Allco Reit calls off plans to raise $150m

Allco Reit calls off plans to raise $150m

ALLCO Commercial Real Estate Investment Trust (Reit), which owns commercial buildings in Singapore, Australia and Japan, has cancelled a plan to raise up to $150 million, citing market conditions.
The trust said it was not proceeding with its plan to raise capital by offering up to 175.2 million new units to existing unit holders.

‘There is no pressing need for Allco Reit to be raising capital at this time,’ said Mr Nicholas McGrath, the chief executive of Allco Reit’s manager.

The Reit had meant to use capital raised from the offering to pay off some of the debt taken on when it bought properties in Singapore and Japan.

‘However, given current market conditions, the manager has concluded that it is not prudent to raise equity at this time,’ the Reit said in a statement.

Earlier this month, Saizen Reit - which owns properties in Japan - saw the price of its units plunge 13 per cent on its debut.

As well, APL Japan Trust - which has a portfolio of residential buildings in 12 Japanese cities - postponed its initial public offering.

It said that it was concerned about post-listing weakness amid poor market sentiment.

Source : Straits Times - 29 Nov 2007

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Private sector not using Govt’s bonus as benchmark - Singapore

Private sector not using Govt’s bonus as benchmark - Singapore

Small firms especially will find it hard to bump up payouts amid rising costs for rent, materials

By Gabriel Chen
THE Government’s move to hand civil servants a year-end bonus of two months’ pay has raised the bar for private companies already struggling to retain talent in a tight job market.
The bumper payout - it follows a half-month bonus in July; a similar one is on the cards for March - will make the civil service a more attractive place to work.

Not only could it stem the drift of talent from the public to the private sphere, it could reverse the direction if firms act like Scrooge this Christmas.

Some bosses have dismissed the significance of the Government’s move, saying that the private sector is a different entity with its own way of calculating bonuses.

Maybank Singapore, for example, has a bonus scheme linked to the company’s performance and ‘will not apply the same formula as the civil service’, said human resources head Wong Keng Fye yesterday.

It is a similar story at air freight firm The National Forwarder (Singapore). ‘We normally base the bonus on our own performance and don’t use the Government as a guideline,’ said managing director Rajoo Amurdalingam. The firm paid a two-month bonus last year and will probably give 21/2 months this year, depending on its performance in the next few weeks.

Remuneration consultants back the view of these bosses, saying that comparing private enterprise and the civil service is like comparing apples and oranges.

But HR experts warn that even though head honchos might dismiss the Government’s generous bonus, their employees will take note, especially with resignation rates rising and job-hopping growing more rampant.

‘While the corporate office might not use the civil service bonus as a benchmark, employees certainly will,’ says Mr Pan Zaixian of recruitment consultancy Robert Walters.

Some firms, already facing rising wage costs and a severe labour shortage, will have tough calls to make.

SC Auto general manager Rachel Lee told the Straits Times: ‘If we don’t follow suit, we’ll see a lot of resignations on the table.’

Wages for welders and other skilled workers at SC Auto, which designs and makes luxury coaches, have risen 7 to 10 per cent this year.

While Ms Lee says she will not cave in and hand out higher bonuses at the expense of her bottom line, she has to manage expectations. Last year’s bonus was about 11/4 months.

For many small and medium-sized enterprises (SMEs), which need to manage capital and cover rising costs for raw materials, demands for higher wages and bonuses could hamstring cash flow.

‘I don’t think SMEs will raise bonuses because of the Government’s move,’ said Mr Kang Puay Seng, a co-founder of soya drink maker Mr Bean. ‘They have to prepare for rainy days.’

This year, his commodity costs, for sugar and beans, for instance, have risen sharply, while rents for his outlets have soared by 20 per cent. With these costs constricting the balance sheet, bonuses are likely to be similar to those paid last year, he said.

Mr Tim Hird, the managing director of recruitment agency Robert Half Singapore, said companies are employing more creative strategies to attract, retain and manage talent.

These include providing flexi-work benefits, hiring on a contract basis, using older workers and implementing structured career development plans.

Source : Straits Times - 29 Nov 2007

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Doors open wider for foreign workers in Singapore

Doors open wider for foreign workers in Singapore

Rules on quotas eased to allow more hiring at all levels, especially S-pass holders

By Yeo Ghim Lay

COMPANIES hungry for workers cheered yesterday when the Government announced that they can soon hire more foreign workers.
They can do so at all levels but a bigger chunk of these extra workers looks set to be mid-level skilled workers, or S-pass holders, due to strong industry demand.

This is because these workers can form up to 25 per cent of a company’s total workforce, a jump from the current 15 per cent. An S-pass worker, who is a notch above a work permit holder, must earn at least $1,800 a month.

The changes in the various industries’ dependency ratios - which is the number of foreigners a company can employ relative to its local employees - will take effect in January.

They were announced by Manpower Minister Ng Eng Hen last night at the Ernst and Young Entrepreneur of the Year event, at which logistics firm YCH Group’s chairman and chief executive, Mr Robert Yap, won the title.

In applauding the changes, the Singapore National Employers Federation, said: ‘They are a very welcome, very timely and very significant response from the Government.’
Its executive director, Mr Koh Juan Kiat, also said that potentially, the 10 percentage point increase in S-pass holders may see between 50,000 and 100,000 workers coming in.

Employers have recently called for the foreign worker quota to be raised. Faced with a buoyant economy, many struggle to fill job vacancies.

It was a situation not lost on Dr Ng.

He said that to succeed as an ‘economy built on high innovation and value addedness’, relying on talent in Singapore is not enough.

There is a limit to the growth of Singapore’s resident labour force, he said, referring to a workforce that includes permanent residents as well. It eased off to just 2 per cent this year.

At the same time, unemployment is at a 10-year low - 1.7 per cent in September.

Dr Ng also noted a crucial condition that helped Singapore become the world’s most competitive labour market this year. This factor is that companies here have access to the manpower they need.

Hence, the introduction of the measures to ensure such access continues.

But with the higher proportion of S-pass holders being allowed in, the Manpower Ministry is hoping companies will use it to improve the quality of their foreign workforce.

Contractors look set to do so. Mr Simon Lee, executive director of the Singapore Contractors Association, said the new S-pass quota comes in handy because contractors would need more skilled supervisors to lead bigger groups of workers, as building activities at a few major projects are expected to intensify from mid-2008.

However, Mr Kellvin Ong, Rendezvous Hotel’s general manager, cautioned: ‘We also have to be mindful of the bottomline. S-pass workers have to be paid a minimum salary.’

Citigroup economist Chua Hak Bin said that in sectors like construction, allowing more foreign workers will mitigate labour costs and ‘more importantly, the greater risk of project delays due to a shortage of workers.’

Besides the quota changes, the Manpower Ministry is also removing the two-year requirement for higher-paid workers eyeing a personalised employment pass (PEP).

This pass, introduced this year, lets them remain here for up to six months in between jobs. Currently, those earning at least $7,000 a month must work here for at least two years before they can apply for a PEP.

But from March 1 next year, those whose last-drawn fixed salary abroad is $7,000 a month can apply straightaway for the PEP.

Source : Straits Times - 29 Nov 2007

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More than 7,000 new Singapre flats expected over next 7 months

More than 7,000 new Singapre flats expected over next 7 months

Over 1,000 flats in 2 projects launched yesterday; 6,000 more to come by next June

By Tan Hui Yee, Housing Correspondent

NEWLY-WEDS need not worry about not having a new HDB roof over their heads.
More than 7,000 new Housing Board flats will be offered for sale over the next seven months, as well as seven plots of land which could boast another 3,200 units.

To cater to different income groups, flats on the drawing board range from the humble two-room flat to privately-designed estates and executive condominiums.

This increase in flat supply, the biggest in recent years, is expected to ease the bottleneck that has emerged in recent months as buyers, put off by the high prices of private homes and resale flats, turned to new subsidised HDB flats.

Prices of resale HDB flats grew by 11 per cent in the first nine months of this year, while prices of private homes shot up 22.9 per cent.

An indication of the rush for new flats: the HDB recently received almost 8,000 applications for just 400 flats in Telok Blangah and more than 1,600 applications for 516 homes in Punggol.
National Development Minister Mah Bow Tan yesterday made clear the HDB was stepping up flat building ‘in a very major way’.

At 4,800 units, the number of HDB’s build-to-order flats offered by the end of this year is already more than double the number launched last year.

Property agents say the move will also encourage HDB flat sellers to be more realistic about their asking prices.

Mr Albert Lu, managing director of C&H Realty, thinks that prices may drop. ‘But it’s a good thing, as more people will be able to afford flats,’ he added.

Two build-to-order projects were launched yesterday:
Segar Meadows in Bukit Panjang Ring Road, comprising 412 three- and four-room flats.

Compassvale Beacon in Punggol Road, comprising 750 two-, three-, and four-room flats.
From next month till June, the HDB will also launch for sale another 6,000 new flats under the build-to-order system, where projects are built only if the majority of flats are booked.

It will also launch for sale four plots of land in Bishan, Simei, Toa Payoh and Bedok for flats to be built and sold by private developers. Another three sites - in Yishun, Jurong, and Sengkang - will be made available next year for development of executive condominiums.

Mr Mah reassured homebuyers - especially those buying their first subsidised home - that there were enough flats as well as a variety of properties to meet their needs.

About 80 to 90 per cent of applicants for each build-to-order project are such ‘first-timers’, many of whom are newly-weds. In the two recent balloting sales exercises, 92 per cent of shortlisted buyers fell into that category.

He urged them: ‘Don’t be too choosy…It’s not possible or realistic for the HDB to offer only new flats in mature estates in the heart of the city.’

The boost in supply buoyed buyers like Ms Affizah Aziz, 40, who turned to the HDB resale market after failing to get a new flat in a recent ballot. The housewife said: ‘I still would like to have a new flat. Its surroundings and atmosphere are much better.’

Mr Mah promised that new flats will remain affordable. Their prices, long pegged to the values of resale HDB flats, will not be affected by a rise in building costs.

He also rejected suggestions that the release of the flats was meant to prevent a property bubble from forming. ‘I don’t see any bubble forming,’ he said. Unlike the private property sector, the HDB market is a much bigger and more stable. ‘The growth we are seeing is a healthy one in the resale market,’ he said.

Source : Straits Times - 29 Nov 2007

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Where high finance meets high living - Singapore

Where high finance meets high living - Singapore

The new downtown will boast a casino, a financial hub, condos and retail areas, writes CLARISSA TAN
TIRED of Orchard Road? Jaded by Clarke Quay? Finding Robertson Walk just a trifle same-old, same-old? For the Singapore consumer - probably among the most avid in the world - Marina Bay may be the next big thing.

The next big thing: An artist’s impression of what Marina Bay may look like in the near future. Events being held in and around the public areas like the Chingay street parade and the upcoming Grand Prix F1 race, will help to pull in the crowds
The new downtown will be home to a casino, a financial centre and several sparkling condominiums, so not surprisingly, shops and restaurants are eager for a presence there.

‘The Marina Bay area presents many exciting opportunities for both the business and leisure market,’ said Sulian Tan-Wijaya, general manager of The Fullerton Heritage, which is developing a string of commercial properties along the waterfront.

‘Our development is at the heart of the Central Business District, the Marina Bay Sands casino, the Esplanade theatres, new high-end residences like The Sail and The Clift, and the nearby Civic District,’ she said.

Edgar Huang, manager of marketing services for Esplanade - Theatres on the Bay, said the arts-performance centre expects to see ‘even more buzz in the area, with more people coming to work and live and play here’. The theatres, open since 2002 and famous for their domes that have been likened to durians, are also adjacent to a shopping mall.

David Martin, general manager of Marina Bay Financial Centre (MBFC), which will consist of high-rise office towers as well as retail space, estimates there will be 50,000 people living and working in the ‘immediate vicinity’ of the financial hub from 2011.

Along with the visitors who are sure to flock to the adjacent Sands, ‘we believe this creates a compelling offer to potential retail tenants, and this is also the feedback we are getting from the market’, he said.

Events being held in and around the public areas of Marina Bay will also help draw in the crowds, said the Esplanade’s MrHuang.

‘Marina Bay is also currently host to many celebrations like National Day, the Fireworks Festival and the New Year’s Day celebrations,’ he said.

Upcoming events like the Chingay street parade and the Grand Prix Formula One race, which Singapore will host in September next year, will also attract visitors, he added.

To entice what promises to be a diverse range of consumers, each developer is adopting a slightly different marketing tack.

The Fullerton development, for example, is aiming to be high-end and historical.

‘In addition to the Fullerton Hotel and a new waterfront 100-room luxury hotel, the Fullerton Heritage Precinct will offer a range of chic, trendy and elegant retail and dining experiences,’ said Ms Tan-Wijaya.

‘These include conservation buildings such as The Fullerton Waterboat House, Clifford Pier and Customs House, as well as One Fullerton,’ she said.

One Fullerton will revamp its second floor and offer even more food and beverage outlets, which should attract tourists who visit the nearby Merlion Park, she said.

The Esplanade is pitching itself as a kind of natural retail extension for the arts lover. ‘It’s a lifestyle experience pegged to the arts,’ said Mr Huang.

‘Besides coming here for a show, you can start or end your evening with drinks and food,’ he added. ‘There are many shops closely related to the arts for art lovers, and those unfamiliar with the arts won’t feel out of place either.’

Mr Huang said that business at the Esplanade has been bustling since its inception.

‘It’s been positive here at Esplanade Mall,’ he said. ‘The Esplanade also presents over 70 per cent of our artistic programmes free, which means visitors will always have something to look forward to after a meal or a visit to the shops.’

He said that some of the main attractions of the mall are the food centre Makansutra Gluttons Bay, award-winning restaurant My Humble House and library@esplanade, Singapore’s first performing-arts library.

Not forgetting the small but unusual Tatami Shop - ‘the world’s first tatami furnishings retailer outside Japan’, said Mr Huang.

Suntec City Mall, which welcomed its first customers in 1997, says its retail concept is ‘a little something for everyone’. The shopping centre’s larger tenants include hypermarket Carrefour and fashion retailers Mango, La Senza and Lacoste. It also boasts the gigantic Fountain of Wealth, which attracts visitors from all over the world.

‘Also, Suntec City Mall houses the embarkation point for the many tourists going for the Duck Tours and Hippo tours,’ said Marilyn Tan, investor relations manager at ARA Trust Management (Suntec).

As for the MBFC, Mr Martin said the financial hub aims to be ‘a vibrant and prestigious, yet convenient, shopping and dining precinct for the internationally-minded’.

Retail in the MBFC would address a ‘market gap’ in the central business district for serving the needs of higher-income earners and residents, he said. ‘This group of customers wants much more than what a conventional mixed-use centre offers. MBFC is designed as a place where residents, the office population and visitors can satisfy their everyday needs without leaving the business and financial district.’

Of the development’s 160,000 sq ft of underground retail space, about half will be for shops and the other half for food and beverage, he said. In addition, there will be a restaurant on the 33rd floor of the Tower One office block.

‘MBFC is in talks with a number of leading retail interests to be located within the centre,’ he said. The development will offer dining and entertainment options for ‘a spectrum of tastes’.

Then, of course, there is Marina Bay Sands, which will open in 2009. Its developers, Las Vegas Sands, declined to comment at this stage on the specifics of upcoming shops and restaurants.

Besides the casino, the entire integrated resort, as it is called, will feature three 50-storey hotel towers, linked by a two-acre Sky Garden. Not to mention an Arts and Sciences Museum shaped like a welcoming gesture, and one-million square feet of ‘integrated waterside promenade and shopping arcade’, according to its website.

Clearly, there will be loads of shopping and dining opportunities there. So hang on to your hats, Singapore consumer - if not your purses.

Source : Business Times - 29 Nov 2007

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More supply but HDB prices will go up: Mah

More supply but HDB prices will go up: Mah
Singapore Board may offer another 6,000 units through build to order scheme
By ARTHUR SIM

(SINGAPORE) The Housing and Development Board will continue to monitor demand and could offer another 6,000 units through its build-to-order (BTO) system. However, prices are also likely to go up.

Saying that he did not want to ‘fudge the issue’, National Development Minister Mah Bow Tan said: ‘Prices will go up as a result of resale prices going up.’ Mr Mah was speaking at the launch of two new housing projects under the BTO system.

The projects, Segar Meadows in Bukit Panjang town and Compassvale Beacon in Sengkang town comprise a total of 1,162 flats.
Three- and four-room flats (68 sq m-93 sq m) at Segar Meadows will cost between $116,000 and $231,000, while two- to four-room (48 sq m to 97 sq m) flats at Compassvale Beacon will cost between $69,000 and $233,000.

Although the precise formula for fixing prices was not revealed, Mr Mah explained that it would be based on average resale prices rather than the ’spectacular prices’ reported for some flats recently.

Mr Mah also let on that he had received a few letters and e-mails from constituents saying that they had not been successful in getting flats through the BTO system.

But he reiterated that the government was committed to providing a variety of affordable public housing to meet the ‘aspirations’ of first-time buyers and young couples.

To this end, he revealed that 4,800 units have been launched through BTO this year, twice the number compared to 2006.

On affordability, Mr Mah said that the majority of households spent a manageable 20-25 per cent of their monthly household income servicing loans for their flats. He also added that since the implementation of the Additional Housing Grant scheme in March 2006, 4,100 eligible households have benefited from grants amounting to about $50 million.

And demand from first time buyers has been strong. According to HDB, about 92 per cent of those who applied for the 4-room flats for the two BTO launches in August and September and were successfully short-listed within the first 100 per cent flat supply were first timers.

Mr Mah also had this advice for those looking to buy a flat now: ‘If you cannot afford a big flat, then buy a smaller flat. If you can’t get a new flat, then get a resale flat. In life, we make trade-offs all the time.’

To meet the needs of the ’sandwiched class’, Mr Mah revealed that HDB will be making more sites for executive condominiums (ECs) and the Design, Build and Sell scheme (DBSS) available in the first half of 2008.

Up to three EC sites with a total of 1,300 units, and four DBSS sites with a total of 1,900 units are set to go on the reserve list of Government Land Sales Programme for H1 2008.

Knight Frank director (research and consultancy) Nicholas Mak said that the supply of more public housing flats could cool resale flat prices but the impact will be felt next year. ‘It could be a signal that the government will release more sites to control runaway prices in the resale market,’ he added.

Managing new supply and demand will be a tricky job for HDB because it does not want to be stuck with a surplus of flats.

A tight hold on supply could, however, push up prices.

But demand seems stable. Mr Mak points out that so far, demand as measured by the number of applications received for new flats between 2000 and 2007 has ranged from 7,900 to 13,800. This pales in comparison to the 60,000 to 70,000 applications received in the mid-1990’s, he said.

Mr Mak also added that he expects the impact on the private property market to be minimal.
Source : Business Times - 29 Nov 2007

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Quotas eased to lighten foreign worker squeeze - Singapore

Quotas eased to lighten foreign worker squeeze - Singapore

Door opens for more skilled workers, but some sectors still face crunch
By UMA SHANKARI

(SINGAPORE) The government yesterday announced that it will ease rules and allow more foreigners into the workforce to support Singapore’s growing manpower needs.

But while most industry players welcomed the moves, some hope that the government will follow up with more measures to address the somewhat complex reasons for certain shortages.

The government’s new package of foreign workforce measures, announced by Manpower Minister Ng Eng Hen yesterday, aims to ease the tight labour supply across the board - particularly in the construction, marine, manufacturing and services sectors, among others.

Citigroup economist Chua Hak Bin said that the relaxation will help meet strong labour demand, given an already tight labour market.

‘Wage pressures have intensified because of the labour shortage,’ Dr Chua said. ‘Companies have been hit by the higher costs.’

Perhaps most significantly, companies will have greater access to S Pass holders. With effect from Jan 1 next year, the S Pass quota for all sectors will be increased to 25 per cent - from 15 per cent at present - to help meet the growing demand for mid-skilled foreign workers, the Ministry of Manpower (MOM) said yesterday.

The new S Pass quota will come entirely from companies’ Work Permit quota which will be increased for all sectors. Companies can therefore employ more S Pass holders in lieu of Work Permit holders.

The change could potentially allow at least another 50,000-100,000 new workers into Singapore, said Koh Juan Kian, executive director of The Singapore National Employers Federation (SNEF).

Other changes include increasing the dependency ratios for several industries - which will allow a higher proportion of foreign workers in those sectors.

However, industry players here want more changes. The changes announced yesterday are also expected to help companies in some sectors more than others, they said.
Orchard Hotel’s human resources director Erica Chui said that allowing more S Passes will not necessarily ease the labour shortage as there is a minimum salary and a minimum number of years of direct work experience required to qualify for the pass.

‘It would be helpful if the Work Permit could be extended to non-traditional sources such as China and Indonesians,’ she said.

Lower-skilled jobs in the services sector are expected to remain plentiful - and labour supply, tight - given the upcoming integrated resorts and the likely tourism boom.

For the construction sector, on the other hand, the building boom has created a severe shortage of highly-skilled workers.

While the new regulations are expected to help increase the supply of lesser-skilled labour, it will not do much to ease the shortage of highly-skilled workers - who are in hot demand worldwide.

‘Currently, there is severe competition for construction workers globally, especially with China and the Middle East in a phenomenal building boom,’ said Jackson Yap, chief executive of construction company United Engineers. ‘Therefore, it is a worldwide supply issue, and not so much of local labour restrictions.’

The shortage of supervisory positions - such as site managers and project engineers - will not be eased in the short term as long as the strong demand for such workers continues, Mr Yap said.

Industry body Singapore Contractors Association Ltd (SCAL) however welcomed the move, saying that the new measures might offset some of these shortages.

In the manufacturing, and marine sectors, the impact of the new regulations could well be greater, experts said. Singaporeans are generally not keen to be employed in these sectors, said Citigroup’s Dr Chua, so allowing more foreign workers will help.

The Singapore Manufacturers’ Federation (SMF) said that skilled foreign workers could provide a ‘buffer’ while students and workers here are given time to be trained on the job and in their institutions to fill the gap.

However, the industry body pointed out that Singapore has to be prepared to pay the ‘market price’ for the skilled workforce that it needs.

Lee Metal Group, a manufacturer of steel reinforcement products, said that the new rulings will allow the company greater ease in its hiring of skilled labour. ‘This new ruling would also make it easier for businesses such as ours to expand,’ said a spokesman for the company.

Singapore’s unemployment rate fell to 1.7 per cent in September this year, the lowest in almost a decade. Far more jobs are being created than locals can fill, MOM said. And companies, the ministry added, have been giving feedback that it is increasingly harder to find workers - especially locals.

Source : Business Times - 29 Nov 2007

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