Singapore GIC wins Korean tax appeal

Singapore GIC wins Korean tax appeal

THE Government of Singapore Investment Corporation, which manages US$100 billion of reserves, has won an appeal against a South Korean tax charge of 16.7 billion won (S$22.2 million). The Seoul High Court ruled on June 17 that the Gangnam-gu district office should scrap taxes imposed on the agency’s purchase of an office tower, Bloomberg reported yesterday.

Bloomberg also said that in April 2006, the Seoul government charged the tax because GIC used two companies to buy Star Tower in 2004, breaching local regulations. GIC split the purchase of the 45-floor Star Tower building between two paper companies to avoid acquisition taxes, the Seoul Metropolitan Government said in a statement then. Acquisition taxes are imposed if more than 51 per cent of the property is bought by a single company.

GIC bought the building in December 2004 from US buyout firm Lone Star Funds for an undisclosed amount. A report then put the sale at about 900 billion won. Lone Star reportedly paid 633.2 billion won for the building in June 2001.

A spokesman for GIC Real Estate told BT yesterday: ‘We welcome the Seoul High Court’s decision. It is an affirmation that we have been conducting our business in full compliance with all relevant Korean laws and regulations.’

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

CBRE S’pore earnings up 130% last year

CBRE S’pore earnings up 130% last year

Property consultancy sets up new business units for luxury homes, residential agency and hotels

By KALPANA RASHIWALA

CB RICHARD Ellis Singapore has set up three new businesses this year - luxury homes, a residential agency of associates to market projects for developers and a hotel business - to provide a stable and broader business platform, after record revenue and net earnings last year.

‘In Singapore, I think we are not so reliant on the US situation improving. We are now struggling with the wait-and-see attitude adopted by many investors. But Asia is still a sweet spot for many foreign institutional investors.’
- CBRE managing director Pauline Goh
The property consultancy company’s managing director Pauline Goh would not give absolute figures but said revenue was up 84 per cent and net profit up 130 per cent in 2007. The gains easily exceeded a 55 per cent jump in revenue and a 56 per cent increase in net profit in 2006.

‘It’s very, very hard to improve on 2007 numbers. Last year has to be taken as an extraordinary year,’ Ms Goh said.

‘Residential sales volume is down fairly significantly this year. Office leasing is still active and rentals are still increasing, though at a slower pace. We expect fees from investment sales to be very close to those last year, thanks to a pipeline of properties we’ve been working on since last year.’

Despite the tough market, CBRE has brokered 62 per cent of the overall $4.9 billion of private-sector office investment sales here so far this year.

Elaborating on the challenges facing the Singapore market, Ms Goh, said: ‘The lack of consensus of when the US sub-prime crisis will stabilise is a good indicator of uncertainty regarding the direction the Singapore market will take this year. Asia has not been hit to the same degree as US and European markets, so Asia - basically India and China - will provide a counterbalance.

‘In Singapore, I think we are not so reliant on the US situation improving. We are now struggling with the wait-and-see attitude adopted by many investors. But Asia is still a sweet spot for many foreign institutional investors.’

Before 2005, foreign buyers accounted for a relatively small portion of Singapore real estate investment deals above $5 million. In 2003, foreign investors bought $53 million of such real estate in Singapore. In 2007, this increased to $4.94 billion. So far this year, the figure is about $2.7 billion.

With the onset of the US sub-prime crisis, the profile of foreign institutional investors in the Singapore market has changed since Q4 last year, according to Ms Goh. ‘There are fewer opportunistic funds in the market now,’ she said. ‘These days we’re seeing more the core and core-plus funds.’

Opportunistic funds typically gear much higher and have a bigger risk appetite in exchange for higher returns, whereas core and core-plus funds have a lower risk appetite and use a higher proportion of equity.

Elaborating on the new businesses CBRE Singapore has entered this year, Ms Goh said the luxury homes business was set up to focus on the top-end of the residential market in a ’systematic and structured manner’ rather than pursuing it ad hoc and risking ’some of the opportunities falling between the cracks’.

CBRE’s luxury homes business is headed by Douglas Wong, formerly with Knight Frank Regal Homes.

CBRE has also built up a team of 180 associates under a residential agency business to help out when it clinches residential project launches for developers. These associates are not salaried. Instead they receive commissions on sales.

‘The associates can do the ground sales, and this frees our core residential project marketing team to focus on more strategic matters like working with developers on project concepts, unit size mixes and marketing, recommended pricing and launch strategy,’ said Ms Goh.

She acknowledges that CBRE’s pool of associates is small compared with competitors. ‘But our associates, unlike the competition’s, don’t focus on the HDB resale market,’ she said.

‘We brought them in with a very clear mandate to do project marketing. We hope to eventually grow the associates team to 400-500. But we’re taking it easy. We want to hire selectively and discriminately, rather than hire for the sake of hiring.’

The firm’s hotel business, set up earlier this year, is CBRE Hotels’ South-east Asia hub. This complements a North Asia hub based in Hong Kong which opened last year. CBRE Hotels began its business in the Pacific (Australia/New Zealand) in 2001 and expanded to Europe, the Middle East and Africa, as well as the Americas in 2003.

‘Currently, the South-east Asia hub focuses on providing hotel consultancy work, but we’re gearing up to handle hotel transactions,’ Ms Goh said.

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore COE premiums flat on high pump prices

Singapore COE premiums flat on high pump prices

COE premiums generally slipped as concerns about high fuel prices and other cost of living issues seem to have curtailed demand for new cars.

Quieter times: A manager of a multi-brand dealership said ‘generally, the market has been quiet with low walk-in sales at most showrooms.’
In yesterday’s bidding exercise for certificates of entitlement, Category A - for cars below 1,600 cc - shed $489 to $14,101. But Cat B - for cars above 1,600cc - creeped up $49 to $14,689.

On the other hand, Cat E - the open category - fell $842 to $15,459. Cat C - for goods vehicles and buses - was also down by $1,499 to $12,002. Cat D - for motorcycles - inched up $19 to $1,102 though.

‘Cat B rose marginally because there have been new models like the Honda Accord and Audi A4,’ said the manager of a multi-brand dealership. ‘But generally, the market has been quiet with low walk-in sales at most showrooms.’

He added that a lot of people are preoccupied with day-to-day issues due to ‘all this economic uncertainty’.

‘For them, there are more important things to worry about at this moment than buying a new car,’ he said.

Another factor that is affecting prospective buyers’ decisions is negative equity. According to him, many people who had taken auto loans for their current cars would have to pay off these loans before they can buy a new vehicle.

‘Some of these owners have to top up as much as $5,000 to $10,000 to settle their loans,’ said the manager.

With the next COE tender three weeks away, more than the usual two-week break, he expects premiums to rise slightly although he does not think the increases will be significant.

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Capital inflow to Asian real estate to climb

Capital inflow to Asian real estate to climb

Asian market being powered by longer-term investments: report

By UMA SHANKARI

THE ongoing credit crisis in the US and Europe has put pressure on a decade of sustained growth in global real estate but the inflow of capital to Asia’s real estate market is accelerating, says a report.

The report - which was released yesterday by KPMG, the FTSE group and the Asian Public Real Estate Association (Aprea) - says that Asian real estate is being powered by a combination of opportunistic and increasingly longer-term investments, coming off the back of a prolonged period of steady growth. Returns in Asia are projected to remain higher than the global average for the coming year, according to the report.

Also, it says that that the slowdown in the US and European markets is unlikely to cause an immediate negative impact on Asia in 2008 - although banks will tighten credit policies, limiting financing options for real estate investments.

‘Despite the current tightening of credit by banks, the deals will continue to happen, but they may take longer, the price may cost more and lead to a temporary slowing of the supply cycle,’ says Andrew Weir, partner-in-charge of property and infrastructure for KPMG in China and Asia-Pacific.

However, the current sub-prime fallout elsewhere may well act as a catalyst for the inevitable further development of Asia-Pacific as a centre of property and investment management, he adds.

According to the report, total investment in the region has continued to increase, growing by over 27 per cent in 2007 to reach US$121 billion.

Within the region, Japan remains a dominant force, not only accounting for half of last year’s real estate transactions but also experiencing the strongest growth. China also grabbed a number of headlines last year as it continued to produce attractive returns for investors.

Looking ahead, Japan continues to be viewed as an attractive market to look into, particularly for the lower-risk investor, while analysts still view China as a popular place to look at as large volumes of capital chase more limited investible stock, the report said.

Real estate funds remain the dominant source of capital for real estate investments in Asia into 2008, KPMG, FTSE and Aprea observe.

The proliferation of single-market high-return funds such as those based on China and Vietnam continue to service the needs of the short-term speculative investor. But long-term funds are generally taking a ‘wait and see’ approach following the dampened sentiment in US markets, the report said.

It also notes that the potential for new real estate investment trust (Reit) listings is being affected by the dull market sentiment.

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore Apartments above $10m still shine in dull market

Singapore Apartments above $10m still shine in dull market

In the landed sector, demand for GCBs remains strong, says CBRE

By KALPANA RASHIWALA

(SINGAPORE) The high-end residential sector has been largely subdued in 2008, but at least 50 luxury apartments costing above $10 million each have been sold so far this year. And the tally for the full year, according to property consultant CB Richard Ellis (CBRE), is expected to come in at about 70 to 100 units.

This will be lower than the 139 such units sold for the whole of 2007, but still significantly higher than the 2006 full-year figure of 23 units, CBRE’s research shows.

Putting things in perspective, CBRE Singapore’s managing director Pauline Goh says: ‘One point to note is that luxury home prices in 2006 were lower than in 2007. Hence, fewer units would have touched the $10 million mark back in 2006. There was also a smaller supply of upscale developments with big units back then compared with 2007 and H1 2008.’

The 50-odd luxury apartments costing above $10 million each sold so far this year are the tally at June 17 and include not just units sold at Nassim Park Residences, which was previewed in May, but also a unit each transacted at Cliveden at Grange, The Tomlinson, The Grange and The Orange Grove condos.

BT understands that the highest-priced transaction so far this year is a $19.7 million ground-floor unit sold at Nassim Park Residences.

In the landed sector, a total of 23 Good Class Bungalows (GCBs) have changed hands so far this year for a total of $380 million.

‘We’re quite confident that at least 50 to 60 GCBs will be sold for the whole of 2008. Demand will continue to be strong from Singaporeans as well as PRs, but deals are limited by availability of GCB stock,’ Ms Goh predicts.

Last year, a total of 87 GCB deals totalling $1.15 billion were sealed, against the record 119 transactions worth $1.23 billion in 2006.

As for the outlook for luxury apartment sales, Ms Goh says: ‘Singapore has a lot going for it; the government has put in so much effort to build Singapore into a global city. We’ll have the integrated resorts, special events like Youth Olympic Games and F1 night race. Singapore is on the radar screens of a lot of international investors. However, the flow of bad news from the US has to stabilise before confidence returns.

‘On the other hand, as Nassim Park Residences shows, if the product is right, there can be very, very strong demand. The project is in a very niche location; arguably the best luxury location in Singapore.’

Market watchers say the volume of transactions for apartments costing more than $10 million for the rest of 2008 will depend partly on when developers release new prime-district condos and their strategy on the mix of unit sizes.

Developers have tended to veer towards bigger units in the past couple of years but some analysts say some developers are now considering changing tack for upcoming projects. These developers are wondering whether it will make more sense now to have a higher proportion of smaller units - given weaker sentiment.

‘The idea is to make the absolute price quantums smaller, say $3-5 million per apartment, which will mean a bigger pool of buyers, compared with having a lot of biggish units in a project costing, say, above $10 million,’ an analyst says.

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore short rates dive, defying expectations

Singapore short rates dive, defying expectations

The analysts believe yesterday ‘great movement were due to the intervention by MAS

By SIOW LI SEN

(SINGAPORE) of interest rates in the short run plunged yesterday to strike a low year almost, training some analysts to stripe their heads after having said last week the bottom had been reached.

Three months the interbank rate of offer of Singapore (Sibor) fell the basic items 12.5 to 1.25 percent yesterday - a nuance above the bottom of year of 1.24 on April 22.

The analysts say that they believe yesterday ‘great movement of S were due to the intervention by the monetary authority of Singapore (MAS), which tried to cover the rise in the dollar of Singapore.

the fall in the three months Sibor could be partly induced by the intervention of foreign currencies of MAS that, said the kit Wei Zheng of economist of Citigroup. our evaluations suggest that the dollar of song planed on the strong side of the band of policy since the beginning of the week, which probably started the intervention of MAS.

The MAS use foreign exchange rate and has a strong policy of the dollar of Singapore to fight the inflation, which reached the 26 years in height. The dollar of song reached $1.36 against the US dollar Yesterday, of $1.38 Monday, said NG Shing Yi of analyst of UOB.

But a dollar of strong Singapore attracts the entries of capital which made pressure on domestic interest rates, which alternatively could whip to the top of inflation further.

the risk of fall of the principal course for three months Sibor is, strong dollar of Singapore said Mrs. Ng. with annual inflation this year probably to reach 6 percent, FARMHOUSE would probably prefer a stronger foreign exchange rate, and that would cover profits of Sibor.

The analysts provide that more movements whipsawing as the FARMHOUSE fights inflation with its fort sing the policy of the dollar while other central banks increase interest rates.

however I would not aim too high this factor too much as I believe that the FARMHOUSE will sterilize the majority of its interventions of foreign currencies to moderate or neutralize the pressure with the fall while resulting on, of interest rate told Citigroup ‘mr. Kit of S.

I doubt much of the FARMHOUSE would like another dive in interest rates which could charge the domestic pressure with inflation, particularly not a moment when the rates of inflation of title enter on the unexplored territory.

Finally, a more important determining cause of domestic interest rates is probably foreign interest rates - not simply interest rates of the USA, but also evaluate in other economies which are a big part of the basket of currency, Mr. Kit said.

Mrs. Ng expects that three months Sibor reaches 1.50 by end of the year. But Former-Wandesforde the Robert economist from HSBC sees the rate going in the other direction.

‘we do not expect a rise of EDF before the end of these year and I m always seeking the three months Sibor to fall to a percent above, of next months it indicated. with the thought of FARMHOUSE to maintain the dollar of strong Singapore, this encourages the foreign contributions, which in their turn decrease by interest rates.

Source : Business Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Positive outlook for Asia property

Positive outlook for Asia property

Inflows from outside the region to increase as a result of the crisis of credit to USA and Europe, says report

By Joyce Teo, property correspondent

Capital flows in the Asia-Pacific ’s real estate market from outside the region accelerates, a new report on property investment has found.

This is the result of the crisis of credit to USA and Europe, said that the KPMG report, FTSE Group and Asian Public Real Estate Association (Aprea).

The acceleration is coming off the back of prolonged growth, which was powered by a combination more and more opportunistic and longer-term investments, he found.

“With the crisis of credit to USA and Europe, investors are seeing a slowdown, so they are turning to Asia for growth,” said FTSE Group ’s head of research quantitative (Asia Pacific), Mr Jamie Perrett.

Many institutional investors such as pension funds seeking to diversify their portfolios and increase the benefits of their property, he told The Straits Times.

Real estate as an asset class has outshone actions and long-term government bonds during the last decade, providing average yields of 7 percent to 8 percent, said the report.

And while the return on real estate investments are expected to decline in most countries, returns in the Asia-Pacific region, should remain above the world average, just over 5 percent for the coming year, he said.

Sentiment market in Asia has been hit by the credit crunch and it is difficult to know when a rebound will occur, but regional perspectives should remain positive, “said Aprea ’s CEO, Mr. Peter Mitchell.

The interest in investing in Asia, but there are still signs of a wait-and-see approach, he said. “We must adopt a longer-term perspective. ‘

Real estate investment trusts (REITs) are not growth stocks, but defensive stocks and inflation hedges, “said Mitchell. Projections show Asia ’s Reit market with a capitalization of more than $ 100 billion (S $ 136.8 billion) by 2010.

“Despite the current tightening of credit from banks, transactions will continue to take place. But they take longer May, the price May be higher and it could lead to a temporary slowdown in the cycle supply, ’said Andrew Weir, KPMG ’s partner in charge of property and infrastructure in China and Asia-Pacific, in a statement.

“However, the Deputy Prime May fallout clearly act as a catalyst for the inevitable development of the Asia-Pacific region as a centre of ownership and investment management. ‘

According to the report, real estate funds remain the main source of capital for real estate investments in Asia this year.

Real Estate Asia, she said, may be short-term pain, but eventually benefit from the credit crunch.

“Over time, the credit crisis in Asia will be considered on a more equal and level playing field compared to the more mature but struggling markets USA and Europe. ‘

Yesterday, FTSE and Aprea also announced they have signed an agreement to develop new indices for the Asia-Pacific real estate sector.

Mr. Mitchell said: ‘It will give more visibility to Asia real estate markets, thus improving the region d ‘access to global capital. ‘

Source : Straits Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Stanchart hiring ex staff as trainers

Stanchart hiring ex staff as trainers

By Ong Hui bi

Hands-on: Marie Low (left) posing as a customer as head Stanchart Asia Jaspal Bindra ‘handles ‘operation sound of his visit to the bank ’s training center. Ms. Low is a former employee Stanchart, which has again been hired to train staff on customer service. The research on learning and is director of development Eileen Chong.

FORMER bank staff who have passed difficult years of service to customers are called into service.

But now, they will be dishing behavior demanding because they pose as customers in Singapore ’s first real bank branch simulation to train frontline staff.

Standard Chartered Bank (Stanchart) is re-hiring former employees to train new employees as consultants personal financial and banking at its branch simulation Commonwealth Drive, which was opened yesterday.

The $ 120000 training center - called learning Hub @ Commonwealth - will be identical to a branch Stanchart typical, but it will be used to train personnel instead.

The training centre is a first for the bank in Singapore. Stanchart hopes to train about 600 staff in the next three years the centre.

Currently, banks staff teach the theory of employment - for example, what they need to know the different banking products and operational procedures which they must comply.

Stanchart hopes that the hands of the training will allow its staff to be more confident and less prone to mistakes when dealing with customers, particularly difficult.

Mr. Ajay Kanwal, head of consumer banking Stanchart Singapore, compares the process of customer service to driving a car: “If you want to learn to drive, you must be put in a car. The banks can not save you in a classroom. ‘

He added: “The hands of training will allow staff to have a better idea of what implies bank. At the same time, former staff members can share their experiences with the younger ones during training. ‘

Twenty to 25 staff will be trained each month, at a cost of $ 3000 to $ 5000 each.

Source : Straits Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore cars using Causeway may have to help fund new JB road - KUALA LUMPUR

Singapore cars using Causeway may have to help fund new JB road - KUALA LUMPUR

Contract says toll will be levied on vehicles entering Malaysia to pay for new link to North-South highway

By Leslie Lopez, South-east Asia Correspondent

KUALA LUMPUR - THE Malaysian government has awarded a RM1.2 billion (S$500 million) contract for a road on the fringes of Johor Baru to a conglomerate linked to the ruling Umno party, a project analysts say will surely attract close scrutiny because it will be funded by sharply taxing vehicles using the Causeway linking Malaysia and Singapore.
Documents reviewed by The Straits Times show that publicly listed MRCB secured the government project in June last year to build an 8km partially elevated expressway linking the Customs, Immigration and Quarantine Complex (CIQ) at the Causeway with the southernmost end of the North-South Expressway.

The contract, which its promoters say will alleviate congestion in Johor Baru city, also features a potentially controversial 34-year toll concession for MRCB, a diversified investment holding company that has interests in property development, infrastructure and engineering services.

Under the contract awarded, tolls would not be levied for users of the proposed dual three-lane carriageway, but rather on all vehicles crossing into Malaysia from the Causeway.

A senior MRCB executive who confirmed the project awarded by the government told The Straits Times that toll collection will begin once the expressway is completed sometime in late 2011.

Based on information contained in an advisory to potential investors for the project, the toll charges will range from RM6.20 for passenger vehicles entering Malaysia to RM12.40 for lorries.

The rates will be raised every three years, and will peak at RM14.60 for passenger vehicles and RM29.20 for lorries, the documents showed.

Currently, vehicles using the Causeway pay a nominal fee. Passenger vehicles entering Malaysia are charged a toll of RM2.90, and lorries, RM5.50. The Singapore Government imposes a charge of S$1.20 for passenger vehicles and S$2.60 for lorries.

The proposal to impose new toll charges in Johor will hit Singaporeans the most.

The document on the bond issue prepared by MRCB bankers stated that the Causeway currently serves ‘69 million person trips annually, which is significant compared to the 20 million passengers at the Kuala Lumpur International Airport’.

The document issued by CIMB Investment Bank and HSBC Malaysia also stated that about 75 per cent of the passenger cars crossing the Causeway are Singapore-registered vehicles.

It is not clear whether Malaysia’s plan to impose toll charges on the Causeway would provoke a similar reaction from Singapore.

But in February, Singapore raised rates at the Second Link, which a Land Transport Authority spokesman said were ‘pegged to those set by Malaysia’.

The Causeway and the Second Link, which connects Tuas and Johor’s Gelang Patah, are the two land links between Malaysia and Singapore.

The 1,056m Causeway is the preferred route because it takes vehicles directly into Johor Baru, and the toll charges there are lower compared with those at the Second Link.

The heavy traffic is a major cause of congestion in Johor Baru.

But the huge cost of the new elevated expressway to alleviate the situation is raising eyebrows.

At a price tag of RM1.2 billion, it will cost roughly RM150 million per kilometre to build, according to bankers and analysts.

Source : Straits Times - 19 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com