It’s building a huge mall, another theme park and a resort across the Causeway to add to Resorts World Sentosa buzz

AS it prepares to launch Resorts World Sentosa (RWS) sans its casino and theme park today, Genting Group is already looking to build another resort, a huge mall and an even ‘more interactive theme park’ just across the Causeway in Iskandar Malaysia.

‘We want visitors to Sentosa to come to our Malaysian resorts as well,’ chief executive officer Lim Kok Thay told reporters in Kuala Lumpur yesterday at the company’s 45th anniversary celebration.

The upcoming development, which expects to attract millions of visitors from Singapore when it gets off the ground in two years, will be located near the mid-point of the group’s operations in Pahang and Singapore.

Genting, Asia’s largest publicly traded casino operator, and its joint-venture partner US-based Simon Property Group have already invested an initial RM200 million (S$83 million) in the Chelsea designer discount shopping complex in Iskandar Malaysia, Johor’s special economic development zone.

The 60 high-end brand shops in the Kulai mall – the first of its kind in the region – have already been fully taken up, and Genting is in the midst of planning a larger-scale development to capitalise on the expected surge in tourists from Singapore and locally, who they anticipate will be drawn to the 25-65 per cent discounts offered on designer labels.

Its proposed theme park and resort development will be centred around the mall, Mr Lim said, adding that Genting has set aside an estimated 4,050 hectares for the project.

‘We can make Iskandar a hub and offer tourists a complete holiday package,’ Mr Lim said, adding that the development may attract ‘millions of visitors’ each year when it is completed in two years’ time.

Three times the size of Singapore, the special economic zone has seen billions of ringgit ploughed in by the government and is envisioned to be a future engine of growth.

Genting hopes many of the visitors will then travel on to its hilltop gambling resort in Genting Highlands, near Kuala Lumpur, which the company hopes will attract as many as 30 million visitors a year in five years’ time, Mr Lim said.

During the celebrations, Genting revealed that it lists the opening of the US$4.4 billion RWS as its latest and 45th significant milestone since the incorporation of Genting Highlands Bhd in 1965.

Mr Lim dismissed the notion that RWS would cannibalise its Malaysian operations. ‘It will grow the pie and if the two resorts work hand-in-hand, we will offer a more complete holiday (destination) for tourists from Asia.’

Media speculation has been rife that the Singapore government will issue RWS a casino licence before Chinese New Year. Though no concrete news has been forthcoming with regard to that, Mr Lim yesterday confirmed that the RWS Universal Studios theme park will be opened next week.

He was also confident that the hotels in RWS (1,400 rooms in the first phase and another 400 rooms planned in the second phase) would in time enjoy a high occupancy of some 80 per cent – ‘otherwise we’ll be in trouble’.

The conglomerate – whose interests range from gaming to power, plantations and property – is sitting on a cash pile estimated at RM5 billion.

And Genting’s interests are not stopping within the narrow confines of the peninsula either.

Last year, Genting invested US$200 million in Las Vegas gaming company MGM Mirage – half in its bonds and half in a 3.2 per cent equity stake – and now it may be looking to venture further.

‘If there are opportunities in the US, I am sure we will look at that. We do have great financial strength, so we can take on a large project,’ Mr Lim said, adding that the group aimed to become a global player.

The Genting Group comprises four listed companies, namely Genting Bhd, Genting Malaysia Bhd, Genting Plantations Bhd and Genting Singapore PLC, with a combined market capitalisation of about RM85.4 billion at the end of December last year.

Source: Business Times, 20 Jan 2010

7.8% price rise in Dec, fastest in 18 months; govt trying to curb speculation

China property sales jumped 75.5 per cent to 4.4 trillion yuan (S$894 billion) last year, led by the eastern cities of Zhejiang and Shanghai, as record new loans boosted buying.

The sales data released yesterday follows last week’s announcement that December property prices rose 7.8 per cent, the fastest pace in 18 months, adding urgency to government efforts to rein in speculation.

China this month reimposed a sales tax on homes sold within five years of their purchase while the country’s Cabinet on Jan 10 urged strict application of a 40 per cent downpayment requirement for second homes.

The measures are likely to weigh on first-quarter sales, economist Lu Ting said. ‘We will see very bad transaction numbers, even though prices may not fall that much as the supply of new homes is still low,’ Mr Lu, a Hong Kong-based economist at Bank of America-Merrill Lynch, said by phone yesterday.

Yesterday’s data more accurately reflects last year’s gain in asset values, he said. By floor area, sales rose 42 per cent from 2008 to 937 million square metres, the National Bureau of Statistics said in a statement on its website yesterday.

That compares with a 53 per cent gain between January and November, when sales value advanced 86.8 per cent. December’s declining sales growth reflects the seasonally slow winter period, Mr Lu said.

The December figure for property prices probably understated the size of the increase, the economist said. ‘In reality, the inflation in asset prices may be between 20 and 30 per cent, and that is way too high for the policymakers,’ Mr Lu said.

Zhejiang topped the increase in sales value, with a 130 per cent gain, the statistics bureau said yesterday. In Shanghai, the gain was 126 per cent.

Investment in property development in 2009 rose 16.1 per cent to 3.62 trillion yuan, the statistics bureau said. That was less than the 17.8 per cent gain in the first 11 months. Chinese banks extended a record 9.59 trillion yuan of new loans last year.

To counter property speculation, China is tightening lending. From Monday, Chinese banks raised the share of deposits they must set aside as reserves, as the government seeks to rein in liquidity from record lending without stalling a recovery. China is targeting 8 per cent growth this year, Industry Minister Li Yizhong said on Dec 21.

Shanghai Shimao Co, the local unit of billionaire Xu Rongmao’s developer Shimao Holdings Holdings Ltd, said yesterday that 2009 profit may quadruple, partly due to higher sales from additional commercial property projects.

Earlier this month, some of China’s biggest developers said 2009 sales increased significantly.

China Overseas Land & Investment Ltd, owned by the country’s construction ministry, said property sales rose 80 per cent to HK$47.8 billion (S$8.6 billion). Evergrande Real Estate Group Ltd, China’s third-biggest developer by market value, said on Jan 5 that contracted sales jumped fivefold to 30.3 billion yuan.

Meanwhile, investor Jim Rogers said Shanghai and Hong Kong property prices may fall after being driven higher by speculative demand, while the rest of the Chinese economy is ‘hardly in a bubble’.

Attempts by China’s government to restrain lending may ease speculation and accelerating inflation, Mr Rogers said in an interview with Bloomberg’s Singapore bureau yesterday.

Hong Kong’s real estate prices rallied the most among the world’s major housing markets last year, according to property adviser Knight Frank LLP, adding to signs that the city’s home values have risen too much.

‘Certainly, Shanghai real estate or Hong Kong real estate should decline,’ Mr Rogers said. ‘My goodness, if anything’s in a bubble in the world, that and US government bonds are certainly very overpriced.’

‘China now realises that they’ve created too much money, that prices are going up too much and they’re trying to slow things down,’ Mr Rogers said. ‘These things are designed to take some of the heat out of the economy. Let’s hope it works.’

Investor Mark Mobius said on Jan 7 the bubble in China’s property market isn’t about to burst. ‘The Chinese will act rationally and they’re not going to kill the market,’ Mr Mobius, who oversees US$34 billion of developing-nation assets at Templeton Asset Management Ltd, said in an interview in Singapore. ‘There’s still a lot of savings in China. Prices are high but I don’t see a crash.’

Mr Rogers, chairman of Singapore-based Rogers Holdings, also said that he hasn’t sold any of his Chinese stocks even after last year’s rally. He reiterated that the last time he purchased stocks in the country was between October and November 2008.

Still, the rally in global stock markets means a ‘consolidation is overdue’, he said. Commodities are a ‘much better place to be’ than stocks, he added.

Source: Business Times, 20 Jan 2010

SOUTH-EAST Asia’s first big-name theme park – Universal Studios Singapore – at Resorts World Sentosa (RWS) looks set to open its doors next week, just a week after the resort welcomes visitors to its hotels and shops today.

Tan Sri Lim Kok Thay, chairman of Genting Group, which owns the $6.59 billion resort, said yesterday: ‘By the end of next week, Universal Studios Singapore will open, and when we officially launch Resorts World Sentosa later this year, it will be another significant and historical milestone achievement for the group.’

He was speaking at the Kuala Lumpur launch of the group’s logo to mark its 45th anniversary.

RWS had previously not been able to confirm the opening date of the theme park, saying only that it would be open by the first quarter. But sources pointed to an opening date of Jan 28 or 29.

When asked about its main attraction yesterday, a RWS spokesman would only say that it was working closely with the Ministry of Home Affairs to get the relevant permits.

The theme park boasts 24 rides and attractions, 20 of which are expected to be ready when it opens, according to a prior announcement. Each ride requires a permit to operate, and a RWS spokesman said they will not be opened to the public until proven to be safe.

The resort is also awaiting a licence to operate its casino.

The casino and theme park are expected to be the sprawling 49ha complex’s main money-spinners, but it boasts other attractions too, including the world’s largest oceanarium, plus dozens of shops and restaurants.

As part of its concept plan, a significant portion of the resort has to also cater to non-gaming areas, with the government setting a maximum approved gaming area of no more than 5 per cent of the resort’s total development area.

The theme park is expected to attract up to 30,000 visitors daily.

A one-day weekday pass will cost $66 for adults, $48 for children and $32 for senior citizens. Weekend, public holiday and eve of public holiday one-day passes will cost $72, $52 and $36 respectively.

But the passes are still cheaper than those of Universal’s other attractions in Orlando and Osaka, which go for US$79 (S$109) and 5,800 yen (S$90) respectively.

Source: Straits Times, 20 Jan 2010

It receives more enquiries on luxury property market

WHEELOCK Properties (Singapore) is planning to launch the freehold Orchard View at Angullia Park in the first quarter of the year.

The news comes as CapitaLand rings in more sales from Urban Suites. It has sold 126 units – 90 per cent of the 140 launched to date, and 76 per cent of the 165 in the freehold project.

According to Wheelock’s director Tan Bee Kim, the company has received an increasing number of enquiries on the luxury property market as compared with three months ago.

‘It is encouraging that we have been approached by several interested parties keen to purchase the units in Orchard View for their own occupation,’ she said.

The 36-storey Orchard View stands on the site of the former Angullia View, which Wheelock bought in late 2004. The new project will comprise 30 four-bedroom units, each measuring 2,530 square feet and spanning an entire floor.

The project will be receiving its temporary occupation permit soon. Wheelock held a private preview for it in August last year and sold three units, at an average price of close to $8 million each or about $3,131 per sq ft (psf).

Over at Urban Suites, CapitaLand sold another 66 units in the second phase of launch. These include homes sold in Jakarta last weekend.

The units went for $2,500-2,800 psf. Prices rose by about 4 per cent from the $2,400-2,700 psf range in the first phase of the launch.

According to CapitaLand, all of the two-bedders and many of the three-bedders at Urban Suites have been sold. Two of the five penthouses available were also picked up, one for around $8.6 million and the other over $9 million.

On the whole, some 70 per cent of the buyers were foreigners, from countries such as Indonesia, China, Australia and Canada. Indonesians alone made up 40 per cent of buyers.

‘With the return of business and consumer confidence in Singapore and Asia, we expect buying interest for well-located homes in the high-end segment of the market to be sustained,’ said CapitaLand Residential Singapore CEO Patricia Chia.

‘We see prices for the mid to high-end segments of the market rising by between 5 per cent and 10 per cent this year.’

Market watchers have centred their attention on the prime property market this year. Sales in the sector have gradually picked up as sentiments improve.

For instance, City Developments’ Volari at Balmoral Road is almost fully-sold – just one penthouse remains of the 85-unit development launched last year.

Developers are also said to be preparing more high-end sites for launch. Far East Organization’s Altez in the Tanjong Pagar area and CapitaLand’s Urban Resort Condominium are some which could be in the market soon.

Urban Resort Condominium will have 64 units, which are generally larger than those in Urban Suites next door. CapitaLand plans to launch it after Urban Suites is fully sold.

Source: Business Times, 20 Jan 2010

THE solution to the public housing conundrum is not to build more new HDB flats for sale because the problem lies in the resale market.

The resale market is where Singaporeans must compete with permanent residents (PRs) for a place to live.
Rental housing also sees the same competition, even though there are not enough rental flats to meet the needs of all deserving citizens.

The shortage of rental flats has its history in the HDB’s decision to cut back on the building of two-room flats because they did not sell or rent well.

All new flats since then were constructed for sale only. The ratio of flats for sale and those built for rent became more skewed in favour of new sales so much so that upon the influx of PRs, there were not enough for them to rent.

The decision to allow PRs to buy public flats in the open market was because there was no other way to accommodate the new immigrants.

If there was a huge supply of HDB flats of various types for rent for all, including low-income Singaporeans, prices of HDB flats would have stabilised and not have caused consternation to the public housing authority.
These new immigrants could stay in such rented HDB flats until such time when they decide to take up full Singapore citizenship; only then would they be allowed to buy an HDB flat.

Becoming a citizen, therefore, would earn them the right to purchase an HDB flat. The gesture would also demonstrate these immigrants’ loyalty which, previously, was just speculation rather than reality.

If building executive condominiums and build-to-order flats are the Government’s only way of fighting rising costs in public housing, our children will have to wait for us to pass on before they can inherit a roof over their heads.

Source, Straits Times 20 January 2010

PHASE 2 of CapitaLand’s Urban Suites’ launch has attracted keen interest from buyers who have snapped up units despite a hike in prices.
The 50 units released in Jakarta, Indonesia, last week were all sold out, while at home an additional 16 sales have been clinched since Phase 1 of the project’s launch closed in early January.

The popularity of the development was undiminished by an increase in prices – from between $2,400 and $2,700 psf in Phase 1, to $2,500 and $2,800 psf in Phase 2 – for the units located in District 9 between Cairnhill, Hullet and Saunders roads.
The latest sales mean that 126 out of the 140 released units in the 165-unit condominium have been sold. The 26 two-bedroom apartments are now completely sold out.

Two of five available penthouses are off the market, with the remaining ones expected to fetch a quantum price of about $9 million. The penthouses range from 3,378 sq ft to 4,715 sq ft and are equipped with private pools.

Though no exact figures were provided, the company said only a few three- and four-bedroom apartments remained to be sold.

CapitaLand will preview the remaining units – by invitation only – to buyers tomorrow. Unlike Phase 1, when only multiple purchases were allowed, units will be open to single-unit purchasers. The 1 per cent discount offered to multiple-unit buyers in Phases 1 and 2 will continue.

Another upward revision in prices is a possibility, according to CapitaLand Residential Singapore chief executive officer Patricia Chia.

The development has attracted a high level of interest from foreigners, with 70 per cent of units bought by those overseas. And most of them were Indonesian, CapitaLand said.

‘Indonesians have a preference for freehold if given a choice. This is one of the very rare freeholds on Orchard Road,’ said Ms Chia.

The stronger market is set to lead to more high-end project launches from CapitaLand this year.

Urban Resorts – neighbouring Urban Suites and previously Silver Towers – consists of 64 three- and four-bedroom units. Unit sizes are larger than those at Urban Suites, starting at 2,000 sq ft for a three-bedder.

Ms Chia added: ‘Everybody expects 2010 to be the return of the high and luxury-end residential market. I think at the right opportunity, we will launch.’

Showflats for units at CapitaLand’s Interlace in Alexandra/Depot Road are likely to be ready for viewing after the opening of the Sentosa integrated resort, Ms Chia said.

Details of the company’s future launches at Farrer Park and Nassim Hill have not been disclosed.

Source, Straits Times 20 January 2010

THE lifestyle hub that was supposed to come up in Sembawang – troubled from the start – may now be on its last legs.

Two anchor tenants have pulled out, and a third is making tracks to leave.

If that third one goes, all that will remain of the planned leisure hub on Admiral Hill will be a childcare centre and a 40-table steamboat restaurant.

Already, what was touted in 2007 as the Dempsey of the north is looking run-down.

Last month, its biggest tenant, the 900-seat Chinese restaurant Dragon Phoenix, threw in the towel.

Its owner Chris Hooi said he had sunk $1 million into renovating the 15,000 sq ft site, and was already more than $500,000 in the red.

The first to quit was Admiral Bar & Grill, which closed in November last year. It had been bleeding about $3,000 a month.

The next to go could be The Tanjong poolside cafe. Its owner, Mr Lim Hong Wee, said he does not intend to stay on for more than three months.

The developer of Admiral Hill, the Yess Group, won a Singapore Land Authority (SLA) tender to develop the site in 2007. It beat other bidders by offering to pay $40,000 a month in rent, more than $5,000 above the guide rent.

Yess had big plans: It said it would bring in tenants to run restaurants, a country club, rock-climbing facilities, beauty and health centres, and a golf driving range, among other things.

But instead of these lifestyle facilities, an illegal school and a workers’ dormitory came up on the site.

Both were ordered to shut.

Mr Hooi, the owner of Dragon Phoenix, said that without the lifestyle attractions, few people came.

He said he had been told to expect corporate functions and families coming in for horse riding, for example.

‘You think I wanted to leave? I’ve put so much money into it,’ he said.

In anticipation of corporate clients, Mr Hooi had added seminar rooms to his restaurant and kitted them with audio-visual hardware for meetings.

But no one came.

‘I had no choice. There were no customers and there was too much space. We were bleeding,’ he said, adding that he met Yess several times to discuss the matter, without success.

Admiral Bar & Grill owner Victor Teo, 41, had a similarly grim tale to tell.

He pumped $150,000 into renovations, but was losing money from the time he opened for business in late 2007.

‘There is nothing here to pull in the crowds,’ he said.

However, promise seemed to lie in the karaoke rooms, which he said Yess approved. Business picked up when the rooms were added. But Mr Teo said that Yess told him later that an entertainment licence from the SLA was needed for the rooms to continue operating, and that it would help him apply for it.

Mr Teo said he pressed Yess to get the licence to reflect the change of use, but this was not done.

Meanwhile, The Tanjong cafe’s Mr Lim said he handed in his quit letter last November, but Yess pleaded with him to stay.

The deal they struck allows the cafe to be open only on weekends and pay only minimal rent.

Mr Lim, 55, said: ‘They asked me to stay because they needed someone to service the pool.’

He now sees that the pool is maintained, on top of running the cafe. But even he wants to go in two to three months because there are so few customers.

Contacted yesterday, Yess declined comment.

In a statement, the SLA said it was aware of the recent closures, but stressed that it would not interfere as it is a ‘commercial matter between a master tenant and its sub-tenants’.

‘It is not appropriate for SLA to speculate on reasons for the cessation of business operations or to interfere, as long as there are no breaches in the terms of the tenancy agreement,’ said a spokesman.

He added that Yess had taken action to rectify its past breaches.

Analysts contacted said it was unlikely the area would ever take off at this rate.

Mr Colin Tan, director of research and consultancy at real estate consultancy Chesterton Suntec International, said it was ‘highly unlikely that such a leisure hub would materialise’.

The site is also home to the two-storey Old Admiralty House, a national monument, which was built to accommodate Royal Navy officers in 1939, before being converted into a seafood restaurant in the 1970s after the British pulled out.

The house now stands empty.

Source, Straits Times 20 January 2010