Wednesday, November 28, 2007

Oversupply Looms In S’pore Office Sector: Citigroup

Source: The Business Times, November 28, 2007

It downgrades two stocks with key exposure to sector - KepLand, CityDev

SINGAPORE is in danger of seeing an oversupply of office space from 2010 onwards, Citigroup is warning.

The bank’s research unit has also downgraded two Singapore stocks with significant exposure to the office market here - Keppel Land and City Developments.

‘The market is underestimating the potential supply of new office space in 2010 and beyond, in our view,’ said Citigroup analyst Wendy Koh in research report dated Monday.

‘Based on our estimates, occupancy rates are likely to peak in 2008-09 and decline thereafter with the impending supply.’

Since May 2007, six new sites with a total gross floor area of 5 million sq ft have been awarded amidst fears of an office space crunch. These sites could add some 3 million sq ft of new office space in 2010-11, Citigroup estimates.

Altogether, on average, 3.2 million sq ft of new supply could hit the market from 2010-12, the bank said. This compares to a historical average demand of 1.5 million sq ft per year.

Supply estimates could rise even further with more government land sales in the first half of 2008, Citigroup said.

All this will mean that buildings in core Central Business District will be competing for tenants.

Key projects that are scheduled to be completed in 2010-12 include Marina Bay Financial Centre, the redeveloped Ocean Building One Financial Centre and the South Beach Road and Marina View land parcels.

In response, Citigroup downgraded its ratings on office landlords Keppel Land and City Developments.

Keppel Land was downgraded to a ’sell’ from a ‘hold’, while CityDev was rated a ‘hold’, from a ‘buy’ previously.

‘Going forward, we expect Keppel Land to face keen competition while marketing the remaining space at the Marina Bay Finance Centre and One Financial Centre,’ Ms Koh said. She cut KepLand’s revalued net asset value (RNAV) estimate to $7.83 (from $8.85) and target price to $6.26 (from $8.97).

For CityDev, Citigroup cut its RNAV estimate to $14.47 from $15.28 and target price to $15.90 from $18.00 to reflect lower capital values of office buildings.

Other analysts however said that all the new projects coming onstream will not cause an oversupply - rather, they will ensure that supply catches up with demand.

‘I think that there will be significant pent-up demand for office space that will only be satisfied when supply hits the market in 2010-11,’ said Moray Armstrong, CB Richard Ellis’ executive director for office services.

This pent-up demand means that demand in 2010-11 will be significantly higher than the historical average, Mr Armstrong said.

EL Devt To Build 200-Units Condo In Woodlands

Source: The Business Times, November 28, 2007

EL Development plans to build a 200-unit mass market condominium on the Woodlands site it won in a government tender, the company’s managing director Lim Yew Soon told BT yesterday.

The project, which will be launched in the third quarter of 2008, is expected to sell for about $600-$650 per square foot (psf), Mr Lim said.

EL Development, which is fully owned by Evan Lim & Co Pte Ltd, trumped seven other bidders for the 99-year leasehold residential site at Woodlands Avenue 2/Rosewood Drive after a government tender closed earlier this month.

The company’s bid was $56 million or $232 psf per plot ratio.

The Singapore Land Authority (SLA) yesterday announced that it is awarding the site to EL Development.

The 172,200 sq ft site has a 1.4 plot ratio, giving it a maximum gross floor area of 241,100 sq ft.

Mr Lim said that the project will consist of mostly 2-bedroom and 3-bedroom apartments. Prices, he said, will be kept ‘affordable’ to target the HDB-upgrader market.

‘We believe that the project will be for HDB upgraders and younger families,’ he said. The company will try to manage the construction costs as it is also a contractor, Mr Lim said.

EL Development also has two other residential sites in its landbank for launch soon - one along Devonshire Road and the other on Kampung Java Road. Both projects will be high-end developments and will be launched in the first quarter of next year, Mr Lim said. Prices for the two sites have not yet been fixed, he said.

United Engineers Makes Top Bid For AMK DBSS Site

Source: The Business Times, November 28, 2007

UNITED Engineers (UE) has emerged as the top bidder for HDB’s latest Design, Build and Sell Scheme (DBSS) site in Ang Mo Kio, the government agency said yesterday.

UE’s bid - which was the highest of five - came in at $134.2 million, or some $212 per square foot per plot ratio (psf ppr).

The amount was higher than analysts’ estimates, who said that the public housing site could fetch between $170 and $200 psf ppr when it was launched.

UE’s bid was 12.8 per cent higher than the second-highest bid of $118.9 million, or $188 psf ppr, which was put in by Chip Eng Seng.

UE’s bid was also 20.9 per cent higher than the lowest bid of $111 million, or $175 psf ppr, put in by Boon Keng Development.

The two other bidders were the Sim Lian Group and a partnership between Straits Construction subsidiary Hoi Hup Realty and Sunway Concrete Products, which is part of the consortium that won the DBSS site in Boon Keng Road earlier this year.

The Ang Mo Kio land parcel has a site area of 180,716 sq ft, with an allowable gross floor area of 632,506 sq ft. It is close to the Ang Mo Kio town centre with its MRT station, bus interchange and the AMK Hub.

The development will target HDB upgraders or en bloc sale downgraders, said analysts, who predict that the take-up for any project coming up on the site should be good because the stock of vacant HDB flats has fallen of late.

UE will be required to build a minimum of 30 per cent of the flats with a floor area of 95 sq m (1,023 sq ft) or less - equivalent to flats of four rooms or smaller.

CBRE Research estimated that the site can yield more than 500 units.

UE’s shares closed 10 cents down at $3.70 yesterday. The company’s stock has climbed 49.8 per cent since the start of the year.

Westwood Apartments Sold For $2,525 psf ppr

Source: The Business Times, November 28, 2007

WESTWOOD Apartments at Orchard Boulevard has been sold for $435 million or a unit price of $2,525 per square foot per plot ratio (psf ppr), making it the most expensive site to be sold by collective sale to date.

In June, The Ardmore was sold for $262 million or $2,337 psf ppr.

The price achieved for Westwood Apartments is perhaps all the more remarkable as it comes after the US sub-prime crisis rocked markets around the world recently.

Sold to Malaysia’s YTL Corp, the deal was brokered by Savills Singapore. Savill’s director (Investment Sales) Steven Ming added: ‘It’s a good shot in the arm for the market as it has not been as hot as it was in the first half of the year.’

Mr Ming would only reveal that ‘a handful’ of bidders took part in the tender. But he added: ‘That the buyer is a foreign investor shows that foreigners are still optimistic on our market.’

Savills is also marketing another four to five collective sale sites, and Mr Ming says that ‘there is interest from both foreign and local buyers’.

Westwood Apartments did, however, sell for slightly under the indicative price of $2,800 psf ppr when it was put up for tender about two months ago.

Although investors were expected to bid cautiously, YTL group managing director Francis Yeoh said its bid reflects that YTL is ‘bullish on Singapore’.

‘I don’t think the bid was cautious,’ he added.

YTL, which is listed on the Malaysian stock exchange and has a market cap of about US$9 billion, ranks as one of Malaysia’s top 20 companies.

The conglomerate, whose businesses include construction, real estate and energy, has already acquired two Sentosa Cove sites.

The breakeven price for a new development at Westwood Apartments is estimated to be between $3,500 and $3,600 psf.

Mr Yeoh would not say what the expected launch price would be but cited the reported $5,000 psf for Ritz Carlton Residences at Cairnhill (RCR) as a possible benchmark.

YTL is the developer for RCR in Kuala Lumpur, and Mr Yeoh said that Westwood Apartments could also be a branded residence.

Mr Yeoh added that its Lakefront Collection development at Sentosa Cove would be branded as Armani Casa. He also did not rule out another Ritz Carlton Residences here. ‘There can be two in Singapore,’ he said.

The 30-year-old Westwood Apartments sits on a 62,179 sq ft site. It has a permissible plot ratio of 2.8 and has the potential to yield about 43 units of 4,000 sq ft apartments.

Record Property Deals

Source : The Straits Times, Nov 28, 2007

$750,888 For 5-rm Marine Parade Flat

IN FRESH signs the property market is still pretty hot, an HDB flat has sold for a record $750,888 - and a developer has paid a record price for a collective sale site.

A retired couple yesterday bought the 32-year-old recently renovated flat in Marine Parade. The couple, who declined to be named, have lots of time to enjoy the full 23rd storey sea view.

The wife said: ‘The view is not blocked. There is morning sun and it’s very near the underpass to East Coast Park.’

They have lived abroad, enjoying sea views in previous homes in Germany and Australia.

The last HDB record of $730,000 was set earlier this month - also for a five-room Marine Parade flat with a sea view. Both are on high floors and near East Coast Park with what agents call the ‘X-factor’. An executive HDB flat in Queenstown recently sold for $755,000, but it is newer and nearly 300 sq ft bigger than the record five-room Marine Parade flat. Executive flats are limited.

$435m for Orchard Boulevard condo

A 30-YEAR-OLD condominium at Orchard Boulevard has smashed the record for Singapore’s most expensive collective sale.

Westwood Apartments was sold yesterday for $435 million to Malaysian conglomerate YTL Corp. That is an eye-popping $2,525 per sq ft per plot ratio (psf ppr), including a $4.6 million development charge.

This beats record-holder The Ardmore, a 24-unit freehold property off Orchard Road - sold in June for $262 million, or $2,338 psf ppr.

Owners of the 50-unit condo will each get about $8 million. Owners of two penthouses will get about $17 million each, said deal broker Savills Singapore.

The deal caught the industry by surprise, given the lukewarm response to government land sales and a slowdown of collective sales, recently.

Hot 5-rm sales

Marine Parade

Marine Parade

Kim Tian Place

Marine Parade

Mei Ling Street

Hot en bloc deals

$2,525 psf
Westwood Apartments

$2,338 psf
The Ardmore, Ardmore Park

$1,820 psf
The Grangeford, Leonie Hill

$1,788 psf
Char Yong Gardens, Cairnhill

$1,735 psf
The Parisian, Wheelock Place

Yishun Industrial Site Up For Sale

Source : The Business Times, November 28, 2007

A SITE at Yishun Avenue 6 has been put up for sale for industrial development.

The land parcel is one of the four new industrial sites that were scheduled for release on the reserve list under the Government Industrial Land Sale Programme for the second half of 2007.

The 1.43-hectare site has a plot ratio of 2.5 with a lease period of 60 years. It is zoned for a Business 1 development and can be developed for a range of clean and light industrial and warehouse use, the Urban Redevelopment Authority said.

Savills Singapore director of industrial business space Dominic Peters said that he believes the site could attract bids of about $30 per square foot per plot ratio (psf ppr). ‘Demand is still likely to be strong,’ he said.

In October, an industrial site at Sin Ming Lane was sold for $68.9 million, or about $50 psf ppr. The site was more centrally located and larger.

Mr Peters said that potential bidders could be interested in developing strata-titled units on the Yishun site for sale. Real estate investment trusts (Reits) or developers targeting Reits may be less keen.

According to a Savills report on the industrial sector, Reits were the major players in the industrial market in the third quarter.

Mapletree Logistics Trust acquired six properties for a total of $62.4 million, Cambridge Industrial Trust purchased three properties for $108.5 million and the recently listed MacArthurCook Industrial Reit added two properties worth $109.3 million to its portfolio.

In the first nine months of this year, more than 25 acquisitions were made by Reits, taking the total transaction value to $503 million, up 27.3 per cent year-on-year.

Westwood Apartments: High Collective Sale Price Catches Analysts Off Guard

Source : The Straits Times, Nov 28, 2007

THE record collective sale price achieved by Westwood Apartments yesterday has put to rest industry concerns that the red-hot property market has cooled off.

BULLISH PRICE: Westwood Apartments' $2,525 psf ppr price trumps the earlier record set by The Ardmore. -- ST PHOTO: TERENCE TAN

Malaysian conglomerate YTL Corporation paid $435 million for the 30-year-old condominium in Orchard Boulevard, with an additional $4.6 million development charge.

This prices it at a startling $2,525 per sq ft per plot ratio (psf ppr), a level that trumps the freehold The Ardmore, a 24-unit property off Orchard Road that was sold to SC Global Developments in June for $262 million, or $2,338 psf ppr.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting about $17 million each.

The sale comes after recent government land sales received lukewarm responses, prompting experts to voice concerns of a souring in sentiment.

A condo plot in Enggor Street in Tanjong Pagar, for example, fetched a top bid of $180.8 million, or $717 psf ppr when it closed recently. This was well below the $852 psf ppr achieved by an adjacent plot.

Analysts told The Straits Times they were caught off guard by YTL’s bullish price but added that the prime Westwood location justified the high price tag.

The 62,179 sq ft condo, which has a plot ratio of 2.8 and a 20-storey restriction, could accommodate 43 luxury apartments of 4,000 sq ft each, said Savills Singapore, which brokered the deal.

Knight Frank director for research and consultancy Nicholas Mak said the sale was refreshing as the volatility in global stock markets, coupled with recent government measures to cool the market, have slowed sales.

Other analysts believe the sale is a one-off with demand for collective sales likely to be confined to prime areas such as District 9, 10 and 11.

Chesterton International Property Consultants’ head of research and consultancy, Mr Colin Tan, said negative sentiment is unlikely to affect prime sites.

‘Even if a developer overpaid, it has secured the site. In the long run, it is likely to be in their advantage,’ he said.

Malaysian tycoon Francis Yeoh, who helms YTL, told The Straits Times yesterday that he was in it for the long- haul. Buying Westwood cements YTL’s entry into Singapore’s top-tier luxury property market.

YTL already owns Sandy Island and the Lakefront Collection at Sentosa Cove.

Dr Yeoh shrugs off the apparent recent real estate cool-down in Singapore, saying wealthy buyers will always demand quality homes, regardless of market sentiment.

‘The question of whether the price paid for the land is reasonable depends on what you do with it,’ he said. ‘There are many people who are still bullish about Singapore’s market.’

Westwood resident Richard Eu, who is also chief executive of the traditional Chinese medicine company Eu Yan Sang, said owners were ‘happy that we managed to get a good price given the recent slowdown’.

The deal took just seven months to complete and is the largest collective sale since new rules kicked in on Oct 4.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting $17 million each.

Citi Sees Likely Office Space Glut By 2010

Source : The Straits Times, Nov 28, 2007

Other analysts argue that pent-up demand will soak up excess supply

OFFICE space may be in severe short supply now, but Citigroup predicts the tables will be turned by 2010 with even a glut possible.

‘The market is underestimating the potential supply of new office space in 2010 and beyond, in our view,’ said the banking group in a report on Monday.

While rents and prices of offices are skyrocketing due to the supply crunch, Citigroup said the situation is set to change in a few years, because of the slew of commercial sites sold by the Government in recent months.

It noted that since May, six new sites have been awarded that could yield three million sq ft of offices in 2010 and 2011. This is in addition to projects already under way.

It means that in those years, potential new supply could be 3.2 million to 3.5 million sq ft a year, according to Citigroup’s estimates.

Demand over the last few years has averaged only 1.5 million sq ft per year, the report added.

All eyes are now on the Government Land Sales programme for next year, which is due to be announced next month. If more office sites are released, even more supply can be expected.

Recent bids for office sites have already come in below market expectations, reflecting a more cautious long-term outlook among developers.

A Marina View site earlier this month attracted bids 35 per cent lower than those drawn by an adjacent plot just two months before. The site has yet to be awarded to a bidder even though the tender closed two weeks ago.

The Citigroup report also predicted that landlords of the new offices - most will be in the Central Business District - will face keen competition for tenants. Occupancy rates will peak next year or in 2009 and decline after that, it said.

This has led Citigroup to downgrade the shares of two major office owners: Keppel Land to ’sell’ and City Developments to ‘hold’.

But other analysts are sceptical of Citigroup’s forecasts of an oversupply. They say that for now and next year at least, demand for office space will still far outstrip supply.

When the new offices are opened from 2010 onwards, enough pent-up demand will have been built to soak up all the space, said Mr Wilson Liew, an investment analyst at Kim Eng Research.

‘Judging from the current demand, if this trend continues, there shouldn’t be much of an oversupply,’ he said. ‘These two, three years or so, the supply that is coming on stream is way below the average rate, so there will be a lot of pent-up demand.’

Mr Soong Tuck Yin of Macquarie Securities said the average supply of offices between next year and 2012 comes to only 1.7 million sq ft a year.

This drops to 1.4 million sq ft if space that has already been pre-committed - leased by companies even before being built - is excluded.

Another analyst added that in three to five years’ time, Singapore’s two casinos will have been built. And with the Government promoting Singapore as a financial hub, banks will still expand and be in need of prime space.

There may also be a delay in some of the new office space coming on stream, given the current shortage of contractors, he added.’It’s a bit soon to be making these sorts of predictions,’ the analyst said of the Citigroup report.

In the end, it boils down to whether the economy keeps growing, said Mr Winston Liew, senior investment analyst at OCBC Investment Research. ‘The office market is mainly driven by GDP growth. If our GDP continues to grow, demand should not be an issue.’

比招标底价高150万 新加坡韩氏祠地段750万元售出

《联合早报》Nov 28, 2007



设在达比莎路(Derbyshire Road)的韩氏祠,是一座兴建于70年前的独立式旧洋楼。30多年前,理事会因设在荷罗卫巷(Holloway Lane,百胜楼所在地段)的祠堂建筑遭政府征用以作重新发展,集资了14万元于1974年买下该洋楼充作祠堂。












《联合早报》Nov 27, 2007

沉静了一阵子的大宗房地产交易活动又开始“动”了起来,市场人士趁机将位于新加坡河畔的河畔大厦(The Riverwalk),以及靠近乌节路的财源大厦(Cairnhill Mansion)推出市场招标。




负责这宗交易的房地产代理公司——莱坊(Knight Frank)说,这两幅地段加起来,占地面积将提高至6万2903平方英尺。这意味,成功标得有关地段的发展商应该能够改建一个拥有大约100个单位(每个面积平均约2000平方英尺)的豪华共管公寓项目。

仲量联行(Jones Lang LaSalle)董事及投资部主管吕醒发昨天受访时承认,今年8月至10月份的大房地产投资性交易活动确实较为缓慢,不过到了这个月又开始“动”了起来。原本关注次贷问题和房地产市场情绪不佳的发展商,最近又纷纷再度出手。此外,也有越来越大发展商倾向于与房地产基金公司一起合作出手,似乎有意降低风险。


这个位于沙球朥路上段(Upper Circular Road)(即俗称的潮州马车街)20号的建筑物,目前建有181个商用单位和118个公寓单位。它占地8万2317平方英尺的地段,总容积率达4.9,可建筑楼面为40万3351平方英尺。


杨忠礼4.35亿元购良园 尺价创新加坡公寓集体出售新高

《联合早报》Nov 28, 2007

马来西亚上市公司杨忠礼(YTL Corp)再一次进军本地的豪宅市场,以4亿3500万元(即容积率每平方英尺2525元)的价格买下乌节林荫道附近的集体出售项目良园(Westwood Apartments)。

这个每平方英尺到2525元(包括发展费在内)的尺价,是继雅茂公寓(The Ardmore)后,创下本地公寓集体出售尺价的新高。这也是自新的分层地契法生效后总尺价最高的项目。


杨忠礼在本地另外拥有两个房地产项目,即升涛湾(Sentosa Cove)的丽沙岛(Sandy Island)和“湖畔精品”别墅地段。其中丽沙岛邀请了曾设计名牌服装店阿曼尼(Giogio Armani)25家店面的克罗迪奥(Claudio Silverstrin)担任绘测师,该项目主要面向海内外的富裕人士。



除了进军本地的豪宅市场,杨肃斌也希望能把集团标志性的高档购物中心升禧艺廊(Starhill Gallery)带进本地。杨忠礼目前在马来西亚吉隆坡设有一间升禧艺廊,并将为迪拜的升禧艺廊提供品牌管理服务。

位于康健医药专科中心(Camden Medical Centre)后边,靠近瑞吉居(St Regis Residences)的良园,占地6万2179平方英尺,拥有约50个高档公寓单位。这个永久地契地段的容积率为2.8,可兴建20层楼高的公寓。


Israel's Largest Bank Opens S'pore Branch

Source : TODAY, Tuesday, 27 November 2007

For the first time in Singapore, an Israeli bank has opened a branch here as part of its global expansion strategy.

Bank Hapoalim chief executive officer Zvi Ziv

Bank Hapoalim, Israel's largest bank, opened the full service offshore bank at Republic Plaza and is looking to attract business in private and retail banking, especially from high net worth individuals.

"Bank Hapoalim's presence in Singapore will provide a further bridge between the Israeli economy, which has enjoyed strong growth rates and increasingly international ties and the global markets," said Bank Hapoalim chief executive officer Zvi Ziv. "We look forward to the opportunity to provide our clients worldwide with this access to this vital financial centre."

Its Singapore branch is one of 44 branches, subsidiaries and representative offices outside Israel. As at June, its total assets amounted to US$68.4 billion (S$98.5 billion) and its net profit was US$345million.

"The opening of Bank Hapoalim's Singapore branch is a major step towards making the bank a truly global player, as it provides the bank with a presence in one of the most vibrant and fastest growing economies in Asia," said its chairman Dani Dankner.

At the opening of the bank on Monday, Minister of Foreign Affairs George Yeo said: "In many ways, Singapore is becoming the London of a new re-emergent Asia. I hope that Bank Hapoalim's presence in Singapore will encourage more Israeli companies to use Singapore as a gateway into a dynamic region."

Noting the bilateral co-operation in the armed forces, industrial research and education, he said the decision to establish a branch here was "not an isolated event, but a further expression of a growing relationship between Israel and Singapore".

Malaysia's YTL Corp Wins Bid For Westwood Apartments

Source : Channel NewsAsia, 27 November 2007

Malaysian conglomerate YTL Corporation has won the bid for Westwood Apartments with an offer of S$435 million.

Market watchers say the high price is a reflection of the continued strong demand by foreign buyers for high end luxury developments.

It is up for redevelopment but Westwood Apartments along Orchard Boulevard will still go down in history for setting a new record for en bloc sales in terms of per plot ratio.

The owners will pocket between S$8 million and S$9 million each if the sale to YTL gets the green light from the Strata Titles Board.

Out of 50 units, more than 40 agreed to the deal and this was before the new en bloc rules kicked in early last month.

The site will be redeveloped into a residential condominium of between 50 to 80 units.

Francis Yeoh, Managing Director, YTL Group, says: "It would definitely be a super luxury brand for well heeled clients high net worth clients who expect the best of the best. So today we're commissioning the Michelangelos and Leonardo Da Vincis of today to build something relevant for today's population, not just a classic reference for yesterday's people."

YTL Group plans to rope in renowned architects to create an iconic development.

Mr Yeoh says: "I hope it won't be torn down one day (because of another) en bloc sale!"

The sale price works out to S$2,525 per square foot per plot ratio.

This is a new record, eclipsing the previous peak of almost S$2,400 set by Ardmore Park.

To make a profit, some property watchers say the new units will have to sell at more than S$3,500 per square foot.

Michael Ng, Managing Director, Savills Singapore, says: "Really the international buyers, those who really hunt for trophy residential apartments around key major cities in the world are placing a lot of emphasis in Singapore. So I think in line with that we can expect prime property prices to continue to grow. Singapore (can) expect to have a lot of very high net worth individuals to invest here."

Market watchers say the record price of S$2,500 per plot ratio bodes well for property prices here, but more importantly, the expected luxurious development will add more prestige to the prime area on Orchard Boulevard. - CNA/ch

3-Night Hotel Stay During F1 Grand Prix Auctioned For S$30,000

Source : Channel NewsAsia, 27 November 2007

A three-night hotel stay during Singapore's Formula One Grand Prix was auctioned off for S$30,000 on Sunday.

Assisi Hospice's Light-a-Heart charity dinner

Senior Minister Goh Chok Tong and his wife were among the 500 guests at the recent Assisi Hospice's Light-a-Heart charity dinner.

The event started off with an auction for a one-night Presidential Suite stay at the Pan Pacific Hotel.

The hotel's management, who were also at the dinner, decided to capitalise on the interest in Singapore's F1 race by making an on-the-spot, impromptu offer to contribute a three-night room stay at the Pan Pacific during the F1 Grand Prix next year.

There was an instant buzz and within minutes, the package was sold for S$30,000.

This helped the Assisi Hospice to meet its target of raising S$700,000 for its cancer patients. - CNA/so

Euro Gains Strength - Will Euro Replace Ailing US Dollar?

Source : The Electric New Paper, November 28, 2007

EUROPE'S exporters may be wincing in pain as the euro gains in strength.

But everyone from currency traders to Egyptian street hawkers are looking to the euro as a better store of value as the US dollar keeps slipping. On Friday, one euro was worth US$1.4966 - another record for the shared 13-nation currency.

As well as being the world's currency of choice in central bank reserves, the dollar has long been the de facto second currency in street markets and on tourist menus around the world.

While its downward trend may not cause worry to currency markets, concern is growing that foreign investors may start dumping their dollar-holdings. In particular, traders are watching China's central bank for changes in its portfolio.

The dollar has been falling against the euro and other currencies as fears about the health of the US economy have been stoked by the mortgage crisis that has tripped up borrowers and caused a credit crunch among banks.

Fears over the huge US trade deficit, which leaves more dollars in the hands of foreigners, has also weighed on the currency.


Yet talk of the dollar's demise has been exaggerated, according to MrPaul de Grauwe, once a candidate for a European Central Bank board seat and economics professor at Leuven university in Belgium. Dollar weakness in the 1980s led to a similar debate, he told The Associated Press.

'There was talk then about other currencies replacing the dollar but it never happened,' he said. 'In the future, the euro will decline.'

For the moment, the euro is definitely up - bad news for the region's exporters.

Plane-maker Airbus has been pummelled by a slumping dollar, the currency in which planes are priced, against a corresponding rise in the euro - in which it pays most of its costs.

Chief Executive Thomas Enders said the euro has now 'crossed the pain threshold.' The rate of the dollar's fall 'is life threatening', he was quoted by Der Spiegel magazine as saying on Thursday.

Still, the stronger euro confers benefits for Europe - holding down energy prices and inflation. And its strength reflects rising confidence in the euro zone and the global prospects of an economically unified Europe.

Baht Controls May End After Election, Says Bank

Source : The Business Times, November 27, 2007

Thailand's central bank may lift its capital controls after national elections on Dec 23, a move that may boost the currency by about 16 per cent next year, Royal Bank of Scotland plc said in a report.

The Bank of Thailand imposed restrictions last December on foreign investment to curb currency gains, causing the baht to trade at a higher exchange rate overseas than in Thailand. Elections will help revive consumer confidence that has dropped to a five-year low following a military coup in September 2006.

'When they imposed the controls, there was a little bit of political turbulence, and now they are going to elect the new democratic government,' said Chia Woon Khien, a local markets strategist for non-Japan Asia in Hong Kong at RBS. 'The currency will continue to improve.'

The baht was little changed at 33.82 onshore against the US dollar as of 12:02 pm in Bangkok, while the currency gained 0.5 per cent to 31.18 offshore.

The military junta that seized power in a bloodless coup imposed the rules to curb last year's 13 per cent gain in the currency and protect exporters. Instead, they have caused rifts within the government, eroded consumer confidence, and failed to halt a 5.6 per cent appreciation in the onshore baht and a 13 per cent jump in its offshore equivalent this year. A 16 per cent advance in the currency next year would be the most since 1997.

The two spot rates will probably converge after the lifting of capital controls, according to the report written by Mr Chia and Euben Paracuelles, economic researcher, non-Japan Asia, at RBS. The bank, the world's fifth-biggest currency trader, expects the baht to advance to 28.5 by the end of 2008.

The baht will trade at 31.8 against the US dollar by the end of next year, according to the median estimate of 16 strategists surveyed by Bloomberg.

'Improvements in the economic and political environment as well as changes to the outlook of the baht have fuelled speculation that the unremunerated reserve requirement may be relaxed altogether,' the bank's report said.

South-east Asia's second-biggest economy expanded 4.4 per cent in the second quarter from a year earlier, the government said in September. The growth accelerated from a revised 4.2 per cent in the previous three months as exports offset a slump in consumer spending.

'The timing would be good if they lift the controls after the election because having a people-elected government may remove political uncertainty,' said Hideki Hayashi, a foreign-exchange strategist at Shinko Securities Co in Tokyo. The baht may rise beyond 32 by the middle of 2008 should the controls be removed, Mr Hayashi said. -- Bloomberg

Pedra Branca Dispute - The Evidence Of Words

Source : The Straits Times, Nov 28, 2007

THE Pedra Branca case before the International Court of Justice will be decided by June next year. What factors will the court focus on?

The record suggests that the most persuasive arguments for the court are to be found in treaties and other formal documents that demonstrate a prior agreement on, or contemporaneous official understanding of, the borders between disputing nations.

Where these are not available, then what their predecessors - often the colonial authorities - did administratively would be most important in deciding where the lines fall.

Next, the court attaches much importance to whether one party has shown open, effective and unchallenged control of the disputed territory for a substantive period.

Finally, it prefers to divide equally any disputed territory whose ownership still remains undecided after considering these factors.
Conversely, the court seems to weigh quite lightly evidence that is mainly geographical (topographical and cartographical), cultural, ethnic, ideological or economic.

In the case of Pedra Branca, most people feel Singapore will win, given its open, continuous and effective administration of the island since 1847. Though this is a very strong point, the relevant treaties must still be dealt with in their fine print.

But first, the broad outlines. The Anglo-Dutch Treaty of 1824 divided the Malay world into two spheres of influence, splitting up the Riau- Lingga-Johor sultanate into the Johor sultanate under the (British) in the north and the Riau sultanate under the (Dutch) in the south.

However, Johor remained sovereign over its people and territories as it was never a colony of Britain, Malaysia argues. Thus, if it had title to Pedra Branca before the treaty, it was not taken away by it.

No party disputes that Johor has remained sovereign to this day, but the fine point is this: Johor retained sovereignty over land and sea north of what? What did the British and Dutch use as the border?

The text of the treaty says the Dutch agreed 'not to open any office on the Malay peninsula or make any treaty with its rulers' while the British agreed 'not to establish any office on...islands south of the Strait of Singapore, or to make any treaties with the rulers of these places'.

Malaysia argues that anything north of the Strait of Singapore includes the strait itself and thus Pedra Branca, which stands at the eastern entrance of the strait, dividing it into the Middle and Southern Channels. The border, it says, is thus the line along the southern border of the strait.

But a more natural reading - which international law requires - would be that north means 'north of the Strait of Singapore' since south is defined as 'south of the Strait of Singapore'. The logic must have been to keep the strait free for maritime traffic of all nations. After all, the strait was then already one of the world's busiest waterways, linking, as it did, the South China Sea to the Strait of Malacca and the Indian Ocean, which was precisely that which had justified the founding of Singapore itself.

Now, if the parties meant the strait to be kept as an international waterway free from each other's control, then Pedra Branca was not a possession of Johor. Instead, it was terra nullius (no man's land), and anyone could own it if they established a substantive and substantial presence there. This, in fact, British Singapore did and a lighthouse was put up on the island and carefully managed to this very day.

So how can this dispute be settled? Contemporaneous documents from individuals involved would shed much- needed light. Thus, Malaysia points to a letter from the government of India to John Crawfurd (then the second British Resident in Singapore, from 1823 to 1826).

Dated March 4, 1825, the letter stated that 'our acquisition of these Islets is not at variance with they are all situated North of the Southern limits of the Straights (sic) of Singapore'.

Whatever these islets may have been, the point is that, Malaysia argues, the authorities of the time understood the Anglo-Dutch border to be an imaginary line drawn along the 'Southern limits' of the Strait.

So that settles it then?

Not quite. Singapore points to someone far more important and closer to the

real action. A letter from the Sultan of Johor to the Principal Secretary of State to the Colonies, dated March 20, 1886, asked that a register of the 'islands in the open Seas and Straits belonging to the State of Johore' be established. The Dutch had occupied Natunas, which the sultan felt was within his domain, so he wanted the British to recover it for him - which they didn't.

In his letter (written under legal advice), entitled The Natunas, the Anambas and Tambilan Islands, Sultan Abu Bakar declared: 'By the English-Dutch Treaty of 1824, the Dutch are excluded from...islands to the North of the Straits of Singapore.

'The groups in question are situated to the north of that line (though one island) is below the line of the Straits of Singapore.'

Thus, in the mind of the Johor sultan, the dividing 'line' was the whole of the Strait of Singapore. That is, he clearly understood the strait - and thus any islands within it, including, logically, Pedra Branca - to be outside his domain. In fact, so there would be no confusion, the word 'North' was even underlined in the original document.

Malaysia also points to the Crawfurd Treaty of 1824, by which Johor ceded Singapore as well as the waters and islands within 16km of the main island to Britain. Pedra Branca, Malaysia notes, stands 39.5km away.

But if the Crawfurd Treaty is interpreted literally in a wooden manner, Singapore argues, the British should have received parts of Batam too. Clearly, it must be read commonsensically. Read that way, the Crawfurd Treaty was concerned with only islands within 16km of the main island, not those beyond. That is, it did not set out to also address the question of sovereignty over islands beyond the 16km, including Pedra Branca.

Overall, Singapore has the stronger case, given its continuous state activity on Pedra Branca since 1847 that was unchallenged until 1979. But as to the two treaties, which interpretation will the court find more persuasive? We should know by next June.



Overall, Singapore has the stronger case, given its continuous state activity on Pedra Branca since 1847 that was unchallenged until 1979. But as to the two treaties, which interpretation will the court find more persuasive?

Red-Hot, But For How Long?

Source : The Straits Times, Nov 28, 2007

INFLATION in Singapore is running at an annualised rate of 3.6 per cent. Trade and Industry Minister Lim Hng Kiang has said it could rise to 5 per cent in the first quarter of next year before moderating. The causes of this spike are many. Partly, it is due to a booming domestic economy. A tight labour market has forced up wage costs and lack of office space has forced up rents. Partly it is due to the rise in the goods and services tax (GST). And partly it is due to global forces - a rise in the prices of oil and other commodities. The last, Singapore cannot do much about; the second, the GST rise, is a one-off thing; and the first, a booming economy, one would not want to wish away.

Abstract economic explanations, however, are of little comfort to the ordinary person. Wages, especially at the low end, are probably not rising as fast as the inflation rate, so low-income households will find it difficult to make ends meet. A number of supermarkets - including NTUC FairPrice, Cold Storage and Prime supermarkets - had earlier pledged to absorb the 2 per cent rise in the GST for six months, but that will expire next month. Among the other organisations that had pledged to absorb the GST increase for a period - including a number of other NTUC cooperatives and SingPost - NTUC Childcare was about the only one that said it would do so for up to a year for low-income families. There is room here for the Government to consider rebates and reliefs targeted at low-income families, either in next year's Budget or earlier, to ease the pain.

Other measures the Government has taken to curb inflation will need some time to show results. For example, it has taken steps to increase the supply of commercial and residential property, but that cannot be accomplished overnight. The chief policy tool the Government has at its disposal is the exchange rate mechanism. The Monetary Authority of Singapore (MAS) has allowed the Singapore dollar to rise against a trade-weighted basket of currencies, thus making imports cheaper. MAS may have to consider allowing the currency to tighten at a somewhat faster pace, bearing in mind the needs of exporters. Those urging the Government to act more quickly or drastically, however, should bear in mind that it is by no means clear the domestic economy will continue to power ahead next year. The US economy may be slowing and a recession there cannot be ruled out. If that were to occur, the Singapore economy will be affected adversely. The Government will have to be careful not to slam too hard on the brakes to cool a seemingly hot economy just when a cooling may already be on the cards.

Paying A Premium For Ocean Views

Source : The Straits Times, Nov 28, 2007

But analysts say price tag is not typical of HDB market, which is more moderate

AN AGEING five-room HDB flat in Marine Parade has been snapped up for a record price of $750,888 - and all because of its sweeping ocean views.

CASHING IN: Owner Sally Sim knocked out the walls to make an expansive living room that takes advantage of the sea view. She had kept the flat as an extra home but decided to sell it to ride on the property boom. -- ST PHOTO: LAU FOOK KONG

The buyers, who paid cash, bought the 32-year-old Marine Terrace flat as their retirement home.

They had the field to themselves as the high asking price of $800,000 deterred many prospective buyers.

Agent Francis Ng from HSR Property Group said the couple were the only ones to view the flat.

Mr Ng said the flat has had its walls knocked out to make an expansive living room that takes advantage of the sea view, so there is only one bedroom.

Owner Sally Sim, who lives in a landed property, renovated the flat about two years ago at the cost of just over $80,000.

She kept the property as an extra home that could one day be used as a retirement haven or for her children's use.

'But since the market is good, I might as well sell it,' she said in Mandarin. 'It's quite tiring keeping it clean.'

ERA Singapore's assistant vice-president, Mr Eugene Lim, said: 'People who buy HDB flats at such record prices are not your typical HDB buyers.

'They are cash-rich and most of them are looking for unique features, such as a full sea view.'

The Marine Parade flat is about 1,300 sq ft in size, which would put its price at $577 per sq ft (psf).

HDB flats are not usually measured on a psf basis, but pricing it this way does give an idea of how much the property is worth when compared with private housing. Mass market condominiums now cost $650 to $700 psf on average.

Executive flats, which are limited in number, have sold for a bit more but are far bigger in size. Take the seemingly stratospheric price achieved for an executive HDB flat in Mei Ling Street. It went for $755,000 but cost only $474 on a psf basis.

But such deals are certainly are not reflective of the market, which is operating at a more moderate level, said Mr Lim.

HSR executive director Eric Cheng said the market was crazier back in the mid-90s. It is rather calm currently, except for sporadic record deals, he said.

M'sia's YTL Corp Buys Westwood Condo At Record En Bloc Price

Source : The Straits Times, Nov 27, 2007

YTL Corp, Malaysia's biggest builder, won a bid to buy Westwood Apartments in downtown Singapore at a record price, increasing its investment in the island-nation as home prices surged to a 10-year high.

It has won a tender to buy 50 high-end apartments on Orchard Boulevard for S$435 million in cash, YTL Corp said in a statement on Tuesday.

The purchase is the company's third land acquisition in Singapore in the last two years, it added.

'The proposed acquisition will enable the group to enhance its earnings potential from the high sale and rental rates expected from the renewed interest in the property sector in Singapore,' YTL said in the statement.

The longest economic expansion in more than a decade in Singapore has pushed up home prices and prompted developers to buy and develop existing apartments at a record pace.

The sale price works out to about S$2,498.55 a square foot, based on the space YTL can build on the site, Bloomberg calculations show. That beat the previous record, set in June when SC Global Developments Ltd paid S$2,338 a square foot for the Ardmore, also located near the city's main shopping belt.

YTL and partner LP World Sdn. in March won a bid to buy a site on Singapore's Sentosa island for S$90 million to build a residential property development.

Westwood Apartments, which is more than 30 years old, is a condominium development located on approximately 62,179 square feet of freehold residential land, YTL said. The site can be redeveloped into about 43 units of 4,000-square- foot luxury condominium apartments, it added. -- AGENCIES

High Court Orders Family Firms To Wind Up, Settle Brothers' Feud

Source : The Straits Times, Nov 27, 2007

IN the end, the eldest of three feuding brothers had his way - the three family firms worth $100 million will be wound up, on a High Court orders.

A liquidator, appointed to do this, will use the proceeds to pay off $34 million in debts.

The brothers - two doctors and an architect - will then get their due shares.

In her judgment published on Tuesday, Justice Judith Prakash noted that the brothers could not get along with each other and had their own ideas about how 'the companies and the family fortunes should be dealt with'.

The rifts had 'translated into fractures in the companies' and a logjam over the past few years over settling the debts owed by the late patriach's estate to the companies.

Property investor Chow Cho Poon had set up the three companies which held properties in Singapore, Malaysia and Hong Kong valued in 2005 at more than $100 million. One property was Chow House in Robinson Road.

Mr Chow died a decade ago. His wife made each of their three sons directors of all three companies, hoping that the feuding brothers would at least work together.

But five years after her death in 2002, the feud spilled over into legal wrangles over the companies they controlled. All three siblings, now in their 60s, live in Hong Kong.

Eldest sibling Chow Kwok Chi, through Senior Counsel Jimmy Yim, sought to wind up the companies so that the brothers could make a clean break from one another and go their separate ways.

He pointed out that as long as the companies exist, their father's estate would remain unadministered because of the unpaid $34 million debt.

The estate cannot be administered unless the debt is settled, but the estate's assets are mainly tied up as shares in the companies.

Second brother Chow Kwok-Chuen opposed the move.

He argued through lawyer Ang Cheng Hock from Allen & Gledhill that Kwok Chi had not alleged any loss of confidence or lack of probity in his conduct in relation to the running of the companies, among other things.

Youngest sibling Kwok Ching also contested the suit, arguing through lawyer Peter Low from Colin Ng and Partners that if there was to be a winding up, the reason should be the alleged 'oppressive conduct' of his two brothers towards him.

Justice Prakash said in view of the 'litigation history' and 'the complex nature of the relationships among the brothers', it did not make sense for the court to 'stand aside and allow the situation to deteriorate further'.

Condo-Like Housing Plot Nets $134m Bid

Source : The Straits Times, Nov 27, 2007

A THIRD site earmarked for public housing to be designed, built and sold by private developers has attracted a top bid of $134.2 million.

Greatearth Development placed the bid, which was 13 per cent higher than the one submitted by its closest rival, AMK Development, and well ahead of those of the other three contenders.

Consultants say the higher-than-expected price - it works out at $212.4 per sq ft (psf) per plot ratio - reflects developers' confidence in the demand for public housing and suburban condominiums.

The 1.7ha plot on Ang Mo Kio Street 52 can house about 550 flats in blocks that can reach 36 storeys.

Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, estimated that the break-even price for the Ang Mo Kio plot would be about $500 psf.

This means the flats can be launched from $580 psf, putting the starting price of a four-room unit at about $560,000.

Judge Throws Out Mother's Claim Against Son

Source : The Straits Times, Nov 27, 2007

WHEN a shipping tycoon died in 2001, he left more than $10 million in assets to only one of his eight children - his favourite son.

Angry at being left out, his 82-year-old wife, two of his children and three grandsons went to court.

Madam Low Ah Cheow and three of the siblings are now living in the family house at Wiltshire Road.

They claimed that, despite his will, Mr Ng Teow Yhee, the patriach, had created secret trusts giving them the family house, shares in his estate and specific cash amounts.

But the High Court dismissed their claims, holding their evidence to be unreliable and 'fraught with inconsistencies.'

In a judgment published on Tuesday, Justice Woo Bih Li noted that it was 'unusual for a man to give his entire estate beneficially to one child out of many children.'

But Mr Sebastian Ng, 50, to whom the estate was given, had said it was because patriach Ng Teow Yhee was 'fed-up with the rest of the children as well as his wife.'

The judge said it was not for Sebastian to justify why he was given everything under the will, but for the other claimants to show that what he received was subject to the oral gifts sought by them to be legally enforced.

Justice Woo held they had failed to do this.

It emerged that Sebastian had become Mr Ng's favourite son at the time the will was executed and when he died in April 2001.

Two of his other sons, Ricky and Sunny had gambled heavily and a third, Raymond, had also squandered away money, said Sebastian, who was represented by lawyers Ling Tien Wah and Koh Jiaying from Rodyk & Davidson.

Raymond had also looked to the patriach for financial help and their mother, Madam Low, spoilt her children and often asked her husband to bail them out.

This apparently strained the relationships between Mr Ng and his wife and other children - up till the time he died.

The judge found there was evidence to support this, but in any event, the late patriach who made a fortune in shipping and stevedoring services, had provided for his family members by giving them homes and vehicles.

They also drew salaries from his subsidiary firm. His four sons and wife also held shares in the patriach's holding company.

Madam Low and the other plaintiffs, through their lawyers Andre Arul and Chung Ping Shen, disputed Sebastian's depiction of their relationship with Mr Ng and countered that he was a gambler who hid important information from them.

The judge cast doubts on this and held, among other things, that if he was a squanderer, Mr Ng would not have been close to him.

'Although Sebastian has not been entirely truthful, neither have the plaintiffs on whom the burden of proof lies.'

'I am of the view that Mr Ng gave his entire estate to Sebastian on the expectation that Sebastian would do right by the other family members,' said Justice Woo.

Reacting to the outcome, Sebastian said he felt sad that his mother and his siblings had opted to sue him through a trial lasting over 30 days.

'I am glad and happy that the court has found no truth in the claims against me, but it is unfortunate that what is a private family dispute has become such a public matter,' he said.

He added that he wanted to make up with his mum and siblings.

On the court's judgement, contesting sibling Angeline Ng, 51, said on Tuesday: 'We are discussing the judgment with our family members and lawyers to decide what to do next.'