House Prices May Fall More Than During 1930s: Economist

Source : The Business Times, April 24, 2008

(NEW HAVEN, Connecticut) An influential economist who long predicted the housing market bubble cautioned on Tuesday that the slump in the US housing market could cause prices to fall more than they did in the Great Depression, and bailouts will be needed so millions don't lose their homes.

Mr Shiller: 'It seems we have developed a speculative culture about housing that never existed on a national basis before.'

Yale University economist Robert Shiller, pioneer of the widely watched Standard & Poor's/Case- Shiller home price index, said there's a good chance housing prices will fall further than the 30 per cent drop in the historic depression of the 1930s. US home prices have dropped 15 per cent already since their peak in 2006, he said.

'I think there is a scenario that they could be down substantially more,' he said during a speech at the New Haven Lawn Club.

Mr Shiller's Standard & Poor's/Case-Shiller home price index is considered a strong measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month.

Mr Shiller, who admitted he has a reputation for being bearish, said real estate cycles typically take years to correct. Home prices rose about 85 per cent from 1997 to 2006 adjusted for inflation, the biggest national housing boom in US history, he said.

'Basically we're in uncharted territory,' Mr Shiller said. 'It seems we have developed a speculative culture about housing that never existed on a national basis before.'

Many people became convinced that housing prices would increase 10 per cent annually, a notion that Mr Shiller called crazy. -- AP

Resorts World Completes $4 Bln Credit Syndication

Source　: The Business Times, April 24, 2008

Resorts World at Sentosa (RWS) announced on Thursday that it has completed the syndication of $4 billion credit facilities for its integrated resort development, closing one of the largest loans ever successfully undertaken in Singapore.

The borrowings were made at an interest rate of 175 basis points above Singapore Swap Offer Rate. The tenure of the loan extends to 2015.

A total of 10 banks participated in the syndication, jointly underwritten and bookrun by five original mandated lead arrangers: DBS Bank, Oversea-Chinese Banking Corporation, The Hongkong and Shanghai Banking Corporation, The Royal Bank of Scotland plc and Sumitomo Mitsui Banking Corporation.

The expanded mandated lead arrangers include Malayan Banking Berhad, The Bank of Tokyo-Mitsubishi UFJ, Singapore Branch, Bangkok Bank Public Company, Singapore Branch, CIMB Bank Berhad, Singapore branch, BNPP Singapore branch, Calyon, Commerzbank AG, Singapore branch and National Australian Bank Limited, Singapore branch. The Singapore branches of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, and JP Morgan Chase Bank, N.A, joined as arrangers.

The credit facilities will fund two-thirds of the integrated resort's $6 billion project cost, with the remaining to be paid through equity raised through a successful rights issue in 2007 by RWS's parent company, Genting International Public Limited Company. -- BT newsroom

China Warns Of Housing Price Hikes In Second Quarter

Source : The Business Times, April 24, 2008

(SHANGHAI) China's top economic planning agency has warned that a range of economic factors were likely to push up domestic property prices in the second quarter.

Going higher: The NDRC says upward pressure on housing prices is mounting again after a slight slowdown in the first three months of the year

The National Development and Reform Commission (NDRC) said in a quarterly report on China's real estate sector released on Tuesday that upward pressure on housing prices was mounting again after a slight slowdown in the first three months.

'Excessive liquidity and the appreciating yuan are driving asset prices including houses higher, while soaring costs of steel and labour are also pushing prices forward, especially in small and medium-sized cities,' the report said.

'Meanwhile, huge amounts of funding have fled equity markets after recent slumps . . . investors are likely to reinvest the money in property instead of bank deposits.'

The report stressed that the government must keep housing market prices stable, partly through increasing the amount of land available for residential development.

Since 2005, China has taken a number of measures, including interest rate hikes and imposing taxes, to curb rapidly rising real estate prices amid concerns of a dangerous bubble in the sector.

In the wake of those measures, soaring home prices did cool to a certain extent. Official data said earlier that property prices in 70 major cities across the country rose 10.7 per cent year-on-year in March, down 0.2 per cent from February.

China has been struggling to rein in galloping inflation, which saw consumer prices soar 8 per cent for the first quarter of the year, near a 12-year high. -- AFP

Property Transactions With Contract Dates Between March 31 - April 7, 2008

Kajima JV Wins $1.05b Sentosa IR Contract

Source : The Business Times, April 24, 2008

Job includes building of three hotels, casino, showroom

GENTING International's Resorts World at Sentosa (RWS) has awarded a $1.05 billion construction contract to a joint venture between Kajima Overseas Asia and Tiong Seng Contractors.

This takes total contracts awarded so far for the $6 billion integrated resort to more than $2 billion. And it is another big win for Kajima-Tiong Seng, which is also the principal contractor for the two commercial towers at Marina Bay Financial Centre.

At RWS, Kajima-Tiong Seng will construct three of the six hotels as well as the resort's thoroughfare, FestiveWalk.

The hotels are the 130-suite Maxims Residences, the 470-room Hotel Michael by architect Michael Graves and the 400-room Festive Hotel.

FestiveWalk is a half-km alfresco strip where the resort's main shopping, eating and entertainment outlets will be located.

Kajima-Tiong Seng will also build a 15,000 sq m casino in the basement of Maxims Residences and the dual-purpose 1,600-seat Le Vie Showroom, which doubles as the Plenary Hall, in Festive Hotel.

Michael Chin, executive vice-president of projects at RWS said: 'This contract covers some of the key components of the development, and we were looking for a contractor with the relevant experience and reputation for completing projects on time.'

With underground construction and superstructure works still going on, Mr Chin said the resort's buildings can be expected to start rising from the site soon.

'Construction is progressing steadily and we are on track for opening in early 2010,' he said.

Companies that have been awarded contracts at RWS so far include Sembawang Engineers and Constructors, Kingsmen Creatives, TBWA and China Jingye Construction Engineering Contract Company.

Earlier this month, RWS awarded a $340 million contract to Singapore-listed Low Keng Huat to build a 360-room Hard Rock Hotel at the resort.

Property Price Data Can Yield Different Conclusions

Source : The Business Times, April 24, 2008

Same figures in flash estimate of property prices can be read very differently

THE property price index (PPI) for the first quarter of 2008 will be released soon - and is unlikely to differ from an earlier flash estimate of a 4 per cent increase, despite developers starting to cut prices for new projects.

So how useful is the PPI? Does data overload cause confusion?

Last week, The Straits Times headline for the story on the flash estimate was 'Private homes sales recover in weak market'. In The Business Times, the headline was 'Private home sales tumble, prices weaken'.













As confusing as it sounds, both headlines were technically correct.

One reason could be how data is interpreted and the level of optimism or pessimism - the same figures can be read very differently.

Consider the flash PPI for Q1, which increased despite the quarter being one of the worst in recent years for new sales. Yet the consensus appeared to be that the PPI could still rise this year.

The PPI is essentially a transaction-based index. Properties are split into segments to form sub-indices that are then used to calculate the PPI.

The Urban Redevelopment Authority (URA) uses the moving-average method to compute the weights assigned to the various sub-indices. The weights, updated quarterly, are based on the moving average mix of transactions over the past 12 quarters.

While the PPI is widely used as the gauge of Singapore's property market, this method is not used universally.

In the United States, for instance, analysts are more likely to refer to 'housing starts' - the number of homes being built - as a gauge of the market, or more importantly, market sentiment.

There are also indices based on the prices of resale homes alone, as some believe this is a more accurate measure of prices the market will bear.

In Singapore, Jones Lang LaSalle (JLL) has been looking at other ways to track and gauge property price movements.

Recently, JLL's head of research (South-east Asia) Chua Yang Liang started to monitor the lowest-transacted median prices of properties in the Outside Core Region because he believes these are a more accurate reflection of price tolerance.

While such an index is in the works, Dr Chua says there could also be variables, pertaining to property size and location, that could have a significant bearing.

Recognising that the property market is becoming more fragmented, with the high-end sector in particular supported by foreigners and speculators, URA has provided separate PPIs for different regions, with the Outside Central Region being one and the Core Central Region and Rest of Central Region the other two.

But this has itself led to speculation on which region is performing better.

In one of its more pro-active moves, URA also began releasing monthly data on developer sales in the middle of last year when the market was most 'exuberant'.

While the rationale at the time was to make pricing of new launches even more transparent, it has inadvertently revealed how prices can be skewed.

Part of this could be due to developers sometimes selling units selectively to ensure prices remain high.

An optimist will interpret this as prices remaining stable, while a pessimist will only see that demand has fallen.

For the current PPI to be meaningful, there should be some correlation with sales volume, as both are tied to the basic mechanics of supply and demand.

However, after comparing sales volume against the PPI since the previous peak in the mid-1990s, no strong correlation could be determined.

One contrarian trend did emerge, and this was that since the last trough in Q4 1998, the PPI is more likely to rise as transaction volumes fall. Unfortunately, this only adds to the confusion.

Keppel Land Q1 Net Profit Down 3.5%

Source : The Business Times, April 24, 2008

Writeback of provisions higher at $23.1 million

KEPPEL Land yesterday posted net earnings of about $60.3 million for the first quarter ended March 31, 2008, down 3.5 per cent from the corresponding period last year.

Earnings per share for the quarter fell to 8.4 cents from 8.7 cents.

The results were helped by a $23.1 million writeback of provisions made earlier for properties held for sale, mostly on Park Infinia at Wee Nam condo which received Temporary Occupation Permit at the end of Q1 2008. For Q1 2007, the writeback of provisions for properties held for sale was $13.34 million lower at $9.76 million.

Profit after tax and minority interest (Patmi) from property trading fell 13.1 per cent to $49.1 million due to the completion of several projects in Singapore and overseas, and reduced profit contribution from Marina Bay Residences (which was being developed by an associated company). In Q1 2007, an initial 20 per cent profit for this project was recognised upon signing of the sales and purchase agreements. Keppel Land also said that property trading posted a lower contribution in Q1 2008 as launches were held back due to market conditions brought on by US sub-prime problems.

Patmi from property investment fell by 33.9 per cent to $7.6 million in Q1 2008.

However, fund management activities achieved a higher Patmi of $4.2 million in Q1 2008 compared with $0.7 million in Q1 2007, on the back of higher management fee income from a larger portfolio of assets under management by K-Reit Asia (arising from the acquisition of a one-third stake in One Raffles Quay) and Alpha Investment Partners.

Keppel Land's Q1 sales slipped 7.6 per cent year-on-year to $273.1 million. The lower turnover was due largely to the completion of Urbana and The Belvedere in Singapore, as well as The Waterfront in China during the last financial year, and hence no sales were recognised in Q1 2008, Keppel Land said.

The group will monitor the market closely and launch Marina Bay Suites and the second phase of Reflections at Keppel Bay 'when market conditions are more favourable', the company said in its results statement.

In late January, it had indicated that Marina Bay Suites would be launched after Chinese New Year, within the first quarter. That itself was a delay from the earlier launch target of before Chinese New Year.

Keppel Land said that Jakarta Garden City, a gated residential township in eastern Jakarta was soft launched early last month and 76 per cent of the initial 191 landed homes released have been sold. In India, marketing is slated to begin in the second half of this year for Elita Horizon, a 1,142-unit condo in Bangalore.

As reported earlier, over 50 per cent of the 2.9 million square feet of total net lettable area at Marina Bay Financial Centre (MBFC) have been pre-committed. Over the last few months, about 150,000 sq ft were taken up, mainly by Barclays and Amex.

Keppel Land said that its other upcoming Ocean Financial Centre has secured financing at an attractive rate and appointed the main contractor.

SingTel To Build Green Data Centre

Source : TODAY, Thursday, April 24, 2008

SINGAPORE Telecom (SingTel) will build a new state-of-the-art data centre at Kim Chuan which will be equipped to deliver highly secure and reliable network infrastructure services to support the next-generation infocomm requirements.

The Kim Chuan Telecommunications Centre 2 will be constructed to meet the Building and Construction Authority’s recently-revised requirements under its Green Mark scheme, that ensures energy and water efficiency.

It will be located next to SingTel’s existing data centre there and will be the telco’s fifth facility in Singapore when completed in early 2010.

It will offer 150,000 sq ft of space, making it one of the largest data centres here, and will increase SingTel’s total data centre capacity here to more than half a million sq ft.

The centre will have high capacity power and cooling systems with full redundancy, advanced fire suppression systems and cabling infrastructure designed with diversity to ensure maximum uptime. It can also withstand the increasing weight of sophisticated computing and data storage systems.

SingTel’s executive vice-president for Business, Mr Bill Chang. anticipates strong demand. “Increasingly, customers are looking for end-to-end managed solutions that offer convenience and peace of mind,” he said.

Singapore Inflation At 6.7 Percent In March: Government

Source ：AFP, Apr 24, 2008




Singapore's annual inflation was 6.7 percent last month, boosted by higher costs of food, transport, communications and housing, the Department of Statistics said on Wednesday.

The March consumer price index figure was down 0.1 percent from February's figure, the department added.

On a seasonally adjusted basis, the index was 0.3 percent higher in March compared with the previous month, it said.

Inflation reached 6.6 percent in the first three months of 2008, compared with the same period last year.

Singapore is not alone in grappling with inflation.

The United Nations food agency on Tuesday said the world faces a "silent tsunami" of soaring food prices and more must be done to help secure future supply.

Rising food prices are driving more people in Singapore, the wealthiest economy in Southeast Asia, to join the queue for free meals, charities say.

Crude oil is also trading at near record high prices globally. --AFP

Concern Over Foreign Workers In HDB flats

Source : My Paper, Apr 24, 2008

THE relaxation of regulations on the rental of HDB flats to foreign workers has become a problem for the residents of a block in Bedok Reservoir.











Many units of the particular block, where I live, are rented to foreign workers from India, China and Thailand, who have a different idea on hygiene, lifestyle and the general appearance of their flats and the surrounding.

Since the flats do not belong to them, plus the fact that they are busy earning a living, the foreign tenants simply treat the units as temporary shelters instead of their home.

Residents who walk past these flats can see that the tenants do not bother with keeping the units clean and tidy, and the flats are really an eyesore and embarrassment to the neighbourhood.

These tenants are mostly single men and they tend to live in groups. Thus, I worry about the safety of my daughters and I have to ensure that they are accompanied to the lift when going out and picked up from downstairs when coming home.

I have not seen the Member of Parliament of this area visiting my block ever since more foreign workers start to live here. Is it a case of the block being too much of an embarrassment?

I have provided feedback to the Housing and Development Board on the issue of the many foreign workers living in our block, but it seems that nothing can be done about it as the criteria for rental are all met.

The residents need help from the authorities so that the flats are not rented out to any Tom, Dick and Harry.

Ms Serene Tan-Lim Hwee Kwang

Inflation Hits 26-Year Record High For March

Source : The Straits Times, Apr 24, 2008

Consumer price index rose 6.7 per cent, with transport and food costing more

ANOTHER month, another record. Last month's figure for inflation was a 26-year high, following on from record months in December and February.

Weeks of reports of rising global prices of food and oil began to bite, hitting Singaporeans hard at the food courts and markets, and on the buses and roads. Higher food and transport costs led to the rise in price levels in March.



















Economists say last month's inflation numbers showed that the Singapore central bank had taken the right step recently when it tightened monetary policy.

But they are not convinced it will be enough to curb inflation in the second half of the year.

The consumer price index (CPI) rose by 6.7 per cent in March compared with the same period last year, said the Singapore Department of Statistics (DOS) yesterday.

This is the highest level since March 1982.

Food prices, which comprise 23 per cent of the total index, rose 7.6 per cent as a result of more expensive cooked food, rice, cereals, milk products, fresh vegetables, seafood and poultry.

Higher petrol and car prices and taxi fares drove transport and communication costs up 7.9 per cent. These costs make up 22 per cent of the overall index.

Housing, the next largest component at 21 per cent, rose by 8.1 per cent in March, driven by increases in accommodation costs and electricity tariffs.

Compared with February, the index fell marginally by 0.1 per cent, with food prices and transport and communication 0.2 per cent lower.

Overall, the index for the first quarter of the year was up 6.6 per cent, compared with the same quarter last year.

The Government has forecast full-year inflation in the range of 4.5 to 5.5 per cent this year, well up on last year's 2.1 per cent.

Economists agreed that March's inflation figures were largely in line with expectations and believe that it is a trend that will likely continue in the next few months.

CIMB-GK economist Song Seng Wun said: 'Looking ahead, we expect elevated high food prices to underpin CPI inflation.

'The rising cost of raw materials and shipping may lead to the index staying high for much longer than we anticipated, although the stronger Singapore dollar will likely partly cushion part of the higher prices in coming months.'

Earlier this month, the Monetary Authority of Singapore announced plans to allow an immediate jump in the value of the Sing dollar by moving up the range in which it allowed the local currency to fluctuate.

This takes direct aim at inflation as a strong Sing dollar helps offset costlier imported goods.

However, United Overseas Bank economist Ho Woei Chen was unsure if the one-off move would be enough.

'Inflationary pressure will continue to stem from food, commodity prices as well as higher education fees, medical and road usage costs which will not be alleviated by a firmer Sing dollar,' she said.

Similarly, HSBC economist Robert Prior-Wandesforde does not believe that a stronger Sing dollar will push inflation back to the traditional 1 to 1.5 per cent.

'We estimate that each 1 per cent appreciation of the trade-weighted currency cuts just 0.1 per cent from inflation in the first full year and a further 0.1 per cent in the second,' he said.

However, some experts believe inflation will ease in the second half of the year, due in part to the basis effect brought about by the 2 percentage point hike in the goods and services tax from July last year.

Mr Song said the risk of a United States and global recession could see commodity prices falling sharply in the second half.

Keppel Land's Q1 Profit Down 3.5% On Year

Source : Channel NewsAsia, 23 April 2008

Mainboard-listed Keppel Land has posted a 3.5 percent drop in quarterly earnings.

First quarter net profit came in at S$60.3 million, down from S$62.5 million in the same period last year. This was much lower than a Dow Jones Newswires poll estimate of S$98 million.

Revenue fell by 7.6 percent on year to S$273.1 million.

The weak earnings came on the back of a cautious property market, following the sub-prime mortgage crisis in the US.

Keppel Land saw lower earnings from property trading and investment operations. Profit from property trading fell by 13 percent, while gains from property investment declined by almost 34 percent.

The earnings were released after the markets closed on Wednesday. Keppel Land shares ended the day's trade 3 cents higher at S$6.10. - CNA/so

Ascott Residence Trust Posts Q1 Distributable Income Of S$14.2m

Source : Channel NewsAsia, 23 April 2008

Mainboard-listed Ascott Residence Trust (ART) has posted a first quarter distributable income of S$14.2 million, up 76 per cent compared to the same period a year ago.

ART said it benefited from higher demand for accommodation from business travellers in the region.

It also attributed its strong financial performance in the first quarter to the improved operating performance of the properties and contribution from new acquisitions.

Going forward, it expects to see stable growth as it maintains a balance of properties in both developed and emerging markets in the Pan-Asian region.

For the first quarter ended 31 March, distribution per unit is 2.33 cents, up from 1.59 cents in the same period a year ago. - CNA/vm

SingTel To Build New State-Of-The-Art Data Centre At Kim Chuan

Source : Channel NewsAsia, 23 April 2008

Singapore Telecommunications (SingTel) says it will build a new state-of-the-art data centre at Kim Chuan.

The Kim Chuan Telecommunications Centre 2 is expected to be completed in early 2010.

SingTel sees the growth of higher performance computing, such as blade servers and the iN2015 government initiative, driving the demand for new data centre facilities that can support next-generation infocomm requirements.

The new centre will be located next to SingTel's existing data centre at Kim Chuan and will be its fifth facility in Singapore. - CNA/ir

Resorts World At Sentosa Awards Largest Contract Of S$1.05b To Date

Source : Channel NewsAsia, 23 April 2008

Resorts World at Sentosa has awarded its largest building contract to date, worth S$1.05 billion, to a joint venture between major Japanese contractor Kajima Overseas Asia Pte. Ltd. and local player Tiong Seng Contractors (Pte) Ltd.

This brings the total building contracts awarded so far to over S$2 billion. The S$6 billion integrated resort is slated for completion in early 2010.

Kajima-Tiong Seng will construct three of the six hotels in Resorts World and the resort's thoroughfare, FestiveWalk.

The three hotels - Maxims Residences, Hotel Michael and Festive Hotel - will offer some 1,000 suites and rooms out of the 1,800 to be found throughout the resort.

The contract also includes the construction of a 15,000-square-metre casino located at the basement of Maxims Residences which will feature gaming rooms, suites and lounges.

The joint venture will also build a dual purpose 1,600-seat Le Vie showroom, which doubles as a Plenary Hall, in Festive Hotel. - CNA/vm

Singapore Dollar Hits Record High Against US Dollar

Source : Channel NewsAsia, 23 April 2008

The Singapore dollar hit a record high against the greenback on Wednesday after inflation in the city-state rose and amid fears of a US recession.

The Singapore unit hit a peak of 1.3463 to one US dollar before falling back to 1.3480 in afternoon trade.

The euro breached 1.60 US dollars for the first time Tuesday on renewed jitters about the US economy, but eased back in Asian trade on Wednesday, dealers said.

The greenback has fallen steeply against world currencies in recent months as US economic growth slowed and fears mounted that the world's largest economy could fall into a recession.

The local unit shot up earlier this month after Singapore's de facto central bank further tightened monetary policy in a bid to address a sharp rise in consumer prices.

Inflation, along with the US dollar's slide, is among the key drivers of the Singapore dollar's strength, said Puay Yeong Goh, a currency strategist at Barclays.

Official figures on Wednesday showed Singapore's annual inflation hit 6.7 percent in March. - AFP/ir

Singapore's March Inflation Rate At 26-Year High Of 6.7%

Source : Channel NewsAsia, 24 April 2008

Singapore's annual inflation was 6.7 percent last month, the highest in 26 years, the Department of Statistics said on Wednesday.

It said the consumer price index (CPI) was boosted by higher costs of food, transport, communications and housing.

The March CPI was down 0.1 percent from February's figure, the department added.

On a seasonally adjusted basis, the index was 0.3 percent higher in March, compared with the previous month.

Inflation reached 6.6 percent in the first three months of 2008, compared with the same period last year.

Singapore is not alone in grappling with inflation.

The United Nations food agency on Tuesday said the world faces a "silent tsunami" of soaring food prices and more must be done to help secure future supply.

Rising food prices are driving more people in Singapore to join the queue for free meals, charities said.

Crude oil is also trading at near record high prices globally. - AFP/so