Sentosa Cove a coveted address

FANCY revelling in a resort home that’s just under 15 minutes from the central business district and shopping malls? Where can you enjoy a round of golf at an international golf course situated right at your doorstep? And if travel is on the cards, the airport is just a 30-minute ride away. If that sounds appealing to you and you have anywhere from $2 million to $20 million to spare, a resort home in Sentosa Cove could be the answer.

Sentosa Cove is to Singapore what Sanctuary Cove is to Australia and the French Riviera is to France. Set on the eastern shore of Sentosa island (just south of the main Singapore island), Sentosa Cove, which spans 117 hectares of mostly reclaimed land, is undergoing a transformation that will see it become Singapore’s first and only integrated oceanfront gated marina residential community.

When completed in 2010, Sentosa Cove will be a luxurious estate comprising some 2,500 99-year leasehold homes in the form of oceanfront villas, waterway bungalows, hillside mansions and upscale condominiums. These will be complemented by an intimate marina village offering supporting amenities such as the 240-berth One Degree 15 Marina, the 320-room W Hotel being developed jointly by City Developments and Starwood, and a three-storey retail and commercial complex with a wide array of shops, upmarket F&B outlets, spa and fitness centre and small-office-home-office (SoHo) units.

To top it all, the development of Resorts World at Sentosa, Singapore’s second integrated resort with a casino, will undeniably attract high-rollers who covet luxury homes to invest in Sentosa Cove, making it the Monte Carlo of Asia.

There are no restrictions on foreigners purchasing condominium units in this enclave. However, foreigners looking to purchase a landed home here will need to submit an abridged application form to the Land Dealings (Approval) Unit of the Singapore Land Authority for approval to purchase what is classified as restricted property in Singapore.

This abridged application, only available for landed homes in Sentosa Cove, will enable a foreigner to receive fast-track approval in 48 hours on the back of simplified purchasing criteria and approval procedure. The catch is that foreigners who have been granted the abridged approval will be required to occupy the landed homes themselves and must not own more than one restricted property in Singapore.

Furthermore, as one of the options under the Global Investor Programme, an applicant can apply for Singapore permanent residency by utilising his property investment in Singapore to form up to half the minimum $2 million required to be invested in approved businesses or investments in Singapore.

With these attractions, it is no wonder that high net worth individuals from all over the world have been making a beeline for a slice of this luxurious resort home market. Foreigners are believed to have accounted for 50 per cent of the property sales in Sentosa Cove. By 2010, 60 per cent of the 10,000 Sentosa Cove residents will likely be foreigners, thus setting the stage for a truly international community.

Since 2004, at least 12 projects comprising six condominium and six landed housing developments have been launched for sale. These projects have enjoyed brisk sales, save for those launched after the onset of the US sub-prime mortgage crisis in 3Q 2007.

Here is a a snapshot of some of the projects in Sentosa Cove.

NON-LANDED DEVELOPMENTS

The Berth By the Cove:  This was the first condominium development to be launched and completed in Sentosa Cove. The development consists of 15 six-storey blocks and provides an array of facilities including 25 berths for private yachts. All the apartments have views of the ocean, with the master bedroom and living rooms facing the sea.

There are 200 units in the development comprising 188 two- to four-bedrooms apartments and penthouses, ranging from 1,015 sq ft to 3,100 sq ft; and two duplex sky villas of 6,028 sq ft, each with a balcony lap pool.

The Oceanfront @ Sentosa Cove: This seafront condominium comprising three 15-storey and two 13-storey blocks is by far the largest and tallest residence in Sentosa Cove. Designed by world-renowned architects Wimberly Allison Tong and Goo Inc and Antonio Citterio, it features a host of luxurious facilities including a fully equipped gym and an infinity lap pool stretching into the horizon.

There are 264 units in the development, comprising 239 two- to four-bedrooms apartments ranging from 1,216 sq ft to 4,282 sq ft, seven sky suites of 3,326 sq ft to 5,038 sq ft, two villas measuring 4,585 sq ft to 4,704 sq ft and 16 sky villas of 2,745 to 8,095 sq ft.

Turquoise: One of the most recently launched developments in Sentosa Cove, Turquoise comprises two six-storey blocks with attics fronted by a waterway near the fairways for views of the golf courses. It boasts full condominium facilities as well as 21 private berths within the development.

Turquoise will have a total of 91 residential units, with 78 three- to four-bedrooms ranging from 2,088 sq ft to 3,035 sq ft, 10 duplex penthouses of 3,111 sq ft to 3,746 sq ft with private spa pools and terraces and three sky villas ranging from 6,900 sq ft to 7,987 sq ft with private sky gyms, infinity lap pools and terraces. Units are still available for sale by the developer.

Marina Collection: Marina Collection is the latest condominium project to be launched in Sentosa Cove. Located next to the One Degree 15 Marina, the development comprises three four-storey blocks. Facilities provided include a lap pool, gym, clubhouse and concierge service. Buyers are offered One Degree 15 Marina club membership and 40 berths will be made available for lease to owners.

The 124-unit project will have 93 three- to four-bedroom apartments ranging from 1,873 sq ft to 3,272 sq ft and 31 penthouses (with private lap pools) measuring 3,369 sq ft to 4,693 sq ft. The project is still open for sale by the developer.

LANDED DEVELOPMENTS

Those who want to design and build their own homes have the chance to do so on Sentosa Cove with land parcels on offer for sale. So popular are they that all the land parcels at Sentosa Cove have been sold as at end-August 2008. There are, however, opportunities to purchase landed homes in the primary and secondary markets. Landed projects that keen buyers can still lay their hands on include:

The Berthside: The Berthside comprises eight terraces with their own private berth and a spacious deck area for outdoor dining. It is the first landed housing development to be launched and completed in Sentosa Cove. The land size for each terrace unit ranges from 2,324 to 3,851 sq ft, with a built-up area of 4,168 sq ft to 5,170 sq ft.

Coral Island: This is an island in the North Cove of Sentosa Cove. It houses 21 bungalows, each equipped with its own private mooring berth for a pleasure craft. The bungalows are built on land plots ranging from 6,000 sq ft to 15,000 sq ft and have built-up areas of between 6,000 sq ft and 12,000 sq ft.

FUTURE PROJECTS

In the pipeline are some 535 condominium and landed houses in Sentosa Cove, which could potentially be launched in the next two to three quarters. These include the 105 yet-to-be-launched condominium units from Turquoise and Marina Collection as well as City Developments’ 228-unit Sentosa Quayside and Ho Bee Group’s 151-unit Seascape.

Beyond the next nine months, would-be purchasers and investors can also look forward to another estimated tally of 350 condominiums and landed homes that are likely to be generated from developers’ land banks.

Buoyant demand for Sentosa Cove’s resort homes has resulted in the trebling of launch prices of non-landed properties, from an average of $785 per sq ft for the first condominium project, The Berth by the Cove, launched in November 2004, to $2,800 psf for latest release for The Marina Collection in December 2007.

Based on caveats lodged, prices of landed homes in Sentosa Cove have similarly trended up steeply. Prices of bungalows have increased some 75 per cent from an average of $743 psf of land  area as at late 2005 to $1,303 psf of land area as at end-2007. For terrace houses, average prices have leaped by 185 per cent from $847 psf of land area as at 1Q 2005 to $2,414 per sq ft as at 1H 2008.

With the stock of resort homes in Sentosa Cove capped at 2,500 units, one can be assured that the exclusivity and resort ambience of homes in the marina community will be preserved. In addition, the rising population of well-heeled expatriates brought about by Singapore’s growing status as a global city and regional financial hub will continue to support demand for resort homes in Sentosa Cove. Hence, despite the current market weakness due to global economic and financial turbulence, the mid-to-long term prospects for resort homes in Sentosa Cove are bright.

Singapore’s sound political, social, economic and geographic environment that is free from natural disasters makes buying a home in this island state, be it for investment, holiday or retirement, a worthwhile option. Hence, laying one’s bet on Sentosa Cove could just be the match made in investment heaven.

Chia Siew Chuin is associate director while Audrey Tan is analyst at Research & Advisory, Colliers International

Business Times – 26 Sep 2008

For more information on bungalow, villa or condo for sale in Sentosa Cove, please call (65) 62727 800 or login to www.OneSentosa.com – The Gateway to Sentosa Cove!

Singapore prime areas beckon

IN Singapore, Districts 9, 10 and 11 are traditionally recognised as prime residential areas.

Districts 9 and 10 are located around the main shopping belt of Orchard Road (Orchard, Cairnhill, River Valley, Ardmore, Holland Road, Tanglin), while District 11 is situated to the north of Orchard Road, in the Bukit Timah, Watten Estate, Novena and Thomson areas.

Since 2005, District 1 (the financial district) and Sentosa Cove have been new additions to Singapore’s prime residential market.

While offering a much-admired lifestyle like no other in Singapore, developments in these prime areas offer an exclusive sanctuary for an individual or family, amid the bustle of city life.

Ranked high on appeal, prices of homes in these areas also come with a hefty price tag. It is not surprising that the developments surrounding or within the Orchard Road area have been some of the most expensive properties in Singapore. With Orchard Road renowned as the epicentre of Singapore’s shopping and entertainment district as well as upcoming malls that seek to titillate one’s senses, the heart of the 1,650ha urban landscape of the Central Area is set to undergo a slew of changes.

On the same note, older prestigious residential projects in the area are usually situated on a five-minute drive from Orchard Road, typically nestled in quiet enclaves. This has changed over the years as we see newer projects planned to be visually apparent from Orchard Road itself compared to those built in the 1980s.

Likewise, Orchard Road is gradually being transformed with new malls such as Orchard Central and Ion Orchard set to enhance the shopping scene. Not only has this led to an alteration of Orchard Road’s urban landscape, but it has also enhanced the nature of high-end developments in Singapore. While still able to furnish a level of opulence, exclusivity and uniqueness, high-end developments are now embedded into the flurry of urban activity, with Orchard Road as its backdrop.

To buttress these claims, the large number of collective sales in recent years would eventually contribute to the remodelling of high-end urban areas.

From 2005 to 2007, a total of 116 residential projects in District 9,10 and 11 were sold in collective sales for re-development. Given this substantial number, and with freedom to re-develop, older residential buildings in the high-end districts would increasingly give way to modern and taller apartment blocks that feature modern architectural designs with complete range of recreational facilities.

Furthermore, some of the new high-end condominiums also offer the luxury of space as seen in developments in the Ardmore Park and Draycott area where the units are larger than 200 sq m.

High-end luxury homes in the traditional prime districts, with their enduring charm, have always been highly regarded by those with large coffers and a distinct taste for the luxuriant high life. With chicly designed homes that offer a lush and lavish lifestyle, residential developments in these areas have drawn the interest of both locals and foreigners alike.

Over the past three years, the number of homes bought by foreigners has risen from around 3,600 in 2005 to about 9,100 in 2007. The proportion of foreign buyers islandwide for all landed and non-landed homes stood at 25.6 per cent as at 2Q 2008, a marginal fall of 2.3 percentage points from the previous quarter.

Over the last 13 years, the proportion of foreigners that purchased all types of private homes (excluding executive condominium units) islandwide reached its peak in 2007 when this figure registered at 25.7 per cent. Regardless of this slight slackening in terms of the proportion of foreign buyers in Singapore, the 25.6 per cent registered in 2Q 2008 is still 3.6 percentage points higher than the five-year quarterly average figure.

Foreign buyers originate from various continents and based on 1H 2008 statistics, the majority, 17.7 per cent, were from Indonesia. Not far behind, Malaysians also formed a significant proportion at 17.6 per cent followed by those from India and China. Farther across oceans and land masses, buyers from the UK and the US are also evident in Singapore’s private residential property market with a proportion of 8.7 per cent and 2.3 per cent respectively as at 1H 2008.

Most foreign home-buyers and investors would prefer to acquire a condominium unit in the prime districts, and figures indicate that for District 9, 10 and 11, the proportion that has purchased both landed and non-landed homes in these two districts was a considerable 35 per cent in 2007.

Driving forces behind foreigners’ interest in residential properties here can stem from a multitude of reasons. One major compelling reason is the efficiency, safety and open business environment in Singapore. There are also Singapore government policies in place to welcome foreigners to live here.

The service industry, especially the financial services segment has seen robust growth over the past decade. This has seen an increase in high-paying jobs, which have attracted many highly skilled foreigners to work in Singapore.

Coupled with various other socio-political reasons, the cosmopolitan city-state of Singapore is endless in its appeal. Not only was Singapore ranked as the best place for Asian expatriates to reside in earlier on in the year, but a recent poll also highlights that expatriates have rated Singapore to be the best place in the world to live, especially in terms of the quality of accommodation. With the introduction of the two integrated resorts and added casinos to boot, the F1 night races and a host of other initiatives, Singapore is also gradually becoming a more interesting place to work, live and play.

In addition, well-heeled investors prefer real estate in the prime districts because property prices in these areas would always be among the first to increase during a property boom. Moreover, investment in Singapore’s real estate is deemed to be relatively low risk in Asia.

With prime residential districts timeless in their appeal, it is still not too late to buy a property in these swanky, plush neighbourhoods within a city that is becoming more enchanting and cosmopolitan. An urban oasis in Singapore’s private residential landscape, these prime areas offer a splendour and lifestyle like no other.

This article is contributed by Knight Frank Consultancy & Research Dept

For more information on Bungalow, villa or condo for sale in Sentosa Cove, please login to www.OneSentosa.com – The Gateway to Sentosa Cove!

Business Times – 26 Sep 2008

Branded residences set to take off

COMING home to an immaculately kept apartment with all the creature comforts or having a beach retreat at your own private villa with all the attendant luxuries are all possible in a branded residential development – the marriage of a luxury residential development and a reputable brand.

Such brands are typically from the luxury fashion world of the likes of Armani and Bulgari, or from an established designer like Yoo or Starck. Then there are the luxury hospitality brands such as St Regis and the Ritz Carlton.

Branding is imperative to an individual seeking a specific lifestyle that the brand espouses. A branded residential development not only provides the investors ownership of a tangible real estate, it also encompasses the brand’s image and value-added services. Branded residences thus become the epitome of an affluent lifestyle given the exclusivity and recognition that these brands provide, in addition to the security, trust and extensive privileges and services which other unbranded luxury residential developments do not generally offer.

Branded residential developments could either be single or mixed use located within an urban or resort setting. They provide the buyers the opportunity to enjoy a full range of services rendered by a branded hospitality service provider.

The target market for branded residential developments is of course the well-heeled high end of society. These affluent individuals have experienced similar quality services elsewhere and now seek the same uncompromised high quality hospitality services in their home country.

Branded residential developments usually command a premium. This is because they offer the owners a distinguished appeal with exclusively designed developments and luxury hotel services and amenities. This premium is estimated to range from 20 per cent up to 40 per cent as compared to similar unbranded residential developments.

While the branded residential market in the US and Europe is quite mature, this market is relatively non-existent and is still in its developing stage in South-east Asia. It is therefore not impossible to expect countries such as Indonesia, Thailand and Singapore to witness the continual development of this market.

Branded developments prefer locating in areas with strong resort markets or cities that offer occupiers and investors the opportunity for a second home. For example, Bali and Phuket are favoured for their unique cultures and luscious beaches. Singapore on the other hand, offers the unique blend of a modern multi-racial city set in a tropical environment.

Rising affluence in Asia is another primary driver for this growth. According to World Wealth Report by Merrill Lynch and Capgemini, the number of high net worth individuals (HNWI) grew by 6 per cent while the Ultra-HNWI band grew by 8.8 per cent in population size in 2006 globally.

Asian countries recorded the fastest growth in terms of the number of HNWIs. India, China, South Korea, Indonesia, Singapore and the United Arab Emirates are in the top 10 markets in HNWI population growth. Other countries in this list include Brazil, Slovakia, Czech Republic and Russia. Collectively, Asia currently holds a quarter of the global high net worth individuals.

According to the same World Wealth Report, Asia’s high net worth wealth will grow at 7.9 per cent per annum and is projected to reach US$13.9 trillion by 2012. The Asia-Pacific region wealth market is expected to surpass Europe as the second wealthiest region after North America in the next five years.

Using real disposable income as an indicator of rising affluence, Asia as a region has the highest disposable income compared to West Europe and North America. As at 2007, the Asian disposable income has a 22 per cent and 47 per cent gap over North America and Western Europe respectively.

With rising affluence globally and regionally, demand for branded residential developments is likely to increase in tandem. Furthermore, it is the affluent from Asia Pacific that are most likely to spend on luxury items and judging by their investment portfolios, Asians have a greater affinity for tangible assets such as real estate and cash compared to their Western counterparts.

An investment in branded residential developments can be for personal occupancy or for income purposes which will help defray the carrying costs when these properties are leased. The demand for branded residential developments could therefore come from a mixture of high net worth individuals and institutions situated locally, regionally or across continents. Some examples of these investors include real estate funds, and individual investors from the Middle East, China, India, Indonesia and Eastern Europe.

It should be highlighted that investments in the branded residential development may differ from country to country.

With potential demand on the rise, the branded residential development market is set to grow in this region. While there is already an established market of branded residential developments in certain cities in South-east Asia, there is also a strong pipeline of branded residential coming on stream over the next few years. In terms of existing developments, the major players include St Regis in both Bali and Singapore and Four Seasons in Bali and Langkawi. Some other notable developments include Bulgari in Bali, Ritz Carlton in Bali and Marriott in Phuket.

Thailand seems to lead this market in terms of future supply. The St Regis Group and Regent Group will each open a branded residential development in Bangkok, Four Seasons and Shangri La in Phuket and Conrad in Koh Samui.

In addition, the St Regis Group and Regent Group is each developing a branded residential development in Kuala Lumpur while Singapore will welcome the completion of a Ritz Carlton branded residential development in the next couple of years.

The branded residential market in Asia is still in its infancy but the market has the potential to grow. We are already seeing a number of developments mushrooming around Asia.

There is also a strong investment demand from high net worth investors looking for branded products where price is not a major issue.

Desmond Sim is associate director of research and consultancy while Melissa Sng is research analyst, Jones Lang LaSalle

Business Times – 26 Sep 2008

Developers tap starchitects for added cachet

THE phenomenon known as the starchitect has been around for a while but it was only after 1997 – when the Guggenheim Museum in Bilbao, Spain, became an international hit – did these architects become global celebrities.

The Guggenheim Museum in Bilbao was designed by the eminent American starchitect Frank Gehry. While the titanium-clad museum is spectacular, it was the fact that the museum had such a huge multiplier effect on the economy of the little seaside town that got many municipal governments (and some developers too) excited.

Within the first three years of opening, it was reported that the museum was receiving almost one million visitors a year, generating about US$130 million for the town’s economy, and helping the local government collect over US$20 million in taxes.

This multiplier effect has since been dubbed the Bilbao effect and governments and developers alike have been scrambling to sign up starchitects in hopes of replicating it.

Singapore came close to having a Frank Gehry designed development after CapitaLand signed him up to design their proposal for the integrated resort at Sentosa.

CapitaLand did not win but it never lost sight of the power of starchitecture. Earlier this year, CapitaLand announced that it had signed on Zaha Hadid to design its new condominium development at Farrer Road. And in the universe of starchitects, few are more stellar than Ms Hadid.

Patricia Chia, CEO of CapitaLand Residential Singapore added: ‘In a challenging market where homebuyers are faced with many choices, it becomes even more important to create a distinct point of differentiation for our developments.’

Ms Hadid is certainly a good designer but developers now also appreciate the cachet a starchitect’s name carries. ‘We believe that Zaha’s signature style and international brand position, together with the site’s many attributes, will provide a strong competitive edge for us when we launch the project in 2009,’ added Ms Chia.

Keppel Land also snagged a starchitect Daniel Libeskind for Reflections at Keppel Bay back in 2006 when ‘iconic architecture’ was the buzzword of the day.

Keppel Land general manager (marketing) Albert Foo added: ‘With globalisation, consumers are now well travelled and informed, and have over time, developed a taste for fine living. As such, the home has gone beyond brick and mortar to factor in lifestyle, luxury, prestige and unique product offering to appeal to these discerning customers.’

Of course, developers know they have to pay a premium for starchitects’ services. In 2006, Mr Libeskind himself said: ‘There are premiums. And if it is worth it, it is worth it.’

Some starchitects are more savvy at parleying their names. Philippe Starck, who has pop-star status, co-founded the design, marketing and branding company yoo Inspired by Starck and has Heeton Holdings as its first client in Singapore. For Heeton, getting Starck on board for its new Grange Road development also helps their own brand.

Heeton chief operating officer and executive director Danny Low said: ‘It is a fantastic opportunity for us to collaborate with the world famous Philippe Starck and this development will further enhance Heeton’s profile both locally and regionally.’

Mr Low said that there was definitely a price premium over local designers but he is confident that it will pay off. ‘From their previous track record, the Philippe Starck brand has been able to achieve premiums in the range of 10-25 per cent, and selling 20-30 per cent faster than other competitive developments launched at the same time,’ he added.

Far East Organization (FEO) is no stranger to starchitects either, having worked with the likes of Arquitectonica, and more recently Rem Koolhaas’ OMA.

Chia Boon Kuah, COO (Property Sales) at FEO, added that most of their luxury home buyers have homes in other international cities. ‘With Singapore staging itself to be a vibrant global city attracting international businesses and talent, there will be demand for world-class accommodation complete with top notch services and facilities,’ he added.

But the partnership with international architects is just one aspect of the value-add that FEO’s luxury developments bring to our buyers, Mr Chia said.

Mr Chia also believes that interest in brand-name architecture and design is not a new thing, but he noted: ‘Internationally, homes designed by famous architects in the past remains one of the most coveted addresses.’

Upping the ante is Wing Tai which has commissioned not one but two starchitects – Jean Nouvel and Toyo Ito – to design Le Nouvel Ardmore in Ardmore Park and Belle Vue Residences in Oxley Walk.

Looking at the designs in more detail reveals that regardless of their star status, starchitects do deliver that certain je nes sais quoi.

For Le Nouvel Ardmore, Mr Nouvel somehow manages to weave living bamboo into the 33-storey facade of the building while Mr Ito sculps organic spaces out of glass and concrete to mimic the branches of trees for Belle Vue Residences.

Is it art or architecture? With starchitects, you get both.

Business Times – 26 Sep 2008

Property prices, rents set to fall in Asian cities

Property prices and rents in Asia’s financial centres of Hong Kong, Singapore and Tokyo are set to fall as banks scale back hiring and investments in the global financial turmoil.

But while banks lay off tens of thousands in the United States, in Asia they are more likely to step back from ambitious expansion plans, so property markets will slip rather than slide.

In Hong Kong, property agents were scrapping to clinch a deal to put new tenants into three floors at the IFC2 building occupied by Lehman Brothers, which could have won them as much as US$2million (S$2.8 million) in commission.

But with Nomura Holdings snapping up Lehman’s Asia operations, the Japanese bank will probably keep most of the space as its own Hong Kong office is in the same building.

However, a reshuffling of tenants in the city is still likely.

Although the Central district, dominated by landlord Hongkong Land, is chock-a-block, rents will probably fall by 25 per cent by the end of next year as cheaper new offices across the harbour hit the market, says Macquarie Securities.

‘There’s a lot of supply coming on to the market,’ said Mr Richard Pyvis, chairman of CLSA Capital Partners, which runs private equity property funds. ‘Just look at that big joint out there,’ he added, pointing across Hong Kong’s harbour to the 118-storey International Commerce Centre (ICC) built by Sun Hung Kai Properties.

With prime Hong Kong office rents almost quadrupling since Sars ravaged the economy in 2003, the likes of Morgan Stanley, Credit Suisse and Deutsche Bank have agreed to move to the ICC building.

But now they could choose not to take up options for more space, or even off-load some.

‘Lots of banks are committed to long leases but some tenants could look to sub-lease space like they did after the dot.com bubble burst,’ said a property agent who works with several global banks but asked not to be identified because of commercial sensitivity.

‘That will put pressure on rents.’

The situation is similar in Singapore.

A whole new office project called the Marina Bay Financial Centre (MBFC) is under construction, spurred by the creation of 50,000 jobs since 2004 as hedge funds and banks lapped up incentives to expand in the city-state.

A loss of a fifth of those new jobs would cause monthly office rents to fall 47 per cent and capital values to drop 34 per cent by 2012, according to UBS analyst Regina Lim. It would hit landlords such as City Developments and CapitaCommercial Trust.

Mr Wilson Kwong, general manager of the management firm for MBFC, said two-thirds of the 150,000 sq m of office space in the project’s first phase had been pre-leased, but conceded that some tenants might choose to sub-let space if they could not fill it.

The US$2 billion development, built by a venture between Cheung Kong Holdings, Hongkong Land and Keppel Land, will eventually provide over 300,000 sq m of office space.

‘Given the current uncertainty in the global economy, we expect some caution from larger corporations with their leasing commitments,’ Mr Kwong said.

‘But many international companies still see Asia as an engine of growth and are confident of Singapore’s role as a key hub in the regional and global financial systems.’

In Tokyo, more gloom will fall on the property market because Morgan Stanley and Goldman Sachs will probably scale back their Japanese property investments, said Credit Suisse analyst Yoji Otani.

As they switch to commercial banks regulated by the US Federal Reserve, the two investment banks are expected to sell high-risk assets such as properties and unlock equity in real estate funds to meet capital adequacy requirements.

Mr Otani predicted falling values will be accompanied by a 5 per cent fall in average Tokyo office rents next year and a 10 per cent drop for grade-B buildings.

Straits Times – 26 Sep 2008

Singapore: Jewel at the heart of Asia’s cruising grounds

THE fact that Singapore is a tiny red dot in the middle of a vast archipelagic region is both a boon and a bane to the luxury marine leisure lifestyle. It’s diminutive size means that there are severe constraints on everything from cruising grounds to marina space.

But being the richest kid on the block also means that it has the best of everything and is within easy reach of some of the top undiscovered cruising areas in the world.

Of Singapore’s seven marinas, only four can be considered luxury with the facilities and prestige to suit the high-life – the newest and poshest being Marina at Keppel Bay and One Degree 15 Marina Club, while the Republic of Singapore Yacht Club and Raffles Marina both have a strong heritage but look a bit worn.

The former two are the new kids on the block with excellent locations, One Degree 15 Marina Club at the heart of the prestigious Sentosa Cove waterfront district on Sentosa island and Keppel Land’s Marina at Keppel Bay anchoring the prestigious Caribbean and Reflections developments in its Keppel Bay precinct.

Singapore’s oldest yacht club, the tradition-bound Republic of Singapore Yacht Club lists a host of illustrious personalities among its membership. President S R Nathan is its patron and honorary members include the Sultan of Johore.

The club is on the once rustic southwest coast, unfortunately now taken over by the rapid development of Singapore’s port infrastructure.

At the western tip of the island is Singapore’s first marina to have dedicated superyacht berths for yachts up to 200 feet long. But its location in industrial Tuas, just next to the Second Link, detracts much from any glamour it may have sought. While it is not uncommon for superyachts to berth at Raffles, they are usually there just to resupply the vessel on the way to the region’s cruising grounds or to get maintenance work done.

Finally, those lucky, or wealthy, enough to own a property with their own private jetty in Sentosa Cove, which has a canal-and-lock system running right through the development, can bring boats of up to 40 feet in length right up to their housefronts.

For many people, the marine leisure lifestyle is either about boats or marinas and sometimes both. Being seen at the right marina spot at the right time is almost as important as which boat you are on and with whom.

One Degree 15’s clubhouse is designed as an ultra-modern cool place to hang out with a range of restaurants, bars and cafes as well as full facilities like an infinity pool, members’ lounge and gym.

The club’s exclusive resort feel is a natural attraction for the jet-setting glamour set that have come to make Sentosa Cove their home and playground. The club is a magnet for prestigious events. Come this Christmas, the marina will host the Singapore stopover of the Volvo Ocean Race.

Marina at Keppel Bay’s excellent location close to the city and within an area that is rapidly becoming a prime waterfront location on the southern coast is also making it a staple of the hip, beautiful people. The glamour events often held there and the fashionable party-going crowd make it the place to be seen on weekend nights.

But the on-land aspect of marina high-living is literally just half the story.

Many of the boats berthed at the marinas are super exclusive entertainment platforms in their own right, plus they have the benefit of not being location specific.

Events can range from a low-key exclusive dinner cruise round the Southern islands to an uber-glamorous party at the dock for a select guest list.

Options range from some of the smaller 20-plus metre cruisers to real superyachts like the 35-metre Hye Seas II to those bordering on the megayacht range like the 50-metre JeMaSa and 45-metre Moecca. These are all yachts that are available for charter if you have the right cash and credentials.

Of course, there are some things that even money cannot buy. Prime among these would be invitations aboard superyachts owned by Singapore tycoons like Yantai Raffles boss Brian Chang’s Asean Lady, Nippon Paint’s Goh Cheng Liang’s White Rabbit and the Shaw family’s Sea Shaw.

Glamour does not have to be restricted to Singapore’s shores and seas. Being at the heart of Asia’s prime cruising grounds means that you can take off on one of these sea limos to anywhere you want with a couple of your closest friends or best business associates, taking along all the entertainment you could possibly need.

The Thai beach playground of Phuket is just 500-odd nautical miles or about a day and a half’s cruise away, and likewise the exquisite diving grounds of the Anambas islands in the South China Sea.

Pure charter brokers like Simpson Marine, Kingfisher Marine and Summit Marine can help arrange the boating side of things while broader-based lifestyle events companies Dragon Blaze and Lifestyle Adventures Asia will be able to enhance the experience beyond the water as well.

The cost? As they say in the glamour circles, if you have to ask you can’t afford it. But just to give a rough idea so you don’t embarrass yourself, a ballpark figure would be about a quarter million US dollars for a week’s use of the boat, not including fuel and all other expenses.

And by the way, you will need a resume and an interview before even being considered as a potential charterer. Asking how much it costs would not be a good way to start the conversation.

Business Times – 26 Sep 2008

S’pore overtakes HK in financial centre ranking

It’s 3rd globally, behind London and NY, with biggest gain of top 20

Singapore has been ranked third in The Global Financial Centres Index (GFCI), behind London and New York, according to a new report published by the City of London.

Singapore gained 26 points in the index, more than any other top-20 centre, which allowed it to overtake Hong Kong. Hong Kong has been ranked fourth this time round.

The GFCI is updated every six months in March and September. This report is the fourth edition.

London and New York still lead the field and ‘continue to be the only two truly global financial centres’, the report said. Both cities, hit by the credit crunch, shed points in this round of the GFCI. But London’s lead as the main banking centre in Europe is consolidated as Frankfurt and Paris have both declined in the ratings relative to other centres, the report noted.

In Asia, Singapore surged past Hong Kong to move into third place overall, albeit by only one point.

Singapore’s 26-point gain also means that the gap between London and New York, and the third place centre fell to 73 points, from about 90 points in previous rankings. Singapore is just ahead of Hong Kong in the banking, insurance and government & regulatory sub-indices and is also ahead in the business environment sub-index. But Hong Kong continues to thrive, the report said.

The GFCI also noted that financial centres in the Middle East continue to generate a lot of interest. Dubai is identified most frequently by respondents as the centre likely to become significantly more important in the next few years; Singapore is second in this respect.

Dubai is also the centre mentioned most often when respondents are asked where their organisations are most likely to open offices in over the next few years.

The GFCI model rated 59 financial centres in this round. The study uses external instruments – such as the United Nation’s Human Development Index and the World Bank’s Ease of doing Business Index – as well as responses to an online questionnaire from 1,406 financial services professionals.

Business Times – 26 Sep 2008

Monaco now has the costliest luxury homes

It overtook London with an average price increase of 30% to £3,762 psf

London was overtaken by Monaco as the world’s most expensive location for luxury homes as job cuts by banks and the prospect of lower bonuses discouraged buyers.

Cooling demand: Average prices for houses and apartments in London’s nine most expensive neighbourhoods fell for the first time in five years in August

The average price of London’s most expensive houses and apartments rose 1.8 per cent to £3,291 a square foot in the second quarter from a year earlier, according to an index compiled by Knight Frank LLP.

In Monaco, the average increase was 30 per cent to £3,762, the property broker said on Tuesday in a statement.

‘The prime residential market is weakening across the world, due to the fallout from the credit crunch and declining economic conditions in western markets,’ said Liam Bailey, Knight Frank’s head of residential research.

Demand from the 300,000 people who work in financial services, which has underpinned London’s luxury-housing market, has dropped as companies in the industry slash personnel costs.

Lehman Brothers Holdings Inc, which filed the biggest bankruptcy in history, employed about 4,500 here.

Average prices for houses and apartments in London’s nine most expensive neighbourhoods fell for the first time in five years in August, as the prospect of a recession weighed on demand, a separate index compiled by Knight Frank showed last month.

The City of London Corporation, the municipal authority for London’s main financial district, estimates that 42,000 jobs will be lost during the next year.

Alongside the financial centres of London and New York in Knight Frank’s index come homes on the French Riviera and chalets in the French Alps, reflecting demand from high net worth individuals, notably from Russia, who are also buyers of ’super prime’ properties here and in New York.

In London, Monaco and New York, prices of properties worth at least £10 million (S$26 million) have continued to climb, with some newly constructed or refurbished homes fetching in excess of £7,000 a square foot, Mr Bailey said.

‘Demand is not going to evaporate,’ he said. ‘Wealth creation and accumulation in emerging economies and in specific high-end service sector activities will continue.’

Business Times – 25 Sep 2008

Economists turn bearish on outlook for Singapore ..

Some of those polled downgrade predictions; pharmaceutical sector remains the wild card

PRIVATE sector economists are turning bearish on Singapore’s economic outlook this year, amid the recent deluge of bad news from Wall Street and weaker- than-expected showings in exports and tourism.

Most of those polled by The Straits Times now believe growth will come in under 4 per cent, with some downgrading their predictions to as low as 2.8 per cent.

The official forecast is still a 4 to 5 per cent expansion, but Trade and Industry Minister Lim Hng Kiang has already said full-year growth may dip below that.

What the final number hinges on is the highly unpredictable pharmaceutical industry, which could still swing things either way in the last quarter, said economists. Always a wild card, this sector – which accounts for about 6 per cent of gross domestic product – has now become pivotal, especially since they cannot put a figure to it.

Mr Leong Wai Ho at Barclays, for instance, is banking on a ’significant pharma-led bounce’ in the fourth quarter to ring in full-year growth at just over 4 per cent, the highest prediction among those polled.

Barring this rebound, Citigroup economist Kit Wei Zheng has cut his growth forecast to 2.8 per cent this year and 2.5 per cent next year, as ‘ripples from the credit crunch hit home’ and trigger a longer and deeper downturn that had been expected earlier this year.

‘Beyond the third quarter, key leading indicators are all flashing red over the next six to 12 months,’ he said, adding that the effects of slowing external demand and the housing market correction will likely be intensified by the ongoing financial crisis.

The latest round of upheaval in the financial markets, triggered by Lehman Brothers’ collapse last week, has sharply increased the risks for a small and open economy like Singapore, added DBS Bank economist Irvin Seah.

‘We are rather exposed to external volatility and will certainly not be spared; in fact, we will probably be one of the worst hit in the region,’ he said.

Exports fell last month by the most in 20 months, plunging 13.8 per cent over the previous year in its fourth straight month of decline.

Tourist arrivals also dropped for the third consecutive month last month, hit by the global economic slowdown.

These figures have made economists increasingly convinced of the possibility of a technical recession in the third quarter, defined as two consecutive quarters of negative growth.

Tomorrow’s manufacturing output numbers for last month could firm up technical recession predictions and may trigger another flurry of growth forecast revisions, depending on whether they continue July’s dramatic 21.9 per cent contraction.

‘If the third quarter is another write- off and you have a technical recession in Europe, Japan, New Zealand, and even some of the Asian economies including Singapore, what we’re looking at is a little bit like a mini-Great Depression,’ said OCBC Bank’s head of treasury research and strategy Selena Ling.

But even if a technical recession does happen, it could just be a ‘numbers game’ rather than a major slowdown, said United Overseas Bank economist Jimmy Koh. In the first place, the second-quarter numbers were dragged down by pharmaceuticals, which ‘aggravated the situation’.

Economists also say there are still some bright spots in the services sector, which is more diversified and has new, independent growth engines such as the F1 race and the integrated resorts, which will create new jobs and new industries.

Other plus points for the economy include still-stable employment rates and a healthy construction sector, added Action Economics economist David Cohen.

Whether next year will be any cheerier is an issue over which economists are divided. Some believe the financial uncertainty will take its full toll on the economy next year, delaying a recovery previously expected in the second half.

CIMB-GK economist Song Seng Wun said his outlook is ‘diminishing by the day’. With a recession looming in the United States, the outlook is cloudy for the rest of the world, he said.

Others, like OCBC’s Ms Ling, are ‘not that bearish’. She predicts 4 to 5 per cent growth for now.

‘Of course a lot depends on how the US crisis pans out in the coming quarters, but assuming we see some light at the end of the tunnel by June next year, we can hope for some sort of recovery in the second half of the year.’

Straits Times – 25 Sep 2008

Singapore one of top cities for SMEs looking for financing

Singapore is one of the top locations in the world for new small and medium enterprises (SMEs) looking for financing. This is according to a new study by MasterCard Worldwide.

The study shows that Tokyo and Singapore are ranked in the top four out of 53 leading global cities in the potential size of its SME financing market.

Tokyo is second while Singapore is ranked fourth.

In the Asia Pacific, Middle East and Africa region, the countries hold first and second spot respectively.

Walt Macnee, president, Global Markets, MasterCard Worldwide, said: “Despite today’s challenging economic environment, there are still sizeable and profitable business opportunities available in the global SME financing sector for financial institutions.”

The study shows that cities where there are dense concentrations of SMEs with limited access to financing from local banking systems show the greatest profit potential.

“The SME sector in Singapore presents an opportunity in developing new revenue streams and helping to advance the economy…Singapore also ranks number two and is one of the top centres based on service enterprises, which are generally smaller and less capital intensive,” said Kevin Mellyn, global solutions leader, Payments Strategy, MasterCard Advisors LLC, who headed the study.

It is estimated that financing SMEs is worth US$5 trillion in global revenue opportunities for financial institutions.

Channel NewsAsia – 24 Sep 2008