Dec 5, 2009
Watch out for asset bubbles amid rebound, warns OCBC
By Dickson Li
WARNINGS abound that asset bubbles may be forming amid the rapid rebound - especially on the stock market, for example, and, recently, in the property sector.
But OCBC's head of treasury research and strategy Selena Ling says policymakers have a powerful tool to stave this off this time around: the benefit of hindsight.
She was taking part in a presentation at OCBC Centre given this week by the bank's in-house experts on the outlook for the Singapore economy for next year.
'These days, policymakers are more forward-looking. Even though they don't think the world economy is (fully recovered) yet, they are already worrying about potential asset bubbles brewing.'
Central bankers are expected to remove the punch bowl as the party gets going, she said, using a heady alcoholic drink to represent cheap credit.
Ms Ling lamented that former Federal Reserve chairman Alan Greenspan had made the error of 'supplying the champagne until the party burst'.
Things could be different this time. Ms Ling cited an unprecedented move by the Reserve Bank of Australia to lift the cash rate three times in three months, most recently this week. The Reserve Bank of India has also raised rates.
She emphasised that this was despite G-20 leaders agreeing not to prematurely withdraw stimulus measures.
Ms Carmen Lee, head of research at OCBC Investment Research, is slightly more wary, saying that the recovery has been 'too fast, too rapid'.
She was concerned that asset prices had risen 'too sharply', and expressed doubts that corporate earnings could match that rate of increase.
As at Nov 24, the Straits Times Index's (STI) price-earnings ratio stands at slightly under 18 - one of the lowest in the region, behind the Hang Seng and the S&P500. The lower that ratio, the better value the shares are. She said a valuation of 18 times is the STI's historic average.
She recommends buying telcos, commodity firms and infrastructure stocks.
OCBC rates the telcos, offshore support firm Ezra Holdings, shipbuilder SembCorp Marine, commodities firms Noble Group and Olam International, manufacturer Midas Holdings, oil and gas engineering firm Rotary Engineering and crane giant Tat Hong as 'buy' stocks.
OCBC is neutral on the banking sector. With the recent rally in banking stocks, it says both DBS Group Holdings and United Overseas Bank are fully valued.
As for property stocks: 'While the residential property market is positive...do keep in mind that the office sector is still weak,' she warned.
OCBC expects the main growth engines here in the year ahead to be manufacturing, financial services and tourism.
Saturday, December 5, 2009
BT : SPH explains property move; shareholders praise FY2009 results
Business Times - 05 Dec 2009
SPH explains property move; shareholders praise FY2009 results
SINGAPORE Press Holdings (SPH) shareholders yesterday praised the media group for the creditable FY2009 financial results and the 25-cents-a-share dividend payment. They also sought further assurance from the company on its property foray.
At the SPH annual general meeting, shareholder Vincent Chen was concerned that the company's share price could be hurt should the market view it as a conglomerate with interests in many areas beyond its core newspaper business. He suggested that SPH focus on its core business and return cash to shareholders to invest in pure-play property counters.
SPH publishes 17 newspapers, including The Business Times, and more than 100 magazine titles. Beyond its media business, it also owns Paragon shopping mall in Orchard Road. A condominium project at Thomson Road is due to be completed in the middle of next year. And an SPH-led consortium recently won a bid for a prime mall building in Clementi.
Chief executive officer Alan Chan said that the mall project will buffer the company from the ups and downs of the media business. And chairman Tony Tan said that the bid is 'testament to SPH's willingness to seek new opportunities to increase shareholder value'.
In the fiscal year ended August 2009, SPH's newspaper and magazine sales dropped 12 per cent, but net profit of $422 million was just 3 per cent down, helped by higher contributions from property and pre-emptive measures to cut costs.
Mr Chan said that 50 cents of every dollar spent on advertising in Singapore goes to SPH, but the industry - especially in developed countries - is under great stress.
'Print (media) is something very close to our hearts and we will invest as much as possible to maintain that,' he said. But it is a 'very challenging' industry now, and the company will have to prepare for a time when the media business will no longer be as profitable. New property ventures give the company an opportunity to expand its areas of expertise, Mr Chan said.
Shareholders praised SPH management for guiding the company through a difficult year with profit more or less intact.
Dr Tan acknowledged the contributions of management and staff, who took pay cuts and stayed loyal to the company through the past year.
One shareholder asked the board on the absence of women in its ranks. 'Women bring a fresh perspective to things,' she said, noting that a woman on the board would not have supported the running of sexist advertisements. Dr Tan said that the board will consider the issue at its next meeting.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
SPH explains property move; shareholders praise FY2009 results
SINGAPORE Press Holdings (SPH) shareholders yesterday praised the media group for the creditable FY2009 financial results and the 25-cents-a-share dividend payment. They also sought further assurance from the company on its property foray.
At the SPH annual general meeting, shareholder Vincent Chen was concerned that the company's share price could be hurt should the market view it as a conglomerate with interests in many areas beyond its core newspaper business. He suggested that SPH focus on its core business and return cash to shareholders to invest in pure-play property counters.
SPH publishes 17 newspapers, including The Business Times, and more than 100 magazine titles. Beyond its media business, it also owns Paragon shopping mall in Orchard Road. A condominium project at Thomson Road is due to be completed in the middle of next year. And an SPH-led consortium recently won a bid for a prime mall building in Clementi.
Chief executive officer Alan Chan said that the mall project will buffer the company from the ups and downs of the media business. And chairman Tony Tan said that the bid is 'testament to SPH's willingness to seek new opportunities to increase shareholder value'.
In the fiscal year ended August 2009, SPH's newspaper and magazine sales dropped 12 per cent, but net profit of $422 million was just 3 per cent down, helped by higher contributions from property and pre-emptive measures to cut costs.
Mr Chan said that 50 cents of every dollar spent on advertising in Singapore goes to SPH, but the industry - especially in developed countries - is under great stress.
'Print (media) is something very close to our hearts and we will invest as much as possible to maintain that,' he said. But it is a 'very challenging' industry now, and the company will have to prepare for a time when the media business will no longer be as profitable. New property ventures give the company an opportunity to expand its areas of expertise, Mr Chan said.
Shareholders praised SPH management for guiding the company through a difficult year with profit more or less intact.
Dr Tan acknowledged the contributions of management and staff, who took pay cuts and stayed loyal to the company through the past year.
One shareholder asked the board on the absence of women in its ranks. 'Women bring a fresh perspective to things,' she said, noting that a woman on the board would not have supported the running of sexist advertisements. Dr Tan said that the board will consider the issue at its next meeting.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
BT : Milestone year for Marina Bay
Business Times - 05 Dec 2009
Milestone year for Marina Bay
URA plans slew of activities to draw locals, visitors in 2010
By FELDA CHAY
THE Urban Redevelopment Authority has planned a string of activities next year to attract local and foreign visitors to Marina Bay.
With most of the key features in the area set to be completed during the year, the development agency aims to attract visitors through a series of events dubbed 'Marina Bay Invitations 2010'.
Kick-starting the series is the Marina Bay Countdown into 2010 on the last day of the year. This will be followed by the opening of the double helix pedestrian bridge and Singapore's first Art Park, next to the seating gallery of The Float @ Marina Bay, both of which will open by March next year.
Members of the community will be invited to the official opening - to be among the first to cross the bridge and enjoy the panoramic views of the city, URA said.
In mid-2010, URA will hold a mass walkathon and carnival to mark the opening of the 3.5 kilometre waterfront promenade, which will feature a continuous waterfront loop and dancing water jets.
This will be followed by an urban light festival in the concluding months of the year. And coming full circle - the series will end with the Marina Bay Singapore Countdown 2010/2011.
URA chief executive Cheong Koon Hean said: '2010 is a milestone year for Marina Bay and Singapore. It is the time when most of the developments around the bay are completed, and the dawn of a new skyline for Singapore. We want to extend an invitation to every Singaporean and visitor to come to Marina Bay to join in the calendar of exciting events in 2010.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
HIGHLIGHTS
Kick-starting the series is the Marina Bay Countdown into 2010 on the last day of the year; in mid-2010, URA will hold a mass walkathon and carnival to mark the opening of the 3.5 kilometre waterfront promenade
Milestone year for Marina Bay
URA plans slew of activities to draw locals, visitors in 2010
By FELDA CHAY
THE Urban Redevelopment Authority has planned a string of activities next year to attract local and foreign visitors to Marina Bay.
With most of the key features in the area set to be completed during the year, the development agency aims to attract visitors through a series of events dubbed 'Marina Bay Invitations 2010'.
Kick-starting the series is the Marina Bay Countdown into 2010 on the last day of the year. This will be followed by the opening of the double helix pedestrian bridge and Singapore's first Art Park, next to the seating gallery of The Float @ Marina Bay, both of which will open by March next year.
Members of the community will be invited to the official opening - to be among the first to cross the bridge and enjoy the panoramic views of the city, URA said.
In mid-2010, URA will hold a mass walkathon and carnival to mark the opening of the 3.5 kilometre waterfront promenade, which will feature a continuous waterfront loop and dancing water jets.
This will be followed by an urban light festival in the concluding months of the year. And coming full circle - the series will end with the Marina Bay Singapore Countdown 2010/2011.
URA chief executive Cheong Koon Hean said: '2010 is a milestone year for Marina Bay and Singapore. It is the time when most of the developments around the bay are completed, and the dawn of a new skyline for Singapore. We want to extend an invitation to every Singaporean and visitor to come to Marina Bay to join in the calendar of exciting events in 2010.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
HIGHLIGHTS
Kick-starting the series is the Marina Bay Countdown into 2010 on the last day of the year; in mid-2010, URA will hold a mass walkathon and carnival to mark the opening of the 3.5 kilometre waterfront promenade
BT : World's tallest tower marks end of era
Business Times - 05 Dec 2009
World's tallest tower marks end of era
The Burj Dubai tower opens on Jan 4 even as hundreds of other building projects in the emirate are mothballed
(Dubai)
NEXT month's opening of the Burj Dubai tower, the world's tallest building, will bring Dubai's era of exuberant expansion to a shuddering halt as hundreds of other building projects are already mothballed.
Plunging property prices and weak demand had already put a dampener on new schemes even before last week's shock announcement by state-owned giant Dubai World that it wants to halt debt payments for six months.
'It's not exactly going to improve investor confidence,' said Matthew Green, associate director at property agency CB Richard Ellis (CBRE), which has reported a 55 per cent year-on-year drop in downtown Dubai commercial rental rates and a 67 per cent fall outside the centre.
The 800m tall skyscraper is the centrepiece of a US$20 billion new shopping district, Downtown Burj Dubai, which also includes 30,000 apartments and the Dubai Mall, which claims that its space for 1,200 shops makes it the world's biggest indoor shopping centre.
The tower, whose needle-shaped upper section is visible from 15 km away, stands on one side of a popular piazza, thronged with strollers in the evenings, when a fountain gushes in the central lake.
Developer Emaar has officially announced that Burj Dubai tower will open on Jan 4, the fourth anniversary of Mohammed bin Rashed al-Maktoum's accession to power in Dubai.
Under construction since 2004, the opening of the steel-and-glass landmark has unofficially been put back from late 2008, but no further delay is likely for fear of loss of face by Emaar, which has not escaped the impact of the global property downturn.
It is keeping quiet about how many tenants it has found for the 160-storey building, and the company's plan announced in June to merge with state-owned Dubai Holding gave the impression that stockmarket-listed Emaar was not in the healthiest financial condition.
That impression was reinforced on Thursday by ratings agency Standard and Poor's Corp, which included both Emaar and Dubai Holding among six state-linked companies that it downgraded to junk bond status.
Despite the debt crisis that unfolded last week, Dubai remains a bustling city full of eye-catching sights.
The city state's iconic national symbol is the three km long Palm Jumeirah artificial island, full of luxury villas whose owners are said to include David Beckham and Brad Pitt.
Immigrant workers were still busy yesterday beavering away on a dozen new housing projects on the island, but Palm Jumeirah's developer Nakheel had halted plans for two more islands even before its credit woes were broadcast around the world last week.
Nakheel's US$3.5 billion Islamic bond programme, due for repayment on Dec 14, is the main deal immediately affected by parent company Dubai World's debt standstill.
All over Dubai, work was still in progress yesterday on dozens of more modest projects, although most are buildings near completion, with the scaffolding only remaining around the upper storeys.
Grand schemes such as the Burj Dubai and Palm Jumeirah are a thing of the past.
The World, an enormous project for artificial islands shaped like the continents, is now no more than a group of sandbanks, and no-one expects Nakheel to go ahead with a one km tall tower announced a year ago.
Market research company Proleads has estimated that projects worth US$582 billion or 45 per cent of the value of all developments, have been put on hold in Dubai or the other members of the United Arab Emirates.
The turning point in Dubai's seemingly relentless ballooning growth came exactly a year ago, on Dec 4, 2008, when state-owned Meeras suspended plans that it had announced only two months previously for a US$95 billion city within a city called Jumeirah Gardens.
Now the question under discussion is not whether Dubai will go on growing but whether Sheikh Mohammed can stop the city going into sharp decline.
'Lease rates are below those of 1996, a reflection of the true extent of the downturn,' CBRE said in its third-quarter report on the commercial leasing market, written before Dubai World suspended its debt payments.
Rents for homes are down by as much as 48 per cent, and CBRE noted: 'Newer areas are faring comparatively badly in the downturn when compared to more established communities.'
CBRE's Mr Green said that his company is not seeing many newcomers to Dubai looking for apartments, as 'there is not a lot of hiring going on'.
'We have witnessed a rise in movements either to larger apartments which were previously too expensive, or to the lower end of the market where terms are more flexible and rates lower, due to continued fear of job security,' he said.
But those are people who already live within the Emirates transferring to a different neighbourhood, Mr Green said.
Even if there was continuing demand for new homes and offices, Dubai's debt crisis means that investors would be likely to think three times about putting up the money, especially to any state-linked company.
'Although the authorities are at pains to say this is corporate default and not sovereign, it undoes all the implied security of ever wanting to do business with any state entity in Dubai this side of 2020,' said Manny Cranus, an analyst with London's MF Global.
'Trust is a very expensive commodity and can be very quickly squandered,' he said. -- AFP
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
IVORY TOWER Under construction since 2004, the opening of the steel-and-glass landmark has unofficially been put back from late 2008, but no further delay is likely for fear of loss of face
World's tallest tower marks end of era
The Burj Dubai tower opens on Jan 4 even as hundreds of other building projects in the emirate are mothballed
(Dubai)
NEXT month's opening of the Burj Dubai tower, the world's tallest building, will bring Dubai's era of exuberant expansion to a shuddering halt as hundreds of other building projects are already mothballed.
Plunging property prices and weak demand had already put a dampener on new schemes even before last week's shock announcement by state-owned giant Dubai World that it wants to halt debt payments for six months.
'It's not exactly going to improve investor confidence,' said Matthew Green, associate director at property agency CB Richard Ellis (CBRE), which has reported a 55 per cent year-on-year drop in downtown Dubai commercial rental rates and a 67 per cent fall outside the centre.
The 800m tall skyscraper is the centrepiece of a US$20 billion new shopping district, Downtown Burj Dubai, which also includes 30,000 apartments and the Dubai Mall, which claims that its space for 1,200 shops makes it the world's biggest indoor shopping centre.
The tower, whose needle-shaped upper section is visible from 15 km away, stands on one side of a popular piazza, thronged with strollers in the evenings, when a fountain gushes in the central lake.
Developer Emaar has officially announced that Burj Dubai tower will open on Jan 4, the fourth anniversary of Mohammed bin Rashed al-Maktoum's accession to power in Dubai.
Under construction since 2004, the opening of the steel-and-glass landmark has unofficially been put back from late 2008, but no further delay is likely for fear of loss of face by Emaar, which has not escaped the impact of the global property downturn.
It is keeping quiet about how many tenants it has found for the 160-storey building, and the company's plan announced in June to merge with state-owned Dubai Holding gave the impression that stockmarket-listed Emaar was not in the healthiest financial condition.
That impression was reinforced on Thursday by ratings agency Standard and Poor's Corp, which included both Emaar and Dubai Holding among six state-linked companies that it downgraded to junk bond status.
Despite the debt crisis that unfolded last week, Dubai remains a bustling city full of eye-catching sights.
The city state's iconic national symbol is the three km long Palm Jumeirah artificial island, full of luxury villas whose owners are said to include David Beckham and Brad Pitt.
Immigrant workers were still busy yesterday beavering away on a dozen new housing projects on the island, but Palm Jumeirah's developer Nakheel had halted plans for two more islands even before its credit woes were broadcast around the world last week.
Nakheel's US$3.5 billion Islamic bond programme, due for repayment on Dec 14, is the main deal immediately affected by parent company Dubai World's debt standstill.
All over Dubai, work was still in progress yesterday on dozens of more modest projects, although most are buildings near completion, with the scaffolding only remaining around the upper storeys.
Grand schemes such as the Burj Dubai and Palm Jumeirah are a thing of the past.
The World, an enormous project for artificial islands shaped like the continents, is now no more than a group of sandbanks, and no-one expects Nakheel to go ahead with a one km tall tower announced a year ago.
Market research company Proleads has estimated that projects worth US$582 billion or 45 per cent of the value of all developments, have been put on hold in Dubai or the other members of the United Arab Emirates.
The turning point in Dubai's seemingly relentless ballooning growth came exactly a year ago, on Dec 4, 2008, when state-owned Meeras suspended plans that it had announced only two months previously for a US$95 billion city within a city called Jumeirah Gardens.
Now the question under discussion is not whether Dubai will go on growing but whether Sheikh Mohammed can stop the city going into sharp decline.
'Lease rates are below those of 1996, a reflection of the true extent of the downturn,' CBRE said in its third-quarter report on the commercial leasing market, written before Dubai World suspended its debt payments.
Rents for homes are down by as much as 48 per cent, and CBRE noted: 'Newer areas are faring comparatively badly in the downturn when compared to more established communities.'
CBRE's Mr Green said that his company is not seeing many newcomers to Dubai looking for apartments, as 'there is not a lot of hiring going on'.
'We have witnessed a rise in movements either to larger apartments which were previously too expensive, or to the lower end of the market where terms are more flexible and rates lower, due to continued fear of job security,' he said.
But those are people who already live within the Emirates transferring to a different neighbourhood, Mr Green said.
Even if there was continuing demand for new homes and offices, Dubai's debt crisis means that investors would be likely to think three times about putting up the money, especially to any state-linked company.
'Although the authorities are at pains to say this is corporate default and not sovereign, it undoes all the implied security of ever wanting to do business with any state entity in Dubai this side of 2020,' said Manny Cranus, an analyst with London's MF Global.
'Trust is a very expensive commodity and can be very quickly squandered,' he said. -- AFP
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
IVORY TOWER Under construction since 2004, the opening of the steel-and-glass landmark has unofficially been put back from late 2008, but no further delay is likely for fear of loss of face
BT : $357.5m extension of North-South line to Marina South
Business Times - 05 Dec 2009
$357.5m extension of North-South line to Marina South
Contract awarded to Samsung C&T Corp
THE Land Transport Authority (LTA) said yesterday that it has awarded a $357.5 million contract to Samsung C&T Corporation for North-South Line extension civil works.
The contract covers the design and construction of an additional station and associated tunnels at Marina South.
Construction is scheduled to start this month and is slated for completion by 2014.
LTA said that the one km underground extension is an extension of the existing North-South Line that runs south from the overrun tunnels after Marina Bay station into the Marina South area.
When completed, the extension will provide an additional transport choice to Marina South Pier and upcoming developments in the area, such as the new cruise terminal and Gardens by the Bay.
Samsung C&T Corporation is a South Korean company with extensive construction experience in Singapore. It is involved in the design and construction of Cross Street Station as part of the Downtown Line Stage 1 and the design and construction of a section of the Marina Coastal Expressway.
The Marina Coastal Expressway, scheduled for completion in 2013, is expected to be Singapore's most expensive expressway. So far, the LTA has awarded $4 billion worth of contracts for the project, which involves undersea construction.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
LONG STRETCH
The Marina Coastal Expressway is scheduled for completion in 2013
$357.5m extension of North-South line to Marina South
Contract awarded to Samsung C&T Corp
THE Land Transport Authority (LTA) said yesterday that it has awarded a $357.5 million contract to Samsung C&T Corporation for North-South Line extension civil works.
The contract covers the design and construction of an additional station and associated tunnels at Marina South.
Construction is scheduled to start this month and is slated for completion by 2014.
LTA said that the one km underground extension is an extension of the existing North-South Line that runs south from the overrun tunnels after Marina Bay station into the Marina South area.
When completed, the extension will provide an additional transport choice to Marina South Pier and upcoming developments in the area, such as the new cruise terminal and Gardens by the Bay.
Samsung C&T Corporation is a South Korean company with extensive construction experience in Singapore. It is involved in the design and construction of Cross Street Station as part of the Downtown Line Stage 1 and the design and construction of a section of the Marina Coastal Expressway.
The Marina Coastal Expressway, scheduled for completion in 2013, is expected to be Singapore's most expensive expressway. So far, the LTA has awarded $4 billion worth of contracts for the project, which involves undersea construction.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
LONG STRETCH
The Marina Coastal Expressway is scheduled for completion in 2013
CNA : Private home prices may hit new high in 2010
Private home prices may hit new high in 2010
By Ng Baoying, Channel NewsAsia | Posted: 04 December 2009 2123 hrs
SINGAPORE: Private home prices here are expected to hit a new high in 2010 and perhaps rise even further after that, should the economy continue to grow.
But analysts said on Friday that sales volumes in 2010 are likely to fall back to sub-10,000 levels seen in previous years.
Observers are projecting that 15,000 to 16,000 units will be sold in the primary market in 2009 – the highest on record.
The launch of a mass market project in Jurong West – Caspian – broke the dam for new home sales in Singapore earlier in 2009.
Some 10 months later, home sales during the economic downturn are projected to exceed even July 2007's record of 14,811 homes. Data already shows that about 13,905 units have been sold from January to September this year.
Analysts said this performance is driven by pent-up demand, and is unlikely to be repeated in the years ahead.
Donald Han, managing director, Cushman & Wakefield, said: "This has been a spectacular year by virtue of pent-up demand. The second and third quarter probably produced about 60 to 70 per cent of total demand for 2009.
"In the third quarter alone, we sold something like 5,700 new home units. We sold more in the third quarter than in 2008. That kind of demand is not sustainable.
"The fact is that the government put on the brakes by discontinuing the interest absorption scheme. Also, they are making promises to ensure enough supply in the marketplace by introducing more government land sales programmes in 2010."
Mr Han said sales are likely to average around 800 new homes a month, or some 9,000 to 10,000 units for the whole of 2010. However, some analysts said prices will not be falling in tandem with lower sales.
That is because the strong economy and fundamentals of the country will support prices, and may even drive them higher.
Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic, said: "Going forward, average home prices still have some way to grow. They could still expand conservatively at about 10 per cent, while in some segments they could go as high as 20 per cent."
Units in the mid- to high-end segments will see prices rise higher than those in the mass market.
Analysts said this is mainly because prices in the mass market, which accounts for about 45 per cent of all private homes sold to date, started heading upwards earlier, and are close to their peak.
But they are not ruling out factors that could temper price growth such as government measures to cool the market, should speculation get out of hand.
By Ng Baoying, Channel NewsAsia | Posted: 04 December 2009 2123 hrs
SINGAPORE: Private home prices here are expected to hit a new high in 2010 and perhaps rise even further after that, should the economy continue to grow.
But analysts said on Friday that sales volumes in 2010 are likely to fall back to sub-10,000 levels seen in previous years.
Observers are projecting that 15,000 to 16,000 units will be sold in the primary market in 2009 – the highest on record.
The launch of a mass market project in Jurong West – Caspian – broke the dam for new home sales in Singapore earlier in 2009.
Some 10 months later, home sales during the economic downturn are projected to exceed even July 2007's record of 14,811 homes. Data already shows that about 13,905 units have been sold from January to September this year.
Analysts said this performance is driven by pent-up demand, and is unlikely to be repeated in the years ahead.
Donald Han, managing director, Cushman & Wakefield, said: "This has been a spectacular year by virtue of pent-up demand. The second and third quarter probably produced about 60 to 70 per cent of total demand for 2009.
"In the third quarter alone, we sold something like 5,700 new home units. We sold more in the third quarter than in 2008. That kind of demand is not sustainable.
"The fact is that the government put on the brakes by discontinuing the interest absorption scheme. Also, they are making promises to ensure enough supply in the marketplace by introducing more government land sales programmes in 2010."
Mr Han said sales are likely to average around 800 new homes a month, or some 9,000 to 10,000 units for the whole of 2010. However, some analysts said prices will not be falling in tandem with lower sales.
That is because the strong economy and fundamentals of the country will support prices, and may even drive them higher.
Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic, said: "Going forward, average home prices still have some way to grow. They could still expand conservatively at about 10 per cent, while in some segments they could go as high as 20 per cent."
Units in the mid- to high-end segments will see prices rise higher than those in the mass market.
Analysts said this is mainly because prices in the mass market, which accounts for about 45 per cent of all private homes sold to date, started heading upwards earlier, and are close to their peak.
But they are not ruling out factors that could temper price growth such as government measures to cool the market, should speculation get out of hand.
Friday, December 4, 2009
CNA : S'pore, HK property investors expect portfolio value to increase
S'pore, HK property investors expect portfolio value to increase
By Tan Hui Leng, Channel NewsAsia | Posted: 03 December 2009 2103 hrs
City skyscrapers in Singapore. (file pic)
SINGAPORE: Singapore investors are not alone in their love for property. Those in Hong Kong have also allocated 25 per cent of their portfolios to property, according to a survey of high net worth individuals conducted by Barclays Wealth.
In fact, both groups expect to allocate a greater part of their portfolios to property over the next two years by about 3 percentage points.
They cited potential yield and capital appreciation as the top two advantages of residential property investment.
Barclays Wealth said on Thursday that it expects investor demand for property to stay relatively strong with economic recovery and the loosening of liquidity. But it noted that diversification is essential to any investment portfolio.
Manpreet Gill, Asia strategist, Barclays Wealth, said: "At the end of the day, 25 per cent concentration for a Singaporean respondent is a fairly high part of the portfolio to invest in one asset class – one which, depending on the specific instance, could be potentially illiquid. That's a higher number than what we would be recommending.
"At this point in time, we think it makes sense to invest in risky assets, which will include property, but also other asset classes like equities. We think diversification is a very important part of what clients and investors should be looking at today. That's one of the important findings of our survey."
Barclays also noted that property as an asset class has typically not delivered high long-term returns.
In Singapore, Barclays expects upward price movements in the mid- to higher-end segments of the market, where property prices have taken a hit because of the global credit crunch.
The survey was conducted in August and September, polling over 2,000 respondents from across the world, including the US, UK, Spain and India.
By Tan Hui Leng, Channel NewsAsia | Posted: 03 December 2009 2103 hrs
City skyscrapers in Singapore. (file pic)
SINGAPORE: Singapore investors are not alone in their love for property. Those in Hong Kong have also allocated 25 per cent of their portfolios to property, according to a survey of high net worth individuals conducted by Barclays Wealth.
In fact, both groups expect to allocate a greater part of their portfolios to property over the next two years by about 3 percentage points.
They cited potential yield and capital appreciation as the top two advantages of residential property investment.
Barclays Wealth said on Thursday that it expects investor demand for property to stay relatively strong with economic recovery and the loosening of liquidity. But it noted that diversification is essential to any investment portfolio.
Manpreet Gill, Asia strategist, Barclays Wealth, said: "At the end of the day, 25 per cent concentration for a Singaporean respondent is a fairly high part of the portfolio to invest in one asset class – one which, depending on the specific instance, could be potentially illiquid. That's a higher number than what we would be recommending.
"At this point in time, we think it makes sense to invest in risky assets, which will include property, but also other asset classes like equities. We think diversification is a very important part of what clients and investors should be looking at today. That's one of the important findings of our survey."
Barclays also noted that property as an asset class has typically not delivered high long-term returns.
In Singapore, Barclays expects upward price movements in the mid- to higher-end segments of the market, where property prices have taken a hit because of the global credit crunch.
The survey was conducted in August and September, polling over 2,000 respondents from across the world, including the US, UK, Spain and India.
TODAY Online : First workers move into Serangoon Gardens dorm
First workers move into Serangoon Gardens dorm
05:55 AM Dec 04, 2009
SINGAPORE - The Serangoon Gardens workers' dormitory will start operations today. MediaCorp understands that about 20 male workers, who will be working in Singapore as hotel staff, are arriving from China and will move into the premises.
The dormitory is operated by Maxi Consultancy and will have an initial occupancy of 600.
A spokesperson for the operator said the foreign workers will be mostly from China, and three-quarters will be women.
The dormitory had been expected to open in August. But it faced delays, as the operator had to first fulfil 14 conditions laid out by Serangoon Gardens residents.
The latter have established four sub-committees to look into security, traffic, environmental and engagement issues.
Mr John Leow, the coordinating chairman of the committees, said: "We're happy with the precautionary measures and all the security in place. The enforcement will have to come in ... when the residents come in."
Last year, the proposal to have a foreign workers' dormitory built in the estate sparked a heated debate and protests from the residents. JOANNE CHAN
05:55 AM Dec 04, 2009
SINGAPORE - The Serangoon Gardens workers' dormitory will start operations today. MediaCorp understands that about 20 male workers, who will be working in Singapore as hotel staff, are arriving from China and will move into the premises.
The dormitory is operated by Maxi Consultancy and will have an initial occupancy of 600.
A spokesperson for the operator said the foreign workers will be mostly from China, and three-quarters will be women.
The dormitory had been expected to open in August. But it faced delays, as the operator had to first fulfil 14 conditions laid out by Serangoon Gardens residents.
The latter have established four sub-committees to look into security, traffic, environmental and engagement issues.
Mr John Leow, the coordinating chairman of the committees, said: "We're happy with the precautionary measures and all the security in place. The enforcement will have to come in ... when the residents come in."
Last year, the proposal to have a foreign workers' dormitory built in the estate sparked a heated debate and protests from the residents. JOANNE CHAN
ST : More options to keep homes
Dec 4, 2009
More options to keep homes
WASHINGTON - A TOP US Treasury official said on Thursday that more needs to be done to prevent people from losing their homes, adding that the department is exploring a wide range of options to help responsible home owners.
'We particularly want to make sure that we have the tools we need to help people who are temporarily unemployed,' Assistant Treasury Secretary Michael Barr told reporters on the sidelines of a consumer conference.
The Obama administration has already created a US$75 billion (S$104 billion) taxpayer-financed program designed to help slow the rate of foreclosures. About 650,000 borrowers have completed trial modifications under the Home Affordable Modification Program.
Mr Barr characterised the program as an aggressive set of tools to engage people in the process, but said more needs to be done. 'We are looking at a wide range of tools to help people who are unemployed,' Mr Barr said. 'We need to look at a process, if we come to this point, that is fair to everyone, that is cost effective, that protects the taxpayers and that gives responsible home owners a chance to stay in their homes.'
Mr Barr expressed dissatisfaction with mortgage lenders' inability to fully execute the required steps to bring relief to borrowers who are struggling.
'It has been an area of frustration for us and for borrowers,' he told the consumer conference. 'It is up to the banks to finish the job and get borrowers into completed modification plans. We are examining their performance every day ... soon to be twice a day.' -- THOMSON REUTERS
More options to keep homes
WASHINGTON - A TOP US Treasury official said on Thursday that more needs to be done to prevent people from losing their homes, adding that the department is exploring a wide range of options to help responsible home owners.
'We particularly want to make sure that we have the tools we need to help people who are temporarily unemployed,' Assistant Treasury Secretary Michael Barr told reporters on the sidelines of a consumer conference.
The Obama administration has already created a US$75 billion (S$104 billion) taxpayer-financed program designed to help slow the rate of foreclosures. About 650,000 borrowers have completed trial modifications under the Home Affordable Modification Program.
Mr Barr characterised the program as an aggressive set of tools to engage people in the process, but said more needs to be done. 'We are looking at a wide range of tools to help people who are unemployed,' Mr Barr said. 'We need to look at a process, if we come to this point, that is fair to everyone, that is cost effective, that protects the taxpayers and that gives responsible home owners a chance to stay in their homes.'
Mr Barr expressed dissatisfaction with mortgage lenders' inability to fully execute the required steps to bring relief to borrowers who are struggling.
'It has been an area of frustration for us and for borrowers,' he told the consumer conference. 'It is up to the banks to finish the job and get borrowers into completed modification plans. We are examining their performance every day ... soon to be twice a day.' -- THOMSON REUTERS
ST : Wealthy S'poreans bullish on property
Dec 4, 2009
Wealthy S'poreans bullish on property
But Barclays advises caution as prices may 'moderate' or flatten
By Joyce Teo
WEALTHY investors in Singapore are so keen on putting their millions into pro-perty investments that even giant bank Barclays is urging caution.
A survey by Barclays Wealth has found that Singapore's high net worth individuals are more bullish on the future of the property market than a lot of their counterparts across the globe.
It has also determined that more women than men believe bricks and mortar make a less risky investment than equities.
These investors - their assets range from $1 million to more than $30 million - place about a quarter of their wealth into property, and this is expected to hit 28 per cent over the next two years.
The reason is clear: Singapore's wealthy see real estate as a better long-term solution, but Barclays' experts feel these people need a better balance.
Mr Manpreet Gill, Barclays Wealth's Asia strategist, said: 'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'
The survey polled more than 2,000 high net worth individuals around the globe, including 125 in Singapore, in August and September. It was commissioned by Barclays Wealth and written by the Economist Intelligence Unit.
It shows that Singapore, Canada and India have a larger number of investors than elsewhere who expect a rise in the value of their property investments over the next two years.
Nearly half of the respondents in Singapore think property prices will likely go up once credit starts to flow freely through the global economy.
Most of them see opportunities in the sector, though a large number feel that tight credit conditions are preventing them from capitalising on the opportunities.
Women are particularly keen. More Singaporean women than men want to invest in property in emerging markets.
The survey has also found that many Singapore investors see rental income as the main advantage of holding residential properties, with the cost of upkeep as the biggest burden.
According to Mr Gill, the momentum in the real estate market, as well as the pickup in residential prices and the improved economic outlook, are driving expectations among property investors.
However, he warns that prices of residential properties in the mid- to high-end segment may 'moderate' or possibly flatten next year due to the large supply coming onstream.
'There's a tendency to be influenced by 2007, when the market was doing very well,' he said.
Property has been a source of new wealth around the world, but it has also proved to be many investors' undoing, Barclays Wealth said in a presentation yesterday.
The good news is that Singapore investors continue to view overseas property markets as offering attractive returns over the next two years, especially in the United States, India and Britain.
This helps to 'avoid excessively concentrating risk in one asset class and region together', said Mr Gill.
Some Singapore investors are, however, prone to developing an emotional attachment to bricks and mortar and may be unwilling to sell at a short notice, according to the survey.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
TOO MUCH FOR COMFORT
'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'
Mr Manpreet Gill, Barclays Wealth's Asia strategist
Wealthy S'poreans bullish on property
But Barclays advises caution as prices may 'moderate' or flatten
By Joyce Teo
WEALTHY investors in Singapore are so keen on putting their millions into pro-perty investments that even giant bank Barclays is urging caution.
A survey by Barclays Wealth has found that Singapore's high net worth individuals are more bullish on the future of the property market than a lot of their counterparts across the globe.
It has also determined that more women than men believe bricks and mortar make a less risky investment than equities.
These investors - their assets range from $1 million to more than $30 million - place about a quarter of their wealth into property, and this is expected to hit 28 per cent over the next two years.
The reason is clear: Singapore's wealthy see real estate as a better long-term solution, but Barclays' experts feel these people need a better balance.
Mr Manpreet Gill, Barclays Wealth's Asia strategist, said: 'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'
The survey polled more than 2,000 high net worth individuals around the globe, including 125 in Singapore, in August and September. It was commissioned by Barclays Wealth and written by the Economist Intelligence Unit.
It shows that Singapore, Canada and India have a larger number of investors than elsewhere who expect a rise in the value of their property investments over the next two years.
Nearly half of the respondents in Singapore think property prices will likely go up once credit starts to flow freely through the global economy.
Most of them see opportunities in the sector, though a large number feel that tight credit conditions are preventing them from capitalising on the opportunities.
Women are particularly keen. More Singaporean women than men want to invest in property in emerging markets.
The survey has also found that many Singapore investors see rental income as the main advantage of holding residential properties, with the cost of upkeep as the biggest burden.
According to Mr Gill, the momentum in the real estate market, as well as the pickup in residential prices and the improved economic outlook, are driving expectations among property investors.
However, he warns that prices of residential properties in the mid- to high-end segment may 'moderate' or possibly flatten next year due to the large supply coming onstream.
'There's a tendency to be influenced by 2007, when the market was doing very well,' he said.
Property has been a source of new wealth around the world, but it has also proved to be many investors' undoing, Barclays Wealth said in a presentation yesterday.
The good news is that Singapore investors continue to view overseas property markets as offering attractive returns over the next two years, especially in the United States, India and Britain.
This helps to 'avoid excessively concentrating risk in one asset class and region together', said Mr Gill.
Some Singapore investors are, however, prone to developing an emotional attachment to bricks and mortar and may be unwilling to sell at a short notice, according to the survey.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
TOO MUCH FOR COMFORT
'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'
Mr Manpreet Gill, Barclays Wealth's Asia strategist
BT : Tax shadow looms over Malaysian property sales
Business Times - 04 Dec 2009
Tax shadow looms over Malaysian property sales
Sellers rushing to beat deadline face approval hurdle
By PAULINE NG
IN KUALA LUMPUR
PROPERTY sellers rushing to dispose of their real estate in Malaysia in order to avoid paying real property gains tax (RPGT) could find their efforts thwarted should their disposal require government consent.
This is because obtaining official approval could push the sale date to one after Dec 31 - the last day before the reintroduction of RPGT, a tax specialist said.
KPMG Tax Services executive director Tai Lai Kok told BT that many transactions involving property could require state approval.
Under the RPGT Act, where a contract for the disposal of an asset is conditional and the condition is satisfied (by the exercise of a right under an option or otherwise), the acquisition and disposal of the asset shall be regarded as taking place at the time the contract was made.
But there are two exceptions: where the acquisition or disposal requires the approval by the government or an authority or committee appointed by the government, the date of disposal shall be the date of such approval; and where the approval is conditional, the date of disposal shall be the date when the last of all such conditions is satisfied.
However, the RPGT Act does not define the term 'government' - whether it refers to the state or federal government. In any event, because land matters come under state control, a number of these transactions could invariably require state approval. 'Lawyers would need to review the individual title to see what restrictions and caveats there are to ascertain if government approvals are needed.'
Lawyers said that the time taken for states to give their approval varies, some reverting in a month, and some up to six months.
'If the property is already owned by a foreigner, it is likely the transaction would require state approval,' Mr Tai said, adding that 'conditional contracts' had become an issue only because of the short 'window period' before RPGT is reintroduced.
He noted that the RPGT Act had introduced government approvals only in 2006.
Shortly after that, former prime minister Abdullah Ahmad Badawi allowed a blanket exemption on RPGT effective April 2007 to boost the sector, so the issue was not fully explored.
Moreover, the Finance Ministry and Inland Revenue Board had not come up with a clear indication as to how the conditional contracts apply. 'There is a bit of a question mark there,' Mr Tai noted.
The government is expected to rake in RM500 million (S$204 million) from RPGT next year when the tax is reintroduced at a flat 5 per cent, notwithstanding the holding period.
Because the tax was supposed to curb speculation, its across-the-board application has upset those who have held their properties for a long time - some for decades, some stretching a few generations - as the value of their assets would have greatly appreciated.
Property players have also criticised the government's reversal in policy after less than three years as inconsistent and a deterrent to foreign investors.
This week, Gerakan - a component party of the ruling federal coalition Barisan Nasional - urged the government to scrap the proposal to reintroduce RPGT as it is 'unfair and inappropriate' since it would impinge on all transactions, including those not of a speculative nature.
'In view of the serious consequences from the tax especially on the middle and low income groups, we appeal to the government to cancel the proposed 5 per cent RPGT under Budget 2010.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved
Tax shadow looms over Malaysian property sales
Sellers rushing to beat deadline face approval hurdle
By PAULINE NG
IN KUALA LUMPUR
PROPERTY sellers rushing to dispose of their real estate in Malaysia in order to avoid paying real property gains tax (RPGT) could find their efforts thwarted should their disposal require government consent.
This is because obtaining official approval could push the sale date to one after Dec 31 - the last day before the reintroduction of RPGT, a tax specialist said.
KPMG Tax Services executive director Tai Lai Kok told BT that many transactions involving property could require state approval.
Under the RPGT Act, where a contract for the disposal of an asset is conditional and the condition is satisfied (by the exercise of a right under an option or otherwise), the acquisition and disposal of the asset shall be regarded as taking place at the time the contract was made.
But there are two exceptions: where the acquisition or disposal requires the approval by the government or an authority or committee appointed by the government, the date of disposal shall be the date of such approval; and where the approval is conditional, the date of disposal shall be the date when the last of all such conditions is satisfied.
However, the RPGT Act does not define the term 'government' - whether it refers to the state or federal government. In any event, because land matters come under state control, a number of these transactions could invariably require state approval. 'Lawyers would need to review the individual title to see what restrictions and caveats there are to ascertain if government approvals are needed.'
Lawyers said that the time taken for states to give their approval varies, some reverting in a month, and some up to six months.
'If the property is already owned by a foreigner, it is likely the transaction would require state approval,' Mr Tai said, adding that 'conditional contracts' had become an issue only because of the short 'window period' before RPGT is reintroduced.
He noted that the RPGT Act had introduced government approvals only in 2006.
Shortly after that, former prime minister Abdullah Ahmad Badawi allowed a blanket exemption on RPGT effective April 2007 to boost the sector, so the issue was not fully explored.
Moreover, the Finance Ministry and Inland Revenue Board had not come up with a clear indication as to how the conditional contracts apply. 'There is a bit of a question mark there,' Mr Tai noted.
The government is expected to rake in RM500 million (S$204 million) from RPGT next year when the tax is reintroduced at a flat 5 per cent, notwithstanding the holding period.
Because the tax was supposed to curb speculation, its across-the-board application has upset those who have held their properties for a long time - some for decades, some stretching a few generations - as the value of their assets would have greatly appreciated.
Property players have also criticised the government's reversal in policy after less than three years as inconsistent and a deterrent to foreign investors.
This week, Gerakan - a component party of the ruling federal coalition Barisan Nasional - urged the government to scrap the proposal to reintroduce RPGT as it is 'unfair and inappropriate' since it would impinge on all transactions, including those not of a speculative nature.
'In view of the serious consequences from the tax especially on the middle and low income groups, we appeal to the government to cancel the proposed 5 per cent RPGT under Budget 2010.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved
BT : S'pore's rich bullish about property investments
Business Times - 04 Dec 2009
S'pore's rich bullish about property investments
High net worth investors here plan to increase their exposure: survey
By UMA SHANKARI
(SINGAPORE) SINGAPORE'S rich are among the most optimistic of investors when it comes to property investments, and are planning to raise their exposure to the asset class in the next two years, a new study shows.
The study, by Barclays Wealth and the Economist Intelligence Unit, found that 53 per cent of high net worth investors in Singapore expect an increase in the value of their property investments over the next two years. This is slightly more than the 49 per cent of respondents who hold the same view globally.
After bottoming in Q2 2009, private home prices in Singapore rose 15.8 per cent quarter on quarter in Q3. Analysts expect property prices to stay firm for the year ahead, and are especially upbeat about the high-end segment.
Wealthy investors here are also planning to allocate a larger proportion of their investment portfolios to property in future. Real estate investment among wealthy individuals in Singapore is set to rise to 28 per cent of the average portfolio over the next two years from 25 per cent now, according to the report. That excludes properties used as a principal residence.
Some 125 high net worth investors were surveyed in Singapore. They were part of the more than 2,000 high net worth individuals - with investable assets ranging from £pounds;500,000 (S$1.1 million) to more than £pounds;30 million - who were surveyed globally in August and September this year.
The survey showed that the high level of confidence in the potential of real estate was global, with investors in nine of the 10 markets covered - including the US, UK and Hong Kong - planning to increase their property allocation over the next two years.
'High net worth investors are picking up on signs of a gradual economic recovery, yet continue to remain cautious of potential dangers, after many have fallen precipitously from earlier heights,' said Didier von Daeniken, chief executive of Barclays Wealth for Asia-Pacific.
Property has always an asset of choice for Asian and Singaporean investors; and with the current recovery, interest in real estate will pick up, bankers said.
'Property is an important asset class for Asian high net worth investors,' said Olivier Denis, head of OCBC Private Bank. 'The interest in the Singapore property market has always been strong and investors are constantly scanning the market for opportunity. Moving forward, we expect the interest to stay positive provided that the overall economic climate remains stable.'
Investors are once again eyeing property as prices in many markets have fallen from earlier highs, the survey found. Barclays Wealth's survey showed that 75 per cent of high net worth investors in Singapore continue to see opportunities in the property sector.
Transactions of high-end homes - generally thought to be the domain of wealthy investors - started to pick up in Q3. The number of units transacted at more than $2,000 per square foot (psf) during the quarter is just below the number of units seen in Q1 2007 prior to the last run-up in the high-end market, noted DBS Group Research analyst Adrian Chua.
And even as the overall property market cooled in October, the high-end segment held up. Some 285 homes with a median price of more than $1,500 psf were sold in October 2009, compared with 115 in September.
'The high-end investors are coming back but it is not the same volumes of transactions we have seen in the past (during the last boom),' said Knight Frank chairman Tan Tiong Cheng.
He pointed out that the profile of investors buying high-end apartments in Singapore has changed. The previous boom was driven by financial sector employees flush with cash. This time around, interest is coming mostly from traditional investors who are sinking their funds into real estate as they consider those assets to be safe, Mr Tan said.
The survey also showed that more than half of Singaporean investors - 54 per cent - feel that tight credit conditions are preventing them from capitalising on opportunities. They also expect home prices to climb once credit starts to flow freely through the global economy.
But bankers cautioned against overexposure to property. 'While it can be tempting to seek refuge in property as a safe haven, investors must be careful to avoid overexposure to an asset class that has traditionally proven to be susceptible to economic cycles,' said Barclays' Mr von Daeniken.
Manpreet Gill, Barclays Wealth's strategist for Asia, called for diversification and said that Singaporean investors' propensity to invest outside the country is positive as it reduces risk. In the survey, the investors identified the US, India, the UK and China as attractive foreign markets.
Mr Gill also added that wealthy investors here can look at real estate investment trusts (Reits) as alternatives to brick and mortar investments.
S'pore's rich bullish about property investments
High net worth investors here plan to increase their exposure: survey
By UMA SHANKARI
(SINGAPORE) SINGAPORE'S rich are among the most optimistic of investors when it comes to property investments, and are planning to raise their exposure to the asset class in the next two years, a new study shows.
The study, by Barclays Wealth and the Economist Intelligence Unit, found that 53 per cent of high net worth investors in Singapore expect an increase in the value of their property investments over the next two years. This is slightly more than the 49 per cent of respondents who hold the same view globally.
After bottoming in Q2 2009, private home prices in Singapore rose 15.8 per cent quarter on quarter in Q3. Analysts expect property prices to stay firm for the year ahead, and are especially upbeat about the high-end segment.
Wealthy investors here are also planning to allocate a larger proportion of their investment portfolios to property in future. Real estate investment among wealthy individuals in Singapore is set to rise to 28 per cent of the average portfolio over the next two years from 25 per cent now, according to the report. That excludes properties used as a principal residence.
Some 125 high net worth investors were surveyed in Singapore. They were part of the more than 2,000 high net worth individuals - with investable assets ranging from £pounds;500,000 (S$1.1 million) to more than £pounds;30 million - who were surveyed globally in August and September this year.
The survey showed that the high level of confidence in the potential of real estate was global, with investors in nine of the 10 markets covered - including the US, UK and Hong Kong - planning to increase their property allocation over the next two years.
'High net worth investors are picking up on signs of a gradual economic recovery, yet continue to remain cautious of potential dangers, after many have fallen precipitously from earlier heights,' said Didier von Daeniken, chief executive of Barclays Wealth for Asia-Pacific.
Property has always an asset of choice for Asian and Singaporean investors; and with the current recovery, interest in real estate will pick up, bankers said.
'Property is an important asset class for Asian high net worth investors,' said Olivier Denis, head of OCBC Private Bank. 'The interest in the Singapore property market has always been strong and investors are constantly scanning the market for opportunity. Moving forward, we expect the interest to stay positive provided that the overall economic climate remains stable.'
Investors are once again eyeing property as prices in many markets have fallen from earlier highs, the survey found. Barclays Wealth's survey showed that 75 per cent of high net worth investors in Singapore continue to see opportunities in the property sector.
Transactions of high-end homes - generally thought to be the domain of wealthy investors - started to pick up in Q3. The number of units transacted at more than $2,000 per square foot (psf) during the quarter is just below the number of units seen in Q1 2007 prior to the last run-up in the high-end market, noted DBS Group Research analyst Adrian Chua.
And even as the overall property market cooled in October, the high-end segment held up. Some 285 homes with a median price of more than $1,500 psf were sold in October 2009, compared with 115 in September.
'The high-end investors are coming back but it is not the same volumes of transactions we have seen in the past (during the last boom),' said Knight Frank chairman Tan Tiong Cheng.
He pointed out that the profile of investors buying high-end apartments in Singapore has changed. The previous boom was driven by financial sector employees flush with cash. This time around, interest is coming mostly from traditional investors who are sinking their funds into real estate as they consider those assets to be safe, Mr Tan said.
The survey also showed that more than half of Singaporean investors - 54 per cent - feel that tight credit conditions are preventing them from capitalising on opportunities. They also expect home prices to climb once credit starts to flow freely through the global economy.
But bankers cautioned against overexposure to property. 'While it can be tempting to seek refuge in property as a safe haven, investors must be careful to avoid overexposure to an asset class that has traditionally proven to be susceptible to economic cycles,' said Barclays' Mr von Daeniken.
Manpreet Gill, Barclays Wealth's strategist for Asia, called for diversification and said that Singaporean investors' propensity to invest outside the country is positive as it reduces risk. In the survey, the investors identified the US, India, the UK and China as attractive foreign markets.
Mr Gill also added that wealthy investors here can look at real estate investment trusts (Reits) as alternatives to brick and mortar investments.
Thursday, December 3, 2009
ST : Dubai not just a castle in the sand
Dec 3, 2009
Dubai not just a castle in the sand
By Kenneth Rogoff
GLOBAL investors are in a giant huff over Dubai's decision to allow its flagship private company Dubai World to seek a six-month standstill - implying at least partial default - on payments on about US$26 billion (S$36 billion) in debt. What exactly did investors expect when they purchased bonds in companies with names like 'Limitless World', one of Dubai World's bankrupt real-estate subsidiaries? Talk about a bubble mentality.
The notion, I guess, was that the emirate's government would stand behind every loan, no matter how risky. And if the oil-poor Dubai government didn't have the money, then somehow its oil-rich sister state Abu Dhabi would cough up.
An absurd expectation, one might think. But it is hardly more improbable than many of the other massive bailouts we have seen around the world in the wake of the recent financial crisis. What really upset investors, of course, was the realisation that, yes, some day untenable debt guarantees will have to be withdrawn. Eventually, an over-leveraged world is going to have to find a way to cut debt burdens down to size, and it won't all be pretty.
There are those who revel in what they see as a comeuppance for brash Dubai's outsized ambitions. I do not share this view. Yes, Dubai, with its man-made islands, hotels simulating Venice, and rooftop tennis courts, is a real-world castle in the sand. Yet, Dubai has also shown the rest of the Middle East what entrepreneurial spirit can accomplish.
Its airport has become a global hub of such significance that German regulators recently had to force the Emirates airline to raise its rates to Frankfurt, lest national champion Lufthansa lose too much business. And with its relatively open goods and capital markets, Dubai has become a trading hub not only for the entire Middle East, but also for parts of Africa and Asia. On the eve of the financial crisis, other Gulf states had started to look to Dubai for insight into how they might diversify their economies and continue to thrive when the oil wells run dry.
Yes, Dubai is certainly an autocratic state where finances are tightly and secretively controlled. Indeed, lack of detailed information on the emirates' finances was a central reason why the Dubai World default came as such a shock.
But in many ways, Dubai's rulers have been remarkably tolerant of free expression. A year ago, I sat through an evening of presentations at the University of Dubai by local artists. One artist, an Emirati photographer, presented a visual timeline of the construction of one of the stations of Dubai's new metro system. This local artist has lived through the stunning transformation of the city-state over the past 13 years, which has been driven by the kind of building boom that one associates with the fastest growing Chinese cities, not the Middle East.
But rather than simply praising the government's new constructions, the artist emphasised how jarring the change was to long-time citizens. How does one relate to the inanimate objects rising out of the barren yet majestic desert sands? Another artist presented a vision of how outside lighting could be used to transform minarets, and help them to stand out in the blur of modern buildings that characterise the contemporary Middle Eastern city. His visions were magnificent, and apparently somewhat radical. One had to be impressed that such ideas could be expressed openly.
Anyone familiar with Dubai understands that these are but small examples of a much broader embrace of creativity that has allowed the country to court elite foreign professionals in finance and other industries. Much as in the United States, elite foreigners have played a key role in developing Dubai's various service industries.
Of course, other countries in the Gulf also have some stunning accomplishments to their credit. Saudi Arabia's national oil company has achieved home- grown expertise in oil drilling that is widely admired in the West. Qatar has had success in media with Al Jazeera, while Abu Dhabi has helped sponsor remarkable advances in artificial intelligence through its support of computer chess. But Dubai, with very little black gold of its own, has done more with less than any other state in the region.
Unfortunately, Dubai ultimately proved subject to the laws of financial gravity. Massive speculation and borrowing led to excessive debt burdens and, ultimately, to default.
Is this the end of the road for Dubai's epic growth? I doubt it. Countries throughout history have defaulted on their debts and lived to talk about it, even prosper. There is no way around the need for Dubai to restructure and prune its excesses before it can resume a more sustainable growth trajectory, though achieving this will take time.
Will there be contagion to vulnerable countries in Europe and elsewhere? Not just yet. While the Dubai case is not different, it is special, so the effect on investor confidence should remain contained for now. But investors are learning the hard way that no country's possibilities and resources are limitless.
The writer, a former chief economist of the International Monetary Fund, is a professor of economics and public policy at Harvard University.
PROJECT SYNDICATE
Dubai not just a castle in the sand
By Kenneth Rogoff
GLOBAL investors are in a giant huff over Dubai's decision to allow its flagship private company Dubai World to seek a six-month standstill - implying at least partial default - on payments on about US$26 billion (S$36 billion) in debt. What exactly did investors expect when they purchased bonds in companies with names like 'Limitless World', one of Dubai World's bankrupt real-estate subsidiaries? Talk about a bubble mentality.
The notion, I guess, was that the emirate's government would stand behind every loan, no matter how risky. And if the oil-poor Dubai government didn't have the money, then somehow its oil-rich sister state Abu Dhabi would cough up.
An absurd expectation, one might think. But it is hardly more improbable than many of the other massive bailouts we have seen around the world in the wake of the recent financial crisis. What really upset investors, of course, was the realisation that, yes, some day untenable debt guarantees will have to be withdrawn. Eventually, an over-leveraged world is going to have to find a way to cut debt burdens down to size, and it won't all be pretty.
There are those who revel in what they see as a comeuppance for brash Dubai's outsized ambitions. I do not share this view. Yes, Dubai, with its man-made islands, hotels simulating Venice, and rooftop tennis courts, is a real-world castle in the sand. Yet, Dubai has also shown the rest of the Middle East what entrepreneurial spirit can accomplish.
Its airport has become a global hub of such significance that German regulators recently had to force the Emirates airline to raise its rates to Frankfurt, lest national champion Lufthansa lose too much business. And with its relatively open goods and capital markets, Dubai has become a trading hub not only for the entire Middle East, but also for parts of Africa and Asia. On the eve of the financial crisis, other Gulf states had started to look to Dubai for insight into how they might diversify their economies and continue to thrive when the oil wells run dry.
Yes, Dubai is certainly an autocratic state where finances are tightly and secretively controlled. Indeed, lack of detailed information on the emirates' finances was a central reason why the Dubai World default came as such a shock.
But in many ways, Dubai's rulers have been remarkably tolerant of free expression. A year ago, I sat through an evening of presentations at the University of Dubai by local artists. One artist, an Emirati photographer, presented a visual timeline of the construction of one of the stations of Dubai's new metro system. This local artist has lived through the stunning transformation of the city-state over the past 13 years, which has been driven by the kind of building boom that one associates with the fastest growing Chinese cities, not the Middle East.
But rather than simply praising the government's new constructions, the artist emphasised how jarring the change was to long-time citizens. How does one relate to the inanimate objects rising out of the barren yet majestic desert sands? Another artist presented a vision of how outside lighting could be used to transform minarets, and help them to stand out in the blur of modern buildings that characterise the contemporary Middle Eastern city. His visions were magnificent, and apparently somewhat radical. One had to be impressed that such ideas could be expressed openly.
Anyone familiar with Dubai understands that these are but small examples of a much broader embrace of creativity that has allowed the country to court elite foreign professionals in finance and other industries. Much as in the United States, elite foreigners have played a key role in developing Dubai's various service industries.
Of course, other countries in the Gulf also have some stunning accomplishments to their credit. Saudi Arabia's national oil company has achieved home- grown expertise in oil drilling that is widely admired in the West. Qatar has had success in media with Al Jazeera, while Abu Dhabi has helped sponsor remarkable advances in artificial intelligence through its support of computer chess. But Dubai, with very little black gold of its own, has done more with less than any other state in the region.
Unfortunately, Dubai ultimately proved subject to the laws of financial gravity. Massive speculation and borrowing led to excessive debt burdens and, ultimately, to default.
Is this the end of the road for Dubai's epic growth? I doubt it. Countries throughout history have defaulted on their debts and lived to talk about it, even prosper. There is no way around the need for Dubai to restructure and prune its excesses before it can resume a more sustainable growth trajectory, though achieving this will take time.
Will there be contagion to vulnerable countries in Europe and elsewhere? Not just yet. While the Dubai case is not different, it is special, so the effect on investor confidence should remain contained for now. But investors are learning the hard way that no country's possibilities and resources are limitless.
The writer, a former chief economist of the International Monetary Fund, is a professor of economics and public policy at Harvard University.
PROJECT SYNDICATE
ST : S'pore is 9th most expensive Asian city
Dec 3, 2009
S'pore is 9th most expensive Asian city
Living costs for expats hit by a stronger Sing$ and rise in inflation
By Fiona Chan
ST PHOTO: ALPHONSUS CHERN
A STRONGER currency and a rise in inflation have made Singapore a more expensive place for expatriates to live in, a survey has found.
Singapore jumped three spots from a year ago to become the ninth priciest Asian city in the latest cost of living ranking by human resource company ECA International.
It beat Taiwan's Taipei and China's Shenzhen and Guangzhou, but remained cheaper than Japan's Tokyo and Yokohama, and China's Beijing, Shanghai and Hong Kong.
Worldwide, Singapore's rising cost of living catapulted it into the 78th spot on this year's global survey, up almost 20 places from 97th last year.
The main reason for the movement - and, in fact, for most of the changes in this year's survey - was exchange rate fluctuations, said ECA International.
The Singapore dollar has gained about 10 per cent against the US dollar since March. This has helped push up the cost of living in Singapore, compared with some neighbouring cities whose currencies are pegged to the US dollar such as Hong Kong.
According to ECA International, living costs in Singapore are now just 7 per cent lower than in Hong Kong, compared with a 15 per cent gap last year.
'While such increases are unlikely to deter companies from relocating staff to Singapore, the cost of doing so is now higher than it was a year ago,' said Mr Lee Quane, regional director of Asia for ECA International.
He said the stronger Singdollar, coupled with the fact that inflation here has been slightly higher than in some other Asian cities, means that companies have to pay their expat workers higher cost-of-living allowances.
The same applies to Japanese cities, which maintained their top spots in the Asia ranking as the yen soared against the greenback. South Korean locations also surged up the ranks, with Seoul jumping four places to seventh this year, after the won regained some of its lost value.
Expats in Singapore said yesterday that they feel the cost of living has gone up.
'In terms of personal costs, day-to-day expenses have definitely increased,' said Mr Trevor Gawne, who is from Australia and based here as managing director of Fuchs Lubricants.
He said the prices of raw food in particular, such as eggs and fresh milk, have gone up quite considerably in the past 12 months, especially if they are imported from countries like New Zealand and Australia, which have seen their currencies strengthen against the Singdollar.
But while rising costs are a concern, a bigger worry is the volatility of costs, said Mr Phillip Overmyer, an American and the chief executive of the Singapore International Chamber of Commerce.
'What I think is a bigger concern at the corporate level is the high fluctuation we are seeing in Singapore costs in general,' he said.
'Housing rentals, office rentals and the prices of general goods and services have been swinging back and forth a lot over the last couple of years.'
This is worrying for companies because they cannot predict costs and plan accordingly, and it hurts Singapore's competitiveness, he said.
Ms Laura Deal, executive director of the American Chamber of Commerce in Singapore, agreed that the extreme swings in costs 'can really destroy budgets and cause pain for small companies'.
'You can get caught in a really bad housing or office lease if you sign at the wrong time, and end up paying 30 per cent more than your neighbour,' she said. 'We think it is important for the Government to control the volatility of costs a little bit more.'
ECA International's survey calculated the cost of living around the world based on a basket of day-to-day goods and services. The survey is done twice a year, but comparisons are made year-on-year to strip out seasonal differences.
In March, Singapore was 10th in the Asia rankings.
In the global rankings, Angola's capital Luanda took top spot as the city with the highest cost of living in the world - many regularly used items are expensive to obtain in the city due to the country's war-damaged infrastructure.
Other cities placed in the global top 10 included Tokyo, Yokohama, Oslo and Copenhagen.
S'pore is 9th most expensive Asian city
Living costs for expats hit by a stronger Sing$ and rise in inflation
By Fiona Chan
ST PHOTO: ALPHONSUS CHERN
A STRONGER currency and a rise in inflation have made Singapore a more expensive place for expatriates to live in, a survey has found.
Singapore jumped three spots from a year ago to become the ninth priciest Asian city in the latest cost of living ranking by human resource company ECA International.
It beat Taiwan's Taipei and China's Shenzhen and Guangzhou, but remained cheaper than Japan's Tokyo and Yokohama, and China's Beijing, Shanghai and Hong Kong.
Worldwide, Singapore's rising cost of living catapulted it into the 78th spot on this year's global survey, up almost 20 places from 97th last year.
The main reason for the movement - and, in fact, for most of the changes in this year's survey - was exchange rate fluctuations, said ECA International.
The Singapore dollar has gained about 10 per cent against the US dollar since March. This has helped push up the cost of living in Singapore, compared with some neighbouring cities whose currencies are pegged to the US dollar such as Hong Kong.
According to ECA International, living costs in Singapore are now just 7 per cent lower than in Hong Kong, compared with a 15 per cent gap last year.
'While such increases are unlikely to deter companies from relocating staff to Singapore, the cost of doing so is now higher than it was a year ago,' said Mr Lee Quane, regional director of Asia for ECA International.
He said the stronger Singdollar, coupled with the fact that inflation here has been slightly higher than in some other Asian cities, means that companies have to pay their expat workers higher cost-of-living allowances.
The same applies to Japanese cities, which maintained their top spots in the Asia ranking as the yen soared against the greenback. South Korean locations also surged up the ranks, with Seoul jumping four places to seventh this year, after the won regained some of its lost value.
Expats in Singapore said yesterday that they feel the cost of living has gone up.
'In terms of personal costs, day-to-day expenses have definitely increased,' said Mr Trevor Gawne, who is from Australia and based here as managing director of Fuchs Lubricants.
He said the prices of raw food in particular, such as eggs and fresh milk, have gone up quite considerably in the past 12 months, especially if they are imported from countries like New Zealand and Australia, which have seen their currencies strengthen against the Singdollar.
But while rising costs are a concern, a bigger worry is the volatility of costs, said Mr Phillip Overmyer, an American and the chief executive of the Singapore International Chamber of Commerce.
'What I think is a bigger concern at the corporate level is the high fluctuation we are seeing in Singapore costs in general,' he said.
'Housing rentals, office rentals and the prices of general goods and services have been swinging back and forth a lot over the last couple of years.'
This is worrying for companies because they cannot predict costs and plan accordingly, and it hurts Singapore's competitiveness, he said.
Ms Laura Deal, executive director of the American Chamber of Commerce in Singapore, agreed that the extreme swings in costs 'can really destroy budgets and cause pain for small companies'.
'You can get caught in a really bad housing or office lease if you sign at the wrong time, and end up paying 30 per cent more than your neighbour,' she said. 'We think it is important for the Government to control the volatility of costs a little bit more.'
ECA International's survey calculated the cost of living around the world based on a basket of day-to-day goods and services. The survey is done twice a year, but comparisons are made year-on-year to strip out seasonal differences.
In March, Singapore was 10th in the Asia rankings.
In the global rankings, Angola's capital Luanda took top spot as the city with the highest cost of living in the world - many regularly used items are expensive to obtain in the city due to the country's war-damaged infrastructure.
Other cities placed in the global top 10 included Tokyo, Yokohama, Oslo and Copenhagen.
TODAY Online : Dubai debacle a taste of things to come
Dubai debacle a taste of things to come
05:55 AM Dec 03, 2009
by Loh Chee Kong
SINGAPORE - The Dubai financial crisis would be the first of many to come as the global economy undergoes a painful transition, warned Financial Times associate editor and chief economics commentator Martin Wolf.
Speaking yesterday at a seminar organised by the Singapore Institute of International Affairs, Mr Wolf pointed out that it was only a matter of time that Dubai- "essentially a very large commercial real estate" - ran into credit problems.
"(The banks) lent to everybody in every conceivable way," said Mr Wolf, "We are still very much at the beginning stage of working through the full implications of the bad lending that occurred in the Great Credit Boom."
Still, Mr Wolf noted that the US$26 billion ($35.9 billion) debt incurred by Dubai government's investment arm Dubai World "seemed almost trivial" compared to the losses that hit government-sponsored companies in the United States at the onset of the global financial crisis.
Doubting Asia's ability to replace the US as the world's chief consumer - particularly in China where a large proportion of corporate profits do not flow down to the average households - Mr Wolf reiterated that prospects for the global economy remain bleak.
And "serious inflation" could set in "seven, eight" years - as the US government deals with a burgeoning fiscal deficit. Said Mr Wolf: "There are just two ways out of it: Close the fiscal deficit dramatically whatever it costs ... big tax rises, big spending cuts. Or they go to the Central Bank and they'll say this is what you are for, buy the (treasury bonds)."
Mr Wolf also dismissed the notion of an era of Asian dominance. The idea that Asian countries such as Japan, India and China could cooperate "so closely as to run the world to the exclusion of the West strike me as one of the higher fantasies", he added. Loh Chee Kong
05:55 AM Dec 03, 2009
by Loh Chee Kong
SINGAPORE - The Dubai financial crisis would be the first of many to come as the global economy undergoes a painful transition, warned Financial Times associate editor and chief economics commentator Martin Wolf.
Speaking yesterday at a seminar organised by the Singapore Institute of International Affairs, Mr Wolf pointed out that it was only a matter of time that Dubai- "essentially a very large commercial real estate" - ran into credit problems.
"(The banks) lent to everybody in every conceivable way," said Mr Wolf, "We are still very much at the beginning stage of working through the full implications of the bad lending that occurred in the Great Credit Boom."
Still, Mr Wolf noted that the US$26 billion ($35.9 billion) debt incurred by Dubai government's investment arm Dubai World "seemed almost trivial" compared to the losses that hit government-sponsored companies in the United States at the onset of the global financial crisis.
Doubting Asia's ability to replace the US as the world's chief consumer - particularly in China where a large proportion of corporate profits do not flow down to the average households - Mr Wolf reiterated that prospects for the global economy remain bleak.
And "serious inflation" could set in "seven, eight" years - as the US government deals with a burgeoning fiscal deficit. Said Mr Wolf: "There are just two ways out of it: Close the fiscal deficit dramatically whatever it costs ... big tax rises, big spending cuts. Or they go to the Central Bank and they'll say this is what you are for, buy the (treasury bonds)."
Mr Wolf also dismissed the notion of an era of Asian dominance. The idea that Asian countries such as Japan, India and China could cooperate "so closely as to run the world to the exclusion of the West strike me as one of the higher fantasies", he added. Loh Chee Kong
TODAY Online : Orchard Road's newest mall 313@Somerset opens today
Orchard Road's newest mall 313@Somerset opens today
05:55 AM Dec 03, 2009
SINGAPORE - With weeks to go before Christmas, 313@Somerset today becomes the final mall this year to open along Orchard Road.
All units on all eight levels of retail space were leased out four months prior to opening, an unprecedented feat in this challenging economic climate, according to the mall.
It will open in stages from today, with 177 specialty retailers and concierge ambassadors to help with most things from taxi bookings to hotel delivery services and language interpretation.
Among the global brand-name tenants are Forever 21, Uniqlo, Zara, HMV, Stadium, Marche and three "food precincts": A food hall opening in January, street-level restaurants and cafes, and a Food Republic on the fifth level featuring a unique sky garden.
URL http://www.todayonline.com/Singapore/EDC091203-0000104/Orchard-Roads-newest-mall-313@Somerset-opens-today
05:55 AM Dec 03, 2009
SINGAPORE - With weeks to go before Christmas, 313@Somerset today becomes the final mall this year to open along Orchard Road.
All units on all eight levels of retail space were leased out four months prior to opening, an unprecedented feat in this challenging economic climate, according to the mall.
It will open in stages from today, with 177 specialty retailers and concierge ambassadors to help with most things from taxi bookings to hotel delivery services and language interpretation.
Among the global brand-name tenants are Forever 21, Uniqlo, Zara, HMV, Stadium, Marche and three "food precincts": A food hall opening in January, street-level restaurants and cafes, and a Food Republic on the fifth level featuring a unique sky garden.
URL http://www.todayonline.com/Singapore/EDC091203-0000104/Orchard-Roads-newest-mall-313@Somerset-opens-today
BT: Uniqlo sees Singapore as regional gateway
Business Times - 03 Dec 2009
Uniqlo sees Singapore as regional gateway
By NISHA RAMCHANDANI
JAPANESE fashion brand Uniqlo is already planning its fourth store in Singapore - as it launches its largest store here today.
'Singapore will be the gateway to the South-east Asian region. Singapore is very significant strategically,' chief operating officer of Fast Retailing Group, Naoki Otoma, told BT in an interview yesterday.
Uniqlo's parent company is fashion retailer Fast Retailing, which also carries Comptoir des Cotonniers and Princesse tam.tam.
In fact, the stores in Singapore have helped pique the interest of potential business partners, who have since approached Uniqlo with the intention of opening similar stores in their home countries.
Uniqlo has plans to open at least five more stores in Singapore within three years, in areas such as Marina Bay, Orchard Road as well as farther out, at suburban malls. The fourth store is likely to be open by next year, Mr Otoma said.
Response to Uniqlo's first two stores in Singapore - at Tampines 1 and Ion Orchard, which collectively saw an investment of $60 million - has been 'overwhelming' and 'better than we expected', said Mr Otoma. The two stores managed to break even within six months of opening.
Uniqlo's stores in Singapore are a joint venture with Wing Tai Retail.
The latest addition covers 17,000 sq ft - the largest in South-east Asia as well as Singapore - and opens its doors today at the new 313@somerset mall.
Today also marks the official opening of the eight- storey 313@somerset, which was 100 per cent leased four months ahead of schedule.
Despite the challenging global economy, an aggressive expansion strategy is necessary, Mr Otoma feels, especially since Asia has become the centre of economic growth.
'We need to take risks to be the dominant player in Asia, to capture the market,' he said.
Uniqlo also has stores in the US, UK, France, Hong Kong, China and Korea.
And now that it has established itself in Singapore, it is looking to enter Malaysia, Thailand, Taiwan and Australia.
Uniqlo sees Singapore as regional gateway
By NISHA RAMCHANDANI
JAPANESE fashion brand Uniqlo is already planning its fourth store in Singapore - as it launches its largest store here today.
'Singapore will be the gateway to the South-east Asian region. Singapore is very significant strategically,' chief operating officer of Fast Retailing Group, Naoki Otoma, told BT in an interview yesterday.
Uniqlo's parent company is fashion retailer Fast Retailing, which also carries Comptoir des Cotonniers and Princesse tam.tam.
In fact, the stores in Singapore have helped pique the interest of potential business partners, who have since approached Uniqlo with the intention of opening similar stores in their home countries.
Uniqlo has plans to open at least five more stores in Singapore within three years, in areas such as Marina Bay, Orchard Road as well as farther out, at suburban malls. The fourth store is likely to be open by next year, Mr Otoma said.
Response to Uniqlo's first two stores in Singapore - at Tampines 1 and Ion Orchard, which collectively saw an investment of $60 million - has been 'overwhelming' and 'better than we expected', said Mr Otoma. The two stores managed to break even within six months of opening.
Uniqlo's stores in Singapore are a joint venture with Wing Tai Retail.
The latest addition covers 17,000 sq ft - the largest in South-east Asia as well as Singapore - and opens its doors today at the new 313@somerset mall.
Today also marks the official opening of the eight- storey 313@somerset, which was 100 per cent leased four months ahead of schedule.
Despite the challenging global economy, an aggressive expansion strategy is necessary, Mr Otoma feels, especially since Asia has become the centre of economic growth.
'We need to take risks to be the dominant player in Asia, to capture the market,' he said.
Uniqlo also has stores in the US, UK, France, Hong Kong, China and Korea.
And now that it has established itself in Singapore, it is looking to enter Malaysia, Thailand, Taiwan and Australia.
BT : Asia is poised for V-shaped recovery next year
Business Times - 03 Dec 2009
Asia is poised for V-shaped recovery next year
By CONRAD TAN
ASIA is poised for a sharp economic recovery next year, even as developed economies in the West continue to struggle, according to Standard Chartered's chief economist.
'Our forecasts suggest the recovery will take the shape of an L or a U in the West and a V in the East,' Gerard Lyons, who is also the group's head of global research, says in a report published yesterday.
But open and export-dependent economies - Singapore, Hong Kong and Taiwan - are likely to grow below trend, due to sluggish exports to major markets in the West, the report says.
In Asia, growth will be centred on China, India and Indonesia, which have large domestic markets and relatively closed economies that cushion them from external shocks.
Overall, '2010 is likely to be the year of global recovery', Mr Lyons says. 'A double-dip recession would require either an external shock - most likely an event that drove oil prices sharply higher, such as an escalation of tension with Iran - or a policy-induced shock triggered by premature policy tightening in the West.
'We are not predicting a double-dip, although we would not be surprised if a number of economies witnessed a negative quarter of growth at some stage.'
But even as Asia leads the global recovery, 'we continue to stress the need to focus on levels' - the dollar value of goods and services produced - rather than just growth rates, Mr Lyons says.
In 2008, the world's economic output, measured by gross domestic product, was US$60.9 trillion, with advanced economies including the US, Japan, Germany, France and the UK accounting for more than half of global output, according to International Monetary Fund data.
'If the West is not booming, the world will not boom. And the West is not going to boom,' Mr Lyons says. 'The US consumer, the key driver of the global economy for some time, faces a difficult outlook.'
He expects the world economy to grow 2.7 per cent next year, after shrinking an estimated 1.9 per cent this year.
Asia's economic output is projected to expand 7 per cent in 2010, faster than this year's estimated growth of 4.5 per cent.
Its biggest economic growth engines, China and India, are expected to expand 10 per cent and 7.5 per cent, respectively, compared with 8.5 per cent and 6.8 per cent in 2009.
Asia is poised for V-shaped recovery next year
By CONRAD TAN
ASIA is poised for a sharp economic recovery next year, even as developed economies in the West continue to struggle, according to Standard Chartered's chief economist.
'Our forecasts suggest the recovery will take the shape of an L or a U in the West and a V in the East,' Gerard Lyons, who is also the group's head of global research, says in a report published yesterday.
But open and export-dependent economies - Singapore, Hong Kong and Taiwan - are likely to grow below trend, due to sluggish exports to major markets in the West, the report says.
In Asia, growth will be centred on China, India and Indonesia, which have large domestic markets and relatively closed economies that cushion them from external shocks.
Overall, '2010 is likely to be the year of global recovery', Mr Lyons says. 'A double-dip recession would require either an external shock - most likely an event that drove oil prices sharply higher, such as an escalation of tension with Iran - or a policy-induced shock triggered by premature policy tightening in the West.
'We are not predicting a double-dip, although we would not be surprised if a number of economies witnessed a negative quarter of growth at some stage.'
But even as Asia leads the global recovery, 'we continue to stress the need to focus on levels' - the dollar value of goods and services produced - rather than just growth rates, Mr Lyons says.
In 2008, the world's economic output, measured by gross domestic product, was US$60.9 trillion, with advanced economies including the US, Japan, Germany, France and the UK accounting for more than half of global output, according to International Monetary Fund data.
'If the West is not booming, the world will not boom. And the West is not going to boom,' Mr Lyons says. 'The US consumer, the key driver of the global economy for some time, faces a difficult outlook.'
He expects the world economy to grow 2.7 per cent next year, after shrinking an estimated 1.9 per cent this year.
Asia's economic output is projected to expand 7 per cent in 2010, faster than this year's estimated growth of 4.5 per cent.
Its biggest economic growth engines, China and India, are expected to expand 10 per cent and 7.5 per cent, respectively, compared with 8.5 per cent and 6.8 per cent in 2009.
BT : Blackstone builds student dorm in City of London
Business Times - 03 Dec 2009
Blackstone builds student dorm in City of London
£205m skyscraper overlooking Broadgate will open in mid-2010
(LONDON) The tallest tower in London's main financial district to open next year will not house bankers or office workers - it will be a student dormitory.
The 33-story building's owner is Blackstone Group LP, the world's largest private-equity company. Blackstone entered the UK's student-housing market four years ago and has so far invested more than £400 million pounds (S$911.4 million). Rents have risen even as Britain endured its worst property slump in more than three decades.
'There is a chronic imbalance between supply and demand in this sector,' said Stuart Grant, the Blackstone executive who oversees the student-housing unit. The average occupancy rate in the industry is 99 per cent.
The shortage of accommodation for London's growing student population has caused average rents to rise by an annual 5 per cent over the last six years, Knight Frank LLP said in a Nov 23 report.
That compared with an average gain of 0.6 per cent for all commercial properties, according to the London-based real estate broker.
Nido Spitalfields, Blackstone's second student hall in the UK capital, will have space for 1,204 pupils paying as much as £300 a week for an en-suite room. The 105m skyscraper is due to open in the middle of next year. It will overlook Broadgate, the office complex in the City of London that is half-owned by the New York-based company, and will cost about £205 million, according to Mr Grant.
There are 270,000 full-time students in London, according to a survey published in March by Drivers Jonas, a broker based in the city. That number will increase by about 40,000 within three years as overseas students keep flocking to London and more UK teenagers choose higher education in a weak job market, the firm estimated.
More than 60,000 people attend three of the UK capital's largest universities: London Metropolitan, Middlesex and the University of Westminster.
'Given the lack of finance currently available for development and the constrained pipeline, rents are likely to continue to rise for the foreseeable future,' Knight Frank said in its report.
Nido Spitalfields will be similar to Blackstone's first student-housing project in the UK, a pair of 16-storey towers in the King's Cross area of north London that were completed in 2007. The property has 846 rooms, or 'cubes' as the company calls them. Most have 16.6 sq m to 18.4 sq m of space.
The expansive foyer, with a manned security desk alongside a kiosk selling Starbucks coffee, is spotless and the only sign of student mischief is a supermarket trolley lurking in the lift. It would not look out of place in Canary Wharf, the cluster of glass-and-steel buildings in east London occupied by companies including Barclays plc, Credit Suisse Group AG, HSBC Holdings Plc and Citigroup Inc.
Most rooms in Nido King's Cross cost £245 to £270 per week. Internet access is free and students have the option of paying for a maid. That is expensive, even by London standards. For the same price, they could rent a local one-bedroom apartment with a separate lounge, kitchen and bathroom.
About 80 per cent of the tenants are from outside the UK, according to Blackstone's Mr Grant. Parents are often willing to pay for accommodation, especially in the first year, if their children are guaranteed security in a city that many are probably unfamiliar with, he said. Americans and Chinese are the largest groups of foreign students.
In the US, most campuses offer some form of accommodation. Around 20 per cent of London students can live in rooms provided by their university.
'Higher education is increasingly a global business,' Mr Grant said. 'We're providing a safe environment for foreign kids coming to London.'
Blackstone plans to build a third residence for students in London next year on a site close to Notting Hill, a fashionable district in west London, Mr Grant said. The building's 272 rooms will be available starting from 2011.
Blackstone Real Estate Advisors, the firm's property investment and management unit, has raised more than US$29 billion since it was formed in 1992, according to the company's website. The firm started investing in student housing and properties such as pubs and nursing homes about four years ago as European retail and office buildings were becoming too expensive, Mr Grant said. Blackstone hired brand consultant Tyler Brule in 2005 to design Nido, which means nest in Spanish and Italian.
Blackstone will operate student homes with about 2,200 beds by mid-2010. The biggest provider of this type of accommodation in the UK, Unite Group plc, has about 38,500 beds, according to its website. Unite's biggest shareholders are Fidelity International Ltd and JPMorgan Chase & Co, according to data compiled by Bloomberg.
'We offer some defensive characteristics in a tough economic environment,' said Mark Allan, Unite's chief executive officer. 'Student accommodation is now firmly recognised by investors as providing that.'
Blackstone will probably sell the Nido business within three years, Mr Grant said. This could take the form of an initial public offering to create a real estate investment trust, he said.
The US firm has already purchased a site in Barcelona to build accommodation for 850 students and is looking at others in Paris, Sydney and Singapore. -- Bloomberg
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Student life: Nido Spitalfields will have space for 1,204 pupils paying as much as £300 a week for an en-suite room
Blackstone builds student dorm in City of London
£205m skyscraper overlooking Broadgate will open in mid-2010
(LONDON) The tallest tower in London's main financial district to open next year will not house bankers or office workers - it will be a student dormitory.
The 33-story building's owner is Blackstone Group LP, the world's largest private-equity company. Blackstone entered the UK's student-housing market four years ago and has so far invested more than £400 million pounds (S$911.4 million). Rents have risen even as Britain endured its worst property slump in more than three decades.
'There is a chronic imbalance between supply and demand in this sector,' said Stuart Grant, the Blackstone executive who oversees the student-housing unit. The average occupancy rate in the industry is 99 per cent.
The shortage of accommodation for London's growing student population has caused average rents to rise by an annual 5 per cent over the last six years, Knight Frank LLP said in a Nov 23 report.
That compared with an average gain of 0.6 per cent for all commercial properties, according to the London-based real estate broker.
Nido Spitalfields, Blackstone's second student hall in the UK capital, will have space for 1,204 pupils paying as much as £300 a week for an en-suite room. The 105m skyscraper is due to open in the middle of next year. It will overlook Broadgate, the office complex in the City of London that is half-owned by the New York-based company, and will cost about £205 million, according to Mr Grant.
There are 270,000 full-time students in London, according to a survey published in March by Drivers Jonas, a broker based in the city. That number will increase by about 40,000 within three years as overseas students keep flocking to London and more UK teenagers choose higher education in a weak job market, the firm estimated.
More than 60,000 people attend three of the UK capital's largest universities: London Metropolitan, Middlesex and the University of Westminster.
'Given the lack of finance currently available for development and the constrained pipeline, rents are likely to continue to rise for the foreseeable future,' Knight Frank said in its report.
Nido Spitalfields will be similar to Blackstone's first student-housing project in the UK, a pair of 16-storey towers in the King's Cross area of north London that were completed in 2007. The property has 846 rooms, or 'cubes' as the company calls them. Most have 16.6 sq m to 18.4 sq m of space.
The expansive foyer, with a manned security desk alongside a kiosk selling Starbucks coffee, is spotless and the only sign of student mischief is a supermarket trolley lurking in the lift. It would not look out of place in Canary Wharf, the cluster of glass-and-steel buildings in east London occupied by companies including Barclays plc, Credit Suisse Group AG, HSBC Holdings Plc and Citigroup Inc.
Most rooms in Nido King's Cross cost £245 to £270 per week. Internet access is free and students have the option of paying for a maid. That is expensive, even by London standards. For the same price, they could rent a local one-bedroom apartment with a separate lounge, kitchen and bathroom.
About 80 per cent of the tenants are from outside the UK, according to Blackstone's Mr Grant. Parents are often willing to pay for accommodation, especially in the first year, if their children are guaranteed security in a city that many are probably unfamiliar with, he said. Americans and Chinese are the largest groups of foreign students.
In the US, most campuses offer some form of accommodation. Around 20 per cent of London students can live in rooms provided by their university.
'Higher education is increasingly a global business,' Mr Grant said. 'We're providing a safe environment for foreign kids coming to London.'
Blackstone plans to build a third residence for students in London next year on a site close to Notting Hill, a fashionable district in west London, Mr Grant said. The building's 272 rooms will be available starting from 2011.
Blackstone Real Estate Advisors, the firm's property investment and management unit, has raised more than US$29 billion since it was formed in 1992, according to the company's website. The firm started investing in student housing and properties such as pubs and nursing homes about four years ago as European retail and office buildings were becoming too expensive, Mr Grant said. Blackstone hired brand consultant Tyler Brule in 2005 to design Nido, which means nest in Spanish and Italian.
Blackstone will operate student homes with about 2,200 beds by mid-2010. The biggest provider of this type of accommodation in the UK, Unite Group plc, has about 38,500 beds, according to its website. Unite's biggest shareholders are Fidelity International Ltd and JPMorgan Chase & Co, according to data compiled by Bloomberg.
'We offer some defensive characteristics in a tough economic environment,' said Mark Allan, Unite's chief executive officer. 'Student accommodation is now firmly recognised by investors as providing that.'
Blackstone will probably sell the Nido business within three years, Mr Grant said. This could take the form of an initial public offering to create a real estate investment trust, he said.
The US firm has already purchased a site in Barcelona to build accommodation for 850 students and is looking at others in Paris, Sydney and Singapore. -- Bloomberg
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Student life: Nido Spitalfields will have space for 1,204 pupils paying as much as £300 a week for an en-suite room
BT : 6 whole floors sold at Marina Bay Suites preview
Business Times - 03 Dec 2009
6 whole floors sold at Marina Bay Suites preview
Buyers include Indonesians, Singaporeans and other Asians
By KALPANA RASHIWALA
ABOUT half a dozen floors at Marina Bay Suites changed hands at last week's preview of the project, BT understands.
The buyers of the whole floors are understood to be Indonesians, Singaporeans and other Asians.
Some of them bought through companies. The foreigners are believed to be Singapore permanent residents.
In absolute terms, the biggest transaction was close to $45 million, involving at least two floors. The buyer is understood to be an Indonesian party.
Market watchers estimate that it could have cost buyers between $17 million and $18 million to purchase a whole floor at the 99-year leasehold condo based on prices at last week's preview.
Each floor has four apartments - two three-bedroom units and two four bedders. The total saleable area per floor is slightly under 8,000 square feet.
Thomas Tan, head of marketing (residential) at Raffles Quay Asset Management (RQAM), told BT yesterday that 87 of the 90 units released for the preview have been sold.
The 87 units fetched close to $400 million, he added.
Two thirds of the units were sold to Singapore residents (including PRs). The remaining one third was sold to non-PR foreigners, including Indonesians, Malaysians, mainland Chinese, Australians and Americans.
'We do have multiple-unit buyers, but due to client confidentiality and privacy reasons, we are unable to reveal such information,' Mr Tan said when asked about purchases of entire floors.
RQAM is the asset manager for Marina Bay Suites, which is being developed by a joint venture involving Hongkong Land, Keppel Land and Cheung Kong Holdings.
Mr Tan declined to give details about pricing except to reiterate that 'the average price range was between $2,200 psf and $2,500 psf'. BT understands that on an average basis, the 90 units were priced at close to $2,300 psf.
However, the range at which the apartments were sold could be about $1,800 psf to slightly over $2,600 psf.
Mr Tan said that the apartments released were from the seventh to the 40-plus floors of the 66-storey development.
The 221-unit project comprises 218 three or four-bedroom apartments and three penthouses. Currently, the plan is to begin construction of the project sometime in the first half of next year, Mr Tan said.
Mr Tan: Some 87 of the 90 preview units have been sold. The 87 units sold fetched close to $400m
'We have no immediate plans to release more units for the rest of this year but we'll continue to register interested buyers. We'll monitor the market and determine the price at the time of launch.'
6 whole floors sold at Marina Bay Suites preview
Buyers include Indonesians, Singaporeans and other Asians
By KALPANA RASHIWALA
ABOUT half a dozen floors at Marina Bay Suites changed hands at last week's preview of the project, BT understands.
The buyers of the whole floors are understood to be Indonesians, Singaporeans and other Asians.
Some of them bought through companies. The foreigners are believed to be Singapore permanent residents.
In absolute terms, the biggest transaction was close to $45 million, involving at least two floors. The buyer is understood to be an Indonesian party.
Market watchers estimate that it could have cost buyers between $17 million and $18 million to purchase a whole floor at the 99-year leasehold condo based on prices at last week's preview.
Each floor has four apartments - two three-bedroom units and two four bedders. The total saleable area per floor is slightly under 8,000 square feet.
Thomas Tan, head of marketing (residential) at Raffles Quay Asset Management (RQAM), told BT yesterday that 87 of the 90 units released for the preview have been sold.
The 87 units fetched close to $400 million, he added.
Two thirds of the units were sold to Singapore residents (including PRs). The remaining one third was sold to non-PR foreigners, including Indonesians, Malaysians, mainland Chinese, Australians and Americans.
'We do have multiple-unit buyers, but due to client confidentiality and privacy reasons, we are unable to reveal such information,' Mr Tan said when asked about purchases of entire floors.
RQAM is the asset manager for Marina Bay Suites, which is being developed by a joint venture involving Hongkong Land, Keppel Land and Cheung Kong Holdings.
Mr Tan declined to give details about pricing except to reiterate that 'the average price range was between $2,200 psf and $2,500 psf'. BT understands that on an average basis, the 90 units were priced at close to $2,300 psf.
However, the range at which the apartments were sold could be about $1,800 psf to slightly over $2,600 psf.
Mr Tan said that the apartments released were from the seventh to the 40-plus floors of the 66-storey development.
The 221-unit project comprises 218 three or four-bedroom apartments and three penthouses. Currently, the plan is to begin construction of the project sometime in the first half of next year, Mr Tan said.
Mr Tan: Some 87 of the 90 preview units have been sold. The 87 units sold fetched close to $400m
'We have no immediate plans to release more units for the rest of this year but we'll continue to register interested buyers. We'll monitor the market and determine the price at the time of launch.'
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