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Archive for August 29th, 2008

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URA seeks public feedback on guidelines for private shophouses

Posted by luxuryasiahome on August 29, 2008

The Urban Redevelopment Authority (URA) is reviewing guidelines for restaurants and pubs located in private shophouses near residential areas. It is asking for public feedback on whether entertainment activities should be freely allowed at those premises.

For the past 20 years, Lai Fak Nian, managing director of Plum Village Restaurant, has been thinking of various ways to entertain customers and spur business at the restaurant.

“We hope to hold performances, showcasing the Hakka culture, once every two to three months. For example, folk songs to complement the dining experience,” he said. His plans, however, did not materialise because he was not sure if they were allowed.

Currently, restaurants and pubs have to get URA’s approval to hold entertainment activities within their premises. But this rule may soon be relaxed.

Yak Pek Ching, head of Development Control, URA, said: “Moving ahead, operators have asked for more flexibility in the types of activities that can be allowed in the shophouses.”

URA is also considering allowing some form of cooking at shops which sell ready-made takeaway items.

The proposed relaxation of guidelines could save businesses S$800 in application fees. It will also be less time consuming for the business owners as the approval procedures usually take about two weeks to complete.

Residents living near shophouses have welcomed the prospect of having a more vibrant neighbourhood. But they are also concerned about the noise level and the lack of car park facilities in the area.

Some residents said they have resorted to leaving trash bins outside their homes to reserve parking lots.

A resident, Jennifer Teo, said: “They will park the car just right in front of your car. When you want to move out, you can’t move out. Then you’d have to horn at the people.”

URA said it received about 14 complaints last year, mostly on disturbances caused by al fresco business activities. As for this year, 16 complaints have been lodged so far.

Over the entire month of September, the public can provide feedback on URA’s review of guidelines via the authority’s website. The urban planners hope to garner some 350 responses from the public consultation exercise.

The survey findings and possible changes to the guidelines are expected to be ready by the end of the year.

Source : Channel NewsAsia – 29 Aug 2008

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Development charge rates mostly flat

Posted by luxuryasiahome on August 29, 2008

The Ministry of National Development (MND) has left development charge (DC) rates – which may be payable for enhancing the use of some sites or building a bigger development on them – unchanged for most use groups, including commercial, landed residential and hotel/healthcare.

However, the average DC rate for non-landed residential use has been trimmed 6 per cent while the average DC rate for the industrial/warehouse use group increased by 0.1 per cent.

The new DC rates take effect from Sept 1, 2008. MND revises the DC rates twice a year in consultation with Chief Valuer, who takes into account current market values.

DC rates are listed by use groups across 118 locations or geographical sectors throughout Singapore. Under the latest revision, the boundaries of eight geographical sectors have been re-demarcated to better reflect current market values.

Source : Business Times – 29 Aug 2008

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CapitaLand sells 30% stake in Menara Citibank in KL for M$176m

Posted by luxuryasiahome on August 29, 2008

CapitaLand is divesting its 30 per cent stake in Menara Citibank, a 50-storey office tower in Kuala Lumpur’s Jalan Ampang, for a consideration of RM$176 million (US$52 million). Upon completing the divestment, CapitaLand will recognise a gain of about $22.1 million (US$15.6 million).

CapitaLand owns the asset through its stake in Inverfin Sdn Bhd, whose principal asset is Menara Citibank. The Singapore-based property giant is making divestment along with all the other shareholders of Inverfin, who are selling their respective shareholdings in Inverfin to IOI Corporation Berhad.

Source : Business Times – 29 Aug 2008

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Sands wants to build a casino strip in India

Posted by luxuryasiahome on August 29, 2008

Las Vegas Sands Corp, operator of Asia’s biggest gambling resort, would consider spending US$12 billion to build a strip of casinos in India similar to its project in Macau, chairman Sheldon Adelson said.

‘We would like to build a Cotai Strip in India,’ Mr Adelson told reporters at a briefing in Macau yesterday. ‘We would be happy to spend US$12 billion there’ if India invites the company. India is the world’s second most populous nation, behind China. Mr Adelson didn’t give details of the potential investment. India now has only one legal casino, in the western state of Goa, a Portuguese colony until 1961.

Las Vegas Sands is investing more than US$15 billion building casinos in Singapore and Macau, the only place in China where casinos are legal. The company and rival Wynn Resorts are vying for the casino market in Asia, where economic growth is faster than in the US and Europe.

The Cotai Strip, modelled on the Las Vegas Strip, is on reclaimed land between Macau’s Coloane and Taipa Islands. Mr Adelson plans to build as many as 14 hotels there by 2013. He spoke yesterday at the opening of the Four Seasons Macao, its second property in the district. The Four Seasons will be part of a complex of hotels that will have more than one million square feet of gambling space, three million square feet of shops and almost 21,000 hotel rooms.

Mr Adelson visited India, meeting the ministers of tourism and trade, before he arrived in Macau, he said yesterday, without giving details of their discussions.

Source : Business Times – 29 Aug 2008

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Outlook still rosy for Marina Bay IR

Posted by luxuryasiahome on August 29, 2008

DARK clouds may be looming over Singapore’s tourism landscape, but the company behind the Marina Bay Sands integrated resort (IR) is not worried.

The reason: Unlike IRs elsewhere, which focus mainly on their casino operations, the Marina Bay Sands will devote much of its space and effort to attracting business from the meetings, incentives, conventions and exhibition sector, also known as Mice.

This, said Las Vegas Sands’ group president William Weidner yesterday, means that business will still be good despite the gloomy outlook, because even when economic times are tough, ‘meetings continue to take place’.

Speaking after a ceremony to mark the opening of new 360-room Four Seasons Macao, he said that the aim of the US$4.5 billion (S$6.3 billion) IR is to be ‘the meeting facility for the region’.

Marina Bay Sands, which opens next year and features a 1.2 million sq ft convention centre, is already in talks with about 30 exhibitors and organisers of about 40 meetings and conferences to bring events to Singapore.

The group’s chairman and chief executive officer, Mr Sheldon Adelson, added that the IR has 240 meeting rooms – equal to the combined number of Singapore’s top 30 to 40 hotels.

Mr Stephen Weaver, the group’s president of the Asian region, said Singapore’s existing reputation as a Mice destination as well as its strong air links make it an easier destination to sell than Macau.

The Sands’ bigwigs were reacting to news of setbacks to tourism growth in Singapore in recent months.

After setting tourist arrival records for more than a year, growth in April and May slowed to 0.8 per cent year-on-year.

In June and July, the numbers were lower than those in the same months last year.

More worryingly, arrivals from 11 of the top 15 visitor-generating markets declined compared to last year.

Still, Las Vegas Sands continues to be ‘bullish’, top executives said yesterday.

Asked about budget overruns, Mr Weidner said the US$1 billion rise in construction costs was not surprising, judging by what is happening globally. The net effect, he said, would just be that it would take longer to make back the money.

The IR is expected to open on schedule in the last quarter of next year. It has started ramping up the hiring of senior management, and plans to hire 10,000 staff for the resort in the middle of next year.

Source : Straits Times – 29 Aug 2008

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BCA taps China as costs go through the roof

Posted by luxuryasiahome on August 29, 2008

With the cost of construction escalating to new highs, the Building and Construction Authority (BCA) has flown missions to China in the hope of attracting construction companies to set up business here.

A spokesman for BCA said: ‘A few Chinese contractors have since registered with BCA.’

Many firms were weakened after the construction industry hit rock bottom at the turn of the last decade. As demand picks up again, the industry cannot cope with the upswing in jobs.

One industry player put the number of top-tier construction companies currently at 45, down from 100 during the last peak.

A spokesman for the Singapore Contractors Association Ltd (SCAL) added: ‘The reduced capabilities of (construction) companies and their respective available resources were directly proportionate to construction contracts awarded during the period of the downturn.’

BCA said that, currently, it has more than 6,000 firms registered with its Contractors Registry. ‘During the last prolonged downturn in the construction industry, the number of firms did not change much but many had reduced their capacity, in varying degrees, to cope with the downturn. As a result, the sudden steep upsurge in construction demand recently has added tremendous pressure on the supply of construction resources and contracting capacity,’ BCA added.

According to a report by construction cost consultant Rider Levett Bucknall (RLB), Singapore has risen the fastest on its International Tender Price Relativity Matrix.

The report reveals that between October 2007 and July 2008, Singapore’s Tender Price Index (TPI) – which is based on a universal basket of construction cost variables – increased by 18.7 per cent.

Singapore ranks 13th on the matrix with an index score of 122, below cities like New York (154), London (151) and Honolulu (141).

According to RLB, the cost range for Premium Office Buildings is $2,450- $4,580 per square metre in Singapore, $3,115-$4,407 psm in New York, $6,230- $8,049 psm in London, and $2,505-$3,373 in Hong Kong.

Apart from ‘volatile commodity prices’, ‘high demand and competition for limited resources, (and) the lack of tendering capacity among contractors’, has also worsened the rise in building costs.

A Citi note this month highlights that crane rentals surged to a record high of $446 per tonne per month (up 7 per cent quarter-on-quarter and 29 per cent year-on-year). So, the cost of building materials is not the only worry the industry faces.

Citi expects other major infrastructure projects to take up the slack after the integrated resorts (IRs) are completed. Its forecast seems in line with RLB’s projection for the Singapore TPI, which RLB expects to increase by 20 per cent for the whole of 2008, and 15 per cent for 2009.

United Engineers Ltd (UEL) managing director Jackson Yap does agree that resources are tight. ‘Currently, most contractors are overstretched with projects, and this is on top of the postponement of projects by the government and some private developers,’ he added.

To date, $4.7 billion worth of government construction contracts have been deferred.

Mr Yap reckons the TPI will increase by 20 per cent in 2008 but does not expect it to increase by more than 10 per cent next year. ‘The outlook for the construction industry at least for the next three years will be good,’ he added.

Bovis Lend Lease, which is building 313@Somerset on Orchard Road, said that there are signs of the TPI moderating. And this could be attributed to rising costs.

A spokesman for Bovis Lend Lease said: ‘While the construction market is still pretty tight based on the backlog of work flowing through from the major capital investments in the last 12 months, there are discernible signs of the industry’s growth decelerating.’ High costs and the uncertain global economic climate are contributing to this.

CapitaLand maintains that its projects, ‘are progressing on schedule’.

City Developments Ltd is taking a slightly different tack. It said earlier this month that ‘the group will proceed to construct developments where it has favourably secured construction costs from reputable and strong construction companies, even before launching them’.

More players in the construction industry will certainly ease some cost pressure but SCAL cautions that companies working in any new market will need to understand the regulatory environment and market practices.

SCAL’s spokesman added: ‘The effort and final success to bring new construction companies to work here will be limited and will not help much in relieving pressure in the industry.’

But he added: ‘The industry is always open to foreign competition, and local construction companies have always been competitive in their project prices, quality and delivery time.’

Source : Business Times – 29 Aug 2008

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HDB has ways to cut waiting time for flats

Posted by luxuryasiahome on August 29, 2008

I REFER to the letter by Mr Sam Sim, ‘Missed one…the three to four years of waiting to buy a HDB flat after marriage’ (Aug 20).

Buying a flat is a long-term commitment and couples are advised to plan ahead for their housing needs. Buyers looking for a new HDB flat should also take into account the construction time of about three years after booking of the flat. This is similar to the construction time in the private property market.

The HDB has various measures to help young couples start their families. Those who want a new flat can apply even before they get married, under the fiance-fiancee scheme.

This will help minimise the waiting time for a new flat upon marriage. In addition, 90 per cent of the flat supply offered for public applicants are set aside for first-timers.

First-timers are also given double the chances over regular applicants in the ballot to determine their queue position under the Build-To-Order (BTO) and Balloting Exercises (BE). Those who apply under the Married Child Priority Scheme for the BTO and BE are given four times the chances over regular applicants. Additional chances will also be given to first-time applicants who had two or more unsuccessful attempts in BTO exercises in non-mature estates.

Couples who want to buy a flat immediately should look to the resale HDB market where there is a wide range of choices in terms of location, design and price.

First-timers who buy a resale HDB flat are eligible for a housing subsidy in the form of a CPF housing grant worth $30,000/$40,000 to help with their flat purchase.

Ignatius Lourdesamy
Acting Deputy Director (Marketing & Projects)
Director (Estate Administration & Property)
Housing & Development Board

Source : Straits Times – 29 Aug 2008

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Reject offer, Japan Land adviser urges

Posted by luxuryasiahome on August 29, 2008

JAPAN Land has urged its shareholders to reject the takeover offer by tycoon Oei Hong Leong, which valued the company at about $78 million.

In its circular despatched to shareholders yesterday, Japan Land said its independent financial adviser (IFA), DMG & Partners Securities, advised its directors to reject the offer as ‘there are insufficient compelling reasons to accept the offers and the options proposal’.

In a letter to Japan Land, the IFA recommended that the directors advise their shareholders to reject the offer. Mr Oei, who currently owns a 4.01 per cent stake in Japan Land, launched a voluntary takeover bid last month for the remaining shares at 60 cents a share. He made a separate offer for all of Japan Land’s outstanding warrants at 0.1 cent in cash.

Japan Land’s optionholders could either exercise their options and accept the share offer for the new shares that are issued from this exercise, or accept Mr Oei’s options proposal to pay them a cash amount for not exercising any options into new shares and not exercising any of their rights as optionholders.

Mr Oei had said in his offer document he has no intention to make major changes to Japan Land’s business, and plans to preserve  its listing status unless his stakeholding breaches 90 per cent. But he stated his intention to remove chairman Tetsuo Yamashita and non-executive director Sandra Wu Wen-Hsiu from the board.

DMG noted that the share offer price represents a premium of about 7.14 per cent to Japan Land’s audited net tangible assets (NTA) per share of 56 cents as at March 31. DMG estimated that the takeover offer would be a 9.09 per cent discount to Japan Land’s adjusted NTA per share of 66 cents when factoring in gains from the sale of a 48 per cent stake in KHC Ltd which was completed in April.

The offer price would be a 16.67 per cent discount to its revalued NTA (RNTA) of 72 cents per share if the share swap between its 14.13 per cent associate Japan Asia Holdings Japan (JAHJ) and Jasdaq-listed ATL Systems goes through, DMG estimated. DMG also projected gains to be made from the listing of Tokyo Stock Exchange (TSE) through Japan Land’s holdings in JAHJ – the single-largest shareholder in TSE with a 3.52 per cent stake.

Assuming that TSE trades at 14.79 times PE upon listing, Japan Land’s gains would be $6.36-11.44 million. Mr Oei’s offer price would hence be a discount of 13.04-15.49 per cent to Japan Land’s RNTA of 69-71 cents per share. If TSE is traded at a higher PE of 26.98 times, Japan Land’s gains would be $13.24-23.83 million. The offer price would therefore be a 16.67-21.05 per cent discount to Japan Land’s RNTA per share of 72-76 cents, DMG estimated.

Japan Land said in the circular that it is the intention of all the directors who hold shares, warrants and/or options to reject the offers and/or the options proposal.

Source : Business Times – 29 Aug 2008

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Oei Hong Leong’s Japan Land bid deemed too low

Posted by luxuryasiahome on August 29, 2008

JAPAN Land shareholders are advised to reject businessman Oei Hong Leong’s offer for their shares as the bid is too low.

Independent directors, following an assessment by external financial advisers, yesterday said Mr Oei’s 60 cent per share offer potentially undervalues Japan Land’s indirect holdings in the Tokyo Stock Exchange, which some observers consider the cherry on the cake.

Mr Oei, who already owns a 4 per cent stake in Japan Land, launched at the end of last month the takeover bid that could cost him as much as $75 million.

Apart from hinting that he is looking to help the company expand into China, the well-known tycoon is seeking to oust chairman Tetsuo Yamashita and non-executive director Sandra Wu.

The move has sent Japan Land shares soaring to as high as 67.5 cents in recent weeks, suggesting that even before yesterday’s report, investors already feel that the company is worth more than what Mr Oei has put on the table. The counter closed at 65 cents yesterday.

DMG & Partners Securities, which assessed the bid, looked at several scenarios in analysing the bid’s valuation of Japan Land.

It said, based on the assumption Tokyo Stock Exchange gets listed, as expected next year, the offer values Japan Land at a discount of 13 to 15.5 per cent. Japan Land effectively owns a 0.5 per cent stake in Tokyo Stock Exchange through two Japanese-based units – Japan Asia Holdings and Japan Asia Holdings (Japan).

DMG also looked at the impact on the offer of an upcoming share-swop deal to secure a backdoor listing for Japan Asia Holdings (Japan). If successful, that deal would mean that Mr Oei’s bid undervalues the Singapore-listed parent company by 16.7 per cent.

Japan Land has an effective 14.1 per cent stake in Japan Asia Holdings (Japan), which is seeking to exchange its shares with stock in Tokyo-listed ATL Systems.

On Mr Oei’s intention to remove Mr Yamashita and Ms Wu from the board, DMG, citing the firm’s latest annual report, noted that both have extensive experience in the financial industry in Japan, where most of the company’s business activities are carried out.

‘There are insufficient compelling reasons to accept the offer,’ said DMG.

Source : Straits Times – 29 Aug 2008

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Quayside hotel for sale

Posted by luxuryasiahome on August 29, 2008

SWISSOTEL Merchant Court, a 476-room hotel near Clarke Quay, has been put up for sale by global tender.

It could fetch about $350 million, given the growth potential in Singapore’s hospitality sector, consultants said. Room rates start from about $250 a night, hotel booking websites show.

‘A hotel in (that) location can fetch around $700,000 to $800,000 per key,’ said Mr Mike Batchelor, managing director of Asia investment sales for Jones Lang LaSalle Hotels, which is handling the sale.

Owner Merchant Quay is controlled by fund manager LaSalle Investment Management, which bought the Swissotel Merchant Court for an undisclosed sum from Colony Capital early last year. It is rumoured to have paid under $200 million.

The hotel was one of 41 properties in the Raffles Hotels and Resorts chain that Colony Capital bought in 2005 for $1.45 billion from CapitaLand’s Raffles Holdings.

‘Singapore remains one of Asia’s most tightly held hotel investment markets and it is rare for more than one international standard hotel to be offered to the market in any given year,’ said Jones Lang LaSalle Hotels yesterday.

Mr Batchelor said: ‘High on the shopping list of international investors are countries such as Singapore which have the sustained support of their governments.’

Investors, including wealthy individuals from Asia, Russia, Europe and the Middle East, also like the fact that Singapore is a key gateway city, he said.

Singapore has a 10.8-million visitor target this year but arrivals registered the first decline in 51 months in June. July figures were also down.

The hotel investment market is slightly more cautious now but still optimistic, said the managing director of Cushman & Wakefield, Mr Donald Han.

Investors typically take a five- to 10-year view of the market and outlying fundamentals here are very strong, said Mr Batchelor.

‘In line with strong growth in visitor arrivals to Singapore and rising room rates, hotel values have increased.’

Swissotel Merchant Court recently went through a multimillion-dollar refurbishment, hence its contemporary-style rooms now provide a platform for future revenue growth, he said.

Whoever buys it will have the opportunity to further enhance the asset by redeveloping the prime riverfront space overlooking Clarke Quay, he added.

Source : Straits Times – 29 Aug 2008

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