bubble aspect of commercial and private rents is making Singapore a much less attractive place to do business than in the past.'

F&N Gets Extra Shield With New Chairman In Place

Source : The Business Times, October 15, 2007

Board bolstered defences over fear of takeover move by Heineken

When Lee Hsien Yang takes over as chairman and consultant to Fraser & Neave today, some members of its board will quietly congratulate themselves.

For, unknown to the public at large, the company has been bolstering its defences against a possible takeover bid by global brewing giant Heineken.

F&N has also been worried that Heineken could try to take control of its subsidiary Asia Pacific Breweries and Mr Lee's appointment is just one of the moves it has made to stop that from happening.

Some 10 months and $900 million later, the story can now be told.

When Temasek Holdings moved to purchase a 15 per cent stake in the company for $900 million in December 2006, it was seen as capital injection for F&N and a portfolio investment for Temasek. Apparently, there was more to it.

F&N, which has interests in property, food and beverage, and publishing, has been doing all it can to ensure that it remains a Singapore-owned entity.

BT understands that the Temasek deal was brokered by accountant Nicky Tan of nTan Corporate Advisory, who is also on F&N's board. The move also stemmed from concern that Heineken was eyeing APB in which it already holds substantial stakes along with F&N.

For some time now, Heineken has been brooding over its contractual obligations under its 1931 joint venture with F&N in APB.

The two jointly own a stake of about 65 per cent in APB through their equally owned Asia Pacific Investment Pte Ltd (APIPL). And F&N separately owns a direct stake of about 7.3 per cent in APB while Heineken has a direct stake of about 9.5 per cent, all through open market purchases. In other words, F&N's total stake in APB is around 39.8 per cent while that of Heineken is around 42 per cent.

Under the terms of their 1931 joint venture agreement, Heineken is prevented from setting up breweries in Asia on its own. Expansion in the Asia-Pacific region, one of the fastest growing beer markets in the world, can only be done through APB.

As Heineken Asia-Pacific's president Siep Hiemstra recently acknowledged, the Dutch company was keen on increasing its stake in APB.

So there was concern within F&N that it might become a takeover target for Heineken. The market capitalisation of the Singapore company is under $7 billion. Investing about $3.5 billion would have given Heineken control and allowed it to be free of its contractual shackles.

Apparently F&N's board got wind of this possibility and Nicky Tan was said to have persuaded the directors to bring in Temasek. The reasoning was that this would make Heineken think twice before trying to take control of one of Singapore's most iconic brands.

Tension between F&N and Heineken was so high at one stage that late last year Heineken filed a summons in the High Court here to obtain a declaration as to who was entitled to appoint the regional director for APB's China operations. Heineken claimed that under an October 2002 agreement it had the right to appoint the China regional director.

However, the High Court here found in favour of F&N and the suit was dismissed with costs. APB subsequently appointed F&N's then chief operating officer (food and beverage), Huang Hong Peng, to the job to replace Heineken's choice, Frederick Linck.

A pre-nuptial agreement before the joint venture was formed allows F&N to appoint APB's chief executive and top management, and this is what allows APB to be considered a subsidiary of F&N although the latter owns less than 50 per cent of the brewer of the famous Tiger Beer.

The investment by Temasek was initially seen as a move by the Singapore investment company to inject capital into F&N.

Said F&N's then chief executive Han Cheng Fong: 'We welcome Temasek's participation to strengthen the growth potential of F&N's food and beverage business. Temasek Holdings, a leading investor in Asia with considerable experience in investing and nurturing businesses, will add tremendous value to all of the company's stakeholders going forward.'

At the same time, however, he hinted that F&N intended to remain firmly entrenched in beer making and hold on to its stake in APB, saying: 'The brewing business is attractive. We intend to grow it through more acquisitions, extend our market reach and grow our brands.'

Heineken, however, wanted to get rid of its constraints and push its brand at a much faster pace than APB was doing, as the latter's priority was promoting the Tiger brand.

Until a couple of years ago, Heineken did not want to brew its beer in APB's refineries in China, preferring instead to import from its breweries outside the country. As a result, all parties suffered because of underutilised capacity. Until the last financial year, their Chinese breweries, as a whole, ran at a loss.

But just over two years ago, the operations there were consolidated under Heineken-APB (China) Pte, which now manages about a dozen breweries on the mainland and in Hainan. Its capacity, including those of associate companies, has risen from 4.2 million hectolitres in 2003 to nearly 23 million hectolitres now.

Things have also appeared better between the Dutch and Singapore partners, with Mr Hiemstra likening the dispute to a rough spot that can hit even successful marriages.

'We have moved on. Since then, we have started new projects. We are both public companies, we have shareholders and a business to run and we do that,' he told the media a few months ago.

URA Promotes S'pore To Middle East Investors At Property Event

Source : The Straits Times, Oct 15, 2007

THE Urban and Redevelopment Authority (URA) is leading a team to Dubai to attract Middle East investors to Singapore.

It will set up a Singapore Pavilion at 'Cityscape Dubai', a three-day conference cum exhibition, to promote the Republic as a great city to live, work, play and invest in.

This is the first time such a pavilion is set up in a premier international property event in the Middle East.

Mr Choy Chan Pong, Director of Land Administration, Urban Redevelopment Authority (URA), will be speaking at the conference on Singapore's success in 'attracting global investments into our real estate market and keep investors abreast of the exciting investment opportunities that Singapore has to offer'.

'Participating in such international property events has reaped tremendous benefits for Singapore as a whole,' said Mr Choy Chan Pong (above), URA's Director of Land Administration. -- ST PHOTO: JOYCE FANG

Other organisations exhibiting in the Singapore Pavilion from Tuesday include the Singapore Tourism Board (STB), Building and Construction Authority (BCA), Marina Bay Financial Centre, Lend Lease Retail, Ong & Ong and the Singapore Institute of Architects (SIA).

The URA will showcase Marina Bay, Singapore's future downtown, which will be more than just a business and financial centre. It will also offer a wide range of quality residential, shopping, dining and entertainment facilities as well as a necklace of public attractions framing the bay within a lush green environment.

The STB will highlight Orchard Road and the Southern Waterfront while SIA will exhibit some of the architectural works of their member firms.

Mr Choy said: 'Participating in such international property events has reaped tremendous benefits for Singapore as a whole. A clear example can be seen in the South Beach project.'

'URA had met with Istithmar at last year's Cityscape Dubai and presented them with the exciting investment opportunities we have in Singapore.'

The Istithmar Group which partnered local developer City Developments Ltd and the North American based El-Ad Group, successfully tendered $1.689 billion for the Beach Road project.

More than 250 Middle East companies currently have operations based in Singapore. There is also an increasing Middle East presence in Singapore's real estate market, from individuals buying private homes to equity funds investing in mega development projects.

New UOB Fund To Tap On Regional Network

Source : TODAY, Monday, October 15, 2007

UNITED Overseas Bank is set to leverage on its regional network and expertise in Asian markets with the introduction of the United Asia Active Allocation Fund (Triple A Fund) today.

The Triple A Fund adapts to changes in market conditions through an active fund allocation investment strategy designed to maximise returns for the investors’ portfolio.

Jointly developed by UOB and UOB Asset Management (UOBAM), it will feed into three Asian-focussed funds managed by the latter — United Asia Fund, United Asian Growth Opportunities Fund and the UOB Optimix Asian Bond Fund.

UOB Personal Financial Services executive vice-president Eddie Khoo said the regional fund “taps on the bank’s regional consumer banking network and UOBAM’s expertise to offer wealth management solutions to customers in Singapore, Malaysia and Thailand”.

Different asset classes respond differently as the economy goes through periods of expansion and contraction. The Triple A Fund’s portfolio diversification strategy covers both Asian equities and fixed-income investments, enabling it to manage market volatility for stable long-term returns.

“The Triple A Fund offers investors ... UOBAM’s in-depth knowledge of Asian markets and the rigorous investment strategy for active asset allocation. With that, even in varying economic and asset market cycles, investors will have peace of mind,” said Mr Thio Boon Kiat, managing director and chief investment officer of UOBAM.

No Need To Panic Yet ...

Source : TODAY, Monday, October 15, 2007

But IMF warns of slowing growth

WASHINGTON — Global finance chiefs gather in Washington this week with the impact of housing and credit woes in the United States spreading worldwide, exchange rate tensions rising and new agendas being carved out at the International Monetary Fund (IMF) and World Bank.

Meetings of the Group of Seven (G7) finance ministers, to be followed by annual gatherings of the IMF and World Bank, are being held against a backdrop of slowing global growth, but comments from key leaders suggest there is no reason to panic.

But IMF officials have said they expect to lower their forecast for global economic growth and estimates for major economies including the United States and Europe.

Sources said the IMF’s World Economic Outlook would lower its global forecast to 4.8 per cent growth from a previous estimate of 5.2 per cent.

The IMF’s outgoing chief Rodrigo Rato said in an interview with the Financial Times that the global credit squeeze that began with sub-prime US housing failures may not be over.

“Problems are going to come to the real sector, to (government) budgets — that is something we keep telling people,” he said.

Mr Rato said it would be “a few months, probably into next year” before credit availability returned to normal levels in the markets, which was “going to have an impact on growth”.

“The US is going to slow down ... Growth in Europe and Japan looks less strong than before,” said Mr Rato, who will be succeeded as IMF chief by former French Finance Minister Dominique Strauss- Kahn at the end of the month.

Other than the impact of the credit squeeze, some finance chiefs are worried that the weak US dollar and strong Euro will end up hurting a number of economies.

“On balance, there is plenty of reason to think that European growth is going to slow and that the euro itself has a very limited upside,” said Mr Robert Brusca of FAO Economics.

“No matter where they go, (eurozone) exports will not be able to escape the threat from lower-priced goods abroad,” he added.

European economies may feel the pinch from slower exports, but Japan’s low interest
rates will fuel the “carry trade” that puts more pressure on exchange rates.

Mr John Lonski, chief economist at Moody’s Investors Service, said a rise of the euro above US$1.50 would be a “shock” but probably manageable.

Of more concern would be a loss of confidence in the US dollar that could send tremors across a fragile global financial system, he noted.

This suggests the G7 will use much of their time discussing interest rates, following
the Federal Reserve’s halfpoint cut on Sept 18.

Expectations are running high for a boost in rates by the European Central Bank. Mr Lonski added that central banks would hope to avert a further pummelling of the US

“I don’t think that other central banks would allow the US dollar to collapse,” he said. “It’s not in the interests of the world economy to allow the US dollar to enter a downward spiral.” — AFP

Better Gains, But With More Investment Risks

Source : TODAY, Monday, October 15, 2007

While GIC, Temasek earnings exceeded CPF interest rates, these returns are volatile

Director (Special Duties),
Ministry of Finance

IN “FREE CPF Board to take risks” (Oct 10), Tan Keng Tat asked that CPF be allowed to invest directly in Temasek Holdings or in the Government of Singapore Investment Corporation (GIC), in order to deliver better returns to CPF members.

GIC and Temasek Holdings have earned returns that have exceeded CPF interest rates by taking on more investment risks. These returns are, however, volatile — they can and will be low or even negative in some years. For example, in the three years from the bursting of the IT bubble in 2000, the value of global equities fell by 48 per
cent. Temasek’s portfolio fell by 38 per cent in value.

Most CPF members have small balances and will not welcome such risks. Neither will older members who may have to withdraw their retirement funds at a time when the markets are down.

Further, there is no assurance that global markets will do as well in the future as they have in the past. The past two decades have been exceptional, for both equities and bonds. Returns in the 1970s were much weaker.

Taken over the last 30 years, the average return on a balanced portfolio of global bonds and equities (5.9 per cent in Singapore dollars) was lower than what the new SMRA (Special, Medisave and Retirement Accounts) formula would have yielded (6.5 per cent).

Singaporeans benefit when GIC and Temasek investments do well. Every year, the Government draws part of these investment returns to fund the annual Budget.

Over the past five years, the Government spent an average of $2.8 billion a year from the Net Investment Income on these funds. This has paid for worthwhile investments and social needs, including subsidies for housing, education and healthcare.

And from time to time, the Government distributes accumulated budget surpluses back to citizens through CPF top-ups and other schemes.

Mr Tan also commented that the new higher interest rates will not make a significant difference because inflation will mean lower real returns. From January next year, the SMRA interest rates will be pegged to long-term (that is, 10-year) Singapore Government bonds.

While it is not assured, long-term bond yields do tend to rise and fall in tandem with inflation. Furthermore, the Government is committed to maintaining a low inflation environment in Singapore through its monetary and fiscal policies.

CPF members with larger balances and the capacity to take higher investment risks can already take out their funds to invest through the CPF Investment Scheme.

The Government has also said that it will study other investment options on an aggregated basis for CPF members with larger balances.

URA Probes Boarding House After Tenants Complain

Source : The New Paper, October 15, 2007

WE'RE LIVING WITH RATS - Residents claim rents high but facilities poor, rooms crowded

IT'S a rat-infested, crowded, dingy shophouse that may well be a fire hazard too.

The shophouse in Little India is not supposed to be used as a boarding house.

But about 60 migrant workers are squeezed into this hell-hole - because they can't afford anything better.

Many earn about $1,000 a month and they pay rent of about $200 for a thin, dirty mattress on a bunk bed.

They have no cupboards so they dump their belongings on the same mattress.

That's not all. Tenants complained they often get bitten by bed bugs and rats crawl all over them.

Pest problem: Rats like this one have beeneating the residents' food.

The landlord makes a whopping $8,000 in rent a month for the shophouse. A housing agent told The New Paper on Sunday that a similar-sized property in Little India would bring $6,000 to $7,000 if rented out for commercial use.

What did the landlord do with his tenant's complaints? He shrugged his shoulders and dismissed them as petty.

But the shophouse is not meant to be used as a boarding house. He claimed he didn't know.

The New Paper on Sunday found out about the shophouse from a hotline call. The workers, mostly from China and Malaysia, were packed into two floors of the shophouse.

Each floor has an area of about 111sqm, slightly more than a four-room HDB flat.

But the landlord carved seven rooms on the second storey. This houses some 30people, two-thirds of themwomen.

The third storey has eight rooms occupied by a similar number, all men. They declined to talk when we approached them.

Exact numbers were not available. These tenants come and go, said the landlord who wanted to be known as only Mr Mok.


As many as eight people have to cram into some of the rooms, each no bigger than an HDB bedroom.

And each of these workers pay $150 to $170 a month to the Singaporean landlord.

He also keeps a month's rent as deposit from each of them, and insists they have to stay for the contracted period. He said he will return the deposit once the contract is over.

But the tenants are saying that with the total of about $8,000 they pay, they could have rented four four-room flats.

Instead, they have to share bunk beds packed into small rooms.

And it is on the same beds that they keep all their belongings, including food, and hang their wet laundry todry.

Mr Mok said some of the tenants had actually forfeited their deposits to stay elsewhere.

And he's not even allowed to use the place as a boarding house.

A check with the Urban Redevelopment Authority (URA) showed that the three-storey building is zoned for commercial use.

A URA spokesman told The New Paper on Sunday that it is located in an area where boarding houses are generally not supported.

'URA will investigate whether the use of the premises has infringed planning controls and if there is any infringement, appropriate enforcement action will be taken against the owner or tenant of the premises for the unauthorised boarding house,' she added.

The 58-year-old landlord admitted that he had not got permission from the URA to run the boarding house.

Mr Mok, who also runs a renovation business, said in Mandarin: 'I took over the place only three months ago. I'm not sure of the rules and regulations for the use of the shophouse.

'I didn't foresee so many problems in running a boarding house.'


The New Paper on Sunday visited the building two weeks ago and spoke to some of the tenants. They all requested that we not use their full names.

'Our biggest problem is pests,' said one tenant, Miss Ren. 'We have to dry our clothes inside our rooms as there isn't a proper laundry area.

'There are no cupboards in the rooms so we have to put all our belongings on our beds.'

The 25-year-old from Jilin province had paid an agent back home the equivalent of $8,000 to help her find a job as a beautician, along with accommodation here.

Miss Ren, who earns $950 a month as a beautician, said: 'One day, I came home after work and saw two rats on my bed. Another time, I left an apple on my bed and it was eaten by rats. Even my packets of instant noodles and rice are not spared.

'My room-mates have seen a rat running over me when I was sleeping. The thought of it gives me goosebumps.'

The New Paper on Sunday spotted rats and cockroaches inside some of the rooms.

The tenants said they have also been bitten by bed bugs.

Some of them showed us what looked like bug bites on their legs.

Mr Mok dismissed their complaints.

He said: 'I've sprayed insecticides to kill the bed bugs and used rat poison to kill the rats. But if these girls continue to bring food into their rooms and dirty the place, no matter how much I do, there will still be rats and bed bugs.

'I have a fridge on the third floor, but these girls choose to keep their food inside their rooms as they are afraid that other tenants will eat it without permission.

'Many of them come from rural parts of China and they have their own living habits. They spit anywhere in the house and throw things everywhere.'


Said one tenant, Miss Wang: 'The fridge on the third floor is too small for more than 50 tenants to use. Also it's all men staying on the third floor, it's not so convenient for us to go up there.'

Many of them arrived in Singapore for the first time recently, in search of a better life.

Some of them are fresh college and university graduates, in the early to mid 20s.

They had borrowed money from parents and relatives to pay agents back home to help them get a job and a place to stay here.

They are here as cashiers, waitresses, beauticians and factory workers, earning $800 to $1,000 amonth.

Miss Ren said: 'I've heard so much about Singapore being a clean, garden city. When I arrived at the airport, I was impressed. But once I stepped into my room, I was shocked.

'There is only one toilet and bathroom on each floor and more than 20 of us have to queue to use it every morning.

'There isn't a kitchen or pantry area for us to cook, so we have to cook while squatting along the corridor.'


There are no windows in their rooms and though there is air-conditioning in every room, it breaks down often, the women claimed.

Miss Chow, 22, said: 'When I arrived two months ago, I cried every night. I felt like I'm living in the dirtiest corner of Singapore, yet I can't get out of this place.

'We are strangers here, we have no idea how to find another place for rent and we have no more money to pay agents to help us find a new place.'

They said they have asked Mr Mok to return their one-month deposit as they find the place unsuitable for living and want to move out.

But Mr Mok refused and claimed they are legally bound by their contracts of three to six months.

When the tenants asked to see their contracts, Mr Mok refused.

He said: 'I will give them a copy of the contract if they give me a copy of their work permit.

'I need to be sure that they are legally employed. But they think I will try to send them back to China if they hand me a copy of their work permit.'

Mr Mok added: 'It is stated clearly in the contract that they are not allowed to cook inside the boarding house and they are to keep the place clean. But none of them seems to be following the rules.

'When they return after work, they all hide inside their rooms to cook with electric stoves. Inevitably the power trips.'

Mr Mok is aware that cooking inside the rooms is a fire hazard.

He said: 'They are unhappy with my stringent rules and do things to spite me, like leaving the tap running or littering the staircases and corridors. I have to clean up the place twice a day.'

The women are also unhappy that the landlord barges into their rooms in the middle of the night without knocking.

But Mr Mok said: 'Their doors are not closed, so is there a need to knock?

'It's only the female tenants who are complaining. The men have no complaints.'

Running the boarding house is part of Mr Mok's retirement plan.

'I'm getting older each day and it's physically draining for me to be doing renovation and electrical work,' he said.

'I had thought that it'll be easier to run a boarding house - just sit back and collect rent.'

URA To Promote Singapore To Middle East Investors At Premier International Property Event

Source : Urban Redevelopment Authority (URA) Press Release, 15 October 2007

A Singapore Pavilion comprising public and private organizations will be at ‘Cityscape Dubai’ between 16 to 18 October 2007 to jointly promote Singapore as a great city to live, work, play and invest in. This is the first time a Singapore Pavilion has been set up in a premier international property event in Middle East, to actively attract and promote Singapore to Middle East investors.

Mr Choy Chan Pong, Director of Land Administration, Urban Redevelopment Authority (URA), will be speaking at the conference in Cityscape Dubai on the ‘Growth of the Real Estate in Singapore’. He will speak on Singapore’s success in attracting global investments into our real estate market and keep investors abreast of the exciting investment opportunities that Singapore has to offer.

Singapore-Middle East connections

More than 250 Middle East companies currently have operations based in Singapore. There is also an increasing Middle East presence in Singapore’s real estate market, from individuals buying private homes to equity funds investing in mega development projects.

A recent foray by a Middle East entity into Singapore’s real estate is the Dubai-based Istithmar Group. The Istithmar Group is owned by the Dubai World consortium, whose investments include The Palm, Dubai. Partnering local developer City Developments Ltd and the North American based El-Ad Group, the consortium recently successfully tendered SGD$1.689 billion (US$1.126 billion) for a prominent 3.5ha commercial site at Beach Road. The estimated SGD$2.7 billion (US$1.8 billion) project called South Beach will feature a high-quality mix of prime office space, two luxury hotels, retail and residences.

Singapore’s Pavilion at Cityscape Dubai

The public and private sector organizations, exhibiting in the Singapore Pavilion in Cityscape Dubai include the URA, Singapore Tourism Board (STB), Building and Construction Authority (BCA), Marina Bay Financial Centre, Lend Lease Retail, Ong & Ong and the Singapore Institute of Architects (SIA).

“Participating in such international property events has reaped tremendous benefits for Singapore as a whole. A clear example can be seen in the South Beach project. URA had met with Istithmar in last year’s Cityscape Dubai and presented them with the exciting investment opportunities we have in Singapore including the prominent Beach Road site. Singapore’s participation in Cityscape Dubai hence allows us to meet with potential investors and developers face-to-face, enables them to better understand what Singapore has to offer”, said Mr Choy Chan Pong.

The URA will showcase Marina Bay – Singapore’s future downtown – and envisioned as the centrepiece of Singapore’s urban transformation. Extending seamlessly from the existing central business district, Marina Bay is planned to be more than just a business and financial centre, offering a wide range of quality residential, shopping, dining, and entertainment facilities, with a necklace of public attractions framing the bay within a lush green environment. To date, Marina Bay has attracted around SGD$15 billion (US$10 billion) worth of investments from international developers including the Marina Bay Sands Integrated Resort, prime commercial developments such as One Raffles Quay, Marina Bay Financial Centre and South Beach as well as high-quality residential developments.

STB will be showcasing some of the exciting changes and transformation to the tourism landscape. In particular, STB will highlight exciting tourism zones including Orchard Road and the Southern Waterfront, while SIA will showcase some of the architectural works of their member firms. BCA will exhibit its mission in building a quality built environment in Singapore. BCA International, a consultancy company by BCA will also be present to provide multi-disciplinary construction related consultancy to both public and private agencies in the Middle East.

The Singapore Pavilion is also joined by private developers, showcasing some of the prime developments including the Marina Bay Financial Centre ad Somerset Central at Orchard Road. Please refer to Annex 1 ( for the list of participating public-private organisations and the projects to be exhibited.

About Cityscape Dubai

Cityscape is one of the largest international real estate conferences and exhibitions, with global presence anchored in USA, Asia, China, India, Dubai, Abu Dhabi and South America. Cityscape Dubai, now in its 6th year, is a 3-day long event that attracts more than 45,000 real estate players, including international investors, property developers, investment firms, government and development authorities, leading architects, and financial institutions.

The inaugural Cityscape Asia was hosted in Singapore in April 2007, and attracted participants from 53 countries, including Singapore, Japan, United Arab Emirates and the surrounding Asia-Pacific region.

For more information on Cityscape Dubai, please log onto its official website at


For media enquiries:

Ms Aida Tay
Public Relations Manager
Urban Redevelopment Authority
DID: 6321 8137


《联合早报》Oct 13, 2007










新“建筑环境通行准则”明年4月生效 大厦之间必须无障碍

《联合早报》Oct 13, 2007


建设局推出建筑环境通行准则(Code on Accessibility in the Built Environment),取代现有的无障碍通行准则,以加强大厦和大厦之间的连接设施,全面打造无障碍环境,让年长及残障者出门时通行无阻。















Asset Inflation May Not Always Be A Bad Thing

Source : The Straits Times, Oct 15, 2007

Property owners, for instance, could gain as asset prices climb.

AS RECENTLY as four years ago, it was the fear of falling consumer prices and its corrosive effect on the stock market and residential properties which gave investors sleepless nights.

Now, economists are worrying about the very opposite phenomenon - rising levels of inflation and their impact on the global economy.

Inflation, like its cousin deflation, is usually seen as an economic bogeyman with the potential to wreak economic havoc if it runs out of control.

But there are circumstances under which investors - property buyers for instance - can win from rising consumer prices.

First, think back to 2003, when Sars stalked much of East Asia and the deflation beast was on the loose. Buying sentiment was so poor that even though residential property prices plummeted, there were few takers.

Downward spiral

AND nearly every condo owner had a grim tale or two to tell of the blight on their posh estates - when, say, an unfortunate neighbour’s flat was repossessed by the bank and put up for mortgagee sale, after he had defaulted on his mortgage.

Such scenarios often turn into a downward spiral. The more buyers postpone purchases, the more sellers are forced to cut prices.

Deflation becomes the enemy of the borrower saddled with huge debts.

Even though he might have borrowed at a 1 per cent interest rate from the bank, if the price of his property falls by 5 per cent, he is actually paying 6 per cent rates in real terms.

Worse, he may suffer negative equity, as the value of his home slips below the amount owed on the mortgage.

In practice, this type of nasty economic downward spiral works like a massive dampener on the stock market too. From 2000 to 2002, the benchmark Straits Times Index ended lower each year for three consecutive years.

Fast forward to now, and the scenario could hardly be more different. Property prices are soaring and there is an air of growing prosperity.

The main gripe now is about how expensive condos are and how much extra cash is needed to fill up the car’s petrol tank, as inflation climbs.

Those old enough to have lived through the tumultuous 1970s, when inflation was in double digits, warn that too much inflation is a bad thing.

Then, like right now, inflation was unleashed by a lethal cocktail of rocketing oil prices and low interest rate policies by successive United States Federal Reserve chairmen, which caused prices of goods to surge, even as the global economy wallowed in recession.

But those looking back at the 1970s also observed that the era provided ample opportunities for great fortunes to be created.

Overall, the stock market performance back then was decidedly unimpressive.

After hitting record highs in 1972, blue chips such as OCBC Bank and United Overseas Bank sank to a fraction of their values, as a gigantic stock market bubble burst with the onset of rampant inflation, after oil prices quadrupled.

But in Singapore and Hong Kong, this also created an environment where interest rates on loans became effectively negative, as inflation galloped ahead of mortgage rates.

In other words, paying off a loan with 5 per cent interest was a breeze if, for instance, prices - and presumably wages - were rising at 7 or 8 per cent year.

Those who took out big loans to finance real estate purchases in Singapore and Hong Kong, where prime land was in scarce supply, were amply rewarded for taking the risks.

Inflation eroded the costs of their borrowings, while providing the perfect backdrop for soaring property prices.

This spawned a new generation of billionaires such as Hong Kong’s Li Ka Shing and the Hong Leong group’s late patriarch Kwek Hong Png, as they rode the property bubble caused by worldwide stagflation - inflation coupled with stagnant economies - to create massive business empires.

It is too early to say whether the world is on the verge of entering a scenario like that seen in the 1970s, which wrought havoc in global economies but also richly rewarded the few who were fortuitous enough to recognise how they might profit from it.

But one thing is certain. Inflation is here to stay, as long as oil prices continue to stay at their current sky-high levels of above US$80 a barrel.

Negative interest

AND with the Fed bowing to domestic pressure by cutting interest rates to combat a souring mortgage crisis back home, prices of prime assets such as Singapore real estate may go on a roll, as funds flee from the falling returns offered by a weakening dollar.

So just like in the 1970s, home owners may get to enjoy effective negative interest rates once again, as their home prices appreciate well above the servicing costs on their mortgages.

For a young couple just starting out in life, the best bet is to get married early and apply for a new HDB flat.

Although they will have to slog to pay back the enormous home loan they take out, it will be the best insurance they can take out to protect their Central Provident Fund life savings from being eroded over the years by inflation.

The odds are good that, like their parents before them, they will stand to reap huge capital gains, as property prices swing up.

Inflation can pose some serious economic headaches if it begins to run out of control, as it can create major uncertainty throughout an economy. People on fixed salaries suffer badly too.

But for some investors at least, inflation can represent a happy problem to live with, at least for now.

As one economist observes, the opposite of inflation - deflation - is like quicksand, easy to get stuck in, but difficult to escape.

Inflation may have its problems but, for some, it can be turned into fabulous investment opportunities.


Inflation can pose some serious economic headaches if it begins to run out of control, as it can create major uncertainty throughout an economy. But while inflation may have its problems, for some, it can be turned into fabulous investment opportunities.

CapitaLand Building 2 Primary Schools In China Later This Year

Source : Channel NewsAsia, 14 October 2007

CapitaLand is planning two more initiatives as part of its corporate social responsibility efforts.

Chua Tin Giap's concept

The company is building two primary schools in China later this year and bringing an artist from China for an exhibition at the Singapore Art Museum in January next year.

CapitaLand also supported this year's Creative Youth Xchange competition, which required young people to re-examine their relationship with the environment by creating concepts to help it.

Competitors from all over Asia and Singapore spent ten days at the Singapore Sports School attending workshops on their concepts.

A presentation ceremony was held on Sunday evening and Malaysian Chua Tin Giap was picked as the winner.

His concept was a recycled diaper changing mat for babies.

He came up with the idea after talking to his friends and mentors in the competition.

Chua won S$10,000 in cash for his efforts.

He said: "It is made of cotton wool and recycled paper, which is environmentally friendly. And we solve problems for parents who are concerned about hygiene inside the baby changing room."

The judges singled out eight of the final twelve concepts for further development.

The partners and organisers in the competition hope suitable end products will be displayed in CapitaLand malls. - CNA/so

Farmers, Reflect On Predecessors' Sacrifices

Source : The Straits Times, Oct 15, 2007

I REFER to the report, 'Granite stockpile: Farmers take 'fresh' approach' (ST, Oct 11) and would like to offer my views.

Since the days of early settlement up to the 1990s, the Kranji area has been populated by generations of farmers. Eking out a humble living, they farmed in order to survive.

With land acquisition, these farmers had to leave. Most, if not all, left without protest even though their livelihood was affected. Like so many Singaporeans over the decades, they probably accepted change for the common good.

Ironically, the land along Neo Tiew Road was put out to tender and a new breed of farmers took over. The tender system by which land was leased meant only affluent individuals or businesses could operate plots there. Some even sought out a retirement lifestyle, quite unlike the hardscrabble lives of the early farmers.

Now, the proposed granite stockpile has upset these new- generation farmers. Despite an earlier assurance from the authorities, they have taken up their case with the Prime Minister.

However valid their grouses, be they about dust or a change in overall ambiance, I hope they can see things in perspective by accepting that sacrifices still need to be made. Reflecting on the stringent sacrifices made not so long ago by their predecessors may help.

Errol Goodenough

Accreditation Scheme For Estate Agents Exists

Source : The Straits Times, Oct 15, 2007

I REFER to the recent letters on the regulation of real estate agents ('Industry regulation of estate agents overdue'; ST, Oct 3 and 'How is public protected if agents are not accredited?'; ST, Aug 7).

Currently, there is an accreditation scheme known as the Singapore Accredited Estate Agencies (SAEA) Scheme which was launched by the Minister of State (Finance) on Nov 10, 2005. This scheme has the support of the Ministry of Finance, Inland Revenue Authority of Singapore and Housing & Development Board. Under the scheme, it is expected that all agents and agencies will be accredited by Jan 1, 2009.

Our agency has been accredited under the scheme. We support the scheme as it seeks to improve the image of the industry by accrediting agencies as well as agents. In my view, agencies, especially those that undertake mass recruitment, should be responsible for the actions of their employees and associates and should not expect the authorities to control the agents on their behalf.

The difficulty with this scheme is that it is not seen as mandatory. Therefore, there are still agencies and agents who have not sought accreditation. Perhaps the authorities could make the SAEA scheme compulsory for all agents. This will go a long way to regulate the industry. The SAEA scheme can be reinforced with a licensing or practising certificate or other form of mandatory accreditation. The aim is to ensure agencies conduct their business properly, including supervision of employees and associates.

There is no need to introduce other licensing schemes at this moment. Let us all strengthen and support the SAEA scheme. As bosses of agencies, we should exercise control over our agents and take responsibility for their actions. Agents on their part should assume personal responsibility for their conduct. The consumer body should also work with SAEA to educate home buyers.

Charles Ee Hoon Kee
Managing Director
Asia-Elite Realty Network