Trend in Singapore luxury hotels to continue upward climb: industry experts

Trend in Singapore luxury hotels to continue upward climb: industry experts

There may be worries about the world economy – especially with the ongoing subprime crisis and rising standards of living – but that hasn’t stopped interest in luxury hotels from making a steady comeback.

With the recent entry of a new player in Singapore’s luxury hotel industry, the exclusive St Regis, competition looks set to heat up.

St Regis opened the Saturday before Christmas, but even before it officially commenced business, the hotel has already sold out almost all its year-end dinner parties.

Singapore’s hospitality sector is experiencing one of its strongest recoveries in over a decade despite the US subprime setback.

In November, the average room rate (ARR) set a new milestone of S$226 per night, the highest ever in any month and up 29.8 per cent over last year, according to figures from the Singapore Tourism Board (STB).

The city-state’s hotels also generated record room revenues of an estimated S$175.4 million, representing an increase of 23.8 per cent from last year.

The rise was likely due to an increase in the number of visitors in Singapore – 837,000 in November, representing a growth of 4.6 per cent as compared to a year ago.

In fact, analysts believe this is just the take-off for the industry. Industry players expect the ARR to continue growing due to upcoming high-impact tourism projects set to be unveiled, starting from next year.

The average occupancy rate is also expected to test the 90 per cent level, industry players say.

Next year, the Singapore Flyer, complete with its signature cocktail (both alcoholic and non-alcoholic) will set its wheel turning from February. Following that, the Formula One (F1) Singapore Grand Prix will roar off in September, expected to draw in F1 lovers from around the world.

Also coming up are the Integrated Resorts – Marina Bay Sands and Resorts World at Sentosa – both of which are expected to boost the tourism rate.

Yngvar Stray, General Manager of the St Regis Singapore, said the city-state is an ideal market for luxury hotels like St Regis to step into “at this point of time in Asia”.

“Singapore is stepping up to the plate in Asia… competing in a very high level. And the economy in Singapore is fantastic and seeing a lot of growth; I think the high-end market in Singapore is also showing substantial growth,” said Stray.

“You can look at the occupancy levels in the city – the demand for this level of hotel is clearly present. So for us, (Singapore) is a starting point.”

He also said that the travel and tourism industry looks positive in the year 2008, despite the overhanging shadow of the subprime crisis.

“I think there is a lot of optimism in 2008 for the travel sector and the travel industry,” said Stray. “Of course, the subprime crisis causes some jitters in the market, but the demand within Asia is by far stronger and more independent than it was ten years ago, when similar trends were showing.

“And we see a market within Asia where about over 60 per cent of … our clientèle… (in Singapore are more financially) independent. There’s stronger economy in this region than before so it won’t cause any dramatic changes for the trend in travel and luxury hotels for the time being.

Source : Channel NewsAsia - 26 Dec 2007

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Interest in Singapore luxury property market rises by 70% in last 2 years

Interest in Singapore luxury property market rises by 70% in last 2 years

With the high-end luxury segment leading the residential sector in price increases this year, Singapore developers have been roping in global names to give their projects that extra touch of distinction.

A growing number of partnerships are being formed, especially with companies in branded home furnishings.

Reflections at Keppel Bay is among the high-end residential projects set to be completed in Singapore soon.

Developer Keppel Land spared no expense in roping in world-renowned architect Daniel Libeskind for the project, with the aim of putting Singapore on the world prime real estate map.

It has also gone one step further by working with other international names to give its units that touch of distinction. These include luxury furniture brands such as Minotti and Giorgetti.

Agustine Tan, Director, Keppel Land, said: “I think with globalisation and international exposure, buyers have actually become more sophisticated… they look at it is as a prestige lifestyle, an entire package of getting into a house that they enjoy.

“70 percent of our buyers are in fact foreigners, if you include the PRs - the PRs will actually account for about 28 percent… locals (account for) 33 percent, and the rest are foreigners, so I think we have attracted a good foreign crowd - a good following who are believers in our lifestyle; when they come and see the quality… and the ability to deliver, that’s the most important thing.”

The kitchens are designed by Germany’s Miele - which has made a name for itself in the luxury kitchen market.

Markus Miele, Managing Director, Miele, said: “I think that the world is getting richer everyday, and we see a growing demand in the high-end (sector); we see a lot of consumers who will pay for quality, who want luxury goods, and this is the case all over the world…”

While top furnishings have helped to woo buyers, property watchers have said that demand next year will hinge on the big picture.

Donald Han, Managing Director, Cushman and Wakefield, said: “We’ve seen very strong growth for the luxury market rising over 70 percent in last two years. The market is taking a breather now.

“Moving forward, next year we expect the market to be dominated by the mid as well as mass market. We expect investors to start moving (the) market upwards for the luxury market in the next year depending on the economy in Singapore as well as the global economy.

“Whatever happens to sub-prime will have an impact on the luxury market. The economy, luxury market are driven by foreign demand so their perception of economic growth in Singapore would be one of the main criteria for them to invest more or less in Singapore.”

Some 70 percent of the buyers at Reflections are foreigners. They include the Al-Nibras Islamic Estate Fund (Al-Nibras Fund) which bought two blocks of 56 waterfront units for S$286 million. - CNA/ms

Source : Channel NewsAsia - 26 Dec 2007

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Singapore Manufacturing sector grows by weaker-than-expected 5.8%

Singapore Manufacturing sector grows by weaker-than-expected 5.8%

Singapore’s manufacturing output rose at a weaker pace than expected in November. It climbed a seasonally-adjusted 5.8% from October.

The offshore oil-rig sector saw strong numbers, but the drugs sector booked more than 33% drop in production.

Still, the increase snapped three straight months of decline. When compared to November last year, total factory output contracted by 1.5%.

The production of drugs has been key to the diversification of Singapore’s manufacturing output. But economists said the sector did not bounce back as they had hoped last month.

Instead of a climb, biomedical manufacturing fell 33.4% from a year earlier.

“This represents not just a base effect due to stronger growth in 2006, but also the fact that it could mean that European markets - our key export markets - are experiencing weaker demand, especially for pharmaceuticals exports in places like Europe and the US,” said Alvin Liew, Global Research Economist, Standard Chartered.

But some economists said they are optimistic that drugs output will rebound.

“This was simply a comparison with the strong number a year ago, and I don’t think anyone is worried about the trend in pharmaceuticals. Singapore was still able to expand its presence of the drug companies, and they are still expanding their output levels here in Singapore,” said David Cohen, Director of Action Economics.

Electronics production, on the other hand, grew 5.3% on year, with semiconductors leading the way at 16.7%.

“For the exports, we’re still seeing it contracting but at a more moderate pace. It probably has something to do with the competitiveness of the semi-conductor industry. For example, the level of competition has intensified and this has led to margin compression and loss of pricing power,” said Liew.

Propping up output last month has been the transport engineering cluster, which rose by almost 32%. This was boosted by strong numbers from shipbuilding and offshore marine.

The monthly factory output numbers are closely watched because manufacturing accounts for about a quarter of Singapore’s economy. - CNA /ls
Source : Channel NewsAsia - 26 Dec 2007

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Singapore Tiong Bahru flats given facelift before being rented out

Singapore Tiong Bahru flats given facelift before being rented out
Five blocks of flats in Tiong Bahru have been given a facelift, and they will be rented out to expatriates and foreign students.

The rental for the units can cost up to S$4,500 a month.

The flats are over 50 years old and are believed to be among the first to be built in Singapore.

Katong Hostel successfully won the HDB tender to rent out the 120 available units.

It invested S$3 million to renovate them with a contemporary design, but it decided to preserve the exterior by using just a fresh coat of paint.

The original tenants have moved out under a redevelopment scheme.

The flats will be ready by March next year.

Half of them are three-room flats while the rest are four-room units.

Katong Hostel said it is charging a high rental rate because it is providing better services such as housekeeping, full security and free wireless services.

Joyce Sim, General Manager, Katong Hostel, said, “We will have our maintenance personnel and operation personnel over here… so basically within the whole premises…cleanliness, hygiene or even the basic kind of operation will be all done by our operation team, and we have actually set up a 24-hour office, and our security checkpoint.” - CNA/ms
Source : Channel NewsAsia - 26 Dec 2007

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Consumers not cutting back on buying household items-Singapore

Consumers not cutting back on buying household items-Singapore

Prices of household items have gone up, but that has not stopped consumers from buying. Some retailers are even reporting a growth in sales.

Every dollar counts these days, but many shoppers are not cutting back on spending, especially on household items.

One shopper said, “The spending would probably be almost the same. It’s just that I would be more conscious about buying brands like the supermarket brands or I would try and check out things that are on offer.”

Another noted, “These are basic necessities that we have to buy. So we just have to make the purchase. But I do make my purchases wisely, I don’t spend more than what I need.”

A buoyant economy is also one of the reasons why NTUC FairPrice said it has seen sales increase this year, compared to the same period the previous year.

NTUC FairPrice declined to give actual figures, but it did say that the sale of their housebrand products - ranging from essential items like rice, detergent and brown rice - has seen double-digit growth in 2007.

So consumers are willing to pay, despite the relatively higher prices.

Lau Chuen Wei, Executive Director, Singapore Retailers Association, said, “Consumer confidence has built up over the first three quarters of the year. And then news about this inflation has very subtly slipped in. By that time, people would have possibly made their plans.

“And when this news of this inflation has come in, at this last quarter, it’s only like two or three months left of the year, and that is the main shopping period of all the festivities, feasting, dining and all the presents.

“As a consumer myself, I would probably think, ok let this be my last burst this year, I would still go and spend. I will still have a Merry Christmas and worry about this next year.”

But the growth in year-end sales does not necessarily mean, bigger profits for all retailers.

Ms Lau said, “By and large, when talking to the retailers, they say yes the sales may have gone up, but their margins, which are already very tight, seem to be getting tighter and tighter.

“And what that means - the challenge for them is how to manage costs… - is how to make the best use of whatever staff is available, and that is another major challenge, especially now, where the job market is so buoyant.”

The Singapore Retailers Association said competition will keep prices low for now. However, rising costs will eventually force retailers to increase prices, and the products likely to be affected include electronics and household items. - CNA/ms
Source : Channel NewsAsia - 26 Dec 2007

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Singapore HDB to launch sale of residential site at Bishan Street 24

Singapore HDB to launch sale of residential site at Bishan Street 24

SINGAPORE : HDB will launch the sale of a site at Bishan Street 24 for tender under the Design, Build and Sell Scheme (DBSS) on Thursday.

This is the fourth site to be offered under the Scheme.

Under DBSS, the developer tenders for the land and designs, builds and sells the flats as public housing.

Flats sold under DBSS come with a 99-year lease and will be offered to buyers under similar HDB eligibility conditions like flats developed by HDB.

Upon completion of the building, the developer will hand over the entire development site to HDB for lease administration, and to the Town Council for maintenance of the common areas and car parks.

The site is located in a middle-aged estate with a wide array of facilities.

The tender will close on Tuesday, 19 February 2008 at 12 noon.

Source : Channel NewsAsia - 26 Dec 2007

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S’poreservices sector tops list of job vacancies: MOM

S’poreservices sector tops list of job vacancies: MOM

Singapore’s November manufacturing output rose 5.8 percent from October, the Economic Development Board (EDB) said in a statement on Wednesday.

Factory output expanded less-than-expected last month as weak biomedical output offset healthy ship and oil rig production.

Compared to a year ago, output in November fell 1.5 percent, said the EDB.

The expansion came from the transport engineering, electronics and chemicals cluster while the biomedical manufacturing, precision engineering and general manufacturing industries cluster contracted.

Output of the transport engineering cluster rose 31.9 percent year-on-year in November. This was due primarily to the 53.5 percent growth in the marine and offshore engineering segment.

The Republic’s shipyards maintained healthy activity levels, producing offshore vessels and conducting repair work.

However, the biomedical sector posted another weak performance, as pharmaceutical output fell sharply. Biomedical manufacturing fell 33.4 percent from a year earlier after contracting 15.7 percent in October.

Electronics manufacturing expanded 5.3 percent on-year, but the sector was weighed by lower output of computer peripherals and consumer products

Source : Channel NewsAsia - 26 Dec 2007

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S’pore Nov manufacturing output up 5.8% from Oct: EDB

S’pore Nov manufacturing output up 5.8% from Oct: EDB

SINGAPORE : Singapore’s November manufacturing output rose 5.8 percent from October, the Economic Development Board (EDB) said in a statement on Wednesday.

Factory output expanded less-than-expected last month as weak biomedical output offset healthy ship and oil rig production.

Compared to a year ago, output in November fell 1.5 percent, said the EDB.

The expansion came from the transport engineering, electronics and chemicals cluster while the biomedical manufacturing, precision engineering and general manufacturing industries cluster contracted.

Output of the transport engineering cluster rose 31.9 percent year-on-year in November. This was due primarily to the 53.5 percent growth in the marine and offshore engineering segment.

The Republic’s shipyards maintained healthy activity levels, producing offshore vessels and conducting repair work.

However, the biomedical sector posted another weak performance, as pharmaceutical output fell sharply. Biomedical manufacturing fell 33.4 percent from a year earlier after contracting 15.7 percent in October.

Electronics manufacturing expanded 5.3 percent on-year, but the sector was weighed by lower output of computer peripherals and consumer products

Source : Channel NewsAsia - 26 Dec 2007

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S’pore Nov visitor arrivals hit 837,000, up 4.6% from a year ago: STB

S’pore Nov visitor arrivals hit 837,000, up 4.6% from a year ago: STB
SINGAPORE : Singapore received a record number of visitors last month but hotel rates were also at fresh highs, the Singapore Tourism Board said on Wednesday.

The STB said 837,000 visitors arrived in November, the largest number ever for that month.

Average room rates for hotels also set a new milestone of S$226 a night, the highest ever in any month and up almost 30 percent over last year, the board said.

The city-state’s hotels earned record room revenues of S$175.4 million, an increase of almost 24 percent from last year, it said.

Visitor arrivals were 4.6 percent higher than a year earlier, fuelled by strong arrivals from China, India and Australia, the board said.

“In November 2007, Singapore welcomed 837,000 visitors… this sets a new record for the month of November,” it said.

Singapore also hosted the annual Association of Southeast Asian Nations (ASEA) summit and its related regional meetings which likely boosted November’s figures, as official delegations occupied several city hotels.

Lacking natural attractions, Singapore has embarked on a major campaign to spruce up its tourist appeal.

It has plans for new attractions including two integrated resorts, expected to open by 2010, and is trying to become an arts and entertainment centre.

It is to host its first Formula One Grand Prix late next year
Source : Channel NewsAsia - 26 Dec 2007

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S’pore Temasek sees strong growth in Merrill

S’pore Temasek sees strong growth in Merrill

Singapore state investor Temasek Holdings, which has taken a $4.4 billion stake in Merrill Lynch & Co Inc , said on Wednesday it sees strong growth potential in the U.S. brokerage firm.
Merrill, which has been hit by write-downs from the U.S. subprime mortgage crisis, said on Monday that Temasek had committed to a $4.4 billion stake that it may raise by another $600 million. “Our participation in this capital raising exercise is a vote of confidence for the management team, and the underlying strengths of Merrill Lynch’s franchise,” said Manish Kejriwal, senior managing director of investments at Temasek.

Temasek snapped up its shares at $48 each, or more than 13 percent below the stock’s Friday close, while asset manager Davis Selected Advisers also bought $1.2 billion of shares.

Analysts have said the deals were a likely prelude to further write-downs for Merrill in the fourth quarter, though said it was positive chief executive John Thain had been quick to bolster Merrill’s sagging balance sheet.

“We believe it has an excellent platform with strong growth potential under John’s leadership,” said Kejriwal in a statement.

“This capital raising will enable Merrill’s management to focus on the execution of its business strategy and deliver shareholder value,” he added.

Temasek has an option to invest up to an additional $600 million in Merrill Lynch by March 28, 2008, as long as Temasek’s aggregate ownership does not exceed 10 percent of Merrill Lynch’s total outstanding common shares. Temasek is an investment vehicle for Singapore and manages a portfolio of over $100 billion. Merrill is the latest in a growing number of Wall Street firms to receive cash from sovereign wealth funds.
Source : Asia Pacific - 26 Dec 2007

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