Singapore has regained its ranking as the most globalised economy in 2009, beating economic giants such as the United States, China and Japan.

This is based on the latest Globalisation Index, compiled by Ernst & Young and the Economist Intelligence Unit.

The study covered 60 of the world’s largest countries and had polled 520 senior business executives, with in-depth interviews conducted with 30 senior executives and high-level experts.

The index measures a country’s degree of globalisation relative to their gross domestic product. It is based on five criteria – trade openness, capital movements, exchanges of technology and ideas, labour movements and cultural integration.

Singapore has been ranked number one since 2003, but it lost out to Hong Kong in 2008 and came in second.

In regaining its top spot, Singapore has high scores for its trade openness and labour movement, but lost out to Hong Kong on capital movements and cultural integration.

This time, Hong Kong was edged into second spot, with Switzerland in seventh place, while the United States came in at 24th in the index ranking.

Ernst & Young Country Managing Partner Steven Phan said: “There was greater movement of capital and finance in Hong Kong in terms of foreign direct investments (FDI), where as Singapore has done relatively well in the areas of investment protection schemes and creating a level playing field for all enterprises.

“Singapore is number one in terms of the movement of goods and services relative to all the other 60 countries we surveyed, so this is really the imports and the exports relative to the size of our small domestic market. So that was a strong indicator, but among the other four criteria as well, we are consistently among the top.”

Source: Channel News Asia, 29 Jan 2010

Singapore’s housing authority said Permanent Residents may soon be subjected to a similar ethnic integration policy already imposed on citizens who buy public flats.

Observers say the move is reflective of Singapore’s changing demographics, where about a third of the population are foreigners.

But there’s already a racial quota for PRs in the purchase of public housing.

A shopping centre in Boon Lay in western Singapore gives an idea of the community it serves. It is filled with facilities for its foreign clientele including remittance units, money changers and provision shops catering to Thai and Myanmar nationals.

Tending one of the shops is a 52-year-old from Myanmar who has been living in Singapore for 15 years.

Like many PRs, Madam Yin Yin Winn, who peppers her sentences with the colloquial term “la” considers Singapore home.

In fact, she made several Singaporean friends while volunteering at her daughters’ school.

Madam Winn says her daughters, aged 19 and 16, go to neighbourhood schools.

“When I go to my daughter’s school, I talk with them, sometimes I bring our traditional food, they enjoy my food,” she said.

Like most Singaporeans, Madam Winn lives in a subsidised public flat, which is also subjected to an Ethnic Integration Policy (EIP).

Prior to the 1960s, various immigrant ethnic groups were concentrated in different parts of Singapore creating enclaves. So the Government introduced the Ethnic Integration Policy. This is where public housing is used as a tool to integrate Singapore’s multi-ethnic population.

The EIP is applicable to the purchase of new flats, resale flats, SERS (Selective En-bloc Redevelopment Scheme) replacement flats and DBSS (Design, Build & Sell Scheme) flats, as well as the allocation of rental flats in all HDB estates.

Under the policy, maximum proportions are set for all ethnic groups – Chinese, Malays, Indians and others, in each HDB block and neighbourhood.

There is no restriction on the sale and purchase of an HDB flat if the proportion of the buyer’s ethnic group is within the prescribed block and neighbourhood limits.

Once the block/neighbourhood limit for a particular ethnic group has been reached, no further sale of HDB flats to that ethnic group will be allowed, if it will lead to an increase of the proportion beyond the limit.

There is no restriction if the buyer and seller are of the same ethnic group.

Currently, PRs are already subjected to the policy according to their race.

For example a China national may fall under the ‘Chinese’ category and an Indian national under ‘Indian’.

What could change is expanding it to account for the immigrant’s nationality.

Mr Eugene Tan, Assistant Professor at the School of Law at the Singapore Management University, said: “The fear is that Permanent Residents are forming enclaves of Permanent Residents. What it would mean is that Permanent Residents could be subjected to two types of quotas. One is the original ethnic integration quota, and the other one could be a citizen/Permanent Resident quota.”

Mr Azhar Ghani, a Research Fellow at the Institute of Policy Studies, questions how an ethnic integration policy will affect Malaysian PRs.

“Malaysian PRs, whom I would say are quite acculturalised to our ways, who will face a new restriction to where they can buy HDB flats. This proposed change will just add another additional layer to the EIP categorisation, and current technology would mean that it would not be too big a challenge administratively to ensure adherence,” he said.

“So will PRs who have been here for many years but have not taken up citizenship for whatever reasons, be subjected to the new PR-related rule, in addition to the race quota, when they buy a HDB flat? Should there be a time-bar? For example, will the rule apply only to PRs who have been here for less than, say, five years?,” he asked.

The first indication that the Government is looking into the integration of foreigners within Singapore’s housing estates was revealed by National Development Minister Mah Bow Tan in Parliament in November 2009.

He said the Government “will keep a close watch on the distribution of PRs living in HDB estates and where necessary, consider measures to prevent the congregation of PRs and foreigner.”

Currently, PRs form only 5 percent of HDB households.

And housing analysts say that’s unlikely to create any surge in home prices.

Mr Eugene Lim, Associate Director of ERA Asia Pacific, said: “No issue, it’s just like the current ethnic integration policy, doesn’t affect re-sale prices because the number of PRs who would be buying flats are still there. It’s just “Oh, if I cannot buy this block, I buy another block.””

“I think some people are under the impression that PRs are driving up the prices. It is not, it’s the whole market, that there’s a lot of people buying flats that’s together driving up the price.” Mr Lim said.

“Actually if you look by and large, the PRs, if they do congregate – actually they are all over the place – they are very practical group of people. They buy where they can afford. They buy where they need to stay near to, for example, a place of work or school.

“But because to them, if they feel a fellow countryman is staying nearby, they do build a community. So there’s this issue of – what if there are too many of them staying at a certain place? So it’s really looking forward, if we have more and more PRs coming, how do we then have a ratio to ensure they are spread out in Singapore?” Mr Lim asked.

Still, observers say even with an ethnic integration policy in place, the true test is in the community bonds forged between citizens and immigrants.

Source: Channel News Asia, 29 Jan 2010

THE Urban Redevelopment Authority (URA) will be launching a transitional office site at Mohamed Sultan Road for sale in around two weeks’ time, after a developer committed to pay at least $9.33 million for it.

The bid, which works out to $94 per square foot per plot ratio (psf ppr), is double that which URA received in 2008 when it last tried to sell the site. This has raised a few eyebrows, considering the soft state of affairs in the office market.

The 15-year-leasehold office site has a site area of 66,482 sq ft and a maximum permissible gross floor area (GFA) of 99,728 sq ft. It can accommodate a four-storey building.

DTZ executive director Ong Choon Fah believes that the parcel stood out because of its location, which is not too far from the central business district and is near entertainment spots at Clarke Quay. Companies in the creative industry may find the site attractive, she said.

Cushman & Wakefield Singapore managing director Donald Han agrees that the site’s location is appealing. Given the relatively high offer, he suggests that the bidder could be a firm looking to own and occupy the site, or a developer which ‘knows the game, and is confident of developing transitional office sites’.

He added that the bidder could be expecting a recovery in the office market and as a result, higher rents in future, after the development on the office site is ready around the second half of 2011.

Leasing activity in the office market has picked up in the last few months as the economy stabilised. ‘Although we expect office rents to continue to slide perhaps to the end of this year or early next year, the worst is probably over,’ says Mrs Ong. ‘There’s a lot more confidence.’

But both consultants do not expect to see many other bidders for the site when the tender is launched. With this bid being so much higher than the previous one, ‘there could be some segments saying ‘it’s not cheap’,’ Mr Han quipped.

URA had launched the site for sale in August 2008 when it was on the confirmed list. It received one bid of $4.65 million or $47 psf ppr from RSP Architects Planners & Engineers, but rejected it as it was too low. URA transferred the site to the reserve list in October that year.

The agency last sold a transitional office site at Scotts Road/Anthony Road in May 2008, for $32.99 million or $226 psf ppr.

Separately, owners of the freehold residential development Holland Hill Lodge have put their estate up for collective sale. The asking price ranges from $15 million to $16 million, and this translates to a land price of $1,038-$1,107 psf ppr, based on a gross plot ratio of 1.6.

The site measures some 9,033 sq ft and the existing GFA of the development is 18,086 sq ft. The owners are checking with the authorities on whether this GFA can be fully utilised upon redevelopment.

Credo Real Estate is marketing the site and the tender closes on Feb 25.

Source: Business Times, 29 Jan 2010

I READ with interest Wednesday’s letter by Mr Robin Chua, ‘Costly flats – How did it come to this?’

Mr Chua appears to allude to the fact that the procreation rate has not risen because of higher prices of public housing, and ‘mixed signals’ in which young couples are urged to marry and have children early to help increase the procreation rate but then told indirectly to wait five years to buy a flat and start a family.

Without doubt, there have been calls to stop the practice of high cash over valuation (COV) and lower HDB resale prices. My take is that things should remain as they are and be dictated by market forces.

My paternal grandparents bought their first HDB flat in Bedok in the 1970s for about $7,000 – a sum that was paid in full in cash. Today, that three-room flat in a mature estate could be sold for $200,000 or more.

I believe elderly Singaporeans who bought such flats would be thankful they can cash out and unlock the value of their fully paid-up flats to see them through their remaining years.

Other Singaporeans who bought their flats later, say in the 1980s, would also be exuberant as they can capitalise on the capital appreciation of their HDB flats to downgrade to smaller units and use the savings for retirement and other needs.

A case in point is the Lease Buyback Scheme, where Singaporeans living in three-room flats can unlock the value of their homes and live on regular monthly payments from the authorities. This mechanism shows how the housing system can enrich Singaporeans when they reach retirement age and that citizens have a stake in the country and their well-being is not forgotten.

Another group who would have benefited from high HDB resale prices and COV prices is those who were caught in the property craze of 1996-1997. Some Singaporeans bought their HDB flat at a peak, and the value of their home tumbled. In negative equity then, these owners must now be relieved and thankful for the system, plus other external factors that steered them back to positive territory.

In essence, these factors play a part in stimulating economic activity where sellers of HDB resale flats with excess cash and housing agents with their sales commission contribute to gross domestic product figures with their spending. When this happens, the economy is buoyant, jobs are created, people are employed and confidence is restored.

Again, my take is that we are fortunate to have a system to help citizens secure an HDB flat tailored to suit their household income, have a stake in the country and ensure capital appreciation of their assets which will come in handy for future needs.

Irwan Jamil

Source: Straits Times, 29 Jan 2010

A SHORT-TERM office site on Mohamed Sultan Road that the Government failed to sell two years ago has garnered renewed interest.

A developer has agreed to put in a bid of $9.33 million for the land – twice the offer that came in for the site in 2008.

The new bid for the 0.62ha spot has triggered a public tender that will start in two weeks’ time, the Urban Redevelopment Authority (URA) said yesterday. It did not identify the developer.

Located between Kim Yam Road and Martin Road, the site can host a four-storey building with a total floor area of almost 100,000 sq ft. It is being sold with a shorter-than-usual 15-year lease.

In August 2008, the URA put the site up for sale without waiting for a developer to make an offer. That was to ease a space crunch that was sending office prices soaring. But the financial crisis struck the next month, resulting in only one bid coming in, at $4.65million. The URA rejected the bid as too low.

Since then, the office market has slumped and is just starting to turn the corner. Prices rose 1 per cent in the final quarter of last year, the first increase in six quarters, according to URA data.

But property consultants do not see the fresh interest as a sign of brighter days for the market.

Mr Li Hiaw Ho, executive director of CBRE Research, said there is still more than ample supply of office space over the next few years, so the bidder for this site is more likely to be a company that needs office space rather than a developer anticipating an upturn in the market.

Separately, a housing site has also been put up for sale by its owners. Holland Hill Lodge, an 11-unit freehold development in Holland Hill, has been launched for collective sale.

The estate, built in the mid-1990s, sits on a 9,033 sq ft site with an existing gross floor area of 18,086 sq ft, said marketing agent Credo Real Estate yesterday. All the owners have agreed to the sale and are asking for $15 million to $16 million, or $1,038 to $1,107 per sq ft of gross floor area.

Source: Straits Times, 29 Jan 2010

WELLNESS provider Mary Chia is looking to move into the hotel business with the launch of a new integrated hotel and lifestyle centre.

The company has entered into a joint venture with businessman Lee Boon Leng, the son-in-law of executive chairman Mary Chia, to set up a firm called Hotel Culture.

It has paid $20 million for three properties on Mosque Street that will be converted into a combined hotel, lifestyle and wellness centre. There will also be a food and beverage business on the 21,399 sq ft site.

Mary Chia is slated to run the beauty, facial, spa and massage business, Mr Lee will be responsible for the food and beverage aspect, while a third party will be appointed to manage the hotel.

The 92-room integrated hotel, which is to emerge from the four-storey conservation shophouses, is expected to be completed by the third quarter of this year.

Mary Chia chief executive Wendy Ho said the property in the heart of the Chinatown heritage zone would charge between $150 and $180 per night and benefit from the tourist flow generated by the integrated resorts.

‘We are targeting people… who will enjoy all the spa, F&B and entertainment facilities combined with a boutique hotel stay,’ she added.

Ms Ho is bullish about her company’s investment, citing positive feedback from the surveys it has conducted.

The bulk of the $20 million bill for the property will be funded by $16 million worth of bank loans, with Mary Chia and Mr Lee extending another $3.5 million to Hotel Culture as shareholders’ loans.

The remaining $500,000 will come from the paid-up share capital of Mary Chia and Mr Lee’s stakes in the company.

Mary Chia paid $255,000 for its 51 per cent stake in Hotel Culture, while Mr Lee owns the remaining 245,000 shares. The loans extended are proportionate to their shareholdings.

Ms Ho said most of the firm’s investment would come from its initial public offering, which succeeded in raising $3.9 million last August.

‘We believe it is a worthwhile investment, and we will look into our costing,’ she said. The firm reported a net profit of $119,000 for the six months ended June last year.

Restaurant operator, Taste Paradise, which currently operates at two of the three units Hotel Culture is acquiring, has confirmed that it will be moving out.

Source: Straits Times, 29 Jan 2010

THE Law Ministry’s reply on Thursday (‘En bloc sale panels already have a lifespan’) to my letter on Monday (‘Save owners from sword of Damocles’) has not addressed the following problem.

As I understand it, a collective property sale expires one year after the first subsidiary proprietor has signed the collective sale agreement. However, until this signing process is triggered, a collective sale committee has, in legal fact, indefinite tenure.

Which means that even if it chooses to stay around for 20 years, legally there is no mechanism to disband it automatically.

The ministry suggests that the owners can do so by holding an annual general meeting (AGM) or extraordinary general meeting to do so. No doubt this is so. This means that those who oppose a collective sale must become active in collecting signatures and rally for votes.

My question is: Shouldn’t the law be refined to have an automatic mechanism to disband a sale committee, which has, after say 12 months, not even collected that first signature?

This is a loophole in the law which should be addressed. No committee should have carte blanche to exist indefinitely.

The law is clear on management councils. These must be dissolved and re-elected at an AGM and have a limited tenure of one year.

Why should collective sale committees be allowed to operate indefinitely unless they choose to dissolve themselves or are booted out?

In my condo, the collective sale committee is restarting the process after 27 months. One member has sold and others have moved out of their condo units.

More than 10 per cent of the residents are new owners. They did not vote in this committee.

Moreover, the agents say they need even more time to ‘evaluate’ the situation.

Unless legal deadlines are set, those who want to stay on live with this situation hanging over their heads. I hope the ministry will consider a revision of the rules.

Susan Prior (Ms)

Source: Straits Times, 29 Jan 2010

The Housing & Development Board (HDB) is checking to see if buyers are using its government-subsidised flats to speculate in the property market – even as resale flat prices hit a new high in the fourth quarter of 2009.

‘There are some people who are saying that people are buying HDB flats for speculation,’ said Minister for National Development Mah Bow Tan. ‘So let’s look at that, see whether it is really happening and if so, whether any of our rules are allowing it to happen.’

Speculation ’shouldn’t be’ taking place as HDB flats under the government’s home ownership programme are for people to live in, Mr Mah added. He was speaking to reporters on the sidelines of the International Housing Conference on Wednesday.

The minister has asked HDB to relook its rules to make sure that prices are not being artificially inflated. ‘I have asked HDB to review its rules and see whether there are any rules that are encouraging and allowing people to speculate in HDB flats,’ he said.

The move comes as HDB resale prices hit a new record in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over- valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Answering questions on whether HDB flats were still affordable, Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a ‘willing buyer, willing seller’ basis. So if there is ‘genuine’ demand, prices will climb.

But he drew the line at speculation and stressed that public housing is for owner-occupation. He did not say which rules are being studied, but added that the review should be completed in a few months’ time.

Aside from reviewing regulations, Mr Mah said he has also asked HDB to step up enforcement. ‘I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive, but anecdotally you do hear of one or two cases,’ he added. ‘We want to make sure that this is not happening.’

Analysts BT spoke to said that there was little speculative activity in the HDB market – in the sense that few buyers are buying flats with the sole purpose of flipping them.

‘In my opinion, there is little or no speculative activity in the HDB market. I think the existing rules are relatively adequate,’ said PropNex Realty chief executive Mohamed Ismail.

Under existing rules, home buyers who receive a grant from HDB can sell their flats only after five years. Singaporeans who choose not to take up grants – as well as PRs who are not eligible for any grants – can sell their flats after a year if they have not received a loan from HDB.

However, there are concerns that people could be buying flats for rental investment. Recent media reports have suggested that some flat owners at the newly completed Pinnacle@Duxton have rented out their entire units without a minimum occupation period. This is illegal under HDB’s rules.

But market watchers pointed out that it will be difficult to check if an HDB flat is being occupied solely by renters.

Going forward, HDB will launch another 12,000 new flats this year as demand for public housing grows. Some 7,000 flats will be pushed out in just the first half of 2010.

‘So long as there is demand, so long as there is a genuine take-up rate, HDB will build,’ Mr Mah said.

Source: Business Times, 29 Jan 2010

THE home buying buzz continues at showflats. Allgreen Properties is said to have sold 54 units at its Holland Residences condo at Taman Warna released this week. The average price of the 68 units released in the 83-unit project is $1,625 per square foot; but the figure is weighed down by private enclosed spaces for ground-floor units in the five-storey freehold project.

Singaporeans bought 80 per cent of the units sold, says Joseph Tan, executive director at CB Richard Ellis, which is marketing the project.

In a more upscale location, a joint venture between BBR Holdings and SP Tao’s Shing Kwan Pte Ltd has sold seven of the total 16 units at its six-storey freehold 8 Nassim Hill project since last Friday. The development is expected to receive Temporary Occupation Permit at the end of March this year.

The project comprises eight townhouses and eight penthouses – all of them triplex units spanning across three levels. The townhouses occupy the project’s lower three levels and range from about 4,200 sq ft to 4,500 sq ft, while the penthouses, which are on the upper three storeys, are about 3,200 sq ft each. Each of the 16 units has its own swimming pool; each townhouse also has its own garden at the back.

The 16 units are priced between $3,100 psf and $3,400 psf or $11-14 million apiece. Singaporeans bought two of the seven units sold so far; the other five were picked up by foreigners – from Europe and Hong Kong.

In the Beach Road area, Hong Fok Corporation is said to have recently released upper-floor units at its 99-year leasehold Concourse Skyline priced at $2,200 psf to $2,400 psf. The 360-unit development reaches up to 43 storeys.

Over at Holland Residences, one-bedroom units (601 sq ft) and two bedders (ranging from 957 to 979 sq ft) were the first to be snapped up at this week’s preview.

The project also has three- and four-bedroom units as well as penthouses. Prices of one bedders start from $1.06 million. Two bedders cost between $1.63 million and $1.73 million. The most expensive units sold was $3.6 million for a four-bedroom duplex penthouse.

The average price of $1,600 psf for Holland Residences is higher than the $1,500 psf at which Ho Bee is selling its nearby Parvis, a 12-storey condo at Holland Hill.

However, there are no one-bedroom units in Parvis; developers typically can command a higher per square foot price for smallish units as the lumpsum amount is still relatively small.

Hence the tendency among some developers to build projects with a higher proportion of smallish units to achieve a higher overall average psf price for the development.

At a Knight Frank auction yesterday, a 1,206 sq ft unit on the 10th floor of Leedon 2 changed hands for $1.38 million or $1,144 psf. Leedon 2, a freehold development, is said to be more than 20 years old.

Source: Business Times, 29 Jan 2010

inTHE Housing Board will launch new flats every month over the next six months in response to growing fears that demand is outstripping supply.

National Development Minister Mah Bow Tan, speaking on the sidelines of a housing event on Wednesday, said that ‘HDB will build flats to meet demand as long as there’s genuine demand’. It is looking to offer 7,000 new flats in the first half of this year and is planning 12,000 for the whole of 2010.

For higher income earners who aspire to own private property, Mr Mah said the HDB was catering to this group by selling land for development into executive condominiums – a hybrid flat with condo facilities but HDB rules.

He assured first-time buyers that there was no need to rush into buying, given that there are ‘more than sufficient flats’. ‘If there is even stronger demand, of course HDB will build even more flats,’ he said.
Mr Mah claimed the high subscription rates at recent launches – at popular projects such as Dawson, where 11 applications were received for every flat – was not a measure of genuine demand.

‘We know that many of them are multiple applicants…they apply every month to make sure they have a better chance…that means the number of subscribers may appear large, but it doesn’t mean that that is the total demand,’ he said.

‘The final test is when we finally offer the flats to these buyers, (we’ll) see what the take-up rate will be.’
The minister emphasised that if there was real demand, the HDB would respond with its build-to-order (BTO) scheme.

‘As the name suggests…you order, we build. That’s the situation.’

Mr Mah pointed out that waiting for a flat to be built was not new. In the past, home buyers have had to wait for as long as seven years for a flat, he said.

Under the BTO scheme, HDB is ‘promising, in a way…that you will get your flat in three to four years, once you have booked it.’

Source, Straits Times 29 January 2010