Singapore En bloc sales: Find fairer way to compensate all

Singapore En bloc sales: Find fairer way to compensate all

Mon, Dec 17, 2007

The Straits Times

THE Singapore Institute of Surveyors and Valuers (SISV) recommends the following methods of apportionment for collective sale: the share value method; 50per cent strata floor area and 50per cent share value method; general valuation method; or the combination of general valuation and share value method.
The share value method favours small units, while the strata floor area method favours units with large areas.

The 50per cent strata floor area and 50 per cent share value method has been quite equitable for the past couple of years as, generally, the bigger units are transacted at a lower rate per sq ft (psf) than the smaller units.

But during the last two years, there has been a growing number of bigger units where the asking on a psf basis is equal or more than that of the smaller units.
One of the reasons could be the reduction in unit size as developers try to maximise the buildings, and hence the scarcity of larger units.
I would like to suggest further variations to the above methods to minimise the objections by the minority owners who own bigger units.

For example, 85per cent strata floor area and 15 per cent share value; or 90per cent strata floor area and 10 per cent share value; or a combination of the percentage of the strata floor area and share value be used, instead of the fixed 50 per cent strata floor area and 50 per cent share value method.

The method chosen will have to be discussed at an extraordinary general meeting.

It will be a win-win situation this way, as a smaller unit is compensated for its share by getting a better psf than a larger unit. At the same time, the larger unit will not be losing out too much. The rationale is to find a fairer way for all owners to be compensated.

During the debate on the Land Titles (Strata) Amendment Bill on Sept20, Nominated MP Siew Kum Hong brought up the matter of apportionment, and the response from Deputy Prime Minister and Law Minister S. Jayakumar was that ‘Mr Siew Kum Hong expressed his unhappiness with the guidelines…on how proceeds should be apportioned or distributed. I would look into this. But let me say that we understand that the SISV is working on refining valuation guidelines…Of course, we are not able to specify in the law a standard apportionment method because there are a multitude of factors to consider in deciding on a single method of distributing the sale proceeds…But I take his point about the guidelines, and we will have discussions with the SISV’.

It would be good if we could know the outcome of these discussions.

Source : Straits Times - 17 Dec 2007

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S’pore Reits may well have to go down development path

S’pore Reits may well have to go down development path

By UMA SHANKARI
REAL estate investment trusts listed in Singapore (S-Reits) must look at developing their own assets going forward, instead of just buying from sponsors or third-party vendors.
Most are suffering from a double whammy - potential assets are lacking and capital is getting more expensive.

Right now, most of them are suffering from a double whammy - potential assets are lacking and capital is getting more expensive.

Too many Reits are competing for a fixed number of assets in Singapore. Since the first S-Reit was listed in 2002, the market has grown by leaps and bounds. Currently, there are 20 Reits listed on the Singapore Exchange.

In addition, foreign funds are also snapping up commercial properties, making assets even scarcer. These funds are also eyeing assets identified by developer-sponsored Reits as being in their asset pipelines.

For example, CapitaCommercial Trust (CCT) did not buy CapitaLand’s Temasek Tower and Chevron House. Market watchers said that a third-party buyer’s offered price must have been at a level that was not accretive to CCT. This means that a sponsor’s portfolio is a guaranteed asset pipeline for a Reit only if no third party is willing to offer a higher price - an unlikely scenario in a hot property market.

Compounding the problem is the jittery market, which makes raising funds for acquisitions difficult.

For example, K-Reit Asia recently decided not to proceed with a convertible bond and unit issue to finance its one-third purchase of One Raffles Quay, citing weak equity and credit markets. Parent company Keppel Corp instead provided a revolving loan facility of up to $960 million.

This pushed up the Reit’s gearing to a relatively high 55 per cent - not far from the regulatory cap of 60 per cent - giving K-Reit little room to fund future acquisitions with debt.

Citigroup recently downgraded K-Reit Asia to a ’sell’ from a ‘buy’, citing stalling acquisition growth. The bank also cut the stock’s target price to $2.17, from $2.87 previously.

‘Acquisitions will be constrained by limited debt headroom of about $100 million,’ the bank said in a research note.

Analysts have identified four other S-Reits - Allco Reit, Mapletree Logistics Trust, Cambridge Industrial Trust and Saizen Reit - as also having relatively high gearing.

Faced with these constraints, many Reits here will sooner or later have to go down the development route.

‘So far, A-Reit is the only Reit that has pursued this route with some success,’ notes OCBC Investment Research. ‘Going forward, with less opportunity for growth, we anticipate to see more S-Reits take on development projects.’

In particular, developers looking to list Reits in 2008 should look at setting up stapled trusts. Right now, there is just one such Reit listed here - CDL Hospitality Trusts, which consists of a hospitality Reit and a business trust, although the business trust is dormant at present.

In a stapled trust in which both parts are functional, investors will get stable returns from the Reit, which could be solely used as a vehicle for holding assets.

The stapled business trust, on the other hand, can take on development jobs and guarantee a pipeline of assets for the Reit. Such a product should prove to be popular with investors, and will also be a fresh and differentiated offering in Singapore’s Reit market.

Source : Business Times - 17 Dec 2007

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Pressure building up in crowded S-Reit sector

Pressure building up in crowded S-Reit sector

Mergers seen as one response to slowing growth as assets, funding get scarce
By UMA SHANKARI
THE Singapore real estate investment trust (S-Reit) market is expected to face waning investor appetite and a short supply of potential acquisitions next year.

Packed: The success of early Reits like CapitaMall Trust encouraged new players hoping to replicate their strategies
The S-Reit sector could also enter a consolidation phase, triggered by the implementation of a takeover code for Reits, analysts say.

‘Reits are under pressure at the moment,’ said Mark Ebbinghaus, the head of Asian real estate at investment bank UBS. ‘Many Reits have been sold off because of money leaving Asia.’

S-Reits have taken a beating over the past few months as large chunks of capital fled Asia on the back of the US sub-prime crisis. Many Reits are now trading at about 20 per cent below their June or July peaks.

Despite this, the sector will grow, with analysts predicting that at least three to five Reits will be listed in Singapore next year. This compares to five Reits in 2007 and seven in 2006.

Mr Ebbinghaus, for one, expects at least five Reits to go public here next year. The Reits are more likely to come to the market in the second half of 2008 as global financial markets recover, he said.

Others see a smaller number. ‘Going into 2008, we can expect at least a further two to three Reits to come into the market,’ said OCBC Investment Research analyst Wilson Liew.

However, he cautioned that the success of these new Reits is not assured. To do well, the Reits have to offer ’something new’ to differentiate themselves from the others in a now fairly crowded market space, Mr Liew said.

The S-Reit sector has grown substantially since the first trust - CapitaMall Trust (CMT) - was listed back in 2002. Right now, there are 20 Reits listed on the Singapore Exchange. Their combined market capitalisation is about $27.2 billion.

This compares to 15 S-Reits with a total market capitalisation of $24.4 billion at end-2006.

Right now, most S-Reits are based on properties in Singapore. A few are based on properties in China, India, Indonesia and Japan.

More diversity is needed, market watchers said. ‘A Reit based on properties in Thailand or Vietnam could do well,’ said Mr Ebbinghaus.

The S-Reit sector has to some extent become a victim of its own success, said OCBC’s Mr Liew.

‘The success of early Reits encouraged more players into the market, all hoping to replicate the same growth strategy,’ he said.

This quickly led to an asset squeeze, made worse as other new players - such as private equity and property funds - entered the market. The buying spree mopped up all the quality properties, pushing up valuations while bringing down yields, Mr Liew said.

BT understands that some Reit managers are putting off buying assets from the sponsor companies due to the high capital values of properties, which reduces the yields.

Acquisitions are slowing down as some S-Reits are also having trouble raising funds to buy the properties they want amid poor market conditions.

One theme for 2008 could be merger and acquisition activity in the S-Reit market.

Singapore’s Securities Industry Council (SIC) announced in June this year that it will extend the Singapore Code on Takeovers & Mergers to Reits. Now, anyone who acquires 30 per cent or more of any Reit must make a general offer for the remaining units.

Underperforming Reit managers could also be removed under the code. Guidelines allow for the removal of a Reit manager if at least 50 per cent of unit-holders are present and the majority votes for it.

OCBC Investment Research said that the industrial sector is most likely to see some consolidation. ‘The candidates could be either Mapletree Logistics Trust (MLT) or A-Reit buying and/or merging with Cambridge,’ Mr Liew said.

How well the S-Reit market will do going forward will depend on how quickly global financial markets can recover next year, observers said.

CIMB economist Song Seng Wun noted that Singapore is heading into a turbulent patch in 2008, although the country’s economic engine has never been in a better shape. ‘While we have faith in the domestic drivers, we note that external threats to growth are real and visible,’ he said.

Reits listed here have raised some $4.0 billion this year, compared to $3.2 billion in 2006, according to data compiled by UBS.

With more Reit listings on the table, the amount of capital raised next year could well be higher - provided the S-Reit market comes out of the current turbulence intact.
Source : Business Times - 17 Dec 2007

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New broadband tender to shake up telco sector

New broadband tender to shake up telco sector

IDA has mandated a distinction between the network firm and operating firm
By WINSTON CHAI
IT’S early days yet in the race to build Singapore’s future broadband highway but companies jostling for pole position are set to strike new partnerships and alliances over the coming months in what could come as the biggest shakeup to the telecommunications sector since its liberalisation in the year 2000.

Following several rounds of delays, the Infocomm Development Authority of Singapore (IDA) has finally announced its much-anticipated tender for the Next Generation NBN (National Broadband Network), an effort to build a high-speed Internet infrastructure to serve Singapore for the next 25 years or more.

Apart from announcing a subsidy of up to $750 million to defray the costs of this project, the IDA also unveiled a tender clause which will result in a flurry of collaborations between incumbents like SingTel and StarHub with other unfamiliar names to the local broadband scene.

Under its request for proposal (RFP), the telecommunications regulator is looking to appoint a so-called Network Company (NetCo) to pave the broadband highway with ‘passive infrastructure’ like high-speed cables and ducts capable of delivering access speeds of 1 Gbps (gigabit per second) or more.

This company will in turn lease its services to another entity called the Operating Company (OpCo), which will be responsible for wholesaling bandwidth to others that are keen to provide Internet-related services.

However, the IDA has mandated ’structural separation’ between the appointed NetCo and other players down the line to ensure open access and avoid unfair competition and discriminatory pricing.

‘If necessary, the government is prepared to consider legislation to achieve such effective open access for downstream operators in the next generation broadband market,’ said Lee Boon Yang, Minister for Information, Communications and the Arts.

Khoong Hock Yun, IDA’s assistant chief executive, told reporters last week that as a rule of thumb, a company cannot have more than a 30 per cent stake in the NetCo if it intends to participate in other aspects of the broadband value chain.

The NetCo and OpCo will be required to have separate offices, a different board of directors and shareholder make-up, he explained.

This unique requirement is a sea change from the current modus operandi, in which companies like SingTel own the underlying infrastructure and resells bandwidth as well as Internet services.

‘Structural separation is an interesting idea that many countries’ regulatory bodies have discussed, but not many, if any at all, have carried it out. This sort of approach is usually used when a telco market is deregulated,’ said Kenneth Liew, a senior analyst with IDC Asia-Pacific’s communications group.

‘As of now, I don’t think there are countries with government interference on structural separation. The closest is in New Zealand, where Telecom New Zealand is proposing for structural separation and this may happen with or without the government’s support,’ he told BizIT.

The IDA mandate will have a major impact on the 12 pre-qualified bidders for this project and especially local telcos SingTel, M1 and StarHub. All three have indicated their interest in the ongoing tender but are unlikely to be contented with winning the NetCo bid alone, which many industry observers believe to be a commoditised business since it is merely leasing infrastructure to others.

All three would be inclined to also play in the more lucrative segment of selling broadband packages and related services like Internet TV to businesses and consumers over the new network.

To do so however, local telcos will have to rope in partners to form new ventures to meet the prerogative of structural separation.

Of the 12 short-listed groups, eight are going in as consortium bids. M1 has already partnered with Hong Kong Broadband Network. SingTel on the other hand, has pre-qualified as both a lone entity and as a group bid alongside investment group Babcock and Brown, and Macquarie Bank.

Proposed joint ventures featuring M1, SingTel and their allies could be on the cards in their tender submissions to the IDA, which closes on March 25 next year. However, this deadline could be extended if a new group decides to vie for the project.

‘We will examine different ways of working with the government to help achieve its vision while ensuring a commercial return for SingTel’s shareholders,’ said Allen Lew, CEO of SingTel Singapore.

StarHub however has pre-qualified only as a single bidder and has yet to publicly announce tie-ups, although these could be locked down over the next three months.

‘The RFP is very much in line with what we had expected, and we will be preparing a proposal to meet the needs of the RFP,’ said Jeannie Ong, StarHub’s head of corporate communications and investor relations.

The winning NetCo bid will be announced by Q3 2008 and IDA will call for a separate tender for the OpCo in the second quarter.

Singapore’s Next Gen NBN is expected to be partly-operational by as early as 2010 and it will be extended islandwide by the year 2015.
Source : Business Times - 17 Dec 2007

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Singapore Mid-tier, mass market homes may lead gains

Singapore Mid-tier, mass market homes may lead gains

Performance hinges on HDB upgraders, en bloc millionaires, say consultants
By ARTHUR SIM
(SINGAPORE) Next year could be the year of the mid-tier and mass market sectors with prices expected to rise between 8 and 15 per cent.

Whether this will happen depends largely on en bloc millionaires, the return of HDB upgraders, the resilience of the Singapore economy, and the possibility of more developers stemming supply and landbanking their redevelopment sites.

CBRE Research executive director Li Hiaw Ho expects 10,000-13,000 new homes to be sold, ‘with more activity seen in the mid-tier and mass market’.

The number falls short of the estimated total number of 15,000 units sold in 2007. But Mr Li said that, in the event of a downturn, developers who can hold will push back their launches until the market turns around.

‘This is possible because most of the collective sale sites are on freehold tenure,’ he added.

Mr Li also noted that while about 67 per cent of the development sites sold in 2006 were in the prime districts of District 9, 10 and 11, this fell to 49 per cent in 2007.

‘More sites outside the prime districts were acquired via the collective sale route in 2007, compared to 2006 when there was more supply in prime areas, and when prices were more affordable,’ he added.

Based on total sites sold, CBRE estimates that there could be about 14,000 units ready for launch outside the prime districts next year. This includes a potential 1,600-unit 99-year leasehold condo built by Frasers Centrepoint and Far East Organization in Tampines, and a 630-unit 99-year leasehold condo by Sim Lian Land in Bishan.

Savills Singapore director of marketing and business development Ku Swee Yong reckons that of the new launches, the majority would be mid-tier.

‘There are not enough launch-ready mass market sites of significant size,’ said Mr Ku.

He believes that there could be more mass market sites in the Government Land Sales (GLS) Programme, with prices for the mass market gaining 30-50 per cent, and mid-tier prices rising 20-40 per cent.

Apart from a rising number of new citizens and PRs (permanent residents), Mr Ku expects an influx of integrated resorts-related foreign manpower in the second half of 2008.

‘The high-end will be replenished with the re-construction of en bloc sites but the mass market housing for junior level expats and foreign talent will have to come from GLS sites,’ he added.

Colliers International director of research and consultancy Tay Huey Ying also expects buyers hoping to reap rental returns to make up a significant portion of the mass market.

However, Ms Tay believes that the mass market and mid-tier sectors will no longer be quite as easy to define.

With many developers improving their product to try and price their projects at benchmark levels, Ms Tay says, there is a noticeable blurring of tiers as the higher-end of each tier encroaches into the lower-end of the next tier.

‘As such, it would be more appropriate to segmentise the residential property market into seven tiers, namely, mass, upper-mass, mid-tier, upper mid-tier, high-end, luxury and super luxury,’ she explained.

Colliers’ target prices for the mass and upper-mass market developments are below $750 psf, and between $750 and $1,100 psf respectively.

Projected prices for the mid-tier market are from $900 to $1,800 psf, and upper mid-tier market, from $1,800 to $2,500 psf.

At these prices, HDB upgraders could be priced out of the private market.

Resale HDB prices are rising with cash-over-valuation now as high as $150,000. Although this is for very select units, sellers are nevertheless holding out for higher resale prices. ERA Singapore assistant vice-president Eugene Lim, for one, does not expect resale volume in 2008 to top the estimated 30,000 units sold in 2007.

PropNex CEO Mohamed Ismail reckons that resale prices will rise 10-15 per cent in 2008. In spite of this, he believes interest on mortgages, stamp duty and legal fees will still leave about 10 per cent of HDB sellers in negative equity if they sell now.

Highlighting a recent trend, Mr Mohamed notes that 5-room flats in areas such as Bishan, Bukit Merah, Bukit Timah, Central, Clementi, Kallang, Marina Parade, Queenstown and Toa Payoh commanded cash-over-valuation of $50,000 and above in Q307. He added that buyers were mainly private property downgraders or en bloc millionaires who are also finding private property too expensive.

Source : Business Times - 17 Dec 2007

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Analysts staying bullish on Singapore SGX in the new year

Analysts staying bullish on Singapore SGX in the new year

But wild card is whether the US goes into a recession and how Asia responds
By LYNETTE KHOO
(SINGAPORE) With lingering market uncertainties and repricing of risks, 2008 is probably going to be a less exciting year for the stock market, compared to the record-breaking run this year.
But analysts are betting that on the whole, share prices would remain on an uptrend.

‘2008 would still be an okay year though it will not be as exciting as this year,’ said Gabriel Yap, senior dealing director at DMG & Partners Securities. ‘On a technical basis, the key support lines have not been broken.’

He added that 2008 would be a year where the great investors - those who are able to make profits even in volatile markets - would shine.

With current concerns over the US sub-prime fallout, a slowdown in the US economy and high oil prices, any market gains would be hard-fought, analysts said.

Most predicted that the market would be more choppy in the first half of 2008 before some stability sets in in the second half.

‘The sub-prime mortgage crisis with its impact on the US economy is not going to disappear overnight and may still cause market volatility during the first half of next year,’ said Yeo Kee Yan, retail market strategist at DBS Research Group.

With wild swings likely to persist, he recommended buying on weakness at the Straits Times Index (STI) level of 3,000-3,300 and selling into strength at 3,700-4,000.

UOB Kay Hian analyst K Ajith expects the STI to drift sideways in the 2,960-3,900 range at least in the first half next year given the market’s uncertainty and a higher risk premium.

To recap, a liquidity-driven rally saw the STI breaking new highs in the first half of 2007 on the back of record property prices and surging Chinese markets. But the second half was dampened by credit woes arising from the US sub-prime crisis, sending the STI below the 3,500 level.

Last Friday, the STI closed 12.93 points or 0.37 per cent lower at 3,466.38, after credit ratings downgrade for US banking giant Citigroup, and Lehman Brothers’ warning about further writedowns further sapped market confidence.

While destabilising factors remain, analysts believe that a doomsday scenario is unlikely.

‘We are unlikely to see panic-selling. The Fed has shown flexibility to ensure that the US does not go into a recession and most people are looking at a 75 basis point cut to 3.5 per cent,’ Mr Yap said.

Analysts said that the wild card really is whether the US goes into a recession, and how Asia responds. As of now, the Asia outperformance story looks intact, and Singapore’s economy is still supported by strong domestic demand, with non-US export demand picking up the slack from the US.

‘The strength of the domestic economy underpins our optimistic outlook on Singapore,’ Merrill Lynch said, pegging its bottom-up STI target for 2008 at 4,426.50.

‘We believe the recent market retreat represents an excellent opportunity to buy into the re-rating of Singapore.’

Analysts said that they like China plays, particularly consumer stocks that are catalysed by China’s growth story and the Beijing Olympics 2008. Huge QDII (qualified domestic institutional investors) inflows are also expected next year as more such funds obtain Chinese regulatory approval to invest in S-shares.

‘That’s (QDII) going to spark tremendous revaluation of S-shares largely due to the large valuation gap between Singapore and China/Hong Kong,’ Mr Yap said.

So far, S-shares are trading at an undemanding forward PE of about 14.5 times compared to A-shares and H-shares at 28.6 times and 18.1 times respectively.

Analysts recommended taking up some defensive positions next year but have mixed views on banking and offshore marine stocks. Although the fundamentals for these sectors remain strong, some analysts believe banks could see more turbulence before the sky clears, while the huge foreign exchange losses incurred by Labroy Marine and SembCorp Marine, reflecting the US dollar exposure among such stocks, is cause for concern.

With the market still pricing in slowing US consumption and rising inflation, CIMB-GK analyst Kenneth Ng believes that company-specific drivers will become more relevant than these broad sectoral themes. ‘We see 2008 as a year for selective stock-picking, above broad sector bets.’

Source : Business Times - 17 Dec 2007

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It’s business as usual for UBS in Singapore

It’s business as usual for UBS in Singapore

By Lee Su Shyan, Assistant Money Editor
INVESTING FOR THE FUTURE: Ms Ong says UBS is committed to nurturing more private bankers in Singapore.

WHEN Swiss banking giant UBS announced US$10 billion (S$14.3 billion) in write-downs last Monday, some clients were uneasy about their money.
But they were relieved when they heard that the Government of Singapore Corporation (GIC) was going to pump money into UBS - 11 billion Swiss francs (S$13.9 billion) for an eventual 9 per cent stake.

Some top-notch UBS clients in the region apparently thought it such an attractive deal that they even asked if there was a chance for them to participate as well.

UBS Singapore says it is business as usual, with new money continuing to flow in from private banking clients.

Though UBS is a leading global bank, its recent losses from the United States sub-prime crisis have taken some of the shine off its reputation.

Regarding the write-downs, UBS Singapore country head Christine Ong told The Straits Times: ‘We wanted to be transparent. We have taken the bull by the horns and adopted a conservative approach to valuing our positions.’

She added: ‘GIC has been an investor in UBS for a long time. It is a shrewd investor, seeking good value and companies with a clear strategy. The increased capital will reinforce client confidence in UBS.’

UBS employs about 2,400 people in Singapore and has been here since 1979 - since 1975, if one counts Swiss Bank Corp, which subsequently merged with UBS.

It has three main businesses.

In the institutional asset management segment, it acts as a fund manager and manages assets for companies or clients such as GIC.

For investment banking, UBS has just come in tops in Singapore for the second year running for raising the most money in initial public offerings (IPOs), trumping JPMorgan and DBS Bank. For example, it handled the Yangzijiang Shipbuilding IPO, the largest in Singapore this year. It also handled the IPO for the Lippo-Mapletree Indonesia real estate investment trust.

Its third business - wealth management - is its mainstay. Worldwide, UBS makes nearly half of its money from wealth management, serving individuals with assets of more than a million Swiss francs.

Private banking is an over-used term, said Ms Ong. ‘It is not just about ‘brokerage’, where someone helps you with trading and to maximise your return. It is also about financial planning, succession planning, making sure the wealth survives beyond one generation and helping with client’s aspirations such as philanthropy.’

Of the 2,400 UBS employees in Singapore, more than 1,300 are in the wealth management division, serving clients in the Asian region. Just two years ago, the team numbered only 500 people.

From 2004 to 2006, UBS’ wealth management business in the Asia-Pacific doubled its invested assets to 151 billion swiss francs.

As a ‘booking’ centre for the bank - that is, where customers open accounts - Singapore comes second only to Switzerland.

Last week, UBS won the FinanceAsia award for Best Private Bank in Asia for the sixth year in a row. Ms Ong said: ‘The Asia-Pacific is the fastest-growing market for wealth management.’

Private banking is a new industry in the region because most of the wealth being created is coming from first-generation entrepreneurs, she added.

Hence, over the long term, UBS is committed to nurturing more private bankers in Singapore. For example, it has set up a training campus at the former Command House off Bukit Timah Road.

For every trainee that it recruits, it can expect to obtain returns only several years down the road. But it sees the move as a necessary investment for the future.

Ms Ong said: ‘This is our bread and butter. It is imperative that we continue to invest and grow in this business for the long term.’
Source : Straits Times - 17 Dec 2007

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Queensway still best place for sports retailers

Queensway still best place for sports retailers

QUEENSWAY Shopping Centre is rundown and fairly inaccessible, it has none of the frills its rivals have, such as a cinema, and rents have been rising. However, tenants at the well-known sporting goods haunt appear willing to stick with it.
Queensway, said Jeans Arcade proprietor Mohamed Yahya, who was echoing what five other retailers in the mall said, is ’still the best place for a sports retailer’. It has managed to maintain its reputation for being the place to go for one’s sporting needs over the years.

He has been at the mall for more than 30 years now, and is currently paying about $14 per sq ft (psf) for his 330-sq ft, second-floor unit. Last year, when his two-year tenancy agreement ran out, his landlord raised his $3,500 rental to $4,500, a whopping 29 per cent increase. The net effect, he said, is that he is just breaking even now.

Three other tenants that renewed leases within the last year reported rental hikes of between 3 and 20 per cent.

Another factor behind Queensway’s continued popularity is that rents at other locations have moved up too. The mall, which sits at the junction of Alexandra Road and Queensway, opened in 1976. Individual owners own the freehold units. A check with tenants there found rental rates ranging from about $13 psf to over $18 psf, depending on the location.

The Straits Times saw only one shop unoccupied.

New tenants such as Kobe 2000 proprietor Chan Chan Seng, 66, have been attracted to Queensway because rents there are lower than in other locations in the Katong and National Stadium area. His shop specialises in triathlon equipment. He is paying about $16 psf for the 135-sq ft unit - not as low as he would like, but still less than what landlords in other locations were asking, he said.

The mall is even attracting new, non-sports retailers such as Games Factory, which specialises in Sony gaming products. Its owner, 23-year-old Fred Yeo, signed the tenancy agreement two weeks ago, paying $14 psf for his 248-sq ft unit. He was considering a tiny $25 psf, 160-sq ft unit at the popular Far East Plaza near Orchard Road earlier, but decided to rent the cheaper Queensway unit just in case his business failed.

Source : Straits Times - 17 Dec 2007

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Asking rents at Singapore specialist malls rise by up to 30%

Asking rents at Singapore specialist malls rise by up to 30%

Some retailers pay willingly for locale’s reputation, others prefer mix of shops

By Chua Hian Hou
SPECIFIC THEME: United Square (above) is known as the mall to go to for children?s products, while Sim Lim Square (below) is known for computer parts. — ALPHONSUS CHERN

RETAILERS in specialist malls such as Sim Lim Square, Queensway Shopping Centre and United Square have not escaped the tide of rising rentals seen at other malls here.
Some tenants have reported demands for rent hikes of up to 30 per cent when the time came to renew their shop leases.

For some, it makes sense to pay the higher rent and stay put and enjoy the advantages of being in a specialist-themed mall. Others say that more variety in the tenant mix might draw even more shoppers.

A check with tenants at the three malls - well-known for electronic products, sporting goods and children’s products respectively - found that rentals went from a low of about $11 per sq ft (psf) to a high of more than $30 psf.

This is still lower than the $44 psf commanded by retail space in Singapore’s prime shopping belt - Orchard Road.

Knight Frank director of research and consultancy Nicholas Mak said that, despite these rental hikes and the limited walk-in appeal of such malls, setting up shop in specialist malls can make sense.

This, he said, is because a concentration of specialist shops can create a useful ‘cluster effect’ for a retailer.

A grouping of specialist retailers can give a locale a reputation as the ‘place to go’ for such products or services. This attracts customers looking for particular products, and in turn attracts more of such retailers to the mall.

For example, Sim Lim Square is known to both locals and tourists as the place to get electronic products. This means that a visitor to Sim Lim Square is much more likely to buy something than someone visiting a ‘generic, cookie-cutter’ mall, he said.

The owner of computer retailer IT Harvest, who wanted to be known only as Mr Sajan, said he has no intention of moving out of Sim Lim Square, even though his monthly rent is more than $30 psf.

‘Sim Lim…is the IT hub. You can’t do business in electronics elsewhere.’

Likewise, Queensway Shopping Centre is known as the place to go for sporting goods, which is why retailers continue to set up shop there.

In 2002, United Overseas Land (UOL) relaunched United Square, located next to the Novena MRT station, and themed it a ‘Kids Learning Mall’, targeting middle- to upper-income shoppers ‘who want to provide the best for their children’, said UOL spokesman Ruth Yong.

One tenant, who declined to be named, said sales at her children’s apparel outlet are on a par with those at her branch in Suntec City, where she pays a higher rental. The latter mall does not have any specific theme.

The tenant, who has had her United Square outlet for about a year now, said that while ‘traffic is lower than I had expected…it’s not a bad choice’.

But things can also be more competitive in a specialist mall.

For example, while the number of potential buyers of electronic gadgets at Sim Lim is likely to be higher than that at Suntec City, the presence of so many competitors will also make it hard for a new computer parts retailer to stand out and secure a sale, Mr Mak said.

Mall specialisation does not always guarantee hordes of shoppers and, in fact, may deter those who are not looking for those particular products.

This is the concern of one tenant at United Square, where rents have risen by an average of 30 per cent this year, according to industry watchers.

Unlike Sim Lim Square or Queensway, where shop units are owned and rented out by individual owners, United Square is owned and managed by property giant UOL.

One tenant, Ms Cordelia Ling, has approached UOL to ask that she be allowed to break her two-year-contract.

She started her four- month-old children’s furniture shop at the basement in United Square ‘because I thought it was central and the crowd was a good fit, but I can’t even cover my rent’, she lamented.

She pays $13 psf in rent, plus 10 per cent of profits made, for her 468-sq ft, basement-level unit.

Ms Ling puts it down to over-specialisation. ‘There are no walk-in customers, and when the schools do not have classes, the place is practically dead,’ she said.
Source : Straits Times - 17 Dec 2007

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S’pore Star Awards full of surprises

S’pore Star Awards full of surprises

By Hong Xinyi
BEST CHRISTMAS PRESENT: Actress Yvonne Lim (left) won the Best Actress award for the drama serial Metamorphosis.

DESPITE the considerable hype about a new generation of TV idols, it was the veterans rather than sweet young things who stole the show at this year’s Star Awards.
The annual ceremony honours MediaCorp TV’s top thespians and most popular stars, and took place last night at the Caldecott Hill TV Theatre.

‘Tomorrow is supposed to be the day the seven princesses officially take their thrones,’ said host Quan Yifeng jokingly at the beginning of the show.

She was referring to the seven starlets anointed by the Chinese press as the next leading ladies of the station: Jesseca Liu, Felicia Chin, Joanne Peh, Rui En, Fiona Xie, Dawn Yeoh and Jeanette Aw.

But only three of them - Liu, Chin, and Rui En - made it into the coveted Top 10 list of Most Popular Female Artistes, compared to five last year.

Instead, it was more seasoned actresses like Vivian Lai, Huang Biren, Quan and Xiang Yun who made up the rest of the Top 10.

‘Sorry I’m fighting for a place with the princesses,’ quipped an elated Lai, 30, after she received her award.

The results for the acting awards were also full of surprises.

Best Supporting Actress May Phua, Best Actress Yvonne Lim, Best Supporting Actor Darren Lim and Best Actor Zheng Geping were all first-time winners.

A tearful Lim, 31, beat hot favourites Huang Biren and Ivy Lee and up-and-comers Peh and Liu to clinch her first award, for Metamorphosis.

‘After 10 years in this business, this is the best Christmas present I could have wished for.’

Zheng, 43, a five-time nominee for Best Supporting Actor, was more circumspect when he picked up his Best Actor trophy for Like Father, Like Daughter.

‘I’m surprised that I still have a shot at this award at my age’ he said.

‘After 20 years as an actor, the awards don’t matter as much as a sense of responsibility to the job and enjoying the process.’
Source : Straits Times - 17 Dec 2007

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A380 still riding high after first 100 flights - Singapore

A380 still riding high after first 100 flights - Singapore

Operations have hummed along since maiden flight in October, thanks to efforts by SIA, Airbus

By Karamjit Kaur, Aviation Correspondent

HITTING that ‘century’ brought out that Up on Cloud Nine feeling for Singapore Airlines and Airbus.
Yesterday, SIA - the first commercial airline to fly the Airbus 380 - and the superjumbo’s European maker celebrated the world’s biggest passenger jet’s 100th commercial flight.

All that extensive testing and troubleshooting prior to the A380’s commercial launch, as well as the real-time monitoring of all flights since, have paid off for SIA and Airbus.

It has been a good run for the double-decker giant since the Singapore-Sydney operations started on Oct 26, SIA’s senior vice-president (engineering) Mervyn Sirisena told The Straits Times recently.

Other than a few weather-related delays out of Sydney, it’s been ‘on time, every time’, he said, adding: ‘It’s been 100 per cent reliable. We have had a few surprises and very minor glitches here and there, but nothing serious or systemic.’

With just one A380 flying - SIA gets its second plane next month - operations and engineering teams here, in Sydney and in Toulouse, France, where Airbus is headquartered, are pulling out all the stops to make everything move like clockwork.

The A380 leaves Changi Airport every night at 8.30pm and arrives in Sydney at about 6am the next morning.

Within 100 minutes, the big jet must be off-loaded, cleaned, re-fuelled, loaded again and ready to return to home base at about 2.20pm.

Airbus’ vice-president (customer services) for the A380, Mr Philippe Mhun, said: ‘Early on, it became clear that SIA would not have a back-up aircraft during the initial operation.

‘We were acutely aware that any ‘no-go’ item could result in the airline having to find hotel rooms for 471 passengers. So it was vital that the wheels were set in motion to deal with any incident as soon as it happened.’

SIA’s Mr Sirisena said that, in a ‘perverse’ way, the almost two-year delivery delay due to production problems did them good, because it gave Airbus and SIA extra time to test and re-test their systems and technologies and work on contingency plans for the A380.

By the time the aircraft started carrying passengers, Airbus, working jointly with SIA and other partners, had a database on more than 5,000 technical and other issues that could go wrong and how they could be fixed.

Also, when it comes to spares and parts, more than 35 suppliers across the globe can be immediately activated if the need arises.

To support the early operations of the A380, Airbus, which already has a customer service centre here, sent a team of about 30 engineers and other specialists here to assist SIA.

Most have returned to Toulouse, but three team members will stay on until the end of the year at least, said Mr Gunter Emmerich, head of the Singapore Airbus team.

The support is 24/7, he said, adding that each time the A380 takes off, separate teams in Singapore, Sydney and Toulouse monitor the aircraft in real time.

Crediting the successful operations of the A380 to the close collaboration between SIA, Airbus and other partners, Mr Sirisena said: ‘We were all a bit tense at first but we are more relaxed now.’

SIA will continue to monitor the A380 and its performance closely to ensure smooth operations continue, he said.
Source : Straits Times - 17 Dec 2007

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Woman’s body found inside unfinished condo

Woman’s body found inside unfinished condo

By Teh Joo Lin
GRISLY FIND: Police cordoned off the Viz@Holland construction site after the discovery and classified the case as murder. — DESMOND LIM

A WOMAN’s body was discovered yesterday morning in a room inside a condominium under construction along Queensway.
The woman, who is believed to have been in her 20s, was apparently naked and bloody.

A foreign worker is believed to have gone to work on the third-storey unit of Viz@Holland and found the body. He alerted his supervisors, who called the police at about 10.45am.

Police have classified the case as murder. No arrests have been made. This is the second murder case here within a week.

After yesterday’s grisly discovery, the police - including the elite Special Operations Command (SOC) - cordoned off the entire construction site.

The site’s workers, who are believed to number more than 100, were not allowed to leave until after 8pm last night.

Most refused to comment, but two of them claimed that the police took swabs and photographs and checked all their work permits.

The workers, who are mostly from China, India and Bangladesh, were escorted even when they went to use the portable toilets at the site. Some of the foreign workers live on site.

It is not known if the murder happened at the site or if the body had been taken there. A security firm has a guard there both day and night. It declined comment.

Viz@Holland is being built on the former Holland View site.

The 165-unit freehold development, which is just a 10-minute stroll from Holland Village, was launched at the end of 2005.

Nearby residents said they were surprised to see the red SOC vehicles in their District 10 neighbourhood.

‘I didn’t expect something like this to happen in this quiet and safe area,’ said Mr Lee Siew Wah, a 72-year-old retiree.
Source : Straits Times - 17 Dec 2007

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S’pore’s Hady Mirza crowned Asian Idol

S’pore’s Hady Mirza crowned Asian Idol

By Eddino Abdul Hadi, MUSIC REPORTER
ASIA’S BEST: Hady reacting after his name was announced as the winner of Asian Idol early this morning. The Singapore singer fell to his knees and covered his face for a minute before he was hoisted up by fellow contestants.

IN AN unexpected victory that caught even the winner by surprise, Singapore’s Hady Mirza was crowned the first Asian Idol in Jakarta early this morning.
A dark horse in the singing competition, the 26-year-old winner of the second season of Singapore Idol beat five other contestants, including favourites Mike Mohede, 24, from Indonesia, and Jaclyn Victor, 29, from Malaysia.

The other contestants were India’s Abhijeet Sawant, 26, Philippines’ Mau Marcelo, 27, and Vietnam’s Phuong Vy, 20.

All six contestants sang two songs each on the performance show on Saturday night.

Hady lost his composure when his name was announced as the winner just after midnight at the end of a two-hour-long results show telecast on Channel 5.

The Singaporean singer dropped to his knees and covered his face with his hands for a full minute before being hoisted up by his fellow contestants.

To a 5,000-strong live audience at Jakarta’s Mega Glodok Kemayoran convention hall and millions more television viewers around Asia, Hady sang U2’s Beautiful Day and Berserah (Surrender), originally sung by first Singapore Idol Taufik Batisah, on Saturday.

Hady racked up the highest votes via SMS voting.

Viewers could vote as many times as they wanted - but they had to vote for two contestants.

This ruling ensured a level playing field for countries with smaller populations.

Hady sent an SMS to The Straits Times soon after his win.

It said: ‘I’d like to thank everyone and my fans for voting for me. Without them, I wouldn’t be where I am now. I love you…see you all back in Singapore!’

His win caught many by surprise. Singapore Idol judge Ken Lim, who was also on the judging panel for Asian Idol, gave him a 50-50 chance at best before the competition.

He told The Straits Times in an SMS after the results were announced: ‘I have been waiting for a long time to prove that Singapore should be proud of its homegrown talents, and this win has finally made Singapore Asia’s best.’

Hady’s friends were also shocked.

‘I am shocked but happy for him. It was unexpected as he was up against strong competition,’ said his friend of eight years Shahfii Ali. The 28-year-old is from hip-hop group Triple Noize and has performed with Hady since the late 1990s in the independent hip-hop and R&B scene.

Source : Straits Times - 17 Dec 2007

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