Friday, April 4, 2008

Occupancy At Business Parks Hits Five-Year High

Source : The Business Times, April 4, 2008

Office space crunch also lifts high-tech space occupancy to 94.1% at end of Q1

The average occupancy rate for business parks has hit a five-year high, crossing the 90 per cent mark.

According to a report by CB Richard Ellis (CBRE), the occupancy rate grew from 89.4 per cent at end-2007 to an estimated 90.2 per cent at end-March 2008, exceeding 90 per cent for the first time in five years.

This was attributed to the current tight availability of office supply in the CBD which saw financial institutions like Standard Chartered Bank, Credit Suisse and Citibank relocating part of their operations to Changi Business Park.

The office space crunch also pushed the average occupancy rate for high-tech space up by 1.3 per cent quarter on quarter to 94.1 per cent at the end of first quarter 2008.

CBRE director of industrial and logistic services Bernard Goh pointed out, however, that while the average occupancy rate for business parks is expected to grow, it would be at a ‘less robust pace compared with high-tech space’.

‘This is due to the healthy pipeline of upcoming business parks in the next four years,’ he said.

Mr Goh said some six million square feet of business parks are expected to be completed from 2008 to 2011. In comparison, only 1.5 million sq ft of high-tech space is expected to come onstream in 2011, explained Mr Goh.

Correspondingly, Mr Goh expects the growth in rental for high-tech space to continue to grow at a healthy pace.

Average monthly rent for high-tech space rose 7.3 per cent quarter on quarter to $2.95 per square foot (psf) by end-March, up from the 5 per cent quarter on quarter increase seen in the first quarter of 2007.

DTZ Debenham Tie Leung also sees more business park development projects in the pipeline.

In a report released yesterday, it said that the potential supply of business park space was 2.7 million sq ft as at end-2007, 10 per cent of total potential supply of private industrial space.

DTZ also noted that average monthly gross rents for business/high-tech industrial space rose 7.7 per cent quarter on quarter to $4.20 psf per month.

Generally, private industrial stock increased marginally by 0.7 per cent quarter on quarter to 299 million sq ft as at end-2007, with about 1.69 million sq ft of net lettable area of new private industrial space added in 4Q 2007, said DTZ.

However, DTZ has projected 7.13 million sq ft of new supply of private factory space for 2008. Subsequently, it is projecting a further 8.35 million sq ft, 2.77 million sq ft and 1.38 million sq ft for 2009, 2010, and 2011 respectively.

Parc Centennial

Location : 100 Kampong Java Road (District 11)
Tenure : Freehold
Expected Completion : Dec 2011
Total Units : 51 units in a single 19 storeys residential block

Unit Types: -
1+study ~ 1345sqft
2 bedroom ~ 1098-1163sqft
2+study ~ 1249sqft
3 bedroom ~ 1550-1572sqft
Penthouse ~ 2486sqft (3 br) & 2885sqft (4 br)

Inflation Threat Dwarfs Risk Of Global Slowdown: ADB

Source : The Business Times, APril 03, 2008

Anthony Rowley In Tokyo

ASIA faces an 'inflation spiral' brought on by multiple upward pressures on prices compounded by supply constraints, the Asian Development Bank (ADB) warned yesterday.

And the social and economic implications of the inflation threat overshadow even the dangers of a global slowdown sparked by the sub-prime crisis, ADB suggests in a new report.

'For a number of years this region has been growing economically at breakneck speed and now it is coming up against speed limits,' ADB chief economist Ifzal Ali told The Business Times from Hong Kong, where he launched the bank's annual Asian Development Outlook (ADO).

While food and fuel prices are strong factors behind the surge in inflation, structural factors are also at work, he said.

Infrastructure bottlenecks and skill shortages arising from rapid growth are forcing up prices and wages.

At the same time, money supply is expanding beyond central bank targets in some countries because of burgeoning current account surpluses and the accumulation of foreign reserves.

The ADO urges Asian policy-makers to keep a close watch on inflation. Despite administrative measures and subsidies introduced by some countries to rein in prices, inflation is expected to spike in 2008 and could hit a decade-long regional high, the report says.

It urges policy-makers to tackle inflation at its root. For some economies, this could mean a more flexible exchange rate. In others, fiscal spending and priorities could be scrutinised, or measures taken to ease supply bottlenecks that are adding to cost pressures.

Regional inflation is expected to rise to 5.1 per cent on average in 2008 and subside to 4.6 per cent in 2009. Price increases will be highest in Central Asia, where they will remain in double digits, the ADO suggests.

Inflation is running at an 11-year high in China and is also a threat to other countries, such as Vietnam.

Similar warnings on inflation were sounded on Tuesday by the World Bank in its latest East Asia Economic Update. Headline inflation is now running at more than 15 per cent a year in Vietnam and has reached 9 per cent in China and 11 per cent in Cambodia, the World Bank said.

The ADO says developing Asian economies as a whole will achieve solid growth this year despite a slowdown in major industrial economies, surging food and fuel prices and an ongoing credit crisis in the US.

The ADB expects developing Asian economies as a whole to expand 7.6 per cent in 2008 and 7.8 per cent in 2009. The region posted its highest growth in almost two decades last year, averaging 8.7 per cent.

'Asia will not be immune to the global slowdown, neither will it be hostage to it,' Mr Ali said. 'It remains tied to global activity through traditional trade channels, and increasingly, through its closer integration in international financial markets.

'Favourable policy conditions and impressive productivity growth associated with Asia's economic modernisation and structural transformation will continue to keep the region on a strong growth path.'

Growth in East Asia is expected to slow to 8.1 per cent this year from 9.3 per cent in 2007. South-east Asia will slow to 5.7 per cent this year from 6.5 per cent in 2007 because its export prospects are likely to be hit by a slowdown in the global economy.

In South-east Asia, only Thailand is expected to post higher growth after a return to normalcy in politics.

Vietnam's economic expansion will moderate as the country seeks to curb inflation.

China is expected to grow a strong 10 per cent this year and India is forecast to expand 8 per cent.

An economic slowdown in the US, European Union and Japan will have a bigger impact on China, which is more open to trade than India, the ADB suggests.

South Asia is also expected to lose some steam in 2008, mainly through a moderation of growth in India. Pakistan, Bangladesh and Sri Lanka will also be affected by economic deceleration in major markets because garment exports are likely to suffer.

Growth in Central Asia is expected to slow sharply to 7.5 per cent this year, from double-digit levels in recent years on the back of weaker expansion in the region's largest economy, Kazakhstan.

Economic expansion in the Pacific Islands is expected to pick up in 2008, with the region's biggest economy, Papua New Guinea, benefiting from high commodity prices and the Fiji Islands forecast to grow after contracting in 2007.

IMF Chief Sees 'Major' Slowdown In Global Economy

Source : The Straits Times, Apr 4, 2008

WASHINGTON - INTERNATIONAL Monetary Fund managing director Dominique Strauss-Kahn said on Thursday he sees a 'major' slowdown in the global economy this year amid a credit market crisis.

'What is certain is that the situation is very serious and that the slowdown in the United States, and subsequently in the rest of the world, is a slowdown that is going to be major,' he said in an interview with AFP ahead of next week's IMF and World Bank spring meetings.

'It is not a catastrophic slowdown, but it is a major slowdown,' he stressed, five months after becoming managing director of the 185-nation institution.

The IMF is set to cut a half point off its 2008 forecast for global economic growth to 3.7 per cent on Wednesday, Mr Strauss-Kahn said, confirming media reports but without providing further detail.

The IMF, whose mission is to promote global financial stability, is to publish its economic growth forecasts in its biannual World Economic Outlook report next Wednesday.

In January, the IMF projected the global economy would expand by 4.1 per cent and the US economy would grow by 1.5 per cent in 2008.

On Tuesday and Wednesday, media reports in Germany said the IMF would lower the global growth projection to 3.7 per cent and that of the US to 0.5 per cent.

The IMF and the World Bank hold their spring meetings on April 12-13 in Washington.

Mr Strauss-Kahn, a former French finance minister who will preside for the first time over the meetings, said that while the United States and European countries are the principal victims of the credit crunch, emerging countries, which have been a global pole of dynamic growth, would also be affected.

'I am particularly concerned about the central European countries,' he said, without identifying the vulnerable countries except to say they are members of the European Union.

Separating bad risks from good risks
To tackle the root of the credit crisis that stemmed from a meltdown in the US housing market, the IMF is mulling a structure that would isolate the risky assets from the rest of the financial system.

'The way to get out of the crisis, is to effectively separate the bad risks from the good risks,' Mr Strauss-Kahn.

That would allow a renewal of confidence and revive the interbank market, where credit flows are down to a trickle.

'Today we have banks that no longer lend to each other because they lack confidence - that is what is freezing up the market,' he said.

He said the crisis represent 'a multilateral question, that is why the Fund has a particular role to play in the matter.' To play such a role in the current crisis in any case offers a welcome visibility for the Washington-based institution, which is under fire as being obsolete, despite reforms it is undertaking.

On that point, Mr Strauss-Kahn called a 'a very big political success' a plan to reform the voting rights system approved by the IMF board last Friday to give more voice to the developing and emerging member nations but criticized as not going far enough.

'If that step wasn't taken, the institution's reform would have been blocked for 15 years,' he said.

The board voted to transfer 1.6 per cent points of voting rights from the developed countries to their developing and emerging peers.

The reform plan, in tripling the base voting rights - a measure that mainly benefits the poorest countries, 'soundly takes into consideration the existence of people above their economic weight,' he said. -- AFP

Business As Usual When $40m Orchard Makeover Begins End April

Source : The Straits Times, Apr 4, 2008

FINALLY, the long anticipated $40 million works that will give Singapore's top shopping street the shine will begin on April 28. The facelift is expected to be completed by next February.

Street Montage- Orchard (Forest) Zone. From February next year, works will commence to transform Orchard Road?s pedestrian mall into a feast for the senses: sight, sound, touch and smell. The $40 million makeover is expected to be completed by April 2009. -- PHOTO: SINGAPORE TOURISM BOARD

Seven construction teams will be working on various sections of the 2km-long pedestrian mall at the same time to speed up the upgrading process.

When Singapore Tourism Board first announced the detailed plans, the makeover was to have started in February, after Chinese New Year. But, works stalled because some mall owners were unhappy about certain aspects of the proposed works.

However, STB announced on Friday that construction will begin on April 28. Hoarding will first come up at buildings like Ngee Ann City, Orchard Parade Hotel and Singapore Visitors Centre. Others like Marriot Hotel and Tang Plaza will also be covered in the first phase of works that will last 10 weeks.

Tanglin (Flower) Zone

STB director of tourism shopping and dining Andrew Phua said all the businesses affected have been informed at a meeting on Wednesday.

He said: 'We wanted to ensure that everyone has been informed and that all of us are on the same page.'

He added that most of the concerns expressed by the mall owners had been ironed out before the works schedule was finalised. One of the key concerns was that the works may disrupt two mega sales: the Great Singapore Sale which begins on May 23 and the year-end Christmas.

Artist impression of Somerset Zone - Fruits - Harkening back to the road's past as a nutmeg plantation, the fruit theme will feature nutmeg and cinnamon trees between Faber House and Le Meridien.

To make sure that the mall owners would not be disadvantaged, STB will allow them to use the hoarding as advertising billboards to show that they are still in business. The hired contractor has also promised to minimise disruption to pedestrian access points to the malls, Mr Phua said.

For malls like Ngee Ann City, STB has rearranged the works schedule to accommodate its its request of having the works done sooner than later.

The $40 million facelift, announced last October, will see new plants and flowers, as well as street furniture and lighting added to the thoroughfare which will be themed along the lines of fruit, flower and forest.

Artist impression of Orchard Zone - Forest - Glass panels etched with botanical graphics represent the forest theme for the area between the new Ion Orchard and The Hereen. -- PHOTOS: STB

Works involved repaving sections of the pedestrian mall from Tanglin Mall to Le Meridien Hotel and the right-most lane will be closed to create a wider walkway in front of Ion Orchard, Wisma Atria, Ngee Ann City and the Meritus Mandarin hotel. As they will be carried out in sections, every building owner has been informed of the exact schedule of when their property will be affected and for how long.

Each section of works is expected to last up to 10 weeks.

STB's Mr Phua said: 'When completed, locals and visitors will enjoy a much enhanced street level experience when they stroll along Orchard Road.'

Property Fever Here Starting To Cool

Source : TODAY, Friday, April 4, 2008

More signs of Singapore’s property market slowing: Tenders for a plot of government development land have closed, attracting one of the lowest bids in recent years.

The residential site bordering Choa Chu Kang Road and Woodlands Road on offer attracted just two bids. The highest offer came from an arm of Peak Properties, which is controlled by the Wee family. It offered $61 million, which works out to just $162 per sq ft (psf) per plot ratio.

Knight Frank research head Nicholas Mak said: “The current bid is one of the lowest in recent years.”

The low point came last month when just $78 psf was offered for land in Westwood Avenue. This was rejected by the Urban Redevelopment Authority (URA).

The last time residential land bids fell below $200 psf was between 2000 and 2002, at the height of Singapore’s decade-long property slump. It is not yet known whether the URA will accept the Peal Properties’ offer.

The Choa Chu Kang Road site can be potentially used to develop up to 240 condominium units or serviced apartments.

This tender may serve as a good benchmark for another nearby site in Choa Chu Kang Drive. Bids for this site close in May. Prices of completed units in nearby Maysprings condominium recently transacted at an average price of $530 to $630 psf.

Are Days Numbered For Malay Village?

Source : The Straits Times, Apr 4, 2008

URA says future plans for Paya Lebar area are being studied and will be revealed next month

THE Malay Village’s kampung-style houses on stilts promise a quaintness from the days of old Singapore.

But they are run-down, and visitors are welcomed by swarms of mosquitoes instead of retailers running businesses there.

The 2.2ha attraction in Geylang Serai was set up in 1989 to showcase traditional Malay village life.

The Malay community, among its harshest critics from the get-go, said the place would be a white elephant. Five changes of management and 19 years later, the prediction seems spot on.

Industry sources who spoke to The Straits Times on condition of anonymity said plans are afoot to tear the place down and replace it with a mixed development when its 20-year lease ends.

The Urban Redevelopment Authority declined comment. Its spokesman would say only that plans for the next decade or two are being studied for the Paya Lebar area, of which the Malay Village is a part. These will be revealed next month.

The 70 shop units there, which include restaurants and food stalls, are languishing. When The Straits Times visited last week, most units were closed, although many had signs proclaiming opening hours from 10am. Many units were vacant and bore ‘For rent’ posters.

Madam Y.J.Zhang, 70, who runs a provision shop, griped in Mandarin: ‘There are more mosquitoes here than people.’

She said she barely makes $20 in sales on a good day, and her monthly rental is $1,300.

For Madam Junainah Ikbal, her toiletry and clothing shop sells nothing on most days. To make matters worse, the rent has gone up, from $3,200 to $3,500 this month, she said.

‘How can we tahan?’ she asked, using the Malay word for endure.

Tenants said that Malay Village Pte Ltd, the current management for the place, promised to hold events and promotions to pull in the crowds when it took over in 2006, but these did not materialise. The company could not be reached for comment.

Ms Ng Lee Li, a section head at Tourism Academy @ Sentosa, said the attraction’s problem could lie in its lack of focus and appeal.

An industry observer, who declined to be named, said it could be that the Chinese running the place have not been able ‘to give it depth’.

Madam Zhang, who has lived in Geylang for over 40 years, said: ‘It is sad what this place has become.’

Just 2 Bids For Ten Mile Junction Site

Source : The Business Times, April 4, 2008

Kheng Leong unit offers $162.40 psf ppr; Sim Lian Land, $121.60 psf ppr

THE public tender for an unusual development site at Choa Chu Kang Road and Woodlands Road has closed with just two bids received.

The site, on which the state-owned Ten Mile Junction currently sits, received a bid of $61 million or about $162.40 per square foot per plot ratio (psf ppr) from Peak Green Pte Ltd.

The company is understood to be linked to Kheng Leong, the privately owned property group controlled by the family of banker Wee Cho Yaw.

The second, lower bid of $45.68 million, or $121.60 psf ppr, was put in by Sim Lian Land.

Earlier estimates had put the value of the site at between $200 psf ppr and $250 psf ppr.

Savills Singapore director of marketing and business development Ku Swee Yong said that he was surprised by the lower-than-expected bid, but added that rising construction costs may have been a factor.

Recently, a development site at Jurong West was not awarded because the highest bid received was considered to be too low by the government.

But while Mr Ku did not know if the higher bid for the Ten Mile Junction site would top the reserve price for the site, he said: ‘I think the site should be awarded.’

‘This area is very local and I believe the household incomes are lower,’ he added.

Knight Frank director of research and consultancy Nicholas Mak noted that the current bid is one of the lowest in recent years.

‘The previous time when land tender bids of below $200 psf ppr were submitted was in the period from 2000 to 2002.

‘But during that period, the government did sell some of the sites at prices below $200 psf ppr.’

On whether the Ten Mile Junction site would be awarded, Mr Mak said that it depended on whether market conditions were the same as those during 2000-2002. ‘There is a 50/50 chance,’ he added.

The site, which has a residential potential gross floor area of 254,394 sq ft, could have between 200 and 240 apartments.

The existing commercial GFA is 121,191 sq ft.

CB Richard Ellis Research executive director Li Hiaw Ho said that if the site were awarded, the breakeven price for the newly developed residential project will be around $400 psf. This will translate to a possible selling price of about $500 psf.

Units in Yew Tee Residences, a new 99-year leasehold project and Maysprings, the development closest to the subject site, were transacted at $520-550 psf, he noted.

Japan Land Unveils New Focus

Source : The Business Times, April 4, 2008

It says its new IDC here will be ‘very meaningful’ to its shareholders

JAPAN Land yesterday unveiled its new business focus at an extraordinary general meeting (EGM) and shed light on the new Internet Data Centre (IDC) to be built in Singapore with its joint-venture partner CS Technology.

The whole project, slated to be one of the largest IDCs in South-east Asia, is estimated to cost $250 million to $300 million and Japan Land will take up at least a 20 per cent stake. Its construction is scheduled to start in September this year and to be completed by the fourth quarter of 2009.

It will be an eight-storey IDC with a server room area of 30,000 sq m, bigger than Japan Land’s first IDC in Tokyo, which is a 10-storey facility with a server room area of 20,000 sq m and a project cost of $170 million.

‘As a company listed on the Singapore Exchange, Japan Land’s doing an IDC project in Singapore will be very meaningful to our shareholders,’ independent director Jen Shek Voon told BT. This will propel Japan Land from a Japanese play into a regional player and signals its shift from customised housing to having a stronger footing in specialised real estate services.

The shift in focus was also prompted by shrinking margins at the group’s 68 per cent-owned customised housing subsidiary KHC Ltd amid higher competition and higher building costs, Mr Jen said. ‘It will be a leg-up to getting more higher-value contribution.’

So far, the Singapore IDC has received good responses from potential tenants, including telecommunication carriers and local blue chips, said Japan Land’s managing director Mitsutoshi Ono.

Yesterday’s EGM saw the ordinary resolution for the proposed stake sale in KHC to Kokusai Kogyo Holdings Co Ltd passed.

In February, Japan Land’s wholly owned subsidiary Japan Asia Land Ltd proposed to sell 48 per cent of its 68 per cent stake in KHC to Kokusai Kogyo Holdings for $45.6 million. The proceeds will be used to repay the outstanding bonds obtained to finance the acquisition of KHC. This allows Japan Land to improve its balance sheet while consolidating part of KHC’s earnings.

Japan Land is now looking to pare down its stake in its first Japan IDC from the current 70 per cent, said Japan Land chairman Tetsuo Yamashita. Upon completion of the construction in June, Japan Land will receive recurring earnings stream in the form of leasing fees. It will continue to evaluate opportunities for more IDC projects in Asia and in mixed commercial development, environment and infrastructure, Mr Ono said.

It is eyeing a third IDC, which could be in Singapore, Malaysia or Vietnam, he added. In Vietnam, the group is in the process of setting up an office to spearhead mixed commercial projects there with local partners, particularly in Ho Chi Minh City and Hanoi.

It’s Wait-And-See For Pender Court, Tulip Garden Home Owners

Source : The Straits Times, Apr 4, 2008

Several have bought new homes and await sealing of deals as sales are delayed

THEIR collective sale deals may be in doubt - and the huge cheques due to come their way - but some owners at Pender Court and Tulip Garden are taking a wait-and-see attitude for now.

Several told The Straits Times that they would not be fazed should the deals fall through.

Some have already received their share of the deposit. And those who have already bought new homes in anticipation of the collective sales going through say they will be open to renting out either of their two properties.

Both condos were bought by Bravo Building Construction last year. It agreed to pay $80 million for Pender Court and $516 million for Tulip Garden.

The Pender Court sale was due to be completed in late February and Tulip Garden in late May, but Bravo has postponed the settlement dates of both sales.

The firm, which works with partners on such large purchases, said it was working on a shareholders’ agreement for Tulip Garden.

Many owners at Pender Court have proceeded on the basis that their deal will go through.

A resident at the 48-unit Pender Court, off West Coast Highway, said his parents had placed a deposit on a property near the Chinese Gardens MRT station.

‘If the deal falls through, our immediate plans would be to take up a loan, buy that Chinese Gardens flat and rent out the Pender Court apartment.’

A man renting a Pender Court unit at $2,000 a month, and who gave his name only as William, told The Straits Times: ‘For tenants, the en bloc sale is a good thing, since most owners are quite desperate to rent out their flats to help pay for their new houses. So as tenants, we have a better bargaining power.’

Another Pender Court owner, who wants to be identified only as Mrs Lim, said her family had bought a West Bay condo, which cost less than their collective sale proceeds.

One owner, who declined to be named, said most Pender Court owners had already bought new homes and were waiting for the money from the sale.

Her family bought an HDB flat. ‘So if the deal falls through, we might consider moving to the new flat then renting out the Pender Court residence,’ she said.

She also said the owners had already received a 10 per cent deposit from Bravo, which they would retain should the deal fail, so that was giving some consolation amid the uncertainty.

Some residents at the 164-unit Tulip Garden near Holland Road seem untroubled by the prospect of not collecting their windfalls, which will range from $1.1 million to $4.2 million.

Trainer Sangita Khera, 40, said she liked the estate and did not wish to move.

But she acknowledged that other residents did not share her opinion. They are now in limbo as they have bought new properties in the hope of collecting a tidy amount from the sale.

‘It’s sad for some of my friends who have bought property and had moved out already,’ she said.

Bravo has paid a 5 per cent deposit of $25.8 million for Tulip Garden. It has cancelled its $162.8 million collective deal for Makeway View after finding out that it had to pay a higher-than-expected development charge.

Ten Mile Junction Site Draws A Top Bid Of $61m

Source : The Straits Times, Apr 4, 2008

Tender For Residential Plot

THE top bid for a unique 99-year leasehold site in Choa Chu Kang has come in at $61 million, which experts say is within expectations.

The residential site at the junction of Choa Chu Kang Road and Woodlands Road attracted only two bids, with Peak Green, a unit of Peak Properties, which is controlled by the United Overseas Bank’s Wee family, leading the way.

Its bid of $61 million values the site at $162 per sq ft (psf) per gross floor area. Sim Lian Land’s offer was well back at $45.68 million.

The site has an existing three-storey commercial development - the Ten Mile Junction mall - and was the first residential site above a Light Rapid Transit station offered for sale by the Urban Redevelopment Authority (URA). It has a gross floor area of 254,394 sq ft for residential use, for either flats or service apartments. The mall has a fixed gross floor area of 121,191 sq ft.

The URA said the tender will be awarded once the bids are evaluated.

Knight Frank director of research and consultancy Nicholas Mak said the price was within expectations given the location and nearby amenities.

CBRE Research executive director Li Hiaw Ho said that if the site is awarded to Peak Green, the breakeven price will be around $400 psf. This will translate into a possible selling price of about $500 psf for apartments on the site.

Lippo Agrees To Sell Robinson Stake To Dubai Retail Giant

Source : The Straits Times, Apr 4, 2008

It accepts higher price of $7.20 a share, giving up control of retailer

INDONESIA’S Lippo Group yesterday agreed to sell its shares in Robinson & Co, paving the way for Singapore’s oldest retailer to be taken over by the Al-Futtaim Group of Dubai.

Lippo, which owns 29.99 per cent of the department store chain, held out from selling until the very last moment, forcing Al-Futtaim to extend its offer deadline and raise its price twice.

The Indonesian group finally accepted the offer just before the 5.30pm deadline yesterday at a price - $7.20 a share - that was almost a dollar higher than the initial offer of $6.25.

With Lippo’s acceptance, Al-Futtaim would control 60.8 per cent of Robinson.

Barely two hours later, the acceptance level had soared to 87.2 per cent. The offer is now unconditional and has been extended to April 30 for the remaining shareholders.

These include OCBC Bank, which holds about 6 per cent of Robinson. OCBC declined to comment on whether Lippo’s move would affect its decision on its stake.

Lippo president Stephen Riady said $7.20 a share was ‘a good price’ for the group’s stake. ‘We bought it at $7.90 a share but received dividends of $1.50, so our cost is really $6.40,’ he told The Straits Times yesterday.

But he also gave other reasons for the sale: ‘The rationale for the disposal is the uncertain prospect of the retailing industry, because of the current adverse global situation.

‘Also, I think the big market for retail is really China and Indonesia. Robinson is not ready to go to China yet. It is focusing on Singapore and Malaysia, but this is a relatively small market.’

Mr Riady also raised concerns about Robinson’s rising cost of doing business in Singapore, with property rentals and staff costs escalating.

He also spoke of how department stores in Singapore are grappling with obsolescence, as mall owners start to favour smaller retailers.

‘Over the last two years, the owners of all the major retail malls in Singapore have gone, one by one, to Reits,’ he said. Reits, or real estate investment trusts, are listed funds that buy properties and collect rental income, which they distribute to unitholders like dividends.

‘The only interest of Reits is to increase yields, to ensure performance. If you have an anchor tenant like a department store, the rent is lower, so they don’t want that.’

Lippo is exiting Robinson less than two years after it bought its stake from OCBC and shook up Robinson’s board, ousting long-serving chairman Michael Wong Pakshong.

Under Lippo’s control, the 150-year-old retailer has been expanding steadily, opening a store in Kuala Lumpur and bringing in new brands.

Al-Futtaim has said it plans to accelerate this expansion and use Robinson as its own gateway into South-east Asia.

The Dubai group is headed by chairman Abdullah Al Futtaim, who is worth US$3 billion (S$4.15 billion) and was ranked the 287th richest person in the world last year by Forbes magazine.

Forbes said Al-Futtaim, which is the exclusive distributor for brands such as Ikea and Toyota in the United Arab Emirates, as well as Marks & Spencer, a franchise held by Robinson in Singapore, is ’so large and profitable that it may make up as much as 15 per cent of Dubai’s gross domestic product’.

Al-Futtaim’s bid sent Robinson shares to a three-year high even as other stocks endured wild swings recently.

But the stock fell 14 cents yesterday to $6.86 before Lippo’s announcement, possibly because of some jittery investors who feared that Al-Futtaim’s offer would lapse, which might have sent the shares tumbling.

Industry Watchers Hope New Master Plan Will Include Higher Plot Ratios

Source : Channel NewsAsia, 04 April 2008

Higher plot ratios and integrated developments with greenery and other features are among the wish lists of industry players, who are anticipating significant changes to the government's new Draft Master Plan.

The master plan, expected to be released soon by the Urban Redevelopment Authority, will guide Singapore's land use over the next 10 to 15 years.

Buildings in Singapore may get even taller, if property players have their wish.

Topping the industry's wish list is higher plot ratios from the upcoming Draft Master Plan.

A higher plot ratio means a more intensive use of land, which analysts say will go some way to supporting a larger population base and encourage existing building owners to redevelop their property.

Chua Chor Hoon, Senior Director of Research at DTZ Debenham Tie Leung, said: "Many people would hope for the master plan plot ratio to be increased but I don't think that would be the case. I think there isn't really a need for the increase in plot ratio, unless there is some pressure for more space. If we intensify everything now, it will be very difficult to grow further in the future."

For now, industry watchers expect the Draft Master Plan 2008 to provide more details about growth areas that have been identified by the URA previously.

They are areas in Jurong, Paya Lebar, Kallang, Punggol and the Southern Ridges, which could support a range of residential, commercial and recreational activities.

Market players also hope to see more interesting urban form where the features, like greenery and canals, are incorporated into the development plan.

Analysts expect the government to continue to grow the Marina Bay area.

They say effects will also be made to enhance the Central Business District.

However, they are concerned that the parking problems in the CBD may be aggravated as old buildings make way for newer ones, which have fewer parking lots.

Other possible key areas include more spaces for tourism and recreation.

Industry players say sustainable economic development and the conservation of old buildings might also be on URA's cards. - CNA/de

Futura Minority Owners Withdraw Appeal Against En Bloc Sale

Source : Channel NewsAsia, 938LIVE, 03 April 2008

Minority owners of the Futura condominium on Leonie Hill Road have withdrawn their appeal against the en bloc sale of the property.

The reasons for the decision have not been disclosed.

Futura was sold to City Developments' subsidiary City Sunshine in October 2006 for S$287 million. This means each unit owner will get between S$3.7 million and S$9.4 million.

However, some minority owners complained that the deal was not done in good faith, with no land survey done.

They also contended that a meeting of owners was not called before the price was accepted.

Now that the appeal has been withdrawn, the sale must be completed within a month. - 938LIVE/ac

Subsidised HDB Rental Flats In Greater Demand Now

Source : The Straits Times, Apr 4, 2008

30% jump in applicants in past few months; HDB says not all are needy

THE number of people applying for heavily subsidised HDB rental flats has shot up by at least 30 per cent in the past few months - to about 4,000 eligible applicants on the waiting list now.

As a result, the wait for these one- and two-room rental units is now up to 15 months - double the waiting time in 2006.

Though families hit by soaring rentals on the open market and those in financial difficulty are among those in the queue, the Housing Board said not all applicants are 'needy or have urgent housing needs'.

It said that last year, more than half who applied for its rental units were former home owners who did not owe the HDB any money when they sold their flats.

In fact, some of those in the rental queue had enough money to buy a smaller unit after selling their flat, said National Development Minister Mah Bow Tan in the recent Budget debate.

The HDB stressed that its rental flats are meant for the poor who cannot afford to own a flat and have no other housing option.

Any family whose household income is $1,500 or less a month can apply for rental housing. Also, they must wait for 30 months after selling their flats before being eligible for subsidised rental homes.

MPs interviewed say they are seeing more and more people approaching them for help in securing a rental flat.

Besides those hit by rising rentals and financial troubles, there were others who had their flats repossessed by banks when they could not service their home loans.

The heavily subsidised HDB rental units are the only lifeline for these people, say the MPs interviewed, who included Ms Indranee Rajah, Madam Cynthia Phua and Madam Halimah Yacob.

Depending on household income and other factors, rentals are between $26 and $205 a month for a one-room flat; and between $44 and $275 for a two-room unit.

One person who has been on the waiting list for the past few months is part-time promoter Chan Yoke Yin, 46.

Her family ran into debt when her husband, a bus driver, was hit by cancer and a stroke, and had to stop work about four years ago.

The family started to fall behind in loan payments, and now owes the HDB more than $300,000 for a five-room flat. Madam Chan, who earns about $1,000 monthly, says she has 'no choice' but to sell her flat.

Ms Rajah said: 'I have had an inordinately large number of people coming for help to get a rental flat last year.

'There seems to be an acute shortage of rental flats.'

She has seen at least two cases of people living in the open while waiting for a rental unit, she said. One is an odd-job worker who has been sleeping at a bin centre for months, while the other is a family living on the beach.

The HDB says people who need a flat urgently can switch to estates where the wait is shorter, for example, in Woodlands. Waiting time at these estates is around three months, compared to Bedok and Tampines, where one can wait for up to 15 months.

Meanwhile, the HDB is referring those in urgent need to charities which run temporary shelters. The first shelter for homeless families, New Hope Community Services, has taken in about 20 families since opening last year.

It is managing 'a few' flats for this purpose, the Ministry of Community Development, Youth and Sports (MCYS) told The Straits Times.

'These families are not allowed to stay long term at these flats and are expected to move out as soon as they find alternative housing,' said the MCYS spokesman. 'Many such families have been able to move on to stay with their relatives or friends.'

HDB is also increasing the supply of rental flats from the current 43,000 units to 50,000 over the next few years and reviewing the eligibility criteria for rental housing to help the 'genuinely poor'.