Wheelock may not launch Singapore Orchard View this year

Wheelock may not launch Singapore Orchard View this year

By KALPANA RASHIWALA

WHEELOCK Properties (Singapore) is likely to hold off launching Orchard View at Angullia Park for sale until next year, when the project is slated for completion. The company had earlier indicated that the development would be launched some time this year.
The group, which yesterday posted a six-fold jump in group net profit for the quarter ended Dec 31, 2007, to $217.5 million, also said it expects to launch Ardmore 3 next year. Piling work for the project is in progress and the development is slated for completion in 2012.

For Orchard View, the main construction work is already in progress and the development is scheduled for completion next year.

For the quarter ended Dec 31, 2007, Wheelock’s revenue from continuing operations rose 43.8 per cent to $189.3 million. Wheelock’s strong topline and bottomline were mainly due to the start of revenue and profit recognition for units sold in Ardmore II condo. The bottomline also received a boost from a $200 million revaluation surplus on Wheelock Place, the group’s retail-and-office investment property on Orchard Road.

Wheelock, which has changed its financial year-end from March 31 to Dec 31, said that for the current year it will book the remaining profits from The Sea View condo in the Amber Road area and The Cosmopolitan at the River Valley/Kim Seng Road corner, which are slated for completion in first-half 2008 and mid-2008 respectively.

It will also continue to book profits from Ardmore II based on the progress of construction work and expects to book maiden profits on Scotts Square, a 338-unit apartment development which is already 67 per cent sold at an average price of $3,988 psf. ‘Sales of the remaining units are ongoing and we expect to sell progressively over the next two years,’ the group said.

Wheelock Place is also expected to continue maintaining full occupancy in the current strong market conditions and ‘prospects for improved rental rates are good for both office and retail space’.

‘The group remains in a strong financial position to take advantage of opportunities which may arise,’ Wheelock said.

As at Dec 31, 2007, the group had total liabilities of $749.5 million and total equity of $2.18 billion. It had cash and cash equivalents of $557.7 million as at the same date. Shareholders will receive a 6-cent per share (one-tier) first and final dividend for the period ended Dec 31, 2007.

With the change in its financial year, the group reported net earnings of $273.5 million for the nine months ended Dec 31, 2007, against net profit of $297.9 million for the 12 months ended March 31, 2007.

Wheelock’s net asset value per share stood at $1.82 as at Dec 31, up from $1.69 as at March 31, 2007.

Earlier this month, the group boosted its investment in fellow upscale residential developer SC Global Developments from 12.01 per cent to 13.09 per cent.

Source : Business Times  - 23 Feb 2008

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Zaha Hadid to design CapitaLand condo - Singapore

Zaha Hadid to design CapitaLand condo - Singapore
CAPITALAND, which had harboured ambitions to commission renowned architects like Daniel Libeskind and Frank Gehry to design its proposed integrated resort projects here will now get to work alongside Zaha Hadid.
 
Having designs: CapitaLand’s condo on the former Farrer Court site will be designed by MsHadid (next) 
UK-based Ms Hadid won the coveted Pritzker Architecture Prize in 2004. Her most recent commissions include the billion euro Louvre in Abu Dhabi.

The news was announced yesterday by Patricia Chia, chief executive of CapitaLand Residential Singapore.

She said that Ms Hadid will design a new condominium that will come up on the site of the former Farrer Court, for which CapitaLand, Hotel Properties and US-based Wachovia Development Corporation paid $1.34 billion in June last year. Ms Chia did not say when the new development will be launched for sale.

Ms Hadid was responsible for the masterplan for one-north here, but did not design any of the buildings coming up at the science hub.

Apart from two bungalows designed for Elevation Developments, CapitaLand’s condominium will be Ms Hadid’s first architectural work in Singapore.

Source : Business Times  - 23 Feb 2008

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CapitaLand full-year profit soars 172.5% - Singapore

CapitaLand full-year profit soars 172.5% - Singapore

By ARTHUR SIM
CAPITALAND achieved a record performance in 2007, with full-year net profit soaring 172.5 per cent to $2.76 billion, from $1.01 billion the year before.

Revenue increased 20.5 per cent to $3.79 billion, from $3.15 billion in 2006.

The stellar performance was attributed to strong sales of development projects in China and Australia, and the consolidation of revenue from Raffles City Shanghai and One George Street, which became group subsidiaries from Q4 2006 and Q4 2007 respectively.

Fuelled by sales registered in China and Australia, overseas revenue accounted for 76.4 per cent of group revenue, up from 71.2 per cent in 2006. Revenue from China grew 66.3 per cent to $1.1 billion, while revenue from Australia rose 16 per cent to $1.4 billion.

Directors have proposed a total annual dividend of 15 cents a share, comprising eight cents core dividend and seven cents special dividend.

If approved at the group’s annual general meeting in April, this will amount to around $420.9 million in dividends paid.

CapitaLand chief executive officer and president Liew Mun Leong said the group’s business model ‘has enabled us to deliver four consecutive years of record profits since 2004′.

But he said the first six months of 2008 are likely to reflect the dampening effects of the US sub-prime crisis and global credit crunch. However, he believes the market may turn around in the second half of the year.

Last year, CapitaLand sold more than 1,400 homes in Singapore and about 2,000 homes in China.

For 2008, Mr Liew said the group expects to launch between 800-1000 residential units in Singapore. Projects slated for launch include Latitude at Jalan Mutiara and the development at the former Silver Tower site. CapitaLand has a pipeline of of 3,500-4,000 units in Singapore, of which about 20 per cent are in the high-end region, he said.

The group has a pipeline of 35,000 homes in China, where it will launch about 2,000 units this year.

In Vietnam, it intends to launch three projects in Ho Chi Minh City. Over in Thailand, it is looking to launch two projects in Bangkok and Krabi.

On a business segment basis, revenue from residential developments in 2007 was $2.86 billion, up 21.5 per cent year-on-year. Earnings before income tax were $1.07 billion, up 52.6 per cent year-on-year.

CapitaLand’s commercial business unit reported revenue of $241.8 million, up 73.7 per cent year-on-year. Earnings before income tax were $1.96 billion, up 443.8 per cent year-on-year and attributed to fair value gains from investment properties, divestment gains, improvement in operating results as well as the consolidation of Raffles City Shanghai and One George Street.

CapitaLand’s retail unit saw revenue increase 31.3 per cent to $124.2 million year-on-year, with earnings before income tax rising 34.7 per cent to $297.9 million. This was attributed to revenue from Clarke Quay, malls in China and property management fees from the group’s China funds.

CapitaLand’s financial services unit saw assets under management grow $2.6 billion to $15.9 billion, excluding Ascott Residence Trust and Ascott Serviced Residence Fund. Revenue grew 17.7 per cent to $119.2 million and earnings before income tax increased 13.2 to $69.7 million.

The serviced residence unit saw revenue fall 3.9 per cent mainly due to consolidation of Ascott Residence Trust. But earnings before income tax rose 66.5 per cent to $337.2 million.
Source : Business Times  - 23 Feb 2008

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CapitaLand takes aim at Asian industrial and logistics sectors with new venture - Singapore

CapitaLand takes aim at Asian industrial and logistics sectors with new venture - Singapore

By ARTHUR SIM

(SINGAPORE) CapitaLand has entered a joint venture with Australian subsidiary Australand to establish a pan-Asian development platform in the industrial and logistics sectors.
The joint venture will identify suitable development sites for projects, in which CapitaLand - through a newly established unit - will take a 51 per cent stake. Australand will own the remaining 49 per cent of the projects.

CapitaLand already has a 54 per cent stake in AustraLand, which is listed in Singapore and Australia. Australand owns 59 properties with an aggregate value of about A$1.9 billion (S$2.5 billion) and a pipeline of development sites with an end value of about A$3.5 billion which can potentially yield a total net rentable floor area of 30 million square feet in industrial space.

At the company’s full-year results briefing yesterday, CapitaLand chief executive and president Liew Mun Leong said that it intends to ‘capitalise on the high growth in the industrial and logistics sector in Asia to become a leading industrial and logistics player’.

He added that the joint venture would also be a good platform from which to enter the Chinese logistics sector.
 
Mr Liew said that CapitaLand already owns over $300 million worth of industrial properties in Singapore, including Technopark@Chai Chee, Corporation Place, Kallang Avenue Industrial Centre and Kallang Bahru Complex.

He added that Australand owns over $1 billion worth of income-producing industrial properties in Australia. Its tenants include LG Electronics, DHL, BMW and Toyota.

While CapitaLand did not say if it intends to launch a pan-Asian real estate investment trust (Reit), one does seem imminent, especially as Mr Liew had reiterated that CapitaLand was ‘interested in creating more Reits’.

CapitaLand’s financial statements also revealed that its financial services unit has some $11.8 billion of investible income, which has a ‘mandate’ to be invested in South-east Asia, China, India, Japan and the Gulf Cooperation Council countries in the Middle East. It also noted that there has been ‘increased institutional and private investors’ interest’ for new Asian Reits and property funds.

That CapitaLand is looking at growing its revenue streams from sectors other than its main residential unit is significant.

While its residential business unit contributed earnings before interest and tax (Ebit) of $1.07 billion in 2007, up 52.6 per cent from a year earlier, Ebit from its serviced residence unit was up 66.5 per cent at $337.2 million.

Shedding some light on CapitaLand’s general offer for its subsidiary, The Ascott Group, last month, Ascott chief executive and president Jennie Chua said: ‘If the privatisation should go through, it will be helpful in the growth process.’ The deal could see CapitaLand invest up to $989.5 million to acquire the remaining 33.5 per cent of Ascott that it does not already hold.

Currently, CapitaLand’s assets under management stands at $15.9 billion. Including Ascott Residence Trust and the Ascott Serviced Residence (China) Fund, the figure is higher at $17.7 billion. ‘I look forward to growing very aggressively,’ said Ms Chua.
Source : Business Times  - 23 Feb 2008

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US$13.4 billion and flying - as Singapore Airshow makes its mark

US$13.4 billion and flying - as Singapore Airshow makes its mark

Record number of exhibitors vow to return and give new venue thumbs-up
By NISHA RAMCHANDANI

(SINGAPORE) With a new brand and a virgin venue, the Singapore Airshow managed to soothe the nerves and smash records at the same time. It pulled in over US$13.4 billion in sales of aircraft and related equipment during the first four days of the inaugural event, which was matched by an equally staunch show of support as 70 per cent of the exhibitors have already signed up to be a part of the next Airshow in 2010.
Thrills galore: Aerobatics by Singapore’s Black Knights and Australia’s Roulettes have been wowing the crowds during the Airshow at the Changi Exhibition Centre
An additional US$2.6 billion was garnered through facilities and other services, which included investments from Rolls Royce and Goodrich Corporation.

The show’s triumph proved to be a huge vindication for the organisers. After years of successful partnership, Singapore had parted ways with the Reed Exhibitions group that used to host Asian Aerospace here. One of the areas of disagreement was the choice of the new venue.

‘This is one of the best airshows and the finest venues that I have ever come across,’ said John Leahy, chief operating officer of Airbus Industrie, giving an unqualified thumbs-up to the new, purpose-built Changi Exhibition Centre (CEC).

Big names like Boeing, Northrop Grumman and Lockheed Martin are also slated to return when the biennial event is next held from Feb 23-28, 2010, with some even opting for more space.

‘The take-up rate is stronger,’ said organiser Jimmy Lau, managing director of Singapore Airshow and Events Pte Ltd, commenting on the majority of exhibitors - 70 per cent - having committed to the next airshow. ‘We usually get somewhere close to 50 per cent.’

Over 30,000 trade visitors - excluding the 7,000 overseas exhibitors - from 104 countries had visited the show at the CEC by yesterday evening, which marked the end of the trade days before it is opened to the public this weekend. About half of the trade visitors were from abroad.

The Airshow also saw a substantial number of high-level government, military and industry delegates, including Prime Minister Lee Hsien Loong, Minister Mentor Lee Kuan Yew, 21 airline CEOs and the heads of the International Air Transport Association (IATA) and the International Civil Aviation Organisation (ICAO).

Another key benchmark of success for an airshow is attendance by the Forbes top 100 aerospace companies. ‘This year we had 59. We want to push that number up,’ added Mr Lau.

Indonesian airline Lion Air’s purchase of 56 Boeing 737-900ER planes, valued at over US$4.4 billion, as well as new private jet operator BJETS’ order of 40 Cessna and Hawker jets for about US$600 million, were among the top deals scored.

All told, the Airshow notched over US$13.4 billion in sales of aircraft and related equipment in the first four days.

Highlighting the dynamism of Asia’s aerospace market today, Bernard Buisson, managing director of EADS, Singapore, said: ‘The Airshow has not only helped us in meeting our customers and partners from Singapore, Asia and across the world, but has also been a platform to explore future partnerships within the aviation and aeronautical industry in the region.’

While Mr Lau acknowledged that there was room for improvement at the next show - such as better management of delegates and event timings - he was largely satisfied with the overall performance of the show as feedback from exhibitors revealed they were impressed with the efficiency and level of service provided.

The next event that the CEC will play host to is Formula Drift Singapore in late April.

Source : Business Times  - 23 Feb 2008

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Olympic-sized exposure for home-grown brands - Singapore

Olympic-sized exposure for home-grown brands - Singapore

Local firms may be offered second-tier sponsorship at YOG 2010: Teo Ser Luck
By NISHA RAMCHANDANI

(SINGAPORE) Local outfits could be catapulted to the world stage as Singapore plans to use the 2010 Youth Olympic Games (YOG) as a platform to raise their brand profiles.
‘The exposure will bring tremendous benefits for businesses,’ said Parliamentary Secretary for the Ministry of Community Development, Youth and Sports Teo Ser Luck, citing Samsung as one example of a company that built up stronger brand recognition when it became an official partner of the Olympic Games in the 90s.

Lenovo, which became the first Chinese company to join the Olympic Partner Programme in 2004, also came into the limelight as a result of the products and services it showcased at the 2006 Torino Winter Games.

‘I think a milestone has been reached because many businesses are taking marketing through sport seriously. I personally think that businesses are willing and this is a way to give back to them,’ added Mr Teo.

In the run-up to the decision to select the host country, many companies in the business community went all out to back Singapore’s bid to host the YOG - efforts that did not go unnoticed by the International Olympic Committee (IOC) and international press.
 
While global sponsors will continue to be involved, Singapore is looking to establish avenues to capitalise on the branding of the Olympic name to help its local companies, possibly through second-tier sponsorship for events and venues. However, licensing details will have to be worked out with guidance from the IOC in due course.

‘We want to get businesses involved early in the process,’ Mr Teo added, stressing that the government wants to build a good partnership with the public and private sectors. ‘There will be spin-off benefits. Many different industries will be involved - event management, construction, services, hotels,’ he said.

It is estimated that some 3,500 athletes and 800 officials from over 200 countries will come to Singapore for the games. Singapore will be transformed into a Games Village as the 26 sports will be held at various city and heartland venues while the $500 million University Town at the National University of Singapore (NUS) - which is currently being developed - will house the athletes.

Lawrence Leow, president of the Association of Small and Medium Enterprises (ASME), is also confident that companies here will reap the benefits of leveraging on the Games and ASME will work closely with the relevant organisations to achieve that. ‘The YOG is an excellent platform for local companies to raise their profiles locally and to an international audience, whether through sponsorships, advertising, marketing and even public relations.’

Though the YOG is two-and-a-half years away, he urged companies to band together to exchange ideas and explore how best they can work together. ‘SMEs need to identify opportunities and transform them into viable ventures. The two short years leading up to the main event will also present many opportunities,’ he said, adding that the goodwill generated from hosting events could create even more opportunities when the Games are over.

Singapore’s local companies seem to be in agreement. CEO William Lim of Old Chang Kee already has plans in the pipeline for a series of promotions and products leading up to the YOG. ‘With tourist arrivals expected to increase significantly, we’re eager to launch a new range of products that will appeal to both foreign and local palates,’ he told BT. Mr Lim reckoned that second-tier sponsorship would be financially viable for local SMEs, and carries great potential for companies serious about putting their names out there.

F&B company Apex-Pal International, which owns brands like Sakae Sushi, is also keen on enhancing its brand name on the back of the high-profile event. ‘It is in line with Apex-Pal International’s vision of building a global brand and developing Sakae Sushi to become the Starbucks of sushi,’ said Joyce Lee, marketing and communications manager for Apex-Pal.
Source : Business Times  - 23 Feb 2008

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Green scheme to mark 100 Singapore buildings by next month

Green scheme to mark 100 Singapore buildings by next month 
 
GREEN buildings are finally taking off in Singapore after a slow start.
Results were sluggish when the Green Mark scheme began in 2005 but they are improving, said Building and Construction Authority (BCA) chief executive John Keung yesterday.

About 100 buildings will have been stamped with the Green Mark - which rates their environmental impact and performance - by next month, said Mr Keung. He added that there are another 200 buildings in the pipeline.

This is in stark contrast to the 17 buildings awarded both in 2005 and 2006.

‘The industry has responded very well. This could only have been achieved with strong support from many green champions,’ said Mr Keung, who was speaking at the Singapore leg of the inaugural FuturArc Forum on green buildings spanning nine regional cities.

The forum - organised by the BCA with Singapore-based construction information services firm BCI Asia - also heard from a green building expert, Mr Kevin Hydes.

Mr Hydes, chair of the not-for-profit World Green Building Council, told the 400-strong audience that buildings account for 33 per cent of global carbon dioxide emissions - seen as the main culprit of climate change. In some cities, this hits 80 per cent.

‘I don’t think the global building industry has got the message out to the politicians that green buildings are part of the solution to climate change,’ he said.

From April, it will be compulsory in Singapore for all new buildings and those undergoing major retrofitting to be green.

Mr Keung said BCA is in talks with the National Environment Agency to devise a scheme to give owners of old buildings incentives to go ‘green’ and upgrade.

Also in the pipeline is a joint BCA and National Parks Board Green Mark scheme for parks, which would involve the better use of lighting, water and other resources.

Source : straits Times  - 23 Feb 2008

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CapitaLand profit leaps to $2.76b on gains in key markets- Singapore

CapitaLand profit leaps to $2.76b on gains in key markets- Singapore 

Firm says volume for home sales could ease in the short term, but should pick up again by year-end

By Joyce Teo, Property Correspondent 
IN THE PIPELINE: CapitaLand plans to launch some 1,500 units at the Farrer Court collective sale site, seen here in an artist’s impression, by early next year. — PHOTO: CAPITALAND
 
PROPERTY giant CapitaLand tips that home prices will increase by 5 per cent to 10 per cent this year, despite the cautious mood that has taken hold in recent months as many buyers stick to the sidelines.
The group, which announced a net profit of $2.76 billion yesterday, added that sales volume could moderate, although prices should hold up.

It said it faces challenging times in the near term due to the United States sub-prime crisis and the global credit crunch it has spawned.

‘In the first half, we will see a bit of headwind,’ president and chief executive Liew Mun Leong said in a results briefing, ‘but by year-end…, the situation in the residential market here will improve.’

Chairman Richard Hu underscored that view.

‘The current weakness in the US housing market and economy and tight credit environment will likely cast a cloudy outlook over the general economic and business conditions for at least the first half of 2008,’ he said.

CapitaLand said its cash reserves of $4.4 billion and low gearing had placed it in a good position to capitalise on opportunities that could arise during this period.

It is well-placed largely because of a net profit of $2.76 billion last year - almost three times the previous year’s $1 billion.

South-east Asia’s largest real estate company said the sparkling numbers were achieved on the back of sterling performances in its key markets of Singapore, China and Australia.

It also benefited from revaluation gains. The surge in prices last year, particularly in the Republic, led to the group recognising revaluation gains of some $1.1 billion from its investment portfolio.

Boosted by a $136.8 million revaluation gain, fourth-quarter earnings hit $674.7 million from $453.5 million a year earlier.

Full-year revenue reached $3.79 billion, up from $3.15 billion year-on-year.

Singapore accounted for 61 per cent of the group’s earnings before interest and tax last year from 51 per cent a year ago.

Earnings per share for the full-year rose to 98.6 cents from a restated 36.6 cents a year ago. Net asset value per share was at $3.54 at the end of last year, up from $2.65 a year earlier.

The group acquired 4.37 million sq ft of land last year, bringing its total pipeline to 5.5 million sq ft of gross floor area.

It sold 1,430 homes worth more than $3 billion in Singapore - making it the largest listed seller here - as well as about 2,000 homes in China.

Unlike some developers, CapitaLand, which has little stock of unsold homes, will not delay its residential launches in Singapore this year. It plans to launch 800 to 1,000 units this year, including 130 units of its high-end condominium Latitude in Jalan Mutiara and 70 units of its luxury condo on the Silver Tower site in Cairnhill in the first half of the year.

Some units in Latitude were sold at a preview last year for $2,494 to $2,829 per sq ft, based on caveats lodged.

Early next year, CapitaLand will launch a 99-year leasehold condo with an estimated 1,500 units on the Farrer Court collective sale site. The firm said yesterday it would be designed by award-winning architect Zaha Hadid.

Mr Liew said Singapore’s evolution into a global city was behind the surge in property prices, marking this boom out from one in the mid-90s when domestic factors were the driver.

Nevertheless, for this year, residential demand will be driven mainly by steady new household formation and demand from buyers displaced by collective sales, he said.

CapitaLand’s assets under management reached $17.7 billion last year.

Source : straits Times  - 23 Feb 2008

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Rising inflation across Asia mauls Singapore Reits

Rising inflation across Asia mauls Singapore Reits 

Trusts may still get big lift from higher rents, higher hotel rates, say analysts

By Goh Eng Yeow, Markets Correspondent 
Investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions. They have ignored the ‘organic’ boost Reits may get from higher rents and hotel rates. - MORGAN STANLEY, in a report recommending property trusts to its clients
 

SOARING inflation across Asia has sucked the life out of real estate investment trusts (Reits), whose high-yielding dividends have made them wildly popular among investors in recent years.
Reits, in general, have fallen about 32.5 per cent in value from their peaks last year, but those with assets in inflation-prone economies, such as China, have fared even worse, according to financial portal Shareinvestor.com.

CapitaRetail China Trust, for instance, has fallen 52 per cent in four months, as inflation in China galloped to 7.1 per cent - its highest level in over a decade.

Reits are financial instruments investing in real estate like shopping malls, office buildings and hotels.

Investors can buy units, which are much like shares, offering attractive dividend yields of 6 per cent to 8 per cent derived from rents.

This is far higher than the 1.5 per cent interest on one-year fixed deposits at a bank.

Historically, a low interest rate environment has been good for Reits - if accompanied by low inflation.

Take CapitaMall Trust, the first Reit listed in Singapore. Its assets include the Tampines Mall and Junction 8 shopping centres.

It received an overwhelming response from investors when it listed six years ago, rising from just 96 cents in July 2002 to a record high of $4.32 in July last year. Inflation played its part by staying at a benign 1 per cent.

As the consumer price index, however, surged from 1.3 per cent in June to 4.4 per cent in December, CapitaMall slid 20 per cent over the period.

The inflation pressure is unlikely to abate in the near future.

Last week, the Government revised its estimates upwards to between 4.5 per cent and 5.5 per cent for the year, from an earlier forecast of 3.5 per cent to 4.5 per cent.

So, while fears of a United States recession are causing much grief among investors as they watch the value of their growth stocks evaporate, inflation is becoming a big threat to those with high dividend-yield plays like Reits.

One trader explained: ‘A Reit may offer 6 per cent in dividend yield. But if inflation is running at 4.5 per cent, the actual yield an investor is getting is only 1.5 per cent.’

To compensate for the lower return, an investor will demand a lower price for the Reit, which escalates the pressure on its share price.

Still, analysts have not stopped promoting Reits, despite their lacklustre performance, to clients.

Morgan Stanley made a case last month with a report arguing that investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions.

Investors have ignored the ‘organic’ boost Reits may get from higher rents as leases expire and hotel rates are jacked up during peak periods.

Citigroup noted on Tuesday that while there may not be a clear growth strategy for Reits this year, some are trading at hefty discounts to their net asset values, despite offering single-digit or even double-digit dividend yields.

‘This makes Reits potential takeover targets, if they have loose shareholding structures,’ it added.

Its top picks include Ascendas Reit, Suntec Reit and Parkway Life Reit.

Source : straits Times  - 23 Feb 2008

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Singapore Private homes to bid for patients

Singapore Private homes to bid for patients 

Subsidised patients will help fill 1,000 unused beds; MOH move may lead to benchmark for govt subsidies

By Salma Khalik, Health Correspondent 
 
NURSING homes run by volunteers versus private ones run for profit: Which are better and more cost-efficient?
To find out, the Health Ministry has asked private homes to do some number crunching and state the amount of subsidies they will need in order to take in up to 500 fairly incapacitated patients.

The amount they ask for and the corresponding level of care they can provide may become the new benchmark for nursing homes receiving government subsidies in future.

The patients they will be asked to house are either wheelchair-bound or bedridden.

It will be in the interest of these homes, which run about 40 per cent of the 8,500 available beds, to bid for these patients as they now have almost 1,000 unused beds in total.

Once a bid offered by a private home is accepted by the ministry, it will be held to those numbers for two years from this July.

A ministry spokesman said she hoped that private nursing homes would put in attractive bids, since their empty beds were adding to their costs. Taking in subsidised patients with the Government footing the bulk of the bill would therefore be in their interest.

Mr Ong Chu Poh, the managing director of China Healthcare, which runs six facilities, said he was interested in the idea and that he saw it as a chance to do his bit to help less well-off patients.

China Healthcare runs four medicare centres and two nursing homes and has another home in the pipeline. It is running at a comfortable 75 per cent occupancy.

The ministry said yesterday: ‘Through this competitive, market-based system, we hope to get the best performance and value when allocating subsidised beds to existing or new providers.’

It added that the exercise would improve consistency in patient care and ‘facilitate healthy competition between providers’.

The charity homes run by volunteers also have several hundred vacancies. This move by the ministry could see even more empty beds there, if private homes start taking in subsidised patients.

The standard of nursing care and the fees patients pay vary greatly even in these charity-run homes which house the majority of the elderly poor. They charge from $200 to over $2,000 a month. Rates in the private sector start at under $2,000 and go beyond $4,000 a month.

The ministry’s decision will hinge on cost and the standard of service and clinical care given. It will hold a briefing on Monday for interested parties.
Source : straits Times  - 23 Feb 2008

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