Source : TODAY, Thursday, February 14, 2008
Office rents rose an average of 14 per cent worldwide last year as demand grew from banks and brokerages in the United States, the United Kingdom and Asia.
Rents in the 10 most expensive office markets increased 40 per cent last year, Cushman and Wakefield, the world’s largest closely held real estate brokerage, said. Singapore moved into the top 10 for the first time, with occupancy costs hitting an average of about US$130 ($184) per sq ft.
Financial services firms are driving rent increases in cities including London, New York and Hong Kong, where they take as much as 60 per cent of available office space. Landlords are earning more as rising construction costs have limited development, said Ms Maria Sicola, executive managing director for research at Cushman.
“We had strong and steady demand, and we really have had very little new supply in these global markets,” she said.
London remained the most expensive city, with rents in its West End rising 30 per cent and total annual occupancy costs averaging US$311.58 per sq ft.
New York dropped to 10th place but is likely to move up the rankings because office space in the city “is so tight and demand there is strong”, Ms Sicola said.
According to the Cushman and Wakefield report, rents in Singapore for top-tier space rose 78 per cent, allowing it to move up 10 spots to 7th place.
According to statistics from the Urban Redevelopment Authority, office rentals here increased 56.1 per cent last year.
The Cushman and Wakefield report stated that total annual office occupancy cost averaged US$130.48 per sq ft last year, making it even more expensive than New York’s Manhattan district. Rent growth in Singapore was helped by demand from banking and business services and a limited supply of top-tier office space, Cushman said.
PricewaterhouseCoopers leased 441,320 sq ft of office space in London last year, while Standard Chartered added 508,298 sq ft in Singapore. Lehman Brothers Holdings leased 414,575 sq ft in Manhattan, Cushman said.
Ms Sicola said it is too early to know how the collapse of the sub-prime mortgage market and tighter lending standards would affect office demand and rents. Rent growth is likely to drop to between 5 and 10 per cent this year. - Bloomberg
Thursday, February 14, 2008
Singapore’s Economic Growth Moderates In Q4 Of 2007
Source : Channel NewsAsia, 14 February 2008
Singapore’s economy expanded 5.4 percent on-year in the fourth quarter, falling short of the advance estimate for 6.0 percent growth, said the Ministry of Trade and Industry in a statement.
Singapore’s gross domestic product fell 4.8 percent in the fourth quarter from the third on a seasonally adjusted and annualised basis compared to an initial estimate for a 3.2 percent decline.
The economy contracted more than first estimated in the fourth quarter of 2007 and the Republic cut its 2008 growth forecast as the US nears a likely mild recession.
The economy grew a revised 5.1 percent in the third quarter from the second.
Singapore’s economy is forecast to grow between 4 to 6 percent in 2008 compared with the previous growth forecast of between 4.5 to 6.5 percent.
“Current conditions suggest that the US will likely enter a mild recession in the first half but its strong fundamentals, coupled with fiscal and monetary stimulus, will help to support recovery in the second half,” the statement said.
For 2007 the economy expanded 7.7 percent after expanding by a revised 8.2 percent in 2006.
Manufacturing expanded just 0.2 percent in the fourth quarter from a year earlier, while construction grew 24.3 percent.
The financial services sector grew 15.9 percent. - CNA/ch
Singapore’s economy expanded 5.4 percent on-year in the fourth quarter, falling short of the advance estimate for 6.0 percent growth, said the Ministry of Trade and Industry in a statement.
Singapore’s gross domestic product fell 4.8 percent in the fourth quarter from the third on a seasonally adjusted and annualised basis compared to an initial estimate for a 3.2 percent decline.
The economy contracted more than first estimated in the fourth quarter of 2007 and the Republic cut its 2008 growth forecast as the US nears a likely mild recession.
The economy grew a revised 5.1 percent in the third quarter from the second.
Singapore’s economy is forecast to grow between 4 to 6 percent in 2008 compared with the previous growth forecast of between 4.5 to 6.5 percent.
“Current conditions suggest that the US will likely enter a mild recession in the first half but its strong fundamentals, coupled with fiscal and monetary stimulus, will help to support recovery in the second half,” the statement said.
For 2007 the economy expanded 7.7 percent after expanding by a revised 8.2 percent in 2006.
Manufacturing expanded just 0.2 percent in the fourth quarter from a year earlier, while construction grew 24.3 percent.
The financial services sector grew 15.9 percent. - CNA/ch
F&N's Q1 Profit Surges 33% To S$103m
Source : Channel NewsAsia, 14 February 2008
Fraser and Neave (F&N) has delivered a 33 per cent rise in first quarter profit to S$103 million.
It attributed the strong performance to contributions from its property developments, including the Soleil @ Sinaran project in Singapore and other overseas projects.
Revenue for the first quarter rose 19 per cent year-on-year to S$1.3 billion.
F&N also plans to launch the sale of two other projects in Bedok and River Valley Road this year.
Its unit, Asia Pacific Breweries, posted an 8.5 per cent rise in first quarter earnings to about S$44 million.
Chairman Lee Hsien Yang said F&N's businesses in the core markets of Singapore, Malaysia, Indochina and Australia have all contributed strongly to the sterling results.
F&N says the economic growth in the Asia-Pacific region is expected to be moderate for the next 12 months.
Barring unforeseen circumstances, it says the group's profit will further improve in the current financial year. - CNA/ac
Fraser and Neave (F&N) has delivered a 33 per cent rise in first quarter profit to S$103 million.
It attributed the strong performance to contributions from its property developments, including the Soleil @ Sinaran project in Singapore and other overseas projects. Revenue for the first quarter rose 19 per cent year-on-year to S$1.3 billion.
F&N also plans to launch the sale of two other projects in Bedok and River Valley Road this year.
Its unit, Asia Pacific Breweries, posted an 8.5 per cent rise in first quarter earnings to about S$44 million.
Chairman Lee Hsien Yang said F&N's businesses in the core markets of Singapore, Malaysia, Indochina and Australia have all contributed strongly to the sterling results.
F&N says the economic growth in the Asia-Pacific region is expected to be moderate for the next 12 months.
Barring unforeseen circumstances, it says the group's profit will further improve in the current financial year. - CNA/ac
Sembawang E&C Wins S$400m Deal For Marina Bay Sands North Podium
Source : Channel NewsAsia, 14 February 2008
Sembawang Engineers and Constructors has won a S$400 million contract to build the North Podium of the Marina Bay Sands integrated resort.
The podium, which will have four upper levels and four basements, will house the casino, theatres and a retail arcade.
Construction work will start this month and expected to be completed by April 2009.
The company is also building the new Downtown Line Bayfront MRT station in Marina Bay which will connect directly to the resort's Meetings, Incentives, Conventions and Exhibitions (MICE) centre.
The S$5 billion Marina Bay Sands integrated resort is due to open late next year.
It will also feature hotel rooms housed in three towers with a sky park connecting the towers.
Sembawang E&C is no stranger to integrated resort products. It is also undertaking the entire foundation work and building a basement for the Resorts World at Sentosa integrated resort. That contract was worth S$250 million. - CNA /ls
Sembawang Engineers and Constructors has won a S$400 million contract to build the North Podium of the Marina Bay Sands integrated resort.
The podium, which will have four upper levels and four basements, will house the casino, theatres and a retail arcade. Construction work will start this month and expected to be completed by April 2009.
The company is also building the new Downtown Line Bayfront MRT station in Marina Bay which will connect directly to the resort's Meetings, Incentives, Conventions and Exhibitions (MICE) centre.
The S$5 billion Marina Bay Sands integrated resort is due to open late next year.
It will also feature hotel rooms housed in three towers with a sky park connecting the towers.
Sembawang E&C is no stranger to integrated resort products. It is also undertaking the entire foundation work and building a basement for the Resorts World at Sentosa integrated resort. That contract was worth S$250 million. - CNA /ls
Most Would Opt For CPF Life Scheme Payouts From Age 80
Source : TODAY, Thursday, 14 February 2008
The range of options offered by the impending CPF Life scheme may be dizzying for some, but to Manpower Minister Ng Eng Hen, the reality is "simpler than what it's made out to be".
In fact, come 2013 when the scheme starts, he believes "70 to 80 per cent" of eligible CPF members would choose the default plan of starting their payouts at age 80.
Apart from getting to decide if they want to start their plan at age 65, 90 or any of four points in between, members can choose to have refundable premiums or not.
At a press conference yesterday, Dr Ng predicted very few people — those without any beneficiaries — would contemplate the non-refundable option.
As for when to start payouts, he said: "The Refund 65 plan is meant for the very small group who have lower balances and feel that they want higher payouts … I don't think the Refund 90 plan will be a popular option either, people would feel it's too far off."
Over time, just "two or three" choices would emerge. And if the plan some members have in mind is too unpopular to be financially viable, they could be asked to join any of the other plans.
Over the next few years, the CPF Board will have to boost its capabilities to operate the scheme on par with commercial insurers, Dr Ng noted. And to educate members, the board would distribute simple handbooks in the four languages, as well as provide an online tool to calculate the financial implications of each of the options.
Those whom Today spoke to said they needed more time to digest the "complicated" scheme, although they liked its look so far.
Computer engineer Tan Siew Lian, 46, who is diabetic, said: "I would want to start getting my payouts as soon as possible. With diseases, you just don't know how long you can live."
Remisier Jimmy Ho, 51, who will be offered the choice to opt into CPF Life, said he might start payouts at age 70 "because by then, I think I would be out of work".
The Government's initial floating of a non-refundable annuity scheme offering payouts from age 85 had met with strong public resistance. Dr Ng said this was expected. "We wanted people to be shocked that they would be living for so long … and then just gently reinforce the messages," he said, adding that the refundable option "was always on the table".
The Government would also consider whether to give a one-off incentive to help those with less than $40,000 in cash in their Minimum Sum to join the scheme. - TODAY/sh
The range of options offered by the impending CPF Life scheme may be dizzying for some, but to Manpower Minister Ng Eng Hen, the reality is "simpler than what it's made out to be".
In fact, come 2013 when the scheme starts, he believes "70 to 80 per cent" of eligible CPF members would choose the default plan of starting their payouts at age 80. Apart from getting to decide if they want to start their plan at age 65, 90 or any of four points in between, members can choose to have refundable premiums or not.
At a press conference yesterday, Dr Ng predicted very few people — those without any beneficiaries — would contemplate the non-refundable option.
As for when to start payouts, he said: "The Refund 65 plan is meant for the very small group who have lower balances and feel that they want higher payouts … I don't think the Refund 90 plan will be a popular option either, people would feel it's too far off."
Over time, just "two or three" choices would emerge. And if the plan some members have in mind is too unpopular to be financially viable, they could be asked to join any of the other plans.
Over the next few years, the CPF Board will have to boost its capabilities to operate the scheme on par with commercial insurers, Dr Ng noted. And to educate members, the board would distribute simple handbooks in the four languages, as well as provide an online tool to calculate the financial implications of each of the options.
Those whom Today spoke to said they needed more time to digest the "complicated" scheme, although they liked its look so far.
Computer engineer Tan Siew Lian, 46, who is diabetic, said: "I would want to start getting my payouts as soon as possible. With diseases, you just don't know how long you can live."
Remisier Jimmy Ho, 51, who will be offered the choice to opt into CPF Life, said he might start payouts at age 70 "because by then, I think I would be out of work".
The Government's initial floating of a non-refundable annuity scheme offering payouts from age 85 had met with strong public resistance. Dr Ng said this was expected. "We wanted people to be shocked that they would be living for so long … and then just gently reinforce the messages," he said, adding that the refundable option "was always on the table".
The Government would also consider whether to give a one-off incentive to help those with less than $40,000 in cash in their Minimum Sum to join the scheme. - TODAY/sh
Queen Margaret University To Open Singapore Campus In April
Source : TODAY, Thursday, February 14, 2008
Some two years after Warwick University's unsuccessful attempt at setting up a campus here, another United Kingdom tertiary institution — Queen Margaret University (QMU) — is ready to open its doors in April.
The QMU Asia Campus is a joint venture between the East Asia Institute of Management and QMU, Edinburgh — the product of a seven-year collaboration and the university's first offshore campus.
It has a tennis and three basketball courts, a gymnasium, a fully-equipped library, 60 classrooms and state-of-the-art multimedia technology. Leased for a 15-year period, officials said it will cost an estimated $38 million in rent.
About 1,600 students, each paying an average of $10,000 a year in tuition fees, will begin classes in two months' time at the four-storey campus located at Ah Hood Road, off Balestier Road.
The 25 lecturers based at the new campus are tasked with boosting the number of graduates from about 400 to 1,500 in three years.
Although QMU offers several business management degrees in Singapore, hospitality and tourism management remain the most popular among students. With the new campus, the university is looking to introduce courses in banking and finance and heathcare management.
"This joint-venture is a manifestation of our shared vision to take our partnership further," said Professor Anthony P Cohen at the agreement signing yesterday.
He said while QMU collaborates with institutions in India, Saudi Arabia, Egypt, Greece and Switzerland, it chose to have its campus in Singapore because of the booming tourism industry, bilingual competency, and strategic location that allows it to reach out to other students in the region, particularly those from China. A bilingual English-Chinese curriculum will be designed for these students, with selected modules taught in Chinese.
Part-time student Darren Tan Wei Beng, 31, is excited about the new campus.
"I will feel like a real student because I can mix with more students on a campus we can call our own, which is three to five times as large as the current one," he said.
Future plans for the new campus include a QMU doctorate programme in Singapore and more student exchanges between the UK and the Republic.
More scholarships will also be offered to attract higher-quality students and a budget of $60 million will be set aside for this. - TODAY/sh
Some two years after Warwick University's unsuccessful attempt at setting up a campus here, another United Kingdom tertiary institution — Queen Margaret University (QMU) — is ready to open its doors in April.
The QMU Asia Campus is a joint venture between the East Asia Institute of Management and QMU, Edinburgh — the product of a seven-year collaboration and the university's first offshore campus. It has a tennis and three basketball courts, a gymnasium, a fully-equipped library, 60 classrooms and state-of-the-art multimedia technology. Leased for a 15-year period, officials said it will cost an estimated $38 million in rent.
About 1,600 students, each paying an average of $10,000 a year in tuition fees, will begin classes in two months' time at the four-storey campus located at Ah Hood Road, off Balestier Road.
The 25 lecturers based at the new campus are tasked with boosting the number of graduates from about 400 to 1,500 in three years.
Although QMU offers several business management degrees in Singapore, hospitality and tourism management remain the most popular among students. With the new campus, the university is looking to introduce courses in banking and finance and heathcare management.
"This joint-venture is a manifestation of our shared vision to take our partnership further," said Professor Anthony P Cohen at the agreement signing yesterday.
He said while QMU collaborates with institutions in India, Saudi Arabia, Egypt, Greece and Switzerland, it chose to have its campus in Singapore because of the booming tourism industry, bilingual competency, and strategic location that allows it to reach out to other students in the region, particularly those from China. A bilingual English-Chinese curriculum will be designed for these students, with selected modules taught in Chinese.
Part-time student Darren Tan Wei Beng, 31, is excited about the new campus.
"I will feel like a real student because I can mix with more students on a campus we can call our own, which is three to five times as large as the current one," he said.
Future plans for the new campus include a QMU doctorate programme in Singapore and more student exchanges between the UK and the Republic.
More scholarships will also be offered to attract higher-quality students and a budget of $60 million will be set aside for this. - TODAY/sh
MTI Revises Economy Growth Forecast For 2008 To 4-6%
Source : Channel NewsAsia, 14 February 2008
Singapore's economy is expected to grow by 4 to 6 percent this year, down from the previous forecast of 4.5 to 6.5 percent.
The downward revision is the result of deteriorating external economic conditions and greater downside risks, said the Trade and Industry Ministry, in a report on Thursday morning.
According to the report, current conditions suggest that the US will likely enter a mild recession in the first half of 2008, but strong fundamentals, coupled with fiscal and monetary stimulus, will help support recovery in the second half.
If this happens, Singapore's economy will likely grow by close to 6 percent.
Related Video Link - http://tinyurl.com/2swgmz
But the government said a protracted slowdown in the US will hit external demand-oriented industries here, like wholesale electronics, and this may push growth to the lower end of the forecast range - at 4 percent.
Reacting to the downward revision of Singapore's economic growth, CEO and Chief Economist at CIMB-GK Research, Mr Song Seng Wun, said the data is within his expectations.
He said: "At this juncture, I still think that the high end of the forecast is achievable. Looking at the data in the fourth quarter, especially for the composite leading index, the fourth quarter managed to climb – I think 0.7 percent on a quarter-on-quarter basis. So that suggests that for the first quarter and probably the second quarter, we may see fairly decent growth."
Ravi Menon, Permanent Secretary, MTI, said: "What's important to remember is that in either scenarios, we're looking at slower growth this year, and slower growth should be viewed in the context of the trend growth that we've seen in the last four years. It represents a moderation to the economy's underlying potential rate of growth."
Singapore's economy in 2007 grew by 7.7 percent, a slower pace compared to 2006 when the economy grew 8.2 percent.
In the fourth quarter last year, the economy grew by 5.4 percent after a 9.5 percent growth in the previous quarter.
The star performer in Q4 was the construction sector which expanded by 24 percent. Another strong performer was the financial services sector which grew by 16 percent.
The manufacturing sector, however, saw a slowdown. It posted growth of 5.8 percent in 2007, slower than the 12 percent growth seen in the previous year.
The weakened growth was due to a 28 percent contraction in the biomedical manufacturing cluster as a result of plant maintenance shutdowns and changes in product mix.
Nonetheless, the government is not expecting Singapore to dip into recession.
Selena Ling, Treasury Economist, OCBC, said: "The key question really is – is the pharmaceutical (sector) going to see a quick rebound in the first quarter of this year and for the rest of this year? I think our take on that is that with the global slowdown, external demand for manufacturing will be affected aversely. We do not expect a very quick turnaround in manufacturing in the first quarter of this year."
But economists do expect consumers to tighten their purse strings because of higher inflation.
This year's government Budget is widely expected to contain measures to cushion the effects of inflation and the higher costs of living on the lower income group.
Halimah Yacob, Assistant Secretary-General, NTUC, said: "We cannot expect wage increases to be as good this year compared to last year, so the impact will be greater on them, the lower income group. Therefore, whatever proposals are being made in the Budget to help lower income workers will be greatly useful."
Despite slower growth and higher inflation, the government believes the moderation in economic growth will help ease some of the cost pressures on the supply side and in turn, dampen inflation. - CNA/so
Singapore's economy is expected to grow by 4 to 6 percent this year, down from the previous forecast of 4.5 to 6.5 percent.
The downward revision is the result of deteriorating external economic conditions and greater downside risks, said the Trade and Industry Ministry, in a report on Thursday morning. According to the report, current conditions suggest that the US will likely enter a mild recession in the first half of 2008, but strong fundamentals, coupled with fiscal and monetary stimulus, will help support recovery in the second half.
If this happens, Singapore's economy will likely grow by close to 6 percent.
Related Video Link - http://tinyurl.com/2swgmz
But the government said a protracted slowdown in the US will hit external demand-oriented industries here, like wholesale electronics, and this may push growth to the lower end of the forecast range - at 4 percent.
Reacting to the downward revision of Singapore's economic growth, CEO and Chief Economist at CIMB-GK Research, Mr Song Seng Wun, said the data is within his expectations.
He said: "At this juncture, I still think that the high end of the forecast is achievable. Looking at the data in the fourth quarter, especially for the composite leading index, the fourth quarter managed to climb – I think 0.7 percent on a quarter-on-quarter basis. So that suggests that for the first quarter and probably the second quarter, we may see fairly decent growth."
Ravi Menon, Permanent Secretary, MTI, said: "What's important to remember is that in either scenarios, we're looking at slower growth this year, and slower growth should be viewed in the context of the trend growth that we've seen in the last four years. It represents a moderation to the economy's underlying potential rate of growth."
Singapore's economy in 2007 grew by 7.7 percent, a slower pace compared to 2006 when the economy grew 8.2 percent.
In the fourth quarter last year, the economy grew by 5.4 percent after a 9.5 percent growth in the previous quarter.
The star performer in Q4 was the construction sector which expanded by 24 percent. Another strong performer was the financial services sector which grew by 16 percent.
The manufacturing sector, however, saw a slowdown. It posted growth of 5.8 percent in 2007, slower than the 12 percent growth seen in the previous year.
The weakened growth was due to a 28 percent contraction in the biomedical manufacturing cluster as a result of plant maintenance shutdowns and changes in product mix.
Nonetheless, the government is not expecting Singapore to dip into recession.
Selena Ling, Treasury Economist, OCBC, said: "The key question really is – is the pharmaceutical (sector) going to see a quick rebound in the first quarter of this year and for the rest of this year? I think our take on that is that with the global slowdown, external demand for manufacturing will be affected aversely. We do not expect a very quick turnaround in manufacturing in the first quarter of this year."
But economists do expect consumers to tighten their purse strings because of higher inflation.
This year's government Budget is widely expected to contain measures to cushion the effects of inflation and the higher costs of living on the lower income group.
Halimah Yacob, Assistant Secretary-General, NTUC, said: "We cannot expect wage increases to be as good this year compared to last year, so the impact will be greater on them, the lower income group. Therefore, whatever proposals are being made in the Budget to help lower income workers will be greatly useful."
Despite slower growth and higher inflation, the government believes the moderation in economic growth will help ease some of the cost pressures on the supply side and in turn, dampen inflation. - CNA/so
GIC RE Takes 40% Stake In Finnish Mall
Source : The Business Times, 14 February 2008
Deal worth 131.6m euros; partner Citycon Oyj to manage project
GIC Real Estate, the property investment arm of the Government of Singapore Investment Corporation, has partnered Finnish retail property investment company Citycon Oyj to acquire a 40 per cent stake in a Helsinki mall called Iso Omena for 131.6 million euros (S$271.7 million).
In a statement yesterday, GIC RE said Citycon will hold 60 per cent of Iso Omena upon completion of the deal.
Citycon - which owns 22 shopping centres in Finland, eight in Sweden and three in other Nordic Countries - will be responsible for the business and management of Iso Omena.
The centre is Finland’s fifth largest and has a wealthy catchment area, GIC RE said. Its total net lettable area is 61,300 sq m, of which 49,000 sq m is retail space.
Citycon acquired Iso Omena from funds managed by private equity firm Doughty Hanson for 329 million euros in September 2007.
According to a statement released by Citycon then, the shopping centre’s net yield on the purchase price was 4.5 per cent. Citycon said that after redevelopment and other improvements, it estimated the net yield would increase. Iso Omena has planning permission for an extension of some 7,000 sq m.
Citycon CEO Petri Olkinuora said of the GIC RE deal: ‘With this agreement we will release capital for the redevelopment of our property portfolio in accordance with our strategy. This business concept may also become part of our strategy and source of capital.’
This is the third property deal that GIC RE has announced this year. Last week it entered into a joint venture to take a S$416.1 million stake in Roma Est Shopping Centre in Italy with with ING Real Estate. It also said it will develop a township on a site in Russia with a market value of US$1.33 billion.
Also last week, it was reported that GIC plans to acquire The Westin Tokyo for about S$1.02 billion.
Deal worth 131.6m euros; partner Citycon Oyj to manage project
GIC Real Estate, the property investment arm of the Government of Singapore Investment Corporation, has partnered Finnish retail property investment company Citycon Oyj to acquire a 40 per cent stake in a Helsinki mall called Iso Omena for 131.6 million euros (S$271.7 million).
In a statement yesterday, GIC RE said Citycon will hold 60 per cent of Iso Omena upon completion of the deal.Citycon - which owns 22 shopping centres in Finland, eight in Sweden and three in other Nordic Countries - will be responsible for the business and management of Iso Omena.
The centre is Finland’s fifth largest and has a wealthy catchment area, GIC RE said. Its total net lettable area is 61,300 sq m, of which 49,000 sq m is retail space.
Citycon acquired Iso Omena from funds managed by private equity firm Doughty Hanson for 329 million euros in September 2007.
According to a statement released by Citycon then, the shopping centre’s net yield on the purchase price was 4.5 per cent. Citycon said that after redevelopment and other improvements, it estimated the net yield would increase. Iso Omena has planning permission for an extension of some 7,000 sq m.
Citycon CEO Petri Olkinuora said of the GIC RE deal: ‘With this agreement we will release capital for the redevelopment of our property portfolio in accordance with our strategy. This business concept may also become part of our strategy and source of capital.’
This is the third property deal that GIC RE has announced this year. Last week it entered into a joint venture to take a S$416.1 million stake in Roma Est Shopping Centre in Italy with with ING Real Estate. It also said it will develop a township on a site in Russia with a market value of US$1.33 billion.
Also last week, it was reported that GIC plans to acquire The Westin Tokyo for about S$1.02 billion.
Adopt Fairer Income Criterion For HDB Grant
Source : The Straits Times, Feb 14, 2008
I WOULD like to highlight an inconsistency in the application of the definition of ‘income’ in the HDB housing grant for resale flats and HDB loan eligibility (HLE) guidelines.
I received preliminary approval from HDB for the HLE and housing grant in December - expiring on March 23. Last month, there was a change in my fiance’s monthly salary as his annual fixed bonus was incorporated in his monthly salary. This inadvertently raised his monthly salary, though his annual salary remained the same as when HDB approved our application for the grant and HLE.
As the HLE letter said HDB reserves the right to revoke the grant and loan if there are changes to salaries between approval date and validity date in the letter, we wrote to HDB to seek clarification.
This month, HDB told us it would be revoking our grant and HLE, due to the change in eligible income since application. We appealed as the increase was due to the incorporation of fixed bonus in monthly salary and not a merit increment. Moreover, the HDB website says bonuses are not considered assessable income.
I seek clarification from HDB on the inconsistency between the application of the definition on its website and our situation.
I would also like to highlight to the authorities that monthly income is not a good gauge of total compensation, as there are variations in all organisations. Some with lower monthly salaries may have a larger fixed bonus, some as high as three months. To compare an employee who earns a higher monthly salary but with no fixed bonus to one who earns a lower monthly salary but a high fixed bonus is not equitable or fair.
A more equitable approach is to consider the total fixed cash component, which includes all allowances and fixed bonuses on an annual basis.
For example, if employee A earns $8,500 a month (which exceeds the total family income cap of $8,000) but has no fixed bonus, his annual income is $8,500 x 12 = $102,000.
If employee B earns $8,000 a month (within the family income cap of $8,000) but has a fixed bonus of 2.5 months, his annual income is $8,000 x 14.5 = $116,000, which is 14 per cent higher than employee A who exceeded the income cap imposed by HDB.
Li Shan (Ms)
I WOULD like to highlight an inconsistency in the application of the definition of ‘income’ in the HDB housing grant for resale flats and HDB loan eligibility (HLE) guidelines.
I received preliminary approval from HDB for the HLE and housing grant in December - expiring on March 23. Last month, there was a change in my fiance’s monthly salary as his annual fixed bonus was incorporated in his monthly salary. This inadvertently raised his monthly salary, though his annual salary remained the same as when HDB approved our application for the grant and HLE.
As the HLE letter said HDB reserves the right to revoke the grant and loan if there are changes to salaries between approval date and validity date in the letter, we wrote to HDB to seek clarification.
This month, HDB told us it would be revoking our grant and HLE, due to the change in eligible income since application. We appealed as the increase was due to the incorporation of fixed bonus in monthly salary and not a merit increment. Moreover, the HDB website says bonuses are not considered assessable income.
I seek clarification from HDB on the inconsistency between the application of the definition on its website and our situation.
I would also like to highlight to the authorities that monthly income is not a good gauge of total compensation, as there are variations in all organisations. Some with lower monthly salaries may have a larger fixed bonus, some as high as three months. To compare an employee who earns a higher monthly salary but with no fixed bonus to one who earns a lower monthly salary but a high fixed bonus is not equitable or fair.
A more equitable approach is to consider the total fixed cash component, which includes all allowances and fixed bonuses on an annual basis.
For example, if employee A earns $8,500 a month (which exceeds the total family income cap of $8,000) but has no fixed bonus, his annual income is $8,500 x 12 = $102,000.
If employee B earns $8,000 a month (within the family income cap of $8,000) but has a fixed bonus of 2.5 months, his annual income is $8,000 x 14.5 = $116,000, which is 14 per cent higher than employee A who exceeded the income cap imposed by HDB.
Li Shan (Ms)
China Square Food Centre To Be Converted Into Office Space
Source : The Straits Times, Feb 14, 2008
THE three-storey China Square Food Centre in Telok Ayer Street is set to undergo a $10 million transformation into an office block.
Singapore’s office supply is so tight that one businessman has already expressed interest in renting all the office space there. If he does, he will get naming rights for the building.
The property’s owner, Wah Khiaw Developments, a property developer, aims to capitalise on the strong office rental market.
Prime office rents in Singapore have risen significantly in the past two years amid tight supply.
While a few smaller new office buildings will be ready to hit the market this year and next year, the supply crunch will ease only in 2010. That is when a large injection of Grade A office supply at the huge Marina Bay Financial Centre will be ready.
Wah Khiaw is moving quickly to get the building fitted out for offices. It has already obtained provisional permission to convert the popular food centre for retail and office use.
Renovation works will be carried out over about six months from April and the office building will be ready in the fourth quarter of the year.
It will boast a leasable area of about 11,000 sq ft of food and beverage outlets and a banking hall on the ground floor, about 38,000 sq ft of office space on the second and third floors, and carpark lots in the basement.
Sole marketing agent Knight Frank said the sizes of the food outlets and banking hall range from just 150 sq ft to 2,600 sq ft. Each floor of the building will typically have about 18,700 sq ft of space.
The developer is now in talks with two parties, one of which is keen to take up all the office space, said Knight Frank’s deputy managing director, Mr Danny Yeo.
Wah Khiaw is hoping for rents of $16 per sq ft, similar to those charged by some office buildings in the Central Business District. It has been planning for the change for months, but it had to wait for all the food stalls’ leases to expire next month, Mr Yeo said.
About two-thirds of the 138 stalls in the air-conditioned building were sold by tender under 10-year leases. The rest were retained by Wah Khiaw for lease.
The China Square Food Centre, with a gross floor area of around 58,000 sq ft, has a 30-year tenure.
It was one of the first few plots sold by tender under the Government’s China Square Concept Plan. Wah Khiaw bought it for about $17 million in 1995.
THE three-storey China Square Food Centre in Telok Ayer Street is set to undergo a $10 million transformation into an office block.
Singapore’s office supply is so tight that one businessman has already expressed interest in renting all the office space there. If he does, he will get naming rights for the building.
The property’s owner, Wah Khiaw Developments, a property developer, aims to capitalise on the strong office rental market.Prime office rents in Singapore have risen significantly in the past two years amid tight supply.
While a few smaller new office buildings will be ready to hit the market this year and next year, the supply crunch will ease only in 2010. That is when a large injection of Grade A office supply at the huge Marina Bay Financial Centre will be ready.
Wah Khiaw is moving quickly to get the building fitted out for offices. It has already obtained provisional permission to convert the popular food centre for retail and office use.
Renovation works will be carried out over about six months from April and the office building will be ready in the fourth quarter of the year.
It will boast a leasable area of about 11,000 sq ft of food and beverage outlets and a banking hall on the ground floor, about 38,000 sq ft of office space on the second and third floors, and carpark lots in the basement.
Sole marketing agent Knight Frank said the sizes of the food outlets and banking hall range from just 150 sq ft to 2,600 sq ft. Each floor of the building will typically have about 18,700 sq ft of space.
The developer is now in talks with two parties, one of which is keen to take up all the office space, said Knight Frank’s deputy managing director, Mr Danny Yeo.
Wah Khiaw is hoping for rents of $16 per sq ft, similar to those charged by some office buildings in the Central Business District. It has been planning for the change for months, but it had to wait for all the food stalls’ leases to expire next month, Mr Yeo said.
About two-thirds of the 138 stalls in the air-conditioned building were sold by tender under 10-year leases. The rest were retained by Wah Khiaw for lease.
The China Square Food Centre, with a gross floor area of around 58,000 sq ft, has a 30-year tenure.
It was one of the first few plots sold by tender under the Government’s China Square Concept Plan. Wah Khiaw bought it for about $17 million in 1995.
S$150m Bid For DRB-Hicom Mall
Source : The Business Times, 14 February, 2008
But management is unlikely to sell the mall, in S’pore’s Little India area, anytime soon
Malaysia’s largest integrated automotive concern, DRB-Hicom Bhd, has received a S$150 million offer for a shopping mall it owns in Singapore’s Little India area, Malaysia’s Business Times reported, citing people familiar with the matter.
The offer is some 50 per cent more than what the company received in 2006. However, it is unlikely to sway the management team to sell the Singapore asset anytime soon.
‘There won’t be a fire sale of assets. Instead, there are plans to make additional investment into the asset before a transparent sale can be considered,’ said a person representing a shareholder of the company, speaking on condition of anonymity.
It is believed that DRB-Hicom intends to pump in between RM10 million and RM20 million (S$4.37 million and S$8.74 million) to refurbish and rebrand the six-storey Tekka Mall, which sits on 6,332 sq m of commercial land between Serangoon and Sungei Road.
DRB-Hicom bought the land a year before the Asian financial crisis and started developing it 2002. It is estimated that its cost of investment, including the land, is about S$188 million.
Tekka Mall (the automotive group’s first property venture abroad), alongside Raba Nyrt (Hungary’s only publicly traded vehicle parts maker), is among assets deemed as non-core. They have been earmarked for sale to raise about RM500 million in fresh capital.
DRB-Hicom, under the stewardship of managing director Mohd Khamil Jamil, has been doing a juggling act of selling assets and buying new ones. This is aimed at reducing debts and adding more urgency to the group’s focus.
Although a mainstay in the automotive sector, DRB-Hicom has sizeable interest in property development, defence and services.
It also has interest in the plantation business via its ownership of the fully matured Connemara Estate, which sits on 6.26 million sq m of land in Ulu Langat, Selangor.
The estate land could be converted for property development. But for now, DRB-Hicom is content to reap dividends from firm palm oil prices.
Mr Mohd Khamil declined to speak on specifics, but told the Malaysian business paper that the management team’s efforts thus far had been helped by the free hand given by major stakeholders of the company.
The major shareholders are tycoon Syed Mokhtar Al-Bukhary (15.4 per cent), the Employees Provident Fund (17.48 per cent) and Khazanah Nasional Bhd, the government-owned investment arm (10.33 per cent).
Since his appointment to the job in February 2006, Mr Mohd Khamil’s team has shaved off almost RM505 million of the group’s debts by getting rid of non-core businesses and improving operational and financial efficiency to strengthen the group’s balance sheet.
To date, DRB-Hicom has outlined plans on the sale of its stake in EON Capital Bhd and Uni.Asia Capital Sdn Bhd, which will raise about RM2 billion cash.
As at March 31, 2007, DRB-Hicom had debts of about RM2.2 billion. Interest on the debts for the year under review stood at RM143.69 million, or about 94 per cent of its net profit of RM156.53 million.
But management is unlikely to sell the mall, in S’pore’s Little India area, anytime soon
Malaysia’s largest integrated automotive concern, DRB-Hicom Bhd, has received a S$150 million offer for a shopping mall it owns in Singapore’s Little India area, Malaysia’s Business Times reported, citing people familiar with the matter.
The offer is some 50 per cent more than what the company received in 2006. However, it is unlikely to sway the management team to sell the Singapore asset anytime soon.
‘There won’t be a fire sale of assets. Instead, there are plans to make additional investment into the asset before a transparent sale can be considered,’ said a person representing a shareholder of the company, speaking on condition of anonymity.
It is believed that DRB-Hicom intends to pump in between RM10 million and RM20 million (S$4.37 million and S$8.74 million) to refurbish and rebrand the six-storey Tekka Mall, which sits on 6,332 sq m of commercial land between Serangoon and Sungei Road.
DRB-Hicom bought the land a year before the Asian financial crisis and started developing it 2002. It is estimated that its cost of investment, including the land, is about S$188 million.
Tekka Mall (the automotive group’s first property venture abroad), alongside Raba Nyrt (Hungary’s only publicly traded vehicle parts maker), is among assets deemed as non-core. They have been earmarked for sale to raise about RM500 million in fresh capital.
DRB-Hicom, under the stewardship of managing director Mohd Khamil Jamil, has been doing a juggling act of selling assets and buying new ones. This is aimed at reducing debts and adding more urgency to the group’s focus.
Although a mainstay in the automotive sector, DRB-Hicom has sizeable interest in property development, defence and services.
It also has interest in the plantation business via its ownership of the fully matured Connemara Estate, which sits on 6.26 million sq m of land in Ulu Langat, Selangor.
The estate land could be converted for property development. But for now, DRB-Hicom is content to reap dividends from firm palm oil prices.
Mr Mohd Khamil declined to speak on specifics, but told the Malaysian business paper that the management team’s efforts thus far had been helped by the free hand given by major stakeholders of the company.
The major shareholders are tycoon Syed Mokhtar Al-Bukhary (15.4 per cent), the Employees Provident Fund (17.48 per cent) and Khazanah Nasional Bhd, the government-owned investment arm (10.33 per cent).
Since his appointment to the job in February 2006, Mr Mohd Khamil’s team has shaved off almost RM505 million of the group’s debts by getting rid of non-core businesses and improving operational and financial efficiency to strengthen the group’s balance sheet.
To date, DRB-Hicom has outlined plans on the sale of its stake in EON Capital Bhd and Uni.Asia Capital Sdn Bhd, which will raise about RM2 billion cash.
As at March 31, 2007, DRB-Hicom had debts of about RM2.2 billion. Interest on the debts for the year under review stood at RM143.69 million, or about 94 per cent of its net profit of RM156.53 million.
中国广场美食中心 将重新发展成办公楼
《联合早报》Feb 14, 2008
本地中央商业区办公楼单位短缺，拥有十年历史的中国广场美食中心(China Square Food Centre)也即将摇身一变，重新发展成办公楼。
位于直落亚逸街51号，占地近2万3681平方英尺的中国广场美食中心，在1998年5月份开幕时，号称是新加坡最大的饮食中心。这个耗资4000万元建造的冷气美食中心，拥有约100个各式各样的熟食摊位、咖啡座及餐馆。
业主华侨发展私人有限公司最近获得市区重建局的批准，将现有的三层楼美食中心的建筑，转而发展成零售和办公楼用途。
拟重新发展的建筑，将采用半透明的玻璃，执照视觉上的深度和图案，打造摩登的外型。（设计图）
重新发展后将改名
除了内部改头换面，外观也将焕然一新。建筑将采用各种半透明的玻璃，制造视觉上的深度和效果，并营造摩登的外型。翻新费估计是1000万元左右，重新发展需要大约半年，因此工程估计会在今年第四季竣工。建筑在重新发展后将改名，而租下大多数楼面的公司，也有权为建筑重新命名。
负责新设计的本地公司e9ap设计师刘竹君指出，虽然外观和里头的布局会改变，但基本架构维持不变，以减低建筑成本。
现有的美食中心，除了顶层出租给同乐集团经营中国茶楼外，其余几层都是美食摊位。在美食中心刚开幕时，同乐集团在那里经营的是以前中共领导人毛泽东为主题的毛家餐厅。
据了解，地点优越的美食中心，在周日午餐时间，吸引了不少附近的上班族光顾，但到了晚餐时间和周末，位于中央商业区内的美食中心就显得相当冷清，开门营业的摊位也很少。
据悉，业主是鉴于商业区办公楼优质单位短缺，而打算将整栋建筑，发展成三层楼高的甲级商用建筑，地面层可作为银行大厅和饮食店。办公楼的楼面面积约为3万8000平方英尺，地面层的可租用楼面则介于150至2600平方英尺。业主也会把目前的地底层美食摊位楼面，改建成地底停车场。
负责行销及为项目“转型”的是房地产咨询顾问公司莱坊（Knight Frank）。
莱坊副董事经理杨应清说，美食中心已经营了十年，现在是为建筑进行翻新和变身，来迎合市场需求的时候了。美食中心尚有空置摊位，现有摊位目前还在营业，摊主会在今年3月份迁出。
杨应清指出，在十年前，业主将大约60％的摊位，以十年为期限，售卖给摊主。售卖协议在3月份全部到期。若将熟食摊位和办公楼的租金做一比较，办公楼提供了更好的租金回报率。他也透露，办公楼单位的每月租金要价是每平方英尺16元左右。
本地办公楼租金在去年全年飙升了56.1％。由于中央商业区地段的办公楼短缺，根据高纬物业(Cushman & Wakefield)的调查，莱佛士坊的黄金地段平均租金，在2007年11月份上涨了4.5％，达到每平方英尺16.30元。
在上个月初，嘉康产业信托管理也宣布，打算把靠近莱佛士坊地铁站的马吉街（Market Street）停车场，重新发展成优质甲级办公楼。
距离莱佛士坊地铁站大约5分钟步行路程的中国广场美食中心，属于中国广场发展蓝图中的一部分，是中国广场七个发展地段中最早竣工的一个。其他地段分别发展为办公大楼、保留店屋及多层停车场。
拟议中的新混合发展项目，将为具有历史的街道，增添现代色彩。建筑也将装置LED灯光装置，为夜晚营造特别效果。
本地中央商业区办公楼单位短缺，拥有十年历史的中国广场美食中心(China Square Food Centre)也即将摇身一变，重新发展成办公楼。
位于直落亚逸街51号，占地近2万3681平方英尺的中国广场美食中心，在1998年5月份开幕时，号称是新加坡最大的饮食中心。这个耗资4000万元建造的冷气美食中心，拥有约100个各式各样的熟食摊位、咖啡座及餐馆。
业主华侨发展私人有限公司最近获得市区重建局的批准，将现有的三层楼美食中心的建筑，转而发展成零售和办公楼用途。
拟重新发展的建筑，将采用半透明的玻璃，执照视觉上的深度和图案，打造摩登的外型。（设计图）重新发展后将改名
除了内部改头换面，外观也将焕然一新。建筑将采用各种半透明的玻璃，制造视觉上的深度和效果，并营造摩登的外型。翻新费估计是1000万元左右，重新发展需要大约半年，因此工程估计会在今年第四季竣工。建筑在重新发展后将改名，而租下大多数楼面的公司，也有权为建筑重新命名。
负责新设计的本地公司e9ap设计师刘竹君指出，虽然外观和里头的布局会改变，但基本架构维持不变，以减低建筑成本。
现有的美食中心，除了顶层出租给同乐集团经营中国茶楼外，其余几层都是美食摊位。在美食中心刚开幕时，同乐集团在那里经营的是以前中共领导人毛泽东为主题的毛家餐厅。
据了解，地点优越的美食中心，在周日午餐时间，吸引了不少附近的上班族光顾，但到了晚餐时间和周末，位于中央商业区内的美食中心就显得相当冷清，开门营业的摊位也很少。
据悉，业主是鉴于商业区办公楼优质单位短缺，而打算将整栋建筑，发展成三层楼高的甲级商用建筑，地面层可作为银行大厅和饮食店。办公楼的楼面面积约为3万8000平方英尺，地面层的可租用楼面则介于150至2600平方英尺。业主也会把目前的地底层美食摊位楼面，改建成地底停车场。
负责行销及为项目“转型”的是房地产咨询顾问公司莱坊（Knight Frank）。
莱坊副董事经理杨应清说，美食中心已经营了十年，现在是为建筑进行翻新和变身，来迎合市场需求的时候了。美食中心尚有空置摊位，现有摊位目前还在营业，摊主会在今年3月份迁出。
杨应清指出，在十年前，业主将大约60％的摊位，以十年为期限，售卖给摊主。售卖协议在3月份全部到期。若将熟食摊位和办公楼的租金做一比较，办公楼提供了更好的租金回报率。他也透露，办公楼单位的每月租金要价是每平方英尺16元左右。
本地办公楼租金在去年全年飙升了56.1％。由于中央商业区地段的办公楼短缺，根据高纬物业(Cushman & Wakefield)的调查，莱佛士坊的黄金地段平均租金，在2007年11月份上涨了4.5％，达到每平方英尺16.30元。
在上个月初，嘉康产业信托管理也宣布，打算把靠近莱佛士坊地铁站的马吉街（Market Street）停车场，重新发展成优质甲级办公楼。
距离莱佛士坊地铁站大约5分钟步行路程的中国广场美食中心，属于中国广场发展蓝图中的一部分，是中国广场七个发展地段中最早竣工的一个。其他地段分别发展为办公大楼、保留店屋及多层停车场。
拟议中的新混合发展项目，将为具有历史的街道，增添现代色彩。建筑也将装置LED灯光装置，为夜晚营造特别效果。
Will We Be Dragged Along
Source : TODAY, Tuesday, February 12, 2008
US economy headed for downhill ride
WHEN I was just a boy, my mother told me: 'Son, you will never know hard times if you don't live through them. I hope you never have to.'
WHEN I was just a boy, my mother told me: 'Son, you will never know hard times if you don't live through them. I hope you never have to.'
She told me about her life on the farm during the great US depression in the 1930s.
Mum was only 10 but she remembered my grandfather going out for breakfast each morning.
Where did he dine?
He went to the chicken coup and took one egg from beneath a chicken. He would crack it open, tilt back his head, drop the egg in his mouth and swallow it. That was breakfast.
Why not cook the egg?
Mum told me that he wanted to save a few cents by not using cooking oil and gas.
At the depths of the depression in 1933, the unemployment hit 25 per cent.
Could things get that bad again?
10 GOOD YEARS
Well, the US enjoyed 10 years of prosperity without a downturn by the end of the 1990s.
So, economists were feeling rather cocky and declared depressions were under control.
Now, their finely-tuned monetary and fiscal policies would also prevent recessions.
Then in 2000, the dotcom bubble burst and reality set it. From March 2000 to October 2002, the high-tech US Nasdaq stock index dropped a whopping 78 per cent.
By 2001, America's problems had spread to a worldwide recession. Singapore was hit too.
Now, in 2008, the US economy is floundering again. The odds of a US recession increase weekly.
Will we be hit? Probably.
Not only do we depend on US sales, our export partners do too. We take a double whammy when US demand declines. That makes a US recession a concern to us.
Incredibly, it was only four months ago that the Straits Times Index hit its all-time high of 3,876. Today, it is 25 per cent lower.
Much has changed. The US engine that drives the world's economies is sputtering. Possibilities for repair are uncertain since this downturn is unique.
For one thing, bank credit has dried up for all but the most credit-worthy borrowers. If a project smells risky, it won't get a loan.
For sure, the new air of caution will slow spending, but by how much? A depression is a long shot. Next week, I will tell you how it could happen.
In the meantime, be afraid. Not very afraid. But be afraid.
US RECESSION
1958
1960
None
1970
1974
1980
1982
None
1990
None
2001
S'PORE RECESSION
None
None
1964
None
None
None
None
1985
None
1998
2001
Sources: Singapore Department of Statistics and National Bureau of Economic Research (US).
--------------------------------------------------------------------------------
TALK LIKE AN ECONOMIST
LEARN these terms and you'll be on your way to becoming an economist. It is a fun and easy profession.
Recession: Six months of no growth in the economy.
Depression: Worse than a recession. No one has ever defined it precisely.
Monetary policy: Lowering interest rates.
Fiscal policy: Government spending and tax cuts.
Unemployment rate: Number of people 15 years old and above who are not employed but are looking for a job divided by the number of unemployed plus employed people.
Asian financial crisis: The sudden decline in Asian currencies and economies, triggered by Thailand devaluing its baht on 2 July 1997. It had no choice as it lacked the foreign currency reserves to defend the baht from speculative selling.
Foreign currency reserves: A central bank's holdings mostly of US dollars but also euros, yen and gold.
It guarantees the strength and stability of a currency.
US economy headed for downhill ride
WHEN I was just a boy, my mother told me: 'Son, you will never know hard times if you don't live through them. I hope you never have to.'
WHEN I was just a boy, my mother told me: 'Son, you will never know hard times if you don't live through them. I hope you never have to.'
She told me about her life on the farm during the great US depression in the 1930s.
Mum was only 10 but she remembered my grandfather going out for breakfast each morning.
Where did he dine?
He went to the chicken coup and took one egg from beneath a chicken. He would crack it open, tilt back his head, drop the egg in his mouth and swallow it. That was breakfast.
Why not cook the egg?
Mum told me that he wanted to save a few cents by not using cooking oil and gas.
At the depths of the depression in 1933, the unemployment hit 25 per cent.
Could things get that bad again?
10 GOOD YEARS
Well, the US enjoyed 10 years of prosperity without a downturn by the end of the 1990s.
So, economists were feeling rather cocky and declared depressions were under control.
Now, their finely-tuned monetary and fiscal policies would also prevent recessions.
Then in 2000, the dotcom bubble burst and reality set it. From March 2000 to October 2002, the high-tech US Nasdaq stock index dropped a whopping 78 per cent.
By 2001, America's problems had spread to a worldwide recession. Singapore was hit too.
Now, in 2008, the US economy is floundering again. The odds of a US recession increase weekly.
Will we be hit? Probably.
Not only do we depend on US sales, our export partners do too. We take a double whammy when US demand declines. That makes a US recession a concern to us.
Incredibly, it was only four months ago that the Straits Times Index hit its all-time high of 3,876. Today, it is 25 per cent lower.
Much has changed. The US engine that drives the world's economies is sputtering. Possibilities for repair are uncertain since this downturn is unique.
For one thing, bank credit has dried up for all but the most credit-worthy borrowers. If a project smells risky, it won't get a loan.
For sure, the new air of caution will slow spending, but by how much? A depression is a long shot. Next week, I will tell you how it could happen.
In the meantime, be afraid. Not very afraid. But be afraid.
US RECESSION
1958
1960
None
1970
1974
1980
1982
None
1990
None
2001
S'PORE RECESSION
None
None
1964
None
None
None
None
1985
None
1998
2001
Sources: Singapore Department of Statistics and National Bureau of Economic Research (US).
--------------------------------------------------------------------------------
TALK LIKE AN ECONOMIST
LEARN these terms and you'll be on your way to becoming an economist. It is a fun and easy profession.
Recession: Six months of no growth in the economy.
Depression: Worse than a recession. No one has ever defined it precisely.
Monetary policy: Lowering interest rates.
Fiscal policy: Government spending and tax cuts.
Unemployment rate: Number of people 15 years old and above who are not employed but are looking for a job divided by the number of unemployed plus employed people.
Asian financial crisis: The sudden decline in Asian currencies and economies, triggered by Thailand devaluing its baht on 2 July 1997. It had no choice as it lacked the foreign currency reserves to defend the baht from speculative selling.
Foreign currency reserves: A central bank's holdings mostly of US dollars but also euros, yen and gold.
It guarantees the strength and stability of a currency.
StanChart Unveils $206m Changi Office
Source : TODAY, Wednesday, February 13, 2008
Underscoring their confidence in the region’s prospects, Standard Chartered Bank yesterday announced a $206-million build-to-suit office building at the Changi Business Park, bringing its total investments for business expansion to more than $1 billion.
“We are very bullish on Singapore. And (it) is becoming increasingly important as a regional hub for training, finance and tourism serving the rest of Asia,” said StanChart chief executive Lim Cheng Teck.
The 225,000-sq-feet campus-style facility will house the bank’s non-customer facing operations such as IT, trade processing and business continuity management and is expected to be ready by 2010.
Together with the bank’s $800-million rental deal for the Marina Bay Financial Centre last year, in which the bank snapped up 24 floors of prime office property in downtown Marina, the two properties will accommodate a projected headcount of more than 6,000 - a sizeable increase from the current 4,700 - in 2010.
Much of the group’s regional or global functions are being managed out of Singapore and growing at a significant pace, Mr Lim said.
Except for its flagship branch at 6 Battery Road, StanChart will also consolidate its operations - currently housed in five other locations - in Marina and Changi, he added.
Underscoring their confidence in the region’s prospects, Standard Chartered Bank yesterday announced a $206-million build-to-suit office building at the Changi Business Park, bringing its total investments for business expansion to more than $1 billion.
“We are very bullish on Singapore. And (it) is becoming increasingly important as a regional hub for training, finance and tourism serving the rest of Asia,” said StanChart chief executive Lim Cheng Teck.
The 225,000-sq-feet campus-style facility will house the bank’s non-customer facing operations such as IT, trade processing and business continuity management and is expected to be ready by 2010.
Together with the bank’s $800-million rental deal for the Marina Bay Financial Centre last year, in which the bank snapped up 24 floors of prime office property in downtown Marina, the two properties will accommodate a projected headcount of more than 6,000 - a sizeable increase from the current 4,700 - in 2010.
Much of the group’s regional or global functions are being managed out of Singapore and growing at a significant pace, Mr Lim said.
Except for its flagship branch at 6 Battery Road, StanChart will also consolidate its operations - currently housed in five other locations - in Marina and Changi, he added.
Stanchart Leases Changi Office At $206m
Source : The Straits Times, Feb 13, 2008
STANDARD Chartered Bank (Stanchart) has signed a $206 million deal to lease a customised building at Changi Business Park to house its backroom operations from 2010.
The deal, involving a 15-year lease, puts Stanchart’s total spending on relocation and consolidation projects over the next 10 to 12 years at over $1 billion.
The six-storey building will have 225,000 sq ft to house up to 2,000 backroom staff. As the bank’s business grows, it could add a second and third phase to increase its space there to 700,000 sq ft.
This move to an industrial location - after it leased 24 floors at the yet-to-be completed Marina Bay Financial Centre (MBFC) last April - is to accommodate the bank’s mid- to long-term expansion.
‘The two properties will accommodate a projected increase in headcount from about 4,700 to over 6,000 by 2010,’ said Stanchart chief executive Lim Cheng Teck.
These leasing deals allow the bank to lock in a significant chunk of future costs, giving it the opportunity to grow at a much faster pace, he said. ‘There will always be cyclical challenges. We are very bullish on Singapore, which is why we are investing ahead.’
When Stanchart moves to the new premises, it will vacate all its current office premises, except its 6 Battery Road location, where it has a 30-year lease of the 10th floor due to expire in 2020.
The MBFC premises will be Stanchart’s main business centre.
Mr Lim said the bank’s business has performed strongly on the back of robust economic growth in Singapore and the region.
‘We will build on the momentum to capture in-country and regional opportunities.’
The Changi Business Park building will be built by Ascendas. Stanchart will lease it for 15 years from late 2010, with a review every five years and an option to lease it for another 15 years.
STANDARD Chartered Bank (Stanchart) has signed a $206 million deal to lease a customised building at Changi Business Park to house its backroom operations from 2010.
The deal, involving a 15-year lease, puts Stanchart’s total spending on relocation and consolidation projects over the next 10 to 12 years at over $1 billion.
The six-storey building will have 225,000 sq ft to house up to 2,000 backroom staff. As the bank’s business grows, it could add a second and third phase to increase its space there to 700,000 sq ft.
This move to an industrial location - after it leased 24 floors at the yet-to-be completed Marina Bay Financial Centre (MBFC) last April - is to accommodate the bank’s mid- to long-term expansion.
‘The two properties will accommodate a projected increase in headcount from about 4,700 to over 6,000 by 2010,’ said Stanchart chief executive Lim Cheng Teck.
These leasing deals allow the bank to lock in a significant chunk of future costs, giving it the opportunity to grow at a much faster pace, he said. ‘There will always be cyclical challenges. We are very bullish on Singapore, which is why we are investing ahead.’
When Stanchart moves to the new premises, it will vacate all its current office premises, except its 6 Battery Road location, where it has a 30-year lease of the 10th floor due to expire in 2020.
The MBFC premises will be Stanchart’s main business centre.
Mr Lim said the bank’s business has performed strongly on the back of robust economic growth in Singapore and the region.
‘We will build on the momentum to capture in-country and regional opportunities.’
The Changi Business Park building will be built by Ascendas. Stanchart will lease it for 15 years from late 2010, with a review every five years and an option to lease it for another 15 years.
Relocation To New Offices To Cost Stanchart $1b
Source : The Business Times, February 13, 2008
Marina Bay Financial Centre and Changi Business Park to house 6,000 by 2010
STANDARD Chartered Bank (SCB) occupies over 500,000 sq ft of office space spread over six buildings in Singapore, but come 2010, some of this will be vacated when it moves into new office space at Marina Bay Financial Centre (MBFC) and a build-to-suit building at Changi Business Park (CBP).
Together, these new premises will cost Standard Chartered over $1 billion to relocate and consolidate its offices with MBFC costing around $800 million and the CBP premises costing $206 million.
SCB chief executive Lim Cheng Teck added: ‘The group, which manages many of its global businesses out of Singapore, is also growing at a significant pace.’
The two properties will accommodate a projected increase in headcount from 4,700 currently to over 6,000 by 2010. Two years ago, its headcount was just 2,600.
Saying that SCB is ‘concerned about rising costs,’ Mr Lim added that the CBP office can accommodate up to 2,000 non-frontline staff, and will provide cost-effective, campus-style space for functions that need not be in the city.
A key feature is a 30,000 sq ft Global Learning Centre which will provide development programmes for staff.
The six-storey CBP building will be developed by Ascendas Land. SCB will be the anchor tenant and has committed to take up 225,000 sq ft of the space in Phase One of the development and will lease the space from Ascendas for 15 years with an option to extend the lease by a further 10 years.
It also has the option to expand its space by 700,000 sq ft in Phase Two and Three.
SCB is the latest financial institution to move backroom operations to CBP.
Mr Lim also revealed that plans to build a CBP campus were wrapped up within two months.
Ascendas president and CEO Chong Siak Ching added that SCB ‘adds to our growing base of customers who are looking beyond the city centre and considering business parks as viable options for their support operations.’
Ascendas also added: ‘We are working on getting more projects in CBP specifically, and elsewhere in Singapore as well.’
SCB currently occupies about 10 floors at 6 Battery Road. Apart from this, its primary offices are at Plaza By the Park on Bras Basah Road and CPF Tampines Building. It also has offices at OUB Centre, UOB Plaza and Odeon Towers.
While it does not expect to move out of 6 Battery Road, it plans to move out of the non-primary buildings in phases as leases expire.
Marina Bay Financial Centre and Changi Business Park to house 6,000 by 2010
STANDARD Chartered Bank (SCB) occupies over 500,000 sq ft of office space spread over six buildings in Singapore, but come 2010, some of this will be vacated when it moves into new office space at Marina Bay Financial Centre (MBFC) and a build-to-suit building at Changi Business Park (CBP).
Together, these new premises will cost Standard Chartered over $1 billion to relocate and consolidate its offices with MBFC costing around $800 million and the CBP premises costing $206 million.SCB chief executive Lim Cheng Teck added: ‘The group, which manages many of its global businesses out of Singapore, is also growing at a significant pace.’
The two properties will accommodate a projected increase in headcount from 4,700 currently to over 6,000 by 2010. Two years ago, its headcount was just 2,600.
Saying that SCB is ‘concerned about rising costs,’ Mr Lim added that the CBP office can accommodate up to 2,000 non-frontline staff, and will provide cost-effective, campus-style space for functions that need not be in the city.
A key feature is a 30,000 sq ft Global Learning Centre which will provide development programmes for staff.
The six-storey CBP building will be developed by Ascendas Land. SCB will be the anchor tenant and has committed to take up 225,000 sq ft of the space in Phase One of the development and will lease the space from Ascendas for 15 years with an option to extend the lease by a further 10 years.
It also has the option to expand its space by 700,000 sq ft in Phase Two and Three.
SCB is the latest financial institution to move backroom operations to CBP.
Mr Lim also revealed that plans to build a CBP campus were wrapped up within two months.
Ascendas president and CEO Chong Siak Ching added that SCB ‘adds to our growing base of customers who are looking beyond the city centre and considering business parks as viable options for their support operations.’
Ascendas also added: ‘We are working on getting more projects in CBP specifically, and elsewhere in Singapore as well.’
SCB currently occupies about 10 floors at 6 Battery Road. Apart from this, its primary offices are at Plaza By the Park on Bras Basah Road and CPF Tampines Building. It also has offices at OUB Centre, UOB Plaza and Odeon Towers.
While it does not expect to move out of 6 Battery Road, it plans to move out of the non-primary buildings in phases as leases expire.
JTC’s Choice Of Reit Manager Raises Questions
Source : The Business Times, February 13, 2008
Mapletree is likely to engage a PR drive to dispel any notions of conflicts of interest in its stable.
JTC Corp has finally announced its selection of manager for a proposed real estate investment trust (Reit) that will hold some high-rise, ready-built properties that JTC is divesting.
However its statement, issued earlier this month, announcing the appointment of Temasek subsidiary Mapletree Investments to set up and manage the new Reit begs several questions.
What happened to JTC’s supposed earlier choice of Australia’s Goodman group, which had been widely reported in the Australian media as having clinched the job of the new Reit’s manager - a piece of market talk which JTC had never denied? What brought about a change in JTC’s mind in the preceding few weeks before it made its decision public?
Did adverse equity-market conditions make it difficult for Goodman to proceed with the proposed acquisition of the assets with a view to listing a Reit within a stipulated timeframe, believed to be end-2008?
JTC has said that Mapletree was chosen ‘after a rigorous selection process’ and that ‘all proposals were evaluated based on individual merit against an objective set of criteria’.
But some market watchers would like to have more details of the reasons that led a Singapore government agency to select a fully-owned Temasek unit for the job of Reit manager after receiving ‘quality submissions from a wide range of international and local players’.
There’s also another interesting set of questions being raised: Will Mapletree’s appointment as the JTC Reit manager create conflicts of interest within the Mapletree stable, given that the group has a range of interests involving similar asset classes?
Going forward, to what extent will the various Mapletree or Mapletree-managed entities compete for acquisitions?
Ahead of the initial public offer for the new Reit - planned for mid-2008, depending on market conditions - Mapletree’s management will no doubt be tackling these issues and making clear to the market exactly how the group is delineating its various interests.
Broadly, there are two areas with potential conflict of interest. The first is between the group’s listed logistics Reit, Mapletree Logistics Trust, and the new JTC Reit.
The second is between the privately held Mapletree Industrial Fund and the new Reit.
Let’s take a look at the first. Technically, MapletreeLog invests in logistics assets whereas the new JTC Reit will hold industrial properties like flatted factories and a few business park buildings. The lay investor can be forgiven for thinking these all belong to broadly the same asset class - industrial properties .
Perhaps, what Mapletree will do is to draw a thicker line between the two asset classes, for instance, warehouses for MapletreeLog, and non-warehouse properties for JTC Reit.
Of course, some properties come with a mix of both warehouse and factory space. In that case, Mapletree will probably state upfront its criteria on defining such assets, for the purpose of deciding which Reit they will go to. Perhaps the definition will based on the predominant use of the property . Hence, if say 50 per cent or more of a property ’s gross floor area (GFA) is for warehouse space, it will be classified as a warehouse property , and hence qualify for potential acquisition by MapletreeLog. But if half or more of a building’s GFA is for non-warehouse space, it can be considered for the new JTC Reit.
It will also be interesting to see how Mapletree handles the conflict between the new Reit and its existing private industrial fund. The latter currently holds about $300 million of industrial properties , not just in Singapore but also in Malaysia and China. It has the potential makings of a Pan-Asian industrial property fund. Like many private property funds these days, a natural exit for investors is to eventually float the fund as a Reit. Instead of floating this fund and having it compete with the JTC Reit, one option would be for Mapletree to roll the two into one. That is, the privately held Mapletree Industrial Fund and its assets could be folded into the new JTC Reit and the private fund’s investors be given units in the new JTC Reit in exchange. In other words, they become cornerstone investors in the JTC Reit.
Of course, this would require agreement of all parties, including JTC and the investors in the Mapletree Industrial Fund, on the pricing of assets and other issues. Because Mapletree had from the outset decided that its private industrial fund will hold only non-warehouse assets (to avoid conflict with the listed MapletreeLog), this will make it easier for Mapletree now to fold the private fund with the JTC Reit, in terms of clarity of asset class.
So moving forward, things could become clearer within the Mapletree portfolio. MapletreeLog will pursue warehouse buildings, while the new JTC Reit (or whatever it is eventually named), will hold non-warehouse properties .
Mapletree’s management will probably embark on a public and investor education programme to explain how it is delineating its various businesses to eliminate conflict of interest. Hopefully, it will be able to clear any misperceptions in the market.
Mapletree is likely to engage a PR drive to dispel any notions of conflicts of interest in its stable.
JTC Corp has finally announced its selection of manager for a proposed real estate investment trust (Reit) that will hold some high-rise, ready-built properties that JTC is divesting.
However its statement, issued earlier this month, announcing the appointment of Temasek subsidiary Mapletree Investments to set up and manage the new Reit begs several questions.What happened to JTC’s supposed earlier choice of Australia’s Goodman group, which had been widely reported in the Australian media as having clinched the job of the new Reit’s manager - a piece of market talk which JTC had never denied? What brought about a change in JTC’s mind in the preceding few weeks before it made its decision public?
Did adverse equity-market conditions make it difficult for Goodman to proceed with the proposed acquisition of the assets with a view to listing a Reit within a stipulated timeframe, believed to be end-2008?
JTC has said that Mapletree was chosen ‘after a rigorous selection process’ and that ‘all proposals were evaluated based on individual merit against an objective set of criteria’.
But some market watchers would like to have more details of the reasons that led a Singapore government agency to select a fully-owned Temasek unit for the job of Reit manager after receiving ‘quality submissions from a wide range of international and local players’.
There’s also another interesting set of questions being raised: Will Mapletree’s appointment as the JTC Reit manager create conflicts of interest within the Mapletree stable, given that the group has a range of interests involving similar asset classes?
Going forward, to what extent will the various Mapletree or Mapletree-managed entities compete for acquisitions?
Ahead of the initial public offer for the new Reit - planned for mid-2008, depending on market conditions - Mapletree’s management will no doubt be tackling these issues and making clear to the market exactly how the group is delineating its various interests.
Broadly, there are two areas with potential conflict of interest. The first is between the group’s listed logistics Reit, Mapletree Logistics Trust, and the new JTC Reit.
The second is between the privately held Mapletree Industrial Fund and the new Reit.
Let’s take a look at the first. Technically, MapletreeLog invests in logistics assets whereas the new JTC Reit will hold industrial properties like flatted factories and a few business park buildings. The lay investor can be forgiven for thinking these all belong to broadly the same asset class - industrial properties .
Perhaps, what Mapletree will do is to draw a thicker line between the two asset classes, for instance, warehouses for MapletreeLog, and non-warehouse properties for JTC Reit.
Of course, some properties come with a mix of both warehouse and factory space. In that case, Mapletree will probably state upfront its criteria on defining such assets, for the purpose of deciding which Reit they will go to. Perhaps the definition will based on the predominant use of the property . Hence, if say 50 per cent or more of a property ’s gross floor area (GFA) is for warehouse space, it will be classified as a warehouse property , and hence qualify for potential acquisition by MapletreeLog. But if half or more of a building’s GFA is for non-warehouse space, it can be considered for the new JTC Reit.
It will also be interesting to see how Mapletree handles the conflict between the new Reit and its existing private industrial fund. The latter currently holds about $300 million of industrial properties , not just in Singapore but also in Malaysia and China. It has the potential makings of a Pan-Asian industrial property fund. Like many private property funds these days, a natural exit for investors is to eventually float the fund as a Reit. Instead of floating this fund and having it compete with the JTC Reit, one option would be for Mapletree to roll the two into one. That is, the privately held Mapletree Industrial Fund and its assets could be folded into the new JTC Reit and the private fund’s investors be given units in the new JTC Reit in exchange. In other words, they become cornerstone investors in the JTC Reit.
Of course, this would require agreement of all parties, including JTC and the investors in the Mapletree Industrial Fund, on the pricing of assets and other issues. Because Mapletree had from the outset decided that its private industrial fund will hold only non-warehouse assets (to avoid conflict with the listed MapletreeLog), this will make it easier for Mapletree now to fold the private fund with the JTC Reit, in terms of clarity of asset class.
So moving forward, things could become clearer within the Mapletree portfolio. MapletreeLog will pursue warehouse buildings, while the new JTC Reit (or whatever it is eventually named), will hold non-warehouse properties .
Mapletree’s management will probably embark on a public and investor education programme to explain how it is delineating its various businesses to eliminate conflict of interest. Hopefully, it will be able to clear any misperceptions in the market.
S'pore Is World's Seventh Most Expensive Office Market
Source : The Straits Times, Feb 14, 2008
It jumps 10 spots in global ranking of occupancy costs by property consultancy
SINGAPORE has moved into the global top 10 most expensive office markets for the first time due to a severe office shortage.
A survey of office costs in 203 locations in 58 countries by global real estate consultancy Cushman & Wakefield saw the Republic jump 10 places to seventh spot.
This came after prime rents shot up by 78 per cent, on average, due to the tight supply.
The consultancy found that occupancy costs in Singapore - which include rents and other costs of running an office - hit an annual average of about US$130 per sq ft (psf).
Office rents, the largest component of occupancy costs, rose 40 per cent on average in the world's top 10 office locations, it said.
Office rental rises in Singapore were also led by strong demand from the banking and services sectors, said Cushman & Wakefield's annual Office Space Across The World report.
Worldwide, rents climbed by 14 per cent on average, compared with 10 per cent in 2006, it said.
London's West End - where rents rose 30 per cent last year - remains the most expensive office location in the world, followed by Hong Kong, then Tokyo. Mumbai, Moscow and Paris were next on the ranking.
Another fast-rising Asian centre, Ho Chi Minh City, is now at 17th spot, with occupancy costs at US$75.81 psf a year, ahead of Sydney, Seoul and Shanghai.
The strong performances in India and Vietnam helped the Asia-Pacific region to achieve the strongest regional growth, with rents up 23 per cent over the course of last year.
Of the 203 locations Cushman & Wakefield surveyed last year, 79 per cent showed rental growth.
Singapore registered the fifth-highest increase in office rents in the world. Istanbul's Levent district registered a 95 per cent rise in office rents, which was the highest annual growth in all locations.
'Last year saw the fastest level of growth in office occupancy costs in many of the world's top locations since the turn of the property cycle in 2001, with the strongest demand coming from the financial sector,' said the firm's head of business space research and consultancy, Ms Elaine Rossall.
'We are unlikely to know the full effects of the current credit squeeze on the world's main office locations until further into 2008.'
But last year's strong rental growth is expected to ease this year, she said.
In Singapore, the United States sub-prime crisis has affected the expansion plans of some firms.
Last year, up to nine out of 10 companies had expansion plans. 'But now, we could perhaps see five out of 10 companies looking to expand,' said Mr Donald Han, Singapore managing director of Cushman & Wakefield.
'We are still seeing new firms being set up, and these firms in the financial services sector must have a Raffles Place address.'
Office rental increases will be more moderate this year and next year, he added.
Instead of a 78 per cent rise in occupancy costs to US$130.48 psf a year - or about $15.44 psf a month on average - a 20 per cent increase is likely this year, he said.
But recent rental deals done at coveted buildings in Singapore, such as Republic Plaza and Millenia Tower, have already surpassed average levels.
For instance, the asking rents at Centennial Tower are now hovering at around $18.50 psf or more.
In Raffles Place, the asking rents for some prime Grade A office space have crossed the $20 psf mark.
Some tenants have complained that their office rents rose by as much as three times or even more when their leases came up for renewal.
The majority of Raffles Place office buildings are operating at 98 per cent to 99 per cent occupancy, so rents will not come down before a major chunk of supply comes onstream in 2010, said Mr Han.
That is when phase 1 of the huge Marina Bay Financial Centre will be ready.
Because of the steep increases, some bigger space occupiers are moving their non-frontline operations to suburban locations.
Some are reconfiguring their work space to make better use of it, property consultants said.
Others are looking to relocate to fringe areas or industrial locations.
These include the Beach Road corridor, conservation shophouses, business parks and transitional sites, where rentals are generally going at single digits - which is hard to find in Raffles Place.
It jumps 10 spots in global ranking of occupancy costs by property consultancy
SINGAPORE has moved into the global top 10 most expensive office markets for the first time due to a severe office shortage.
A survey of office costs in 203 locations in 58 countries by global real estate consultancy Cushman & Wakefield saw the Republic jump 10 places to seventh spot.
This came after prime rents shot up by 78 per cent, on average, due to the tight supply.The consultancy found that occupancy costs in Singapore - which include rents and other costs of running an office - hit an annual average of about US$130 per sq ft (psf).
Office rents, the largest component of occupancy costs, rose 40 per cent on average in the world's top 10 office locations, it said.
Office rental rises in Singapore were also led by strong demand from the banking and services sectors, said Cushman & Wakefield's annual Office Space Across The World report.
Worldwide, rents climbed by 14 per cent on average, compared with 10 per cent in 2006, it said.
London's West End - where rents rose 30 per cent last year - remains the most expensive office location in the world, followed by Hong Kong, then Tokyo. Mumbai, Moscow and Paris were next on the ranking.
Another fast-rising Asian centre, Ho Chi Minh City, is now at 17th spot, with occupancy costs at US$75.81 psf a year, ahead of Sydney, Seoul and Shanghai.
The strong performances in India and Vietnam helped the Asia-Pacific region to achieve the strongest regional growth, with rents up 23 per cent over the course of last year.
Of the 203 locations Cushman & Wakefield surveyed last year, 79 per cent showed rental growth.
Singapore registered the fifth-highest increase in office rents in the world. Istanbul's Levent district registered a 95 per cent rise in office rents, which was the highest annual growth in all locations.
'Last year saw the fastest level of growth in office occupancy costs in many of the world's top locations since the turn of the property cycle in 2001, with the strongest demand coming from the financial sector,' said the firm's head of business space research and consultancy, Ms Elaine Rossall.
'We are unlikely to know the full effects of the current credit squeeze on the world's main office locations until further into 2008.'
But last year's strong rental growth is expected to ease this year, she said.
In Singapore, the United States sub-prime crisis has affected the expansion plans of some firms.
Last year, up to nine out of 10 companies had expansion plans. 'But now, we could perhaps see five out of 10 companies looking to expand,' said Mr Donald Han, Singapore managing director of Cushman & Wakefield.
'We are still seeing new firms being set up, and these firms in the financial services sector must have a Raffles Place address.'
Office rental increases will be more moderate this year and next year, he added.
Instead of a 78 per cent rise in occupancy costs to US$130.48 psf a year - or about $15.44 psf a month on average - a 20 per cent increase is likely this year, he said.
But recent rental deals done at coveted buildings in Singapore, such as Republic Plaza and Millenia Tower, have already surpassed average levels.
For instance, the asking rents at Centennial Tower are now hovering at around $18.50 psf or more.
In Raffles Place, the asking rents for some prime Grade A office space have crossed the $20 psf mark.
Some tenants have complained that their office rents rose by as much as three times or even more when their leases came up for renewal.
The majority of Raffles Place office buildings are operating at 98 per cent to 99 per cent occupancy, so rents will not come down before a major chunk of supply comes onstream in 2010, said Mr Han.
That is when phase 1 of the huge Marina Bay Financial Centre will be ready.
Because of the steep increases, some bigger space occupiers are moving their non-frontline operations to suburban locations.
Some are reconfiguring their work space to make better use of it, property consultants said.
Others are looking to relocate to fringe areas or industrial locations.
These include the Beach Road corridor, conservation shophouses, business parks and transitional sites, where rentals are generally going at single digits - which is hard to find in Raffles Place.
S'pore World's 7th Most Expensive Office Location
Source : The Business Times, February 14, 2008
Prime office rents rose 78% last year to US$130.48 psf per annum: report
SINGAPORE has jumped 10 places to become the world's seventh-most expensive office location.
According to Cushman & Wakefield's (C&W) report on office occupancy costs, prime office rents rose 78 per cent in Singapore last year. Occupancy costs are now at US$130.48 psf per annum, up from US$954 psf per annum in 2006.
Rental increases here were the fifth highest globally last year, after locations in Turkey and Norway. However, Singapore still ranks below London, Hong Kong, Tokyo, Mumbai, Moscow and Paris in terms of occupancy costs.
London remains on the top of the list, with occupancy costs rising 30 per cent to US$312 psf per annum followed by Hong Kong, with an increase in occupancy costs of 40 per cent to US$238.58 psf per annum.
Paris, which was put in sixth place, registered occupational costs of US$141.57 psf per annum.
C&W executive managing director (South-east Asia) Arsh Chaudhury said that rental growth in Singapore was led by strong demand from the banking and services sectors coupled with limited supply of quality office space.
He said: 'Whilst the effect of a US slowdown on Asia will be muted, the uncertainty of growth plans of US institutions, especially banks, may possibly result in an easing of demand.'
But he said that C&W expects the upward trend in rents to continue, albeit at a slower pace.
The C&W report compares office occupancy costs in 203 locations in 58 countries. New entries include Kyiv in Ukraine at 16th place with occupancy costs at US$78.22 psf per annum, and Ho Chi Minh City in Vietnam at 17th place with occupancy costs at $75.81 psf per annum.
Of these 203 locations, 79 per cent registered rental growth, 20 per cent showed stable growth and only one per cent experienced a fall in rentals compared to 6 per cent in 2006.
Perhaps also interesting to note is that of the bottom 10 locations in C&W's list of 58 countries, neighbouring South-east Asian cities took up four spots.
Bangkok took the 58th position, with office occupancy costs at US$26.52 psf per annum, preceded by Jakarta, at 57th position with occupancy costs at US$26.54 psf per annum, Manila in 50th place with occupancy costs at US$33.75, and Kuala Lumpur 49th, with occupancy costs at US$34.39 psf per annum.
Prime office rents rose 78% last year to US$130.48 psf per annum: report
SINGAPORE has jumped 10 places to become the world's seventh-most expensive office location.
According to Cushman & Wakefield's (C&W) report on office occupancy costs, prime office rents rose 78 per cent in Singapore last year. Occupancy costs are now at US$130.48 psf per annum, up from US$954 psf per annum in 2006.
Rental increases here were the fifth highest globally last year, after locations in Turkey and Norway. However, Singapore still ranks below London, Hong Kong, Tokyo, Mumbai, Moscow and Paris in terms of occupancy costs.
London remains on the top of the list, with occupancy costs rising 30 per cent to US$312 psf per annum followed by Hong Kong, with an increase in occupancy costs of 40 per cent to US$238.58 psf per annum.
Paris, which was put in sixth place, registered occupational costs of US$141.57 psf per annum.
C&W executive managing director (South-east Asia) Arsh Chaudhury said that rental growth in Singapore was led by strong demand from the banking and services sectors coupled with limited supply of quality office space.
He said: 'Whilst the effect of a US slowdown on Asia will be muted, the uncertainty of growth plans of US institutions, especially banks, may possibly result in an easing of demand.'
But he said that C&W expects the upward trend in rents to continue, albeit at a slower pace.
The C&W report compares office occupancy costs in 203 locations in 58 countries. New entries include Kyiv in Ukraine at 16th place with occupancy costs at US$78.22 psf per annum, and Ho Chi Minh City in Vietnam at 17th place with occupancy costs at $75.81 psf per annum.
Of these 203 locations, 79 per cent registered rental growth, 20 per cent showed stable growth and only one per cent experienced a fall in rentals compared to 6 per cent in 2006.
Perhaps also interesting to note is that of the bottom 10 locations in C&W's list of 58 countries, neighbouring South-east Asian cities took up four spots.
Bangkok took the 58th position, with office occupancy costs at US$26.52 psf per annum, preceded by Jakarta, at 57th position with occupancy costs at US$26.54 psf per annum, Manila in 50th place with occupancy costs at US$33.75, and Kuala Lumpur 49th, with occupancy costs at US$34.39 psf per annum.
Revision Of DC Rates Expected To Be 'Moderate'
Source : The Business Times, February 14, 2008
Consultants project smaller DC rate rise for residential and commercial use
THE coming March 1 revision of development charge (DC) rates - payable to enhance the use of sites or build bigger projects on them - is generally expected to be more moderate than the past couple of revisions, which imposed steep rises.
That's because on the whole, land price increases have slowed considerably in the the past few months. And collective sales, which traditionally account for the lion's share of private-sector land sales, have virtually ground to a halt, property consultants have told BT.
'We believe collective sale brokers are unlikely to feel inspired by the upcoming DC rate revisions,' says Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt.
Most consultants project smaller average DC rate increases for residential and commercial use this time. However, JLL is predicting bigger hikes for industrial and hotel use, as hotel and industrial sites sold at government land sale (GLS) tenders in recent months have fetched top bids significantly higher than the land values implied by current DC rates.
This can be attributed to the shortage of hotel rooms and strong demand for industrial space by office tenants looking for cheaper backroom space, says JLL's head of research (South-east Asia) Chua Yang Liang.
For non-landed residential use, JLL reckons the average DC rate will go up just about 5 per cent come March 1, compared with the 58 per cent hike that took effect on Sept 1, 2007.
CB Richard Ellis executive director (investment sales) Jeremy Lake also reckons that on the whole, non-landed residential DC rates are unlikely to rise significantly, although there may be hikes in locations where land sales have taken place at prices significantly above values implied by the prevailing Sept 1, 2007 DC rates.
Market watchers point to examples such as Westwood Apartments in Orchard Boulevard, Toho Garden in Yio Chu Kang Road and 15 terrace houses at Jalan Bunga Raya in the Balestier/Novena area.
Agreeing, Credo Real Estate executive director Yong Choon Fah says the increases for such locations could be in the order of 30-40 per cent, while the average islandwide hike will be much smaller at 5-20 per cent.
DC rates - revised every six months, on March 1 and Sept 1 - are listed according to use (for example, non-landed residential, commercial, and industrial) and 118 locations across Singapore.
Savills Singapore director Steven Ming, who predicts a 0-10 per cent rise in the average non-landed residential DC rate, reckons both prime and suburban/mass-market areas will see only moderate increases.
However, bigger rises may be seen in mid-tier locations like Pasir Panjang, Balestier, Upper Bukit Timah, Hillview and Upper Thomson, where condo prices have risen 20-40 per cent in the past six months.
For landed residential use, JLL projects the average increase this time could be 8-15 per cent - again lower than the 11.3 per cent rise in Sept 2007.
Jones Lang LaSalle expects the rates for places like Dunsfold Drive and Binchang Rise in the Bishan/Ang Mo Kio area, Sentosa and Chestnut Drive to increase about 20-25 per cent, as market values of landed properties in these locations are significantly above the values implied by prevailing DC rates.
JLL reckons that after a 42 per cent spike in the average commercial-use DC rate on Sept 1 last year, the rate could still rise a further 30-35 per cent come March 1. However, it believes rates may generally stay put in the central business district (CBD), and expects increases mostly in suburban locations, particularly in the Jalan Sultan and Toa Payoh areas. In the past few months in these areas, commercial GLS sites have been sold at prices more than double the land values implied by prevailing DC rates.
Agreeing, Credo's Ms Yong sees the islandwide increase in commercial DC rates around 5-15 per cent, with increases mostly outside the CBD.
Market watchers highlight the sharply different top bids for two white sites - with stipulated minimum office components - at Marina View in the CBD sold just three months apart late last year, reflecting how swiftly investor sentiment in the office market turned cautious.
JLL estimates industrial DC rates will appreciate around 30 per cent on average, compared with a 2.2 per cent increase last round. It also expects the average hotel DC rate to go up 30-35 per cent, after a 23 per cent hike last round, pointing out that hotel sites offered under the GLS programme at Upper Pickering Street and New Market Road/Merchant Road have been sold at premiums of 80 and 64 per cent respectively above prevailing DC rate-based land values.
The coming round of DC rate revisions will have 'minimum impact on the already slowing collective sales market', according to Savills' Mr Ming.
But for en bloc sites with a significant DC component, and where the reserve price has been fixed by owners, a substantial DC increase will make it even harder to find takers, says Credo's Ms Yong.
JLL's Dr Chua reckons owners of properties in fast-changing neighbourhoods like Buona Vista and Telok Blangah - and possibly Paya Lebar and Jurong East, which are earmarked by the government for development into business hubs - will be watching the coming DC rate changes as they may set the tone for potential change-of-use applications.
Potential bidders for reserve list sites under the GLS programme will also be watching the revisions to get a sense of the Chief Valuer's sentiment before making any applications for these sites to be released, says Dr Chua.
Consultants project smaller DC rate rise for residential and commercial use
THE coming March 1 revision of development charge (DC) rates - payable to enhance the use of sites or build bigger projects on them - is generally expected to be more moderate than the past couple of revisions, which imposed steep rises.
That's because on the whole, land price increases have slowed considerably in the the past few months. And collective sales, which traditionally account for the lion's share of private-sector land sales, have virtually ground to a halt, property consultants have told BT.
'We believe collective sale brokers are unlikely to feel inspired by the upcoming DC rate revisions,' says Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt.
Most consultants project smaller average DC rate increases for residential and commercial use this time. However, JLL is predicting bigger hikes for industrial and hotel use, as hotel and industrial sites sold at government land sale (GLS) tenders in recent months have fetched top bids significantly higher than the land values implied by current DC rates.
This can be attributed to the shortage of hotel rooms and strong demand for industrial space by office tenants looking for cheaper backroom space, says JLL's head of research (South-east Asia) Chua Yang Liang.
For non-landed residential use, JLL reckons the average DC rate will go up just about 5 per cent come March 1, compared with the 58 per cent hike that took effect on Sept 1, 2007.
CB Richard Ellis executive director (investment sales) Jeremy Lake also reckons that on the whole, non-landed residential DC rates are unlikely to rise significantly, although there may be hikes in locations where land sales have taken place at prices significantly above values implied by the prevailing Sept 1, 2007 DC rates.
Market watchers point to examples such as Westwood Apartments in Orchard Boulevard, Toho Garden in Yio Chu Kang Road and 15 terrace houses at Jalan Bunga Raya in the Balestier/Novena area.
Agreeing, Credo Real Estate executive director Yong Choon Fah says the increases for such locations could be in the order of 30-40 per cent, while the average islandwide hike will be much smaller at 5-20 per cent.
DC rates - revised every six months, on March 1 and Sept 1 - are listed according to use (for example, non-landed residential, commercial, and industrial) and 118 locations across Singapore.
Savills Singapore director Steven Ming, who predicts a 0-10 per cent rise in the average non-landed residential DC rate, reckons both prime and suburban/mass-market areas will see only moderate increases.
However, bigger rises may be seen in mid-tier locations like Pasir Panjang, Balestier, Upper Bukit Timah, Hillview and Upper Thomson, where condo prices have risen 20-40 per cent in the past six months.
For landed residential use, JLL projects the average increase this time could be 8-15 per cent - again lower than the 11.3 per cent rise in Sept 2007.
Jones Lang LaSalle expects the rates for places like Dunsfold Drive and Binchang Rise in the Bishan/Ang Mo Kio area, Sentosa and Chestnut Drive to increase about 20-25 per cent, as market values of landed properties in these locations are significantly above the values implied by prevailing DC rates.
JLL reckons that after a 42 per cent spike in the average commercial-use DC rate on Sept 1 last year, the rate could still rise a further 30-35 per cent come March 1. However, it believes rates may generally stay put in the central business district (CBD), and expects increases mostly in suburban locations, particularly in the Jalan Sultan and Toa Payoh areas. In the past few months in these areas, commercial GLS sites have been sold at prices more than double the land values implied by prevailing DC rates.
Agreeing, Credo's Ms Yong sees the islandwide increase in commercial DC rates around 5-15 per cent, with increases mostly outside the CBD.
Market watchers highlight the sharply different top bids for two white sites - with stipulated minimum office components - at Marina View in the CBD sold just three months apart late last year, reflecting how swiftly investor sentiment in the office market turned cautious.
JLL estimates industrial DC rates will appreciate around 30 per cent on average, compared with a 2.2 per cent increase last round. It also expects the average hotel DC rate to go up 30-35 per cent, after a 23 per cent hike last round, pointing out that hotel sites offered under the GLS programme at Upper Pickering Street and New Market Road/Merchant Road have been sold at premiums of 80 and 64 per cent respectively above prevailing DC rate-based land values.
The coming round of DC rate revisions will have 'minimum impact on the already slowing collective sales market', according to Savills' Mr Ming.
But for en bloc sites with a significant DC component, and where the reserve price has been fixed by owners, a substantial DC increase will make it even harder to find takers, says Credo's Ms Yong.
JLL's Dr Chua reckons owners of properties in fast-changing neighbourhoods like Buona Vista and Telok Blangah - and possibly Paya Lebar and Jurong East, which are earmarked by the government for development into business hubs - will be watching the coming DC rate changes as they may set the tone for potential change-of-use applications.
Potential bidders for reserve list sites under the GLS programme will also be watching the revisions to get a sense of the Chief Valuer's sentiment before making any applications for these sites to be released, says Dr Chua.
$46.5m Capital Gain Boost For Bt Sembawang
Source : The Business Times, February 14, 2008
Third-quarter net profit soars more than 8-fold to $52.4m
THANKS to a one-time capital gain, Bukit Sembawang Estates has reported third-quarter net earnings of $52.4 million, more than eight times the net profit of $6.25 million it generated for the corresponding quarter last year.
The one-time capital gain of $46.5 million for the three months ended Dec 31, 2007, came from the sale of more than two million shares in HSBC Holdings plc. Bukit Sembawang had earlier said that the share sale was to reduce the group's bank borrowings.
The exceptional gain was reflected in the group's 'other operating income' which went up to $47 million, from $961,000 in the year-ago period. Revenue jumped 30.9 per cent to $17.7 million.
The performance brings the property group's nine-month revenue to $63.7 million, 51.3 per cent higher than the $42.1 million in Q3 last year. During the period, revenues for housing units sold at Parc Mondrian, Paterson Suites and phases 4 and 6 of Mimosa Terrace were recognised.
The boost in Q3 bumped up its nine-month net profit to $71.3 million, from $17.7 million. This brings basic earnings per share to 78.11 cents, from 24.47 cents previously. As at Dec 31, 2007, net asset value per share came to $4.53, from $4.64 as at March 31, 2007.
In view of the uncertain climate in the property market, Bukit Sembawang said it is reviewing the launch of the two projects - the 102-unit freehold development Paterson Suites and the 123-unit The Vermont on Cairnhill. It is also waiting for the hearing of the appeal against the Strata Title Board's rejection on the collective sale of Airview Towers.
Bukit Sembawang had planned to build a 36-storey condominium on the site currently occupied by Airview Towers and an adjacent property. But the Strata Titles Board had dismissed a collective sale application by the majority owners of Airview Towers on grounds of technicality. The hearing of the appeal is set to take place on Feb 19.
Shares of Bukit Sembawang slipped 2 cents yesterday to close at $8.96.
Third-quarter net profit soars more than 8-fold to $52.4m
THANKS to a one-time capital gain, Bukit Sembawang Estates has reported third-quarter net earnings of $52.4 million, more than eight times the net profit of $6.25 million it generated for the corresponding quarter last year.
The one-time capital gain of $46.5 million for the three months ended Dec 31, 2007, came from the sale of more than two million shares in HSBC Holdings plc. Bukit Sembawang had earlier said that the share sale was to reduce the group's bank borrowings.The exceptional gain was reflected in the group's 'other operating income' which went up to $47 million, from $961,000 in the year-ago period. Revenue jumped 30.9 per cent to $17.7 million.
The performance brings the property group's nine-month revenue to $63.7 million, 51.3 per cent higher than the $42.1 million in Q3 last year. During the period, revenues for housing units sold at Parc Mondrian, Paterson Suites and phases 4 and 6 of Mimosa Terrace were recognised.
The boost in Q3 bumped up its nine-month net profit to $71.3 million, from $17.7 million. This brings basic earnings per share to 78.11 cents, from 24.47 cents previously. As at Dec 31, 2007, net asset value per share came to $4.53, from $4.64 as at March 31, 2007.
In view of the uncertain climate in the property market, Bukit Sembawang said it is reviewing the launch of the two projects - the 102-unit freehold development Paterson Suites and the 123-unit The Vermont on Cairnhill. It is also waiting for the hearing of the appeal against the Strata Title Board's rejection on the collective sale of Airview Towers.
Bukit Sembawang had planned to build a 36-storey condominium on the site currently occupied by Airview Towers and an adjacent property. But the Strata Titles Board had dismissed a collective sale application by the majority owners of Airview Towers on grounds of technicality. The hearing of the appeal is set to take place on Feb 19.
Shares of Bukit Sembawang slipped 2 cents yesterday to close at $8.96.
Wee Hur Clinches 2 Deals Totalling $146.5m
Source : The Business Times, 13 February 2008
RECENTLY listed Wee Hur Holdings, a building contractor in Singapore with a range of construction projects, has won two new contracts worth a total $146.5 million.
The group announced yesterday that its wholly owned subsidiary, Wee Hur Construction Pte Ltd, has been awarded two projects for a residential development and a commercial development worth $99.9 million and $46.6 million respectively.
The first contract is for a residential development located in the prime Newton Road area. Awarded by a subsidiary of the Ho Bee Group, the condominium development consists of two 30-storey blocks comprising a total of 152 units, a basement car park, swimming pool and communal facilities. Construction of this project is expected to commence in May 2008 and be completed in March 2011.
The second contract, worth about $46.6 million, is the Phase 1 construction of a commercial building at Changi Business Park. This project was awarded by Ascendas (Tuas) Pte Ltd. Piling work for this project is expected to begin next month and be completed in August next year.
The two projects represent an approximately 61 per cent increase over Wee Hur's order book as disclosed in its IPO prospectus.
Some of Wee Hur's major ongoing projects include Park View Eclat with a contract value of about $73.0 million, a commercial building at Changi Business Park ($70.3 million) and a nine-storey hotel at Mohamed Sultan/Nanson Road ($43.3 million).
Said Wee Hur executive chairman and managing director Goh Yeow Lian: 'These two major contracts are testament to our ability to handle a wide array of projects. Given the positive construction industry outlook, we will continue to work hard to secure more higher-value projects, so that we can continue to perform well and deliver value to our shareholders.'
The latest contracts are expected to have a positive impact on Wee Hur's financial performance for the financial year ending Dec 31, 2008, the group said.
RECENTLY listed Wee Hur Holdings, a building contractor in Singapore with a range of construction projects, has won two new contracts worth a total $146.5 million.
The group announced yesterday that its wholly owned subsidiary, Wee Hur Construction Pte Ltd, has been awarded two projects for a residential development and a commercial development worth $99.9 million and $46.6 million respectively.
The first contract is for a residential development located in the prime Newton Road area. Awarded by a subsidiary of the Ho Bee Group, the condominium development consists of two 30-storey blocks comprising a total of 152 units, a basement car park, swimming pool and communal facilities. Construction of this project is expected to commence in May 2008 and be completed in March 2011.
The second contract, worth about $46.6 million, is the Phase 1 construction of a commercial building at Changi Business Park. This project was awarded by Ascendas (Tuas) Pte Ltd. Piling work for this project is expected to begin next month and be completed in August next year.
The two projects represent an approximately 61 per cent increase over Wee Hur's order book as disclosed in its IPO prospectus.
Some of Wee Hur's major ongoing projects include Park View Eclat with a contract value of about $73.0 million, a commercial building at Changi Business Park ($70.3 million) and a nine-storey hotel at Mohamed Sultan/Nanson Road ($43.3 million).
Said Wee Hur executive chairman and managing director Goh Yeow Lian: 'These two major contracts are testament to our ability to handle a wide array of projects. Given the positive construction industry outlook, we will continue to work hard to secure more higher-value projects, so that we can continue to perform well and deliver value to our shareholders.'
The latest contracts are expected to have a positive impact on Wee Hur's financial performance for the financial year ending Dec 31, 2008, the group said.
GIC Real Estate Buys 40% Stake In Finland's Shopping Mall For S$270m
Source : Channel NewsAsia, 13 February 2008
GIC Real Estate has bought a 40 per cent stake in Finland's fifth largest modern shopping centre, Iso Omena, for 132 million euros or about S$270 million.
The seller, Citycon, will continue to own the remaining 60 per cent of the mall.
Citycon will also continue to manage the shopping centre in Helsinki.
Iso Omena has a total lettable area of over 61,000 square metres.
Both Citycon and GIC RE have agreed to develop and extend the mall.
The shopping centre has planning permission for an extension of 7,000 square metres.
It was completed in 2001 and acquired by Citycon five months ago. - CNA/ir
GIC Real Estate has bought a 40 per cent stake in Finland's fifth largest modern shopping centre, Iso Omena, for 132 million euros or about S$270 million.
The seller, Citycon, will continue to own the remaining 60 per cent of the mall. Citycon will also continue to manage the shopping centre in Helsinki.
Iso Omena has a total lettable area of over 61,000 square metres.
Both Citycon and GIC RE have agreed to develop and extend the mall.
The shopping centre has planning permission for an extension of 7,000 square metres.
It was completed in 2001 and acquired by Citycon five months ago. - CNA/ir
Singapore Is World's 7th Most Expensive Office Location
Source : Channel NewsAsia, 13 February 2008
Singapore has moved up 10 spots to become the world's seventh most expensive office location.
According to Cushman & Wakefield's global ranking, prime office rents shot up 78 percent in Singapore last year.
The property consultancy expects demand for office space from companies across most industry sectors to remain strong this year against a tight supply till 2010.
Cushman is predicting that the effect of a US slowdown on Asia will be muted.
However, it said the uncertainty of growth plans of US institutions, especially banks, may possibly result in an easing of demand.
Cushman said rents are likely to trend up, but at a slower pace compared with last year.
London retains its title as having the most expensive office occupancy costs in the world. A square metre of prime space in London's West End cost US$3,354 a year.
In second place is Hong Kong, where rents were up 40 percent to about US$2,550 per square metre. - CNA/ms
Singapore has moved up 10 spots to become the world's seventh most expensive office location.
According to Cushman & Wakefield's global ranking, prime office rents shot up 78 percent in Singapore last year. The property consultancy expects demand for office space from companies across most industry sectors to remain strong this year against a tight supply till 2010.
Cushman is predicting that the effect of a US slowdown on Asia will be muted.
However, it said the uncertainty of growth plans of US institutions, especially banks, may possibly result in an easing of demand.
Cushman said rents are likely to trend up, but at a slower pace compared with last year.
London retains its title as having the most expensive office occupancy costs in the world. A square metre of prime space in London's West End cost US$3,354 a year.
In second place is Hong Kong, where rents were up 40 percent to about US$2,550 per square metre. - CNA/ms
Older S'poreans Not Automatically Covered Under CPF Life Want To Opt In
Source : Channel NewsAsia, 13 February 2008
What do older Singaporeans not automatically covered under the new CPF Life annuity plan think about the scheme? Will they opt in? Two such Singaporeans Channel NewsAsia spoke to say they will do so.
This echoes Manpower Minister Ng Eng Hen's confidence that many such citizens will want to sign up for the scheme voluntarily.
65-year-old management consultant Ernest Chen, one of the older Singaporeans who want to opt in for the scheme, said: "Perhaps by the year... (I'm) 85 or 75 or even earlier, I can take a bit of money out and enjoy the harvest... I think it's pretty good.
"I'm only concerned about why they only introduce (the scheme) in 2013. Why not next year? What's the fuss of doing it? If they do it early, and if they think they need to polish up or do a little bit of changing, why not along the way, make the changes? So do it next year, don't wait."
Will he encourage others to opt into the scheme?
"Many people, they are not financially tuned to know what to do with the money. Sometimes they may invest elsewhere and they lose their money. It's better to leave it to the government. As long as they do it fairly for the people, the nation, I believe this is a good scheme," said Mr Chen.
Another one who wants to opt in for the scheme is businessman Chua Lai Teck. He said that he will consider a few factors before deciding his CPF Life payout age.
These include discussions with friends on what they are choosing and what his financial situation will be like when he hits 55 years old.
Right now, Mr Chua said, he has enough cash savings to last him for at least the next 20 years. So he will not depend solely on CPF Life.
But Mr Chua said the government may want to reconsider the age when eligible CPF members must decide when they want the annuity payouts to start. CPF Life participants have to decide on this when they turn 55.
Mr Chua said: "Personally I think the government doesn't need to jump in too early. You're talking about 65 (the earliest age for the annuity payouts to start), you're still healthy, still can work, and people are living till 85 years and above. I think we should, if we can, pull it back to 60, 65 years old to decide." - CNA/ir
What do older Singaporeans not automatically covered under the new CPF Life annuity plan think about the scheme? Will they opt in? Two such Singaporeans Channel NewsAsia spoke to say they will do so.
This echoes Manpower Minister Ng Eng Hen's confidence that many such citizens will want to sign up for the scheme voluntarily.
65-year-old management consultant Ernest Chen, one of the older Singaporeans who want to opt in for the scheme, said: "Perhaps by the year... (I'm) 85 or 75 or even earlier, I can take a bit of money out and enjoy the harvest... I think it's pretty good.
"I'm only concerned about why they only introduce (the scheme) in 2013. Why not next year? What's the fuss of doing it? If they do it early, and if they think they need to polish up or do a little bit of changing, why not along the way, make the changes? So do it next year, don't wait."
Will he encourage others to opt into the scheme?
"Many people, they are not financially tuned to know what to do with the money. Sometimes they may invest elsewhere and they lose their money. It's better to leave it to the government. As long as they do it fairly for the people, the nation, I believe this is a good scheme," said Mr Chen.
Another one who wants to opt in for the scheme is businessman Chua Lai Teck. He said that he will consider a few factors before deciding his CPF Life payout age.
These include discussions with friends on what they are choosing and what his financial situation will be like when he hits 55 years old.
Right now, Mr Chua said, he has enough cash savings to last him for at least the next 20 years. So he will not depend solely on CPF Life.
But Mr Chua said the government may want to reconsider the age when eligible CPF members must decide when they want the annuity payouts to start. CPF Life participants have to decide on this when they turn 55.
Mr Chua said: "Personally I think the government doesn't need to jump in too early. You're talking about 65 (the earliest age for the annuity payouts to start), you're still healthy, still can work, and people are living till 85 years and above. I think we should, if we can, pull it back to 60, 65 years old to decide." - CNA/ir
CPF Board To Aggressively Encourage CPF Life Opt-Ins
Source : Channel NewsAsia, 13 February 2008
Manpower Minister Ng Eng Hen has said the CPF Board will over the next year aggressively encourage Singaporeans not automatically included in the new CPF Life, to opt in.
He was speaking a day after the National Longevity Insurance Committee released its recommendations on the lifelong income scheme.
Dr Ng also believes that the majority of Singaporeans, about 70 to 80 percent who qualify for CPF Life, will opt for annuity payouts to start at age 80, the default age.
Related Video Link - http://tinyurl.com/257btj
This so-called "Refund 80" Plan is the option which strikes a balance between the amount of monthly payouts and the amount to be left behind for the beneficiaries when the member dies.
Dr Ng, who is 49 years old, would automatically qualify for CPF Life. So which Refund Plan does he have in mind? Though he has not made his pick, he does have one regret.
"That we couldn't introduce it earlier. It is for all those aged 50 and below. But we want an opportunity for all those older than 50 years to opt in, in other words, for CPF Life to cover all those older than 50," said Dr Ng.
He said in devising the CPF Life scheme, the government was concerned about the baby boomers - those in their late forties and early fifties now - when they retire.
Dr Ng added: "For those who are older, they have large families to depend on, most of them, anyway. But (not) for the baby boomers... With this piece, CPF Life, it's a great weight lifted off one's shoulder.
"Now, it's transferred to the other shoulder, the CPF Board, to shoulder this. The foundations are much stronger, we now have a tool to address longevity."
The CPF Life scheme gives Singaporeans about the same amount of monthly retirement income as the CPF Minimum Sum payout.
The difference is that the annuity income under the CPF Life scheme is for life whereas the payouts under the existing CPF Minimum Sum will last for only 20 years.
In fact, the National Longevity Insurance Committee had explored if the Minimum Sum payout period could be extended to 30 years.
"But that would have meant a reduction of what you got under the older system. Even at 30 years, you will still miss out those who live longer than 30 years from age 65, say, beyond 95," Dr Ng said.
"The committee came to the same conclusion that if we did that, it's not a sensible option and that annuities is a much (more) sensible option, and you get about the same payout, more or less compared to the old system, but for life," he added.
The Manpower Minister revealed that the Prime Minister and his Cabinet colleagues had been discussing over the past three years the need for Singaporeans to have enough savings in their CPF to last their lifetime. And CPF Life is the missing piece which will complete Singapore's CPF system.
Dr Ng said that the ball is now in the CPF Board's court. It will soon embark on an extensive public education exercise, with simple handbooks and guides in the four languages to explain the CPF Life scheme to Singaporeans. - CNA/ir
Manpower Minister Ng Eng Hen has said the CPF Board will over the next year aggressively encourage Singaporeans not automatically included in the new CPF Life, to opt in.
He was speaking a day after the National Longevity Insurance Committee released its recommendations on the lifelong income scheme.
Dr Ng also believes that the majority of Singaporeans, about 70 to 80 percent who qualify for CPF Life, will opt for annuity payouts to start at age 80, the default age. Related Video Link - http://tinyurl.com/257btj
This so-called "Refund 80" Plan is the option which strikes a balance between the amount of monthly payouts and the amount to be left behind for the beneficiaries when the member dies.
Dr Ng, who is 49 years old, would automatically qualify for CPF Life. So which Refund Plan does he have in mind? Though he has not made his pick, he does have one regret.
"That we couldn't introduce it earlier. It is for all those aged 50 and below. But we want an opportunity for all those older than 50 years to opt in, in other words, for CPF Life to cover all those older than 50," said Dr Ng.
He said in devising the CPF Life scheme, the government was concerned about the baby boomers - those in their late forties and early fifties now - when they retire.
Dr Ng added: "For those who are older, they have large families to depend on, most of them, anyway. But (not) for the baby boomers... With this piece, CPF Life, it's a great weight lifted off one's shoulder.
"Now, it's transferred to the other shoulder, the CPF Board, to shoulder this. The foundations are much stronger, we now have a tool to address longevity."
The CPF Life scheme gives Singaporeans about the same amount of monthly retirement income as the CPF Minimum Sum payout.
The difference is that the annuity income under the CPF Life scheme is for life whereas the payouts under the existing CPF Minimum Sum will last for only 20 years.
In fact, the National Longevity Insurance Committee had explored if the Minimum Sum payout period could be extended to 30 years.
"But that would have meant a reduction of what you got under the older system. Even at 30 years, you will still miss out those who live longer than 30 years from age 65, say, beyond 95," Dr Ng said.
"The committee came to the same conclusion that if we did that, it's not a sensible option and that annuities is a much (more) sensible option, and you get about the same payout, more or less compared to the old system, but for life," he added.
The Manpower Minister revealed that the Prime Minister and his Cabinet colleagues had been discussing over the past three years the need for Singaporeans to have enough savings in their CPF to last their lifetime. And CPF Life is the missing piece which will complete Singapore's CPF system.
Dr Ng said that the ball is now in the CPF Board's court. It will soon embark on an extensive public education exercise, with simple handbooks and guides in the four languages to explain the CPF Life scheme to Singaporeans. - CNA/ir
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