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SENTOSA Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition but so they will be seen to be transparent and fair, a Parliamentary committee has recommended, following findings of lapses by the Auditor-General.

In its latest report, presented to Parliament on Thursday, the Public Accounts Committee (PAC) says SDC has taken measures to redress deficiencies but PAC takes the view that the inherent weakness of SDC’s land sales by private treaty - one of the two modes of sale - was not fully addressed.

‘Direct negotiation with a prospective buyer may not result in the best price as compared with an auction, especially in a rising market,’ says the eight-member committee chaired by Cedric Foo. It is also open to abuse as information on reserve price, for example, could be leaked, PAC adds.

The additional controls of not providing board directors with privileged information will not prevent public perception of conflict of interest, says PAC, because directors and ex-directors taking part in SDC land sales will still have access to more background information than others.

PAC recommends that SDC further review its land sale guidelines and procedures so sales ‘not only comply with the principles of fair competition, maximising total returns to the government and transparency, but are also seen as such by the public’.

The committee further suggests that the Auditor-General undertake ‘a more regular audit’ of the Economic Development Board, following the Auditor-General’s findings of lapses in governance structure and financial operations in its first audit of EDB.

Apparently, EDB’s budget of $105 million for the year under review (2005/2006) was not submitted to its board for approval, and the board had also delegated power to staff to grant loans and to borrow without reporting back - practices against the law. EDB says it has taken prompt action to address the mistakes.

Other lapses unearthed in the Auditor-General’s audits of ministries and statutory boards in financial year 2005/2006 include procurement irregularities in the Ministry of Defence, inaccurate records of state land and buildings, unfair payment practices and false accounting information in the Ministry of Information, Communications and the Arts, circumvention of internal controls in a Foreign Affairs overseas mission, and weak access controls in several government agencies.

Source : Business Times - 26 May 2007

The editorial on collective property sales (’Cooling the en-bloc frenzy’; ST, May 24) has prompted me to comment on the issue. That the issue has merited your comments speaks for itself. The editorial has put the picture in perspective. It has summarised the matter judiciously.

The Strata Title law is important legislation and as such, it should be sent to a Select Committee so the public can give its view.

Granted that the Government has asked for feedback. That is not sufficient. When the law was amended in 1999, the Bill was referred to the Select Committee. The Select Committee received submissions from wide sections of the public. Representations were made from academia, professional bodies and members of the public.

Some of the presenters were invited to attend the Select Committee’s hearing. The public gave valuable input. The Select Committee submitted its report to Parliament. The Bill was amended by the House, incorporating some of the proposals made by the public.

Similarly, in view of the public interest in collective sales, as can be seen in recent press reports, it would be worthwhile for the Bill to be sent to the Select Committee.

I know the process is time-consuming but such important legislation should be referred to a Select Committee. I urge MPs to ask the House to send the Bill to the Select Committee.

Finally, I would like to share my experience as a former member of the Strata Titles Board. The board has adopted a mediatory approach in reaching settlement of many a thorny dispute. Its efforts are laudable.

The Government should reward members of the board with an extra honorarium. Most members are busy professionals. It is unfair to ask them to sacrifice their time, sometimes for days.

Source :  Straits Times - 26 May 2007

Initial assets: Mt Elizabeth, Gleneagles, East Shore hospitals

PARKWAY Holdings, the largest operator of private hospitals in Singapore, yesterday said that it will put all three of its hospitals here into a new real estate investment trust (Reit) worth at least $765 million.

Parkway Life Reit will initially consist of Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital as well as adjoining medical and associated shops.

The Reit will buy the properties, which are valued between $765 million and $775 million.

Once the Reit is set up, Parkway will hold a stake of 30-45 per cent in it.

Parkway, which is South-east Asia’s biggest healthcare group by market value, intends to use the proceeds to acquire hospitals and healthcare assets in the region, said managing director Lim Cheok Peng.

Some of the money will also be distributed as special dividends to shareholders and used to refinance debt, he said.

‘The proceeds can be used to grow our business in Singapore, China and India,’ Dr Lim said. ‘Medical tourism will be a very strong impetus of growth for us.’

In Singapore, Parkway is interested in bidding for new hospital sites that the government could release.

Health Minister Khaw Boon Wan told Parliament earlier this year that Singapore is moving to expand its medical capacity to capitalise on the market for medical tourism, which involves selling more land to private hospital operators.

It is widely expected that one or two sites will be put up for sale to private hospital operators such as Parkway soon.

Parkway sees ageing populations and increasing affluence across Asia as growth opportunities.

The company intends to look for acquisition opportunities together with the new Reit.

‘While the Reit will initially consist of portfolio assets here, the intention is to diversify out of Singapore,’ said Choo Oi Yee, Parkway’s senior vice-president for strategic planning and business development.

At the moment, Parkway has 10 hospitals in Malaysia, as well as a hospital each in Brunei, China and India.

Each of these is a joint venture and cannot be immediately injected into the Reit.

The three initial properties will be sold to the Reit on a leasehold basis.

Gleneagles and East Shore each come with a 75-year reversionary lease, while Mount Elizabeth has a 67-year lease.

Parkway intends to lease the properties back from Parkway Life Reit for an initial term of 15 years, with the option to extend the lease for another 15 years.

For the first year, the rent paid will be at least $45 million, said Parkway.

Shares of Parkway closed eight cents down at $4.50 yesterday.

The stock has climbed 43.3 per cent since the start of the year.

Source : Business Times - 26 May 2007

A SKY villa and two penthouses of the luxury Leonie Parc View condominium (picture) will go under the hammer on June 8 in a by-invitation-only auction conducted by Colliers International and Christies’ Great Estates exclusive affiliate Ken Jacobs.

The freehold, 29-storey property is developed by Soilbuild Group Holdings and consists of one sky villa, three penthouses, and 40 four-bedroom apartments. There is also a “sky sanctuary” on the 14th level.

The sky villa and the penthouses, located on the top floors, offer a panoramic view of the city skyline.

There is also a private lap pool on the upper level of the double-storey, 6,975-square-foot sky villa.

The penthouses — each measuring between 2,906 sq ft and 3,003 sq ft — are served by private lifts.

“An international auction is another effective way of introducing ultra-high-end projects to well-heeled buyers from all over the world,” said Ms Grace Ng, deputy managing director of agency and business services for, and auctioneer of, Colliers International.

“We expect the sky villa and penthouses at Leonie Parc View to appeal to both foreign and local investors, commanding prices in the region of $3,200 to $3,600 psf.”

The project has been well received at Soilbuild roadshows conducted in Hong Kong and Indonesia, with about 18 out of the 20 apartments offered being sold to date.

The remaining apartments will be offered to the Singapore market at a later date. — Joseph Yadao

Source : Weekend Today - 26 May 2007

En bloc sale of condo sets record price for Newton area: Jones Lang LaSalle

GILSTEAD View, a freehold 17-storey apartment block in the Newton area, has gone under the en bloc hammer for $96.5 million.

Chedstone Investment Holdings bought the site at approximately $1,070 per square foot per plot ratio (ppr), inclusive of the estimated $10-million development charge.

Real-estate firm Jones Lang LaSalle believes this is a new record for the Newton area.

“The sale of Gilstead View has set a new benchmark in the Newton area. It is the only property to go beyond $1,000 psf ppr,” said Mr Lui Seng Fatt, regional director and head of investments for Jones Lang LaSalle.

Last month, investment company Ho Bee paid $990 psf ppr for Elmira Heights, which topped the previous benchmark price of $666 psf ppr that Wing Tai paid for Newton Meadows.

The 35,510 sq ft Gilstead site has a gross plot ratio of 2.8 and is subjected to height restrictions of up to 36 storeys. The estate has a total of 64 apartments averaging between 830 and 850 sq ft each.

Chedstone Investment is an associate company of Selangor Dredging Berhad (SDB), a premium lifestyle property company that specialises in niche residential developments.

A new high-rise, luxury development could be built on the plot, which has a gross floor area of 99,428 sq ft. This equates to around 75 luxury apartments averaging 1,300 sq ft each. Jones Lang LaSalle estimates the break-even price for this new project to hover around the $1,600 psf mark.

This is SDB’s second property in Singapore. Its first project, currently known as Mount Emily Tower, is located at Wilkie Road.

“Like the development at Wilkie Road, the development at Gilstead Road will be a luxury condominium development and will have the unique brand of an SDB development,” said Ms Teh Lip Kim, managing director of SDB.

Source : Weekend Today - 26 May 2007