Katong Mall Goes On Sale Amid Controversy

Source : The Straits Times, Sep 28, 2007

Minority owners say process to sell en bloc too fast; no chance to air views













'LESS STRINGENT': Minority owners of Katong Mall are upset that the collective sale process was conducted under the old rules and not the stricter ones due to kick in next month. -- ST PHOTO: FRANCIS ONG


KATONG Mall is up for a collective sale but angry minority owners claim they have been left out of the process.

More than 35 disgruntled owners said the sale agreement was drawn up so fast that they did not get a chance to air their views.

They are also upset that the sale process was conducted under the old rules and not the stricter ones due to kick in next month.

Owner Jeannette Aruldoss, 44, a lawyer, told The Straits Times that the process was 'done too quickly. We welcome the idea of the sale, but we want it done by the new rules'.

The revised law requires sale committee members to be elected at a general meeting and allows a five-day cooling off period for owners after signing a sale deal.

Three firms own 72 per cent of the 258-unit mall at the junction of East Coast and Joo Chiat Roads - Elysium, a holding company, and property developers Nustavino and Habitat Properties. The three have common investors. The rest of the mall is divided among about 100 owners.

The majority owners backed a sale and needed only a further 8 per cent for the required 80 per cent. This was confirmed on Wednesday.

The first time minority owners heard of a sale initiative was in a July 6 letter from property firm Jones Lang LaSalle (JLL) stating that five owners, holding about 74 per cent of the shares, had already volunteered for a sale committee.

At an Aug 6 meeting to discuss the sale, JLL said a process for collecting signatures would start the next day.

Minority owners met JLL on Sept 6 to express their concerns and to set up a meeting with the sale committee.

They did not hear from JLL until Sept 11, when it told them that the required 80 per cent level had been reached.

They were unconvinced and tried repeatedly to arrange a meeting with the sale committee - personally and through JLL - but to no avail.

JLL marketing agent Stella Hoh told The Straits Times yesterday that she did tell minority owners on Sept 11 that they had achieved the 80 per cent 'subject to lawyer's verification of signatures'.

Confirmation came only on Wednesday.

Owner Lim Earn San, 60, said he was shocked at the speed of the sale, adding that the minority owners were not given any room for negotiations over the terms of the sale agreement.

The appointment of the marketing agent and lawyers was also done by the majority owners without consulting the minority owners, he said.

Mr Lim, who also owns a unit at Katong Shopping Centre, said the approach to the sale of the two malls, 'couldn't be more different'.

Owners at Katong Shopping Centre are following the new rules, having known of the changes since March, he said, adding: 'Why can't Katong Mall do the same?'

Some minority owners also fear a conflict of interest as two majority owners are in the property industry. But Ms Hoh said JLL had told the owners that the sale will be done by public tender and that any interested buyers related to the collective sale agreement 'are required by law to declare their interests'.

Three sale committee members declined to comment.

The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. An independent expert estimated its sale price to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.

JLL figures show that units have sold at a range of $300 psf to $800 psf this year.

All eyes are now on its upcoming sale launch. 'We'll see how it goes, but if we're not convinced the sale was done in good faith, we'll take our concerns to the Strata Titles Board,' said minority owner Robert Ong.

VALUE ESTIMATE

The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. Its sale price is estimated to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.

Looking back

KATONG Mall is a building with a beleaguered past.

Built in 1983, the former Katong People's Complex was known as the 'prison with pipes' due to its exterior of gigantic pipes and steel structures.

The surburban mall struggled initially with poor traffic and flagging businesses and in 1994, a woman, Madam Mona Koh, was shot there by an unknown gunman. She became paralysed after the incident.

A year later, the complex underwent a $12 million revamp and became Katong Mall.

Its flamboyant developer was Mr Ho Kok Cheong - who was also behind People's Park Complex.

He was declared bankrupt in the 1990s and was infamously involved in a massive corporate fraud in 2005.

Collyer Quay Makeover

Source : The Straits Times, Sep 28, 2007

One Fullerton part of big revamp; exciting new dining, nightlife possibilities opening up

COLLYER Quay and the surrounding corridor of properties are set for big changes under developer Sino Land's multimillion-dollar makeover plan.

Among the first to be revamped will be One Fullerton, though it is one of the newest buildings on the waterfront.

Sino Land's plans call for the building to get a new set of tenants offering exciting dining and nightlife possibilities - all by August or September next year, to ride on the National Day festivities.

It is a popular vantage point for the National Day Parade, which is now held on a floating amphitheatre across the bay.

But the big ace up the developer's sleeve is that the top floor of One Fullerton has the perfect vista onto the hairpin turn of the proposed F1 race track.

The company said it will explore how it can best use its prime waterfront vantage.

Ms Sulian Tan-Wijaya, the new general manager of The Fullerton Heritage, now the name for Sino Land's clutch of properties in the area, said: 'There are tremendous opportunities to create special events and promotions in the precinct.'

Sino Land, controlled by the family of property magnate Ng Teng Fong, won the tender for the Collyer Quay corridor amid much public interest. It put in the highest bid at $165.8 million for the land. The group already owns the iconic Fullerton Hotel and Waterboat House.

The Fullerton Heritage project will preserve the distinctive architecture of the area - including historic Clifford Pier and the Customs Harbour Branch Building.

Upmarket restaurant and luxury retailers are meant to fill the area, which will be rebuilt with outdoor decks and spaces for cafes.

The plans also include a six-storey luxury boutique hotel with 100 rooms with 'full sea views'.

Revellers will be able to party on the water itself as the blueprint calls for a floating plaza with space for a nightspot and several private 'pods' for shops or exclusive parties.

The Straits Times understands that the development will also have berths for small boats that will ply the bay.

The Fullerton Heritage is set to grow alongside a string of attractions around the promontory of the Singapore River. This includes the new Marina Bay downtown and financial centre; the Marina Bay Sands integrated resort (IR); the Garden at Marina South; the Singapore Flyer, and the Esplanade Theatres by The Bay.

Together, they will cater to about 50,000 well-heeled executives working in the area, as well as about 20,000 residents in the upcoming residential projects, including The Sail, which will sit right next to the Sino Land development area.

Mr Donald Han, managing director of property consultancy Cushman & Wakefield, told The Straits Times that market interest has been keen, especially in the upmarket Clifford Pier.

The Fullerton Heritage had several factors going for it, he said. For one thing, it would be an architectural showcase, especially with the efforts to preserve Clifford Pier.

But more importantly, it would have one of the longest, and most sought-after waterfronts in Singapore: 'It's a view to die for.'

With its multiple buildings, Sino Land can create the draw for a critical mass of visitors, he said. 'I think of it as the last link, almost, in the entire rejuvenation masterplan for the Marina Bay area.'

When told of the plans, undergraduate Kenny Tan, 21, wondered if it would be too much of a good thing: 'Hopefully, it doesn't end up as a white elephant with all the competition from the new IR and downtown.'

But shipping executive Simon Lee, 37, said that he could envision it as the new place to see and be seen.

Foreign Population In S'pore Crosses 1m Mark

Source : The Straits Times, Sep 28, 2007

Highest jump in at least seven years helps lift total population here to 4.68 million

FOREIGNERS are coming here in unprecedented numbers, contributing to the largest swell in Singapore's population in more than two decades.

The foreign population, which includes professionals, workers, students and their family members, was an estimated 1,005,500 in June this year - crossing the one million mark for the first time.

This is a 14.9 per cent rise over a year ago and represents the highest jump in at least seven years, according to the Department of Statistics.

The previous year's increase was 9.7 per cent.

The number of Singaporeans and permanent residents here also grew 1.8 per cent, the same as the previous year.

These increases lifted Singapore's total population to 4,680,600 as of June this year - a 4.4 per cent rise over the previous year.

This is also the largest increase since 1982's 4.5 per cent.

The figures, from the Department's annual report on population trends released yesterday, also covered statistics for marriages, divorces, births and deaths.

Economist Song Seng Wun said the surge in the number of foreigners reflects the nation's broad- based economic recovery.

'Foreigners are lapping up job opportunities for sectors across the board, from financial services to teaching to construction,' he said.

External factors figure too.

'Many neighbouring countries, such as Indonesia and Malaysia, have been on a strong growth path, so their companies have been setting up shop here as a base for regional expansion,' he added.

Liberal immigration policies also play a part, said consultant demographer G. Shantakumar.

'We are attracting not just workers, but also students, in the hope of getting more foreigners to settle down here,' he noted.

One newly-arrived professional is 36-year-old China national Hu Yen. The accountant said career prospects are better here and he is hoping his wife and son can join him.

'My wife's an accountant too, so she can find a job here. And my son will benefit from the education system,' said Mr Hu, who arrived two weeks ago.

Singaporean Thomas Gan, 56, an operations officer, said there is no harm having more foreigners if jobs are aplenty, especially those that locals do not want to take up. 'But the aged and uneducated who compete with foreigners for jobs will feel the pinch.'

Asked about the effects that an influx of foreigners might have on social cohesiveness, sociologist Paulin Straughan said she did not see an adverse impact.

But she cautioned against negative stereotyping, such as saying foreigners usurp high-paying jobs, as this could lead to a less cohesive society.

'We need to be careful, and not grow a culture of resentment among locals,' she said.

The annual report also showed that the total fertility rate rose a notch to 1.26 last year. While this is up from 1.25 a year earlier, it is still far below the 2.1 figure needed to replace the population.

US May Have To Bid Farewell To Good Times

Source : The Business Times, September 28, 2007

The house of cards is falling amid soaring oil prices, diving home sector and credit crunch

IT will be recalled as a Golden Economic Age, the Greenspan Era, or the Goldilocks Economy - but one thing is clear: The good days of doing-away-with-the-business-cycle and spending-like-there-is-no-tomorrow are probably over as far as the US economy is concerned.

End of the Goldilocks Economy: The good days of Americans spending-like-there-is-no-tomorrow and maxing out on their credit cards on luxury items at establishments in places like the high-end Santana Row shopping area in San Jose, California, are most probably over

Indeed, it is becoming obvious that Americans will have to say 'bye, bye' to an age when consumers could take out huge mortgage loans to pay for new homes and spend the weekends shopping for the latest plasma televisions - made in China - as they maxed out on their credit cards.

The era when financial institutions could juggle new and increasingly complex ('exotic') financial products that made it possible to extend more credit to the consumers and businesses, including packages of mortgages to those who had already maxed out on all their credit cards, are well and truly over.

And the time when the government could expand its current account deficit (6.2 per cent of US GDP in 2006) on military adventures in Mesopotamia and on tax breaks for financial speculators and real estate magnates - and have all of that financed by China - has gone.

And, yes, it's also an end to the years during which the US Federal Reserve Board could print more money to ensure that the good times of low interest rates, low prices, and cheap money will continue to roll.

For much of the post-Cold War era and the ensuing years of globalisation, with the former members of the communist bloc, China and other emerging markets joining the global economy, Americans benefited from the rewards of economic liberalisation abroad and at home.

Hence, global trade liberalisation, including the creation of the World Trade Organization (WTO) and the accession of China and other new economies into it, made it possible for American consumers to spend more time in shopping malls buying very cheap Made-in-China socks and shoes, televisions and computers, and a lot of toys.

In turn, the Chinese - as well as the South Koreans and Japanese - used up the money they made exporting their cheap products to the United States to purchase US treasury bills and stakes in American companies and help the US to run its huge current account deficit and maintain its low real interest rates.

While the Chinese were saving and the Americans were spending, the de-regulation of the American economy, including its banks and other financial institutions in the 1990s, made it possible for whiz-kids in the hedge funds to come up with all the various exotic financial instruments that made it possible to provide more credit to American consumers and businesses.

US financial institutions stoked up a real estate boom that provided cheap mortgages to American buyers who could then commute from their new homes in the 'exurbs' to their work in cheap SUVs and who could fill their cars with cheap gas, thanks to the low global energy prices, made possible by Saudi Arabia and other oil-producing states that the American military helped protect.

The process of globalisation combined with the high-tech boom of the 1990s, including the above-mentioned new financial products together with the intervention by Alan Greenspan's Fed in the form of pumping money during financial crises, helped protect the American economy against potential shocks and created expectations that it was possible to moderate the business cycle for eternity.

And it all sounded like a good deal. This American Empire of Debt made life good for most Americans. It enriched the money men and women and the members of the emerging class of globe-trotting yuppies while making it possible for the members of the middle class to finance their shopping for televisions, home buying and vehicle driving.

The bursting of the high-tech bubble, the bearish mood on Wall Street and the terrorist attacks on Sept 11, 2001, created the sense that the economic chickens were coming home to roost. But the Fed's intervention in the form of rate cuts helped keep the economy going with just a mild recession.

It also lifted spirits in Wall Street as low interest rates kept the credit bubble afloat even as energy prices were going up - as a result of the booming Chinese economy and the instability in the Middle East - while the US budget and trade deficit were expanding - thanks to the military intervention in the Middle East and the growing imports from China.

It was not surprising that with falling interest rates and low inflation, Americans felt that despite recession and war, they were getting richer.

But the combination of high energy prices, a collapsing housing market and a credit crunch have finally brought down the house of cards in the form of falling home prices, collapsing mortgage firms and anxious financial markets.

Even if the recent rate cuts by Ben Bernanke's Fed helps lessen the turmoil in the markets, it is becoming clear that the mood among American consumers and businesses is changing as the economy is getting ready for a major slowdown.

There are no signs that the housing market is recovering or that borrowing costs will stop rising. And there are growing fears that the rate cuts could actually backfire, by igniting inflation pressures and by putting downward pressure on the US dollar that has already been sliding against the euro and other major currencies in the last six years.

While some investors will probably take advantage of new investment vehicles to exploit the decline in the value of the US currency, and American exporters will benefit from a weak US dollar in selling their products abroad, the falling dollar is probably the most dramatic sign of a weakening American economy.

A weak US currency would put upward pressure on prices in the United States and increase the risk of inflation. Most worrying is the possibility that foreigners, including the Chinese, will be less inclined to buy and even keep their dollar reserves which - as you recall - helped finance the American borrowing and spending, and by extension the US current deficit and allowed the good times to roll.

Little India Site Fetches $265m Top Bid

Source : The Straits Times, Sept 28, 2007

A PLOT in Little India drew two bids when its tender closed yesterday.

Singapore HealthPartners put in the higher offer for the 1.36ha site at $265.3 million.

This works out to $431 per sq ft (psf) of gross floor area and is 11 per cent more than the other bid submitted by Hiap Hoe Superbowl, which offered $238 million, or $386.40 psf of gross floor area.

The Government firmly pushed out the site - located at the junction of Rangoon and Race Course Roads - earlier this year after it received little interest from developers.

It was first offered as a 'white' site in August last year, which meant it could be used to build homes, shops, offices or hotels.

The site, however, failed to attract takers eight months after it was first offered, prompting the Government to extend its use to hospital development.

The Government stipulated that 40 per cent of the site's total floor area - potentially 615,965 sq ft - should still be given over to hotel rooms.

Even then, no developers came forward. This prompted the Government to offer the site for sale outright in July.

Property consultants said yesterday it is likely that the winning bidder will build a development with both hotel rooms and hospital rooms or medical suites on the site.

At least 550 hotel rooms can be built on it, estimated Mr Li Hiaw Ho of property consultancy CB Richard Ellis.

These rooms can 'complement the hospital or medical suites' by serving medical tourists, foreign medical consultants or family members accompanying patients, he said.

Mr Li added that this hospital-hotel hybrid model is likely to prove successful, given Singapore's twin aims of boosting tourism and health care.