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Archive for September 19th, 2008

Slide in property investment deals continues in Q3

Posted by luxuryasiahome on September 19, 2008

Global financial instability, stock market volatility hit sentiment: CBRE

PROPERTY investment sales continue to soften in Q3 2008 and global financial instability could keep investors out of the market, said a CB Richard Ellis (CBRE) report.

According to latest figures from CBRE Research, property investment transactions in Q3 (up to Sept 18) reached $3.17 billion. This is a 35 per cent drop from $4.86 billion in Q2 and a 65 per cent slide from $9.09 billion in Q1 this year. On a quarterly basis, property investment sales last peaked in Q3 2007 at $16.51 billion.

‘The lingering worldwide impact of the US-spawned credit crisis has compounded financial instability in most global economies, compelling many regional investors to adopt a cautionary attitude,’ said CBRE’s report.

Many are holding back on major investment decisions as credit conditions tighten, and stock market volatility has also hit investor sentiments, it said.

Driving property investment sales in Q3 was the industrial sector, which accounted for 61 per cent or $1.92 billion of transaction value. However, most of the sector’s contribution came from a single $1.71 billion deal, in which JTC Corporation divested its industrial property portfolio to Mapletree Industrial Trust.

The residential sector was the next largest contributor, registering 26 per cent or $807.79 million of property investment sales in Q3. There was only one successful collective-sale deal in the period, where an unnamed developer bought Ruby Apartments for $11 million.

‘Developers’ ability to acquire sites was dampened by rising construction costs, rising interest rates and tighter lending measures,’ said the report. Investment activity in the retail and office sectors was also quiet in Q3, with transaction values of $215.04 million and $142.84 million respectively.

While the hospitality sector accounted for just $100 million of property investment sales, CBRE noted that the limited supply of hotel rooms today would attract greater investor interest in the medium term.

Property investment sales chalked up in the year to date stood at $17.12 billion, with 65 per cent coming from the residential and office sectors. While this is some distance from the $54.02 billion achieved for the whole of 2007, it has already exceeded the $14.66 billion in 2005.

‘Looking ahead, investors are expected to stay on the sidelines in view of the cautious market conditions that are likely to prevail until the end of the year,’ said the CBRE report. Nevertheless, it noted that demand for quality assets as a hedge against inflation may provide some support for investment activity the rest of the year.

Source : Business Times – 19 Sep 2008

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Sales of investment property stagnating

Posted by luxuryasiahome on September 19, 2008

SALES of investment property are in the doldrums with the global financial mayhem and credit crisis slowing buying interest so far this quarter.

Nearly all sectors have been ‘relatively quiet’ apart from the hospitality industry, which has ‘remained healthy’, said a CB Richard Ellis (CBRE) report yesterday.

CBRE said a total of $3.17 billion worth of investment transactions have been recorded so far this quarter – the period actually runs until Sept 30 – down from $4.86 billion in the April-June quarter.

The figure is also a fraction of the $16.51 billion recorded in the third quarter last year, and likely to mark the fourth consecutive quarter that investment transactions have dropped.

Total investment sales for 2008 so far have totalled $17.12 billion.

CBRE’s director of investment properties, Mr Jeremy Lake, said this year will likely round up at about $18 billion, a third of 2007’s bumper $54.02 billion.

‘If you look at the freak year of 2007, yes, it is a huge drop. But if you look back to 2004, it’s still the third highest result of the last five years,’ said Mr Lake.

The second highest total for investment sales occurred in 2006 when transactions hit $28.38 billion.

CBRE’s report said the latest results are because tighter credit measures have brought about a temporary halt to major investment decisions as investors take stock of the local property market.

Mr Lake also said the spectacular failure of two large US banks this week will ‘compound the slowdown that is evident in the statistics’ and ‘exacerbate the uncertain outlook’.

CBRE defines investment sales as real estate sales with a value of at least $5 million. It includes private and government sales, buildings and land, strata and en bloc, as well as the change of ownership of real estate via share sales.

The report said the industrial sector has accounted for 61 per cent of sales so far in this quarter. Retail investment sales contributed the least, just $215.04 million, or 7 per cent, of sales.

CBRE blamed rising construction costs, higher interest rates and tighter lending measures for the inactivity.

It added that investors are expected to ’stay on the sidelines’ in view of the cautious market conditions.

Source : Straits Times – 19 Sep 2008

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Sibor posts stunning jump before relief pours in

Posted by luxuryasiahome on September 19, 2008

Central banks pump billions to ease borrowing costs; markets on a yo-yo

LIKE A journey in the hills, stocks in Asia fell, rose and dipped again on a day when the world’s biggest central banks injected billions into banking systems in a desperate bid to unblock interbank markets and bring down borrowing costs.

The move came after US-dollar interbank lending rates in Singapore saw their biggest jump on record, following similar severe dislocations in interbank markets in the United States and Europe earlier this week.

In a statement published at 3pm Singapore time, six of the world’s biggest central banks – the US Federal Reserve, Bank of Canada, Bank of England, European Central Bank, Swiss National Bank and the Bank of Japan – said they would provide up to US$180 billion in additional funds to meet demand for US-dollar short-term loans worldwide.

The concerted attempt to ease borrowing costs came after interbank lending in some markets ground to a halt and interbank rates jumped to unprecedented levels as banks jealously hoarded cash and charged each other exorbitant rates to borrow funds.

Here, the one-month Singapore interbank offered rate or Sibor for US-dollar loans soared 48 per cent or 1.4 percentage points to 4.31 per cent yesterday morning before the intervention – its single biggest one-day jump on record and a stark indication of how the severe stress in financial markets worldwide is affecting even the interbank market here. On Monday, the rate was just 2.53 per cent.

Last night, the Monetary Authority of Singapore said the joint action by central banks yesterday afternoon appeared to have eased pressures in US-dollar markets, adding that it ’stands ready to inject additional liquidity’ if needed.

The Sibor is fixed at 11am daily by the Association of Banks in Singapore based on quotes by selected banks on what they expect to pay for interbank loans that day. Domestic interbank rates for loans in Sing dollars also rose, but far less sharply.

The dramatic developments meant that retail investors – those that still had the stomach to trade shares – were taken on a dizzying ride, as Hong Kong’s Hang Seng index plunged 7.7 per cent before staging a spectacular recovery to close flat after central banks in the US, Canada, Europe and Japan pumped a staggering US$180 billion into money markets to ease interbank lending rates.

The last time central banks took drastic action on such a large scale was in early March – when credit markets seized up, eventually causing investment bank Bear Stearns to topple.

Here, the Straits Times Index also staged an astonishing recovery, finishing virtually unchanged after plunging as much as 4.6 per cent earlier in the day.

In Japan, where trading ended before the official announcement of the central bank action, the Nikkei-225 index closed 2.2 per cent lower after falling as much as 3.8 per cent earlier.

Meanwhile, indices tracking the spreads on corporate credit-default swaps – a measure of the risk of the underlying companies defaulting on their debt – surged in Asia yesterday as investors sought protection from bank defaults on fears that more financial institutions would crumble.

In Russia, stock markets were shut most of the day – the third day of interruptions by trading suspensions to prevent a financial crash. The government said stock trading will resume today after it announced a slew of measures to restore investors’ confidence in financial markets.

‘There is no more important task for Russian authorities than supporting the financial system,’ President Dmitry Medvedev told Russian ministers, according to AFP.

The US financial sector is facing a ‘long workout’ of past excesses – chiefly an over-reliance on debt – but not a complete meltdown, said Gerard Lyons, chief economist at Standard Chartered Bank, in a report yesterday.

‘This deleveraging process still has some way to go, and requires a rebalancing of the economy. Private sector debt is still too high, and American consumers need to spend less, save more.

‘Caution, not pessimism, is required in 2009.’

Source : Business Times – 19 Sep 2008

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New CPF rule for home sellers aged 55 and above

Posted by luxuryasiahome on September 19, 2008

It will address shortfalls in their Minimum Sum to build up retirement funds

A LITTLE-KNOWN rule change will kick in next year regarding how much money property owners must return to their Central Provident Fund (CPF) accounts when they sell their homes.

The new rule, which will address shortfalls in an individual’s Minimum Sum, is aimed at helping CPF members build up their retirement funds.

Currently, home owners aged 55 and above do not have to refund their CPF accounts when they sell their properties, unless they have pledged their homes to meet their Minimum Sum requirement. In that case, they will pay back to the CPF the amount they have pledged their home for – with interest.

But from Jan 1, all home sellers over 55 who use CPF funds to pay for their properties will have to pay back this money – plus interest – up to their Minimum Sum requirement.

If they have withdrawn less CPF money than the shortfall in their Minimum Sum, they will need to refund only what they have withdrawn, including interest, currently at 2.5 per cent a year. They do not need to make up for the rest of the shortfall in cash.

Home sellers who do not receive enough from the property sale to refund the Minimum Sum deficiency will not be required to top up the shortfall, as long as the property is sold at market value.

To see how the rule change works, consider the case of Mr Tan, a 58-year-old home owner whose Minimum Sum requirement is $90,000.

He has only $30,000 in his retirement account, so his shortfall is $60,000. To help make up for this difference, he has pledged his property for $45,000.

If Mr Tan sells his property this year, he will pay back to the CPF what he has pledged the property for, plus interest, which works out to, say, $51,000.

But if he sells his property next year under the new rule, he will have to pay back the amount he has withdrawn, capped at his Minimum Sum deficiency – that is, $60,000.

This rule change, which was first announced during the Budget debate last year, will not affect those under the age of 55, or who turned 55 before July 1, 1995.

While home sellers under 55 have to refund any CPF money used to buy their properties, this rule has not been enforced uniformly for those above 55, said Manpower Minister Ng Eng Hen last year.

‘Specifically, we have only recovered the property pledge from them and not the shortfalls for the cash portion of the Minimum Sum,’ said Dr Ng when he introduced the rule change in March last year.

The Minimum Sum that applies to any individual CPF member depends on the year he or she turns 55. Those turning 55 between July 1 this year and June 30 next year will have a Minimum Sum of $106,000, for instance.

Generally, the impact of this rule change is likely to be small, said Mr Christopher Tan, chief executive of independent private wealth firm Providend.

‘To begin with, most people would have pledged their house as part of the Minimum Sum because they want to take out more money at 55,’ he said.

‘When they sell their house, they would have to put back that money anyway. With the new rule, you refund your CPF account only up to the Minimum Sum, which is, in all likelihood, less than what you withdrew from the CPF to pay for it.’

Limited Impact

With the new rule, you only refund your CPF account up to the Minimum Sum, which is, in all likelihood, less than what you withdrew from the CPF to pay for it.’ – Mr Christopher Tan, chief executive of independent private wealth firm Providend, saying the impact of the rule is likely to be small

Source : Straits Times – 19 Sep 2008

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A new night glow

Posted by luxuryasiahome on September 19, 2008

23 buildings in Marina Bay, CBD submit lighting proposals to the Govt

A NEW city skyline will arise over the next couple of years when 23 buildings turn on the lights at night.

Maybank, The Sail condo and the Marina Bay Sands integrated resort are among the buildings that have sent lighting proposals to the Government. The plans include how they will illuminate their roofs or accentuate their facades.

The existing skyline of the CBD will be illuminated with new lights. — GRAPHIC: URA PHOTO: URA

This light-up is part of Singapore’s plan to create a night buzz for a distinctive city, said Mrs Cheong Hoon Kean, chief executive officer of the Urban Redevelopment Authority (URA).

Speaking to The Straits Times ahead of the Formula One night race next week, she said: ‘We can look forward to a signature night skyline in the next couple of years, when the buildings in Marina Bay and Central Business District (CBD) are completed and external lighting is installed.’ Beautiful lighting will create ‘a captivating night scene that enhances our city’s appeal’, she added.

An artist’s rendering of the reborn skyline was completed yesterday, piecing together the 23 lighting proposals.

The buildings appear subtly illuminated, not flooded with light.

Good lighting, Mrs Cheong said, is not about being the brightest or flashiest. Asian cities tend to be over-lit, she added, but this is not Singapore’s ethos.

The underlying principle is to stay ‘elegant and tasteful, and sensitive to a building’s architecture’, she said. ‘Look at Paris, the romantic City of Lights.’

According to URA officials, elegant lighting should bring out the architectural design elements of a building. So, the emphasis includes illumination of the roof or crown of the building, and lighting walkways on the first storey to create spaces ideal for outdoor activities.

Lights can also be programmable. Day-to-day lighting can be ‘a little bit more calm’, Mrs Cheong said. The look can be ‘celebratory’ for festive seasons.

Building owners are hiring lighting experts like Mr Bo Steiber to give their properties a glow at night. The founder of Bo Steiber Lighting Design is lighting up the new tower of OUB Centre at 1, Raffles Place.

His earlier work includes illuminating Shanghai’s Xintiandi lifestyle and nightlife district, and the Esplanade’s Theatres on the Bay.

The Swede, a Singapore permanent resident, said his energy-efficient lighting of OUB Centre will ‘accentuate the tower’s angular, linear, diamond features’. He lauded the URA’s ‘good initiative’ to beautify the skyline.

The URA’s Lighting Masterplan was introduced in 2006. To encourage more buildings in Marina Bay and the CBD to light up, incentives were rolled out. New developments and buildings being revamped can get as much as 2 per cent additional gross floor area if they light up.

Cash incentives from a $10 million fund to offset the capital costs of new lighting are also granted, particularly for existing structures.

The URA also had a night lighting plan in 1995 for the civic district, the cultural and historical heart of the city. Some 90 per cent of the buildings, bridges and public spaces there were lit.

Source : Straits Times – 19 Sep 2008

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Skyline to be all lit up

Posted by luxuryasiahome on September 19, 2008

STB, URA and building owners making plans for special lighting

WITH the world’s first Formula 1 night race to be beamed to350 million fans globally, Singapore authorities are pulling out the stops to ensure the downtown skyline forms a blazing backdrop.

The reason why that will be a challenge: The race circuit’s 1,500 light projectors, which are four times brighter than average stadium floodlights, so as to simulate daylight, could easily wash out the normal Singapore nightscape.

That is why the Singapore Tourism Board (STB) and Urban Redevelopment Authority are working closely with trackside building owners to install special lighting during the race weekend of Sept 26 to 28.

Some, like Marina Mandarin Hotel, even have their own fancy lighting arrangements to add spice to the razzle dazzle.

The hotel will be projecting nine slides of race-related artistic works by German architectural projection specialists Casa Magica onto the building’s facade on the three race nights, a spokesperson said.

Meanwhile, five key landmarks along the race circuit ˜ Anderson Bridge, City Hall, The Esplanade, Old Supreme Court and the Victoria Theatre Clock Tower ˜ that will be featured prominently by the race cameras will be specially lit up, STB’s assistant chief executive (Brand and Communications) Ken Low told Today.

Other downtown buildings in the Marina Centre area and Central Business District, such as Raffles City, Maybank Tower and UOB Plaza, have also been encouraged to keep their building lights on during the race weekend.

“Because it is a race held at night, Singapore’s cityscape around the Marina Centre area needs to be made visible in order to showcase itself to the world,” said Mr Low. “Lighting of the skyline is an integral part of the event, and will help create a vibrant and dynamic night race atmosphere, and experience for spectators and television broadcast globally.”

The Singapore Flyer will also have 15 different lighting patterns for the races, said a spokesperson.

For instance, the giant observation wheel will be illuminated in red and white to represent our national colours before each race. Additional floodlights will also be mounted on the Flyer to make it more prominent.

The crowns of the 50- and 28-storey towers of One Raffles Quay will also be lit up ˜ similar to what was done during National Day ˜ to mark the occasion.

Said its asset management general manager, Mr Wilson Kwong: “With F1 in the city, the eyes of the world will be on Singapore. As building owners, we want to help make sure the view is a spectacular one. We’re doing our part to make sure there is a great backdrop for the race.”

Source : Today – 19 Sep 2008

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Fun stay at SIM hostel

Posted by luxuryasiahome on September 19, 2008

Tennis, futsal, yoga, dance and space for visiting parents too

IT MAY not be publicly funded, but the Singapore Institute of Management (SIM) is shaping up to offer some students a varsity experience not unlike that of the three local universities. Hostel living will now become part of the SIM education, after the tertiary institution officially opened its new campus yesterday.

Formerly an army camp, the campus at Ulu Pandan will have an array of facilities such as tennis and futsal courts, an outdoor yoga pad and a dance studio to go with its 247 rooms and 428 beds. The residences will be open to both local and international students ˜ and even visiting parents, who can use four short-stay studio apartments while their children settle in.

“We note that many of the parents of our foreign students come with them when they first arrive in Singapore. Since we provide hostel facilities for some of the foreign students, it will be logical for us to cater to parents who would want to stay with them for a few days,” said SIM chief executive Lee Kwok Cheong. These studio apartments would also be used to accommodate visiting faculty members.

But the biggest beneficiaries of its new campus, which is the size of six football fields, are its students.

SIM dance club president and final-year student Tan Mei Sha said: “I enjoy the green environment here. The facilities on this site have also helped CCA (co-curricular activity) groups to cut cost.

A lot of CCAs in SIM are self-funded and we previously had to rent our own dance studios for practice but now booking (the campus dance studio) is free and it’s really accessible to all students.”

Mr Lee said SIM’s third campus ˜ its main academic building is at Clementi Road and its management house is at Namly Avenue ˜ now gives the tertiary institution the opportunity to develop its students academically, personally and socially. “The new SIM is not just to provide hostel facilities to foreign students. It also creates a new campus to live, to learn and to have fun in.”

For international students, the timing could not have been better.

Mr Antony Simon, 21, a third-year student from Medan, North Sumatra, said: “Rising rentals have been a concern especially for international students.”

He described the $700 monthly hostel fees for his twin-sharing room as “quite reasonable”, although it would be $50 more than what he used to pay for a single room in a condo apartment. “There are enough facilities to support my study needs as CCA meetings and group studies are all centred in the campus.”

But what students like most about having a residential campus, they told Today, is that it takes interaction among themselves to a whole new level.

Mr Akshay Kingar, 20, a second-year student from Bangalore, India said: “I plan to start a business in the future and here, I get to mingle with and learn new things and concepts from international students from different countries. The world is getting more globalised and I feel here is a good place to start.”

Yesterday also marked the launch of SIM’s scholarship programme for its Global Education students.

Up to 35 scholarships would be offered each year to students with outstanding academic results or achievements in the areas of sports and the arts. The scholarships would have a total value of $500,000 annually.

Finance Minister Tharman Shanmugaratnam, who graced the opening, said: “The students are very lucky to have a campus that makes this a full university in a sense of providing an all round education for its students. I hope SIM continues to contribute to the Singapore brand of education, team up with reputable players internationally as it has been doing and keeps the high quality standard it has come to be known for.”

Source : Today – 19 Sep 2008

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Khoo Teck Puat Hospital opening in 2010 at 40% higher cost

Posted by luxuryasiahome on September 19, 2008

The new Khoo Teck Puat Hospital in Yishun is on track for opening in 2010 despite a hike in construction costs, says its CEO Liak Teng Lit.

Commenting on the progress, Mr Liak said the structure of the hospital will be completed by the middle of 2009.

Mr Liak said, “The lift shaft has reached level 3, basement is almost completed. So part of the hospital is now at level 1. From now on, every 3 weeks or so we will move up 1 floor. The building completion will be between March to June. Then we have about a year to commission the hospital. You know you have to put the wires, the lights, and everything else.”

However, due to rising costs of construction materials, the budget for the hospital has gone up by some 40 per cent.

While this has caused some delays, Mr Liak said the hospital will open on schedule.

“I’m sure all of you know about the steel price, aluminium price, all gone up by 2, 3 hundred percent. All the building materials are imported, so it’s really not within our control, not within Singapore’s control. It’s really a worldwide phenomenon. But no problem, we will still get the hospital done on time,” said Mr Liak.

On the hospital’s manpower, he said there are already 1,700 people on board, mainly staff from Alexandra Hospital.

Mr Liak hopes to increase this number to about 2,100.

The Khoo Teck Puat Hospital is part of the Alexandra Health group, which currently oversees Alexandra Hospital and the Jurong Medical Centre.

Source : Channel NewsAsia – 19 Sep 2008

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S’pore hosts first private aviation show for wealthy visitors

Posted by luxuryasiahome on September 19, 2008

Singapore’s first private aviation show at Seletar Airport, which will be held next week, is targeted at ultra high net worth individuals, with over US$30 million in liquid assets.

200 tycoons and business leaders mostly from Indonesia, Malaysia and Singapore will be in town for the MillionaireAsia Private Aviation Show and the Formula One Grand Prix as well.

Singapore has one of the fastest rates of growth in millionaires, along with China, India and Indonesia.

According to the latest Merrill Lynch World Wealth Report, the number of these individuals in Asia have increased by 12.2 per cent in 2007, the largest growth rate worldwide.

Seven planes are expected to be on show and they cost anything between US$5 million and US$30 million. Organisers say 80 per cent of buyers use planes for business.

The visitors to the show include global business leaders, royalty, hotel owners from places like Malaysia, the Middle East and Europe.

Experts predict that the number of corporate jets in Asia will grow to 1600 or 12 per cent of the world’s total fleet in the next ten years.

Chuck Woods, chairman, Asian Business Aviation Association, said: “You see some markets that are really picking up. Singapore is a big market now. Hong Kong is on fire and Beijing is picking up.

“The market is growing such that people who would build maintenance facilities and hangars are coming. And you see it here in Singapore Seletar Airport. “

Experts said the recent financial turmoil will have little impact on the private jet industry as it’s targeted at the top two per cent of business travellers.

Source : Channel NewsAsia – 19 Sep 2008

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