Thursday, October 18, 2007

ICDR And SIAC Open Office In Singapore

Source : The Business Times, October 18, 2007

WITH businesses around the world increasingly looking to settle their disputes by arbitration rather than in public courtroom battles, the American Arbitration Association (AAA) yesterday opened an office in Singapore - its first in Asia.

The arrival of this leading institution will be a boost for law firms based here, industry players say.

The new office, located at City Hall, is a joint venture between AAA's international arm, the International Centre for Dispute Resolution (ICDR), and the Singapore International Arbitration Centre (SIAC).

SIAC deputy chairman Lawrence Boo said: 'There will be new opportunities for law firms based here and in the region.' This is because foreign companies in Asia which choose to have an ICDR arbitration are likely to choose to hold the hearing in Singapore - where the ICDR office is based - and thus are more likely to use law firms based here.

ICDR senior vice-president Richard Naimark said: 'This is a major step towards the establishment of Singapore as a leading arbitration centre in Asia.'

ICDR is responsible for the administration of all AAA international cases. It said that it saw its Asian caseload increase by 35 per cent last year, from 88 cases in 2005 to 119 last year. The ICDR also has offices in New York, Mexico City and Dublin.

On why the ICDR chose Singapore as its first office in Asia, John Townsend, who chairs the executive committee of AAA's board of directors, said: 'Singapore is the pre-eminent legal and business centre in this part of the world.' He said that while Hong Kong is close to China, Singapore is preferred because of its reach to Asia as a whole.

Jun Bautista has been appointed as the director of ICDR Singapore. He previously was an associate in a law firm in the Philippines and served as a law clerk in the Supreme Court of the Philippines.

Mr Boo of SIAC said: 'We hope to further reach out to US companies doing business in Asia. Outside the Asian region, US parties continue to be the largest user of SIAC arbitration and I am confident that ICDR Singapore will enhance the use of institutional arbitration in Singapore.'

World Economic Growth Robust But Risks Remain: IMF

Source : The Business Times, October 18, 2007

Asian and other emerging markets still face overheating pressures, it says

ON present indications, the global economy should weather recent financial market turbulence quite well with the overall world economy growing by a robust 5.2 per cent this year, slackening only to 4.8 per cent next year, says the International Monetary Fund (IMF) in its latest World Economic Outlook published yesterday.

But the risks 'are firmly on the downside', the IMF warns in its latest bi-annual report. The chief reason for this unusually heavy qualification to the global economic outlook 'centres on the concern that financial market strains could deepen and trigger a more pronounced global downturn', says the report. Additional risks include 'potential inflationary pressures, volatile oil markets, and the impact on emerging markets of strong foreign exchange flows', it adds.

Underscoring these warnings, the IMF said in its Global Financial Stability Report Update published on Tuesday that while the worst of the recent turmoil in leading world financial markets appeared to have subsided, 'the period of adjustment will take some time and setbacks are possible'.

The reports came as leading US banks Citigroup, JPMorgan and Bank of America announced they were launching a 'super-fund' to buy US$75-100 billion of financial assets from so-called structured investment vehicles or SIVs set up by major banks and asset management groups with the aim of injecting liquidity and confidence back into financial markets shaken by recent turmoil.

The baseline economic forecast in yesterday's IMF report assumes that market liquidity is gradually restored in coming months and that the interbank market reverts to more normal conditions, although wider credit spreads are expected to persist.

But 'there remains a distinct possibility that turbulent financial market conditions could continue for some time (with) a significant dampening impact on growth', the report says.

'In the United States, tightening lending standards are likely to crimp the overall supply of credit to the housing sector, and weaker borrowers will face higher mortgage rates,' the report suggests. This could feed through to reduce consumption, with an adverse impact upon US import demand which would impact the global economy.

The sharpest downgrade in growth forecast for next year is in the US where the economy is projected by the IMF to expand at 1.9 per cent next year - a near one percentage-point downgrade over its previous forecast.

If signs are that US growth is likely to continue below trend, that would 'justify further interest rate reductions' there, says the report, although US Federal Reserve chairman Ben Bernanke said on Monday that the recent 0.5 per cent cut in rates had reduced risks to the near-term outlook.

Another cause for concerns is the fact that 'oil prices have risen to new highs and a further spike in prices cannot be ruled out, reflecting limited spare production capacity, says the report.

As a backdrop to the IMF warnings, crude oil prices jumped to an all time high of above US$86 a barrel this week amid warnings of tight supplies ahead of the winter peak in demand for energy.

Asian and other emerging market economies, meanwhile, 'still face overheating pressures and rising food prices', the latest IMF report notes. 'Further monetary tightening' may be required in these markets while policy-makers are likely to have to balance the need for higher rates with 'strong foreign exchange inflows' that threaten overheating of some emerging market economies. 'There is no simple formula for dealing with these flows,' the IMF says.

Economy's Solid Growth To Still Into 2008: NTU

Source : The Business Times, October 18, 2007

It cites uptick in world electronics demand, sizzling construction activity

THANKS to the sustained health of the global economy, an uptick in world electronics demand and sizzling construction activity here, the rosy picture for Singapore's economy will persist into next year, Nanyang Technological University economists said yesterday.

Singapore's gross domestic product is expected to grow 8.3 per cent this year and 7.5 per cent in 2008, the Econometric Modelling Unit (EMU) of the Economic Growth Centre at NTU said in its bi-annual forecast for the economy.

'The expected growth in 2008 is due to external demand conditions, mainly the world economy is expected to remain healthy, China and India are expected to drive growth in Asia and the aggressive policies of the Federal Reserve with regard to the sub-prime mortgage market in the US would likely contain the credit squeeze in the US,' said NTU Associate Professor Joseph Alba.

Based on leading indicators for the electronics cluster, the upturn in global electronics demand will likely gather pace in 2008, while construction activity amid buoyant property prices and spillover effects from the building of the two integrated resorts here will provide further stimulus, he added.

The forecasts were made barring additional risks in the Middle East that could cause oil prices to spike further, but assumed high oil prices of US$80 a barrel.

Assoc Prof Choy Keen Meng, who has been spearheading the macro-economic forecasts since 2001, said the impact of oil price spikes on economic growth is not discernable as there are offsetting factors.

'Historically, the impact of oil price increases on the Singapore economy has been ambiguous,' said Assoc Prof Choy.

For the fourth quarter of this year, EMU expects Singapore's economy to grow 8.6 per cent after the government's advance estimates showed the economy growing 9.4 per cent in Q3.

Giving a sectoral breakdown, Assoc Prof Alba said growth in manufacturing, hotels and restaurants, transport and storage and information and communications is expected to accelerate in 2008 from 2007. But sectors like construction and financial services could see slightly slower growth in 2008 given the high base of comparison in 2007.

EMU also projects that one-off impact of the two percentage-point hike in the Goods and Services Tax will likely blow over by 2008, with the Consumer Price Index (CPI) to be 2.6 per cent in Q4, 1.6 per cent for the whole year and 2.4 per cent in 2008.

This falls within the official CPI forecast by the Monetary Authority of Singapore of 1.5-2 per cent for 2007 and 2-3 per cent for 2008.

The buoyant economic outlook is expected to put more pressure on inflation as labour costs increase, EMU said, but added that these wage pressures may moderate in 2008 as productivity growth accelerates or employment is allowed to grow through Singapore's flexible foreign labour policy.

It estimates that job creation will reach a record of 200,000 this year, after an all-time high of 176,000 last year.

EMU's projected job creation would take the unemployment rate to 2.3 per cent for 2007 and 2 per cent for 2008 - the lowest level in a decade.

S'pore Presses On With F1 Night Race Plans

Source : The Business Times, October 18, 2007

SAO PAULO - Singapore is pressing ahead with plans to host Formula One's first night race next year, with local promoters announcing on Wednesday a deal with a lighting contractor.

Singapore GP said in a statement they had signed a letter of intent with Italy's Valerio Maioli Spa to design and construct the lighting system after two tests in July and September at Le Castellet circuit in southern France.

The proposed system was presented to the governing International Automobile Federation (FIA) in Paris on Oct 10.

The plans envisage installing nearly 1,500 lighting projectors, powered by 12 twin-power generators, around the Singapore circuit.

'An overall average of about 3000lux levels is required to illuminate the circuit, which is enough to meet High Definition Television broadcast standards,' the promoters said. 'As a result, the track will be almost four times brighter than a typical stadium.'

The statement said the lights will be transported to Singapore in early January for testing in an environment similar to what would be expected on race day.

The grand prix is scheduled for Sept 28 on public roads around the Marina Bay area, making it Formula One's first street race in Asia.

'Valerio Maioli Spa estimates that the set up would take about two to three months. The system is likely to be set up in the second quarter of 2008,' the statement said.

The FIA gave the go-ahead last month for construction of the planned 5.067km Singapore circuit. Singapore agreed a five-year deal for the race in May. -- REUTERS

CapitaRetail China To Buy Beijing Mall For $336m

Source : The Business Times, October 18, 2007

CapitaRetail China Trust, a shopping mall trust managed by Singapore developer CapitaLand, said on Thursday it plans to buy a mall in Beijing for $336 million (US$230 million).

Related Link -
CapitaRetail China Trust's news release

The Xizhimen Mall, located near Beijing's west second ring road in Xicheng district, is held by CapitaLand's CapitaRetail China Incubator Fund.

The mall has a gross rentable area of 73,857 sq m. -- REUTERS

Japan's Asia Pac Land Plans US$350m S'pore Reit

Source : The Business Times, October 18, 2007

Tokyo-based Asia Pacific Land Group aims to raise up to $515 million (US$350 million) by listing a real estate investment trust (Reit) in Singapore, the company said on Thursday, confirming an earlier Reuters report.

The unlisted property firm is offering 411.9 million units through an international placement and a public offering at between $1.05 and $1.25 each, according to a prospectus.

The trust is based on a portfolio of nine shopping and office properties in Japan valued at about 66 billion yen (US$567 million).

'Japan represents one of the few mature real estate markets globally where opportunities exist to acquire quality real estate assets at an attractive spread to the cost of debt,' it said.

Asia Pacific Land, which has operated in Japan for more than eight years, has 100 billion yen in assets.

JPMorgan and Lehman Bros are arranging the initial public offering, which would be the first Singapore-listed property trust by a Japanese sponsor. -- REUTERS

Ascendas Reit To Develop $277m Projects

Source : The Business Times, October 18, 2007

Singapore's Ascendas Real Estate Investment Trust said on Thursday it would develop $277 million (US$190 million) worth of new property projects.

The projects are two business parks in Changi Business Park in eastern Singapore, and an industrial development in Pioneer Walk in western Singapore, the firm said. --REUTERS

Act 2 Of The Credit Crisis Will Be More Dramatic

Source : The Business Times, October 18, 2007

IF you thought that the crisis that erupted in leading credit markets recently was scary but happily short-lived, then don't relax yet. This is just the intermission, and 'Act 2' (as former US Federal Reserve chairman Alan Greenspan has referred to it) threatens to be a good deal more nasty.

And if you think that emerging markets in Asia and elsewhere, which have moved to all-time highs in the wake of the recent crisis, are the safest place to invest while money and credit markets in the advanced economies sort out their problems, then think again. When the curtain goes up on second act of the drama, it could be a more dramatic performance than Act 1, and with a more global impact.

In an apparent attempt to pre-empt this sequel, three major US banks (Citigroup, JP Morgan and Bank of America) announced on Monday that they were launching a 'super fund' to buy US$75-100 billion of financial assets from so-called structured investment vehicles or SIVs set up by major banks and asset management groups. The idea is to inject liquidity and confidence back into financial markets shaken by recent market turmoil.

Markets responded positively for a while but then bankers, dealers and others began asking why this emergency measure is needed if things really are as under control as they have appeared to be. What do regulators know that the market is not yet aware of, they wondered.

What indeed? It was the US Treasury that did the arm twisting of leading banks to get them to finance this scheme (by guaranteeing the price of special funding needed to pay for it). Past experience has shown that when central banks have to lock up commercial bankers in a room until they agree to help fund a major financial bailout, then something of systemic proportions is at stake.

Among those that are privy to what is going on behind the scenes, none are prepared to say what it is, because the name of the game is confidence rebuilding. While they talk a lot about the need for transparency in financial markets, central bankers and regulators do not usually like to practice it themselves. So we have to read behind the lines, with the help of nods and winks from people such as those to whom I have been talking. For example, while the IMF in its latest World Economic Outlook published this week takes a studiedly optimistic line on the likely impact of recent events on the global economy, one official acknowledged that things could get more ugly if this 'central scenario' does not play out as hoped.

That scenario envisages that global gross domestic product (GDP) growth will still reach 5.2 per cent this year and will decline only fractionally to 4.8 per cent next year. But as the report acknowledged, 'risks are firmly on the downside, centred around the concern that financial market strains could deepen and trigger a more pronounced global downturn'. What this means is that if instead of financial markets reverting to more or less normal in coming months, turbulent financial conditions continue and credit continues to tighten, then that could have a significant impact on growth.

To drive home the point, the IMF's Global Financial Stability Report Update, also published this week, warned that 'while some of the worst turbulence may have subsided, the period of adjustment will take time and setbacks are possible and it will not be costless'.

The impact on banks of dealing with off-balance sheet vehicles (SIVs etc) could yet trigger a major credit crunch. Emerging markets, not least those in Asia, seem to have weathered the turbulence quite well so far but as one IMF official at the highest level told me this week, there is no room for complacency on this score. The problems that are currently embroiling leading global markets and financial institutions could well spread to emerging markets in future, he suggested.

One reason for this is that the now infamous yen carry trades where cheap yen, borrowed or otherwise, is used to finance investments in higher yielding currencies. These trades appear to be a major driving force behind an emerging market price bubble, and they are on the rise again. According to the IMF, it is not just portfolio investors that are using the carry trades to pour billion of yen into emerging market equities, corporates are also big yen carry traders. Contrary to the view that structured investment products are chiefly a Western phenomenon, the IMF suggests that size of the market in Asia (centred mainly in Korea and Taiwan) has topped US$100 billion. Investors in these markets are 'exposed to a rise in volatility', it says.

Enjoy the intermission before the curtain goes up again, but don't open the champagne yet.

Tokyo correspondent Anthony Rowley is in Washington for the IMF/World Bank meetings.

Property Transactions Between Sept 24 - 29, 2007


《联合早报》Oct 18, 2007















截至上月,职总英康保险合作社推出的反向抵押贷款(reverse mortgage)收到57项申请,其中17项获得批准,27个收回申请。







Springhill @ Sembawang Walk

Modern Cluster Houses with Spa Facilities

Springhill is a beautiful strata housing development. Each of the three-storey terrace house comes with a basement and attic.

Addess : Sembawang Walk
District : 27
Total Units : 115
Developer : Beautiful Hill Pte Ltd (Far East Organization)
Expected TOP : End of 2008
Tenure : 99 Years

Typical Floorplan

Price : $1.1m nego, 4Bdrm, 3078sqft

# Nestled at Sembawang Walk

# Nearby shopping and entertainment amenities like Sun Plaza, Sembawang and NorthPoint Shopping Centres

# Sembawang and Yishun MRT stations and Seletar Expressway are in close proximity

# Neighbourhood schools such as Sembawang Primary and Secondary Schools

Facilities :-
-Swimming Pool,
-Wading Pool
-Children's Playground
-BBQ Pits
-24 Hours Security
-Private Basement Parking Lots

URA Launches Tender For Boon Lay Condo Site

Source : The Straits Times, Oct 18, 2007

A PRIME residential site on Boon Lay Way has been released for sale, just days after news emerged that a nearby condominium unit had fetched a record price of $1,080 per sq ft (psf) last month.

Property pundits expect keen interest in the 2.2ha land parcel next to Lakeside MRT station. The Jurong West HDB estate and Jurong Point shopping mall are nearby.

The Urban Redevelopment Authority (URA) launched the 99-year leasehold site yesterday by public tender, stipulating that it has a maximum permissible gross floor area of 77,003 sq m.

CB Richard Ellis (CBRE) research executive director Li Hiaw Ho said the site is expected to attract significant attention. He noted: ‘Given recent signs of recovery in the suburban market, we expect developers to be keen to bid for this site to beef up their land bank. Demand is likely to be from HDB upgraders and people working in western Singapore.’

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, agreed the site would be popular. ‘It’s definitely quite attractive as there are quite a lot of things happening in the west. For example, the Canadian International School is going to move nearby soon.’

URA said this week that a unit in Far East Organization’s The Lakeshore, near the new site, had set a new benchmark of $1,080 psf last month - surprising most analysts as it had been on the market for more than two years.

CBRE’s Mr Li said the Lakeshore site had been purchased by the developer at $197 psf per plot ratio (psf ppr) in August 2002. He noted: ‘The subject site will be able to fetch bids around $300 psf ppr, which translates into a selling price of $700 to $750 psf for the new project on-site.’

Knight Frank’s director of consultancy and research, Mr Nicholas Mak, said about 660 to 700 units could be built on the site. ‘This site would be attractive to major developers such as Far East Organization, Frasers Centrepoint and other listed developers. The number of bids could range from four to eight.’

URA said that a tender period of about eight weeks will be allowed for the site. The tender will close at noon on Dec 12, and selection of the successful tenderer will be based on the tendered land price only.

CDL In US$125m Moscow Hotel Venture

Source : The Business Times, 18 October 2007

JV will develop conference and business facilities on adjacent site

CITY Developments Ltd (CDL) has teamed up with a company owned by Sudhir Gupta of Amtel Group for a US$125 million joint venture in Moscow that involves investing in a hotel that will be repositioned as a Copthorne (under CDL's Millennium & Copthorne Hotels chain). The tie-up will also develop conference and business facilities, among other things on a vacant site next door.

Boomtown Moscow: Site comprising Iris Congress Hotel (above) and artist's impression of new complex, which will consist of conference & business facilities, food & beverage areas and a car park

'CDL is also looking at more residential developments and hotel investments in the Russian cities of Moscow and St Petersburg,' a CDL spokesman said.

Under the agreement inked yesterday, CDL will take a 50 per cent stake in Soft Proekt, which owns the Iris Congress Hotel and a nine-storey serviced apartment building in Moscow. The remaining 50 per cent in Soft Proekt is held by Golden Orchard Hotels Pte Ltd, which is linked to Dr Gupta, who is founder and chairman of the Amtel Group of Companies.

Related Link -
City Developments' news release

The eight-storey Iris Congress Hotel has over 200 rooms and facilities, including 13 conference rooms. The joint venture also plans to build a mixed-use development complex on a vacant plot adjoining the existing hotel. The complex will include conference and business facilities, food and beverage areas, and a car park. Details are being finalised.

The combined land area of the site of the joint venture is 287,547 sq ft. It is located along Korovinskoye Chaussee, about 15 km north of Moscow city centre and 16 km south-east of Sheremetyevo Airport.

CDL said that Moscow is experiencing an acute shortage of hotel rooms due to its economic boom, and recorded among the highest revenue per available room growth in Europe last year.

Yesterday's agreement is CDL's maiden investment in Russia, although the group has been marketing some of its upmarket Singapore condos in the country for a while.

'We look forward in great anticipation to exploring further opportunities in our investments and developments in Russia and Eastern Europe,' CDL executive chairman Kwek Leng Beng said in a release yesterday.

India-born Dr Gupta, who was educated in Russia and is now a Singapore citizen, is no stranger to CityDev. He bought three floors and a penthouse at The Sail @ Marina Bay in 2005.

CityDev also indicated in its release yesterday that M&C, its London-listed hotel arm, will soon be launching the Grand Millennium brand as its most prestigious brand in key cities.

First off will be the former Regent Hotel in Kuala Lumpur, which has just been reflagged as a Grand Millennium. Ongoing refurbishments at the property are expected to be completed soon.

M&C's three other brands are Millennium, Copthorne and Kingsgate.

Dr Gupta's Amtel Properties Development also has a joint venture with The Ascott Group, a subsidiary of CapitaLand, to acquire and develop international-class serviced residences in strategic business districts in Moscow and St Petersburg.

UK House Market Is 'Heading For Crash'

Source : Times Online, October 17, 2007

The International Monetary Fund said today that soaring UK prices have rendered the market vulnerable to correction

Runaway increases in Britain’s house prices over the property boom of the past 10 years have left the housing market in danger of an American-style slump in the value of homes, the International Monetary Fund said today.

UK housing market could mirror the US slump

In a bleak warning, the IMF finds that the cost of homes in Britain and other European countries may have become much more excessive than in the United States before the present property slump began there.

Its finding will fuel fears over the housing market’s prospects after recent evidence in a series of key surveys that house prices have begun to fall in some parts of the UK.

“The extent of house price over-valuation may be considerably larger in some national markets in Europe than in the United States,” the IMF concludes. “Taken at face value, the estimates suggest that a number of advanced economies’ housing markets outside the US could be vulnerable to a correction.”

In its twice-yearly report on world economic prospects, the IMF warns Europe’s governments that tightening lending conditions for homebuyers triggered by the present worldwide credit squeeze could be the spark for a serious correction in excessive house prices.

“The steady increase in interest rates has already contributed to some cooling of these housing booms, and recent developments are likely to have a further dampening impact, particularly if credit availability were to be tightened,” it says.

“There would clearly be a sizeable impact on the housing markets in the event of a widespread credit crunch.”

The report notes that across the West, and in Europe in particular, house prices have charged upwards in relation to people’s incomes and also when compared with rents. In Britain, house prices now stand at about nine times annual earnings - up from only about five times in 2001.

“The largest increases in house prices relative to incomes have been experienced by France, Ireland, the Netherlands, Spain and the UK,” it notes.

In an analysis using a model of the key driving forces that can justify higher house prices, from rising incomes, to borrowing costs and population, the IMF found that across 18 rich Western nations only three-quarters of the rise in house prices over the past decade can be explained by these fundamental factors.

The unexplained 25 per cent of the rise in prices suggests substantial over-valuation and that prices could be prey to a correction.

In the UK, the IMF’s number-crunching indicated that only 60 per cent of the rise in house prices since 1997 is explained by its model of fundamental factors, leaving 40 per cent unexplained.

The Washington-based fund does qualify its assessment, however, conceding that there are “considerable uncertainties” surrounding its analysis. Its model of prices does not, for example, factor in key factors in the British market such as shortages of housing supply, boost to prices from immigration, and greater affordability owing to the availability of mortgage financing. These factors are “likely to continue to support housing sectors in particular national markets”, it concludes.

Compared with the situation in the US, which is in the grip of a severe housing market slump, the IMF also notes a number of “moderating factors” in European countries such as Britain. Unlike the US, European housing markets have largely avoided lending to financially exposed homebuyers through “sub-prime” loans, so lending standards have been higher, it notes.

If housing markets in Europe were to slump, the IMF also argues that the countries that would face the most severe economic impacts would be those where residential building booms have gone hand in hand with rising home values, boosting past economic growth. Ireland and Spain are singled out as in this category. But in the UK and the Netherlands, the construction industry has been less important to economic growth as building has been limited by planning restrictions.

Banks’ Profits Lower In Q3?

Source : TODAY, Thursday, October 18, 2007

But higher if compared to same quarter last year: Forecast

BANKS likely had a weaker performance for the three months ended Sept 30, even as loans extended to the housing and construction sectors increased.

Some analysts forecast the banks — DBS Bank Holdings, United Overseas Bank and Oversea-Chinese Banking Corp — to post a net profit of $1.66 billion, which would be a 18.9-per-cent rise from $1.39 billion a year earlier.

Against the second quarter’s average $1.77 billion net profit, the forecast would mark a loss of 6.21 per cent. In the second quarter, earnings rose 35.3 per cent from a year earlier and were 7.42 per cent up from the first quarter.

Monetary Authority of Singapore monthly data show home loans rose 2.6 per cent month on month and 10.7 per cent year on year — the fastest in 29 months— in August, while construction loans increased 0.36 per cent on month and 14.7 per cent on year.

“Strong interest-income growth is offset by a slowdown in fee-income,” said CIMB-GK’s analyst Kenneth Ng.

Such fee income — largely from stockbroking, fund and wealth management — likely was hurt by the United States subprime crisis, which began to unfold from July, analysts said.

Provisions for their investments in collateralised debt obligations (CDO) — or loans to risky borrowers packaged together with other financial instruments and sold to investors — are also possible, although analysts said it is hard to gauge their size.

“We believe market expectations will be focused on the CDO issue and whether there will be provisions taken to earnings,” Mr Tay Chin Seng of Macquarie Research said, although he doesn’t expect that to happen.

CDOs should also come back to haunt the banks if they decide to “kitchen sink” or make mark-to-market provisions of the losses in their balance sheet, said Credit Suisse, adding that could reduce their net profits by 25 per cent on year or as much as 40 per cent on quarter.

Credit Suisse said should the three local banks decide to “kitchen sink” the CDOs, “the market should take it positively”, as “all three of them will still manage to show decent profits”, and “there should be no dent to their Tier 1 capitalisations at all”.

CDL And Golden Orchard Ink $183-Million Deal In Russia

Source : TODAY, Thursday, October 18, 2007

CITY Developments’ (CDL) continued its foray into foreign lands following yesterday’s signing of a US$125-million ($183-million) joint venture in Russia with Golden Orchard Hotels, a member of the Amtel Group of Companies.

“Russia is fast becoming an important eastern European market and Moscow is the perfect place to establish our first foothold in this rapidly developing city,” said Mr Kwek Leng Beng, executive chairman of CDL.

Under the agreement, CDL and Golden Orchard Hotels will each take a 50-percent stake in Soft Proekt, owner of the Iris Congress Hotel and a nine-storey serviced apartment building in Moscow.

“We are confident that with CDL’s proven track record in managing awardwinning serviced residences around the world, we can set higher standards for Russia’s hospitality sector,” said Dr Sudhir Gupta, founder and chairman of the Amtel Group of Companies.

There are plans to build a mixed-use development on the vacant plot of land next to the eight-storey hotel. Details of the new development are being finalised but will include conference and business facilities, food and beverage outlets and a carpark.

It is believed that CDL subsidiary Millennium & Copthorne Hotels will manage and operate the hotel which is likely to be re-positioned as a Copthorne property.

The Iris Congress Hotel currently has more than 200 rooms, 13 conference rooms, three bars and restaurants, and recreational facilities like a fitness club and swimming pool.

Riding Demand, More Flats Up For Sale

Source : TODAY, Thursday, October 18, 2007

4,500 Build-to-Order flats to be on market within 6 months

JUST three years ago, it was saddled with more than 10,000 unsold units. Today, thanks largely to a buoyant property market, there are just about 3,500 unsold Housing and Development Board (HDB) flats, and the stock could shrink further to some 2,200 units by the year's end.

Acting on the rosy outlook and feedback that public housing is in demand, the HDB will put 4,500 new flats for offer under the Build-to-Order (BTO) scheme in the next six months. Already, 2,700 units were made available in the first nine months of the year.

Said HDB chief executive officer Tay Kim Poh in a briefing on the statutory board's annual report, which was released yesterday: "The main focus will still be largely in Punggol and Sengkang.

"For Punggol, this is part of our plans to build up the catchment so that we can provide more facilities.

"In Sengkang, there is also land available, and these two towns happen to be very popular towns with flat buyers.

"We will also be looking at other estates where we have run out of unsold flats."

In addition, the Design, Build and Sell Scheme (DBSS) — in which the private sector is involved in developing public housing — has met with such positive response that the statutory board will release another three new DBSS sites, with a combined yield of about 1,500 flats, in the next six months.

The sale of the first batch of the DBSS at The Premiere@Tampines was almost 10 times oversubscribed. The tender for the second site in Boon Keng was awarded in June while the tender for the third site in Ang Mo Kio will close next month.

In the last financial year, the HDB received 8,455 bookings for new flats — 7 per cent more than the previous year.

Property agents have welcomed the move to build more new flats, saying increased supply will stabilise prices in the resale market. Interestingly, despite the strong demand for new flats, there was a 7-per-cent reduction in resale applications in the last financial year — attributed to rising interest rates, rising resale prices and the new requirement for the letter for loan eligibility.

Said Mr David Poh, director of Strategic Planning and Development at PropNex: "I believe the resale prices will continue to climb in the next few quarters for a few reasons. First, the demand is going up. Next, the spillover from the en-bloc fever.

"For the fourth quarter this year, it should be in the region of about maybe 5 to 7 per cent, and after Q4, it should grow in the region of 3 to 5 per cent."

The HDB's Mr Tay said: "Our prices do move with the market but if you compare private resale prices and HDB's prices, the movement for HDB is not as high."

Other than catering to a majority of middle-income Singaporeans, the HDB also caters to the lower-income, as it resumed selling two-room flats from July last year. So far, 539 units have been launched for sale under both the BTO system and through balloting, with a high take-up rate.

It also converted larger flats to two-room flats in Jurong West and Sengkang. Out of the 184 converted two-room units offered for sale, 177 units found buyers.

To allow elderly home-owners to generate income by renting out their flats, the subletting policy was eased. Said Mr Tay: "Our figures showed that the number of HDB flats in the rental market has gone up from 12,000 last year to about 16,000 now."

As for response to the reverse mortgage scheme, as of Sept 30, NTUC Income had received 57 applications, of which 17 were approved and 27 withdrawn.

Can Trash Be Used In Court?

Source : The New Paper, October 18, 2007

Clear legislation on issue may help draw more MNCs to set up shop here, says one lawyer

CAN information from the rubbish in your bin be used against you in a civil case?

Right now this is a grey area in Singapore law.

But it is allowed in the US state of Florida, said a lawyer who is here for the International Bar Association (IBA) Conference. He gave details of how a debtor was caught concealing his assets.

In Singapore, the issue came up when the High Court ruled in February that information from your rubbish bin can't be used against you.

But Chief Justice Chan Sek Keong allowed an appeal against the ruling, saying the issue would have 'serious repercussions for everybody'.

However, he said the issue of who owns the rubbish should be decided in a separate trial.

Lawyer Adrian Tan said: 'Many multi-national companies would be comforted to know if there is clear legislation on this topic. They come from places where their laws are more stringent.

'So, if we want to attract them here, we need to offer them the same level of protection that they get in their own countries.

'We need to make a stand that personal information should be protected.'

Criminal lawyer Mark Goh said there were some hurdles to overcome when dealing with garbage ownership.

Said Mr Goh: 'Information can be confidential and must be separated from the physical piece of paper.

'So a person can argue that while he threw away the piece of paper because he did not want it anymore, he can also argue that the information contained on that piece of paper was confidential and he did not intend to give it away.

'So, the confidential information would still be his property.

'If I deliberately shred a piece of paper, that indicates I treat the information as confidential and want to deny public access to it.

'But if you retrieve it and piece it back together, how can you argue that it was in the public domain?'


Mr Martin Kenney, one of more than 4,000 participants from 120 countries at the IBA Conference, said in Monday's session on business intelligence and industrial espionage, that for 18 months, his law firm monitored a fraud suspect's movements at home.

He said his clients had accused the man in Florida of owing them US$21.9 million ($32m), which he had borrowed in a business deal.

He was also found to be involved in Medicare (a medical insurance programme for the elderly) fraud and was made a bankrupt.

Before Mr Kenney's agents began the sting operation, they had to make sure taking the man's trash was allowed there.

He said: 'We had to make sure it was not illegal in the state of Florida.

'It wasn't. It was by the side of a public road.

'As long as the trash was outside the person's property, it was considered 'abandoned property'.'

He said they found documents from the man's lawyers and other incriminating information showing he had had an elaborate plan to conceal his assets.

A settlement was reached, but Mr Kenney said he could not reveal its details.


THE question was posed last month in a case before Chief Justice Chan Sek Keong.

# Creditors who use private investigators to sift through debtor's bin want to use it against debtor in court.

# High Court judge Andrew Ang says improper and/or illegal to do this, in February last year. Rules against creditors, but they appeal.

# CJ Chan says during appeal hearing last month that this is a serious issue as people often leave their trash bins outside their homes. CJ Chan allows appeal, says issue of who owns garbage should be decided in separate trial.

CDL Makes First Venture Into Russia

Source : The Straits Times, Oct 18, 2007

PROPERTY developer City Developments (CDL) is using a joint venture to make its entry into Russia.

It will pay US$62.5 million (S$91.7 million) for a 50 per cent stake in Soft Proekt, a company that owns land and properties in Moscow, CDL said in a statement yesterday.

The Amtel Group, which has diverse businesses within the Commonwealth of Independent States, is the other owner of Soft Proekt.

Soft Proekt owns a nine-storey service apartment building and the Iris Congress Hotel in Moscow. There are plans for CDL's London-listed hotel arm, Millennium & Copthorne, to manage the 200-room hotel and rebrand it as a Copthorne property.

The CDL-Amtel venture also plans to build a complex on an empty plot next to the hotel. It will house conference and business facilities, food and beverage areas, and a carpark, CDL said.

The land owned by the venture occupies about 287,550 sq ft at a site on Korovinskoye Chaussee, 15km north of Moscow's city centre.

'Russia is fast becoming an important East European market and Moscow is the perfect place to establish our first footprint,' said Mr Kwek Leng Beng, CDL's executive chairman.

'There is strong interest in the tourism and business sectors, so it is a good time to invest in hospitality and real estate.'

An acute shortage of hotels in Moscow has led to soaring rates and 'greater demand than supply' for rooms, CDL said. Revenue per room for Moscow hotels is among the highest in Europe, it added.

'CDL strongly believes that there is a ready market of hotel guests who are willing and able to spend on upscale accommodation.'

CDL is Singapore's second-largest developer after CapitaLand. The latter also recently entered Russia, to develop logistics parks.

CDL yesterday said it is also interested in building homes in Moscow and other key Russian cities, including St Petersburg. It is likely to focus on mid-tier and luxury residences, which are already its strengths in Singapore.

The joint venture is not the first time CDL and Amtel have been linked. Amtel's founder and chairman, Dr Sudhir Gupta, bought three floors and a penthouse at CDL's Sail @ Marina Bay in 2005.

Dr Gupta, an Indian-born businessman, has also bought other luxury homes in Singapore, including a Marina Bay Residences penthouse and a Binjai Park bungalow.

He was ranked by Forbes magazine as Singapore's 13th-richest man last year, but he dropped off the list this year.

Two Collective Sale Sites Eyeing High Selling Prices

Source : The Straits Times, Oct 18, 2007

THE collective sale frenzy may have cooled somewhat but a number of new sites have hit the market since new rules on these sales took effect earlier this month.

The latest are two sites in posh parts of town which were put up for sale yesterday -both are aiming for hefty sale prices.

One of them, Villa delle Rose, located off Holland Road, has an indicative price of $700 million.

Owners of the other site, Elizabeth Towers, in the more central location of Mount Elizabeth, are hoping for a price of $673 million.

In the past two weeks, a string of other collective sale sites have been put on the market, including Westwood Apartments on Orchard Boulevard, The Estoril on Holland Road and Royalville off Sixth Avenue.

Some of the latest sites for sale, such as Elizabeth Towers, still come under the old collective sale rules as the required minimum owner consent was obtained before Oct 4.

Property consultants have said that collective sale activity is likely to continue at a somewhat slower pace than the frenzy of sales seen earlier this year and last year.

They say there are several reasons, including the fact that the new rules will make the process more transparent and, as a result, probably more cumbersome.

Still, owners continue attempting to sell their estates en bloc.

Villa delle Rose's guide price works out to $1,758 per sq ft of potential gross floor area. A development charge of about $31 million is payable.

The estimated breakdown is between $2,200 per sq ft (psf) and $2,300 psf.

Developers can expect to build 208 units, assuming an average size of 2,000 sq ft each, said CB Richard Ellis, which is marketing the site.

The 104-unit Villa delle Rose sits on 297,132 sq ft of land. Its sale tender closes on Nov 16.

In the Orchard area, Elizabeth Towers, a freehold 54,318 sq ft site, is up for sale at $2,666 psf of potential gross floor area. No development charge is payable.

The site can be built up to a plot ratio of 4.647, which would give it a gross floor area of 252,416 sq ft, said Newman & Goh, which is marketing the site.

Newman & Goh's head of investment sales, Mr Jeffrey Goh, said the site can be redeveloped into 101 apartments with an average size of 2,500 sq ft each and could fetch well above $4,000 psf. This is because nearby developments such as Scotts Square and Hilltops are selling well at $4,200 psf and above, he said.

The tender for Elizabeth Towers closes on Nov 21.

IMF Lowers Global Growth Forecast Amid Rising Financial Risk

Source : The Straits Times, Oct 18, 2007

WASHINGTON - THE International Monetary Fund (IMF) on Wednesday slashed its 2008 global economic forecast, warning that turbulence stemming from a crisis in the US housing sector could crimp growth worldwide.

The world economy is expected to expand 4.8 per cent next year after a 5.2 per cent pace projected for 2007, the IMF said in its twice-yearly World Economic Outlook (WEO) report.

The downgrade comes in the wake of turmoil in global financial markets in August that prompted the IMF to reverse course after an unusual update in July in which it raised its 2008 global growth forecast to 5.2 per cent.

The greatest threat to the world economy is the financial market unrest stemming from the high-risk US subprime mortgage sector, where loans were given home buyers with poor credit histories.

This has affected banks and lenders worldwide and made credit conditions more difficult, said the report, released ahead of the annual meetings of the IMF and the World Bank that open on Saturday in Washington.

'Risks to the outlook lie firmly on the downside, centring around the concern that financial market strains could continue and trigger a more pronounced global slowdown,' the IMF said.

'Thus, the immediate task for policymakers is to restore more normal financial market conditions and safeguard the continued expansion of activity.'

G7 meeting
The financial turmoil will figure high on the agenda of a meeting of Group of Seven finance ministers in Washington Friday, US Treasury Under Secretary David McCormick said.

'The issues raised by the recent turmoil are complex and require careful analysis,' Mr McCormick said. 'We must undertake this work quickly but we cannot rush to judgment.'

Attending the G7 meeting will be finance ministers and central bank chiefs of the seven leading industrialized nations: the United States, Japan, Germany, France, Britain, Italy and Canada.

The IMF report said that, despite the heightened risks, the global economy is poised for 'solid' growth in 2008.

'The expansion is projected to remain above the long-term trend, notwithstanding recent financial market turbulence, with emerging market and developing countries leading the way,' the IMF said, citing mainly low inflation levels and robust gains in trade volumes worldwide.

In a July update of the April WEO, the IMF had raised its global growth forecasts for both 2007 and 2008 by a 0.3 percentage point to 5.2 per cent.

The latest WEO holds this year's forecast at 5.2 per cent. But the IMF reversed course and downgraded its 2008 outlook following the financial market turmoil of August.

Credit market deteriorated
'Global credit market conditions have deteriorated sharply since late July as a repricing of credit risk sparked increased volatility and a broad loss of market liquidity,' said the 185-nation Fund, whose mission is to promote global financial stability.

The IMF said it partly based its 2008 global forecast on the assumption that this year the US Federal Reserve would cut interest rates by a further half point and that the European Central Bank and the Bank of Japan would refrain from raising rates.

In September the Fed, in its first rate cut in four years, lowered its target for the federal funds rate by a half point to 4.75 per cent to ease a credit crunch that had spread worldwide in August, pummelling stock markets.

The IMF said the world's largest economy is facing a rising risk of recession due to a severe, two-year downturn in the housing sector that could crimp consumer spending.

Lower US growth
The Fund shaved its US economic growth forecast by 0.1 point to 1.9 per cent for this year and by a sharper 0.9 point to 1.9 per cent for 2008.

Growth in Japan, the second-biggest economy, was marked down to 2.0 per cent in 2007 and 1.7 per cent in 2008, 0.6 percentage point and 0.3 percentage point lower, respectively, than the July estimates, reflecting in part a slightly stronger yen.

In the 13-nation eurozone, growth was reduced 0.4 point to 2.1 per cent as a result of the delayed effects of euro appreciation, trade spillovers from the US and more difficult financing conditions.

China to set pace
By contrast, 'growth is expected to remain very strong' among emerging market and developing countries, the IMF said, with China continuing to set the pace, at 10 per cent in 2008, about 0.5 percentage points lower than in the July update. -- AFP

HDB Glut Shrinks In Rising Market

Source : The Straits Times, Oct 18, 2007

Number of unsold flats plunges from 10,000 to 3,500 in just three years; more will be built

MORE than 10,000 Housing Board flats were languishing unsold in a tepid market just three years ago.

But the rapidly rising residential market has meant that the stock of unsold flats has fallen dramatically to 3,500.

And by the end of this year, that figure will plunge even further to only about 2,200 units, as eager buyers snap up homes.

In response, HDB is pulling out all the stops to meet burgeoning demand.

'The rosy economic outlook and improved market sentiment have resulted in rising demand for new flats,' said HDB chief executive Tay Kim Poh at a briefing held on Tuesday on HDB's newly released annual report.

Demand is now so strong that HDB's bi-monthly sale this month attracted 4,800 applicants for just 489 flats.

Mr Tay said HDB is committed to building more flats to meet the rising demand as supply shrinks.

In the next six months, it will offer about 4,500 new flats under the build-to-order (BTO) system, which puts flats on the market only if there is sufficient demand.

So far, in the first nine months of the year, HDB has offered 2,700 new flats under the BTO system.

It will also release another three new Design, Build and Sell Scheme sites, which will yield about 1,500 flats in total.

'Definitely, whatever that we have, we will push it out,' said Mr Tay of its stock.

This is a far cry from just two years ago, when HDB was still devising new ways to clear about 9,000 unsold units.

Today, strong demand has meant that buyers in central areas are paying bigger sums over valuation, for instance.

HDB's initial estimate for the third quarter, released earlier this month, showed that resale flat prices have risen 6.5 per cent, up from a 3 per cent rise in the previous quarter and by far the biggest quarterly jump since 1999.

And prices could rise further in line with the general market.

'Our prices move with the market,' said Mr Tay. 'But if you were to look at how resale prices compare with the market, our movement for HDB flats is not as great as private housing.'

The HDB market has a 'stabilising effect' as buyers can choose to buy from the resale market or purchase a new flat, he said.

'When we price our flats, we do look at prevailing market prices. Then after that, we will give a market discount.'

SingPower Building On Sale For Expected $990m

Source : The Business Times, October 18, 2007

Market watchers say leasehold property likely to fetch $1,800 psf

THE office market can be expected to continue teeming with deals, with the latest offering said to be the Singapore Power Building behind Somerset MRT Station. The 30-year-old building, once known as PUB Building, is being marketed through an expression-of-interest exercise, BT understands.

Singapore Power Building: Sitting on a site with a remaining lease of 67 years, the building was completed in 1977 and refurbished just last year

Market watchers expect the leasehold property to fetch about $1,800 per sq ft of net lettable area (NLA), which works out to $990 million based on the 17-storey building's NLA of around 550,000 sq ft.

SingPower Building, completed in 1977 and refurbished last year, is on a site with a remaining lease of 67 years.

The building is being put up for sale by owners SingPower and Public Utilities Board. The latter moved out earlier this year. SingPower occupies some 200,000 sq ft, while the rest of the space is leased to other tenants.

SingPower is expected to structure a deal to lease back the space it occupies from the new buyer

Industry sources say SingPower Building's existing gross floor area reflects a 7.0 plot ratio - the ratio of maximum potential gross floor area to land area. This exceeds the 4.9 plot ratio indicated in Master Plan 2003. The site area is about 110,000 sq ft.

However, there may be a possibility of redeveloping the property in the medium term by building a more efficient modern structure, after existing leases expire.

SingPower Building has two basements with a total of 530 parking lots. There is also an auditorium for public use.

The building was originally developed for $32 million. It was clad in silvery metal when refurbished last year.

The building was described as a 'ground-scraper' - two parallel slab blocks facing north and south connected by a lift and stair core - in an article in The Straits Times in August this year. Between the two blocks is a landscaped court.

If SingPower Building changes hands for around $990 million, it will be one of the biggest office deals so far this year, along with the $1.04 billion sale of Temasek Tower to a fund managed by Macquarie Global Property Advisors in March, and the sales of separate one-third stakes in One Raffles Quay to K-Reit Asia and Suntec Reit for $941.5 million each.

In late August, CapitaLand, IP Property Fund Asia and NTUC Income Insurance Co-op sold the leasehold Chevron House, formerly Caltex House, at Raffles Place, for $730 million or a record $2,780 psf of NLA. The buyer is understood to be a Goldman Sachs-linked fund.

The Goldman Sachs group is also understood to be finalising a deal to buy the next-door Hitachi Tower, a 37-storey office tower on a 999-year leasehold site facing Collyer Quay.

The price is expected to be around $3,000 psf.

Hitachi Tower is 50:50 owned by CapitaLand and National University of Singapore.

Marina Bay's Key Selling Points

Source : The Business Times, October 18, 2007

Its 'live-work-play' concept makes it an attractive location for home-buyers, reports UMA SHANKARI

MARINA Bay is not just well on the way to becoming Singapore's new financial hub, it is also shaping up as an attractive location for home-buyers.

Hot demand: When Marina Bay Residences was launched, all 428 units were snapped up within days, with one penthouse fetching $3,450 psf - a record for private homes prices at the time

Property analysts say that since the first residential project there - City Developments' The Sail - was launched in late 2004, interest in the area has spiked, sending prices climbing.

Prices at The Sail averaged $970 per sq foot in 2004 after the project was launched in November that year.

But since then the average price - taking into account new sales, resales and sub-sales - climbed to $1,060 psf in 2005 and $1,300 psf in 2006, says Knight Frank's director of research and consultancy Nicholas Mak.

And for the first nine months of 2007, units at The Sail went for an average of about $1,600 psf, he says.

He reckons prices could hit $1,800-$1,900 in about two years. The 1,111-unit development is fully sold.

'The project was launched in 2004, which means it was just in time to rise on the property market upturn,' he said.

Analysts say the upside for other residential projects in the area may not be as great because they were launched at higher prices. But they could still benefit from the 'buzz' now associated with the area.

Two projects have been launched since The Sail - Marina Bay Residences and One Shenton.

Marina Bay's biggest selling point, analysts and developers agree, is its 'live-work-play' concept.

For one, office space there has been a huge hit with banking and financial institutions.

The top office draw at the moment is the massive Marina Bay Financial Centre (MBFC).

Two office towers in MBFC's first phase will add about 1.7 million sq ft of lettable area when they come up in 2010. And the office tower in the second phase is expected to offer a further one million-plus sq ft of space.

Nearby One Raffles Quay, completed last year, has slightly over 1.3 million sq ft of office space.

In addition to this, the government has indicated that it intends to progressively release plots in the area.

Two parcels - known as Land Parcel A at Marina View and Land Parcel B at Marina View - will add at least 1.7 million sq ft of office space. Parcel A has been awarded, while the tender for Parcel B closes on Nov 13.

The authorities are also moving to increase the area's vibrancy. And one eagerly anticipated project is Gardens by the Bay.

The waterfront is set to be home to three distinct gardens, each with its a unique look, the National Parks Board revealed last year.

The gardens will range in size from 10 to 54 hectares. It is estimated that $300 million-$400 million could be spent on them.

Perhaps most significantly, the $5.2 billion Marina Bay Sands integrated resort (IR) will come up in 2010 - significantly changing the look and feel of the place.

Besides drawing more tourists, the retail and F&B facilities at the IR could attract home buyers, market watchers say. All these goings-on have translated into greater local and foreign interest in homes in the area, analysts and developers point out.

'We are seeing a keen appetite among investors confident in Singapore and interested in the live-work-play destination of Marina Bay,' said Kan Kum Wah, head of residential marketing for Marina Bay Suites.

More residential projects are likely to be launched in the coming months.

For a start, Land Parcel A and Land Parcel B are 'white' sites, which means the successful bidders can use some of the gross floor area to build homes.

The Urban Redevelopment Authority is also setting aside some 60ha of land at Marina South for a landmark residential district.

Some 11,000 housing units are planned, with a mix of commercial, hotel and community facilities.

URA is expected to start launching sites in the residential district within the next year, and interest is expected to be keen.

But the next project in the area to hit the market is likely to be Marina Bay Suites.

The 223-unit development, which is the second and last residential block at MBFC, will be launched early next year.

MBFC's developers - Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land - expect strong interest in the project, as well as high prices, on the back of then-record prices achieved by Marina Bay Residences.

Last December, when Marina Bay Residences was launched, all 428 units were snapped up within days, with one penthouse fetching $3,450 per square foot (psf) - a record for private homes prices at the time.

'Marina Bay Suites will be a fitting, even more upscale, sister development to the 428-unit Marina Bay Residences,' said Mr Kan.

However, homes in the area still have some catching up to do before they reach the prices fetched by residential units in the traditional prime districts 9 and 10.

At Orchard Residences, CapitaLand and Sun Hung Kai Properties are said to have sold a penthouse on the 53rd storey for about $5,600 psf. In contrast, prices at Marina Bay have only hit $3,450 psf.

But home prices in the area could hit $3,500-$4,000, said Ku Swee Yong, Savills Singapore's director of marketing and business development.

'Once the casino is up - and perhaps with more traffic congestion due to the vibrant economy - younger high-flying execs in financial services, legal services, etc will come to appreciate inner-city living,' Mr Ku said.

Sites In Jurong, Holland, Orchard Up For Sale

Source : The Business Times, October 18, 2007

2 prime freehold sites could fetch $670-$700m each in collective sales

THREE sites for residential development were launched for tender yesterday - a 99-year leasehold, traditional suburban mass-market housing plot next to Lakeside MRT Station in the Jurong area, as well as two freehold, prime district sites offered through the collective sales of Villa delle Rose off Holland Road and Elizabeth Towers at Mount Elizabeth.

Villa Della Rose: The Holland Road property could be sold for a unit land price of $1,758 psf of potential GFA

Villa delle Rose, with a land area of 297,132 sq ft, has a guide price of $700 million, which reflects a unit land price of $1,758 psf of potential gross floor area, inclusive of an estimated $31 million development charge. The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey maximum height under Master Plan 2003.

Its marketing agent CB Richard Ellis conducted an expression of interest for the property which ended in August and is said to have received offers of up to slightly over $1,600 psf per plot ratio (psf ppr). The EOI exercise had been launched before approval from majority owners was secured, which CBRE recently obtained.

CBRE executive director Jeremy Lake said in a news release yesterday that 'a few parties have approached us with keen interest, but the owners would like a transparent public tender to achieve the best results'.

Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. All but a handful of units are rented out, CBRE said.

Over in the Orchard Road area, Elizabeth Towers' owners are looking at $673 million for their 54,318 sq ft site. This works out to $2,666 psf ppr. No development charge is payable. Planning approval has been obtained from the Urban Redevelopment Authority to build up to a plot ratio of 4.647, translating to a maximum gross floor area of 252,416 sq ft.

In Jurong, URA has launched the tender for a 2.2-hectare site flanked by Lakeside MRT Station and LakeHolmz condo. Property consultants reckon the site can be developed into around 680 apartments averaging 1,200 sq ft.

CBRE executive director Li Hiaw Ho estimates the site to be worth about $300 psf ppr, translating to a breakeven cost for a new condo at about $650 psf and an average selling price of about $700-750 psf.

Knight Frank, which predicts the site will draw between four and eight bids, estimates the site's land price at $325-$375 psf ppr, or a breakeven cost of around $650-$720 psf.

The firm's managing director, Tan Tiong Cheng, said developers will take into account the fact that the 'Jurong area has traditionally been a slower-moving market compared with other suburban/mass market locations'.

CBRE said that units in The Lakeshore condo a short distance away from the latest site are currently being marketed by its developer at around $800 psf.

In the subsale market, Lakeshore units have been sold recently at $650-750 psf, while apartments at The Centris one MRT station away have been changing hands at about $600-650 psf.

The Lakeholmz, a completed development, has been seeing sales in the $550-600 psf range, according to CBRE research.

CEO Survey Finds 37% Chance Of US Recession

Source : The Business Times, October 18, 2007

(WASHINGTON) Leading Wall Street chief executives predicted a 37 per cent chance of a US economic recession in the next 12 months, according to a Financial Services Forum survey released yesterday.

The forum is a policy group made up of the chief executives of 20 of the world's largest financial institutions, including Citigroup Inc, Morgan Stanley, Goldman Sachs and MetLife.

The executives said they expect slower US economic growth over the next year due to the housing slowdown, credit market turmoil and higher energy prices, according to the survey.

In predicting a 37 per cent chance of a US recession in the coming 12 months, the executives also cut their expectations of economic growth.

The forum's US economic growth index fell from 2.03 in April, when the last bi-annual survey was taken, to 1.27 in October. The growth survey represents sentiment on a scale ranging from -5 for strongly negative growth to 0 being no growth and 5 being robust growth.

Former Federal Reserve chairman Alan Greenspan this month put the odds of a recession at less than 50 per cent. A Reuters survey of 56 private economists earlier this week found the majority saw the chance of a US recession at somewhere between 21 per cent and 30 per cent.

The Financial Services Forum executives also indicated that the credit market problems are not finished. On a scale of 1 to 5, with 5 being significant turmoil still to come, the chief executives on average answered 2.9, according to the survey.

The survey found the executives expect a Federal Reserve interest rate cut of 25 basis points before the end of the year.

In September, the Fed cut benchmark rates by a hefty half-percentage point to 4.75 per cent amid concerns about increasing mortgage delinquencies and financial market disarray.

In assessing the stock market, the executives predicted the Dow Jones Industrial Average (DJIA) would finish the year at 14,137, according to the survey. On Tuesday, the DJIA closed at 13,912.9. -- Reuters

Possible 2008 Recession In US Will Hit Asia: Stephen Roach

Source : The Business Times, October 18, 2007

Asia needs to take events in US more seriously, he says

THE United States could face a consumer-induced recession next year, which will also hit Asian economies, said Morgan Stanley's chairman for Asia, Stephen Roach.

Mr Stephen Roach: The wealth effect, based on rising home values, 'is over, is done, is finished'

Speaking at the World Knowledge Forum in Seoul, Mr Roach - well known for his bearish views - presented what he called a 'decidedly sub-prime outlook' for the US economy.

The so-called sub-prime mortgage crisis is 'the tip of a much bigger iceberg', he said. It has started to hit the American consumer.

Mr Roach, who has long predicted a US economic slowdown, pointed out that the US consumer is facing the toughest times in 30 years, and the impact on the economy could be acute.

He noted that in the first half of this year, US consumption accounted for a record 72 per cent of GDP, or about US$9.5 trillion.

'The US consumer is about to take a long rest,' he said, 'and if the US consumer goes, there's nobody on the demand side who can fill the void.' Even China's total consumption is only about one-ninth that of the US, he noted.

Mr Roach suggested that the US consumer is at risk because the consumption binge of the last seven years has been underpinned, not so much by rising incomes but by a wealth effect which has, in turn, been driven by 'an extraordinary property market'.

In short, 'the US consumer has turned his home into an ATM machine', he added.

But now, with the US property bubble deflating, the wealth effect, based on rising home values, 'is over, is done, is finished'.

In fact, next year, home prices for the whole of the US could decline for the first time in history, he predicted, which would severely diminish US consumers' ability to extract equity from their homes.

In the face of this, Mr Roach said that the risk of recession 'is quite high'.

Although sub-prime mortgage assets account for only 14 per cent of all securitised assets, the sub-prime crisis has already spread.

Moreover, 'the big story gets written in the real economy, not in the financial markets', he said.

And worth noting here, he added, is that US consumption is about five times the size of US capital spending, which triggered the US recession of 2001.

Mr Roach, who is based in Hong Kong, said that Asia needs to take developments in the US more seriously.

'What's worrying is a complacency in Asian markets, based on a belief that Asia has 'decoupled' from the US,' he pointed out.

But the decoupling thesis is fanciful, he said, noting that the US absorbs 21 per cent of China's exports, 22.5 per cent of Japan's and about 14 per cent of Asean's. 'If the US consumer goes down, Asia will feel it,' he said.

Villa Delle Rose Up For Sale By Public Tender

Source : Channel NewsAsia, 17 October 2007

A development in the Holland Road area has been released for en bloc sale by public tender.

The sale of Villa delle Rose was launched on Wednesday with a guide price of S$700 million.

This works out to almost S$1,758 per square foot per plot ratio.

Villa delle Rose sits on 27,604.5 square meters of prime land.

The development charge payable is approximately S$31 million.

Under the Master Plan 2003, the site is zoned for residential use with a plot ratio of 1.4 and a height restriction of four storeys.

The tender exercise closes at 3pm on 16 November. - CNA/so

HDB Expects Stock Of Unsold Flats To Drop To 2,200 Units By Year-End

Source : The Business Times, October 18, 2007

THE stock of unsold Housing and Development Board (HDB) flats, which stood at about 10,000 three years ago, is now down to 3,500, and the board expects the stock to fall to 2,200 units by the end of the year.

Speaking at a press conference to release the HDB Annual Report 06/07 on Tuesday, HDB CEO Tay Kim Poh said: 'Positive growth has resulted in strong demand for HDB flats.'

Indeed, according to the figures in the latest annual report, demand appears to have outstripped supply.

For the financial year ended March 31, HDB sold 5,712 new flats, down from 10,100 flats in the previous year, a drop of over 40 per cent. But the number of flats completed in the year was also down, to just 1,764, a decline of nearly 60 per cent from the 4,378 flats of the 2005-06 period, perhaps explaining the recent spike of 6.5 per cent in HDB's Resale Price Index (flash estimate) for open market flats.

As at March 31, 14,212 flats were under construction, compared to 12,571 in the previous year. These flats have already been launched, and Mr Tay said: 'BTO (Built-to-Order) subscription is also very high.'

HDB's latest bi-monthly balloting/walk-in sale exercise also suggests that demand is high, with the 489 flats offered now almost 10 times oversubscribed. Four thousand and eight hundred online applications have been received so far.

New supply of about 6,000 flats from BTO exercises and the Design, Build and Sell Scheme is expected over the next six months but managing supply and demand will be a challenge.

HDB said that a projected 6,300 flats will be completed in FY07-08, followed by 1,700 in FY08-09, 4,000 in FY09-10, and 13,000 in FY10-11.

Savills Singapore director (marketing and business development) Ku Swee Yong said: 'Assuming about 5,000 to 7,000 flats are completed between 2008 and 2009, we are at best even on supply and demand.'

Mr Ku said improved economic conditions and population growth could have some impact on this balance.

It is, of course, difficult to predict future demand. A case in point would be the backlog of 10,000 unsold flats just three years ago.

Knight Frank director (research and consultancy) Nicholas Mak said that in the past, HDB built flats 'speculatively', hence the backlog. But, with the current practice of BTO exercises, the building programme has become more 'market responsive'.

For now, any unsatisfied demand will have to be supplied by the resale market. 'The resale market is very big and has great capacity to increase demand,' added Mr Mak, but he also cautioned: 'If the economy and job market continues to expand, we can expect demand for new flats to spill over into the resale market and this could impact prices.'

While resale prices have gone up, the HDB said that the number of resale applications actually fell 7 per cent in FY06-07. This could be because HDB buyers are still very price sensitive.

HSR Property Group senior vice-president Donald Yeo said that he does not believe a supply crunch is imminent because many potential buyers already own HDB flats. Based on feedback from HSR property agents, Mr Yeo said that about eight out of 10 buyers already own flats, so even if there is a desire to buy a new flat - regardless of whether it is to upgrade or downgrade - there is no dire need to.

'Buyers who find resale prices too high are also prepared to wait for new flats rather than buy from the resale market,' he added.