Nov 28, 2009
PUB spending $68m to stem flooding
Drains to be widened in several areas over the next three years
By Amresh Gunasingham
THE PUB is spending $67.5million over the next three years to widen the drains in five areas around Singapore to make them less prone to floods.
They are in Jalan Haji Alias, Telok Kurau, Keppel Road, Jurong Port Road and Lincoln Road.
The national water agency also recently completed 10 projects in places such as Sims Avenue, Geylang and Commonwealth Avenue, which are low-lying areas prone to being inundated by the year-end deluge. The projects were fast-tracked and completed in two years, at least a year ahead of schedule.
Almost half the year's rainfall of 2,357.8mm comes during the months of November, December and January.
The projects are part of ongoing efforts that have seen the number of flood-prone areas in Singapore reduced from 3,200ha in the 1970s to 79ha today.
Another project at the junction of Tanjong Katong and Mountbatten Roads will see over $1million invested to widen a portion of the drainage system from 1m at present, to 3.5m.
The drains in this area of reclaimed land of 0.5ha regularly overflow when bouts of heavy rain coincide with high tides during the north-east monsoon season, flooding nearby homes up to three times a month.
Construction will be completed by the first quarter of next year.
PUB is also working with the three Bukit Timah condominiums whose basement carparks were partially submerged during an unusually intense rainstorm last week, to prevent future occurrences.
The building management at the three-decade-old Corona Ville condominium, in Jalan Haji Alias, for example, is looking to build a concrete hump at the entrance to its basement carpark to block surface run-off during a storm.
This should be completed by early next month.
Mr Edwin Tan, chairman of the residents' committee at the condominium, said the estimated cost of damage to the eight cars affected by the floods ran into a 'few hundred thousand dollars', but residents were, so far, adopting a sense of perspective in assessing the cost to their property.
'This is something beyond everyone's control,' said Mr Tan, whose $140,000 BMW X4 was partially damaged in the floods.
The Sixth Avenue Centre is exploring the installation of a water sensor system to provide a flood alert, said Mr S.K. Goh of the building's managing agent, Land & Building Services.
The system would trigger an alarm once the water reached a certain level so car owners could move their vehicles.
Mr Goh said the carpark does have water pumps, but these could not cope with the 'sudden surge of water' that occurred on Nov19, when around 92mm of rain was dumped in the area in just half an hour in the early afternoon.
It is understood that the owners of four cars and one motorcycle which were submerged have been asked to submit claims for damages to the building's management by next week.
At the two-year-old Tessarina condominium in Wilby Road, more sandbags have been placed around the control rooms in the 500-lot basement carpark that provide electricity to the estate's five buildings.
'We are working with the management to explore other measures they can take,' said a PUB spokesman, adding that the estate's drainage network was also being assessed.
Mr Chan Ming Hwang, senior manager, catchment and waterways department, with the PUB, said ejector pumps used in basement carparks to channel rainwater outside have to be checked regularly to prevent them from being choked by debris such as silt and mud.
Saturday, November 28, 2009
ST : Dubai's debt crisis sparks global sell-off
Nov 28, 2009
Dubai's debt crisis sparks global sell-off
Bank shares savaged as default triggers fears of new financial meltdown
By Fiona Chan
STOCK markets around the world reeled yesterday as investors panicked that the Dubai government's debt crisis would trigger a fresh financial meltdown.
The spectre of a Gulf emirate plunging into bankruptcy drove investors from Tokyo to London to seek safety in the US dollar and bonds, while dumping riskier assets such as commodities and stocks.
In particular, shares of banks in Asia and Europe were savaged - with HSBC Holdings and Standard Chartered Bank faring the worst in Hong Kong, and ING Group and Royal Bank of Scotland among the biggest losers in Europe. All four have been involved in Dubai World deals.
Dubai's government investment firm Dubai World shocked markets on Thursday when it asked for a six-month delay in repaying a US$59 billion (S$81 billion) tranche of its total debt of US$80 billion.
The news, which credit rating agency Standard & Poor's said amounted to a default, recalled Argentina's sovereign default in 2001, the biggest in history.
The announcement came just hours before the Middle East shut down for a religious holiday. A lack of new information worsened the panic, reports said.
Asian markets took the news harder than European ones yesterday, with reports of Tokyo traders describing the panic as 'Financial Crisis Part II'.
The Hang Seng Index in Hong Kong plunged 4.8 per cent yesterday, while Japan's Nikkei 225 Stock Average slumped 3.2 per cent to a four-month low. South Korean shares also closed at a four-month low after falling 4.7 per cent.
In Europe, major markets lost just over 3 per cent in Thursday's trading. The FTSE 100 index in London closed down 3.2 per cent - its worst one-day fall since March - while Germany's DAX fell 3.2 per cent and France's CAC-40 dropped 3.4 per cent. The European markets were down fractionally yesterday after the mid-morning session.
The Dubai news caused panic throughout trading in London, Mr David Jones, chief market strategist at IG Index in London, told The Independent newspaper.
'The market had been chugging along nicely for the past six months, now this. A lot of people are worried that it is a precursor for more bad news,' he said.
The Singapore stock exchange was closed yesterday for the Hari Raya Haji holiday, delaying any carnage to when it re-opens on Monday.
Markets in the United States were also closed on Thursday for the Thanksgiving holiday, but the Dow was down about 200 points as soon as markets opened for trading last night.
Dubai, touted as an economic miracle of the Middle East, poured billions of dollars in borrowed money into building huge luxury developments and lavish tourist attractions. Now, investors are worried about the health of banks that lent money to the debt-ridden emirate.
HSBC's Middle East arm was by far the biggest single foreign lender in the United Arab Emirates (UAE), with outstanding loans of US$17 billion as at the end of last year, according to an Agence France-Presse report. It is not clear how much of this was lent to Dubai.
Stanchart was next with US$7.8 billion owed as at end-2008, and Barclays Bank was third with US$3.6 billion, said AFP.
Citigroup analysts said Japan's largest banks, Mitsubishi UFJ Financial and Sumitomo Mitsui, had also lent hundreds of millions of dollars to Dubai World.
In Singapore, DBS Bank was mentioned by CLSA analyst Daniel Tabbush as having exposure to Dubai. All three local banks - DBS, UOB and OCBC - have also lent money to Singapore's South Beach development, a joint project involving City Developments and Dubai World.
But some commentators yesterday cautioned that the selling was overdone.
'Everyone has gone into panic mode, but this is Dubai. It is not going to send the world into a tailspin,' Mr Chris Blair, Patersons senior client adviser, said in a Dow Jones report.
All eyes are now on whether Dubai's richer cousin Abu Dhabi, the capital of the UAE's seven emirates, will lend a hand. It will not be the first time Abu Dhabi has had to help. It bought US$10 billion in bonds from Dubai in February to ease a cash crunch.
Dubai's debt crisis sparks global sell-off
Bank shares savaged as default triggers fears of new financial meltdown
By Fiona Chan
STOCK markets around the world reeled yesterday as investors panicked that the Dubai government's debt crisis would trigger a fresh financial meltdown.
The spectre of a Gulf emirate plunging into bankruptcy drove investors from Tokyo to London to seek safety in the US dollar and bonds, while dumping riskier assets such as commodities and stocks.
In particular, shares of banks in Asia and Europe were savaged - with HSBC Holdings and Standard Chartered Bank faring the worst in Hong Kong, and ING Group and Royal Bank of Scotland among the biggest losers in Europe. All four have been involved in Dubai World deals.
Dubai's government investment firm Dubai World shocked markets on Thursday when it asked for a six-month delay in repaying a US$59 billion (S$81 billion) tranche of its total debt of US$80 billion.
The news, which credit rating agency Standard & Poor's said amounted to a default, recalled Argentina's sovereign default in 2001, the biggest in history.
The announcement came just hours before the Middle East shut down for a religious holiday. A lack of new information worsened the panic, reports said.
Asian markets took the news harder than European ones yesterday, with reports of Tokyo traders describing the panic as 'Financial Crisis Part II'.
The Hang Seng Index in Hong Kong plunged 4.8 per cent yesterday, while Japan's Nikkei 225 Stock Average slumped 3.2 per cent to a four-month low. South Korean shares also closed at a four-month low after falling 4.7 per cent.
In Europe, major markets lost just over 3 per cent in Thursday's trading. The FTSE 100 index in London closed down 3.2 per cent - its worst one-day fall since March - while Germany's DAX fell 3.2 per cent and France's CAC-40 dropped 3.4 per cent. The European markets were down fractionally yesterday after the mid-morning session.
The Dubai news caused panic throughout trading in London, Mr David Jones, chief market strategist at IG Index in London, told The Independent newspaper.
'The market had been chugging along nicely for the past six months, now this. A lot of people are worried that it is a precursor for more bad news,' he said.
The Singapore stock exchange was closed yesterday for the Hari Raya Haji holiday, delaying any carnage to when it re-opens on Monday.
Markets in the United States were also closed on Thursday for the Thanksgiving holiday, but the Dow was down about 200 points as soon as markets opened for trading last night.
Dubai, touted as an economic miracle of the Middle East, poured billions of dollars in borrowed money into building huge luxury developments and lavish tourist attractions. Now, investors are worried about the health of banks that lent money to the debt-ridden emirate.
HSBC's Middle East arm was by far the biggest single foreign lender in the United Arab Emirates (UAE), with outstanding loans of US$17 billion as at the end of last year, according to an Agence France-Presse report. It is not clear how much of this was lent to Dubai.
Stanchart was next with US$7.8 billion owed as at end-2008, and Barclays Bank was third with US$3.6 billion, said AFP.
Citigroup analysts said Japan's largest banks, Mitsubishi UFJ Financial and Sumitomo Mitsui, had also lent hundreds of millions of dollars to Dubai World.
In Singapore, DBS Bank was mentioned by CLSA analyst Daniel Tabbush as having exposure to Dubai. All three local banks - DBS, UOB and OCBC - have also lent money to Singapore's South Beach development, a joint project involving City Developments and Dubai World.
But some commentators yesterday cautioned that the selling was overdone.
'Everyone has gone into panic mode, but this is Dubai. It is not going to send the world into a tailspin,' Mr Chris Blair, Patersons senior client adviser, said in a Dow Jones report.
All eyes are now on whether Dubai's richer cousin Abu Dhabi, the capital of the UAE's seven emirates, will lend a hand. It will not be the first time Abu Dhabi has had to help. It bought US$10 billion in bonds from Dubai in February to ease a cash crunch.
ST Forum : Town council has funds to replace lifts
Nov 28, 2009
Town council has funds to replace lifts
I REFER to Ms Eilleen Tan's query on Wednesday, 'Where's the fund to replace 1,260 lifts in future?'
We thank Ms Tan for her concern on the funding of lift replacement in future by Tampines Town Council. She rightly pointed out that the future replacement cost of lifts is paid out of the town council's sinking fund.
However, these lifts will be replaced only gradually over the 28-year replacement cycle as all the lifts are of different ages. The current expenditure of $24 million was largely due to the current Lift Upgrading Programme (LUP) which will be completed over the next few years.
To put it simply, we will need an average of $4.5 million a year to replace the 1,260 lifts over the 28-year cycle, which will be adequately provided for from our annual sinking fund contribution which currently is $11.8 million.
We wish to assure Ms Tan and all residents of Tampines Town that Tampines Town Council will continue to manage its sinking fund and expenditure prudently to ensure our community facilities are replaced or upgraded in a timely manner.
Leong Shee Wing
General Manager/Secretary
Tampines Town Council
Town council has funds to replace lifts
I REFER to Ms Eilleen Tan's query on Wednesday, 'Where's the fund to replace 1,260 lifts in future?'
We thank Ms Tan for her concern on the funding of lift replacement in future by Tampines Town Council. She rightly pointed out that the future replacement cost of lifts is paid out of the town council's sinking fund.
However, these lifts will be replaced only gradually over the 28-year replacement cycle as all the lifts are of different ages. The current expenditure of $24 million was largely due to the current Lift Upgrading Programme (LUP) which will be completed over the next few years.
To put it simply, we will need an average of $4.5 million a year to replace the 1,260 lifts over the 28-year cycle, which will be adequately provided for from our annual sinking fund contribution which currently is $11.8 million.
We wish to assure Ms Tan and all residents of Tampines Town that Tampines Town Council will continue to manage its sinking fund and expenditure prudently to ensure our community facilities are replaced or upgraded in a timely manner.
Leong Shee Wing
General Manager/Secretary
Tampines Town Council
TODAY Online : A busy year on the horizon?
A busy year on the horizon?
05:55 AM Nov 28, 2009
by Donald Han
EVEN though Singapore saw its worst economic recession since independence this year, the property market remained relatively buoyant, with the resurgence led by sell-out mass market condominium projects such as The Caspian and The Alexis.
In the first 10 months of this year, developers sold 13,905 new homes - almost three times that in the whole of last year. In fact, Q3 alone saw developers selling 5,720 units - more than in the whole of 2008. Total sales volume this year is likely to breach the 15,000 unit mark, exceeding 2007's record high of 14,811 new home sales.
This remarkable development was mainly supported by the convergence of huge pent up demand, low savings deposit rate, stock market revival and a market flushed with liquidity.
Twelve months ago, no one would have dared to predict a U-shaped property market recovery, let alone a V-shaped rebound this year. Even the most optimistic property consultant would not have anticipated Q3's property price index to have turned a corner, registering a mind-boggling 15.8-per-cent price rise quarter-on-quarter. With just about a month to go, we are likely to end the year with a price hike of between 2 and 5 per cent.
With economic improvement and the ease of credit, developers have been busy replenishing their land bank. Five Government sites, which have been on the Urban Redevelopment Authority's Reserve List since last year, have been released from as early as July. The parcels represent the choicest residential sites on the list, mostly within established residential enclaves with reasonably close proximity to MRT stations, thus making end products easily saleable.
The five sites attracted between six and 15 bidders per tender exercise. Each of the successful bids exceeded initial reserve prices by between 2.32 and 3.07 times - a huge premium. Fierce bidding among developers translated to high bids for land prices. With developers typically passing on this land cost to buyers, one can only expect higher project launch prices when these offerings come to the market.
But the Government's release of a slew of 99-year leasehold sites the 1H2010 Government Land Sales (GLS) programme sees a variety of sites, some of which may not translate to high selling prices.
There are two plum sites which developers have seemingly given a miss thus far. These are within excellent strategic development zones which provide a catalytic start to urban rejuvenation and being part of Government's larger decentralisation and suburbanisation programme.
The sales of sites at Kallang Riverside (for the development of hotel with possibility residential component) and Jurong East Street 13 (a "white site" zoning where part residential is permissible) at Jurong Gateway near to Jurong Lake district are paramount examples. These sites have been placed in the reserve list since last year, but they have not received the necessary attention despite their immense potential and location appeal.
Developers should look at sites like these at Kallang and Jurong when studying their choices in the GLS programme. After all, those that have embarked in new and seemingly obscure development precincts have in the past been rewarded with "first mover" advantage.
These include Ho Bee Group's achievement at Sentosa Cove and the consortium of Keppel Land, Cheung Kong Holdings and Hongkong Land's success at Marina Bay. Next year looks set to be a busy year for property developers. ¢
The writer is the managing director of Cushman and Wakefield Singapore. The opinions expressed here are his own.
05:55 AM Nov 28, 2009
by Donald Han
EVEN though Singapore saw its worst economic recession since independence this year, the property market remained relatively buoyant, with the resurgence led by sell-out mass market condominium projects such as The Caspian and The Alexis.
In the first 10 months of this year, developers sold 13,905 new homes - almost three times that in the whole of last year. In fact, Q3 alone saw developers selling 5,720 units - more than in the whole of 2008. Total sales volume this year is likely to breach the 15,000 unit mark, exceeding 2007's record high of 14,811 new home sales.
This remarkable development was mainly supported by the convergence of huge pent up demand, low savings deposit rate, stock market revival and a market flushed with liquidity.
Twelve months ago, no one would have dared to predict a U-shaped property market recovery, let alone a V-shaped rebound this year. Even the most optimistic property consultant would not have anticipated Q3's property price index to have turned a corner, registering a mind-boggling 15.8-per-cent price rise quarter-on-quarter. With just about a month to go, we are likely to end the year with a price hike of between 2 and 5 per cent.
With economic improvement and the ease of credit, developers have been busy replenishing their land bank. Five Government sites, which have been on the Urban Redevelopment Authority's Reserve List since last year, have been released from as early as July. The parcels represent the choicest residential sites on the list, mostly within established residential enclaves with reasonably close proximity to MRT stations, thus making end products easily saleable.
The five sites attracted between six and 15 bidders per tender exercise. Each of the successful bids exceeded initial reserve prices by between 2.32 and 3.07 times - a huge premium. Fierce bidding among developers translated to high bids for land prices. With developers typically passing on this land cost to buyers, one can only expect higher project launch prices when these offerings come to the market.
But the Government's release of a slew of 99-year leasehold sites the 1H2010 Government Land Sales (GLS) programme sees a variety of sites, some of which may not translate to high selling prices.
There are two plum sites which developers have seemingly given a miss thus far. These are within excellent strategic development zones which provide a catalytic start to urban rejuvenation and being part of Government's larger decentralisation and suburbanisation programme.
The sales of sites at Kallang Riverside (for the development of hotel with possibility residential component) and Jurong East Street 13 (a "white site" zoning where part residential is permissible) at Jurong Gateway near to Jurong Lake district are paramount examples. These sites have been placed in the reserve list since last year, but they have not received the necessary attention despite their immense potential and location appeal.
Developers should look at sites like these at Kallang and Jurong when studying their choices in the GLS programme. After all, those that have embarked in new and seemingly obscure development precincts have in the past been rewarded with "first mover" advantage.
These include Ho Bee Group's achievement at Sentosa Cove and the consortium of Keppel Land, Cheung Kong Holdings and Hongkong Land's success at Marina Bay. Next year looks set to be a busy year for property developers. ¢
The writer is the managing director of Cushman and Wakefield Singapore. The opinions expressed here are his own.
ST Forum : Rules should cover concerted action by agents
Nov 28, 2009
Rules should cover concerted action by agents
I REFER to Thursday's report, 'Thumbs up for ending estate agents' dual role'.
The Ministry of National Development's (MND) proposal to ban agents from representing both seller and buyer in the same property transaction is a step in the right direction. However, the proposal is silent on agents who may act in concert in the same transaction, such as agents from the same team of the same agency.
Under the proposed framework, teams could continue to represent both seller and buyer in property transactions. Agents may continue to profit handsomely by attaining exclusivity from sellers and dealing only with associated agents, to the exclusion of all others. Such uncompetitive market structures would give agents strong pricing power when negotiating fees as well.
Agents operating in teams are a common feature of Singapore's property market and so the proposals by MND should extend beyond the regulation of single agents to include that of teams as well.
Otherwise, agents may continue to follow only the letter of the law with regard to safeguarding both buyers' and sellers' interests, disregarding its intent.
Ho Kah Chuen
Rules should cover concerted action by agents
I REFER to Thursday's report, 'Thumbs up for ending estate agents' dual role'.
The Ministry of National Development's (MND) proposal to ban agents from representing both seller and buyer in the same property transaction is a step in the right direction. However, the proposal is silent on agents who may act in concert in the same transaction, such as agents from the same team of the same agency.
Under the proposed framework, teams could continue to represent both seller and buyer in property transactions. Agents may continue to profit handsomely by attaining exclusivity from sellers and dealing only with associated agents, to the exclusion of all others. Such uncompetitive market structures would give agents strong pricing power when negotiating fees as well.
Agents operating in teams are a common feature of Singapore's property market and so the proposals by MND should extend beyond the regulation of single agents to include that of teams as well.
Otherwise, agents may continue to follow only the letter of the law with regard to safeguarding both buyers' and sellers' interests, disregarding its intent.
Ho Kah Chuen
ST : S'pore firms shrug off Dubai default
Nov 28, 2009
S'pore firms shrug off Dubai default
Those with links to Gulf emirate expect little impact on tie-up projects
By Fiona Chan
THE debt troubles of Dubai World appear to have had a limited impact on Singapore companies with links to the Gulf emirate.
Property group City Developments (CDL), which tied up with the Dubai government investment company to develop the billion-dollar South Beach site near Suntec City, said it does not expect 'any impact at all' on the site's development.
'Dubai World holds only a one-third share' of the development, a CDL spokesman said yesterday. CDL has another third, and the last third belongs to the United States-based El-Ad Group.
The spokesman told The Straits Times that no further capital needs to be pumped into the project at present.
'However, when the time comes for construction to proceed, all partners will be required to put in their share of additional funds. Should Dubai World decide not to contribute their proportionate share for whatever reasons, their shareholding will be diluted.'
Dubai World had asked on Thursday for six more months to repay its debts, sending global financial markets into a panic over Dubai's possible bankruptcy.
Analysts singled out banks as among the most vulnerable to a Dubai debt default. The news could have a 'meaningful impact' on banks across Asia, said Mr Daniel Tabbush, a banking analyst at CLSA in Bangkok.
He listed Standard Chartered, HSBC and Singapore's DBS Group as the most exposed in the region.
DBS has a branch in Dubai that was opened in 2006, marking the bank's first foray into Islamic finance. DBS could not be reached for comment yesterday.
Along with United Overseas Bank and OCBC Bank, DBS is also part of a syndicate helping to finance CDL's South Beach project.
Market observers said the banks that have exposure to Dubai only through the South Beach project are unlikely to be affected by Dubai's financial problems, as they will have collateral in the form of the property.
Public transport company SMRT also has a partnership with Nakheel, a property developer that works under the umbrella of the Dubai World group.
SMRT has a six-year contract worth about $120 million with Nakheel to operate and maintain a monorail running through the Palm Jumeirah development in Dubai.
In response to queries about how Dubai's debt difficulties would affect SMRT, chief operating officer Yeo Meng Hin said the impact to the monorail's operations, if any, would be minimal.
'We are long-term partners with Nakheel, and will continue to work closely with its management during this challenging time,' he said.
Other Singapore companies that have crossed paths with Dubai World include Labroy Marine and Pan-United Marine. The Dubai firm bought both Singapore shipyards in 2007 for about US$2 billion (S$2.7 billion).
Earlier that year, Dubai World's sister firm Dubai Ports World grabbed headlines in Singapore when it beat PSA International to buy P&O Ports for £3.9 billion (S$8.8 billion).
fiochan@sph.com.sg
--------------------------------------------------------------------------------
From fishing village to desert paradise in 40 years
IN A land seemingly built for the purposes of conspicuous consumption, Dubai never lacked extravagant icons of success.
The most extravagant - and most emblematic of the once sleepy fishing village's transformation to oasis playground for the rich - were surely the palm tree and the sail.
In keeping with the tiny Gulf emirate's grandiose vision, both were artificial. One was a set of man-made islands in the shape of palm trees and the other the sail-shaped Burj Al Arab, the world's most expensive hotel.
Then there was the man-made harbour, the largest in the world, built at Jebel Ali while a free-trade zone was created around the port, catapulting Dubai into the league of major international business hubs.
Billing itself as a safe haven within a volatile region for investors and tourists alike, Dubai, which discovered oil in 1966, tripled its economy to US$34.5 billion (S$47.9 billion) in the 10 years to 2006 and achieved double-digit growth every year until the financial crisis struck.
Its expansion was relentless. By last year, foreign direct investment into Dubai totalled US$21 billion, according to the Financial Times.
The Gulf emirate established itself as the region's trade and tourism hub, developing businesses such as port operator DP World that became leaders in their field.
It also set out to become a world-class financial centre, competing with the likes of New York and London and boasting an edge in the burgeoning area of Islamic finance.
In 2007, Dubai and Qatar became the two biggest shareholders of the London Stock Exchange, the third-largest bourse in the world.
Within its own borders, Dubai embarked on a massive six-year building boom that turned sand dunes into a glittering metropolis and the city into a magnet for the young, rich and glamorous.
No project was too lavish for Dubai. It is home to the world's biggest shopping mall - the 1,200-shop Dubai Mall - and will have the world's tallest building when the 160-storey Burj Dubai is completed next year at an estimated cost of US$1 billion.
The Burj Al Arab hotel was itself the tallest building in the world when it was completed in 1999. The hotel gave itself a seven-star rating - the first in the world - and watched as the publicity, room rates and bookings rocketed.
Dubai made the unthinkable possible with Ski Dubai, which opened in 2006 to offer the ultimate in luxury: skiing in the desert, on one of the world's largest indoor ski slopes with fresh powder all year round.
Celebrities converged on Dubai's sands, with David Beckham and Brad Pitt reportedly owning villas in the Palm Jumeirah development, the only one of three planned palm-tree shaped islands that has been completed.
The future of the other two Palm islands is now up in the air - much like that of Dubai itself.
S'pore firms shrug off Dubai default
Those with links to Gulf emirate expect little impact on tie-up projects
By Fiona Chan
THE debt troubles of Dubai World appear to have had a limited impact on Singapore companies with links to the Gulf emirate.
Property group City Developments (CDL), which tied up with the Dubai government investment company to develop the billion-dollar South Beach site near Suntec City, said it does not expect 'any impact at all' on the site's development.
'Dubai World holds only a one-third share' of the development, a CDL spokesman said yesterday. CDL has another third, and the last third belongs to the United States-based El-Ad Group.
The spokesman told The Straits Times that no further capital needs to be pumped into the project at present.
'However, when the time comes for construction to proceed, all partners will be required to put in their share of additional funds. Should Dubai World decide not to contribute their proportionate share for whatever reasons, their shareholding will be diluted.'
Dubai World had asked on Thursday for six more months to repay its debts, sending global financial markets into a panic over Dubai's possible bankruptcy.
Analysts singled out banks as among the most vulnerable to a Dubai debt default. The news could have a 'meaningful impact' on banks across Asia, said Mr Daniel Tabbush, a banking analyst at CLSA in Bangkok.
He listed Standard Chartered, HSBC and Singapore's DBS Group as the most exposed in the region.
DBS has a branch in Dubai that was opened in 2006, marking the bank's first foray into Islamic finance. DBS could not be reached for comment yesterday.
Along with United Overseas Bank and OCBC Bank, DBS is also part of a syndicate helping to finance CDL's South Beach project.
Market observers said the banks that have exposure to Dubai only through the South Beach project are unlikely to be affected by Dubai's financial problems, as they will have collateral in the form of the property.
Public transport company SMRT also has a partnership with Nakheel, a property developer that works under the umbrella of the Dubai World group.
SMRT has a six-year contract worth about $120 million with Nakheel to operate and maintain a monorail running through the Palm Jumeirah development in Dubai.
In response to queries about how Dubai's debt difficulties would affect SMRT, chief operating officer Yeo Meng Hin said the impact to the monorail's operations, if any, would be minimal.
'We are long-term partners with Nakheel, and will continue to work closely with its management during this challenging time,' he said.
Other Singapore companies that have crossed paths with Dubai World include Labroy Marine and Pan-United Marine. The Dubai firm bought both Singapore shipyards in 2007 for about US$2 billion (S$2.7 billion).
Earlier that year, Dubai World's sister firm Dubai Ports World grabbed headlines in Singapore when it beat PSA International to buy P&O Ports for £3.9 billion (S$8.8 billion).
fiochan@sph.com.sg
--------------------------------------------------------------------------------
From fishing village to desert paradise in 40 years
IN A land seemingly built for the purposes of conspicuous consumption, Dubai never lacked extravagant icons of success.
The most extravagant - and most emblematic of the once sleepy fishing village's transformation to oasis playground for the rich - were surely the palm tree and the sail.
In keeping with the tiny Gulf emirate's grandiose vision, both were artificial. One was a set of man-made islands in the shape of palm trees and the other the sail-shaped Burj Al Arab, the world's most expensive hotel.
Then there was the man-made harbour, the largest in the world, built at Jebel Ali while a free-trade zone was created around the port, catapulting Dubai into the league of major international business hubs.
Billing itself as a safe haven within a volatile region for investors and tourists alike, Dubai, which discovered oil in 1966, tripled its economy to US$34.5 billion (S$47.9 billion) in the 10 years to 2006 and achieved double-digit growth every year until the financial crisis struck.
Its expansion was relentless. By last year, foreign direct investment into Dubai totalled US$21 billion, according to the Financial Times.
The Gulf emirate established itself as the region's trade and tourism hub, developing businesses such as port operator DP World that became leaders in their field.
It also set out to become a world-class financial centre, competing with the likes of New York and London and boasting an edge in the burgeoning area of Islamic finance.
In 2007, Dubai and Qatar became the two biggest shareholders of the London Stock Exchange, the third-largest bourse in the world.
Within its own borders, Dubai embarked on a massive six-year building boom that turned sand dunes into a glittering metropolis and the city into a magnet for the young, rich and glamorous.
No project was too lavish for Dubai. It is home to the world's biggest shopping mall - the 1,200-shop Dubai Mall - and will have the world's tallest building when the 160-storey Burj Dubai is completed next year at an estimated cost of US$1 billion.
The Burj Al Arab hotel was itself the tallest building in the world when it was completed in 1999. The hotel gave itself a seven-star rating - the first in the world - and watched as the publicity, room rates and bookings rocketed.
Dubai made the unthinkable possible with Ski Dubai, which opened in 2006 to offer the ultimate in luxury: skiing in the desert, on one of the world's largest indoor ski slopes with fresh powder all year round.
Celebrities converged on Dubai's sands, with David Beckham and Brad Pitt reportedly owning villas in the Palm Jumeirah development, the only one of three planned palm-tree shaped islands that has been completed.
The future of the other two Palm islands is now up in the air - much like that of Dubai itself.
BT : Resorts World househunt reaches into HDB heartland
Business Times - 28 Nov 2009
Resorts World househunt reaches into HDB heartland
Property consultants say Sentosa IR is scouting for rental flats for some of its foreign staff
By EMILYN YAP
VISITORS to the Universal Studios theme park in Resorts World at Sentosa (RWS) will soon be able to live out adventures seen in various movies. There will be zones based on films such as Madagascar, Shrek and Jurassic Park, to bring thrill-seekers to a make-believe world far away from home.
For some employees at RWS, being away from home will also be a new adventure. The integrated resort will be hiring a considerable number of foreigners, and it is said to be searching for hundreds of HDB flats to help them settle in. C&H Realty managing director Albert Lu said that RWS is looking for HDB flats to rent, and approached his firm a few months ago to find out about the rental market. RWS did not share many details then, but the number of flats is 'in the hundreds', he told BT.
Another property market insider who declined to be named also said that RWS has been 'aggressively looking for flats to rent', and is probably in need of 'a few hundred' units.
So far, there is no official statement on the number of foreigners that RWS could hire. Overall, it will employ about 10,000 people when it opens next year. RWS spokesman Robin Goh told BT that it remains committed in recruiting Singaporeans and Singapore permanent residents.
A media report in June noted that RWS had hired 600 workers, of whom 80 per cent are locals. Assuming that the local-foreign ratio stays constant, its headcount from abroad could reach 2,000.
Going by HDB rules, one- or two-room flats can each be rented out to at most four people; three-room flats to at most six people; and four-roomers or bigger flats to at most nine people. Assuming that RWS hires 2,000 foreigners and all of them rent four-room flats, it would need to find at least about 220 units.
Mr Goh said that RWS started looking for 'suitable accommodation' for foreign staff early this year, with help from a 'reputable service provider'. He did not specify the types and number of housing involved.
'To help reduce their stress and anxiety of relocating overseas, we assist our foreign team members in addressing one of their basic needs - accommodation,' he said. 'We make sure that they settle down comfortably as well as enjoy working and living in Singapore.' And it is important for RWS to keep its employees happy because that could enhance their work performance and in turn, visitors' experience at the integrated resort, he said.
Mr Goh added that RWS considered several factors in choosing accommodation, including the place's accessibility and proximity to amenities such as convenience stores. 'The locations we have chosen facilitate good interaction between the local community and foreign talent,' he added. BT understands that units at Tiong Bahru and Toa Payoh have been found.
C&H Realty's Mr Lu said that he believes that RWS would want flats in areas near Sentosa, such as Telok Blangah. But he pointed out that the supply of rental flats in such central locations is tight, and RWS might have to broaden its search to estates near MRT stations.
Rents of HDB flats in the central region rose between the second and third quarter of the year. For instance, the median sub-letting rent for a four-room flat in the area increased from about $2,000 to $2,200.
HDB's website shows that up to the third quarter of this year, the agency has granted 11,235 sub-letting approvals. The bulk of these - 3,978 or 35 per cent - were for three-room flats. Another 3,593 approvals were for four-room flats.
Also, looking across all towns and flat types, median sub-letting rents have remained relatively steady from the first to third quarter.
Dennis Wee Group director Chris Koh observed that the HDB rental market is 'more stabilised' compared with the period when collective sales were rife and many displaced residents were looking for lodging. His firm has seen more rental enquiries direct from foreigners working with RWS.
Marina Bay Sands, the other integrated resort due to open next year, has not engaged property agents to look for accommodation for its foreign staff. 'Housing arrangements will take into account the needs of the prospective foreign employees,' said a spokeswoman. 'At this time, Marina Bay Sands is giving priority to attracting and selecting Singaporeans and permanent residents for our job opportunities.'
Resorts World househunt reaches into HDB heartland
Property consultants say Sentosa IR is scouting for rental flats for some of its foreign staff
By EMILYN YAP
VISITORS to the Universal Studios theme park in Resorts World at Sentosa (RWS) will soon be able to live out adventures seen in various movies. There will be zones based on films such as Madagascar, Shrek and Jurassic Park, to bring thrill-seekers to a make-believe world far away from home.
For some employees at RWS, being away from home will also be a new adventure. The integrated resort will be hiring a considerable number of foreigners, and it is said to be searching for hundreds of HDB flats to help them settle in. C&H Realty managing director Albert Lu said that RWS is looking for HDB flats to rent, and approached his firm a few months ago to find out about the rental market. RWS did not share many details then, but the number of flats is 'in the hundreds', he told BT.
Another property market insider who declined to be named also said that RWS has been 'aggressively looking for flats to rent', and is probably in need of 'a few hundred' units.
So far, there is no official statement on the number of foreigners that RWS could hire. Overall, it will employ about 10,000 people when it opens next year. RWS spokesman Robin Goh told BT that it remains committed in recruiting Singaporeans and Singapore permanent residents.
A media report in June noted that RWS had hired 600 workers, of whom 80 per cent are locals. Assuming that the local-foreign ratio stays constant, its headcount from abroad could reach 2,000.
Going by HDB rules, one- or two-room flats can each be rented out to at most four people; three-room flats to at most six people; and four-roomers or bigger flats to at most nine people. Assuming that RWS hires 2,000 foreigners and all of them rent four-room flats, it would need to find at least about 220 units.
Mr Goh said that RWS started looking for 'suitable accommodation' for foreign staff early this year, with help from a 'reputable service provider'. He did not specify the types and number of housing involved.
'To help reduce their stress and anxiety of relocating overseas, we assist our foreign team members in addressing one of their basic needs - accommodation,' he said. 'We make sure that they settle down comfortably as well as enjoy working and living in Singapore.' And it is important for RWS to keep its employees happy because that could enhance their work performance and in turn, visitors' experience at the integrated resort, he said.
Mr Goh added that RWS considered several factors in choosing accommodation, including the place's accessibility and proximity to amenities such as convenience stores. 'The locations we have chosen facilitate good interaction between the local community and foreign talent,' he added. BT understands that units at Tiong Bahru and Toa Payoh have been found.
C&H Realty's Mr Lu said that he believes that RWS would want flats in areas near Sentosa, such as Telok Blangah. But he pointed out that the supply of rental flats in such central locations is tight, and RWS might have to broaden its search to estates near MRT stations.
Rents of HDB flats in the central region rose between the second and third quarter of the year. For instance, the median sub-letting rent for a four-room flat in the area increased from about $2,000 to $2,200.
HDB's website shows that up to the third quarter of this year, the agency has granted 11,235 sub-letting approvals. The bulk of these - 3,978 or 35 per cent - were for three-room flats. Another 3,593 approvals were for four-room flats.
Also, looking across all towns and flat types, median sub-letting rents have remained relatively steady from the first to third quarter.
Dennis Wee Group director Chris Koh observed that the HDB rental market is 'more stabilised' compared with the period when collective sales were rife and many displaced residents were looking for lodging. His firm has seen more rental enquiries direct from foreigners working with RWS.
Marina Bay Sands, the other integrated resort due to open next year, has not engaged property agents to look for accommodation for its foreign staff. 'Housing arrangements will take into account the needs of the prospective foreign employees,' said a spokeswoman. 'At this time, Marina Bay Sands is giving priority to attracting and selecting Singaporeans and permanent residents for our job opportunities.'
BT : From mass market to high end
Business Times - 28 Nov 2009
From mass market to high end
Analysts upgrade property counters with exposure to the top end of the sector
By UMA SHANKARI
SALES of high-end homes have picked up. And as a result, analysts are more upbeat about property counters with exposure to the top end of the market.
DBS Group Research has upgraded its calls on SC Global, Ho Bee Investment and Wheelock Properties to 'buy'. The three developers have significant exposure to the high end of the market.
'We see value emerging for these companies, following price consolidation in recent months, and this is backed by our expectation of a pick-up in activity in the high-end segment come 2010,' DBS analyst Adrian Chua said in a Nov 17 report.
DMG & Partners Securities analyst Brandon Lee said in a Nov 16 note: 'The confluence of the integrated resorts' opening, strong real estate fundamentals and more positive economic newsflow should lead to an upswing in high-end prices from current levels over the next six months.'
Mr Lee issued fresh 'buy' calls on City Developments, Wing Tai Holdings and SC Global.
The property recovery started in the mass market, where sales began to improve as early as February this year. Activity at the top end of the market only started to pick up in Q3.
'The number of units transacted at more than $2,000 psf - our definition of high-end - is just below the number of units we saw back in Q1 2007, prior to the run-up in the high-end market,' said DBS's Mr Chua.
And while the property market cooled in October, the high end held up. Developers sold 811 new private homes in October, down from the 1,143 in September.
But the number of high-end homes sold climbed month on month. Goldman Sachs said that 285 homes with a median price of more than $1,500 psf were sold in October 2009, compared with 115 in September. Prime district sales are now the driver, the bank said on Nov 16.
Analysts cited a number of reasons for betting on high-end homes. Policy risk is smaller for this segment as government policies tend to focus on the mass market.
The government announced cooling measures in September and warned recently that further pre-emptive measures will be taken, if necessary, to ensure a stable market.
But the government has traditionally been less concerned with the top end of the market, as this is seen to be the playing field of high net-worth individuals.
Any new cooling measures, if prudent, will also only have a near-term negative impact on share prices, as improving property fundamentals and still attractive valuations matter more, according to Goldman Sachs analysts Paul Lian and Rishab Bengani. They have 'buy' calls on two property stocks - CapitaLand and City Developments.
Another boon for the high end is the opening of the integrated resorts (IRs) in early 2010, which could boost demand from foreigners in particular.
DBS's Mr Chua said that high-end homes in Singapore now look relatively cheap compared to those in Hong Kong - similar to the valuation gap before the 2007 high-end run here. He said that the high-end segment here could also be a beneficiary of Chinese demand, which did not factor in a big way in 2007 but could be a force in 2010.
Looking ahead, top-end prices are expected to trend upwards. Prices here have stayed between $1,750 and $1,825 psf over the past quarter, up 38-44 per cent from the bottom in April 09, DMG's Mr Lee said. 'Nonetheless, this represents 15-20 per cent off Q4 2007 peaks, which should head upwards over the subsequent six months in the wake of the IRs' opening and improved economy.'
Property analysts are also encouraged by developers' Q3 results. They came in mostly ahead of expectations, with year-on-year bottom-line growth.
'Perhaps the most important takeaway is the substantial improvement in developers' balance sheets,' CIMB Research said in its Q3 2009 earnings round-up. 'Robust property sales and stabilising asset values helped push down average net gearing from 0.5 times in Q2 2009 to 0.3 times for developers under our coverage.'
From mass market to high end
Analysts upgrade property counters with exposure to the top end of the sector
By UMA SHANKARI
SALES of high-end homes have picked up. And as a result, analysts are more upbeat about property counters with exposure to the top end of the market.
DBS Group Research has upgraded its calls on SC Global, Ho Bee Investment and Wheelock Properties to 'buy'. The three developers have significant exposure to the high end of the market.
'We see value emerging for these companies, following price consolidation in recent months, and this is backed by our expectation of a pick-up in activity in the high-end segment come 2010,' DBS analyst Adrian Chua said in a Nov 17 report.
DMG & Partners Securities analyst Brandon Lee said in a Nov 16 note: 'The confluence of the integrated resorts' opening, strong real estate fundamentals and more positive economic newsflow should lead to an upswing in high-end prices from current levels over the next six months.'
Mr Lee issued fresh 'buy' calls on City Developments, Wing Tai Holdings and SC Global.
The property recovery started in the mass market, where sales began to improve as early as February this year. Activity at the top end of the market only started to pick up in Q3.
'The number of units transacted at more than $2,000 psf - our definition of high-end - is just below the number of units we saw back in Q1 2007, prior to the run-up in the high-end market,' said DBS's Mr Chua.
And while the property market cooled in October, the high end held up. Developers sold 811 new private homes in October, down from the 1,143 in September.
But the number of high-end homes sold climbed month on month. Goldman Sachs said that 285 homes with a median price of more than $1,500 psf were sold in October 2009, compared with 115 in September. Prime district sales are now the driver, the bank said on Nov 16.
Analysts cited a number of reasons for betting on high-end homes. Policy risk is smaller for this segment as government policies tend to focus on the mass market.
The government announced cooling measures in September and warned recently that further pre-emptive measures will be taken, if necessary, to ensure a stable market.
But the government has traditionally been less concerned with the top end of the market, as this is seen to be the playing field of high net-worth individuals.
Any new cooling measures, if prudent, will also only have a near-term negative impact on share prices, as improving property fundamentals and still attractive valuations matter more, according to Goldman Sachs analysts Paul Lian and Rishab Bengani. They have 'buy' calls on two property stocks - CapitaLand and City Developments.
Another boon for the high end is the opening of the integrated resorts (IRs) in early 2010, which could boost demand from foreigners in particular.
DBS's Mr Chua said that high-end homes in Singapore now look relatively cheap compared to those in Hong Kong - similar to the valuation gap before the 2007 high-end run here. He said that the high-end segment here could also be a beneficiary of Chinese demand, which did not factor in a big way in 2007 but could be a force in 2010.
Looking ahead, top-end prices are expected to trend upwards. Prices here have stayed between $1,750 and $1,825 psf over the past quarter, up 38-44 per cent from the bottom in April 09, DMG's Mr Lee said. 'Nonetheless, this represents 15-20 per cent off Q4 2007 peaks, which should head upwards over the subsequent six months in the wake of the IRs' opening and improved economy.'
Property analysts are also encouraged by developers' Q3 results. They came in mostly ahead of expectations, with year-on-year bottom-line growth.
'Perhaps the most important takeaway is the substantial improvement in developers' balance sheets,' CIMB Research said in its Q3 2009 earnings round-up. 'Robust property sales and stabilising asset values helped push down average net gearing from 0.5 times in Q2 2009 to 0.3 times for developers under our coverage.'
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