Singapore Temasek may sell small Merrill stake to Korean firm

Singapore Temasek may sell small Merrill stake to Korean firm 
 
SINGAPORE’S Temasek Holdings may sell a small stake in Merrill Lynch to South Korea’s Hana Financial Group, but a final decision is yet to be made, a source close to the deal said yesterday.
‘Hana is looking to buy a stake in Merrill from Temasek,’ said the Singapore-based source, who was briefed on the deal.

A Hana Financial spokesman said yesterday that it was considering buying shares in Merrill, but added that nothing in detail has been determined.

South Korea’s Maeil Business Newspaper reported yesterday that Hana Financial, the country’s No. 4 financial services company, will buy US$50 million (S$70.7 million) worth of Merrill shares through its banking unit.

Temasek, a Singapore state investment fund and a major shareholder in Hana Financial, declined to comment on the report.

Late last year, Temasek bought US$4.4 billion worth of Merrill shares at US$48 a share as the United States brokerage, hit by US sub- prime mortgage losses, sought to raise capital.

Temasek and Goldman Sachs are top shareholders in Hana Financial with a combined 19 per cent stake.

REUTERS
Source : Straits Times  - 19 Feb 2008

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Singapore Merchant Square on sale for $73m

Singapore Merchant Square on sale for $73m 

By Joyce Teo, Property Correspondent 
ON OFFER: The Merchant Square, in a quiet area opposite Riverside Point and Clark Quay, consists of a four-storey office tower and two blocks of conserved shophouses on a 28,083 sq ft plot. — PHOTO: CB RICHARD ELLIS
 
A MODEST office development with well-known cosmetics company Estee Lauder as its anchor tenant is up for sale at an indicative price of $73 million.
The price for the 99-year leasehold Merchant Square - located in Merchant Road, opposite Riverside Point - works out to $1,450 per sq ft (psf) of net lettable area.

The latest office property transaction in the vicinity involved the Apollo Centre, sold last December for $1,378 psf.

Merchant Square, completed in 1996, comprises a four-storey office tower integrated with two blocks of conserved shophouses.

CB Richard Ellis, which is marketing the property, said potential buyers can expect substantial rental appreciation in the short to medium term.

Nearly 50 per cent of the property’s leases will expire over the next two years.

Some of the leases were signed at rates as low as $3 to $4 psf, while others are at the current rates of $5 to $5.50 psf.

The Merchant Square vicinity is quiet - a far cry from the other side of the road where Riverside Point and Clarke Quay are located. It is currently 96 per cent occupied.

Estee Lauder takes up 1-1/2 floors, or about 15 per cent, of the space.

Merchant Square has a net lettable area of 50,262 sq ft and sits on a 28,083 sq ft plot. There are two basement carpark levels with 76 lots.

It was originally intended to be a retail project.

Back in 1995, however, owner Jackson International reportedly took advantage of the narrowing gap between office and retail rents to convert three of four shop floors in the development into offices.

Jackson owns one industrial building, but its main business is as a carpet and rugs distributor and manufacturer.

The tender for the property closes on March 12.
Source : Straits Times  - 19 Feb 2008

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Tan family’s final offer for Singapore Straits Trading: $6.70 a share

Tan family’s final offer for Singapore Straits Trading: $6.70 a share 

Tecity offer now puts a price of $2.18b on minerals, hotels and property company

By Lee Su Shyan, Assistant Money Editor 
 
THE battle for The Straits Trading Company went up another gear yesterday, with the family of the late Mr Tan Chin Tuan raising their bid yet again. This time, however, their offer is final.
Tecity, the family’s investment vehicle, lifted its offer from $6.50 to $6.70 per share and extended the acceptance period to March 6.

This came after its rival bidder - the Lee family, who are OCBC Bank’s main shareholders - raised their offer last Thursday.

The bidding war began in January, when Tecity offered $5.70 per share for Straits Trading, saying it wanted more control due to its historical ties with the firm.

Tecity, which has been a shareholder since the 1950s, now owns about 24 per cent of Straits Trading.

The Lee family own about 7 per cent of Straits Trading but control around 33 per cent through their shares in Great Eastern and OCBC, which are also Straits Trading shareholders.

Late last month, the Lee family countered Tecity by offering $5.76 per share. Tecity swiftly responded by raising its offer to $6.50, and the Lees returned serve last Thursday with an offer of $6.55.

Before the takeover tussle began, Straits Trading shares had an average price of about $4.70 over the last year, valuing it at $1.53 billion.

Tecity’s $6.70 offer now values the minerals, hotels and property company at $2.18 billion, an increase in its market capitalisation of more than $500 million in just a couple of months.

Tecity chief executive Chew Gek Khim, granddaughter of Mr Tan, a former OCBC chairman, said her group’s offer of $6.70 was final. Ms Chew said independent adviser CIMB had taken into account Straits Trading’s financial performance and volatility in the stock market.

CIMB has revalued Straits Trading’s assets at $6.52 per share.

Straits Trading announced last Saturday that for the year ended Dec 31, profits rose to $485 million from $194 million previously. The net asset value per share, which has not been revalued, works out to $5.62.

OCBC has said it will not sell its shares to either Tecity or the Lee family, while Great Eastern has yet to decide.

The question now is how the Lee family will respond.

They can opt to do nothing and hope the Tecity bid fails. Tecity needs about 27 per cent for its bid to cross the 50 per cent line and succeed.

If OCBC and Great Eastern do not sell their stocks, Tecity will have to rely on individual shareholders to shore up the numbers.

It remains to be seen if the Lee family will be willing to take the risk of sitting it out, given that they have clearly stated that they want to retain control.

However, if they trump Tecity’s offer, they may end up having to shell out anything up to $1.4 billion, assuming all remaining shareholders, including Tecity but not OCBC and possibly Great Eastern, accept their offer.

Straits Trading shares closed three cents up at $6.70 yesterday.

Source : Straits Times  - 19 Feb 2008

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Two more Singapore govt agencies to vacate downtown offices

Two more Singapore govt agencies to vacate downtown offices 

IDA, SLA making room for private businesses to ease office shortage

By Fiona Chan, Property Reporter 
 
MORE help is on the way to ease Singapore’s office shortage, which has led to soaring rents.
At least two government agencies will give up their downtown offices to make room for private businesses that need more space.

The Infocomm Development Authority (IDA) will relinquish about a third of its 11,300 sq m office in Suntec City by moving some divisions to the Mica building in Hill Street by the end of the year.

Although it will still be close to town, IDA plans to move again in a few years to a ‘more appropriate location outside the central business area’ that can accommodate all its headquarters staff.

The Singapore Land Authority (SLA) is also planning to give up its seven floors at 8 Shenton Way, formerly Temasek Tower, although it has yet to find a new home. This is a considerably larger office space than the one IDA is vacating this year.

Other state departments may follow suit.
Finance Minister Tharman Shanmugaratnam said on Friday that the Government would move several agencies out of the central area by the first quarter of next year.

This will free up 20,000 sq m of precious prime office space for the private sector - equivalent to about 20 floors of a Suntec City office tower, Mr Tharman said in his Budget speech.

Although office space in the Republic is still cheaper on average than in Hong Kong or Tokyo, he said, the rate at which rents have risen has been ‘rapid and unsettling for businesses’.

Prime office rents shot up by 78 per cent on average last year, catapulting Singapore into the world’s top 10 most expensive office markets for the first time. The Republic jumped 10 spots to seventh place in the latest rankings, according to a report last week.

The Government has taken several steps to address the situation, including releasing temporary office sites and state properties, but these have had little noticeable effect so far.

Meanwhile, surging rents are also acting as a push factor for agencies that are relocating, especially those whose leases will expire soon.

The Economic Development Board (EDB), for example, is said to be firming up plans to move to Fusionopolis when its lease at Raffles City Tower is up next year.

Asking rents at Raffles City, where the EDB has been since 1985, have doubled in the last 15 months to about $17 per sq ft per month.

But other statutory boards that have ongoing leases - such as IE Singapore in Bugis Junction, whose lease extends to 2011 - will stay put.

Experts said this latest move would help relieve some of the immediate supply crunch, ahead of a slew of building completions expected in 2010 and beyond.

In particular, it will make things easier for firms already located in Suntec City or 8 Shenton Way that are looking to expand, said Ms Tay Huey Ying, director of research and consultancy at property firm Colliers International.

She added more agencies could jump onto the bandwagon.

‘Even those who own their own buildings could move out and lease out the offices, thereby releasing some space for the market and, at the same time, earning rental returns,’ she said.

Government offices still located downtown include the Ministries of Finance, Law, and Trade and Industry, all within the Treasury building in Hill Street next to Funan DigitaLife Mall.

There is ‘no real need’ for some of these departments to be in the central business district, and they could free up space for other occupiers who need the location more, said Mr Chua Yang Liang, head of research (South Asia) at Jones Lang LaSalle.
Source : Straits Times  - 19 Feb 2008

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Asian carriers still can grow even if recession hits USA, say experts

Asian carriers still can grow even if recession hits USA, say experts 
 
WITH continued good growth in Asian air travel, airlines in the region will be spared the worst if, as many are predicting, a recession hits the United States this year.
In fact, Mr Giovanni Bisignani, director-general and chief executive officer of the International Air Transport Association (Iata) - which groups about 240 airlines - said traffic in Asia is expected to grow by about 6 per cent this year.

Driving this will be the twin engines of China and India with booming economies that are fuelling strong demand for air travel.

Speaking to reporters on the sidelines of the inaugural Singapore Airshow Aviation Leadership Summit, Mr Bisignani said American carriers will bear the brunt of a global slowdown, especially if domestic business travel in the US takes a hit.

Singapore Airlines (SIA) chief executive officer Chew Choon Seng agreed that Asian carriers will be largely spared. For instance, he said, SIA’s ‘good network to India and to China, as well as a buoyant situation around the South-east Asian region’ means it could be in a better position than some others to ride out a US downturn.

But the airline is not immune from global economic trends, Mr Chew said, and stressed that it was prepared for the worst. SIA’s contingency plan if economic prospects go south includes redeploying aircraft and capacity.

He did not elaborate, but experts suggest the airline could move US-bound capacity and beef up services to China and other strong markets to cushion itself against the impact of the slowdown.

Mr Chew and Mr Bisignani were among about 200 aviation experts representing airlines, airports and civil aviation organisations who were at the Raffles City Convention Centre for the inaugural summit, held as part of the first Singapore Airshow, which officially starts today.

Kicking off the proceedings yesterday, Transport Minister and Second Minister for Foreign Affairs Raymond Lim touched on three trends that will shape the industry going forward - liberalisation, airport development and expansion, and airline growth and innovation.

Meanwhile, in his address, Mr Bisignani urged Asia, which will be the key driver of growth going forward, to take a leadership role.

He said Asia should start with throwing out the bilateral system - the current arrangement that regulates where airlines can fly, how often, and how many people they can carry, which is based on agreements reached between the governments of the two points airlines fly between.

Calling for a ‘world without borders’ and consolidation among the more than 1,000 carriers that today criss-cross global skies, Mr Bisignani said the pace of liberalisation needs to be quickened.

To this end, the day’s third speaker, Roberto Kobeh Gonzalez, the president of the International Civil Aviation Organisation (Icao), reminded airlines to keep their eyes on the prize: The traveller.

Air travel is becoming ‘more and more difficult’ he noted, with ‘overcrowding and long line-ups that generate frustration and negative reactions’.

In an ideal world, stakeholders would ensure that they remain focused on being efficient, so passengers would find their way around airports more easily, security checks would proceed more smoothly and quickly and on-time performance would be the norm.

The result: ‘Passengers would be on their way home or to the beach, with all of their baggage, and perhaps a smile on their faces.’

Source : Straits Times  - 19 Feb 2008

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9,901 applications pour in for just 278 Singapore flats

9,901 applications pour in for just 278 Singapore flats 

By Tan Hui Yee, Housing Correspondent 

ALMOST 10,000 people have applied for just 278 surplus flats being offered for sale by the Housing Board in keenly sought-after mature estates such as Toa Payoh, Tampines and Bedok.
By 5pm yesterday, ahead of the midnight deadline, 9,901 applications had been lodged - or 36 homeseekers for every flat available. This is the highest subscription rate recorded so far for such sales exercises.

A computer ballot will determine the order in which applicants get to pick a flat. The results will be out on Feb 21.

Most of the surplus flats offered in this batch are already completed, with the rest expected to be ready by 2011. Property consultants had expected a flood of applicants as buyers are increasingly being turned off by high asking prices in the HDB resale market.

Resale prices of HDB flats rose 17.5 per cent last year, while the median cash-over- valuation (COV) amount paid in transactions rose to $22,000 in the October to December quarter last year, compared with $17,000 in the previous quarter.

The surplus flats also appeal to buyers not wanting to wait three to four years for the HDB’s build-to-order flats, which are being offered in great numbers this year. About 4,500 will be offered from January to June alone.

The 278 surplus flats offered in this launch are located in highly coveted mature towns surrounded by amenities. Most are four-room flats, while 84 are five-room and executive units.

With its latest offer, the HDB’s stock of surplus flats will be whittled down to about 2,000.

In a statement yesterday, the HDB urged unsuccessful applicants to book a unit under its build-to-order scheme. Given that the take-up rates for the past four build-to- order exercises in Punggol and Sengkang have ranged from 65 per cent to 94 per cent, there was still a selection of flats left over.

It said: ‘On average, only one in two applicants invited on the first day of the selection exercises actually booked a flat, despite having a wide range to choose from.’

It also suggested that couples book their flats before getting married under the fiance-fiancee scheme to reduce the waiting time for their flats. Those already married can consider living with their parents or renting a room of a flat on the open market while waiting for their flats to be completed, it said.

Resale flats, meanwhile, were still ‘affordable’. The HDB said that a quarter of transactions last month were completed at prices not exceeding $10,000 above the flats’ valuations. These includes flats sold in established towns such as Ang Mo Kio, Bedok and Tampines.

According to Mr Eric Cheng, executive director of HSR property group, sellers are asking for about 10 per cent less in COV amounts compared with the fourth quarter of last year. Buyers, he said, were adopting a wait and see attitude.

The HDB said earlier this month that it was conducting a review of its year-old sales exercises. Chairman of the Government Parliamentary Committee on National Development and Environment, Mr Charles Chong, suggested that the board fine-tune the system to allay fears of young homebuyers who continually fail to get a flat in ballots.

‘There should be some predictability - for example, if I apply (for a unit) now, I can get my flat one or two years down the road,’ he said.
Source : Straits Times  - 19 Feb 2008

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CAD called in to probe Ren Ci’s finances - Singapore

CAD called in to probe Ren Ci’s finances  - Singapore

White-collar crime officers will look into questionable transactions of charity
SEEKING GREATER CLARITY: Officers from the Commercial Affairs Department carted off at least 20 boxes of documents from the charity’s office in Buangkok View early yesterday. — PHOTO: SHIN MIN DAILY NEWS
 
THE probe into Ren Ci Hospital’s finances has taken a more serious turn, with Singapore’s white-collar crime busters called in to look at questionable transactions in its books.
The Buddhist charity, the second largest under the purview of the Ministry of Health (MOH), was unable to explain some of its deals satisfactorily, Health Minister Khaw Boon Wan told reporters yesterday.

‘There may be wrongdoing, there may not be. I do not know,’ he said, urging patience while the Commercial Affairs Department (CAD) does its work.

‘It is important to let the investigators do their job. Let’s not speculate or jump to conclusions because that would not be fair to Ren Ci and the individuals involved.’

He hoped that the CAD would complete its probe in ‘a few weeks’. Officers from the agency carted off at least 20 boxes of documents from the charity’s office in Buangkok View early yesterday.

Ren Ci will continue caring for its 120 nursing-home patients and 300 chronically ill individuals.

The charity and its chief, Buddhist monk Venerable Shi Ming Yi, have been facing questions for the past year, since the ministry started auditing the largest charities under its charge.

Last February, the monk was told he could not hold the posts of chief executive and chairman concurrently as that was contrary to good corporate governance practices.

Prominent businessman Chua Thian Poh, head of property developer Ho Bee Group, took over as chairman last September. Venerable Ming Yi became the honorary chief executive.

Then, last November, the Health Ministry announced an inquiry into Ren Ci’s finances, citing ‘possible irregularities’.

It did not give details, but it appeared Ren Ci had given interest-free loans to several companies, including a few Venerable Ming Yi had a share in.

There were also discrepancies between what was loaned out in Ren Ci’s accounts and what was reflected in the borrowers’ books.

Venerable Ming Yi, who is also abbot of the Foo Hai Ch’an Monastery in Geylang East, initially brushed away news of the probe, telling reporters that the shortfall in the charity’s accounts amounted to no more than $200,000 to $300,000.

But a ministry spokesman responded immediately, saying the issue was not the sum involved but the original transactions themselves.

With the launch of investigations, Ren Ci lost the right to grant its supporters tax-exemption for donations.

It was well known for its televised annual fund-raisers that featured stunts by Venerable Ming Yi and celebrities, which raked in millions of dollars.

The shows have usually been held in January, but this year’s has been postponed indefinitely.

Yesterday, Mr Khaw noted that the charity will still have access to Government subsidies and its own reserves to fund its work.

Its accumulated reserves of $33.5 million are enough to last six years. In 2006, it received $9 million in subsidies.

Contacted yesterday, the charity’s chairman, Mr Chua, told The Straits Timesthat he planned to improve the charity’s ‘credibility and sustainability’ by bringing in new blood, among other things.

He has roped in Mr Seah Moon Ming, president of Singapore Technologies Electronics, to head the committee on corporate governance, while Mr Tan Huay Lim, a partner with audit firm KPMG, now leads its audit committee.

The charity still has its supporters. Before the Chinese New Year, businessman Oei Hong Leong donated $306,000 to cover sums owed by Bodhicherie Food, a company in which Venerable Ming Yi had a stake.

It ran a vegetarian restaurant, which has since closed down.

Source : Straits Times  - 19 Feb 2008

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