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Archive for November 7th, 2008

Las Vegas Sands reaffirms commitment to Marina Bay Sands project

Posted by luxuryasiahome on November 7, 2008

Las Vegas Sands said it is committed to completing the development of the Marina Bay Sands integrated resort in Singapore.

Concerns had been raised about the company’s ability to finish the US$4 billion development after news broke out that it was struggling with a shortage of cash.

In a statement on Friday, Sands said it met with the Singapore government this week and gave the assurance that it will see the Marina Bay Sands project through.

It said the meeting covered a range of subjects, such as the pace of construction of the hotel towers in the resort and the strong response to the marketing efforts by Marina Bay Sands and the Singapore Tourism Board to bring more conventions, exhibitions, and corporate meetings to Singapore.

Sands also said it has complied with regulatory requirements that will allow it to have up to 1,000 gaming tables in the resort’s casino – up from the original figure of 600 tables.

The company said it has received more than 10,000 responses from Singapore job-seekers to its joint recruitment initiative with the National Trades Union Congress’ (NTUC) Employment and Employability Institute and the Singapore Workforce Development Agency.

Sand’s statement came as banks which had provided loans for the project said all signs showed that it is on track. DBS said it has not had any indication that work on the project is faltering.

DBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.

“All signals I’m getting from the management of Las Vegas Sands is that they intend to finish the project and move on,” DBS chief executive Richard Stanley said at a news conference on the bank’s third-quarter earnings.

“I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands… There’s been no default, there’s been no indication of default,” he said, adding there was no need to provide for loan provisions.

“As of now, all the equity commitments have been made, the project is proceeding in pace.”

Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.

Citi’s head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected given the current market conditions.

According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.

The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project.

Source : Channel NewsAsia – 7 Nov 2008

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Govt to watch market before deciding: Mah

Posted by luxuryasiahome on November 7, 2008

THE government will watch the property market closely before deciding whether further measures are needed to address the supply-demand imbalance that has emerged, National Development Minister Mah Bow Tan said yesterday.

‘There is a lot of uncertainty,’ he said. ‘It’s best for us to watch carefully before we start to make the next move. We are watching the market very closely.’

On Friday last week, the government said the sale of land from the ‘confirmed’ list has been suspended for the first half of next year. Most sites on the ‘confirmed’ list have been shifted to the ‘reserve’ list, from which properties are offered for sale if there is interest from developers. A ban on converting office space in the central area to other uses, such as housing, was also lifted.

The moves are seen as an attempt to stabilise the property market as residential prices and office rents continue to fall. Developers welcomed them, but expressed hope that the government will reintroduce the deferred payment scheme (DPS), which was scrapped in October last year to deter speculation.

Under the DPS, home buyers had to pay only 10 or 20 per cent of the price of a residential property without having to commit to a bank loan, which could be delayed until a project was closer to completion and the rest of the payment was due.

Asked yesterday if the DPS will be reintroduced, Mr Mah said the authorities are watching the market. ‘We have just made this change (the suspension of sites from the ‘confirmed’ list),’ he said. ‘Let’s take a look and see what the market is like.’

Mr Mah, who was speaking to reporters on the sidelines of a public forum on enhancing Singapore’s environment, also said Singapore will have a blueprint on sustainable development for the next 10-15 years by February next year.

The inter-ministerial committee on sustainable development, set up in February this year to come up with a national strategy for sustainable development, will release its recommendations then, he said.

Source : Business Times – 7 Nov 2008

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Long-term prospect ‘fabulous’, but 2009 looks gloomy

Posted by luxuryasiahome on November 7, 2008

British Chamber spokesman paints the big picture for Singapore

THE long-term outlook for Singapore is ‘fabulous’ but 2009 is likely to be a miserable year economically, said Roman Scott, economic spokesman for the British Chamber of Commerce.

In a luncheon presentation yesterday, Mr Scott painted a bleak picture of global growth, but reiterated his confidence that Asia will bounce back stronger.

‘I remain a long-term secular Asian bull. In the mid- to long term, (the crisis) accelerates the secular shift of economies towards Asia,’ he said. While open and export oriented economies such as Singapore will be hit hard, domestic consumption in countries such as China is expected to provide a fresh engine of growth.

‘Singapore is very very vulnerable; it’s a canary in a coal mine. It will be the first to pick itself up when things get better . . . The Singapore story is fundamentally intact and will be fabulous in 2015.’

Still, Asian economic data for the third and fourth quarter this year is expected to be weak. ‘Asian banks may hold very little of the sub-prime toxic debt, but the resultant damage to the interbank and those human things – trust and credibility – that are essential ingredients of the banking system, has affected Asia equally.’

On the global economy, he said IMF forecasts have been consistently over-optimistic in downturns and pessimistic in upturns. IMF forecast for 2009 has been revised downwards to 3 per cent, the slowest pace since 2002.

Mr Scott believes that global growth will actually slip to a ‘recessionary’ level of 2 per cent. ‘The only question that remains is for how long this will last. Given my comments on why systemic banking crises leave the fires burning far longer than the standard cyclical recession, a two-year period is a minimum, not a maximum, and that would be lucky,’ he wrote in a paper.

Asia is expected to bounce back earlier, within 18 months.

A banking crisis, he maintains, differs markedly from normal cyclical recessions. ‘This is a heart attack, not a fall, and hearts are difficult to get started again . . . This is what happens when the trust that underpins the system disappears and credit is severely restricted.’

For businesses, he said plans should be stress tested against two to three scenarios. ‘Smaller enterprises will be particularly vulnerable and should plan cash flow to ensure that a year’s requirements for cash is available, and if not it is time to liquidate assets to get to that point.’

Source : Business Times – 7 Nov 2008

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Adjustments to government land sales programme

Posted by luxuryasiahome on November 7, 2008

WE thank Ee Teck Siew for his letter ‘Government should leave land prices to market forces’ and Adrian Ho for his letter ‘Government should not help developers’ (BT, Nov 4, 2008).

Both writers referred to the Oct 31, 2008 announcement by the Ministry of National Development to transfer most of the remaining Confirmed List sites in 2008 to the Reserve List and to suspend the Confirmed List for the first half 2009 Government Land Sales Programme.

The government’s decision to transfer most of the sites onto the Reserve List is not aimed at cutting off land supply to prop up prices or rentals. Rather, given the uncertain economic outlook, we have transferred the sites to the Reserve List so that these sites continue to be made available for sale, but we allow the market the flexibility to respond to changes in the economic outlook and adjust the supply of land accordingly. Developers can bid for sites in the Reserve List at any time. This market-led approach under the Reserve List system, where sites are released for sale only if there is genuine demand, would allow prices to adjust accordingly and find a level that best reflects the prevailing market conditions.

In deciding to transfer the sites to the Reserve List, the government has also assessed that there is an adequate supply of private residential units and commercial space from projects in the pipeline to meet the needs of population and economic growth over the next few years.

We thank Mr Ee and Mr Ho for their feedback.

Lim Yuin Chien
Deputy Director (Corporate Communications)
for Permanent Secretary
Ministry of National Development

Source : Business Times – 7 Nov 2008

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Mah: No delay to HDB, govt building projects

Posted by luxuryasiahome on November 7, 2008

PUBLIC housing and government building projects will not be delayed on account of the economic downturn, said Minister for National Development Mah Bow Tan yesterday evening.

‘Demand is still very, very strong. As long as there is a demand, we will continue to build,’ he said, on public housing.

Speaking after chairing a public forum on sustainable development in Singapore, Mr Mah said more than 8,000 new HDB units are scheduled to be built this year.

On other building projects, he said: ‘Other government projects…infrastructure projects, MRT projects, road-building, schools, all those things we felt are urgent and necessary – for example, retrofitting Nanyang Technological University for the Youth Olympic Games – all are on track. It’s something we need to do.’

The forum, which focused on physical-environment issues such as energy efficiency and biodiversity, was held at the Urban Redevelopment Authority centre in Maxwell Road. About 200 people attended, including architects, engineers, students, teachers, nature enthusiasts and the managing director of a company that builds solar-energy systems.

Questions at the lively discussion ranged from the technical, such as those on solar power and energy-efficiency incentives, to the practical, including adding more greenery to HDB blocks and building bicycle paths.

It was the second of two public discussions on sustainable development. Last week’s session was chaired by Environment and Water Resources Minister Yaacob Ibrahim, who co-chairs a committee with Mr Mah to think up ways to promote economic growth and preserve natural resources.

Both forums drew topics from a website launched in July, for the public to offer suggestions.

More than 1,000 have been received and will be considered as officials draw up a sustainable-development blueprint for the next 10 to 15 years, expected to be ready next year.

Source : Straits Times – 7 Nov 2008

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$700k housing scam: Lawyer pleads guilty

Posted by luxuryasiahome on November 7, 2008

A LAWYER pleaded guilty yesterday to being part of an elaborate housing scam that cheated banks out of almost $700,000.

David Tan Hock Boon, 40, became the fourth person convicted in connection with the plot, which also involved David Rasif, Singapore’s most famous fugitive lawyer.

A district court heard that Tan conceived a scam in 2003 to swindle banks and the Central Provident Fund (CPF) Board by falsely declaring the purchase prices of properties.

His partners included property agent Goh Chong Liang and Rasif, who went missing in June 2006 with about $12 million of his clients’ money.

Their plan saw Goh convince sellers and buyers of properties, mainly HDB flats, to declare inflated purchase prices.

Armed with phoney documents such as CPF and employment records, they secured mortgages well above the value of the houses.

The scam, set in motion in 2004, saw them pocket nearly $700,000 in just over a year.

Court documents did not say how the men planned to get away without repaying the loans.

When the Commercial Affairs Department got wind of something suspicious in 2005, Goh asked to have signatures removed from documents connected to the sale. Tan handed over the documents to Goh, who erased his own signatures and replaced them with those of another man, Zurkifli Alang Noordin, in return for money.

Goh was sentenced to five years and five months’ jail on Aug 2 last year for his offences, while Zurkifli was jailed for a year in April.

Another man involved in the scam, Abu Samah Yacob, was jailed for 17 months in June. Rasif remains on the run.

District Judge Toh Yung Cheong adjourned Tan’s sentencing to next Friday.

Source : Straits Times – 7 Nov 2008

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Soilbuild Q3 net profit more than trebles

Posted by luxuryasiahome on November 7, 2008

Revenue up 159%, helped by Balestier condo’s contribution

SOILBUILD Group Holdings has more than trebled net profit to $15.35 million for the third quarter ended Sept 30, 2008 – from $4.57 million for Q3 2007.

Revenue for the quarter was $68.4 million, up 159 per cent year-on-year (yoy) from $26.4 million, helped by the maiden contribution from the fully sold Montebleu in Balestier, which was launched in mid-2007.

For the nine months ended Sept 30, net profit was $44.63 million, up 34 per cent from the previous corresponding period’s $33.3 million.

Revenue for the nine months was $188.04 million, up 164 per cent from $71.3 million.

Soilbuild also recognised additional contributions from the developments, Centrio, Espa and Leonie Parc View.

Revenue contribution from property development was $65.82 million for the quarter, up 161 per cent yoy.

Based on its five residential development projects, Soilbuild said it has chalked up $569 million worth in residential units transacted, with 44 per cent or $248 million recognised to-date.

It expects the remaining to flow through in the coming years, ‘thereby underpinning the group’s performance’.

Q3 revenue contribution from property rental was $2.54 million, an increase of 125 per cent yoy.

Soilbuild highlighted the continued recurrent rental income contribution from the leasing of the fully occupied Eightrium@Changi Business Park, three remaining units of Senoko Food Connection factories, and seven units of Kranji Linc factories.

For its new business space projects for lease, development of the Solaris at the Fusionopolis has commenced. Similarly, development of the Goodvine site has also commenced while design development for the Tanjong Kling project has been completed.

Development of its Tuas Lot factories is in progress while the purchase of the Woodlands site which was acquired through a government land sales tender was completed in October.

In October, Soilbuild increased its capital base with $12.9 million raised from the completion of a rights-cum warrants issue and also bought back $16.5 million of the $60 million convertible bonds issued in July 2007 as part of its capital management strategy. Soilbuild said the buy-back at below par prices will allow it to selectively retire higher cost debt more cheaply.

In the third quarter of 2008, the group’s finance costs rose from $1.2 million in Q3 2007 to $1.9 million. The increase in finance costs was due mainly to the recognition of finance costs related to the convertible bonds issued in 2007 and higher working capital interest expenses which were partly offset by lower interest expenses for completed projects.

Earnings per share came to 7.67 cents for the quarter compared with 2.28 cents a year ago.

Soilbuild shares were last traded at 74 cents each.

Source : Business Times – 7 Nov 2008

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Soilbuild’s profit more than trebles in third quarter

Posted by luxuryasiahome on November 7, 2008

TIMES may be difficult in the property sector, but developer Soilbuild Group Holdings has reported a more than trebling of third-quarter net profit from $4.57 million to $15.35 million.

The bumper results stemmed from higher contributions from its residential developments and rental properties.

Revenue shot up 159 per cent to $68.37 million – largely owing to the maiden contribution from the fully sold Montebleu project, which is 26 per cent completed, rent from its industrial properties, and income from other property sales.

Soilbuild received additional contributions from the fully sold Centrio and Espa projects, as well as the posh Leonie Parc View project.

Executive director Low Soon Sim said Soilbuild will continue to remain prudent in view of the current challenging business environment.

‘We remain well-supported by financial institutions who have developed long-term relationships with us despite the financial crisis,’ he said.

Last month, Soilbuild strengthened its capital base with $12.9 million raised from a rights-cum-warrants issue.

Looking ahead, Mr Low said the group is expected to perform better this year.

‘Even as our pre-sold residential developments progressively add to earnings, the build-up of our recurrent rental income base will help drive our growth in the medium term, in line with our business strategy.’

The firm will be seeking potential opportunities to selectively lower the development costs of its projects arising from lower commodities prices and material prices for construction.

Earnings per share were 7.67 cents, up from 2.28 cents last year. Net asset value per share was at 76.77 cents as at Sept 30, up from 57.51 cents as at Dec 31 last year.

Soilbuild, in its announcement, said that overall business and consumer confidence are expected to remain weak in the near term and will dampen sentiment towards property purchases and both residential and business space investments.

‘Among multinational corporations and companies with longer-term business outlook, there is expected to be selected demand for affordable business space in well-located sites.’

Source : Straits Times – 7 Nov 2008

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When ‘buy now, pay later’ makes sense

Posted by luxuryasiahome on November 7, 2008

A case to restore deferred payment schemes during the recession?:

What a difference a year makes.

Just over 12 months ago, the economy and stock market were booming, prompting the Government to intervene to cool the heady property market.

Out went deferred payment schemes for homebuyers. A year on, and the economy is in recession, with the stock market tanking.

Scrapping deferred payment schemes was probably the right decision then.

But is it still right?

Perhaps it is now time for the Government to make another pre-emptive strike by permitting deferred payments again, to help prevent property prices from spiralling in the opposite direction.

As recession sinks in, unemployment will rise and rents will drop as the influx of expats slows. At the same time, there is about to be a flood of new housing, following last year’s en-bloc redevelopment frenzy.

The Government has already moved to limit state land sales. This is bound to help in the longer-term. A restoration of deferred payment schemes might have a more immediate impact.

It would allow people still confident about the mid- to longer-term prospects of Singapore’s housing market to commit to buying homes now, without having to take on the financial burden of paying instalments on a mortgage for another two to three years – by which time the economy can be expected to have bounced back.

Deferred payment schemes were first offered in the early 1990s and again in the early 2000s. Under such schemes, developers could offer buyers of uncompleted private properties the option to defer part of their payment.

For instance, buyers could pay an initial 20 per cent for units in a future development, with the remainder due when the project is completed, typically two to three years later.

Such buyers would typically pay 2-3 percent more for their properties for this privilege.But many found it a price worth paying.

For speculators or buy-to-rent investors, the returns on capital can be substantial in an upward market because of the implicit leverage. If you sell-on the unit before it is completed, a 20 per cent increase in property value, for example, generates a 100 per cent return on the initial capital outlay.

The downside is that such schemes encourage speculators to sign up for properties they have no intention of hanging on to.

During last year’s boom, this added to concerns of over-heating. Given the cool chill blowing over the global economy and markets right now, there’s less risk of deferred payment schemes doing that at present.

Urban Redevelopment Authority figures show that private home prices fell by an average 2.4 per cent in the third-quarter from the preceding quarter. However, most agents will tell you prices of top-end units have fallen by much more.

Over 31,000 housing units are already under construction, Credit Suisse estimated last month. Of these, the bank estimates that 15,000 are slated for completion by the end of next year. Citibank estimates closer to 18,500.

That’s huge. Typically just 6,600 new units are bought each year. However, expect some projects to be delayed.

In the property boom, deferred payment schemes shifted the burden of financing to developers and construction companies, and away from households.

It meant that during the recent housing boom, local banks enjoyed a surge in building and construction loans, but only saw modest growth in mortgage lending.

The flip side to this is that banks may now not see a sharp slowdown in mortgage lending in coming months as the property market cools. That’s because many homebuyers who bought using deferred payment schemes two or three years ago are about to knock on the banks’ doors for mortgages as their projects are completed.

Going forward, banks themselves could choose to tighten the lending strings as falling property valuations increase the risk of foreclosure. Expect banks to ask tougher questions about your credit-worthiness before granting mortgages – and rightly so.

Yes, a return of deferred payment schemes would again shift the burden of financing to developers and construction companies. But if it helps keep sales ticking over, they may be happy.

Source : Today – 7 Nov 2008

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No delay in upgrading or building: Mah

Posted by luxuryasiahome on November 7, 2008

Minister reassures that public housing projects will proceed

THERE is no need to fear that the economic slowdown will be felt in our public housing projects.

Giving his reassurances last night in response to questions, National Development Minister Mah Bow Tan said: “There is no delay in our public housing programme, our building programme and in our upgrading programme.

“We know there is demand for public housing. We are building something like 8,000 units. Demand is still very strong. Similarly upgrading … is something our HDB residents are looking forward to. Lift upgrading, we’ve set a deadline for it. We’ve promised by 2014 that all the eligible flats will be upgraded.”

As for the Home Improvement Programme and neighbourhood renewal programmes, “we’re going to proceed as originally planned, so there’s no delay,” said Mr Mah.

He was speaking to reporters after chairing a public forum on enhancing Singapore’s physical environment.

With regard to its land sale programme, why did the Government decide to move most of the remaining sites on the Confirmed List for the rest of this year to the Reserved List?

This, said Mr Mah, was because of the uncertainty in the market. “I think it was important to let the market, the developers, take some time off to look at the market and to see how they need to respond.”

He also noted that these sites were not completely off the table and if any party was interested in bidding, then the site would go up for public tender. “Putting it on the Reserve List allows the market to determine whether they want the site and whether they areprepared to pay for the site.”

As for criticism from some quarters about moving sites off the confirmed list, Mr Mah said: “Every move we make, somebody has comments – some people think it’s too early, some people too late.

“We make our judgment based on what we think is good and help stabilise the market which is in the interest of Singapore.”

On developers calling for the deferred payment scheme to be reinstated, Mr Mah said: “Well, we’ve just made this change and I think let’s take a look and see what the market is like. I think there’s a lot of uncertainty going on. I think it best for us to watch carefully before we start to make the next move.”

Source : Today – 7 Nov 2008

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