MM Lee says S’pore has shock absorbers to buffer setbacks

MM Lee says S’pore has shock absorbers to buffer setbacks

By Imelda Saad,

SINGAPORE: Minister Mentor Lee Kuan Yew has provided some assurance as the country faces a bumpier road ahead with slower growth and soaring inflation.

Speaking to his constituents at the Tanjong Pagar National Day celebration dinner, Mr Lee said Singapore has some shock absorbers to buffer the setbacks. For the needy, the government has put aside over S$3 billion this year in various support schemes.

He added that Singapore could grow 5 to 6 per cent or even 7 to 8 per cent if there is no long-term recession in the United States or EU, but should the giants go into a recession, then growth may be at 3 to 5 per cent.

Mr Lee said Singapore has massive investments with long-term implementation periods. When the integrated resorts are completed, there will be demand for workers, softening the impact of retrenchments.

“We have an economy which is diversified. We have a workforce that we have upgraded year by year, better educated, better able to earn more because we are connected with the world and our incomes can rise because of our higher skills and higher technology,” said Mr Lee.

He said work-permit foreign workers will take the brunt of any lay-offs, saving many Singaporeans their jobs. And due to the fact that the country has been increasing its investments with China and India, the impact of the slowdown in the US and EU will be buffered.

Mr Lee also noted that the government is taking care of the lower income. “We have succeeded so far in housing, in health, in education, in job facilities.

“We will do our best to re-train people who are being retrenched to upgrade their skills. But we must face facts, this gap is going to remain for five, ten or more years.”

In the region, the minister mentor pointed to the political flux in Malaysia and Thailand, and said that money politics is at the heart of problems in many Asian countries. The good thing for Singapore, he said, is that there is no money politics.

He also highlighted Singapore’s political stability, saying the frequent chop and change in governments and policies have caused instability in countries like Thailand and Taiwan.

- CNA/so

Source : Channel NewsAsia - 14 Aug 2008

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Mindy Yong

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Estate ERA agent behaved more like an impatient customer

Estate agent behaved more like an impatient customer

MY FAMILY and I viewed a resale four-room HDB flat at Block 641A Punggol Central, last Sunday at about 6.30pm. It was a ‘open house’ type of viewing with about 20 to 30 potential buyers. The agent representing ERA was a young women, reportedly a top salesman in the area.
During the viewing, we experienced her impatience and negative service attitude. After almost 20 minutes, she raised her voice and said in Mandarin: ‘I have no time.’ She then closed all the windows - body language to tell us to leave instantly. Before she locked the unit, she said, again at the top of her voice: ‘$360,000, we close the deal.’ We felt we had been chased away.

On Tuesday at about 8pm, we decided to view the unit a second time as the first was a rush and wasn’t exclusive at all.

When we mentioned details such as an unserviceable air-con unit in the master bedroom, asking for a better bargain, to our surprise, she responded with negative body language, closing all the windows again. At the same time, she told us: ‘No one will install new air-con then sell the flat.’ Again, we were chased out of the flat, no thanks to her hospitality.

I do not question defects in the flat nor her product knowledge that may cause delay before we can sign the agreement. I only question her service attitude. Based on my observations, she was not only impatient with customers, but also used the wrong right choice of words and tone of voice. She behaved more like a ‘customer’ then we did. She was more interested in closing the deal, than explaining about the unit. She never smiled during the viewing, as if we were disturbing her rather than giving her business. We thought she might not be interested in our ’small’ deal.

My questions:

- Is this the well-trained service attitude of a professional salesman from ERA with a motto, ‘First in service’?

- Is it right for ERA agents to stereotype potential buyers?

- Do high property prices and complacency makes some agents arrogant?

- Do customers have to tolerate discrimination?

Today, in this competitive world, there are tens of thousands of salesmen out there, selling the same things using different methods. So it is service that matters more than the product. Don’t forget Singapore is promoting Gems - Go the Extra Mile for Service.

After this incident, I regret to say agents like this have tarnished the image of ERA, a renowned property agency that took years to build.

Chua Sok Woon (Ms)

Source : Straits Times - 14 Aug 2008

Singapore Building projects busting budgets

Singapore Building projects busting budgets

Shortage of construction workers and materials causing costs to shoot up by as much as 50%

By Francis Chan

SOME building projects in Singapore are facing cost blowouts of 30 to 50 per cent above their original budget as higher construction costs bite hard.
The continuing shortage of construction workers and building materials has left project bosses with little choice but to pay upfront for the far higher costs or abandon the project.

Anecdotal evidence suggests that building budget blowouts are far bigger than official figures indicate.

One project that has been hit by higher building costs is the Khoo Teck Puat Hospital in Yishun.

The chief executive of Alexandra Hospital, Mr Liak Teng Lit, who is overseeing the construction project, said some parts of the project face cost hikes of 30 to 40 per cent. The original total cost of the project was $400 million.

Another project that has been hit is Safra’s Jurong clubhouse. Costs for the project have shot up 30 per cent since its groundbreaking ceremony in February last year. Its original budget: $30 million.

And earlier this month, the Health Ministry announced that it would provide Ren Ci charity with additional funding of ‘up to $9.3 million’ for its new hospital at Irrawaddy Road.

This was to help cover the hike in construction costs for the medical centre - now set to cost up to $42.4 million.

Although Ren Ci declined to comment on the issue, previous reports indicated that the initial budget for the project was $30.8 million.

One of the biggest cost increases reported this year involves the Singapore Island Country Club (SICC). The club was reported in June to have sought club members’ approval to increase its budget to construct a new clubhouse from $60 million to $90.3 million - a whopping 50 per cent rise.

The Building and Construction Authority reported that construction costs rose 20 to 30 per cent last year.

A statement by National Development Minister Mah Bow Tan last month said a rise of another 3 to 5 per cent was recorded in the first quarter of this year.

Mr Goh Ngan Hong, president of the quantity surveying division at the Singapore Institute of Surveyors and Valuers (SISV), said: ‘Based on leading quantity surveyor firms and general industry feedback, construction cost was estimated to have increased by about 20 to 30 per cent in 2007.’

He added that costs were ‘estimated to have increased by another 10 to 15 per cent by mid-2008′.

Market watchers and most industry players such as property developers, contractors, suppliers and construction-related firms that The Straits Times spoke to broadly agreed with SISV’s figures.

However, a number of projects surveyed by The Straits Times painted a bleaker picture.

Project bosses cited the escalating cost of essential construction materials, including sand, concrete, steel and other base metals. Another problem is the lack of construction industry manpower.

‘This spike in basic plant, equipment, materials and labour costs is affecting construction project budgets,’ said the executive director of the Singapore Contractors Association, Mr Simon Lee.

He said such cost increases would inevitably cause delays in the completion of contracts, which was ‘not good for business’.

The construction cost hikes have affected big and small projects alike.

The Marina Bay Sands and Resorts World at Sentosa integrated resorts have also fallen prey to cost hikes.

Marina Bay Sands was recently reported to have blamed soaring prices of building materials for its cost rising from an estimated US$3.6 billion ($4.9 billion) to US$4.5 billion. And last November, Resorts World at Sentosa bumped up its budget to $6 billion from $5.2 billion.

The Singapore Manufacturers’ Federation (SMa) took a more contrarian view of construction costs.

‘Although raw material and labour prices have risen significantly over the past two years, costs or selling prices of most construction-related materials… have by and large not risen more than 15 per cent year-on-year,’ said Mr Alan Lee, chairman of the SMa’s building products and construction materials industry group.

When asked what measures the construction industry may put in place to tackle the problem of rising costs, the SISV said: ‘Passing the higher costs to the property purchasers and other consumers - this seems to be the likely case.’

Source : Straits Times - 14 Aug 2008

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Mindy Yong

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BHP Billiton to lease Singapore office space at MBFC

BHP Billiton to lease Singapore office space at MBFC

Aussie firm will take up 150,000 sq ft at Marina Bay Financial Centre’s Tower 2

By KALPANA RASHIWALA

(SINGAPORE) Mining and resources giant BHP Billiton of Australia is leasing about 150,000 sq ft at Marina Bay Financial Centre, BT understands.

With a view to grow: The space BHP Billiton will be leasing at MBFC is said to be more than twice its existing space in S’pore, suggesting expansion plans here —
The space will be in MBFC’s 50-storey Tower 2, under the mega project’s first phase, which is slated for completion in second quarter 2010.

BHP Billiton is one of the world’s biggest producers of primary aluminium, copper, lead, zinc, nickel, iron ore and metallurgical coal. It is also a major producer and marketer of export thermal coal and has a significant oil and gas business with production operations in Australia, the UK, Gulf of Mexico, Algeria and Pakistan, according to information on the group’s website.

Singapore is already one of BHP Billiton’s three centralised marketing hubs (the other two are in The Hague in The Netherlands and Antwerp in Belgium) focusing on the Asian energy market, base metals, stainless steel materials and carbon steel-making raw materials. The centre in The Hague focuses on aluminium, petroleum and the European energy coal market, while the Antwerp office serves the group’s diamond customers around the world.

BHP Billiton’s Singapore operations are currently located at Capital Tower and Springleaf Tower, both near Tanjong Pagar MRT Station. Market watchers expect the group to give up its existing premises when it moves to MBFC. The 150,000 sq ft or so it will be leasing at MBFC is said to be more than twice the group’s existing space in Singapore, suggesting expansion plans in Singapore.

BHP Billiton, which is listed on the Australian and London bourses, posted profit after taxation of US$13.5 billion for the year ended June 30, 2007, up 28.2 per cent from the preceding year.

Some property market watchers were pretty impressed with news of BHP Billiton’s leasing deal at MBFC given the slower office leasing market.

MBFC is iconic of Singapore’s ambitions to be a major financial centre. Including the latest leasing deal with BHP Billiton, MBFC’s 2.9 million sq ft total net lettable area of offices is about 60 per cent pre-committed.

Monthly rents in the development are in the region of $16 per sq ft, said Kevin Wong, chief executive of Keppel Land, at a results briefing last month. KepLand is developing MBFC jointly with Hongkong Land and Li Ka-shing’s Cheung Kong Holdings/Hutchison Whampoa.

However, BHP Billiton will probably be paying less than the $16 psf rental being quoted, given the size of space it is leasing, market watchers reckon.

Earlier tenants clinched at MBFC include Standard Chartered, which is taking 508,298 sq ft at the 33-storey Tower 1, also in the project’s first phase. Barclays and American Express International have signed up for Tower 2, also in Phase 1 and where BHP Billiton will be housed.

The second phase of the project, expected to be completed in 2012, will include Tower 3, with about 1.3 million sq ft of offices, of which about 700,000 sq ft have been leased by DBS.

Source : Business Times - 14 Aug 2008

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SC Global’s Q2 net rises 117% to $11.47m

SC Global’s Q2 net rises 117% to $11.47m

By ARTHUR SIM

SC Global Developments has reported a net profit of $11.47 million for Q2 2008, up 117 per cent from the $5.28 million in the year-ago period.

Upmarket homes: The group saw revenue recognition from residential units sold in its Singapore development projects such as The Marq on Paterson Hill
Revenue for the quarter was $32.4 million, marginally lower by 5 per cent compared with $34 million in Q2 2007.

The group saw revenue recognition from residential units sold in its Singapore development projects, namely, The Marq on Paterson Hill and Hilltops. This was also the first quarter of revenue recognition for Hilltops.

SC Global said that its development project under its Kairong brand in Shenyang, China, called Kairong International Gardens, also made a positive contribution for the quarter as construction progressed.

Gross profit for the quarter increased 116 per cent to $16.5 million compared with $7.7 million in the same period last year. Gross margins were also higher at 51 per cent for the quarter versus 23 per cent in 2007.

On a half year basis, gross profit for 1H 2008 was $41.6 million, up 48 per cent compared with $28.1 million a year ago.

SC Global said that higher selling prices achieved for the projects coupled with management of construction costs enabled the group to attain a high gross margin of 55 per cent for 1H 2008 against 32 per cent recorded in the year-ago period.

The group’s associate company in Australia, AVJennings Ltd (AVJ), reported that its pre-tax profit for the full year ended 30 June 2008 was A$15.5 million (S$18.8 million) compared with A$17.8 million for the 15-month period ended 30 June 2007 (A$14.2 million annualised).

In Q208, the group increased its investment in AVJ through the subscription of its full entitlement under a rights issue undertaken by AVJ and acquired 32.6 million new shares at an issue price of A$0.67 each, increasing its shareholding from some 43 per cent to about 49 per cent.

Earnings per ordinary share for the quarter period was 2.9 cents compared with 1.65 cents (adjusted) a year ago.

At the close of trading, SC Global shares ended at $1.10 per share, down one cent.

SC Global added that operationally, its developments under construction are proceeding as planned and new projects in Ardmore Park and Sentosa Cove are continuing to progress in the planning stage.

Source : Business Times - 14 Aug 2008

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Mindy Yong

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