Wednesday, June 30, 2010

CNA: More signs of slowdown in Singapore property market

More signs of slowdown in Singapore property market
By Mok Fei Fei 29 June 2010 

SINGAPORE : There's been more signs of a slowdown in the private property market here in the second quarter. 

Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter's figure of 4,380. 

In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter. 

If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter. 

Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish. 

Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase. 

In addition, the number of HDB upgraders buying private homes slipped. 

About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That's lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter. 

CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter. 

Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year. 

The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang. 

CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

CNA: S'pore emerges as most liveable Asian city in Global Liveable Cities Index

S'pore emerges as most liveable Asian city in new Global Liveable Cities Index
By Joanne Chan 29 June 2010 

SINGAPORE: Singapore has emerged as the most liveable Asian city in a new index. It was ranked third worldwide, coming in behind Geneva and Zurich in the Global Liveable Cities Index. 

Published by Singapore's Centre for Liveable Cities, the index looked at 64 cities, including 36 from Asia. 

Vibrant economic growth, eco-friendliness and a high quality of life are just some aspects of an ideal liveable city. 

Based on the index, Singapore is ranked up there with some of Europe's best cities. 

It performed relatively well in four of the five areas, scoring well for security and good governance. 

It came in first for domestic security and stability and third for good governance and leadership. 

It ranked fifth in economic vibrancy and quality of life. 

But Singapore paled in the area of eco-friendliness and sustainability which looked at things like pollution and environmental initiatives. 

Dr Tan Khee Giap is the lead researcher for the Index. 

He said: "We did very well on water management but this data is not available to most cities. Data which is available in Singapore but not available in most of the 64 cities we studied will not be used." 

Dr Tan said cities can work with the centre if they want to improve their ranking. 
He added: "We do simulations by looking at cities and identify for example, 20 weakest indicators among the more than 100 indicators we have. And hypothetically, if you improve your weakest 20 per cent, how would your ranking be raised? So in that sense, it is more constructive than just doing a ranking which can be a beauty contest." 

These preliminary findings of the index were unveiled at the World Cities Summit on Tuesday. 

The research team said the index is still a work in progress. 

While the index is comprehensive and covers 135 indicators, it is by no means complete. 

Dr Tan said that they may be looking to include more factors such as gender bias. 

Other cities, such as Penang and Tatarstan have also indicated interest in being included in the index. 

Dr Tan noted that the government plays a crucial role in promoting a sustainable and liveable city. 

This theme was also explored during a separate plenary session. 

National Development Minister Mah Bow Tan proposed a Learning Network for Cities, so that countries can share the best practices of liveable cities. 

He said: "Cities differ from one another in size and character. They are shaped by their own demographics, cultures and traditions, their history and geography. 

"But there are some recurring themes in the sustainable development practices of successful cities. These themes include strong governance, citizen engagement, balancing development and the environment, and international collaborations." 

Mr Mah highlighted the Bilbao City Hall, winner of the inaugural Lee Kuan Yew World City Prize, as an example. 

It is a city which has achieved sustainable development through good leadership and commitment to long-term planning. 

Team Marshe
Martin Koh/ Sherry Tang
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CNA: World Cities Summit opens in Singapore

World Cities Summit opens in Singapore
28 June 2010 1329 hrs 

SINGAPORE : The second biennial World Cities Summit (WCS) opens in Singapore Monday. 

The event brings together leaders, professionals and experts, and provides a platform for important dialogues on issues of leadership and governance, building of sustainable and eco-friendly cities, and fostering of harmonious and sustainable communities. 

There will also be a series of high-level Expert Panel Sessions for government representatives, policy makers and specific industry experts to discuss the challenges and solutions faced by cities around the world ranging from urban planning to climate change. 

A Ministerial Dialogue will also be held to discuss the vision for a liveable and vibrant city, as well as the priorities of a country or city in light of the recent economic crisis. 

This year's summit will also include the inaugural WCS Mayors' Forum to share best practices and suggest solutions to the pressing urban needs facing the cities. 

The summit has attracted 25 ministers and 45 mayors & governors from 20 countries, including China and Australia. 

A highlight will be the Lee Kuan Yew World City Prize. It will be conferred on the Bilbao City Hall, Spain, in recognition of its integrated and holistic approach to urban transformation. 

The WCS will be formally opened later Monday by Singapore's Deputy Prime Minister and Defence Minister Teo Chee Hean.

Team Marshe
Martin Koh/ Sherry Tang
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Business Times: It's boom time for Biopolis

June 29, 2010
It's boom time for Biopolis
Phase 5 will be completed by 2013 and will bring the total R&D space there to more than 3.3 million sq ft, reports UMA SHANKARI

SINGAPORE'S biomedical sciences sector is booming. And to cater to the growing number of companies that need more space, the nation's premier biomedical research hub, Biopolis, will be expanded again.

Industrial developer and landlord JTC said in May that it will spend another $140 million to provide 495,000 square feet of new space for companies engaged in cutting-edge work in creating new drugs and medical equipment. 

This new phase - which will be the fifth for Biopolis and will be completed by 2013 - will bring the total research and development (R&D) space at Biopolis to more than 3.3 million square feet. 

Phase five follows hot on the heels of the fourth phase, which was announced just in January this year. 

Biopolis has been purpose-built for public and private biomedical research institutes and organisations and the expansion comes at a time when multi-national biomedical companies are expanding in Singapore.

'The biomedical sector has been putting up a strong showing so far this year,' says CIMB economist Song Seng Wun. 'We have seen a lot of reports on capacity expansion and reports on new investments and it looks like the sector is now attracting quite a lot of interest.' 

In May, Japan-based Fujitsu officially opened its first biomedical research facility in South-east Asia here in Singapore. The company plans to work with the Agency for Science, Technology and Research (A*Star) to provide cutting-edge methodology to drive research for the diagnosis of cancer and other diseases.

'Fujitsu's collaboration with A*Star represents our commitment to being part of an ecosystem that will enable Singapore to harness innovations in technology, with the aim of developing a world-class R&D hub,' said Francis Goh, president of Fujitsu Asia, at the plant's opening.

US-based Abbott also officially opened its Asia-Pacific Nutrition Research & Development Centre at the Biopolis in Singapore recently. The centre is Abbott's largest nutrition R&D facility outside of the US and will create science-based nutritional products for infants, children and adults.

The biomedical sector has been a boost to the overall economy over the first five months of this year. For example, Singapore's economy grew by close to 50 per cent year-on-year in April 2010 and 60 per cent year-on-year in May. Mr Song points out that the growth was largely led by the biomedical sector, which accounted for more than half of the growth in both months.

And for the whole of 2009, Singapore's biomedical sciences manufacturing output rose 2.5 per cent year-on-year to $20.7 billion, while total employment climbed 7.2 per cent to 13,174. Singapore aims for the sector to hit a manufacturing output of $25 billion by 2015. 

Looking ahead, the sector is expected to continue expanding, and JTC will provide the real estate to support this growth, said Heah Soon Poh, director of JTC's biomedical and chemicals cluster.

Spearheading sustainable design 

Biopolis's fifth phase will feature an energy efficient and sustainable design which will allow for more pre-clinical trials to be carried out.

In fact, the entire development aims to spearhead innovation in environment performance and sustainability and serve as a test-bed for promising environmental technologies. 

Examples of Biopolis' sustainable features include: a building-integrated photovoltaic or solar-powered system; 'intelligent' building automation systems to optimise energy usage; a district cooling system to provide centralised chilled water supply to optimise the use of space and minimise energy costs for air-conditioning; and solar-powered LED lights with ultra capacitor as energy storage device, which are now being used as a landscape feature.

But with the upcoming expansion of Biopolis, sustainability will be taken a step further as JTC focuses on energy-efficient lab designs. Design strategies JTC will be looking into include more accurate sizing of laboratory equipment to reduce energy wastage; tapping on higher efficiencies for mechanical and electrical equipment and solar control and glazing for laboratory spaces to reduce heat gain.

It is also looking at the optimal selection of lighting to reduce maintenance and running costs as well as designing for naturally ventilated spaces wherever possible to reduce the cooling needed for the building.

'JTC recognises that energy efficiency is the leading driver for sustainable lab design as it represents the greatest possible operational savings,' the agency says. 'Sustainable energy efficient labs underscores JTC's ongoing effort to provide innovative and sustainable real estate solutions.' 

Working to build a biomedical hub 

Besides Biopolis, JTC is preparing land for manufacturing activities in the biomedical sciences sector. 

The agency said earlier this year that it will launch a medical technology (med-tech) cluster in Jurong. 

The med-tech sub-sector is expected to drive growth within the larger biomedical sciences sector. The cluster involves the manufacture of equipment used in the industry, such as syringes and medical test-kits.

Singapore's manufacturing output of med-tech products is expected to increase from $2.9 billion in 2008 to $5 billion by 2015, said JTC's Mr Heah.

Med-tech employs about two-thirds of all workers in the biomedical science sector, as it is more labour intensive than pharmaceutical production.

The new med-tech cluster, at Jalan Tukang in Jurong, aims to bring major industry players together in a new facility that will cost $60 million to $80 million to build initially.

Firms can collaborate and cut costs through cooperation as they will be located 'in the same space, creating synergies and reducing costs', said Mr Heah.

JTC and other government agencies are also pushing Tuas Biomedical Park, which has already attracted a host of global biomedical players such as Merck, Novartis, Pfizer, Wyeth, Genentech and GlaxoSmithKline.

The 183ha Tuas Biomedical Park I and 188ha Tuas Biomedical Park II are located at Tuas View at the western tip of Singapore and are five minutes from the Tuas Checkpoint to Malaysia and 20 minutes away from Jurong Port. 

The park has all essential infrastructure, such as roads, power lines, telecommunication lines, sewer pipes and water and gas supplies. Third parties provide utilities such as steam, natural gas, chilled water and waste treatment services. 

With the estate's 'plug-and-play' design, pharmaceutical, biologics, medical device and other biomedical companies can set up manufacturing operations with minimal lead time. They can either move into fully serviced facilities or custom-build their own. 

By staying within a cluster, these firms can enjoy economies of scale from sharing major infrastructure. It is also easier for JTC to look after their niche requirements, the agency says.

All these developments show the government's ambitions for the biomedical sciences sector. 

Several government agencies - including the Economic Development Board, A*Star and JTC - all share the job of turning Singapore's aim of being a biomedical hub into reality. JTC, which is charged with supporting the unique real estate requirements of the biomedical sciences industry, will continue to come up with innovative solutions, it said.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Business Times: Savills puts 6 HDB shops up for sale

June 29, 2010
Savills puts 6 HDB shops up for sale

(SINGAPORE) Real estate consultancy Savills yesterday launched six HDB commercial shops for sale through expressions of interest.

The shops are in the mature estates of Ang Mo Kio, Bedok, Bukit Batok, Yishun and Tampines.

They are rented and operate as substantial eating establishments, with seven to 13 food stalls each plus an anchor drinks stall. They have elastic seating capacity of 200-370 people spread over internal and outdoor areas.

All the shops are close to wet markets and transport nodes, and have good visibility and plenty of public car parking.

Collectively, the six shops have a guide price of about $65 million, reflecting a net yield before property tax of 5.7 per cent. They can be sold as a portfolio or individually, with each shop priced at between $4.8 million and $16 million.

The existing tenancies have four to nine years to run. The net yield before property tax is expected to grow to above 6 per cent in the near term as committed rents are stepped up over the tenancy period.

Expressions of interest close at 3pm on July 21.

Team Marshe
Martin Koh/ Sherry Tang
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Business Times: Industrial rents creep up in first rise since Q3 '08

June 29, 2010
Industrial rents creep up in first rise since Q3 '08

RENTS for factories and warehouses turned around in the second quarter, rising for the first time since Q3 2008, DTZ said yesterday. 

The property consultancy said the average monthly gross rent for first-storey private conventional industrial space was $2 per sq ft in Q2, up 2.6 per cent from Q1. The rent for upper-storey space was $1.60 psf, up 3.2 per cent.

According to DTZ, the average monthly gross rents for first and upper-storey private industrial space are down 14.9 and 22 per cent respectively from their peaks in Q3 2008.

Colliers International's director (industrial) Tan Boon Leong also said rents for factories and warehouses edged up in Q2. 'This is in line with the increase in factory orders, which in turn led to higher demand for industrial space,' he said.

In May, Singapore's manufacturing output surged 58.6 per cent year on year, driven largely by higher biomedical output.

Greater demand for industrial space has come mainly from higher-end manufacturers such as those in electronics and precision engineering, Mr Tan said. 

He believes factory and warehouse rents will continue to rise in small steps this year, as manufacturers still need to utilise excess capacity carried over from the downturn.

DTZ has a similar view. 'Industrial rents are likely to continue to increase but at a slow pace given the stream of about 15 million sq ft of private industrial space in the pipeline over the next one and a half years,' said its South-east Asia research head Chua Chor Hoon.

The outlook for hi-tech industrial space is less bright. In Q2, the average monthly gross rent for business, science park and other space in this sector was unchanged at $3.15 psf.

DTZ does not expect hi-tech rents to move much this year, with a significant amount of business park space expected to come on stream in the second half.

There will also be competition for tenants from commercial space in secondary locations, said DTZ's executive director (business space) Cheng Siow Ying. 'The narrow rental gap between decentralised offices and hi-tech industrial space provides little impetus for upward movement of hi-tech industrial rents.' 

Team Marshe
Martin Koh/ Sherry Tang
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Business Times: StayWell brings Australia hotel brands to Singapore

June 29, 2010
StayWell brings Australia hotel brands to Singapore
Park Regis hotel opening in Sept; Leisure Inn plans on drawing board

AUSTRALIA-BASED StayWell Hospitality Group is looking to stamp its Park Regis and Leisure Inn brands on more properties in Singapore and the rest of Asia.

The first Park Regis hotel here is set to open in September, and the group also has the country's first Leisure Inn hotel on the drawing board. 

StayWell may be rather new to Singapore, but it is not venturing unassisted. The group's chairman is Asok Kumar Hiranandani, who built up property firm Royal Brothers with his brother, Raj Kumar.

Park Regis Investments - in which Mr Asok Kumar Hiranandani is a shareholder - won the bid for a piece of state land at Merchant Road in 2007. It has invested around $175 million in total to build the 203-room four-star Park Regis Singapore, as well as a seven-storey office block, on the site.

The hotel is targeting business travellers and room rates could start in the range of $200. StayWell is expecting an occupancy rate of 70-80 per cent. Talks to lease the office space out are underway.

The hotel will be a 'stunning investment' in the next few years, Mr Hiranandani told The Business Times. His confidence stems from the hotel's location near Clarke Quay and from the opening of the two integrated resorts.

To stand out from the competition, Park Regis Singapore will incorporate 'bits of Singaporean and Australian flavours', said StayWell CEO and managing director Simon Wan. For a start, it has picked an Australian, Jason Dowd, as the hotel's general manager.

'We will make sure that from the composition of the food, the composition of the wine, the television channels in the room to the staff uniforms, there will be some Australian flavour complemented by local themes,' Mr Wan said.

There are generally few good hotels up for sale in Singapore, so those on the market tend to generate interest among investors and observers. According to Mr Hiranandani, Park Regis Singapore has already attracted investors' interest. 

'If someone gives us a management contract back for at least 15 years, we'll be more than happy to sell the hotel . . . The intention of bringing the brand to Singapore was to take it out of Australia and expand it to Asia,' he said.

'But I'd rather open the hotel first and get the income going. If it's an attractive price, we'll take the offer and buy another site.'

StayWell hopes to follow up with another hotel here under the three-star Leisure Inn brand. The Park Regis and Leisure Inn lines will complement each other, Mr Wan said, adding that there is strong demand for well-located and well-managed hotels in the three-star market.

He cited the success of Ibis Singapore as an example. The hotel, managed by another hospitality group Accor, opened in February last year and has achieved an above 90 per cent occupancy rate in the last three months.

But StayWell will not be rushing into any deal just so it can set up the Leisure Inn hotel. 'Because of high land costs, we have to be very careful in approaching this,' Mr Hiranandani said.

StayWell has 24 hotels in its portfolio and owns 14 of them. The group is looking to expand in Asia, and is in negotiations to buy 38 hotels in China.

Mr Hiranandani also said that he has bigger plans for StayWell but declined to elaborate. All he shared was: 'We are the only unlisted hotel operator out there.' 

So is StayWell eyeing a public listing? Mr Hiranandani's son Bobby, who has been involved in the day-to-day running of his father's hospitality business, said: 'There are many options we are looking at. A listing is somewhat possible down the road.'

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Straits Times: CapitaMalls Malaysia Trust launches IPO

Jun 29, 2010 
CapitaMalls Malaysia Trust launches IPO 
CapitaMalls Asia could raise RM864m from spin-off's retail offering
By Jonathan Kwok 

CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.

The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.

It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here. 

About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08. 

The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).

The retail offering opened at 10am yesterday and will close at 5pm next Monday. 

The institutional offering opened last Friday and will close next Wednesday. 

CapitaMalls Malaysia Trust is expected to list on July 16.

CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.

CMRM is the manager of CapitaMalls Malaysia Trust. 

CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'

CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.

The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total. 

They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.

Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.

AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.

The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.

At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT. 

CMMT's market capitalisation is expected to be about RM1.4 billion, it added.

The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.

CapitaMalls Asia lost two cents to $2.14 yesterday.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400