CapitaLand to give back S$41.5m in rental rebates to existing mall tenants

CapitaLand to give back S$41.5m in rental rebates to existing mall tenants

By Rachel Kelly,

SINGAPORE : Property developer CapitaLand has said it will give back S$41.5 million in rental rebates to existing retail, commercial and industrial tenants.

This will effectively mean a 4 per cent reduction in rentals on average.

The developer is passing on the savings it received from the government’s Budget announcement last week.

Finance Minister Tharman Shanmugaratnam had said the government is giving a 40 per cent property tax rebate for industrial and commercial properties in 2009.

It also urged landlords to pass on the benefits of the rebate to tenants.

Liew Mun Leong, president and CEO, CapitaLand Group, said: “CapitaLand will pass through 100 per cent of the rebate to the retailers…if the retailers do not survive, we also cannot survive.”

CapitaLand’s retail tenants currently pay rents ranging from S$5 to over S$30 per square foot, depending on location and size of units.

The company declined to say how much commercial rents are, but it is understood these could be up to some S$18 per square foot a month, depending on location, grade of office space and the time at which the lease was signed.

CapitaLand owns or manages close to 6 million square feet of commercial and industrial floor space in Singapore.

It also operates 18 malls in Singapore, including ION Orchard, Raffles City, Bugis Junction, Tampines Mall and Plaza Singapura.

Retailers have welcomed the move.

Daniel Yeo, managing director, Comics Connection, said: “What is very important is the cash flow, I can use it for the cash flow. I can use part of it to send my staff for training.”

CapitaLand has spent at least S$600 million since 2002 to develop its malls to utilise space.

It said it will continue to focus on enhancing its assets.

CapitaLand plans to concentrate on the Plaza Singapura and Atrium@Orchard developments along the prime Orchard Road shopping belt next. - CNA/ms

Source : Channel NewsAsia - 30 Jan 2009

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Divided House votes for Obama package - WASHINGTON

Divided House votes for Obama package - WASHINGTON

By Chua Chin Hon, US Bureau Chief

WASHINGTON: President Barack Obama’s ambitious plan to rescue the US economy passed its first major test yesterday, though political bickering could yet keep the US$800-plus billion (more than S$1 trillion) stimulus package from being signed next month.
The sharply partisan vote in the US House of Representatives - no Republican voted yes despite intense lobbying by Mr Obama - hinted at a bitter divide.

The Democrats have proposed a plan consisting roughly of US$275 billion in tax reductions and US$550 billion in federal spending. Republicans want less government spending and more tax cuts.

Questions have also been raised about the relevance of some expenditure in the 647-page Bill, such as US$400 million to study global warming.

Mr Obama said in a statement soon after the vote that ‘we can’t…drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work and that is exactly what this plan begins to do’.

He also promised unprecedented measures to maintain transparency, such as a website detailing how taxpayers’ money would be spent.

His assurances and bipartisan overtures, however, did not translate into concrete results yesterday.

The House vote for the stimulus package was 244-188, with 10 Democrats delivering a ‘no’ vote alongside all of the chamber’s 178 Republicans.

US Congressman Jeff Flake neatly summed up the dissent in the Republican camp when he described Mr Obama’s effort to win support for the Bill as: ‘Good salesman, bad product.’

The measure now moves to the Senate, where a similar but more expensive version of the stimulus package is expected to be put to a vote on Monday.

Senate and House negotiators are expected to smooth over their differences over the draft Bill before presenting Mr Obama with a final version that he could sign into law by mid-next month.

The debate over the economic rescue plan has all but overshadowed Mr Obama’s other major challenges - the wars in Iraq and Afghanistan.

He held a 90-minute meeting with the country’s top military brass at the Pentagon yesterday, but gave no details about the discussion beyond saying that he had ‘difficult decisions’ to make about these two hot spots.

Source : Straits Times - 30 Jan 2009

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Fed pledges use of unconventional tools to unlock credit markets

Fed pledges use of unconventional tools to unlock credit markets

US central bank keeps rate near zero in latest meeting

By ANDREW MARKS
NEW YORK CORRESPONDENT

THE Federal Reserve may have used up all its traditional ammunition on Wednesday when it essentially brought its target short-term lending rate to zero. But Fed chief Ben Bernanke sent a strong message of support to financial markets with his pledge to use ‘unconventional’ tools, such as the purchase of mortgage-backed securities and the Term Asset-Backed Securities Loan Facility, to facilitate the extension of credit to households and small businesses.

The Fed has already flooded markets with US dollars, more than doubling the size of its balance sheet to more than US$2 trillion. It also said in its policy statement that it is prepared to purchase longer-term Treasury securities ‘if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets’.

On Wall Street, investors welcomed the Fed’s statement. Joe Liro, chief stock market strategist at Stone & McCarthy Research Associates, said the Fed’s strongly stated commitment to not only keep its target for short-term interest rates at or near zero, but also its idea of using ‘unconventional’ measures are very important for market psychology.

‘The Fed can do nothing more on the interest rate side besides assure investors rates will remain where they are, so pursuing a credit rate intervention policy, which is what they’re talking about now, is a big positive. It’s both a good idea to try it and it’s absolutely necessary given how frozen the credit markets remain, but there’s no guarantee that these measures will ultimately be helpful,’ he said.

‘Just like the rest of us, the Fed is venturing into new territory, and there’s no telling what kind of impact their attempts to free up credit will have.’

Indeed, after surging upwards by about 5.5 per cent in the course of the past four trading sessions, Wall Street turned cautious yesterday.

Faced with another round of weak profit reports and a government announcement that unemployment claims reached a record high this month, stocks slid at the opening bell on the New York Stock Exchange, with the Dow Jones Industrials giving up 105 points, or 1.25 per cent, in the first minutes of trading.

On Wednesday, investors were in a far more upbeat mood, spurred by the Fed’s promise to keep short-term rates ‘exceptionally low . . . for some time’ as well as it’s more vaguely worded statement of intention to buy longer-term Treasuries as a way to keep interest rates down.

The Dow advanced 200 points, or 2.5 per cent, to close at 8,375, and the S&P 500 jumped 28 points, or 3.4 per cent, to 874, while the Nasdaq gained more than 3.1 per cent to 1,558, spurred on as well by reports that the government could unveil a new rescue plan for banks that would buy up the billions of dollars worth of toxic assets that have weighed so heavily on banks’ portfolios and their ability to lend to new borrowers by next week.

Treasury Secretary Tim Geithner said the next step would be announced ‘relatively soon’.

The House of Representatives’ approval of President Barack Obama’s US$825 billion stimulus package was also a boost. The Senate now moves ahead on its version of the bill.

But as of 10.15am in New York, blue chips were down 118 points, or 1.42 per cent, to 8,257 and the S&P 500 was losing 16.8 points, or 1.92 per cent, to 857.28.

The downward bias yesterday took no one on Wall Street by surprise, despite what most market analysts agreed was a strongly positive impact of the FOMC statement and the rising certainty that Mr Geithner will soon use the second US$350 billion of TARP funds to establish a so-called ‘Bad Bank’.

‘We’re stuck in a trading range for the time being and nothing the government does right now is going to create the near-term conditions for a sustainable stockmarket rally,’ said Mr Liro.

‘The economy has got a lot more problems and challenges ahead in the next couple of months, and there’s no way to avoid the pain that’s still to come.’

Source : Business Times - 30 Jan 2009

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