Funds waiting to grab cheap Asian properties

They are raising funds for direct property investments in the region as values slide

AS property values in Asia slide, hedge funds, private equity funds and pension funds are waiting in the wings to swoop in on good buys, according to KPMG’s global head of real estate, Jonathan Thompson.

‘We’re aware that some (hedge funds and private equity funds) have been raising money for distressed situations,’ Mr Thompson told BT.

Investors have been on the lookout. Just last month, Merrill Lynch completed fundraising for its Asian Real Estate Opportunity Fund, collecting some US$2.65 billion to invest in real estate assets and companies.

Reuters also reported on Wednesday that AMP Capital Investors is trying to raise up to S$2.9 billion for direct property investments in Asia. The Australian fund manager hopes to purchase Japanese shopping malls at a bargain as falling sales hit retailers and credit tightening squeezes landlords. Industrial buildings and offices beyond the main financial district in Singapore are other potential targets.

Pension funds are also showing more interest in Asian real estate, said Mr Thompson. According to him, these investors are drawn to growing economies with a structural shortage of properties. The economies would also have to be politically stable, with transparent and sound regulatory systems.

‘(Singapore and Australia) are the easiest countries to invest in,’ he said. But he added that China will attract considerable attention.

Across Asia, Mr Thompson believed that ‘the fundamentals for real estate are better than they are in Europe or America’. But because of the global economic slowdown and tighter credit, property values in Asia will continue to fall.

Savills Singapore predicted in a report on Thursday that prices for high-end and super-luxury private homes could drop more than 20 per cent in the next five quarters.

The property consultant also estimated that Grade A office rents could ease 5 to 10 per cent in Q4 this year and a another 15 to 20 per cent next year.

Source : Business Times – 22 Nov 2008

Savills sees over 20% drop in luxury home prices

Announced forecast for period ending 2009 grimmest yet by any consultancy

Savills Singapore is predicting price drops of more than 20 per cent in the next five quarters for high-end and super-luxury private homes.

This would follow declines of 14.3 per cent and 12 per cent respectively for these two segments in the first nine months of 2008 from the peak in Q4 last year.

The forecast is probably the grimmest announced by a property consultancy here – although some rival firms BT spoke to yesterday said that privately, they have similar estimates.

Research analysts at stockbroking houses/banks have already been making downbeat pronouncements, predicting declines of about 30 per cent or more for luxury home prices byl end-2009.

In its report yesterday, Savills said that the high-end and super luxury segments are more vulnerable to the deteriorating global investment climate. The average capital value for high-end (non-landed) residential homes fell to $2,065 per square foot in Q3 2008, 4.6 per cent lower than the preceding quarter and 14.3 per cent below the Q4 2007 peak of $2,410 psf.

In the super luxury league, the average capital value slipped to $3,240.40 psf in Q3, down 5.2 per cent from the preceding quarter and 12 per cent lower than the Q4 2007 figure.

Savills expects mass- market home prices to fall 5 to 8 per cent in the next five quarters – arguing that a price drop in this segment will be cushioned by continued support from HDB upgraders and other buyers picking up private homes for their own occupation.

The fundamentals of the mid-tier and mass-market segments are stronger today than during the Asian Crisis downturn, partly due to Singapore’s more open immigration policy, Savills said.

Permanent residents have accounted for 14.3 per cent of private home purchases (excluding ECs) in the first nine months of this year, up from a 12 per cent share in 2004. PRs are likely to become a strong demand driver in the residential market in the coming months, Savills reckons.

Foreigners (including PRs) had 24.8 per cent share of private home purchases (including ECs) in the first nine months of 2008, down from a 25.9 per cent share for the whole of last year but still ahead of sub-20 per cent shares between 2000 and 2004.

In Q3 2008, a total of 4,287 caveats were lodged for private homes (including ECs), covering both primary and secondary markets – 9 per cent higher than the 3,934 caveats lodged in the preceding quarter.

However, the total value of private homes transacted edged up only slightly to $5.68 billion in Q3 from $5.62 billion in Q2.

‘The average value of each unit transacted decreased, as evidenced by the very successful sales at mass market projects such as Livia and Clover by the Park. The proportion of transactions in the luxury and super luxury sectors dropped compared with mass market, as rich investors were more cautious about big-ticket purchases,’ said Savills’ director of marketing and business development Ku Swee Yong.

The average monthly rental value for high-end non-landed homes tracked by Savills contracted for the second consecutive quarter, slipping 3.6 per cent quarter-on-quarter to $5.62 psf in Q3.

This followed a 1.2 per cent drop in Q2. ‘For full- year 2008, we expect prime rents to ease 4 to 6 per cent and fall a further 7 to 13 per cent in 2009,’ Mr Ku said.

Tenants may now seek more competitive rentals, softening the market.

‘So far, the impact on the local rental market has been limited, despite rents beginning to come off their peaks. The quarters ahead, however, should see a more entrenched rental decline as demand weakens in the face of a global economic slowdown,’ Mr Ku said.

Savills also said that 10,923 leasing deals were recorded for private homes (excluding ECs) in the July to September quarter this year, the highest Q3 figure since 2000.

The leasing volume for Q3 2008 was up about 20 per cent from the preceding quarter and 25 per cent above the figure in the same period a year ago.

The strong leasing volume may have been contributed by a seasonally active Q3 that coincides with the opening semester of some international schools, as well as displaced tenants from collective sales completed last year, downgrading from high rental units to more affordable ones, and completion of new projects with attractive facilities and competitive rents.

However, Savills expects rental demand drivers to weaken in coming quarters. Savills’ residential leasing head Patrick Lai says: ‘The inflow of expats is expected to slow down, although we’re still seeing an influx of foreign talent into Singapore, particularly in the healthcare, pharmaceutical, R&D and logistics industries.’

Source : Business Times – 21 Nov 2008

AMP Capital eyes funds for S’pore, Japan property

AMP Capital Investors wants to raise A$2 billion to A$3 billion (S$1.97 billion to S$2.96 billion) for Asian property in the next couple of years, hoping that bargain Japanese malls and Singapore offices will appeal to investors despite tough markets.

The Australian fund management firm, a unit of AMP Ltd, is starting a push into direct property in the region, touting its record of managing some 40 shopping malls in its home market.

But because most Australian institutional investors are overweight property after the securities portion of their portfolios has tumbled in value, AMP is looking further afield for capital.

‘It’s a very difficult time for equity raising,’ Simon Vinson, AMP’s head of Asian property, said. ‘We’re looking outside Australia. Sovereign wealth funds are continuing to put money into real estate. And the US and Europe are traditional good sources of equity for investment outside their own markets.’

AMP, which opened an office in Singapore in 2006 to funnel investment into Asia, is looking to launch funds in the next couple of years to buy property in Japan and Singapore. ‘For the Singapore fund, we’re talking to investors at the moment,’ Mr Vinson said.

The proposed fund would invest in offices outside of Singapore’s main financial district, as well as industrial premises, and would target internal rates of return of 10-12 per cent.

In Japan, Mr Vinson wants to invest in shopping malls, hoping some bargains emerge as retailers suffer from falling sales and landlords are squeezed by a cutback in bank lending.

AMP is also considering raising a fund for distressed property in Vietnam, where developers are struggling after banks clamped down on lending and hiked interest rates as inflation soared out of control.

‘We’re exploring an opportunity to create a development fund. We really like the long-term story,’ Mr Vinson said.

AMP manages A$104 billion worth of assets, including about A$15 billion worth of property, mostly in Australia.

Source : Business Times – 20 Nov 2008

S’pore is 4th best place to invest in: Poll

Republic pips rival HK in KPMG’s survey of 260 leading global firms

THE global economy may be slowing, but Singapore has been rated as one of the top four places in the world to invest in during these turbulent times.

A survey by accounting giant KPMG of 260 leading global companies, conducted in September and October across 12 economies, has placed Singapore behind mainland China, the United States and India next year as well as in five years’ time.

The Republic edged out Hong Kong, a long-standing rival for investments.

Among the key factors attracting prospective investors to Singapore are the political stability, the impartial rule of law, a friendly tax regime as well as access to new customers.

Mr Owi Kek Hean, KPMG’s head of tax services in Singapore, said: ‘We wanted to compare and contrast what businesses would like to see from the countries when deciding where to locate their operations.’

This is the first survey by KPMG on the importance of tax and demographics in influencing corporate decisions on location. It also tracked investment intentions of firms over the next five years.

The survey included responses from 20 multinational corporations based in Singapore, each with a turnover of US$1 billion (S$1.5 billion).

Mr Phillip Overmyer, the chief executive of the Singapore International Chamber of Commerce, said of the results: ‘That people are saying this is not earth-shattering, but the importance is in the timing of it.’

He said what is important is that MNCs indicated their intention to invest in the middle of the financial crisis, over the next few years, and also the places they are most inclined to invest in.

‘It confirms that people think Asia is the market of the future, that it will recover very early and it reinforces very strongly that Singapore will play a critical role in this development in Asia as the crisis starts to resolve itself.’

Mr Overmyer said that compared to the three top-rated nations in the survey, Singapore’s standing at No.4 is impressive, given the Republic is not a large market in itself but because of its ‘tremendous capability to support activities on a wide regional basis of MNCs in Asia’.

Mr Owi, who was speaking to The Straits Times on the sidelines of KPMG’s Asia-Pacific Tax Summit at the Ritz-Carlton, Millenia Singapore, said the survey reinforced a few things about what companies want.

‘Businesses would like to see more tax incentives from the government and they also want the government to attract more foreign talent to these shores.’

He said that this is no surprise as Singapore moves from a manufacturing-based economy to a high value-added service- based economy that needs more and more skilled workers.

He added that compared to Hong Kong, Singapore’s headline corporate tax rate is higher, but because the government has targeted tax incentives for various sectors, the effective corporate tax rate for a company could actually be lower than Hong Kong’s.

The survey found that 70 per cent of respondents said the tax regime is an important factor in choosing where to locate their business. Also, half of all respondents indicated that the tax policy of a country is more important than an educated workforce in deciding where to locate their business operations.

The survey also found that 65 per cent of respondents here look to the government to work with them to attract foreign talent. This is unlike in Europe, where companies feel attracting foreign talent is their own responsibility.

Mr Owi said: ‘This shows that the expectation here is for a partnership between the government and companies to bring in foreign talent.’

Bayer Schering Pharma’s Asia-Pacific regional head Chris Lee said: ‘Lower taxes and immigration barriers are only part of a number of factors that make people decide on one place or another.’

He added: ‘Many cities are vying now for talent and offering attractive incentives, so it is important for Singapore to distinguish itself.’

Source : Straits Times – 20 Nov 2008

Retail rents: S’pore keeps 4th spot in Asia”

SINGAPORE is still the fourth most expensive centre for retail rents in Asia, though its global ranking has slid a couple of notches given faster rises elsewhere, a new survey has found.

The Republic fell to 16th position globally from 14th last year, according to the survey by consultancy Cushman & Wakefield.

Rents in Orchard Road, Singapore’s premier shopping belt, rose 9.3 per cent in the year ended June 30 from $42 per sq ft per month to $45.90.

But because of US dollar movements, that is reflected in the survey as a 25 per cent jump from US$325 psf per year to US$405.

CB Richard Ellis put out a similar report yesterday, which placed Singapore in 22nd spot in the world’s fastest growing destinations for retail rents.

The market today, however, is changing fast in the light of the global financial crisis. Singapore is seeing lower tourist arrivals. Retail sales, excluding motor vehicles, have started to dip.

A number of factors will determine the rate of rental changes for the rest of the year and next year, said Ms Letty Lee, director of retail services at CBRE.

‘The full impact of the financial meltdown on the job market is still unknown. Meanwhile, consumers will remain cautious and may cut spending as a result,’ she said. ‘The financial turmoil will also impact tourism arrivals, which will affect consumer spending. Landlords may be pressured to reduce rentals as a result.’

Still, Cushman & Wakefield’s managing director Donald Han believes that Orchard Road prime rents will be flat next year despite new supply as it is still the first stop for new brands here.

But suburban malls will see a softening of rents, he said.

‘While the weakening economic environment has started to pass through to retail rentals towards the fourth quarter, we believe that the rentals would remain well supported in the medium term by the comparatively undershopped characteristic of the Singapore market,’ said the Cushman & Wakefield report.

Source : Straits Times – 20 Nov 2008

Developers want govt to turn back clock on several policies

Wish-list includes reinstatement of deferred payment, old formula for DC

Some property industry players are yearning for the good old days, hoping the government will reverse some of the changes in property policies made in the past two years and thus go beyond the usual exemptions and rebates on property taxes with its off-Budget/Budget packages.

Such a strategy may be timely in helping to stimulate currently flagging property demand given that the measures were rolled out when the market was sparkling.

Developers are hoping the government will reinstate the deferment of stamp duty on property purchases where the property is under development (this was removed in December 2006) and revert to the old formula for computing development charge (DC) rates, based on 50 per cent of the appreciation in land value arising from changing the use of a site or building a bigger project on it. This was raised to 70 per cent in July last year.

Also high on the developers’ wish-list is a revival of the deferred payment scheme (DPS) – which was scrapped in October last year – to boost home purchases, with a qualifier that safeguards be introduced to address concerns that such schemes had spurred speculation.

A major property developer also suggested a demand-boosting measure in the form of changing the investment criteria for Economic Development Board’s Global Investor Programme to allow a higher quantum for property purchase or even lowering the total threshold value.

Under a new option to the Programme announced in July 2005, a foreigner can be considered for permanent resident status if he invests at least $2 million in business set-ups, other investment vehicles, and/or private residential properties, with up to half of the investment allowed in private residential properties.

‘More people taking up permanent residence or citizenship and landing on our shores will help the property market,’ said the developer.

KPMG Tax Services executive director Leonard Ong said that granting exemptions or rebates on property taxes for completed commercial and industrial buildings will help landlords and hopefully they will pass on some of the savings to their tenants.

‘Earlier this year, when property prices were on the rise, the government also raised Annual Values of properties. So based on this, owners would be paying more property taxes than last year. This makes it all the more important to introduce exemptions or rebates for property taxes,’ he added. Property tax is calculated as a percentage of a property’s annual value.

Developers are also hoping for property tax exemption for vacant land and land under development to reduce costs.

‘During this period, the market is so quiet we cannot launch projects,’ notes Ho Bee Investment chairman and CEO Chua Thian Poh.

Following the December 2006 rule change on stamp duty, property buyers are now required to pay stamp duty within 14 days from the date that the option to purchase is accepted.

The previous concession, introduced in June 1998, had allowed stamp duty payment to be deferred to the date of issuance of Temporary Occupation Permit for a project or date of sale of interest in the property, whichever was earlier, for properties under development.

Deferring payment of stamp duty for projects under development once more would lower upfront cash commitment for home buyers, some of whom may be stretched, especially since it could take a few years for the new homes they’ve bought to be completed, says Knight Frank managing director Tan Tiong Cheng.

Most developers are hoping the government will reinstate the DPS. They say DPS helped genuine home buyers, especially upgraders who may be able to sell their existing homes only when their new private home has been built.

Ho Bee’s Mr Chua suggests modifications be made to DPS to allay concerns that it also facilitated speculation in the past.

‘The most important thing is to require the buyer to secure a housing loan even if he does not need to draw down the loan immediately, to ensure a credit assessment of the buyer is done by the banks,’ he said.

However, Ho Bee’s Mr Chua disagreed with the suggestion by some analysts that the initial payment by the buyer – before the deferred payment kicks in – be raised from 10-20 per cent previously to 30 per cent, as that ‘would not help home buyers much’.

Although developers are currently not in a race to redevelop their sites given the property slump, many argue that going back to the pre-July 2007 formula for computing DC rates – which creamed off a smaller portion of the enhancement in land value – ‘would provide greater incentive for land owners to explore more productive use for their properties and could spur some activity’, the head of a listed property group said.

Developers are also concerned about banks tightening financing to home buyers and to businesses in general, and hope the Monetary Authority of Singapore will use ‘moral suasion’ to send the right signal to banks.

Source : Business Times – 19 Nov 2008

S’pore property fund index in the works

Compiler seeking more data from portfolio managers

THE Investment Property Databank (IPD), a global provider of real estate investment indices, is calling for more support from property fund managers in Singapore to develop a national index.

‘An IPD Singapore Index would bring an internationally recognised property benchmark to the regional property sector, enhancing market transparency . . . and would, for the first time, facilitate property derivatives trading in Singapore,’ said IPD yesterday.

IPD has been compiling publicly available data since the first quarter of this year to determine returns from the local real estate sector last year. But because data is incomplete, it is urging property fund managers to provide more specific information on their portfolios. IPD has written to the managers to garner support and outline the steps required to create the index.

‘With the cooperation of the Singapore property market, IPD is confident it could produce the first definitive set of returns for 2007 early (next year),’ said IPD director and head of Asia-Pacific Kevin Swaddle.

According to Dr Swaddle, the proposed IPD Singapore Index will measure the return on capital employed in each period, not just the change in property values. This makes the index different from price indices already available in Singapore.

He also cited Trade and Industry Minister Lim Hng Kiang who said in a speech last year: ‘A key criterion to develop the property derivative market in Singapore would be the existence of transparent, reliable and well-followed direct property indices, which serve as reference points or benchmarks for structuring of property derivative products.’

Source : Business Times – 18 Nov 2008

Dismal sales of private homes in Oct

112 new private homes sold as sales dip to lows last seen in 2003 Sars period

A MERE 112 new private homes were sold by developers last month, the lowest figure since monthly data was made public amid the boom in June last year.

The October figure is sharply down from 376 units sold in September, according to the data released yesterday by the Urban Redevelopment Authority.

Developers launched just 159 units last month, down from 767 units in September and a 12-month average of 559 units.

Analysts suggest last month’s very thin sales are comparable to the first quarter of 2003 when the Sars outbreak crippled economic activity. Developers sold just 427 units of new private homes then.

In the first three quarters of this year, sales of private homes slumped to 3,890 units, a far cry from 14,811 for all of last year.

‘The fall in the number of units launched was largely due to an obvious weakening in economic conditions, and Singapore’s entry into a technical recession,’ said Knight Frank’s director of research and consultancy Nicholas Mak.

‘In October, all major stock markets globally suffered their worst performance in decades. Singapore was not spared. In the face of such massive losses in the bourses, both sellers and homebuyers retreated to the sidelines, resulting in the low launch and sales volume.’

Things were so bad last month that some projects – among them a 59-unit landed project Watten Residences – recorded no sales at all.

Since monthly data was made available, last month was the first with not a single sale of a non-landed private residential unit at above $2,500 per sq ft (psf), Mr Mak said. In the high-end market, two condo units were sold at $2,306 psf and $2,407 psf.

There were a few quirks in the figures. For instance, a mass market condo, Lakeshore in Jurong West, sold for a relatively high $1,038 psf, said Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong.

Two posh 99-year leasehold bungalows at Sandy Island at Sentosa Cove were sold for a high $2,033 psf and a possible record price of $2,169 psf, or above $13 million each.

CBRE Research executive director Li Hiaw Ho said such deals last month seemed to show prices have remained fairly stable in the past two months.

‘However, it is very likely that the persistent thin volume will have a downward effect on prices.’

Overall, the only project that did well was a 12-unit cluster housing development, Jewel, near Serangoon New Town, which caught the market in time. All 12 units were sold from $286 psf to $342 psf, or $1.3 million to $1.4 million each.

Over 60 per cent of the 159 units launched were landed properties, marking the first time that landed supply has exceeded non-landed supply but demand was far weaker, said Jones Lang LaSalle.

‘In this current market, pricing is a great determinant of demand,’ said its local director and head of research for South-east Asia, Dr Chua Yang Liang.

Chesterton Suntec International’s head of research and consultancy, Mr Colin Tan, said: ‘The stand-off is continuing as there are still many unrealistic sellers out there taking their cues from the quarterly price index.’

The index, which has showed only a small drop, seemed to suggest the market is still in fairly good shape.

‘If the correct market signals are not given, the stand-off between buyers and sellers will likely continue with prices edging down very slowly,’ he said.

‘At the end of the day, sellers may not sell until they are forced to. This will occur when there is panic selling… The sharp correction will affect confidence.’

Property consultants are expecting the sluggish sales momentum to last the rest of the year and possibly through to Chinese New Year in late January given economic and job market uncertainties.

‘It may well be that the fourth quarter will see a total sales volume of around 500 units, a level that was last seen in the first quarter of 2003,’ said CBRE’s Mr Li.

Savills’ Mr Ku believes that transaction levels of new homes will remain roughly around 150 to 200 units for the next six months, with possibly 500 to 700 sub-sales and resale deals per month.

‘The average number of monthly transactions for the last 10 years is about 1,300 per month, so we should be seeing lower than average transaction volumes.’

Hit by stock market blues

‘In the face of such massive losses in the bourses, both sellers and homebuyers retreated to the sidelines, resulting in the low launch and sales volume.’ – Knight Frank’s director of research and consultancy Nicholas Mak

Source : Straits Times – 18 Nov 2008

Govt may let IRs open in stages

But operators must fulfil obligations; no change in their projected benefits to job scene, economy

THE Government is considering requests by both integrated resort (IR) operators for their openings to be made in stages, Senior Minister of State for Trade and Industry S. Iswaran told the House yesterday.

Both operators will also be held to fulfilling their obligations as outlined when their bids for the projects in Sentosa and Marina Bay were submitted, he said.

He added that the Government does not expect any change in the contribution that both projects will have towards the economy and job scene here.

Mr Iswaran was responding to questions from Non-Constituency MP Sylvia Lim and Nominated MP Eunice Olsen on when the IRs will fully open and whether the global financial crisis will have any impact on their ability to operate.

The recent financial crisis and the resulting credit crunch have affected several United States-based companies, including Las Vegas Sands, whose Marina Bay project here is slated to fully open next year.

Mr Iswaran noted that not only had the casino operator raised an additional US$2 billion (S$3 billion) in capital, but also its chairman and chief executive officer Sheldon Adelson had made a public declaration of his commitment to the Singapore project.

Although Sands had promised to complete the entire development by the end of next year, it has since submitted a proposal for progressive opening instead.

This is now being considered by the Singapore Tourism Board and other agencies involved.

Mr Iswaran said that Resorts World at Sentosa, which is scheduled to open in 2010, also applied for a progressive opening, and this is being reviewed too.

But he assured the House: ‘Even as we do so, our expectations remain that each development will open as an integrated resort and not just as a stand-alone casino.’

There will also be terms and conditions which the operators must abide by should their requests be approved, he added.

Although a company’s financial capability and its ability to get credit were a factor in determining the award of the projects when the IR bids were first sought, Mr Iswaran reminded the House that ‘we are now in profoundly altered circumstances’.

Still, he said both companies have assured the Government that their financing has been secured.

Mr Iswaran had already made it clear last week that the Government will not step in to bail out the IRs should their parent companies go under.

But when asked yesterday if Singapore investment company Temasek Holdings will step in, he said: ‘I think that’s a question for Temasek. It’s a commercial company – they make their own decisions.’

Ms Olsen also queried him on whether the Government had relaxed its ruling on the gaming area restriction in allowing Marina Bay Sands to have 1,000 gaming tables instead of the 600 that were originally proposed.

Mr Iswaran refuted any suggestion of a government concession.

The restriction has always been on the floor area for the casino – which has to be less than 3 per cent of the entire resort, he stressed. And that requirement remains unchanged.

In response to Ms Lim and Ms Olsen’s questions on the benefits that Singapore stands to gain from both projects, Mr Iswaran said that the Trade and Industry Ministry is standing by its projections ‘for now’.

These projections are that there will be 20,000 jobs generated directly by the IRs, and a further 30,000 to 40,000 jobs created indirectly by their operations here.

Projections that the IRs will contribute $5.4 billion to the economy were based on the projects being in a ’steady state’ in 2015 after they have been fully developed and open, he said.

But Mr Iswaran added that whether that can be achieved in 2015 is something that the ministry will have to ’study and see’.

Source : Straits Times – 18 Nov 2008

IR : Not a question of if, but when

IRs expected to meet economic targets, albeit with impact from crisis

THE promise, when the Government decided to allow the Integrated Resorts (IRs) in, was a $1.5-billion increase in our Gross Domestic Product (GDP) and 35,000 new jobs – but will these economic rewards now materialise? And if so, when?

In response to questions by Nominated MP Eunice Olsen and Non-Constituency MP Sylvia Lim yesterday, Senior Minister of State for Trade and Industry S Iswaran said the projection remains that the Marina Bay and Sentosa IRs, when they are “fully developed and running”, will achieve their economic targets and create as many as 40,000 jobs.

But whether these will be achieved by 2015 – as originally expected – “is something we will have to study and see”, he said.

“It would be fair to say that due to the global financial crisis and the slowdown already evident in our tourism sector, there may be some impact on the integrated resorts’ business when they open.”

Another issue: Marina Bay Sands (MBS) had announced that its proposed casino floor plan, which had upped the number of gaming tables from 600 to 1,000, had been approved. Ms Olsen wanted to know if the Government had made concessions to its original position.

Mr Iswaran noted that the provisions stipulated all along that up to 15,000 sq m of MBS – within the 3 to 5-per-cent limit of their over 500,000 sq m total area – could be set aside for gaming activities. There has been no change, he added, reiterating that “each development will open as an IR and not just as a stand-alone casino”.

Both MBS and Resorts World at Sentosa have requested for a “progressive opening” and their proposals are now being “carefully considered” by the Singapore Tourism Board (STB) and other government agencies, reiterated Mr Iswaran.

Both IRs had given assurances that they have secured project financing, he added, and the STB will “continue to work closely” with the operators to facilitate the developments’ completion.

Ms Olsen asked if the assurance that taxpayers’ money will not be used to bail out the IRs, can be interpreted to mean that Temasek Holdings will not step into the picture.

Mr Iswaran reiterated that would be a commercial decision to be made by Temasek.

Source : Today – 18 Nov 2008