UOL Unit Is Top Bidder For Hotel Site

Source : The Business Times, October 11, 2007

It bids $253m for Upper Pickering plot with plan including Soho units
















UOL Group subsidiary Hotel Plaza plans to develop small office, home office (Soho) units as well as a 350-400 room hotel on a choice plot at Upper Pickering Street, for which it emerged as the top bidder at a tender yesterday, UOL Group chief operating officer Liam Wee Sin said yesterday.

Hotel Plaza's top bid of $253.2 million or $805 per square foot of potential gross floor area was 21 per cent higher than the next highest offer of $209 million ($664 psf per plot ratio) from a unit of Park Hotel Group.

The highest of the nine bids at yesterday's state tender for the hotel site was also at least 40 per cent higher than the prices paid for two hotel sites along Tanjong Pagar Road awarded recently, CB Richard Ellis noted.

Market watchers suggest UOL/Hotel Plaza's scheme to include Soho units may have given it the edge in outbidding the other contenders at yesterday's tender. Besides Park Hotel unit Park Plaza, other bidders were:

# City Developments' unit Glades Properties ($201.8 million);

# Hiap Hoe Superbowl JV ($185 million);

# Hotel Properties' unit Op Investments ($161.08 million);

# Ho Bee Investment & Multi Wealth Singapore ($153.53 million);

# Amara Holdings & Garden City Hotel Holdings ($151.89 million);

# AAPC Hotels Singapore ($150 million);

# and Soilbuild Group Holdings ($128.82 million).

Analysts estimate that UOL/Hotel Plaza's all-in investment in the project (including land and construction) may be around $400 million. The longish plot, with a frontage of about 200 metres along Upper Pickering Street, is right across the road from Hong Lim Park and diagonally opposite One George Street.

'We're likely to build the hotel on the side closer to One George Street while the Soho tower will be on the other stretch of the plot facing Chinatown Point and Furama,' Mr Liam said yesterday evening when contacted by BT.

'The Soho tower may be about 16 to 20 storeys high and will have about 120-150 units, mostly studio units of about 60-80 sq metres (646 to 861 sq ft) each. We may sell the Soho units or just decide to keep them for lease.

'The hotel is likely to be 16 storeys high and will have about 350-400 rooms. Hotel Plaza will most likely flag it as a Parkroyal. In fact, this will be the flagship Parkroyal hotel in Singapore when it is completed around 2011,' Mr Liam said.

However, hotel industry watchers pointed to the possibility that the group has the option of targeting a higher tier of the market and flagging the new property as a Pan Pacific hotel, since UOL recently bought this brand.

Industry observers said the Upper Pickering Street site is probably one of the choicest plots allowed for hotel development to have been released by Urban Redevelopment Authority in recent years other than the former NCO Club site in Beach Road.

Hotel Plaza owns two other hotels in Singapore - Parkroyal hotels at Beach Road and Kitchener Road - while UOL directly owns 100 per cent of The Negara on Claymore and has an interest of about 30 per cent in Marina Centre Holdings, which has stakes in the Pan Pacific, Oriental and Marina Mandarin hotels here.

Office Block Flipped 3rd Time Over Past Year

Source : The Business Times, October 11, 2007

Dapenso Building sold for $120m, double December's price tag of $58m

The Dapenso Building, a nine-storey office block in Cecil Street, seems to have changed hands three times in the past year, with ownership recently passing to home- grown property outfit KOP Capital under a deal said to have valued the building at just below $120 million.

Dapenso Building: Latest deal values building at just below $120m, against the $58m it fetched in Dec 2006

This is about double the $58 million the property was sold for in December last year, which itself was more than twice the sum it sold for previously.

KOP Capital declined to confirm the cost of its recent acquisition, which it said it effected by purchasing shares in East Coast (Cecil) Investment Pte Ltd, which took control of Dapenso Building in June this year.

KOP managing director Ong Chih Ching told BT her company plans to spend about $80 million on additions and alteration works at Dapenso Building, adding about four-and-a-half storeys that will result in a 14-storey building with a roof terrace, two basement carparks and a net lettable area of about 113,000 sq ft, which KOP will lease out.

'This will be a stylish office development, inspired by the Louis Vuitton outlet in Omote-Sando in Tokyo,' she said. The plot is zoned for commercial use with an 11.2 plot ratio.

KOP's all-up investment of about $200 million works out to almost $1,770 psf based on the proposed net lettable area of 113,000 sq ft. Work will start in Q1 next year and is expected to take about 15 months.

Ms Ong, a lawyer by training, runs KOP with her fellow shareholder and executive director Leny Suparman. A third shareholder, another lawyer, is a silent partner.

In August, a KOP Capital-Hwa Hong joint-venture bagged URA's maiden transitional office site next to Newton MRT Station. Since then, Dubai Investment Group has joined the consortium, taking a 45 per cent stake, leaving Hwa Hong and KOP with 50 and 5 per cent stakes respectively, according to an announcement by Hwa Hong last week.

The all-up investment in the project is expected to be about $90 million and the four-storey office development, with about 150,000 sq ft net lettable area, is expected to be ready in the second half of next year.

KOP also has an equal joint venture with Emirates Tarian Capital, a unit of Emirates Investment Group, which is developing two luxury residential projects in Singapore - the 58-unit Ritz Carlton Residences in Cairnhill on the former Horizon View site, and a 56-unit project on the former Hotel Asia site in Scotts Road. The latter project will feature two carpark lots housed within each apartment.

Ritz Carlton Residences is slated for launch next month while the Scotts Road project will come on the market early next year.

Ms Ong says KOP is keen on more projects in the residential and office sectors in Singapore. 'We shall continue to look for more office blocks that we can upgrade to trendy, boutique offices, but we're also interested in investing in bigger office towers in the CBD that may not require much sprucing up,' she said.

Earlier this month, KOP bought East Coast (Cecil) Investment Pte Ltd, a company formed in June this year by Alvin Ng and Kim Seng Holdings to purchase Dapenso Building, for $96 million from Remarkable Investment. Remarkable, believed to be linked to Hong Kong investors, bought the building in December last year for $58.4 million from Hotel Royal, which bought it in 2004 for $27 million from Bank Negara Indonesia.

Tender Closing For Hotel Site At Upper Pickering Street

Source : Urban Redevelopment Authority (URA) News Release, 10 October 2007

The Urban Redevelopment Authority (URA) closed the tender for the hotel site at Upper Pickering Street today.

The site at Upper Pickering Street was launched for public tender on 18 July 2007 (http://www.ura.gov.sg/pr/text/2007/pr07-72.html). The site was offered for sale on a 99-year lease.

Please see Annex A for the particulars of the site and the details of the bids received.






















This is not an announcement of tender award. A decision on the award of the tenders will be made after the bids have been evaluated. This will be publicised at a later date.

--------------------------------------------------------------------------------

For media enquiries, please contact:

Ms Serene Tng
Manager, Public Relations
DID: 6329 3224
Email:serene_tng@ura.gov.sg

Analysts Play Catch-Up As Economy Stays Hot

Source : The Business Times, October 11, 2007

They bump up forecasts following Q3 flash estimates of 9.4% growth

The Singapore economy continued to power ahead in the third quarter, prompting several research houses to raise their growth forecasts for the whole year.

Flash estimates released by the Ministry of Trade and Industry (MTI) showed that the economy grew a sterling 9.4 per cent year-on-year last quarter, based on data from July and August. This is higher than the median forecast of 7.8 per cent among private sector economists polled by the Monetary Authority of Singapore recently.

The performance was fuelled by broad-based expansion across various sectors. The construction industry moderated to a growth of 15.5 per cent in Q3, from 18.8 per cent in Q2. And despite a lacklustre performance from the electronics cluster, the manufacturing industry managed 12.3 per cent growth, picking up momentum from the 8.3 per cent year-on-year gain in Q2. This was underpinned by the strong biomedical and transport engineering clusters.

The services sector eased to a 8.1 per cent gain, from 8.4 per cent in Q2. 'Our sense is that financial services, information and communications as well as hotels and restaurants outperformed during the quarter,' said Citigroup economist Chua Hak Bin. 'Some modest slowdown was detected for wholesale and retail trade and sea transport activities.'

On a quarter-on-quarter, seasonally adjusted annualised basis, real GDP growth decelerated to 6.4 per cent from 14.4 per cent in Q2.

The headline figure takes the growth rate for the first nine months to 8.2 per cent, exceeding the official forecast of 7-8 per cent for the full year. Several economists that BT spoke to said that they were revising their full-year growth estimates, with one going as high as 8.7 per cent.

'Although the advance estimates are below our expectations, we believe once the full set of data is in, 3Q '07 GDP could be revised up to the 10 per cent level, as year-to-date growth is already 8.2 per cent,' CIMB-GK research head Song Seng Wun wrote in a report yesterday. 'Hence, we are actually raising our full-year growth estimate from 7.5 per cent to 8.7 per cent.'

The team at Citigroup has upgraded its 2007 growth forecast to 8 per cent, from 7.2 per cent previously. Similarly, Standard Chartered Bank economist Alvin Liew is raising his forecast to 8 per cent, from 7.6 per cent, while UOB is looking at 8.4 per cent growth for the full year.

'The preliminary estimate for manufacturing growth of 12.3 per cent year on year in 3Q factors in a modest 2 per cent year-on-year growth in the industrial output for the month of September after 18.1 per cent year-on-year expansion in July-August,' said a UOB report. 'This suggests that actual GDP growth for the quarter could potentially surprise on the upside should the biomedical sector continue its robust expansion in September.'

While many are keeping an eye on rising prices, some said that the risks of the economy overheating are low - at least for the time being.

'If you look at asset prices, inflation, wage increases in the last two quarters, there does seem to be some risks of overheating,' said Stanchart's Mr Liew. 'But I don't foresee an overheating situation, at least for the next three quarters until mid-2008.

'For one, we can see that there's a lot of domestic driven activities. And even though we had achieved fairly high growth, the manufacturing sector isn't the one that's pushing it. So it's not an export-oriented kind of growth story this time round.'

UOB economist Ho Woei Chen said that the risks of overheating could be tempered by the slowdown in the US economy. 'We are not so concerned about overheating because there's some downside risks to the global growth outlook going forward,' she said. Besides, the steeper appreciation of the S$NEER slope, announced by the MAS yesterday, could help cap imported inflation to a certain extent, she added.

HSBC, which last week cautioned against an overheating Singapore economy, is maintaining a growth estimate of 8.5 per cent. In a report titled Easy, tiger, it argued that the economy is showing signs of overheating, with wages rising at a seven-year high of 8.5 per cent, office rents jumping 50 per cent, and the consumer price index hitting a 12-year high.

Citigroup's Dr Chua also suggested overheating pressures were looming. 'Tightness is apparent in labour and property markets, with wage costs, office rents and residential rents all rising strongly,' he wrote in a report on Monday.

The market probably reacted on fears that there may be more tightening measures ahead, following an adjustment to the S$NEER slope yesterday. The Straits Times Index shed more than 50 points to end the day's trading at 3,814.45.

'The market has also run up quite considerably,' said Dr Chua. 'I suppose there may be some concerns as well that a stronger Singapore dollar could probably hurt exports. So it's a combination of factors.'

MAS Slightly Tightens Monetary Policy; S$ At 10-Year Highs

Source : Channel NewsAsia, 10 October 2007

The Singapore dollar was trading at 10-year highs against the greenback on Wednesday after the central bank signalled a slight tightening of its policy in the face of rising inflation, dealers said.

Skyscrapers in Singapore's central business district

In afternoon trade, the local unit was at 1.4654 to the US dollar, up from 1.4752 on Tuesday.

The Monetary Authority of Singapore (MAS), the de facto central bank, said inflationary pressures have picked up, with rents and wages increasing amid buoyant domestic economic conditions and rising global oil and food prices.

Inflation rose to an average 2.8 percent in July-August, but the MAS said about half that increase was attributed to a two-percentage-point rise in the goods and services tax.

Full-year inflation is now projected to reach between 1.5 and 2.0 percent, up from the 0.5-1.5 percent expected when the bank issued its last twice-yearly policy review in April, it said.

For next year, headline inflation is seen rising to about 3.5 percent in the first half before easing to between two and three percent for all of 2008, the MAS said.

"Going forward, while the economy is expected to moderate to a more sustainable pace, inflationary pressures stemming from external sources, as well as domestic conditions including a tight labour market and rising rental costs, will persist," the MAS statement said.

Against this backdrop, MAS said it will continue to seek "a modest and gradual appreciation" of the local dollar. But it said there would be a slight tightening of policy.

"This means there is slightly more room for the Singapore dollar to appreciate. This will ease a lot of imported inflation," Credit Suisse currency strategist Charlie Lay said.

Lay said the local currency should appreciate towards the 1.40 level against the US dollar over the next year.

"In our assessment, this policy stance will remain supportive of economic growth while capping inflationary pressures and ensuring price stability over the medium term," the MAS said.

DBS Group Research said the Singapore dollar "has reprised its role as the proxy for Asian currency appreciation." The unit should close the year between 1.4580 and 1.5030, DBS said.

The MAS conducts monetary policy through the local currency rather than by setting interest rates.

The Singapore dollar is traded against a basket of currencies of the city-state's major trading partners within an undisclosed trading band known as the nominal effective exchange rate (NEER).

Details of the trading band are not made public to prevent speculation in the Singapore dollar. - AFP/ch