Singapore Serangoon Central to get mega shopping mall

Singapore Serangoon Central to get mega shopping mall

$1.3b centre, about twice the size of suburban malls here, is expected to be completed by 2010

By Joyce Teo, Property Correspondent

IT IS full steam ahead for a $1.3 billion mega shopping mall being built at Serangoon Central - in defiance of the current gloomy times
Construction firm Low Keng Huat was yesterday awarded a $295 million contract to build the mall and the firm is grabbing the contract with both hands.

Its chief financial officer, Mr Chin Yeok Yuen, said private contracts of such a scale are ‘hard to come by’ these days as many developers have delayed projects in light of the slowdown.

Developer Gold Ridge, a special purpose vehicle made up of mainly institutional investors from the United States and Europe, is confident of the project’s long-term success.

Ms Victoria Sharpe, the chief executive of Pramerica Real Estate Investors (Asia) which is advising the investors, said the mall has tremendous potential to be developed into an iconic retail centre serving Singapore’s north-east.

It is also strategically located in the heart of Serangoon with its large residential population and numerous schools.

The yet-to-be-named six-storey mall - which sits above Serangoon MRT station and the upcoming Serangoon Circle Line station - will be integrated with the stations and a new bus interchange.

It will boast a 24-hour zone with shops, food and beverage outlets, a 10-screen cineplex, a 60,000 sq ft hypermarket and a 10,000 sq ft gourmet supermarket. Also, SAA Architects has conceptualised a ‘green necklace’ along the exterior of the eco-friendly building. This involves a series of lush green spaces. There will also be a landscaped sky terrace and an internal roof garden.

A new 16-bay bus interchange will take up part of the mall’s ground floor. The mall will have a total net lettable area of slightly more than 618,000 sq ft. That will make it bigger than Ang Mo Kio Hub, a suburban mall that is also linked to a bus interchange and an MRT station.

‘Suburban malls are usually about 300,000 to 400,000 sq ft in size. This one is big and will be more exciting as it can accommodate more concepts, activities and experiences,’ said property consultancy Knight Frank’s head of retail, Ms Sherene Sng.

Gold Ridge plans to include a department store that may occupy up to 60,000 sq ft, as well as a 500-seat food court. There will be more than 400 specialty shops. The firm is investing $1.3 billion, including land cost, in the project. It had successfully tendered for the site in March this year, with a bid of $800.9 million or $850 per sq ft per plot ratio.

The existing shopping centre portfolio of Pramerica Real Estate Investors (Asia) includes Tiong Bahru Plaza, Century Square and upcoming Tampines 1.

The weak economic outlook is expected to hit retail sales but suburban malls with high traffic may fare better than some prime downtown malls. Said Ms Sng: ‘Suburban mall rents will remain fairly resilient, going ahead. If they were to fall, the decline will not be as great as the fall in rents in prime areas.’

Builder Low Keng Huat yesterday said it had been awarded the construction contract for Serangoon Central Mall, which comprises the mall and bus interchange. The project is expected to be completed by October 2010.

The total value of the firm’s ongoing construction projects, including Serangoon Central mall, is about $900 million as of yesterday, it said in its statement.

Guthrie Consultancy Services is the project manager, retail consultant and marketing manager for the mall. The mall will eventually be held by two or possibly several funds managed by Pramerica.

Source : Straits Times - 26 Nov 2008

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Bosses, if you must make cuts, here’s what to do

Bosses, if you must make cuts, here’s what to do

1 AVOID DEATH BY A THOUSAND CUTS
It is better to do your calculations thoroughly and then retrench in one fell swoop, than make multiple cuts as things worsen, says Dr Stewart Black, executive director of the Insead business school’s Centre for Human Resources in Asia.

‘By the second cut, remaining employees will wonder if they will survive the third or fourth round. The impact is counter-intuitive. Instead of working harder to keep their jobs, they get anxious and lose concentration.’

Because misery loves company, they will spend all their time commiserating in the hallways. Productivity, he warns, will plunge further.

2 BEWARE THE SURVIVOR EFFECT

‘Employees are human beings first, economic animals second. If you didn’t get cut, but your friend does, it’s your friendship heart that kicks in first,’ he says.

According to research done on car companies where many were let go in the 1980s, for companies where job cuts were perceived to be fair, productivity did not go down or up. At best, there was a neutral effect.

But where people felt their dearly departed were unfairly targeted or treated, they slowed down their work to ‘exact revenge’. He says: ‘Even though it was not in their own economic interest to do that, people’s hearts obviously won over their heads.’

As such, the ‘why’ and ‘how’ of retrenchment becomes paramount. ‘Was it because the person was of lower seniority or belonged to a poor performing unit? Was there prior consultation or did they just come in one morning and get escorted out by security?’

If a company is seen to be reasonable, even if not generous, productivity goes back to neutral. ‘Quite frankly, neutral is good. In a slowdown, the last thing you can afford is any further drop in productivity.’

3 RALLY THE REMAINING TROOPS

‘Like a sports team, you need to inspire the survivors to fight on. When you are losing, many players feel like mentally and emotionally giving up. Once they do, the game is over,’ he says.

‘However, the rally cry must be based on reality. If you are down by 50 points in basketball with one minute to play, promising the players they can win the game if they try just doesn’t ring true.’

In some business cases, the goals need to be more realistic.

‘For example, General Motors recently announced that for it, winning would be surviving the next two years. For many companies, winning could be just surviving. In other cases, you can help employees see that the actions being taken now can help the company emerge from the recession even stronger.’

Source : Straits Times - 26 Nov 2008

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US govt commits US$800b to unlock lending - WASHINGTON

US govt commits US$800b to unlock lending - WASHINGTON

Fed to buy up to US$600b in housing debt and set aside US$200b for consumer loans

The Fed’s US$200 billion (S$306 billion) lending programme will help banks to extend more credit to consumers and businesses, says Mr Paulson. — PHOTO: REUTERS

WASHINGTON: The United States Federal Reserve took two new steps yesterday to unfreeze credit for homebuyers, consumers and small businesses, committing up to US$800 billion (S$1.23 trillion).
The central bank will purchase as much as US$600 billion in debt issued or backed by government-chartered housing-finance companies. It will also set up a US$200 billion programme to support consumer and small-business loans, the agency said yesterday.

The Fed will purchase up to US$100 billion in direct debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks and up to US$500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.

‘This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,’ the Fed said.

The Fed will also lend up to US$200 billion to holders of AAA-rated asset-backed securities backed by ‘newly and recently originated’ loans, such as for education, cars, credit cards and loans guaranteed by the Small Business Administration.

US Treasury Secretary Henry Paulson said yesterday that the Fed’s lending programme will enable banks to extend more credit to consumers and businesses.

‘I and my regulatory colleagues are committed to using all the tools at our disposal to preserve the strength of our financial institutions and stabilise our financial markets, to minimise the spillover into the rest of the economy.’

The Treasury committed US$20 billion of its Troubled Asset Relief Programme (Tarp) as part of the US$200 billion plan to support consumer and small-business loans.

The programme ‘underscores our support for the housing market’, Mr Paulson said. ‘Nothing is more important to getting through this housing correction than the availability of mortgage finance.’

The efforts by Mr Paulson and Fed chairman Ben Bernanke are the latest attempt to alleviate the credit crunch. Mr Paulson has committed all except US$20 billion of the first half of the US$700 billion Tarp programme, with less than two months before the end of the Bush administration.

‘It will take time to work through the difficulties in our markets and our economy, and new challenges will continue to arise,’ Mr Paulson said.

He has committed US$270 billion to inject capital into banks, including US$20 billion as part of a rescue of Citigroup on Sunday, and brokered a deal providing US$40 billion to insurer American International Group.

In a press conference yesterday, Mr Paulson called for patience in expecting quick results from the effort to recapitalise financial institutions and unfreeze credit markets that have contributed to a slowing in US economic growth.

‘It is naive for any of us to think that when you’re dealing with a situation of this magnitude, that a Bill could be passed or a single action taken to make all the issues go away,’ he said.

Policymakers are aiming to prevent a financial collapse and stamp out the threat of deflation.

‘They’re trying to put funds into the system, trying to unfreeze these markets,’ said Mr William Poole, the former St Louis Fed president, in an interview with Bloomberg Television. ‘Clearly, the Fed and the Treasury are beginning to take a large amount of credit risk.’

The Dow was 59.58 points lower at 8,383.81, after two hours of trading.

BLOOMBERG, REUTERS

Source : Straits Times - 26 Nov 2008

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Protests force Bangkok’s key airport to shut

Protests force Bangkok’s key airport to shut

Demonstrators storm Suvarnabhumi terminal, disrupting flight operations

By Leslie Lopez, South-east Asia Correspondent

A television grab showing a PAD supporter firing at pro-government activists on a road to the smaller Don Muang Airport. Other images showed the rival groups hurling stones and wooden staves at each other, as the months-long campaign turned violent.

BANGKOK: The months-long street campaign to unseat the Thai government turned desperate and violent yesterday, after anti-government protesters besieged the country’s main airports and clashed with the rival camp.
Bangkok’s Suvarnabhumi International Airport was closed indefinitely last night, after thousands of anti-government protesters stormed the terminal, affecting flight operations as startled tourists looked on.

‘For the safety of passengers, we have to stop flights out of the airport temporarily, until the situation returns to normal,’ airport manager Serirat Prasutanon said in a statement, adding that incoming flights were still operating.

Prime Minister Somchai Wongsawat is scheduled to return from an overseas trip today.

Mr Parnthep Pourpongpan, spokesman for the anti-government People’s Alliance for Democracy (PAD), said: ‘Our goal is to shut down Suvarnabhumi airport until Somchai quits.’

On the other side of the capital, about a dozen pro-government supporters were injured when gunfire erupted during a clash with PAD supporters on a road to Don Muang domestic airport.

Television footage showed at least two PAD security guards firing half a dozen rounds from handguns at their opponents. Other images showed the rival groups hurling stones and wooden staves at each other.

Thousands of PAD supporters had earlier besieged the government’s makeshift offices at Don Muang, on the second day of demonstrations even as a threatened nationwide strike fell flat.

The airport sieges, one of the PAD’s most disruptive acts in its six-month campaign, could undermine public support for a movement that appears to be using increasingly aggressive tactics to provoke a violent flashpoint, a prospect that could push Thailand into unchartered territory.

‘The PAD is looking and behaving increasingly desperate because the sentiment for the movement could be taking a sharp dip,’ said a senior Western diplomat, who asked not to be named.

The shift in sentiment away from the PAD has a lot to do with the country’s already troubled economic prospects, analysts said.

‘It is about confidence and all these developments don’t help,’ said Mr John Bonnell of Automotive Resources Asia, a regional Bangkok-based consultancy.

‘We are facing a double whammy. The economy is being battered by the global meltdown and on the domestic front, our political troubles are making it difficult for the government to move with counter-measures,’ said Professor Thitinan Pongsudhirak, who teaches political science at Bangkok’s Chulalongkorn University.

Mr Somchai yesterday again rejected calls to resign and criticised the protesters for leading a ‘rebellion’.

‘The people are the ones who make decisions, because my government came from an election under the Constitution,’ he said, while on a flight back from an Asia-Pacific Economic Cooperation summit in Peru.

‘Anyone who wanted to overthrow or resist the government is a rebel,’ he said.

The PAD - supported by sections of Bangkok’s elite - has vowed to bring down the government, which they accuse of being a front for ousted prime minister Thaksin Shinawatra.

The uncertain outlook has forced economists to downgrade their prospects for Thailand.

The National Economic and Social Development Board has revised downwards its 2008 growth forecast to 4.5 per cent, from its earlier estimate of 5.2 per cent.

Key sectors, such as electronics and automotive manufacturing and tourism, have all registered slowing activity, the agency noted and it expects the trend to continue next year.

At press time, several airlines flying out of Changi Airport had already cancelled morning flights to Bangkok, on the advice of the Thai and Singapore authorities. Both Jetstar Asia and Tiger Airways cancelled their early flights, departing at about 7am.

When contacted, the Ministry of Foreign Affairs reiterated its existing travel advice, which is for Singaporeans to postpone travel to Bangkok to a later date, if they do not have a pressing need.

Source : Straits Times - 26 Nov 2008

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Citi’s Singapore head reassures customers

Citi’s Singapore head reassures customers

By CONRAD TAN

CITIGROUP’S Singapore country head has written to Citi customers here to reassure them of the bank’s financial standing after a collapse in its share price last week led to a US government rescue.

Mr Larsen: ‘We have seen a relatively small number of customers seeking to diversify their deposits.’
‘Our business is strong and our support for our customers has been unwavering,’ Jonathan Larsen, Citi’s Singapore country officer, said in an email to customers on Monday.

Mr Larsen, who is also chief executive of Citibank Singapore - Citi’s consumer banking unit here - emphasised the bank’s ‘continued commitment to our customers in Singapore’ and the boost to Citi’s capital base from the US government bailout.

The group also took the unusual step of publishing full-page advertisements in major newspapers including The Business Times on Monday to restore confidence among customers.

That followed a similar advertising offensive in the US on Sunday, as Citi’s senior executives in New York scrambled to contain growing panic over its future.

After a weekend of frenzied negotiations with US government officials and regulators, the executives finally emerged with a deal to save the bank.

The US government said it will insure up to US$306 billion of Citi’s troubled assets and pump US$20 billion of capital into the bank.

Its share price plunged 60.4 per cent last week to just US$3.77 when trading ended on Friday, before the government rescue was put together.

The plummeting value of its shares last week caused some customers here to take fright and withdraw their savings, Citi admitted.

‘The share price movements generated a number of customer queries and we have seen a relatively small number of customers seeking to diversify their deposits,’ Mr Larsen said in a response to BT queries.

But he added that Monday’s agreement with the government ‘has reinforced Citi’s overall financial standing, and has provided strong reassurance to our customers with respect to the strength of Citi’s global franchise’.

Citi’s businesses in Singapore have maintained ‘a stable operating income, unparalleled access to funding, extraordinary levels of liquidity and the best talent in the business’ through the difficult market conditions of the past few months, he said

Source : Business Times - 26 Nov 2008

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Not possible for Singapore to pump-prime economy: PM Lee

Not possible for Singapore to pump-prime economy: PM Lee

He says Republic has its own ways to help its people in these troubled times

By LEE U-WEN
IN SAO PAOLO, BRAZIL

THE global financial crisis may be forcing other countries to spend billions to stimulate their economies, but Singapore cannot follow in their footsteps because of its small economy, said Prime Minister Lee Hsien Loong.

In bigger economies, consumption can be boosted when their governments pump in extra money as people will spend it within the economy, PM Lee told some 200 businessmen over lunch in Sao Paolo on Monday.

‘Most of the money stays in, a little bit of it leaks out. You get a multiplier and the economic activity goes up,’ Mr Lee said during his visit to the Brazilian city, one of four cities during his week-long official stay in Latin America. ‘However in Singapore, if people spend money, most of it goes overseas because we are so open. Most of the demand is abroad.’

Singaporeans spend much of their money on things that are imported, explained the Prime Minister, so it was ‘not possible for us to pump-prime the economy in the same way that other governments are doing’.

Still, even as the Republic is closely keeping tabs on what other countries are doing to cope with the economic meltdown, Singapore had its own ways to help its people in these troubled times, said Mr Lee.

‘There are other things we can do, such as reducing costs and helping citizens directly. . . We want to maintain confidence and let Singaporeans know that they are not in this alone. The government is helping them.’

‘In Singapore, if people spend money, most of it goes overseas because we are so open. Most of the demand is abroad.’

- PM Lee addressing businessmen from the Federation of Industries of Sao Paolo (FIESP) over lunch. Seated beside him is FIESP president Paulo Skaff

A number of measures are already in place, such as providing direct financial assistance for the lower-income group and spending heavily on training to help people find and keep good-paying jobs, he said.

Recently, the government made available $2.3 billion in loan and credit facilities to companies, and a further $600 million to retrain workers.

Explaining the decision to do so, Mr Lee said that as banks become more cautious during a downturn, the impact will be felt among many companies, especially SMEs.

‘We have schemes that co-share the risk of banks lending to small companies. We take on a significant part of the risk and the banks make the evaluation, so that the banks do not just make loans and pass the problem on to the government.’

Looking ahead to next year’s Budget, which has been brought forward a month to January, the Prime Minister said there would be ’strong measures’ introduced to deal with the recession.

Meanwhile, in a separate development, Singapore and Malaysia are set to discuss ways on how best to resolve the package of outstanding issues involving both countries.

A spokesman from Mr Lee’s office confirmed that, in his meeting with Malaysia’s Deputy Prime Minister Najib Razak in Peru last weekend, Mr Lee had discussed ‘outstanding issues including the Points of Agreement’.

The package includes issues concerning the sale of water to Singapore, the CPF savings of Malaysians working in Singapore, the use of Malaysian airspace by the Singapore air force, and the relocation of Malaysia’s railway station at Tanjong Pagar.

According to reports quoting Mr Najib, the foreign ministers of the two countries will meet to discuss the matter further.

Source : Business Times - 26 Nov 2008

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Protesters storm Bangkok airport, shutting down terminal - Thailand

Protesters storm Bangkok airport, shutting down terminal - Thailand

Skirmish caps a dramatic day that also saw clashes on the street

(BANGKOK) Flight operations at Thailand’s main international airport were disrupted last night after hundreds of anti-government protesters stormed the terminal building.

Big standoff: Police standing guard as anti-government protesters block the main road at Bangkok’s Suvarnabhumi airport last night
‘We have ordered the closure of the airport because PAD supporters have come inside the airport, breaching international safety rules,’ an airport spokeswoman told Reuters.

Members of the People’s Alliance for Democracy (PAD) broke through police lines and began roaming through the new, sprawling US$4 billion Suvarnabhumi international airport terminal, near Bangkok, as startled tourists looked on.

The terminal invasion capped a dramatic day that also saw PAD protesters firing on pro-government supporters on a major road leading to the old airport to the north of the city.

Footage aired by public broadcaster TPBS showed at least two PAD security guards firing half a dozen rounds from handguns. The PAD said they were attacked first with planks and stones. At least 11 people were hurt, a city emergency services official said.

There were chaotic scenes at Suvarnabhumi, gateway for the 13 million tourists who visit every year, when protesters broke through lines of hundreds of shield-toting riot police.

Thailand’s government called on the military to help restore order at the airport after demonstrators stormed into the main terminal.

‘We are using non-violent measures but we may further step up our actions later,’ government spokesman Nattawut Saikuar said yesterday.

Earlier, thousands of PAD members waved plastic hand-clappers, flags and portraits of King Bhumibol Adulyadej, while others slung razor wire across the four-lane access road.

‘Our goal is to shut down Suvarnabhumi airport until Somchai quits,’ PAD spokesman Parnthep Pourpongpan said of the protest, aimed at Prime Minister Somchai Wongsawat, who returns today from an Asia-Pacific summit in Peru. He would not land at Suvarnabhumi, a spokesman said.

The airport siege, one of the PAD’s most disruptive acts in its six-month campaign, could undermine public support for a movement that appears to be going to ever greater extremes to provoke a violent government backlash.

‘It is time to make a clear-cut choice between good and evil, between those who are loyal and traitors,’ PAD leader Somsak Kosaisuk told supporters at a rally earlier in the day.

Mr Somchai has rejected repeated PAD demands that he resign because of allegations he is a puppet of his brother-in-law, Thaksin Shinawatra, who was ousted as leader in a 2006 coup.

Even though a nationwide strike failed to materialise, the airport unrest could deepen the economic impact of a crisis that has stymied government decision-making and raised fears about the export-driven economy’s ability to cope with a global slump.

The government forecast this week that the economy would grow just 4.5 per cent this year, its slowest rate in seven years.

However, Thai shares and the baht shrugged off the protests, with the main stock index up 1.5 per cent as Asian bourses rose after the US bailout of Citigroup.

Opinion polls show waning public support for the PAD, an unelected coalition of royalist businessmen, academics and activists.

Some analysts say its powerful backers in the Bangkok establishment, including Queen Sirikit, are getting cold feet about the damage the political strife is inflicting on the economy.

‘The people who’ve been backing PAD in the background have got frightened that it’s getting out of control. It’s a threat to public order and even the structure of the state itself,’ historian and political analyst Chris Baker said.

Despite his ties to Thaksin, Mr Somchai’s bland, inoffensive personality has proved a hard target.

Army chief Anupong Paochinda reiterated yesterday that a putsch would do nothing to resolve the fundamental political rifts. — Reuters, Bloomberg

Source : Business Times - 26 Nov 2008

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Fed puts economy on US$800b life support - WASHINGTON

Fed puts economy on US$800b life support - WASHINGTON

Paulson pledges use of all tools to maintain financial institutions, stabilise markets

(WASHINGTON) The US central bank threw a massive life-line to consumers and the financial system yesterday with two programmes aimed at injecting liquidity and making it easier for consumers to get loans for homes, cars and on credit cards.

Under the new mortgage programme, the Federal Reserve will buy up to US$100 billion of debt issued by government- sponsored mortgage enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It will also buy up to US$500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae.

The Fed also launched a US$200 billion facility to support consumer finance, including student, car, and credit card loans and loans backed by the federal Small Business Administration.

This will lend to investors who hold securities backed by this debt.

The launch of the two programmes did not seem to excite the stock market by much, driving up the Dow by about 100 points within minutes of the opening before the blue chip index began flatlining by late morning.

US Treasury Secretary Henry Paulson said that the Fed lending programme will enable banks to extend more credit to consumers and businesses.

‘I and my regulatory colleagues are committed to using all the tools at our disposal to preserve the strength of our financial institutions and stabilise our financial markets, to minimise the spillover into the rest of the economy,’ he said in a statement at a press conference.

The programme ‘underscores our support for the housing market’, he said. ‘Nothing is more important to getting through this housing correction than the availability of mortgage finance.’

Said Scott Brown, chief economist at Raymond James & Associates in St Petersburg, Florida: ‘One of the big problems we have is that there has been a lack of demand for debt. You have seen the market for securitised debt such as credit cards or student loans dry up completely.

‘Here is the Fed taking a bunch of debt out of the market,’ he said. ‘It should help unblock the credit markets.’

The new mortgage- support facility was intended to strike at the collapsed housing market, the core of the US’s economic woes.

‘This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved financial conditions more generally,’ the Fed said.

Investor appetite for both the debt issued by Fannie Mae and Freddie Mac and the mortgage-backed securities they guarantee has dried up since the government seized the companies in September, and the Fed hopes to fill that void.

‘They are getting to the heart of the problem, it’s clean, it’s quick, it’s direct,’ said Todd Abraham, co-head of government and mortgage bonds at Federated Investors in Pittsburgh, Pennsylvania. ‘It’s a good way to bring down mortgage rates.’

Under the consumer- finance facility, the Treasury will help cover any losses that the Fed might face by providing US$20 billion of credit protection from its US$700 billion financial bailout fund, which Congress approved last month.

A Treasury spokeswoman said that the US$20 billion will come from the remaining unallocated US$40 billion in the first tranche of the US$700 billion financial rescue fund. That leaves Treasury with US$20 billion; and once that is used, it must ask Congress for access to the remaining US$350 billion in the fund.

The Treasury noted that issuance of asset-backed securities in consumer lending categories such as credit cards, car loans and student loans had essentially ground to a halt in October.

Last year, issuance was roughly US$240 billion.

‘Continued disruption in the ABS market could further deteriorate credit availability for consumers and increase the prospects for further deterioration in the economy generally,’ the Treasury said in a statement.

The Fed’s twin announcements marked the latest in a series of emergency measures by US authorities to try to keep the economy from falling into a deep and prolonged recession. Late on Sunday, the government stepped in to prop up the second largest US bank Citigroup.

Most economists said that the emergency steps represent a necessary, if ad hoc, response to the greatest financial shock the US has experienced since the Great Depression.

Some, however, are worried that the mounting costs of the measures, which have the potential to reach several trillion dollars, could eventually fuel a troubling inflation.

‘It may mean (a) longer- run issue with inflation and inflation concerns,’ said John Silvia, chief economist at Wachovia Securities in Charlotte, North Carolina. ‘It may be too much of a good thing is a bad thing. We may be overpaying for bad assets.’

Policymakers, however, have signalled a willingness to do whatever it takes to try to tamp down the risk of a severe recession. — Reuters, Bloomberg

Source : Business Times - 26 Nov 2008

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