HDB to prioritise the more deserving ahead of rental flat queue

Source : Channel NewsAsia - 23 Aug 2008

The Housing and Development Board (HDB) will complete its review of the Public Rental Scheme as early as year end, says National Development Minister Mah Bow Tan.

The HDB will tighten eligibility criteria for rental flats and help moderate demand. But from now, applicants with more urgent needs will be able to bypass the long queue to get their flats.

The HDB is also increasing the number of rental flats from about 43,000 to nearly 50,000 units by 2011.

Speaking to reporters at a Citizenship Ceremony at Tampines on Saturday, Mr Mah said the highly subsidised rental flats will be given to those with the most pressing needs first.

As of June this year, over 4,300 people are on the waiting list for a rental flat. It can take about at least nine months (for a 2-room flat) to 18 months (for 1-room) before they get one.

In reviewing the Public Rental Scheme, Mr Mah said the Housing Board may re-look the 30-month debarment rule, which prevents property owners from applying for a rental flat after selling their home.

Mr Mah said: “The 30-month seems to give the impression that if you wait 30 months, you are sure to get a flat. I think we have to re-examine the 30-month debarment. In fact, we may have to remove the 30-month debarment and just go for eligibility criteria. So if you are truly eligible, you don’t have to wait 30 months.”

Also under study is the rule that requires first-time home owners, who have bought a flat directly from the Housing Board, to return a portion of the proceeds to their CPF account when they sell the unit.

Right now, the lease for rental flats is renewable every two years. But, Mr Mah said, it is hoped that existing tenants will be able to move out when their financial situation improves. For instance, they could buy a smaller flat or move in with their children, freeing up these units for people who need them more.

Denise Phua, an MP for Jalan Besar GRC, has a suggestion on the eligibility criteria for rental flats.

“Instead of looking at total family income, it might be good to look at per capita income, or income per household member……people who need a rental flat but who may not be the poorest of the poorest, but could still rent HDB flats, but perhaps at a higher rate,” she said.

About 60 per cent of 12,000 applications for rental flats filed last year did not meet eligibility criteria. Only 4,671 applicants managed to get a rental unit.

Ms Denise Phua is helping Mr Lee Koon Chua with his rental flat appeal. The 73-year-old, who has been unable to work since a stroke, had sold his 3-room flat earlier this year. But part of the proceeds went to settling his debts and medical expenses. What’s left is not enough to buy another property.

Speaking in Hokkien, Mr Lee said: “I could sleep in the streets, but what about my wife. She needs to work, she earns $600-$700 a month. If she stops working, what do we eat?”

He claims that his eight children have abandoned him.

So, Mr Lee and his 64-year-old wife rented a HDB rental flat sublet out illegally by another elderly tenant.

The couple are paying $400 rental a month. This is much higher than HDB rates.

HDB is charging $30 a month, a rate which has been unchanged in the last 30 years. For larger units, it is $330, a rate pegged to the market rate.

CNA gets $10.4m Changi deal

Source : Business Times - 23 Aug 2008

CNA Group announced yesterday that it has been awarded a $10.4 million contract for Changi Airport Terminal 1’s upgrading initiative.

The deal was awarded by Takenaka Corporation, the main contractor for the Changi Airport Terminal 1 upgrading process.

The landmark deal for CNA to provide an Intelligent Building Management System (IBMS) and structured cabling system is the group’s fourth participation in the development of Singapore’s aviation infrastructure.

The estimated implementation period is about 30 months.

The IBMS is meant to maximise the operational efficiency of the facility. It operates on a high-speed cabling system, optimising the use of energy within Changi Airport’s Terminal 1 without creating interference in the information system within.

‘We are honoured to have been selected for another milestone development in Changi Airport’s ongoing reign as a world- class aviation hub,’ said CNA’s chief executive Michael Ong.

‘This demonstrates trust in our strength and ability as a systems integrator of similar cadre that can deliver reliable and complex solutions.’

The company is headquartered in Singapore and has a direct presence in China and the Middle East.

Its track record includes the Ninoy Aquino International Airport Terminal 3 in the Philippines, Yangon International Airport in Myanmar, the Emiri (Royal) Terminal section of the New Doha International Airport in Qatar, and the Guangzhoi Baiyun and Fuzhoi Changle Airports in China.

Budget hotel boss makes rich list

Source : Straits Times - 22 Aug 2008

Chief of Fragrance chain debuts on Forbes’ S’pore list at No.24

BUDGET hotels and mid-range condominiums are hardly what one associates with the rich and famous.

But they proved the key to wealth for Mr Koh Wee Meng, the chief of Fragrance Group, which owns the chain of tourist-class Fragrance hotels, as well as boutique property developer Fragrance Land.

From far left: Kwek Leng Beng, Dr James Koh, Fragrance Hotel owner and Tan Boy Tee. — THE STRAITS TIMES FILE PHOTOS

Mr Koh debuted on Forbes magazine’s list of Singapore’s richest people at No.24, propelled by a string of well-sold boutique condos and revenue from Fragrance’s 18 hotels islandwide. But Fragrance - one of the few property companies that did better this year than last year - was an exception to the real estate riches rule.

Some other property bigwigs found their fortunes halved as the market slowed and stock prices tumbled. Upmarket developers such as SC Global’s Simon Cheong and Ho Bee Group’s Chua Thian Poh suffered especially from the downturn in the luxury homes segment.

Mr Cheong, who made his debut on the list last year, fell from 15th place to 22nd as his net worth fell from US$480 million (S$680 million) to US$245 million. Mr Chua slipped from 13th position last year to 20th this year after his fortune fell from US$500 million to US$260 million.

Mr Cheng Wai Keung, chairman of property and retail group Wing Tai Holdings, saw his wealth plunge to US$255 million from US$475 million last year after the company’s stock fell 50 per cent.

Generally, the rankings released yesterday remained much the same as last year, particularly in the top spots.

Property magnate Ng Teng Fong, who heads Far East Organization, was named Singapore’s richest man for the second year in a row. His fortune rose from US$6.7 billion last year to US$7 billion.

Mr Ng was again followed by the family of the late banker Khoo Teck Puat, who are worth US$6.1 billion, up from US$5.7billion last year.

United Overseas Bank chairman Wee Cho Yaw also kept his third spot with a family fortune valued at US$3.6 billion, from US$3.3 billion last year.

In fifth and seventh places are Singapore’s newest billionaires: Mr Kuok Khoon Hong of Wilmar International and remisier-turned-investor Peter Lim.

Mr Kuok, who founded Wilmar as a tiny palm oil outfit and turned it into one of Asia’s largest agribusinesses, saw his stock surge nearly a third in the last year due, in part, to soaring palm oil prices.

Mr Lim, coincidentally, also got rich off Wilmar. He bet on Mr Kuok’s success with an early investment in the palm oil producer and is now reaping the benefits.

Commodities also launched Mr Sunny Verghese, the chief of cashew and cocoa trader Olam International, into the rich list for the first time. He debuted in 39th place with a fortune of US$125 million.

Another new entry was Mr Wong Fong Fui, the chief executive of Boustead Singapore, whose successful turnaround of one of Singapore’s oldest companies echoes his own classic rags-to-riches story.

Forbes said Mr Wong was born into a poor family and worked as a tree tapper on a Malaysian rubber plantation when he was seven. He was accepted into a secondary school after he wrote an essay, with the following lines: ‘I tap rubber trees. I see rubber trees in the morning. I see rubber trees in the evening. I see rubber trees every day, day in, day out. Rubber trees, rubber trees. I hate rubber trees.’

As always, shipping magnates sailed smoothly into the wealth rankings. In the top 20 alone were Labroy Marine’s Tan Boy Tee, Yantai Raffles’ Brian Chang, Pacific International Lines’ Chang Yun Chung, Singapore Shipping Corp’s Ow Chio Kiat and Ezra Holdings’ Lee Kian Soo.

Notable dropouts this year include fashion entrepreneur-turned-high-end hotelier Christina Ong, wife of tycoon Ong Beng Seng. Her fortune was dragged down by the falling stock price of bag maker Mulberry, in which she has a stake.

After her removal, only three women remain on the list: Ms Olivia Lum, founder of water treatment firm Hyflux; Ms Vivian Chandran, the widow of energy firm Chemoil founder Robert Chandran; and Mrs Margaret Lien, the widow of banker Lien Ying Chow. The total net worth of the richest 40 remained at US$32 billion.

Li Ka-Shing says ‘worst is yet to come’ in global economy slump

Source : Business Times - 22 Aug 2008

Hong Kong billionaire Li Ka-shing, who predicted China’s stock market bubble would burst, says the ‘worst is yet to come’ from the global credit crunch.

The crisis is turning Li ‘very conservative about acquisitions’, he told reporters here yesterday while announcing the results of his companies Hutchison Whampoa Ltd and Cheung Kong (Holdings) Ltd.

The US housing slump has triggered more than US$500 billion in credit- market losses for banks globally and led to the collapse and sale of Bear Stearns Cos, the fifth-largest US securities firm.

Mr Li, Asia’s richest man according to Forbes magazine, controls companies that operate businesses including retail, real estate, container ports and energy in 57 countries.

‘Mr Li’s views tend to be accurate,’ said Castor Pang, a strategist at Sun Hung Kai Securities Ltd here.

‘Looking ahead, signs of a US economic slowdown will become even more obvious. Asia has a high correlation with the US, so market performances will likely get worse.’

Sometimes called ’superman’ by Hong Kong’s media for his investing skill, Mr Li arrived here from mainland China in 1940 and built his Cheung Kong (Holdings) Ltd into Hong Kong’s second-biggest developer by market value from a company he founded in 1950 to make plastic flowers.

Mr Li’s comments echo those of Kenneth Rogoff, former chief economist at the International Monetary Fund, who said ‘the worst is yet to come in the US’.

Credit-market turmoil has driven the US into a recession and may topple some of the nation’s biggest banks, Mr Rogoff, a Harvard University professor of economics, said in an interview in Singapore on Aug 19.

‘The financial sector needs to shrink,’ Mr Rogoff said. ‘I don’t think simply having a couple of medium- sized banks and a couple of small banks going under is going to do the job.’

Hong Kong will be shielded to some extent because of China’s economic outlook, Mr Li said.

Hong Kong’s negative real interest rates are keeping the housing market stable and real estate ‘has always been a big part of the economy here’, Mr Li said.

China, the world’s fastest growing major economy, will see its economy continue to grow above 8 per cent ‘in the next few years’, Mr Li said.

China’s CSI 300 Index is down 54 per cent this year, the most among 88 major benchmark indexes tracked by Bloomberg, because of concern measures to cool inflation will damp both profit and economic growth. - Bloomberg

Bid for DBSS site goes to Ho Hup, Sunway Devts & Hoi Hup

Source : Channel NewsAsia - 23 Aug 2008

The Housing and Development Board has awarded the tender for a public housing site under Design, Build and Sell Scheme (DBSS) to Ho Hup Realty Pte Ltd, Sunway Developments Pte Ltd and Hoi Hup JV Development Pte Ltd.

Their successful joint bid was S$198,822,000 for the site at Lorong 1A Toa Payoh.

The plot has an area of 27,479.9 square metres and an allowable gross floor area of 115,415.58 square metres.

The site, the sixth to be offered under this scheme to build condominium-like public housing, has a lease term of 103 years.

The next tender for a 1.67-hectare site at Bedok Reservoir Crescent is expected to be launched in the second half of this year.

Hoi Hup-Led Group Wins HDB Project

Source : Business Times - 23 Aug 2008

It will build 1,200 DBSS flats at Lor1A Toa Payoh

THE Housing and Development Board yesterday awarded a Design, Build and Sell Scheme (DBSS) site at Lorong 1A Toa Payoh to a Hoi Hup Realty-led consortium that emerged as the top bidder when the tender for the site closed on Tuesday.

The winning bid of about $198.82 million works out to about $160 per sq ft per plot ratio - the highest of three bids for the 103-year leasehold plot.

The consortium also includes Sunway Developments and Hoi Hup JV Development, whose shareholders include Straits Construction and Hoi Hup Realty.

A Hoi Hup spokeswoman said yesterday the group plans to build about 1,200 HDB flats on the site, of which about a third will be three and four-room flats and the rest five-room flats. ‘We’re looking at launching the project in early second-quarter 2009,’ she said.

The average selling price is expected to be around $500 psf and will depend on whether Hoi Hup succeeds in securing exemption of bay windows and planter boxes from gross floor area calculations.

This will hinge on whether Hoi Hup can submit its formal application for the project to the Urban Redevelopment Authority in time to secure provisional permission before Oct 7.

After that date, bay windows and planter boxes will no longer be exempt from GFA calculations.

‘We’re looking at building a total of five blocks, of which two will be 46 storeys high and with a sky terrace on one of the upper levels (above the 20th floor). The remaining blocks will be 40 storeys high,’ the spokeswoman said.

‘We have to complete the entire project within four years.’

A Hoi Hup-Sunway consortium is also developing another DBSS flat project, called City View @ Boon Keng. This was launched earlier this year at an average price of $520 psf.

More than 80 per cent of the 714 units have been sold so far.

Retailers hit by soaring rentals

Source : Straits Times - 23 Aug 2008

FOR a retailer, it is a nightmare scenario - getting stuck in a shop with expensive rent that attracts no shoppers.

Yet retail rental levels, especially in prime areas, are still skyrocketing despite the slower economy.

That has left industry players wondering if retailers who committed to lease shop spaces at very pricey levels have over-extended themselves.

‘The top retail rents of about $80 per sq ft (psf), which were announced recently by Ion Orchard, are a cause for concern,’ said Mr Colin Tan, head of research and consultancy at Chesterton International. ‘How do you ensure a reasonable profit?’

Said Mr Nash Benjamin, chief executive of fashion retailer FJ Benjamin: ‘Very, very few people can pay that rate. It’s a top-end rate which everyone’s making big noise about, but it’s neither a realistic nor sustainable rate.’

‘A lot of retailers are struggling,’ noted Ms Lau Chuen Wei, executive director of the Singapore Retailers’ Association.

She said: ‘(It’s getting) more difficult for retailers to maintain top line sales. And what’s hitting them quite hard is sustaining the bottom line.’

According to Jones Lang Lasalle, average retail rents are about 27 per cent higher than they were 10 years ago.

They stood at an average of $41.25 psf a month in the first quarter of this year, compared to about $32.50 psf a month in the first quarter of 1998.

They have risen about 57 per cent since the rock-bottom days of the Asian financial crisis, when they hit $26.25 psf in the first quarter of 1999.

CB Richard Ellis said ’super-prime space along Orchard Road saw the highest quarterly increase of 5.3 per cent, hitting an average of $54.40 psf a month’.

‘If the shop size is very small and the shop is situated in a very busy place, the rentals can be as high as $60 psf or more. (But) the majority will be between $10 and $50 psf,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

Retailers interviewed by The Straits Times all sigh with despair at the rising rentals, which property consultants say show no sign of abating yet.

‘Quite a good number of retailers are getting worried about whether they can sustain present sales volumes in the current economic slowdown,’ said Mr Danny Yeo, Knight Frank’s director of retail.

‘But have they been complaining that sales have dropped by a very substantial amount? I don’t think so.’

Other industry experts agree, saying that demand for prime retail spaces remains high.

Rising demand is reflected in the rising occupancy rate, said Mr Mak, who added that the average occupancy rate for retail space in Orchard Road rose from 95.4 per cent in the middle of last year to 96.7 per cent in the middle of this year.

Knight Frank said in a recent research brief that the projected supply of five million sq ft of retail space expected to be completed next year will ’serve to relieve the supply crunch seen over the past couple of years’.

It added that ‘retailers can look forward to higher retail sales psf’ as the nominal retail sales figure is expected to rise from $650.60 psf last year to almost $700 psf in 2010.

And it seems the so-called retail hot spots have remained roughly the same through the years.

Property consultants are unanimous that Orchard Road remains Singapore’s primary and premier shopping belt, mainly because of its central location and the large density of malls on the strip.

Said Chesterton’s Mr Tan: ‘Orchard Road has been Singapore’s only major shopping belt. Other shopping areas just cannot match up to Orchard Road in terms of size, quality and variety.’

‘If we classify retail hot spots according to the level of shopper traffic, the malls nearer to Orchard MRT Station would still be considered the hottest,’ said Ms Daisy Loo, head of leasing and consulting at Sandalwood Retail.

By these experts’ definition, malls such as the upcoming Ion Orchard and Orchard Central would certainly make it to the ‘Singapore’s hottest retail spaces’ list and continue commanding premium rental rates from retailers.

So would the Orchard Road-facing double-storey stores in existing malls Ngee Ann City, Wisma Atria, Paragon and Mandarin Gallery.

‘At the end of the day, it’s who wants who more,’ said Ms Lau.

‘We’ve heard of times when the mall can bend backwards to accommodate what the tenant wants.’

Said Mr Yeo: ‘I think, going forward, retailers contracting for renewal will just be more careful about committing to a $60 or $80 psf kind of rent.’

Mr Benjamin said: ‘I always tell our landlords to please remember one thing - You own the property but we are your customers. If we can’t afford to rent your premises, you have a problem. So be nice to your customers.’

Singapore’s hottest retail spots

1: Ion Orchard

Location: Being built at the corner of Orchard Road and Orchard Turn

Top rental range: $60 to $80 per sq foot (psf) per month

Star tenants: Six double-storey stores totalling 50,000 sq ft, including luxury fashion brands Prada, Louis Vuitton and Cartier

2: Wisma Atria

Location: On Orchard Road between Ion and Ngee Ann City

Top rental range: $55 to $70 psf

Star tenants: Double-storey Nike concept store, totalling 8,000 sq ft, which has taken over the former Topshop space.

3: Mandarin Gallery

Location: At the corner of Orchard and Bideford Roads

Top rental range: $50 to $60 psf

Star tenants: Double-storey stores, ranging from 2,700 sq ft to 6,800 sq ft, for Emporio Armani, Marc by Marc Jacobs and D&G.

4: Ngee Ann City

Location: At the corner of Orchard and Bideford Roads

Top rental range: $40 to $60 psf

Star tenants: Luxury giants Chanel and Louis Vuitton on the first floor. They are due to expand into double-storey spaces, or duplexes, over the next two years - Chanel into a 7,000 sq ft store and Louis Vuitton into a 10,500 sq ft one.

5: Paragon

Location: At the corner of Orchard and Bideford Roads

Top rental range: $40 to $60 psf

Star tenants: Four duplexes facing Orchard Road, ranging in size from 3,600 sq ft to more than 10,000 sq ft, to be occupied by luxe labels Gucci, Salvatore Ferragamo, Prada and Tod’s.

Note: Rental figures provided by Mr Danny Yeo, director of retail at Knight Frank

Market could do with Wing Tai plainspeak

Source : Business Times - 22 Aug 2008

WHEN Wing Tai Holdings holds its fourth-quarter and full-year results briefing next Tuesday, it will be the last of the major Singapore-listed property groups to announce results for the period ended June 30, 2008. Net earnings are expected to be lower than the $382 million record performance for the preceding year. But the wait may still be worth it, if the Cheng brothers who helm the group once again give a candid assessment of the state of the Singapore property market.

The duo has made some of the frankest pronouncements on market prospects. Last August, during the early days of the US sub-prime mortgage crisis, Wing Tai chairman Cheng Wai Keung was probably the first major developer to say publicly that sub-prime woes had slowed property transactions across the entire market in Singapore.

He said: ‘Yes, temporarily, it has affected some of the take-up rates. But it is actually not a bad thing. The market needs a bit of consolidation. High-end home prices have gone up 100 per cent within the last 6-9 months. It’s just not sustainable. But if sub-prime settles within a reasonable period, I believe there is still room to grow in the property market. We’re not at the end of the property cycle.

‘On the other hand, if sub-prime or the credit market continues to be in turmoil and it affects confidence in general, then, of course, it will be a completely different scenario,’ he had added.

That was in August last year. By February this year, when the sub-prime crisis and its bite on the local property market had worsened, some developers here were still singing a positive tune, hoping the sub-prime gloom would blow away after mid-year.

Upfront

But Wing Tai deputy chairman Edmund Cheng told BT at the time that it may not be realistic to expect sub-prime problems to fade away by mid-year. ‘They are likely to linger beyond this year, as the exposure has extended to many other areas, and it may still take some time for the full extent of exposure to be discovered,’ he said.

Now, with the official forecast for Singapore’s GDP growth this year trimmed and all-round warnings for tougher times ahead, the market will hopefully once again be able to count on the Cheng brothers to deliver an honest verdict for the property market - and perhaps even offer some advice for property investors caught in the turbulence.

After all, Wing Tai itself has been through tough times. It was one of the worst-hit developers during the Asian financial crisis. It chalked up huge losses and was strained by a pile of debt.

It had bought some high-priced residential plots in Singapore in June 1997, on the eve of the Asian crisis. These included a 99-year leasehold residential site at Draycott Park that it purchased at $1,103.60 per square foot per plot ratio (psf ppr) and another plot in the Newton Road area for $611.91 psf ppr. The price of the Draycott plot remained a record for 99-year leasehold prime district residential land for about a decade.

Better shape

Wing Tai had high net gearing ratios (over 1) during the Asian crisis years and again during the more recent property slowdown in 2000-2004. Today, the group is in much better financial shape. As at March 31, 2008, its net gearing ratio was 0.5.

Like all developers, Wing Tai will try to hold off launches given the current weak market sentiment, especially since it has strengthened its financial position from the recent Singapore residential market boom between 2005 and 2007.

But, as Morgan Stanley Research said in a recent report: ‘Should the residential market remain subdued for a prolonged period, Wing Tai may have no choice but to stomach lower selling prices to entice buying activity, particularly if the other developers have cut selling prices in their projects.’

The group’s existing Singapore residential land bank was by and large acquired at more attractive prices, except for a 40 per cent stake in a 99-year leasehold plot at Alexandra Road bought for $639 psf ppr late last year.

Fortunately for Wing Tai, its other prime district freehold sites like Anderson 18, Ardmore Point, Belle Vue and Newton Meadows were acquired between 2005 and May 2007 at relatively attractive prices of $1,650 psf ppr and $1,369 psf ppr for Anderson 18 and Ardmore Point respectively and about $660 psf ppr for both Belle Vue and Newton Meadows.

If necessary, Wing Tai could take a hit on selling prices for new condos on these sites and should still be able to make a decent profit. Wing Tai seems to have learnt its lessons from the past and, hopefully, history will not repeat itself. As a bonus, the Cheng brothers may again offer probing insights into the local property market next week.

HDB awards DBSS site in Toa Payoh to Hoi Hup-led JV

Source : Business Times - 22 Aug 2008

The Housing & Development Board on Friday awarded the tender for a Design, Build and Sell Scheme site at Lor 1A Toa Payoh to the top bidder - a consortium comprising Hoi Hup Realty Pte Ltd, Sunway Developments Pte Ltd and Hoi Hup JV Development Pte Ltd.

Their winning bid of about $198.82 million works out to about $160 per square foot per plot ratio. The tender closed on Tuesday.

Eng Wah sells KL condo for US$157,000

Source : Business Times - 22 Aug 2008

Eng Wah Organisation has sold a property in Jalan Binjal, Kuala Lumpur, to two individuals for 525,000 ringgit (US$157,171) cash.

The sale was made after the firm entered into a reverse takeover deal with Transcu Ltd, that requires the disposal of its existing assets and businesses.

MPs: Plug loopholes for rental flats

Source : Straits Times - 23 Aug 2008

WHEN it comes to nipping the problem of the not-really-needy applying for rental flats meant for the truly needy, the health sector offers some answers.

Eye surgeon and MP Lim Wee Kiak (Sembawang GRC) said the crucial question asked of applicants for Medifund, which helps the needy pay for medical expenses, was whether their family can support them financially.

This meant producing documents to prove family members have little or no money in their Medisave and bank accounts.

Currently, people who apply for subsidised HDB rental flats do not need to give such details.

They need only show that their household income is not more than $1,500 and that they had not sold their property within 30 months of applying for a rental flat, noted Dr Lim.

Five other MPs who spoke to The Straits Times also gave suggestions on how to deal with this problem.

These include educating applicants on alternatives to rental flats and giving concessionary loans to those who want to downgrade to a smaller flat.

The MPs were responding to Prime Minister Lee Hsien Loong’s worry over the tripling in the number of people seeking HDB rental flats and his call for those who were not really in need to look for alternatives, such as moving in with their children or renting a room in the open market.

In his National Day Rally speech on Sunday, Prime Minister Lee cited the case of three children asking the HDB to give their mother a rental flat, even though two of them lived in private property and they had the money to hire a maid to look after her.

MPs who have seen such cases believe the underlying problem is often that elderly parents cannot get along with their daughters-in-law or their own children.

Madam Ho Geok Choo (West Coast GRC) believed the solution was to counsel such families.

She recalled persuading a man to rotate among his siblings the care of their elderly parents, instead of putting his old folks in the queue for a rental flat.

She said: ‘The family should always be the first line of defence. People should not take the easy way out.’

Mr Zaqy Mohamad (Hong Kah GRC) wanted more public education, focusing in particular on middle-aged parents with children and parents who live with their grown-up children.

‘Educate them on the alternatives to rental flats and go on the positives, that you should be more caring to your parents,’ he said.

And when the HDB comes across such cases, it should refer them to the community development councils which can mediate among the family members, instead of just rejecting the application.

He added: ‘If you give a straight no, you will get more and more re-appeals.’

Housing policies also need to change to cater to the high demand for rental flats, said MPs Liang Eng Hwa (Holland-Bukit Timah GRC) and Charles Chong (Pasir Ris-Punggol GRC).

They noted that those seeking rental flats may genuinely want to downgrade to smaller, less costly accommodation.

Mr Liang reckoned that these people who earn more than $1,500 a month may not mind paying a little more than those renting the flat at a subsidised rate.

To cater to them and others who are needy, more rental flats should be built, he added. This would be over and above the current plan to raise the supply by 20 per cent to 50,000 in the next few years.

Mr Chong homed in on the policy of granting HDB concessionary loans only to people moving to bigger flats.

He argued that the HDB should allow people who cannot afford to live in four- or five-room flats and who want to downgrade to also qualify for these loans. That way, they can look for a smaller flat in the open market and do not need to apply for a rental flat.

While the HDB has approved requests on a case-by-case basis, Mr Chong believed it should be ‘a matter of policy, not exception’.

One sure change is the eligibility criteria for rental flats. They are under review, with an eye on tightening them and keeping out people who are not in need.

En bloc spat: mailboxes hit

Source : Straits Times - 21 Aug 2008

FIRST cars, now letter boxes.

A police investigator examining vandalised mailboxes at Laguna Park condo last night. — MUGILAN RAJASEGERAN/THE STRAITS TIMES

Several residents of the Laguna Park condominium in Marine Parade Road had their mailboxes vandalised last night.

In the third such attack this month, vandals used glue to seal the keyholes of eight letter boxes - all belonging to residents who had not signed the condominium’s en bloc sales agreement.

For some victims, last night’s attack was the second time they had been hit.

Several had their cars damaged last month when vandals threw a corrosive liquid, possibly paint thinner, on them.

The residents have appealed to their management committee for help, and have suggested that closed-circuit television cameras be set up to prevent future attacks.

This is being studied.

One victim of last night’s mailbox attack, who wanted to be known only as Mr Chan, 50, said: ‘I’m disappointed that it has come to this. The kampung spirit we had here has gone…all over an en bloc sale.’

He added: ‘I fear that this is not the end.’

Police are investigating.

CapitaLand going ahead with 2nd Malaysian Reit

Source : Business Times - 21 Aug 2008

Latest offering will comprise 3 malls worth RM2b: chief investment officer

CAPITALAND will list its second Malaysian real estate investment trust (Reit) this year, barring unfavourable market conditions, the company’s chief investment officer Kee Teck Koon said yesterday.

Mr Kee: CapitaLand will time the launch of the Reit ’so it can capture the imagination of investors’

The Reit will initially comprise three shopping malls worth RM2 billion (S$849 million), he said. CapitaLand will gauge market sentiment to ensure the launch is timed ’so it can capture the imagination of investors’.

At a news briefing after the topping-out ceremony for Kuala Lumpur’s Tower D, which is owned jointly by CapitaLand and Malaysia’s Quill Group, Mr Kee said that the listing plan for the second Reit has not changed. ‘The intention is very clear,’ he said.

Penang’s Gurney Plaza and two malls in the Klang Valley - Mines Shopping Fair and Sungei Wang Plaza - will form the Reit’s initial core assets. Mr Kee would not say who CapitaLand’s local partner in the Reit would be.

The company’s reservations about market sentiment are warranted. The last three listings on Bursa Malaysia have debuted below their offer price. In the latest, shares of Perwaja Steel yesterday opened 10 sen short of the RM2.90 offer price before closing at RM2.48.

Although Malaysian Reits are seen as defensive, interest among foreign investors has been dampened by relatively high withholding tax.

Still, some investors continue to be attracted to local real estate because its comparative pricing ought to allow for greater capital appreciation down the road.

For example, the Malaysia Commercial Development Fund (MCDF) - a US$270 million closed-end private equity investment fund launched jointly by CapitaLand and Maybank in March 2007 with a gross development value of US$1 billion - is fully invested, CapitaLand Commercial chief executive Wen Khai Meng said yesterday.

CapitaLand ‘may consider subsequent funds’ focused on residential, commercial and retail segments, he said.

MCDF provides a pipeline of projects to be injected into Quill Capita Trust - a commercial Reit jointly listed by Quill and CapitaLand in January 2007 with an initial fund size of RM276 million, which has grown to over RM800 million.

Tower D in the KL Sentral area will allow them to further leverage on strong demand for commercial property and is likely to be injected into the Reit.

To be completed by January, the Grade A building, which has a net lettable area of 355,000 square feet, has a confirmed tenancy rate of 65 per cent and is expected to be fully tenanted by March.

The 29-storey office block with a six-storey retail podium has attracted several multinational and big local companies as tenants, said Quill director Michael Ong.

Rental rates are around RM6 to RM7 per square foot and a number of tenants have signed three-plus-three-year leases, he said.

CapitaLand, through MCDF, owns 40 per cent of Tower D developer Quill Realty.

Moving away from the city

Source : Today - 21 Aug 2008

There is a need to manage demand for land and its increase in value across the island

One of the highlights of Singapore’s Draft Master Plan 2008 is to bring jobs closer to home.

Economists point out that it makes financial sense for firms to locate in suburban areas. What then are the limiting factors that prevent complete decentralisation?

Agglomeration benefits, such as accessibility to clients and supporting services, largely account for the continual concentration of businesses in the Central Business District (CBD). However, with the advent of communication technology, will these benefits diminish and cause further decentralisation? If so, which locations are conducive for the development of a new commercial hub?

In 1964, William Alonso proposed the bid rent theory which explains how land will be allocated under perfect market conditions and how the CBD is established.

The theory has two significant assumptions: One, a monocentric city has a single activity node at the centre of the CBD Core where all transactions are done. Two, land is allocated to the bidder that will pay the highest rental.

According to the theory, a firm’s profit varies with its distance from the city centre due to savings from transport or shipping costs. But in today’s context of a knowledge-based industry, locating near the city centre provides accessibility to clients and enhances corporate image.

City-centre location continues to be dominated by high-paying firms, whose profits are not necessarily affected by physical distance or savings from transport cost.

There is a multitude of other soft factors such as prestige, image and convenience that attract such high-profit-margin firms to the city centre. Nonetheless, profits vary inversely with the distance from the city centre.

Likewise, residential land rental function is sloping downward as closer proximity to the city centre translates into higher quality of life, image and prestige.

However, home owners are unwilling to pay the same premium as that of firms.

To a certain extent, the bid rent theory can explain the pattern of land-use allocation in Singapore.

A comparison of development charges rates over the past years shows that premium in commercial land value for areas closer to the CBD area is rising, suggesting that there are increasing preferences for offices near the city area. This is contrary to common belief that the advancement of communication technology will render proximity to the city centre less important.

This continual rise in the premium of land value in the CBD is associated with robust economic growth.

However, there is a need to manage demand for land and its increase in value across the island. If left to pure market forces alone, the development pressure will result in a phenomenon known as “leapfrogging”, which is not uncommon in other countries.

Instead of an orderly growth from the city centre going outwards, developments will leap to areas further away from the city where cost of land is cheaper.

While this may benefit residences around the area, there may not be enough threshold population and amenities to support the developments.

Tan Chin Wei is a research analyst and Chua Yang Liang is head of South-east Asia research at Jones Lang LaSalle.

Bidders subdued at auction of 8 plots

Source : Straits Times - 22 Aug 2008

AN AUCTION of eight small plots of state land yesterday attracted 50 registered bidders and many more onlookers but only half the sites were sold.

The subdued response reflects the mood in the property market, said observers, and is in contrast to a similar auction last November when all six plots offered were sold after brisk bidding.

Yesterday’s sale was the second held so far by the Singapore Land Authority (SLA), which is offloading residential ‘infill’ sites with fresh 99-year leases.

These are vacant pockets of state land located in the midst of established landed housing estates. They were either left untouched by nearby developments or were once used for public purposes.

Knight Frank auctioneer Mary Sai, who conducted the auction, said potential bidders were very cautious: ‘We heard the interest there but when they heard the starting bid, they refrained from bidding.’

Ms Sai said the bidders likely did not expect the opening price to be so high while site constraints and high construction costs might be dampening interest.

Take a site in Upper East Coast Road. It opened with a bid of $2.47 million or $334 per sq ft (psf) but there were no takers. It was reintroduced later at a starting bid of $2.1 million and attracted some bids but they failed to meet the reserve price and it was passed.

SLA’s reserve price, which is set by the chief valuer and not revealed to bidders, is slightly below the opening bid.

But there were some bright spots. The biggest plot on the list - a 15,461 sq ft good-class bungalow site in Ridout Road - was the most hotly contested property with 34 bids lodged by three hopefuls.

BreadTalk founder and chairman George Quek and his wife clinched the site with a bid of $8.96 million or $579.55 psf. This was 22.6 per cent above the opening bid of $7.31 million or $473 psf.

This site is right next to Mr Quek’s home and the family had been renting a portion of it for use as a garden for over two years.

Mr Quek said he will combine the land with his own.

The lowest-priced lot sold was a 4,720 sq ft site in Glasgow Road, near Rosyth Road, which is suitable for a three-storey bungalow. Mr Anthony Tan, 62, bought it for $710,000 or $150.40 psf - close to the starting bid of $680,000 or $144 psf.

‘It’s where my wife used to live and my daughter was born,’ said the retiree. He will build a single- storey house on the site but will continue to stay in his Serangoon Gardens house.

A 4,357 sq ft corner plot in Tanah Merah Kechil Road began with a bid of $1.36 million or $312 psf before going to Mr Ng Kim Hoe for $1.51 million or $347 psf. He had only one competitor.

Ms Martha Lim, 31, who runs her family business Lim Seng Kok Contractor, bought a 7,771 sq ft Namly Avenue plot for $2.63 million or $338 psf.

The bidding opened at $2.55 million. Ms Lim said she may keep the site for her own use or redevelop it for sale.

Yesterday, there were some bargain hunters among the crowd of about 200 at M Hotel. Others such as a resident in Ridout Road were there to see if the plot in the street sold.

SLA may release the unsold sites again after researching price levels.

Its deputy director of land sales, Mr Teo Jing Kok, said yesterday that the agency would work with the chief valuer to see if the prices are too high.

And there will be more of such auctions to come, he said. ‘We are looking at one or two land sale auctions a year, assuming there’s no downturn.’

Cooling property market takes a seat at SLA auction

Source : Business Times - 22 Aug 2008

The wait-and-see attitude that buyers have adopted in the cooling property market was evident at a Singapore Land Authority (SLA) auction yesterday.

Some 200 individuals and small developers packed a room at M Hotel, but there were only a handful of bidders. Only four of eight in-fill sites launched for residential use were eventually sold, for a total of $13.81 million.

In-fill sites are pockets of state land in established landed housing estates that have been left untouched by nearby development or were once used for public purposes. All eight sites came with fresh 99-year leases.

‘The response today was very cautious,’ said auctioneer and executive director (auctions) at Knight Frank, Mary Sai. SLA conducted a similar auction for six sites last November but sold all the plots then.

Those at yesterday’s auction told BT that opening prices were higher than expected. ‘I think a lot of people were surprised - that’s why there was not much bidding,’ said retiree Anthony Tan Ho Peng.

Mr Tan won the bidding for a 4,720 sq ft three-storey bungalow plot in Glasgow Road for $710,000 or $150.40 per sq ft. Bidding started at $680,000, whereas Mr Tan had expected an opening price of $550,000.

According to SLA, the Chief Valuer decides reserve prices for sites, which cannot be awarded if bids are too low.

The timing of the auction - coinciding with the Hungry Ghost Festival or the seventh month of the lunar calendar - could have affected interest. But Ms Sai reckons this was not the main reason. ‘Market sentiment is still weak,’ she said. And high construction costs could be another concern.

While the auction did not generate heated competition throughout, one parcel received considerable attention. A 15,461 sq ft good class bungalow plot in Ridout Road attracted 34 bids, which drove the opening price of $7.31 million up steadily.

BreadTalk chairman George Quek eventually won the site for $8.96 million or $579.50 psf - the highest psf price of the four sites sold. Mr Quek told reporters that the land will be for his own use.

A three-storey bungalow parcel in Namly Avenue went for $2.63 million or $338.40 psf to Martha Lim. The 31-year-old CEO of Lim Seng Kok Contractor may also keep the 7,771 sq ft site for her own use.

A plot in Tanah Merah Kechil Road was sold for $1.51 million or $346.60 psf.

As for the unsold sites, SLA will work with the Chief Valuer to re-assess their prices. ‘If we lower the reserve price, we could release (the site) subsequently,’ said SLA’s deputy director of land sales, Teo Jing Kok. Alternatively, ‘if the feedback is that maybe the site is not popular and there are other in-fill sites, then we will release other sites’.

According to Mr Teo, SLA could hold one or two land auctions a year if market conditions remain steady.

Stanchart launches transparent home loan pegged to Sibor

Source : Business Times - 22 Aug 2008

STANDARD Chartered Bank has upped the ante in the mortgage market here with a new transparent home loan pegged to the Singapore interbank offered rate (Sibor). The loan comes with an offset feature where customers can use the interest earned on their deposits to reduce the interest payable on their home loan.

MortgageOne Sibor loans will be priced at 0.8 per cent a year above the three-month Sibor for the first three years.

Customers enjoy the same interest rates as their mortgage loan on two-thirds of the deposits linked to MortgageOne Sibor, subject to a maximum of their loan principal outstanding.

The remainder of the deposits will enjoy an interest rate of 0.5 per cent a year.

By paying less interest every month, customers can repay their mortgage loan faster compared with a traditional mortgage loan.

Under this loan package, customers can put any surplus funds in their current account to reduce interest costs.

They also have the flexibility to withdraw these funds at any time and capitalise on investment opportunities.

‘MortgageOne Sibor is designed for all customers,’ said Dennis Khoo, general manager of lending at Standard Chartered Bank Singapore.

‘For example, for a $500,000 mortgage loan with a 25-year tenure, a customer can reduce interest payments by 20 per cent, just by saving $500 every month.’

DBS Bank said it was the first to offer Sibor- pegged interest rates early last year, after it launched the CPF ordinary account pegged rates under its flagship POSB Home Ideal product in November 2006.

Under the DBS Managed Mortgage, customers can choose between the three-month and 12-month Sibor benchmark and the loans are priced between 0.8 and 1.25 per cent a year above the benchmark, depending on the period of commitment.

Other big players in the home loan market here, however, do not seem to be pressured to launch Sibor- linked loan packages as yet.

‘There are many different housing loan packages in the market today. Ultimately, what matters to the home loan borrower is that he is given a choice of which home loan package best suits his needs and his reading of the interest rates trend,’ said Gregory Chan, head of secured lending at OCBC Bank.

The bank currently offers fixed and variable packages as well as the swap offer rate package, which is a customised home loan with interest rates that are pegged to the three-month Singapore dollar swap offered rates (SOR), starting from one per cent above SOR for the first two years and 1.25 per cent above SOR thereafter.

Maybank told BT yesterday it does not have any immediate plans for Sibor- pegged home loans at the moment.

Its home loan single board rate stands at 3.75 per cent a year currently and is benchmarked against interbank rates, market conditions, as well as business costs.

Two-tier test system raises standards of estate agency industry

Source : Straits Times - 22 Aug 2008

We refer the letter ‘HDB resale net services open to abuse’ by Mr Steven Lau last Saturday. We would like to take this opportunity to clarify the misconceptions about the SAEA (Singapore Accredited Estate Agencies) accreditation schemes.

The SAEA scheme was launched in November 2005 with the objective of raising the level of professionalism in the estate agency industry by getting agencies and agents to be accredited.

A time frame of three years was proposed so that agents would have the opportunity to upgrade themselves during that period. The accreditation requires agencies to have a certain percentage of their agents pass the Common Examination for House Agents (Ceha), starting with 40 per cent in 2006, 60 per cent last year, 80 per cent this year and 100 per cent next year.

To support the SAEA accreditation scheme, the HDB has kindly provided the use of the HDB resale net services to accredited agencies, bearing in mind that there are agents with the accredited agencies who do not possess the Ceha.

During the implementation of the scheme, feedback from the industry and agency bosses was obtained. One of the feedback given was to introduce a two-tiered accreditation scheme, one for agents who intend to practise as a principal licensee, and another for salespersons on the ground, who deal with the buyer and seller.

This two-tiered scheme is not uncommon in other countries. Hence, the SAEA salespersons accreditation was announced in April this year. Under the two-tiered scheme, agents can either take the Ceha or the CES (Common Examination for Salespersons) to be accredited as an accredited agent or salesperson.

The syllabi for the CES examination are as extensive as the Ceha except topics like those that deal with the management of the agency, such as business operations and human resources management, are excluded. Those taking the CES, for instance, are required to understand the procedures to carry out HDB resale transactions, to be aware of the HDB policies and familiar with the resale checklist, various upgrading programmes and so on in order to pass.

The possession of Ceha or CES is only one of the requirements for accreditation. All accredited agents or salespersons are required to comply with a code of ethics and conduct, and will be subject to disciplinary action if they misconduct themselves.

We urge Mr Lau or the public who is aware of any abuse of the HDB resale net services to inform us so that appropriate disciplinary action can be taken against our accredited agencies.

The two-tier system is a good system to exercise control on the estate agency industry where there are close to 20,000 agents who do not even have a basic qualification and understanding of real estate and property transactions.

We urge the general public to deal with accredited agents or salespersons in order to protect their own interests.

Wilson Lim
Executive Director
Singapore Accredited Estate Agencies (SAEA)

Test ensures housing agents are more qualified

Source : Straits Times - 22 Aug 2008

WE REFER to the letter by Mr Steven Lau last Saturday on the SAEA salesperson accreditation.

The SAEA scheme was introduced to accredit both agencies and agents. The original scheme requires agents who wish to practise as principal licence holders and bosses of agencies to pass the Common Examination for House Agents (Ceha).

The recent salesperson accreditation provides for a two-tiered accreditation for other agents - basically salespersons who do not wish to become agency bosses, but would like to continue working as agents. They are those that deal with the buyers and sellers on the ground. Currently not many of these salespersons have basic qualifications.

The Association of Singapore Estate Agencies is one of the bodies that advocates the introduction of the salespersons accreditation for all practising salespersons to pass the Common Examination for Salesperson (CES) as an entry point.

This move will help to ensure that henceforth, anyone claiming to practise house agency is suitably qualified. With the accreditation, recalcitrant salespersons will be hauled up and reprimanded under the scheme.

The CES will, therefore, not only raise the level of professionalism in the real estate agency industry, but will also provide protection for consumers.

David Ong
President, Association of Singapore Estate Agencies

Lum Chang wins $76.5m contract from A-Reit

Source : Business Times - 22 Aug 2008

ASCENDAS Real Estate Investment Trust (A-Reit) has awarded a $76.5 million design-and-build contract to a unit of Lum Chang Holdings for the construction of a new eight-storey tower and a three-storey ancilliary podium in Changi Business Park.

The building will be on land with an area of over 28,000 square metres - one of the biggest developments there, Lum Chang said. The project is due to be completed by October 2009.

The contract marks the second time that A-Reit has appointed homegrown construction company Lum Chang for a Changi Business Park development.

In 2007, Lum Chang was awarded a $71.8 million tender to build an eight-storey office building - the first of three towers in the Changi Business Park commercial development.

Construction of this building as well as the basement carpark is currently underway, and progress is well on track for completion in the first quarter of 2009.

The building has been leased to Citigroup to house up to 4,000 operational and backroom staff.

The latest contract brings the total value of contracts Lum Chang still has in progress to over $456 million, the company said.

The newest project is expected to be 60 per cent completed by the end of the financial year ending June 30, 2009.

The earnings from this contract will be recognised progressively according to the stage of completion, Lum Chang said.

Lum Chang’s shares lost two cents to close at a 52-week low of 19 cents yesterday. A-Reit’s stock similarly shed two cents to end the day at $2.30.

CityDev issuing 1st tranche of Islamic bonds by year end

Source : Business Times - 22 Aug 2008

CITY Developments said yesterday that it will issue the first tranche of Islamic bonds by the end of the year, as it looks to build up its war chest.

Singapore’s second-largest developer announced last week that it plans to sell $1 billion of Islamic multi-currency medium-term notes, arranged by Malaysian bank CIMB. The deal will be Singapore’s first Islamic unsecured financing arrangement.

CIMB Group is listed on the Malaysian stock exchange through Bumiputra-Commerce Holdings.

‘We hope to do the first tranche before year-end, subject to market conditions,’ CityDev’s chief financial officer Goh Ann Nee said at a briefing yesterday.

CityDev said that it has not decided on the size or the coupon rate of the first tranche of notes. But management has indicated that the rates will be competitive and that it expects to see good institutional demand.

CityDev will use the funds to buy land or buildings, and has said that it will inject its own properties, freeing funds for new investments.

Islamic financing will allow CityDev to tap a broader base of investors, says managing director Kwek Leng Joo.

‘Many are curious why City Developments is enhancing its war chest,’ Mr Kwek said. ‘We always believe that in the midst of any economic slowdown there are tremendous opportunities.’

CityDev did not say which markets it is interested in. But management has guided that it will look at distressed assets in the region, including Vietnam, China, the Middle-East and Russia, CIMB analyst Donald Chua said in a note yesterday.

‘Given restrictions on the use of syariah/Islamic products, we believe proceeds will be used for investments primarily in residential property and commercial (office) investments,’ he added.

CIMB Investment Bank head of debt capital markets Thomas Meow said that the bank has been in discussions with other Singapore firms to set up syariah-compliant financing.

Vince Cook, chief executive of DBS unit Islamic Bank of Asia, told Reuters: ‘Given the ongoing difficult conventional market conditions, it is not surprising that issuers are looking at ways to open up new pools of investors.’

CityDev shares gained six cents to close at $10.20 yesterday.

Appeal to get back site of temple

Source : Straits Times - 22 Aug 2008

Three devotees argue that acquisition of site off Bartley Road violated Constitution

FOR almost two hours yesterday, judges of the Court of Appeal heard arguments over whether the Government’s acquisition of a 65-year-old temple off Bartley Road was legal.

Lawyers representing three devotees of the Jin Long Si Temple said the acquisition of the temple site in 2003 violated the Constitution.

They also said the trio - Ms Eng Foong Ho, Mr Hue Guan Koon and Ms Ang Beng Woon - had the right to initiate court action on the matter.

Their arguments before the Court of Appeal sought to overturn a decision by the High Court in February which upheld the Government’s acquisition of the site.

Deputy Senior State Counsel Eric Chin, in countering their points, said there cannot be any breach of the Constitution when an acquisition is based on correct land planning considerations.

Both sides argued before Chief Justice Chan Sek Keong, Justice Andrew Phang and Justice V.K. Rajah.

The Appeal Court judgesquestioned them on issues related to zoning and acquisition, among other things, and will give their ruling at a later date.

The trio first challenged the Government’s acquisition in January this year. The site was acquired as part of redevelopment plans linked to the building of the Circle Line’s Bartley station.

The temple was given five years - from the time it was acquired till Jan 31 this year - to relocate. It was in talks with the authorities about an alternative site but the move was postponed following the lawsuit.

CapitaLand to realise S$313 m gain from asset injection

Source : Business Times - 22 Aug 2008

PROPERTY giant CapitaLand has inked deals to inject four Raffles City-branded integrated developments in China - in Shanghai, Beijing, Chengdu and Hangzhou, into its Raffles City China Fund.

The US$1 billion (S$1.4 billion) real estate private equity fund will be purchasing CapitaLand’s effective 55.9 per cent stake in Raffles City Shanghai, and 100 per cent of the other three Raffles City projects under development.

CapitaLand has a 50 per cent stake in the fund.

The property group is expected to receive a total consideration of about US$841 million (S$1.149 billion) which takes into account the agreed value of Raffles City Shanghai at 4.5 billion yuan (S$889 million) and the agreed land values of the other three Raffles City projects.

Net of its 50 per cent stake in the fund, CapitaLand will obtain an eventual net cash flow of about US$420 milllion (S$574 million).

In addition, CapitaLand will realise a total portfolio gain of S$313 million, which includes a net gain of S$183 million from the dilution of its interest in the four Raffles City assets as well as the fair value gain of S$130 million for Raffles City Shanghai.

Besides originating and retaining a sponsor stake in the fund, CapitaLand is also managing the fund and its properties.

Source : Business Times - 22 Aug 2008

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Market could do with Wing Tai plainspeak

Posted by luxuryasiahome on August 22, 2008

WHEN Wing Tai Holdings holds its fourth-quarter and full-year results briefing next Tuesday, it will be the last of the major Singapore-listed property groups to announce results for the period ended June 30, 2008. Net earnings are expected to be lower than the $382 million record performance for the preceding year. But the wait may still be worth it, if the Cheng brothers who helm the group once again give a candid assessment of the state of the Singapore property market.

The duo has made some of the frankest pronouncements on market prospects. Last August, during the early days of the US sub-prime mortgage crisis, Wing Tai chairman Cheng Wai Keung was probably the first major developer to say publicly that sub-prime woes had slowed property transactions across the entire market in Singapore.

He said: ‘Yes, temporarily, it has affected some of the take-up rates. But it is actually not a bad thing. The market needs a bit of consolidation. High-end home prices have gone up 100 per cent within the last 6-9 months. It’s just not sustainable. But if sub-prime settles within a reasonable period, I believe there is still room to grow in the property market. We’re not at the end of the property cycle.

‘On the other hand, if sub-prime or the credit market continues to be in turmoil and it affects confidence in general, then, of course, it will be a completely different scenario,’ he had added.

That was in August last year. By February this year, when the sub-prime crisis and its bite on the local property market had worsened, some developers here were still singing a positive tune, hoping the sub-prime gloom would blow away after mid-year.

Upfront

But Wing Tai deputy chairman Edmund Cheng told BT at the time that it may not be realistic to expect sub-prime problems to fade away by mid-year. ‘They are likely to linger beyond this year, as the exposure has extended to many other areas, and it may still take some time for the full extent of exposure to be discovered,’ he said.

Now, with the official forecast for Singapore’s GDP growth this year trimmed and all-round warnings for tougher times ahead, the market will hopefully once again be able to count on the Cheng brothers to deliver an honest verdict for the property market - and perhaps even offer some advice for property investors caught in the turbulence.

After all, Wing Tai itself has been through tough times. It was one of the worst-hit developers during the Asian financial crisis. It chalked up huge losses and was strained by a pile of debt.

It had bought some high-priced residential plots in Singapore in June 1997, on the eve of the Asian crisis. These included a 99-year leasehold residential site at Draycott Park that it purchased at $1,103.60 per square foot per plot ratio (psf ppr) and another plot in the Newton Road area for $611.91 psf ppr. The price of the Draycott plot remained a record for 99-year leasehold prime district residential land for about a decade.

Better shape

Wing Tai had high net gearing ratios (over 1) during the Asian crisis years and again during the more recent property slowdown in 2000-2004. Today, the group is in much better financial shape. As at March 31, 2008, its net gearing ratio was 0.5.

Like all developers, Wing Tai will try to hold off launches given the current weak market sentiment, especially since it has strengthened its financial position from the recent Singapore residential market boom between 2005 and 2007.

But, as Morgan Stanley Research said in a recent report: ‘Should the residential market remain subdued for a prolonged period, Wing Tai may have no choice but to stomach lower selling prices to entice buying activity, particularly if the other developers have cut selling prices in their projects.’

The group’s existing Singapore residential land bank was by and large acquired at more attractive prices, except for a 40 per cent stake in a 99-year leasehold plot at Alexandra Road bought for $639 psf ppr late last year.

Fortunately for Wing Tai, its other prime district freehold sites like Anderson 18, Ardmore Point, Belle Vue and Newton Meadows were acquired between 2005 and May 2007 at relatively attractive prices of $1,650 psf ppr and $1,369 psf ppr for Anderson 18 and Ardmore Point respectively and about $660 psf ppr for both Belle Vue and Newton Meadows.

If necessary, Wing Tai could take a hit on selling prices for new condos on these sites and should still be able to make a decent profit. Wing Tai seems to have learnt its lessons from the past and, hopefully, history will not repeat itself. As a bonus, the Cheng brothers may again offer probing insights into the local property market next week.

CIMB to arrange CityDev’s Islamic bond issue

Source : Business Times - 20 Aug 2008

Malaysian lender CIMB has been picked to arrange an Islamic bond sale by Singapore property developer City Developments, the bank said on Wednesday.

CityDev, Southeast Asia’s second-biggest property developer by market value, had said it would sell S$1 billion of sharia-compliant debt, in what would be Singapore’s first Islamic unsecured financing arrangement aimed at tapping new markets.

Badlisyah Abdul Ghani, chief executive of CIMB Islamic Bank, said the deal would be formally announced on Thursday.

CIMB Bank is part of CIMB Group which is listed on the Malaysian stock exchange through Bumiputra-Commerce Holdings.

CityDev to issue Islamic bond by year end

Source : Business Times - 21 Aug 2008

City Developments, Southeast Asia’s second-biggest developer by market value, will issue the first tranche of a $1 billion (US$708 million) Islamic bond programme by the end of this year.

‘We hope to do the first tranche before year-end, subject to market conditions,’ CityDev CFO Goh Ann Nee told journalists at a briefing.

CityDev last week announced that it was planning to sell $1 billion in sharia-compliant debt arranged by Malaysian lender CIMB, in what would be Singapore’s first Islamic unsecured financing arrangement and aimed at tapping new markets.

CIMB Bank is part of CIMB Group which is listed on the Malaysian stock exchange through Bumiputra Commerce Holdings . — REUTERS

HDB flats: No new valuation method

Source : Straits Times - 21 Aug 2008

WE refer to Ms Christina Heng’s letter, ‘Queries on HDB valuation scheme’ (Aug 12).

The methods adopted by the valuation profession are applicable to all properties, be it HDB flats or private properties. There is no new valuation method used.

To refresh our earlier reply on June 28 in response to Mr Patrick Tan’s query on ‘What determines market value of property’, we stated that the market value of a property is determined on the basis of a willing buyer and a willing seller, with both parties acting with knowledge, prudence and without compulsion in an arm’s-length transaction.

For homogeneous properties such as HDB flats, the common valuation method adopted is the direct comparison approach. This approach is similar to that used by a potential buyer when considering the purchase of a flat. He would look at the location, consider the age, size, design, height and other important characteristics of the flat and compare the prices paid for comparable flats in the locality.

The final selling price of a property is dependent on the demand and supply of a property and the negotiation between the buyer and seller. Some buyers may pay a premium for a flat for personal reasons. The cash top-up is a legitimate part of the resale market price. It is the willing buyer and seller that determines the final price and this final price as considered by the market forces can be above or below the valuation.

Janet Han (Ms)
Secretariat
Singapore Institute of Surveyors and Valuers

Is this the world’s costliest home?

Source : Straits Times - 21 Aug 2008

Mystery buyer said to have paid $1b for palace in Cote d’Azur in France

PARIS: A mystery buyer, said to be a super-rich Russian, is believed to have broken a world record by buying a half-a-billion euro luxury home on France’s affluent Cote d’Azur.

Local and national media in France reported this week that the sprawling property, unusual and so especially prized in that it combines a sea view and palace- size dimensions, was purchased for 496 million euros (S$1.03 billion).

Most reports initially named the buyer as 43-year-old Russian mining tycoon Mikhail Prokho-

rov, who has long been a familiar figure in the discos, clubs and resorts of Cote d’Azur. He is the owner of Onexim Holdings investment company

But yesterday, the bachelor denied the reports through a spokesman in Moscow. The spokesman added that Mr Prokhorov refused to do business in France until police apologised for questioning him last year during an investigation into a high-priced prostitution ring.

His statement immediately rekindled lively speculation on the French Riviera about who will be moving into what could be the world’s most expensive home.

The seller of the property, the widow of Swiss banker Edmond Safra, has not confirmed either a deal or a price.

The property is called Villa Leopolda, after the Belgian king Leopold who had it built more than 100 years ago, but could more aptly be called a palace.

It includes 8.1ha of land planted with fruit trees and slender cypresses, boasts a giant swimming pool and is surrounded by a cascade of outbuildings and guest mansions.

The main building, used by Fiat boss Giovanni Agnelli as a residence in the 1950s, is also topped by a turret.

Real estate agents in the area around the port city of Nice, where the coastline is called ‘billionaires’ bay’, said Russians were bidding constantly on luxury properties like Villa Leopolda.

‘One of them paid 30 million euros for a villa that was on the market for 15, and claimed later that he had been ready to pay twice that,’ agent Jean-Marc de Broux told Le Monde newspaper.

Other names mentioned by real estate specialists in the area include Mr Roman Abramovich, owner of Britain’s Chelsea football club, who already has a chateau nearby. But he has also denied interest.

A third Russian billionaire on the list is industrialist Oleg Deripaska.

All three are ranked among the richest men in the world by Forbes magazine.

Also according to Forbes, the current highest-priced residence is a home in the upmarket London neighbourhood of Kensington, for which Indian steel magnate Lakshmi Mittal reportedly paid US$222 million (S$315 million).

Mr Abramovich could outdo him in London, after receiving planning permission for a home in the same neighbourhood which he said would cost US$285 million.

But the sunshine and cachet of the French Riviera are getting most of the attention from newly rich Russian tycoons, said French author Alexandre Melnik, who has written about the history of wealthy Russians in France.

‘They got rich very quickly… and they want to show that wealth by their spending and their antics.’

Flat valuations not done by HDB

Source : Straits Times - 21 Aug 2008

I refer to the letter, ‘Queries on HDB Valuation Scheme’ published on Aug 12.

The writer attributed the increase in resale prices of HDB flats to a new method of valuation implemented by the HDB that incorporates the cash-over-valuation (COV) amount. This is not correct, as there has been no change in the method of valuation recently.

We wish to clarify that valuations of resale HDB flats are carried out by professional private valuers, and not by HDB. The private valuers on the panel are licensed by Inland Revenue Authority of Singapore and are members of the Singapore Institute of Surveyors and Valuers.

Buyers and sellers of resale flats are free to negotiate and agree between themselves the selling prices. Information provided by HDB on the median COV for each flat type in each town serves to help them make an informed decision. As stated in HDB’s press release of July 25, about 10 per cent of the resale transactions registered in the second quarter this year were done at or below valuation, that is with no COV.

Gopal Singh
Head (Valuation & Alienation)
Housing & Development Board

CityDev inks deal with CIMB

Source : Straits Times - 21 Aug 2008

SINGAPORE property developer City Developments on Thursday inked a deal with Malaysian financial group CIMB in a bid to raise one billion Singapore dollars through the issuing of Islamic bonds.

City Developments hopes to have the first tranche of the issue on the market by the end of the year, the company said. CIMB is lead manager for the issue.

The signing followed the announcement last week by City Developments that it planned the unsecured Islamic bond offering.

‘This is the first Islamic unsecured financing transaction of its kind in Singapore,’ said Mr Kwek Leng Joo, City Developments managing director.

The city-state has been trying to grow its share of the Islamic finance market.

He said the Islamic bond offering will boost City Developments’ coffers and enable it to tap opportunities during an emerging global economic slowdown.

‘We always believe that in the midst of any economic slowdown, there are tremendous opportunities to explore and take advantage of,’ Mr Kwek said.

City Developments is one of Singapore’s leading property developers and also has interests in hotels.

Islamic banking fuses principles of sharia, or Islamic law, and modern banking. Islamic funds are banned from investing in companies associated with tobacco, alcohol or gambling, considered taboo by Muslims.

According to CIMB, the Islamic bond market is holding up despite global economic woes.

‘It is holding up quite well considering that it is a new market and people are still hungry for assets and the demand is still very much there for any issue whenever they come to market. They will take it up,’ said Mr Badlisyah Abdul Ghani, chief executive officer of CIMB Islamic Bank Berhad.

Muslim-dominated Malaysia has the world’s largest Islamic bond market, accounting for about 66 percent of total Islamic bonds issued worldwide in 2007, figures from CIMB showed.

The global market for sukuk - the Islamic equivalent of bonds - could top 100 billion US dollars (S$140 billion) in the next few years after exceeding 60 billion dollars last year, credit ratings firm Standard and Poor’s said in March. — AFP

Dubai’s new law on mortgage

Source : Business Times - 21 Aug 2008

Dubai newspapers are reporting that the local government has issued a mortgage law aimed at regulating the city-state’s booming property market.

Yesterday’s reports in the Khaleej Times and the Gulf News say that the law requires that mortgages be insured, sold by approved banks, registered with local authorities and that they specify the property value and terms of the loan.

They say the ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum, issued the decree on the new law. It will take effect 60 days from publication. — AP

San Francisco Bay Area home sales up

Source : Business Times - 21 Aug 2008

7,586, or 2% more, units sold in July, recording first sales gain since Jan 2005

San Francisco Bay Area home sales rose in July for the first time since 2005 and the median price fell to the lowest in more than three years as buyers bought discounted properties in foreclosure.

Cheap buys: One-third of the Bay Area’s resales in July were homes fresh off foreclosure. Buyers are attracted by foreclosure sales to inland areas where home prices fell after rapid appreciation during the housing boom

Sales increased 2.2 per cent last month from a year earlier, San Diego-based MDA DataQuick, a property research firm, said in a report on Monday. A total of 7,586 houses and condominiums sold in July in nine Bay Area counties.

The median fell a record 29.3 per cent to US$470,000, the lowest since March 2005.

‘We know one-third of the Bay Area’s resales in July were homes fresh off foreclosure,’ said John Walsh, MDA DataQuick president. ‘Who knows how many more involved a desperate seller and a lender who accepted a short sale?’

Foreclosure sales are attracting buyers to inland areas where home prices declined after rapid appreciation during the five year housing boom. Those transactions accounted for 33 per cent of total Bay Area sales last month, up from 29.9 per cent in June and from 4.2 per cent a year earlier.

Eleven ZIP codes in Solano and Contra Costa counties had foreclosure sales at least double the amount in July 2007, according to MDA DataQuick.

Falling prices enabled 48 per cent of households to afford an entry-level home in the state in the second quarter, compared with 24 per cent a year earlier, the California Association of Realtors said in a separate report on Monday. The minimum qualifying income was US$62,870, compared with US$101,440 a year earlier, the Realtors said.

The year-over-year sales gain was the first since January 2005, MDA DataQuick said. Transactions increased 5.7 per cent in July from June. Southern California home sales rose 14 per cent to the highest level since March 2007.

Sales are slower in more expensive coastal areas such as San Francisco, Marin and San Mateo counties, MDA DataQuick said.

Potential buyers are waiting for mortgage terms to become less strict and sellers are reluctant to put their homes on the market as prices fall, Mr Walsh said.

Purchases made with jumbo loans, those over US$417,000, fell by half in July from a year earlier and help explain why the region’s median price declined the most since MDA DataQuick, a unit of Vancouver-based MacDonald Dettwiler and Associates, began statistics in 1988, the company said.

The Bay Area median hasn’t been lower since March 2005, when it was US$469,500.

Prices dropped in all nine counties, led by a 42 per cent decline in Contra Costa. Prices decreased 34 per cent in Solano, 30 per cent in Sonoma, 28 per cent in Napa, 27 per cent in Alameda, 16 per cent in Santa Clara, 16 per cent in San Mateo, 13 per cent in Marin and 6 per cent in San Francisco, according to MDA DataQuick.

Sales increased 47 per cent in Napa, 45 per cent in Solano, 30 per cent in Contra Costa and 8 per cent in San Francisco. They fell 13 per cent in Santa Clara, 11 per cent in San Mateo, 10 per cent in Marin and 9 per cent in Alameda. Sales were unchanged in Sonoma, MDA DataQuick said.

The typical monthly mortgage payment was US$2,218 in July, down from US$2,282 in June and US$3,222 a year earlier.

Adjusted for inflation, current payments are 15.1 per cent below payments in the spring of 1989, the peak of the prior real estate cycle, and 36.1 per cent below payments in June 2006, the current cycle’s peak, MDA DataQuick said. — Bloomberg

Key Japan real estate sector seen tripling

Source : Business Times - 21 Aug 2008

Logistics property market investments may grow 3-fold in a few years: LaSalle

Japan’s market for investment in logistics real estate - such as warehouses, distribution centres and ports - is seen growing threefold within a few years as more players enter a sector considered stable even in an economic slowdown, an executive of LaSalle Investment Management said.

The real estate securitisation investment market was about 320 billion yen (S$4 billion) in 2007, accounting for only 3.8 per cent of Japan’s total Reit (real estate investment trust) investment.

But LaSalle, which manages US$54 billion assets in global real estate markets, sees such logistics-area investment accounting for more than 10 per cent of total J-Reit investment in the near future, executive officer Yosuke Yoshikawa told a Tokyo seminar.

‘Logistics property investment is still immature here for reasons such as a dearth of investment opportunities and limited information disclosure . . . maybe that’s why only one J-Reit is solely focusing on the logistics field,’ Mr Yoshikawa said.

‘But considering its big and established presence in Europe, especially in Britain, and the relative strength of the economic slowdown, logistics real estate investment has a big growth potential,’ he said.

After raising 360 billion yen, the Tokyo-based investor launched ‘LaSalle Japan Logistics Fund Two’ last year.

LaSalle still has some 280 billion yen left to invest until 2010 after spending 80 billion yen since the fund’s launch, another executive told Reuters after the seminar.

A planned investment would include development of multi-purpose logistics centres and ‘off-balance- sheet’ support for logistics companies.

LaSalle is a unit of Chicago-based property services company Jones Lang LaSalle Group which manages property investments of institutional investors such as pension funds and companies.

Tokyo-based LaSalle bought out an asset management company in 2007 and injected fresh capital into a Reit that has since been renamed LaSalle Japan Reit Inc.

LaSalle Japan Reit closed down 12.3 per cent at 191,200 yen yesterday, while the Tokyo Stock Exchange’s Reit index shed 0.3 per cent to 1,269.54. — Reuters

US$ slips on housing data, lender worries

Source : Business Times - 21 Aug 2008

IN OVERNIGHT trading, the US dollar gave back a small portion of the strong gains it had chalked up over the past month, rattled a bit by the combination of a stronger - than - expected number out of the Eurozone, and the weaker US housing numbers released on Tuesday evening.

Combined with persistent reminders about the fragile state of US financial-sector health, these punished Wall Street and helped gold to rebound smartly through US$800 per ounce, and oil prices to recover in excess of US$2 per barrel.

Given that some of the week’s more important data releases were crammed into Tuesday trading, players suggested that this might have provided some added incentive for a little profit-taking on overbought US dollar positions in overnight trading - especially when the breaking news worked against the latter’s favour.

Out of the Eurozone, for example, a closely watched August ZEW index of economic expectations for Germany showed a chunky improvement to -55.5, compared with July’s -63.9 reading and forecasts for a softer outcome of between -60 and -64.

Out of the US, by stark contrast, the numbers for July housing starts and building permit readings both showed good-sized slippage from their respective June readings, fuelling concerns about more large US financial-sector provisions down the road.

At least partly in response to that, gold finished the day almost 2 per cent stronger higher from Tuesday’s Asian close at US$809 per ounce. Notable victims of the US dollar’s recent resurgence such as the euro, Australian dollar and New Zealand dollar rode gold’s bounce to finish up to 0.3 per cent better - at US$1.4713, 86.90 US cents and 71.08 US cents respectively.

Sentiment, however, continued to be rough on the Indian sub-continent, with Nymex light crude revisiting the US$115 per barrel mark yesterday. Despite the mild slippage recorded elsewhere, the greenback was able to score a fresh 17-month high of 43.86 rupees yesterday.

Indeed, players report that it might have risen even more sharply if not for widespread talk of possible intervention sales by the agent banks of the Reserve Bank of India. JP Morgan researchers, for example, project that the US dollar will end 2008 back up towards the 45-rupee level. ‘The rupee weakened at a brisk pace in the past week owing to broad-based US dollar strength, elevated purchases from oil marketing companies and renewed withdrawal of funds from foreign investors,’ they explained yesterday.

By the Asian close, the US dollar had recorded gains of up to half a per cent each versus the rupee as well as another notoriously oil price-sensitive currency, the Philippine peso, at 43.77 rupees and 45.68 pesos respectively.

Elsewhere in the region, the greenback also closed 0.2 per cent better at 110.2 Japanese yen, but slipped between 0.2 and 0.3 per cent to finish at 9,160 Indonesian rupiah, 3.3345 Malaysian ringgit and 6.8552 Chinese yuan. At the same time, it ended about unchanged at S$1.4160, 1,049 Korean won and NT$31.39.

Pushing ahead through Asian crisis headwinds

Source : Business Times - 19 Aug 2008

JTC went full steam ahead with reforms and restructuring during the ‘97 slump, says CLARISSA TAN

The 1990s was an exciting decade. Singaporeans, along with the rest of the world, invested in dotcoms, watched Seinfeld and started sipping Starbucks. But globalisation also meant that a financial crisis brewing in Thailand quickly spilt over to the rest of Asia.

During this period, the Jurong Town Corporation stuck to its guns and even ratcheted up its development of Singapore’s industrial space. By the time 2000 beckoned, not only did the industrial landscape look different, JTC itself had changed significantly.

The manufacturing and technological demands of the 1990s were complex. The growing reliance on personal computers and the internet required a momentous shift towards more nimble, knowledge-based corporate structures. At the same time, the world’s burgeoning population put increasing demands on large-scale industries such as oil refining and production, petrochemicals and biotechnology.

JTC, which this year celebrates its 40th anniversary, fired on all cylinders. On the heavy industry front, it undertook a reclamation project that would see the joining of seven islands - Merlimau, Serya, Ayer Chawan, Ayer Merbau, Sakra, Pesek and Pesek Kechil - into one territory, Jurong Island, to house a giant petroleum and petrochemical complex. The islands’ combined area of 930 hectares would balloon to 3,000 hectares by the end of this long-term project.

In terms of high-tech, knowledge-intensive activities, JTC started the International Business Park at Jurong East. Planned in the 1980s, the Park was launched in February 1992. Besides custom-made and ready-built buildings, it would also boast banks, restaurants, a post office and supermarkets, set against landscaped gardens and open water spaces. This became a model for a second and larger business park later in the 1990s, in Changi.

Another arm of JTC’s strategy was regionalisation - to develop Singapore as a node for investments throughout Asia. The Singapore-Johor-Riau Islands Growth Triangle, for example, was part of this strategy. Besides Malaysia and Indonesia, JTC also ventured into joint projects in Thailand and China.

By the mid-90s then, Singapore was sitting pretty. But the financial crisis of 1997 sent shockwaves through the global economy. Companies, including those who had manufacturing operations in Singapore, tightened their belts. That year, there was a noticeably slower take-up rate of standard factories, while the termination rates of flatted factories rose sharply.

Generous rebates

In July 1997, JTC either froze or cut its posted rents for land and factories. In April 1998, it handed out rental rebates to help cut its tenants’ operating costs. The rebates were between 3.6 per cent and 7.6 per cent for land lessees, and up to 5 per cent for factory tenants who renewed their leases. These rebates cost JTC $25 million in foregone revenue.

Another round of rental rebates was handed out in July 1998 as the economy worsened. This relief package was estimated to amount to $252 million in foregone revenue.

And in January 1999, JTC slashed its rents yet again, this time bringing them down to the levels of the early 1990s.

In the midst of the crisis, JTC pushed ahead with reforms and restructuring. In fact, 1997 was something of a landmark year for the Corporation, when seminal plans and ideas were launched.

That year saw the implementation of IP21 - Industrial Land Plan for the 21st century - a comprehensive plan to squeeze more out of Singapore’s tight industrial land supply. The new ‘9′ series of factories was launched. Designed to achieve higher plot ratio, these factories have two or three floors for production, and a mezzanine area that’s ideal for an office. The buildings also have a seven-metre high ceiling on the first storey for tall machines, and a goods lift for movement of heavy deliveries.

‘The downturn will be a test of our three Rs - resilience, resolve and responsiveness,’ said Maj-Gen (NS) Lim Neo Chian, who took over the reins as chairman of the Corporation in January 1998. ‘In three to four years you will see a very different JTC.’

The JTC baton had been passed to MG Lim (who is now chief executive officer of the Singapore Tourism Board) by Wong Hung Khim. Mr Wong’s own four-year term had seen JTC’s operating income rise to $1,857 million in 1997 from $1,023 million in 1993. Mr Wong had also played important roles in IP21 and in the development and marketing of the China-Singapore Suzhou Industrial Park.

‘We are earnest when we say we want to ensure better use of limited land,’ said MG Lim in 1998. He added that the Corporation aimed to ‘deliver greater value to customers, and react even more quickly to customers’ needs, especially with the current crisis’.

A programme called CS21 (CS stands for customer service) encapsulated this emphasis on the client. It aimed to cut red tape and customers’ waiting time, and also simplified the process of applying for industrial land and the sub-letting of factory space by lessees. A call centre was established to respond promptly to customer queries.

The Jurong Island reclamation work, it turned out, was actually expedited during 1997 and 1998. ‘We are pressing on without let at Jurong Island, upturn or downturn!’ said Lim Chin Chong, deputy director of the project, at the time. ‘Development will not slow down.’

JTC’s regionalisation strategy also continued apace. By the end of March 1998, it had invested more than $340 million in 13 industrial parks and related projects in China, Indonesia, the Philippines, Taiwan, Thailand, Vietnam and Singapore. Some of these included the International Tech Park in Bangalore, the Carmelray Industrial Park in the Philippines, the Thai-Singapore Industrial Estate and the Batam Industrial Park in Indonesia.

In 1998, JTC celebrated its 30th anniversary. ‘If JTC succeeds, Singapore succeeds. If JTC fails, Singapore fails,’ said Brig Gen (NS) George Yeo, then Second Minister of Trade & Industry and Minister of Information & the Arts, at the anniversary dinner.

That was also the year the Corporation made financial history, with a $4 billion Medium Term Note programme, by far the largest that Singapore had ever seen. It was also the first MTN ever by a statutory board. The MTN would help to minimise JTC’s long-term funding in the long run, while also broadening the spectrum of financial products in Singapore

By 2000, JTC - and Singapore - emerged from the Asian financial turbulence stronger than ever. Fittingly, the Corporation moved to sparkling new headquarters - a building that would epitomise its ideals

The JTC Summit is high-tech, with the latest in IT systems. It houses the Corporation’s one-stop customer service centre. And, towering at 32 floors, it is an example of efficient land use. It takes up only one-fifteenth of the former Jurong Town Hall premises in terms of land, but has 28 times more usable space

JTC could stand tall to greet the new millennium

This is the third of a four-part series brought to you by JTC Corp