Temasek must follow Indonesian laws, says V-P Jusuf

Temasek must follow Indonesian laws, says V-P Jusuf

Ruling also sparks private plan to buy back foreign stakes in Indonesian telcos

By Salim Osman, Indonesia Correspondent
JAKARTA - INDONESIA’S Vice-President Jusuf Kalla says Singapore’s Temasek Holdings should respect Jakarta’s competition watchdog’s verdict that its stakes in the two biggest Indonesian mobile telcos broke anti-monopoly laws.
The watchdog on Monday ordered Temasek to sell its stakes in either Telkomsel or Indosat.

And in his first comments on the case, Mr Jusuf yesterday said the investment company must abide by laws designed to prevent monopolistic practices and promote healthy business competition in Indonesia.

‘Whoever wants to do business in Indonesia, he or she must abide by Indonesia’s laws. They often ask us to abide by their laws, and so they must also abide by our laws. They should not get angry when they are given sanctions, and say the investment climate in Indonesia is bad,’ said Mr Jusuf at a business function in the Indonesian capital.

He also said the Business Competition Supervisory Commission, or KPPU, was a legal institution operating like a court of law.

‘So, it’s not a question of whether the government supports the decision of the KPPU or not. It’s more a question of law enforcement, so that business competition in Indonesia remains sound and proper,’ he added.

But he stopped short of directly criticising Temasek’s plan to fight the ruling, saying any aggrieved parties were entitled to appeal against the decision.

His remarks were echoed by an Indonesian presidential spokesman in Singapore for the Asean summit.

Temasek issued statements in Singapore on Tuesday, saying that it will go all the way to international arbitration, if need be, to contest the verdict.

Mr Jusuf’s interest in the case is well known, as he was among the politicians who last year urged the government to buy back Indosat shares sold to Temasek subsidiary ST Telemedia, under a 2002 privatisation programme.

The KPPU verdict has also given fresh life to the movement to buy back the shares.

A member of the parliamentary commission on foreign affairs, Mr Effendy Choirie, welcomed what he said were the first signs of resistance to the ‘onslaught of capitalist alliances’, which he said were trying to monopolise strategic sectors of the Indonesian economy.

He also said it was time to take things further, by investigating those behind the ‘questionable’ Indosat sale.

‘Now we should go on and take the next step: all those who sold Indosat and also Telkomsel must be legally investigated, including Laksamana Sukardi,’ the National Awakening Party politician added.

Mr Laksamana was the state enterprises minister at the time.

Also yesterday, a group of Indonesian professionals, calling itself Masyarakat Profesional Madani (MPM), announced a drive to buy back shares held by foreign companies in Indosat and Telkomsel.

MPM chairman Ismed Hasan Putro said his group, which includes the Vice-President’s daughter Ira Jusuf Kalla, had already raised 300 billion rupiah (S$47 million). It plans to set up a consortium with local businessmen to raise enough money to acquire the shares.

The group says the buy-back plan is a response to remarks by State Enterprises Minister Sofyan Djalil that the government has no plans to buy back Indosat shares from ST Telemedia.

Mr Ismed told reporters at a press conference: ‘We have to build up the means to free our economy from foreign domination.’

Meanwhile, Mr Sofyan also said yesterday that the KPPU’s ruling that Telkomsel had imposed excessive tariffs and should reduce them by 15 per cent was groundless.

He said such a move would kill small-time operators, and added: ‘I have instructed Telkomsel to appeal against the verdict.’

Source : Straits Times - 22 Nov 2007

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Bugis to have new $160m mall by next year - Singapore

Bugis to have new $160m mall by next year - Singapore
‘LIKE NO OTHER’: The 10-storey Iluma mall will be connected to Victoria Street by an overhead link bridge (left). At least 60 per cent of its floor area will be used for entertainment outlets including restaurants and a cineplex (right), while more than 150 shops will be targeted at customers such as young, single executives. — PHOTOS: JACK INVESTMENT

THE developer of a new entertainment mall in Bugis has boosted its budget for the project by $60 million, bringing its investment to $160 million from an initial $100 million.
The mall, to be called Iluma, is expected to open by the end of next year. It is being built by Jack Investment, next to Bugis Village and opposite Bugis Junction and Hotel Intercontinental.

With the higher investment, the company aims to create a project that ‘promises to be like no other current retail-entertainment malls’ here, said project director Lim Swee Teck.

At least 60 per cent of the mall’s floor area will comprise entertainment outlets such as restaurants, a cineplex, and dance floors, said Ms Sherene Sng, the head of retail at Knight Frank, the mall’s sole marketing agent. This use of space was one of the tender requirements.

‘We will strive for an arts-inspired, creative experience,’ Ms Sng said. More than 150 shops will be targeted at customers such as young, single executives. Tenants have not been confirmed but, unlike a typical mall, Iluma will not have a supermarket operator.

Rents would largely fall between $10 and $30 per sq ft (psf), said Ms Sng. At Bugis Junction, the highest rents are said to have reached about $50 psf.

Iluma sits on a 95,799 sq ft site and will be spread over 10 storeys. The second storey will be connected to Victoria Street by an overhead link bridge. The mall will have a first-of-its-kind, large column-free space of up to 27,000 sq ft on the rooftop that will be suitable for restaurants, said Mr Lim.

Jack Investment also owns the $70 million shopping mall and entertainment hub Leisure Park Kallang.

The company, owned by real estate veteran Han Chee Juan, won the tender for the Iluma site in 2005 with a bid of $46 million.

Source : Straits Times - 22 Nov 2007

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Five estates sold to one buyer in Singapore collective deal

Five estates sold to one buyer in Singapore collective deal

FIVE small adjoining freehold apartment blocks near Thomson Road have been sold en bloc to Kim Seng Heng Realty, a subsidiary of listed KSH Holdings, for $120 million.
The construction and property development group said yesterday that the combined site could be redeveloped into a high-rise residential block with about 142 luxury apartments of 1,250 sq ft on average.

It added that it is currently negotiating with other investors to form a joint venture to develop the site.

Credo Real Estate, which brokered the deal, said it is possibly the first time in Singapore that as many as five estates have been successfully combined and sold en bloc to one buyer.

The properties - Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui - are located near Rangoon Road and Moulmein Road.

They are single apartment blocks sitting on relatively small plots ranging from 10,061 sq ft to 18,524 sq ft.

When combined, they form a land area of 74,355 sq ft, which would permit a gross floor area of 208,196 sq ft.

If small pieces of state land in between are thrown in, the developer will have a site of 87,092 sq ft, said Credo’s executive director, Ms Yong Choon Fah.

In any case, three of the developments could not have otherwise been redeveloped on their own. ‘They need each other because there’s a 30m buffer requirement from the expressway,’ said Ms Yong.

This Urban Redevelopment Authority rule would mean that it is impossible for Norfolk Court, Mergui Lodge and The Mergui to be redeveloped individually. But if combined with the other two sites, a bigger development that does not fall within the 30m buffer zone can be built.

The five estates have 88 units in total. Each unit owner will get between $906,856 and $1.91 million.

The $120 million price reflects a price of $580 per sq ft (psf) of potential gross floor area.

After factoring in the cost of the state land in between, the rate could come down to about $540 psf, said Ms Yong.

KSH Holdings’ recent projects include a construction contract for a luxury boutique hotel at Clifford Pier.

Source : Straits Times - 22 Nov 2007

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Singapore has fastest-growing prime office rents in the world: Report

Singapore has fastest-growing prime office rents in the world: Report

It outpaces Mumbai as rents, occupancy costs rise 83% to $12.60 psf a month

By Joyce Teo, Property Correspondent
LOFTY HEIGHTS: Overall, Singapore is ranked 11th most expensive, at US$102.37 (S$148.39) psf a year. Not surprisingly, many companies are thinking of abandoning the Central Business District for lower rentals.

PRIME office rents have grown faster in Singapore than anywhere else in the world over the past year, a new report has found.
The rate of increase beat even that in Mumbai, now the world’s second most expensive office market, after London’s West End, according to CB Richard Ellis (CBRE).

But overall, Singapore ranks 11th on the list of worldwide office rentals, which are generally rising quickly.

Rental levels plus other associated costs for Singapore prime office space shot up 82.6 per cent in the 12 months ended Sept 30 to $12.60 per sq ft (psf) a month, said the CBRE’s Global Market Rents report. Apart from lease rates, occupancy costs include expenses for management and basic building maintenance.

In terms of occupancy costs, Moscow posted the second-fastest growth, of 65.4 per cent. Third in line was Mumbai, where occupancy costs grew 55 per cent.

The booming economics of the Asia-Pacific region continue to support strong demand for office space and to drive occupancy costs at a faster rate than in any other region, said CBRE in the report.

In comparing the costs, it looked at the typical achievable rent for a 10,000 sq ft unit in a top-quality building in a prime location.

Of the 171 markets it monitored, 85 per cent recorded growth in occupancy costs.

London’s West End - which registered 41.9 per cent growth - still has the most expensive office space, at US$328.91 (S$476.76) psf a year.

Mumbai came in a distant second, at US$189.51 psf a year. But it is already 5 per cent more expensive than London City, where occupancy costs came to US$180.80 psf a year.

Moscow is ranked fourth most expensive, at US$180.78 psf a year.

To facilitate comparisons across markets, the report based the most expensive rents on US dollars while rental growth was measured in local currency terms.

Singapore is ranked 11th on the world’s most expensive list, at US$102.37 (S$148.39) psf a year.

It came just after Hong Kong, where costs were at US$106.31 psf a year.

At $100.79 psf a year, rents for prime office space in New York’s Midtown have come down. Costs in Tokyo ranged from US$154.56 to US$178.61 psf a year.

As was the case with other key Asian financial centres such as Tokyo and Hong Kong, office vacancy rates remained low in Singapore at 5 per cent or less, said CBRE.

It noted that the uncertainty in global financial markets has had no discernible impact on demand for office space in Singapore.

The companies in Singapore that require larger spaces are largely from the fast-growing financial and insurance sectors. And before year-end, several sizeable bookings by companies in these two sectors are expected, CBRE said.

The report also echoed comments by property consultants about rising tenant resistance to rental hikes as rents are at record-high levels.

Companies are now more prepared to move to cheaper space further out of town to avoid paying high rents.
Source : Straits Times - 22 Nov 2007

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Singapore ECs gain appeal as HDB, private home price gap widens

Singapore ECs gain appeal as HDB, private home price gap widens

Easing of rules expected to increase demand for exec condos

By Tan Hui Yee, Housing Correspondent
ON A REBOUND: Developers of executive condos, such as the Quintet ECs (above), are optimistic as prices for these homes are expected to rise. Many had expected La Casa in Woodlands to be the last EC project on the market when it was launched for sale in 2005.

THE rising property market has brought executive condominiums (ECs) back from the brink of extinction.
These homes - which are halfway between public housing and private condominiums - suddenly looked much more appealing after rules for buyers were relaxed on Tuesday.

Property consultants now expect that more plots for ECs, such as the 2.27ha site placed on the market on Tuesday, will soon be offered.

The main reason: the widening gap between prices of resale Housing Board flats and those of private condos. ECs, which come with condo facilities but with sale restrictions similar to those for public housing, were introduced in 1995 to bridge this gap.

They became relatively unpopular, however, after the property market plunged a few years later, making private condos more affordable.

In fact, when the first few ECs hit the resale market in 2004 after the minimum five-year occupation period, many were sold at a loss or at breakeven prices. This was because they were booked when prices were at their peak in 1996.

Many people expected Far East Organization’s La Casa in Woodlands to be the last EC project on the market when it was launched for sale in 2005.

‘Mass market condo prices were in the doldrums, making ECs redundant. Today, that’s a different story,’ said Colliers International’s director of research and consultancy, Ms Tay Huey Ying.

Private home prices surged 22.9 per cent in the first nine months of the year - more than twice the rate achieved by resale HDB flats.

Lower-priced ECs are more attractive now because prices of condos in the suburbs - where ECs tend to be sited - have started to move up significantly. In the July-

September period, prices of non-landed homes outside the central region rose 7.9 per cent. Consultants expect this growth to continue.

The easing of EC rules is also expected to increase demand from people looking to move from HDB flats. The HDB removed a hurdle for upgraders by scrapping a resale levy payable by EC buyers who had previously bought government-subsidised flats.

Buyers of new EC units are also no longer barred from buying second new EC units or new flats. In addition, the HDB now requires developers to reserve 90 per cent of units for first-time buyers in the first month of sale.

Although ECs still cannot be sold within the first five years and remain out of bounds to foreigners within the first 10 years, the easing of rules has helped ECs shake off their tag as second-rate condos, said Mr Eric Cheng, the executive director of the HSR property group.

Potential buyers include property agent Lester Tan, 27, who has been living with his parents for the past five years since he got married.

He and his wife started looking for a condo about two years ago, but regretted waiting so long to buy one, as prices have shot up.

He said: ‘We heard that the Punggol EC may be launched, and we are quite excited about it.’

Potential upgraders like Ms Elsie Cheng, 31, are also eyeing the future EC in Punggol. The teacher - who lives with her husband, seven-month-old son and maid in a two-bedroom EC unit in Tampines - is looking to move into a bigger EC.

‘Why pay so much for a private condo?’ she asked.

Knight Frank’s head of research and consultancy, Mr Nicholas Mak, said the changes were likely to raise the proportion of upgraders among EC buyers, from an estimated 5 per cent to 10 per cent, to 20 per cent to 25 per cent.

Developers such as Frasers Centrepoint Homes, which built the Lilydale and Quintet ECs, are optimistic. Its chief operating officer, Mr Cheang Kok Kheong, told The Straits Times: ‘The EC will do well in today’s market as a hybrid property - apartments with condo facilities but without private condo price tags.’

He added: ‘As a reflection of the strong confidence and growth potential of the EC market, we expect to see increased competition in this market segment and more developers taking part in upcoming EC land tenders.’

Buyers hoping to make a quick buck from ECs, however, should take heed. ‘The (full) value of the EC will not be realised immediately but in 10 years, subject to the property market being buoyant at that time,’ said PropNex chief executive Mohamed Ismail.

For now, all eyes are on the EC site in Punggol Field. Estimated to be able to fit about 620 homes, it will be put up for tender once a developer commits to a minimum bid that meets the Government’s reserve price.

The EC units, however, will meet only a small portion of the current demand for new homes. In a recent HDB sales exercise, almost 8,000 families applied for just 400 flats in Telok Blangah, while more than 1,600 applied for 516 homes in Punggol.
Source : Straits Times - 22 Nov 2007

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COE prices down for all categories of vehicles

COE prices down for all categories of vehicles

BUCKING the recent northward price spirals of everything from housing to food to commodities, certificate of entitlement (COE) premiums continue to remain soft.
Yesterday, COE prices for vehicles fell across the board - by as much as 19 per cent.

Motor traders pointed to a combination of reasons for the price drop.

Mr Mark Choong, managing director of Toyota distributor Borneo Motors, said: ‘A dearth of new models, people going away for the school holidays, and high fuel prices are all contributing to the soft car market now.”

The COE premium for cars up to 1,600cc closed 14.5 per cent lower at $14,404, while the COE price for cars above 1,600cc closed 8.9 per cent lower at $16,401. The COE rate for commercial vehicles dipped by 4.1 per cent to end at $14,389.

This means someone buying a Mazda 3 pays about the same COE price as someone buying a delivery van.

The motorcycle COE price fell by 19.1 per cent to finish at $1,052.

The premium for the Open COE category, used mainly by people who want to register a car urgently, ended 4.5 per cent lower at $17,001.

Car prices are expected to fall in line with the COE price corrections. Yesterday, Borneo Motors cut prices of its smaller models by $2,400 and its bigger cars by $1,500.

Motor traders do not expect a sizeable rebound in COE premiums.

‘Buyers these days know they have an influence on prices,” said Mr Choong. ‘They will stay away until they think prices are right.”

The dry spell for new car launches will soon be broken by arrivals in the coming weeks, including Honda’s new Accord, and Ford’s new Mondeo and S-Max.

Source : Straits Times - 22 Nov 2007

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Average Grade A office rents here on par with HK

Average Grade A office rents here on par with HK

But top rents in HK are 1.8 times higher than in comparable buildings here

By ARTHUR SIM
AVERAGE island-wide Grade A rents are currently just a shade under those of Hong Kong, but the highest rents achieved by Hong Kong Grade ‘AAA’ office buildings are still about 1.8 times higher than the top rents achieved in comparable buildings here.
A report by Savills reveals that in the CBDs of Hong Kong and Singapore, Grade A rents are now the equivalent of $9.80 and $9.70 psf respectively.

However, top rents in Hong Kong’s Grade ‘AAA’ buildings like the International Financial Centre, Chater House and AIG Tower are closer to $32 psf while those in Singapore’s Republic Plaza, One Raffles Quay and 6 Battery Road are at about $17.50 psf.

Rising business costs have come under scrutiny recently and Savills Hong Kong senior director (research and consultancy) Simon Smith does say that there is the perception that Hong Kong and Singapore are in direct competition to attract businesses for this segment of the property market. However, he added: ‘I have not come across any financial institutions that have chosen to relocate from Singapore to Hong Kong yet.’

Indeed, Mr Smith believes that the financial institutions that are so important to the economies of both cities are more likely to set up offices in both cities to service different markets.

In terms of new supply of office space, Mr Smith does point out that Hong Kong will see some ‘AAA’ space become available next year in areas like West Kowloon where the 2.5 million sq ft International Commerce Centre (ICC) is set to open. The ICC is said to have attracted some major financial institutions already.

In contrast, Savills notes that the recently awarded commercial development sites including those at Marina View and Beach Road are expected to generate a combined 3 million sq ft of office space, scheduled for completion between 2010 and 2012.

But competition actually could come from more unlikely quarters.

Savills’ survey of regional office rents includes the emerging Vietnamese cities of Hanoi and Ho Chi Minh City and already average Grade A office rents in both cities have outpaced those in Shanghai and Beijing (but are still less than Tokyo, Hong Kong and Singapore).

Mr Smith believes that rising rents and 100 per cent occupancies in Hanoi and Ho Chi Minh City are largely due to the shortage of quality buildings in these cities, and hence adds: ‘There is a huge potential there for developers.’

Giving an insight into the pace of development there, he said: ‘Vietnam is much like China was in the 1990s, where companies were running their businesses out of hotel rooms. But when the market matures, rents will settle down.’

Savills believes the outlook for Singapore office sector remains positive, with rents continuing to rise, although at a slower pace for Grade A space due to ‘resistance from tenants’.

‘Demand from multinational companies for offices in suburban areas and high-tech space is expected to increase, especially by those who are more conscious of their bottom-line,’ it said.
Source : Straits Times - 22 Nov 2007

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Jack Investment raises Iluma project cost - Singapore

Jack Investment raises Iluma project cost - Singapore

Entertainment, retail mall bill to soar to $160m from $100m

JACK Investment, which won the tender to build a retail and entertainment mall on a site opposite Bugis Junction in 2005, has revised its projected total investment cost from $100 million to $160 million.

Iluma: Will have high-tech features like a light and media facade and a 27,000 sq ft column-free space on the rooftop dedicated to theme restaurants
Project director Lim Swee Teck said that Jack Investment intends to ‘ensure that the final finished product will be of an iconic stature’. The development is now called Iluma.

Mr Lim said that the mall, designed by award-winning architectural firm WOHA, will have high-tech features like a light and media facade and a 27,000 sq ft column-free space on the rooftop dedicated to theme restaurants and concept dining.

Other features will include exhibition and promotional spaces within the mall, as well as a flexible performing space which can seat up to 400 people.

Also confirmed is the vital link-bridge across Victoria Street to Bugis Junction.

Jack Investment also owns Leisure Park Kallang, West Coast Recreation Centre, Woodlands Point and 600@Toa Payoh.

One of the main entertainment attractions at Iluma will be a cineplex, with a capacity for 1,400 seats, which will be run by Jack Investment. This will be a new business for company that will begin with the recently announced six-hall, 830-seat cineplex next to Leisure Park Kallang.

Iluma will be 10 storeys high. Up to 60 per cent of the gross floor area will be dedicated to entertainment uses. There will be 191,580 sq ft of net lettable area with a total of 150 retail units.

Iluma’s marketing consultant Knight Frank said that the primary target market will be fashion conscious 20 to 30-year-olds.

Knight Frank head of retail Sherene Sng added that entertainment attractions could also include brand-name dance clubs similar to the Ministry of Sound.

She said that rents at Iluma can be expected to range between $10 and $30 per square foot (psf). Currently, top rents at neighbouring Bugis Junction are said to be in the region of $40 psf.

The mall is currently under construction and is expected to be completed in the final quarter of next year.

Source : Business Times - 22 Nov 2007

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Singapore Credo Real Estate sells 5 adjacent developments in en bloc package

Singapore Credo Real Estate sells 5 adjacent developments in en bloc package

Five developments with total site area of 74,355 sq ft sold to KSH for $120m
By ARTHUR SIM
FIVE in one fell swoop - taking collective sales to the next level is Credo Real Estate, which has just managed to sell a package of five neighbouring residential developments to a single developer for $120 million.
The five developments, which are at Mergui Road, off Rangoon Road, are Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui.

With a total site area of 74,355 square feet and a plot ratio of 2.8, the $120 million price reflects a unit price of $580 per square foot per plot ratio (psf ppr).

It has been sold to KSH Holdings. The publicly listed construction, property development and property management company said in a statement released yesterday that the site has a potential to be developed into a 142-unit development with units averaging 1,250 sq ft.

KSH also said that the acquisition will be financed through internal funds and bank borrowings, and that it is currently negotiating with other investors to form a joint venture to develop the site.

On the challenge of bringing together the owners of five developments, Credo executive director Yong Choon Fah said that it had been looking at the possibility of a combined collective sale for several years.

She also explained that each development had different attributes and that only by combining them could a ‘win-win’ be achieved for all.
The five developments have land areas ranging from 10,061 sq ft to 18,524 sq ft and Ms Yong said that all the home owners have accepted the same unit price.

There are a total of 88 homes and the owners will receive between $906,856 and $1,908,491 each.

The site, which is considered to be in the ‘city fringe’, is estimated to have a breakeven price of about $1,000 psf.

In the immediate vicinity, Pristine Heights is currently selling for between $1,000 and $1,150 psf.

In 2006, Credo marketed Lock Cho Apartments, Comfort Mansion and a four-storey walk-up block for a combined collective sale. They were eventually sold to City Developments Ltd. The latest deal, however, is thought to be the only one to involve five developments.

Source : Business Times - 22 Nov 2007

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Singapore Q3 domestic wholesale trade index up 4.6%

Singapore Q3 domestic wholesale trade index up 4.6%

By VINCENT WEE

THE booming local economy is continuing to filter through into figures for the wholesale trade. The third-quarter domestic wholesale trade index rose 4.6 per cent year-on-year with sales of food, beverages and tobacco rising 45.7 per cent and timber, and paints and construction materials growing 23.3 per cent, the Department of Statistics said.
Increased turnover on an annual basis was also reported in industrial and construction machinery (9.7 per cent), telecommunications and computers (8.3 per cent) and chemicals and chemical products (6.8 per cent).

Lower sales were however seen in electronic components which contracted 19.4 per cent and household equipment and furniture, which declined 4.4 per cent. Excluding petroleum, domestic sales rose 7.5 per cent year-on-year.

On a quarter-on-quarter basis, the overall index went up 12.2 per cent, but excluding petroleum sales were up 8.2 per cent. Reflecting higher activity in the oil market, sales by ship chandlers and in bunkering rose by 27.9 per cent while petroleum and petroleum products rose by 17.8 per cent.

Sales in the general wholesale trade sector showed an especially sharp decline of 10.9 per cent after growing strongly in the second quarter.

Overall foreign wholesale trade rose 4.3 per cent year-on-year in the third quarter. Huge jumps were posted in the food, beverages and tobacco sector (51.2 per cent) and timber, paints and construction materials (15.5 per cent). Chemicals and chemical products, and telecommunications and computers also rose 7.6 per cent and 5 per cent respectively.

Source : Business Times - 22 Nov 2007

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Jakarta minister orders Telkomsel to appeal

Jakarta minister orders Telkomsel to appeal

State enterprises minister criticises KPPU ruling, says Telkomsel did no wrong
By LAUREL TEO
IN JAKARTA
STATE Minister for State Enterprises Sofyan Djalil has ordered PT Telkomsel to appeal against the ruling that found Indonesia’s No 1 cellular operator guilty of price-fixing.
He rejected the judgement issued on Monday by the Business Competition Supervisory Commission (KPPU), which had spent more than a year conducting an anti-monopolies investigation into Telkomsel, Singapore’s Temasek Holdings and eight other Temasek-linked companies.

The KPPU had ruled that Telkomsel was guilty of abusing its dominant market position to charge excessive tariffs. It fined Telkomsel 25 billion rupiah (S$3.9 million) and told the telco to cut its tariffs by at least 15 per cent - a move that could slash the company’s annual revenue by about 6.3 trillion rupiah.

But on Tuesday night, Mr Sofyan told the local media that Telkomsel’s dominant presence in certain areas in Indonesia was ‘natural’.

Any tariff reduction by Telkomsel, which is 65 per cent owned by state-owned enterprise PT Telkom, could also undercut smaller players and hurt them, he said.

‘This was a decision that we had made when I was Communications Minister. Big telcos are not allowed to enter into a price war. Otherwise, smaller companies would not be able to enter the market,’ said Mr Sofyan, who had moved over to his current ministerial portfolio during a Cabinet reshuffle in May.

He added: ‘I gave instructions that Telkomsel appeal against the KPPU’s decision.’

Following his remarks, parent company Telkom promptly issued a statement yesterday morning on the matter. Telkom, a listed company, said: ‘As the majority and controlling shareholder of Telkomsel, Telkom has requested Telkomsel to immediately carry out a legal review in accordance with its own internal processes and governance practices.

‘Telkom will fully support all legal efforts made by Telkomsel, including any options for an appeal to the district court.’

In the same case, the KPPU also judged that Temasek Holdings has cross-ownership through its indirect stakes in Telkomsel and PT Indosat, Indonesia’s No 2 telco.

It ordered Temasek to sell off either of these two stakes, and imposed another fine of 25 billion rupiah on Temasek, as well as on each of the other eight Temasek-linked companies named in the case.

Asked to comment on the KPPU’s ruling on the Singapore companies, Mr Sofyan refused to be drawn into a discussion. All he would say was: ‘Temasek is not our affair. But if it wants to appeal, please go ahead.’

The Singapore investment company has denied any wrongdoing and vowed to contest the decision by appealing through the Indonesian courts. It would seek international arbitration if necessary, it had said earlier.

Meanwhile, a group known as the Masyarakat Profesioal Madani (MPM) or Civil Society of Professionals has already declared its interest in buying either of the telco stakes that Temasek might choose to let go.

Temasek holds an indirect 35 per cent share in Telkomsel through SingTel, and another indirect 30 per cent stake in Indosat through ST Telemedia. Analysts estimated the Telkomsel and Indosat stakes up for possible divestment at $12.4 billion and $2.9 billion respectively.

MPM head Ismed Hasan Putro said at a press conference yesterday that his organisation had already amassed funds of 300 billion rupiah and was ready to form a consortium with the Indonesian Chamber of Commerce (Kadin) and the Association of Young Indonesian Entrepreneurs (Hipmi) to buy back Telkomsel or Indosat share, in the name of national interest.
Source : Business Times - 22 Nov 2007

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Hot Singapore market smokes out solo land sites

Hot Singapore market smokes out solo land sites

19 single-owner plots worth $1.05b sold this year
By UMA SHANKARI

(SINGAPORE) With the property market running hot, it is not just collective sales that have ballooned. Over the past two years, more residential land sites owned by single owners were sold as well.

So far this year, 19 residential sites owned by single owners and worth some $1.05 billion in all were sold to developers, data provided by property firm CB Richard Ellis (CBRE) shows.

And in 2006, there were 15 single-owner land sales worth a total of $865 million. By comparison, just four single-owner land sales worth $303 million were done in 2005.

Market watchers say a property market that is strong and active will bring out more sellers - both of the en-bloc variety as well as single owners.

‘Collective sales have hogged the limelight of late, but the single-owner sales have also been very active,’ says CBRE executive director Jeremy Lake. ‘If you look at overall residential sales, you will see that they have gone up too. So single owners are just mirroring the overall market.’

Ku Swee Yong, director of marketing and business development at Savills Singapore, says that in the case of those sites owned by associations or clubs, members who were looking to sell might have been able to convince those who were previously not in favour of selling to change their minds, considering the prices that the properties can now fetch.

‘When the price is better, they (those looking to sell) manage to clear the hurdle,’ Mr Ku says.

The 19 sites sold by single owners this year include a few owned by associations, including one sold by Chui Hui Lim Club. The club sold a Keng Lee Road site to Sim Lian Group for some $115.8 million.

CBRE’s data also shows that this year, while there were a few large single-owner sites that were sold, the bulk of the 19 properties were small - with 10 of them going for less than $30 million each.

Market watchers attributed the increased interest in smaller sites to new players in the property market. These smaller developers generally do not have the resources to bid for en-bloc sites that go for hundreds of millions dollars - the province of the likes of CapitaLand, City Developments and foreign property funds.

‘When the market is good, it will attract new entrants,’ says CBRE’s Mr Lake. ‘And you will find some people who will want to get into the market, but might not be able to afford the big sites.’

Sesdaq-listed Tee International is an example of one new entrant which has been snapping up smaller sites. The company, which has a market capitalisation of $41.5 million, has been in the electrical and mechanical engineering business since 1980. But since the start of the year, Tee has been buying a string of freehold terrace houses and apartments with plans to develop them into luxury ’boutique’ homes.

Among its purchases are three single-owner sites, CBRE’s data shows. Tee acquired two single-owner plots in Cairnhill Circle in July - one for $7.7 million and the other for $5.5 million. It also bought a single-owner property in Thomson Road for $6.9 million in January this year.

Similarly, Eastern Holdings, which publishes magazines, also picked up two small single-owner sites in Grove Drive this year - one for $12.5 million and the other for $10.3 million. The company is also relatively small, having a market capitalisation of about $70 million.

Savills’s Mr Ku says that there are also some high net worth individuals who are buying smaller sites, redeveloping them and then selling them - all within a short span of time - to capitalise on the property market.

These wealthy individuals were also adding to the demand for smaller sites, he says.

Source : Business Times - 22 Nov 2007

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