GIC MD: Latest billion-$$$$ forays spurred by unique situation

GIC MD: Latest billion-$$$$ forays spurred by unique situation

Agency’s investment strategy of small, passive stakes remains unchanged
By MATTHEW PHAN
(SINGAPORE) Contrary to the buzz over the investments that GIC has made in global banking giants Citigroup and UBS, the investment strategy at the Singapore agency is unchanged.
The Government of Singapore Investment Corp said yesterday that it is not deviating from its traditional practice of buying relatively small-sized, passive stakes in a diversified body of securities.

‘There is no change in GIC’s investment strategy,’ said GIC managing director and group chief investment officer Ng Kok Song.

‘However, the approach taken with the specific transactions involving UBS and Citigroup differs from our norm as GIC sees the current financial situation in US and Europe as being unique and unprecedented,’ he added.

‘A confluence of factors, like the sub-prime crisis, the credit squeeze, and a possibility of recession, has led some banks with strong franchises to require urgent capital infusions.’

The investments are not the same as putting billions - the 11 billion Swiss francs (S$14.4 billion) committed to UBS and US$6.88 billion to Citigroup add up to some $24 billion - into shares, because the structures have downside protection. GIC says it manages over US$100 billion in assets.

‘Notwithstanding their large size, the two transactions have been structured with appropriate downside protection, and are within GIC’s risk management parameters,’ said Mr Ng.

BT understands that GIC was among the first investors that Citigroup’s new chief executive, Vikram Pandit, approached, a step that resulted in GIC committing US$6.88 billion to buy a potential 4 per cent of the troubled banking giant.

Both Mr Pandit and Winfried Bischoff, the head of Citigroup’s board, are personally known by GIC’s senior executives, a fact that was extremely important in GIC’s decision to invest. GIC was one of the original investors in Old Lane, a hedge fund co-founded by Mr Pandit in January 2006 after he left Morgan Stanley, where he was president of the investment bank’s institutional securities business.

Citigroup paid US$800 million to take Old Lane into its fold in July last year, partly to gain access to Mr Pandit and his team of former Morgan Stanley executives.

BT understands that GIC and Citigroup began discussions just over a week ago. But GIC has held Citigroup shares for years, and has been closely monitoring the bank, as well as its peers such as UBS.

Source : Business - 17 Jan 2008

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The GIC-Citi deal: opportunistic, (almost) completely safe

The GIC-Citi deal: opportunistic, (almost) completely safe

Investment seems a winner in every scenario - except the very worst case
By VIKRAM KHANNA
GIC’s US$6.88 billion investment in Citigroup announced on Monday is one of those hard-to-refuse deals that are available only to investors big enough and bold enough to step up to the plate when the going is really bad.
Too good to pass up: Had GIC declined the Citibank deal, another big investor would have gladly grabbed it
The deal is almost risk-free. GIC (together with the other big investors in the private placement, totalling US$12.5 billion) stands to earn a 7 per cent yield regardless of what happens to Citigroup’s share price - not at all bad for downside protection.

As for the potential upside, GIC and the others can convert their preferred perpetual securities to Citigroup shares at a 20 per cent premium to a reference price (yet to be determined, but reckoned to be around the average of the next few days’ trading prices) any time they want.

This means if, some time in the future, Citigroup shares rise by over 20 per cent from the reference price (which would be close to a more than four-year low), GIC will be able to participate in some capital appreciation too.

How could anyone refuse such a deal? It is less risky than the deal the Abu Dhabi Investment Authority (ADIA) got when it pumped US$7.5 billion into Citigroup last November.

Although ADIA got a higher coupon (11 per cent), its mandatory convertible instrument obliges it to convert its securities into shares after a fixed time period (2.5 to 3 years).

That means ADIA would have to pick up the shares at a fixed conversion price of between US$31.83 and US$37.24 per share even if Citi’s share price has fallen - which would expose it to capital losses, albeit these would be at least partially offset by high coupon earnings prior to conversion.

Had GIC said no - for whatever reason - it is highly likely that another large investor would have been only too happy to take its place. And then, at the end of its capital-raising exercise, Citi might not need the funds as badly, and the window of opportunity to invest on such favourable terms in the world’s biggest banking franchise would have passed.

GIC’s investment in Citigroup is, in short, shrewdly opportunistic and with a high degree of safety.

However, the deal cannot be said to be totally risk-free. First, it is obvious that Citigroup is in dire straits and needs money urgently - otherwise it would not have offered the deal that it did. In fact, it would not be inaccurate to characterise this latest capital injection as a bailout, not a regular investment.

It is also possible that Citi will need to go through more capital-raising exercises; even after all its write-offs so far, it still has exposure of about US$29 billion to collaterised debt obligations (into which sub-prime mortgage debt has been packaged). And in a deteriorating economy, its potential losses from other loans - regular mortgages, credit cards, unsecured personal loans, auto loans and corporate lending - could rise by more than it has made provisions for.

The question is: how easily will Citi be able to raise large amounts of capital again and again if its situation were to deteriorate more seriously than expected? Keep in mind that it is not the only institution going to the market to raise capital. Merrill Lynch, UBS, Morgan Stanley, Bear Stearns, and an unknown number of smaller institutions, mortgage lenders and hedge funds in the US and Europe are in a similar situation.

As the US and European economies weaken, many of these institutions might need to raise large amounts of capital, quickly and repeatedly. Can sovereign wealth funds be counted on to step in again and again? And what happens - including, perhaps, to Citi - if and when they reach the limits of their risk appetite for US and European financial institutions?

Which brings us to the most serious risk to the GIC deal: Citigroup going under. While this must be said to be a very remote possibility - with Citi perceived as being “too big to fail” - the risk cannot be said to be zero. Citi was, in fact, thought to be close to bankruptcy during the savings and loan crisis in the US in the early 1990s. And it’s worth recalling that the “too big to fail” thesis has not always held.

There have been several cases of big US companies and even banks going under, sometimes surprisingly - think Enron, WorldCom and Global Crossing in the 1990s; Drexel Burnham Lambert and Continental Illinois bank in the 1980s; and Lockheed and Chrysler (which were bailed out by the government) in the 1970s.

Another possibility - again remote, but not unthinkable - is a break-up of Citigroup into its component units, some of which are still doing well. How Citi’s current shareholders would fare under such a scenario is uncertain - although they would have legal recourse and there is a chance they would gain.

With all that said, it seems clear that in every scenario except the very worst case, the GIC investment in Citigroup comes out a winner. That makes it a pretty good bet, even in these bad times. If it was my money, I’d take it.

Source : Business - 17 Jan 2008

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Marina Bay Suites - Marina Bay - Singapore - District 01-08

Marina Bay Suites - Marina Bay - Singapore - District 01-08

Marina Bay Suites, a 65-storey residential tower is poised to offer the very finest living in Marina Bay.

Developed by the same leading consortium that brought the world the hugely successful Marina Bay Residences, this iconic building will set a new standard for luxury in the heart of Marina Bay.

Marina Bay Suites offers a commanding location in the centre of Marina Bay, anchoring one side of the splendid new Central Linear Park and providing stunning views of the Marina Bay Sands integrated resort. The dramatic architecture of Marina Bay Suites, with its striking staggered balcony layout, is the creation of leading New York-based architects Kohn Pederson Fox.

Location : Marina Boulevard
District : 01
Tenure : 99yrs Leasehold (w.e.f 8 March 2007)
TOP : 31 Aug 2012
Total Units : 221 in one block of 66 storeys

Unit Types:-
Type A 4 Bedroom ~ 55 units (2680 to 2691sqft)
Type B 4 Bedroom ~ 55 units (2045 to 2067sqft)
Type C 3 Bedroom ~ 54 units (1572 to 1604sqft)
Type D 3 Bedroom ~ 54 units (1615 to 1625sqft)
Type P Penthouse~ 3 units (4715 to 8181sqft)

Nearby Amenities: Walking distance to CBD- Raffles Place, Garden by The Bay, Singapore Flyer, Bayfront Bridge, Marina Barrage, Marina Bay Sands Integrated Resort, Bussiness Financial Centre, Grand Prix Racing, Esplanade Theatres on The Bay.

SALES PREVIEWS TO COMMENCE FOR MARINA BAY SUITES SIGNALLING LAST OPPORTUNITY TO BUY WITHIN THE MBFC

The developers of Marina Bay Suites today confirmed that selected buyer previews for the development’s 221 luxury bay-side units will commence in January.

MBFC Head of Residential Marketing Kan Kum Wah said the commencement of sales previews for Marina Bay Suites signalled the last opportunity for discerning buyers to own a condominium unit within Marina Bay Financial Centre and last opportunity within the foreseeable future to purchase an apartment directly fronting Marina Bay.

Mr Kan said the joint venture of Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong
Land and Keppel Land is confident of strong market support for the ‘fine living’ concept
offered by the 66-storey Marina Bay Suites.

“Following our previous experience marketing Marina Bay Residences in the same precinct, we believe there is significant demand for larger units offering fine living in this locality,” Mr Kan said.

“With its striking design, spacious units and the limited future availability of apartments in this locality, Marina Bay Suites will appeal to a distinct group of discerning internationally minded residents and investors seeking to be part of the Marina Bay lifestyle and growth story,” Mr Kan said.

Every unit in Marina Bay Suites comes with its own private lift lobby and there are just 4
units of 1,600 to 2,700 square feet, per floor. The development also includes three
penthouse units, ranging from 4,700 to over 8,100 square feet. Each penthouse has its
own swimming pool.

Marina Bay Suites is a joint venture by Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong Land and Keppel Land

Marketing agents for Marina Bay Suites, CB Richard Ellis and DTZ Debenham Tie Leung
have recorded significant numbers of enquiries from Singapore and from pre-marketing
visits by the developers to key international markets including Shanghai, Dubai, Jakarta,
and Hong Kong.

Marina Bay Suites offers a commanding bay-view location, and will anchor one side of the
new Central Linear Park which is a landmark feature of Singapore’s new downtown under
development at Marina Bay. The development also provides luxurious outdoor areas and
facilities on levels 6, 27 and 46.

Apartments in Marina Bay Suites are fitted with an elegant combination of Miele kitchen
appliances and quality fittings from Laufen, Steinberg and Reginox.
“Marina Bay is appealing to both local buyers and international investors as a new
investment location that is endowed with international flavour. We are experiencing a keen appetite from investors confident in Singapore’s continuing prosperity and excited by the live-work-play destination of Marina Bay,” Mr Kan said.

Marina Bay Suites is developed by a joint venture of three of Asia’s leading property
developers – Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong Land and Keppel
Land.

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Nearly 3,500 applications received for Singapore City View @ Boon Keng

Nearly 3,500 applications received for Singapore City View @ Boon Keng

By Valarie Tan,
SINGAPORE: Singapore’s second public housing apartments designed by a private developer – City View@Boon Keng – received some 3,500 applications.

That is four times the number of units available for sale.

Developed as part of the Housing and Development Board’s Design, Build and Sell Scheme (DBSS), the 714 apartments are priced at S$520 per square foot.

City View’s developer, Hoi Hup, said the applications will be put to a ballot and successful applicants will be notified next month.

The first project under the DBSS is in Tampines. It was launched four years ago and was oversubscribed by ten times.
- CNA/so
Source : Channel NewsAsia - 17 Jan 2008

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More Singapore buildings lined up for Green Mark ratings this year

More Singapore buildings lined up for Green Mark ratings this year

By Zul Othman,
SINGAPORE: Only 39 buildings made the mark last year. But just two weeks into 2008, nearly 120 building projects, both private and public, are lined up and eager for a Green Mark rating.

The idea of building sustainability is gaining acceptance among industry players and builders, even as need and legislation are providing the added impetus.

“So far, over 70 buildings have been Green-Mark-certified, and many more are in the pipeline for assessment. This is an encouraging sign,” said Parliamentary Secretary for National Development Mohamad Maliki Osman Tuesday, even as he announced even more good news: New construction demand is expected to reach between S$23 billion and S$27 billion this year.

The bulk of this is expected to come from private residential and commercial developments, while public sector housing, amenities and infrastructure projects will also add to demand. This buoyant period is also a time to look forward to the industry’s environmental responsibilities, Dr Maliki said at the Construction and Property Prospects 2008 Seminar.

When the Building Control Act takes effect in a few months, all new buildings and existing ones undergoing major retrofitting will have to meet Green Mark standards. Green Mark Platinum buildings would have achieved 30-per-cent energy efficiency, and a basic Green Mark building at least 10-per-cent energy efficiency, said Building and Construction Authority (BCA) chief executive John Keung.

Meanwhile, to promote sustainable construction, the BCA will introduce new guidelines this month for the usage of high-strength concrete, while guidebooks on the use of steel and of recycled materials in building will also be launched soon.

A “wake-up call” came early last year, in the form of disruption to sand and granite supply that had “some developers exploring sustainable designs, using alternative or recycled construction materials,” said Dr Keung.

And now — a year since Indonesia banned the export of concreting sand — Dr Maliki announced the BCA’s assistance scheme to co-share the risk of bringing in sand from distant sources would be “discontinued”.

“Concrete prices stabilised quickly after an initial spike and the construction boom last year was hardly affected … Based on feedback from the industry, the scheme is no longer necessary,” he said.

But to ensure the long-term supply and quality of essential construction materials, the BCA is finalising details of a licensing scheme for importers. -TODAY/sh

Source : Channel NewsAsia - 17 Jan 2008

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Analysts say S’pore GIC’s decision to invest in Citigroup a positive move

Analysts say S’pore GIC’s decision to invest in Citigroup a positive move

By Rachel Kelly,
SINGAPORE : GIC’s decision to pump more money into Citigroup is seen as a positive move, despite the huge sum involved.

Analysts that Channel NewsAsia spoke to say the deal is a great long term investment opportunity.

As for GIC, it says the multi-billion cash infusion does not represent a change in its investment strategy.

The almost US$6.9 billion injection into Citigroup comes just one month after a US$10 billion investment in UBS.

The investments make GIC a key stakeholder in the global financial sector.

However, GIC was careful to clarify on Wednesday that the deals do not signal a departure from its common strategy of making smaller investments in companies.

It noted that the current financial situation in Europe and the US was unique and unprecedented.

By opting to buy into Citigroup via convertible preferred securities, the returns are also relatively lower. According to analysts, this makes sense in the long term.

Ivan Ossa, Head of Investment Advisory, Alpha Financial Advisory, said: “I think if you look at the book value, the assets of Citigroup, you know it makes sense.

“Our comments are really that, you know - it’s just any other financial institution making a decision that makes sense for further investment long term.”

Citigroup revealed a net loss of US$9.83 billion for the fourth quarter and US$18 billion in writedowns.

It has been trying to raise capital, and GIC came to the rescue with the largest chunk of the US$14.5 billion pie that Citigroup is seeking to raise.

However, in the short term, analysts say they expect to see further market volatility.

Song Seng Wun, CEO, CIMB-GK, said: “There may still be downside risk because at the end of the day, when you’re talking about a downturn in the property cycle, it’s not going to disappear in a matter of months, it could be years.

“And certainly, Singaporeans are well aware that when we do get a downturn it will be years before things stabilise. They will be able to ride through this current fairly rough period and it will be rough… I think payoff in the longer run will be there for everybody.

“So I think this is the situation where investment has to be seen in the long run context rather than in the short term, where short-term volatility will certainly lead to downside risks.”

According to some industry experts, a similar investment in Citigroup two years ago would have cost GIC up to ten times more than what it is paying now.

And if it had let the opportunity pass, other sovereign wealth funds or investors would have gladly stepped in.

GIC first bought a 0.3 percent stake in Citigroup two years ago. - CNA/ch
Source : Channel NewsAsia - 17 Jan 2008

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Marina Bay Suites sees strong demand despite market uncertainty -Singapore

Marina Bay Suites sees strong demand despite market uncertainty -Singapore

By Ng Baoying,

SINGAPORE : Marina Bay Suites is seeing strong demand despite uncertainty in the market, according to its marketing agents.

Both CB Richard Ellis and DTZ Debenham Tie Leung say they’ve received significant numbers of enquiries from both local and foreign buyers.

What goes up may not necessarily come down, even in these uncertain times.

Demand for these luxury apartment units overlooking Marina Bay seems almost immune to external shocks.

Ong Choon Fah, Executive Director and Regional Head, Consulting and Research, DTZ Debenham Tie Leung (SEA), said: “The top end of the market is like your blue chip stocks. When the market recovers they’re the ones that run first, the price recovery is the fastest. But when the market comes down, a lot of them don’t need to sell, so activity may come down but we find there’s very good price support.”

Joseph Tan, Executive Director - Residential, CB Richard Ellis, said: “This is likely to be probably one of the last sites that has views of the Bay so in any property purchase situation, it’s still location, location, location.”

According to Raffles Quay Asset Management, the prevailing market rate for the Marina area is between S$3,000 and S$4,000 per square foot.

And it remains bullish about the capital appreciation from residential units there.

Kan Kum Wah, Marketing Head - Residential, Raffles Quay Asset Management, said: “You can see from the first phase of Marina Bay Residences, the price has moved between 25 percent and 75 percent as of today, and we believe that based on the current strong economy, we’ll be growing in tandem or even outperform.”

Each unit in Marina Bay Suites comes with its own private lift lobby and there are just four units per floor.

The apartments range from 1,600 to 2,700 square feet in area each.

The development also includes three penthouse units, ranging from 4,700 to over 8,100 square feet each.

Selected buyer previews for all 221 units will be held later this month. - CNA/ch

Source : Channel NewsAsia - 17 Jan 2008

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Mindy Yong

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mindy@mindyyong.com

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S’pore KepLand appoints Bellingham to design and build marinas

S’pore KepLand appoints Bellingham to design and build marinas
Keppel Land has appointed Bellingham Marine Industries to design and build marinas on its waterfront properties in the region.

The first is Marina at Keppel Bay, located within the Keppel Bay precinct.

This will have floating berths that can accommodate 170 yachts of up to 250 feet.

The berths will be built over two phases. The first phase will cost S$9 million and will have 75 berths.

Keppel Land says waterfront living has become a growing lifestyle trend worldwide. - CNA/ch

Source : channelnewsasia - 17 Jan 2008

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Mindy Yong

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Tomlinson - Cuscaden Road-Singapore -District 09 - 10

Tomlinson - Cuscaden Road-Singapore -District 09 - 10

A splendid fusion of granite and glass, TheTomlinson is like no other residence in Singapore. Conceived with the idea of the ultimate in luxury living, The Tomlinson is a masterpiece that’s created by the very best.

Its graceful rhythmic form, with its grand curving gesture is designed by Pei Cobb Freed & Partners, the renowned architectural firm founded by I M Pei. Impressive by day, this striking structure’s beauty will be illuminated and transformed at night by lighting specialist, L’Observatoire International.

And naturally, once you step in, you’ll appreciate the same unparalleled standards that the reputed interior design firm of Hirsch Bedner Associates is known worldwide for. Sensuous living. A way of gratifying your senses to the fullest. Whether it’s simple modern comfort, sheer decadence or contemporary opulence that you prefer, The Tomlinson is where you can indulge to perfection.

A profusion of glass and natural light infuses the living room with a marvelous sense of airy serenity, while affording panoramic views of the city. Unexpected details like a gracefully curved corridor and an ingenious wine alcove are just some of the exacting design work you can expect.

And of course, space is at a premium to do as you desire. You may make your selection
from a choice of commodious 2,347 sq ft 4- bedroom and 3,703 sq ft 5-bedroom apartments.
For more extensive space, there’s also a 5-bedroom apartment with a private roof terrace; as well as a 3-storey penthouse with its own internal lift, reflecting pool and roof terrace with a magnificent view.

Developer: Wing Tai Holdings Limited

Singapore Real Estate - Buy ,Sell, Rent ,invest ,Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop,factory, warehouse & land right here.

MINDY YONG

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The Tessarina - Wilby Road - Singapore District 10

The Tessarina - Wilby Road - Singapore District 10

First it was the location. Then, the luxury. But now, it’s about living. The way you hadn’t thought possible.

The Tessarina is a treasure waiting to be enjoyed. It lies nestled in an idyllic oasis bound by Wilby Road, Holland Road and Bukit Timah Road. Close to the heart of the city, close to the best schools. And yet, far from the crowds.

Here’s what is so spectacular and serene about the spot we have picked for you:
all around The Tessarina and lush, majestic trees and pretty, low to mid-rise developments. Without anything to disturb the skyscape, The Tessarina offers a sweeping, exhilarating view of its charming surroundings. And keeping the greatest timeless pleasures of life in mind, world-renowned architect Harold Guida has quietly constructed what he calls, quite simply, a place you can feel good about being in.

Developer: Wing Tai Holdings Limited

PROPERTY TYPE: APT
LOCATION: WILBY RD
DISTRICT: 10
POSTAL CODE: 276306
TENURE: FH
EST. TOPDATE: 2004
TOTAL UNITS: 443

Singapore Real Estate - Buy ,Sell, Rent ,invest ,Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop,factory, warehouse & land right here.

MINDY YONG

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