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New rules state that they can no longer keep anonymous accounts

Lawyers sitting on millions of dollars of clients’ money in trust or client accounts will have to be more sure where the money came from, under new rules that aim to curb money laundering.

In particular, lawyers will no longer be able to maintain anonymous accounts - they will have to know a client’s business and keep records for at least five years.

The moves - spelt out in the Legal Profession (Professional Conduct) (Amendment) Rules 2007 that takes effect Aug 15 - come amid whispers that some crooks are using Singapore’s hot property market to launder ill-gotten gains. The fear is that crooks who are using the property boom could be parking cash with lawyers here pending a purchase.

More than 90 per cent of all property purchases go through lawyers. ‘To help combat laundering through law firms, two areas need to be looked at,’ said Wong Partnership’s managing partner Dilhan Pillay Sandrasegara - ‘retail conveyancing and clients that come to us via private banks’.

Law firms also need to pay more attention to funds from overseas or by way of telegraphic transfer, he said. Singapore banks have had to implement increasingly stringent rules to prevent ‘black’ money being moved into the financial system.

And now lawyers are going to have to do the same, to prevent illegal funds seeping into the legitimate economy through investments in real estate, luxury assets or business ventures. But once clients clear the first hurdle of opening a bank account here, it is difficult for lawyers to know whether funds are illicit.

‘I’ve yet to see anyone come in with a suitcase of cash,’ said KCChuang, conveyancing partner at Advent Law Corp. ‘Usually they have a cheque or demand draft issued from a Singapore bank.’

Mr Chuang said he has been approached three times by suspected money launderers in the past few years.

‘They asked to use our client account, saying they would remit money from an overseas bank and if we could remit onwards to their accounts - one was to Thailand, another to New Zealand.’

The amounts were US$5 million a month, for which the launderers offered a 2-5 per cent service fee, he said. ‘For some lawyers this can be very tempting.’

Mr Chuang turned down all the requests. ‘One of them said he was dealing in second-hand cars,’ he said. ‘I asked him why he could not remit directly, but got no answer.’

Lawyers typically hold clients’ money in common accounts that can be huge, running to tens or even hundreds of millions of dollars. Once illegal funds are sent into a client account, it can be difficult to separate them from the rest of the account.

Law firms typically have three accounts - trust account, client accounts and an office account.

Worldwide, laundering illicit money by buying real estate has become a common tactic.

The new rules here put the onus on lawyers to know a client’s business, with the ‘acquisition, divestment or any other dealing of any interest in real estate’ at the top of the list. Reputable law firms say they will not be affected by the amendment because they have systems to guard against money laundering.

‘Our reputation is very important to us,’ said Wong Partnership’s MrDilhan. But some tweaking will have to be done with regard to private banking clients, he said.

Private banks do not want to reveal clients’ identity at first for requesting searches, such as for caveats, before a deal goes through. ‘But going forward, in keeping with the principal of know your client, the private banks will have to disclose upfront their clients and vouch for them,’ he said. ‘Otherwise we cannot accept instructions.’

Every financial centre is a target for money launderers. ‘The real estate market is so global that the issues we face are the same issues a lawyer in London faces,’ Mr Dilhan said.

Still, the new rules are no tougher that those in London or New York, so legitimate investors will have no problem buying property or other assets here, he said.

For instance, most law firms already keep records five years after a transaction. ‘Law Society rules already say we have to maintain files for 6-12 years,’ MrChuang said. ‘It’s a storage nightmare.’

Many firms use external warehouses to store records and files, he said. ‘We don’t look at the new rules as negative. They formalise requirements that some of us already practise.’

Will law firms that are expanding overseas, such as in China, have to be extra vigilant against suspicious transactions?

Wong Partnership exercises the same diligence on clients at all its offices, Mr Dilhan said. ‘So far the number of incidents in China when we’ve had to discharge ourselves is very small.’

Source : Business Times - 30 Jul 2007

HK: Housing and office rents pushed up by limited supply

It’s a common refrain from property agents these days, but one that irks flat-hunter Shen Man Yan.

‘Better view that apartment soon or risk losing it to someone else,’ they would advise Ms Shen, a 31-year-old lawyer who is looking for a flat in Happy Valley, a prime district for professionals and expatriates.

‘I don’t know if that’s a marketing ploy, or if the market is really that hot, but I hate it when I hear that,’ she said.

Analysts say it is a combination of both factors, with housing rents for professionals and expatriates here now among the priciest, if not the priciest, in the world.

Add that to similar double-digit rental increases over the past year for office space - bolstered by the promise of more mainland investment funds - and the city’s property industry looks pretty rosy.

A recent report by human-resource specialist ECA International showed that the cost of renting an expatriate apartment in Hong Kong is the world’s highest, at an average of US$8,592 (S$13,000) a month.

The figure was 17 per cent higher than for Tokyo, which ranked second, and 150 per cent over that in 15th-placed Singapore.

According to Mr Lee Quane, ECA general manager in Hong Kong, apartment rents in executive districts such as the Mid-levels and Happy Valley have jumped 25 per cent over the past two years.

The main reason for the spike is a limited supply of homes in the top districts.

A similar situation exists in the office space market, where a 17-year-low vacancy rate is pushing up prices in the prime Central district on Hong Kong Island.

US giant Morgan Stanley, for one, is said to be considering moving some operations from its Central address - traditionally de rigueur for the financial services trade - to less expensive Kowloon on the other side of Victoria Harbour.

Rents in the Kowloon hub of Tsim Sha Tsui average about HK$30 (S$5.80) per sq ft (psf) to HK$40 psf - less than half of the HK$90-HK$100 psf in Central.

For now, such increases in housing and office rents are hardly denting Hong Kong’s ability to attract investors. The city’s gross domestic product is expected to grow by 5.5 per cent this year.

One reason, noted Ms Karen Choi, research head of property firm Vigers, is that the average cost, while high, remains about 10 per cent off the peak in 1997 before the economy was ravaged by the Asian financial crisis and 2003 Sars outbreak.

‘Also, prices everywhere from Singapore to Shanghai are rising too,’ she told The Straits Times.

Said Mr Quane: ‘In the future, more companies will certainly consider moving to Shanghai, where housing costs are 50 per cent lower.

‘But then, tax rates there may also run as high as 45 per cent, which could prove just as costly for firms that pay taxes for their employees.’

The next logical option, he added, would be Singapore, which shares Hong Kong’s attractive tax regime but not its physical and political intimacy with China.

‘Hong Kong remains, for now, worthwhile for the large multinationals despite high property rents,’ Mr Quane concluded.

Source : Straits Times - 30 Jul 2007

New complex in Katong will also have shops and service rooms

The former Katong Red House Bakery will soon welcome customers again - but perhaps not the kind craving fragrant cakes and rolls.

Along with the five shophouses next to it, it will become part of a $15 million complex housing shops and rooms managed like service apartments.

The landmark fire-engine red facade of the two-storey building at 75, East Coast Road will be retained, as will the traditional floor tiles and pillars, because the shophouse is a conservation property.

But whether or not it will go back to being a bakery will depend on its future tenant, said Mr Mohammad Zahid Yacob, who heads Warees Investments, a subsidiary of the Islamic Religious Council of Singapore (Muis), the legal owner of the property.

The former bakery, hugely popular with Singaporeans, sold traditional cream cakes and Swiss rolls until its closure in 2003.

The former tenants said they could not afford to pay the $15,000-a-month rent, which was almost eight times the old rate.

Mr Zahid said: ‘If we can get a tenant selling kueh, we’ll take him.

‘But as much as we want to preserve the original concept, the bottom line is it has to be commercially viable.’

He added that the plan was for the Red House to remain a food-and-beverage outlet to evoke memories of the bakery.

A food outlet will serve the needs of the long-term residents in the five-storey block of 80 to 100 service rooms to be built behind it.

Talks in recent years have been about turning the former bakery into a halal foodcourt or Indonesian restaurant.

The five shophouses adjacent to the Red House will be redeveloped, for instance, into a 24-hour convenience store, a launderette and business centre serving the residents.

Work on the complex will start early next year and will take two years.

Mr Zahid said it was hoped that the complex would liven up that stretch of Katong.

‘We want to revitalise the whole area. With a sizeable plan, we can create a more ‘happening’ district, raise human traffic and bring Katong back to the way it was in the old days.’

The Red House is a wakaf property, meaning it is held in trust for Muis.

It was put in trust by Sherrifa Zain Alsharoff Mohamed Alsagoff, who wanted the income generated from the property to be used to provide free medicine for the community.

She was the great-granddaughter of Hajjah Fatimah, who built the Hajjah Fatimah Mosque in Beach Road.

Source : Straits Times - 30 Jul 2007

Though rents are rising, expats say housing here is more affordable than in many major cities

SINGAPORE and Hong Kong are keen competitors in most things but when it comes to rent, there is only one winner.

Ask Mr Jason Longley, the regional manager of an insurance company. A year ago, he was paying $8,500 a month to rent a 900 sq ft apartment in Hong Kong’s prime Peak area.

Now he rents a 1,400 sq ft flat at Leonie Hill off Grange Road for just $5,500.

Mr Longley, 35, said Singapore’s cheaper rent was a key factor in his decision to relocate: ‘I definitely saw rent as a huge expense in Hong Kong.’

It also helps put into perspective the growing complaints about rising rents.

Urban Redevelopment Authority figures out last Friday showed that residential rents rose 10.4 per cent in the April to June quarter and are up 31.2 per cent over the past 12 months.

But expats and agents told The Sunday Times that Singapore rents are still cheaper than in cities such as Hong Kong, Tokyo, London and New York.

A new survey by ECA International, a human resource consultancy, showed that rents here were 45 per cent less than the average price in Tokyo and 40 per cent less than in Hong Kong.

Singapore was the eighth most expensive place to rent a three-bedroom flat in Asia and 15th most expensive in the world - below Hong Kong, Tokyo, New York and London.

Investment banker Timothy Rice, who moved here last August, can testify to that.

Mr Rice, 27, pays $1,400 for a 350 sq ft studio in Kelantan Lane, near Bugis Junction. He said such a flat in an equivalent London location would still cost about the same figure - but in pounds. That is about $4,300.

Mr Masamitsu Kawasumi, 44, chief bank representative of the Development Bank of Japan, arrived here last month and was struck by the rental gap between Tokyo and Singapore.

Tokyo’s hip Roppongi area, with its many clubs and restaurants, has rents of about $13 per sq ft. Orchard Road’s $6 psf seems like a bargain.

Mr Thomas Preben Hansen, 32, chief executive of a listed marine firm, has lived in Shanghai and London: ‘Rents had become very cheap since 1997, and still have some catching up to do.’

He anticipated the rent squeeze and so bought a flat in Ewe Boon Road, off Bukit Timah Road, when he arrived in May.

A rental squeeze is exactly what Ms Isabelle Scali, 30, is bracing herself for. The public relations manager thinks Singapore is relatively more costly than London.

She pays $1,800 - nearly half of her salary - for a 1,200 sq ft flat at Sunshine Plaza off Prinsep Street.

In London, she said she spent just a third of her salary on a 700 sq ft studio flat in Balham, southwest London.

Ms Scali, who has signed a two-year lease, said rental costs will determine if she stays in Singapore.

Mr Rajesh Malkani, 43, who lived in Hong Kong for 13 years before moving here in 2005, said: ‘I don’t expect Singapore’s prices to reach Hong Kong levels because there is still land here. But I do expect them to go up.’

Mr Malkani, the global head of sales and business development at Standard Chartered, rents a 4,000 sq ft bungalow in Sunset Place. He would not reveal his rent but said it would get only half the space in Discovery Bay, which he feels is a comparable site in Hong Kong.

Given the decade-long property slump here, Mr Simon Smith, a senior director at Savills Asia Pacific, thinks rents will keep rising for the next one to three years.

But Mr Rice is not complaining: ‘Compared to Hong Kong, New York, London - Singapore is still cheap,’ he said.
 
Source : Sunday Times - 29 Jul 2007

They’re leaving the penthouse and 3 other maisonettes empty. Who needs to rent them out when you’re billionaire Peter Lim - and he won’t cash in on his $100m Ardmore Park property

Even for the ultra rich, condo living still means having to share facilities like pools and tennis courts with neighbours. Unless you’re billionaire Peter Lim, that is.

Mr Lim, his wife Cherie and his 85-year-old mother have an entire 11-storey condo - and pool - at Ardmore Park to themselves. No noisy neighbours, no barking dogs, no learner trumpeters practising in the apartment next door.

The family occupy an apartment close to 4,000 sq ft at the Abelia condo while the other three maisonettes and a 5,000 sq ft penthouse sit empty, although there is a security guard.

Not that Mr Lim needs the rent. He made his first fortune as a remisier and another bigger one with shrewd investments in palm oil.

And Abelia - Mr Lim owns 80 per cent and a pal the rest - is probably worth about $100 million given its primest of prime locations near Orchard Road.

But Mr Lim is resisting the temptation to sell up and cash in on the property boom as his mum does not want to move.

They like the location and the acres of space, including an underground carpark, which is handy given Mr Lim’s pricey collection of 10 cars, Ferraris included.

‘I have enough space to park them,’ Mr Lim said in a recent interview.

‘The road is also very wide with lots of entrances and exits. If I were to live at Orchard Turn, I would have to put up with the bad traffic. But here, there are many ways for me to avoid the congestion,’ he added.

And while he could sell the Abelia and buy a handful of houses, the posh bungalow life in District 10 doesn’t suit him.

‘Maybe it comes from the days when I was a remisier and travelling a lot in Malaysia, every four days of the week.

‘That has made me security conscious so I prefer to live in an apartment,’ he said.

The bumper gain he is sitting on at the Abelia must also enhance the home sweet home feeling. He bought the building in 1994 when Malayan Credit sold some of its investment properties, paying less than $14 million.

That is looking like a bargain to end all bargains, what with the land and building now worth as much as $100 million, going by recent sale prices.

Last month, SC Global forked out $262 million for The Ardmore, just a few doors away at 6 Ardmore Park. The price for the plot of 42,565 sq ft worked out to $2,337 per sq ft (psf) of potential gross floor area, including development charges.

Abelia has an estimated 40,000 sq ft of gross floor area, which could mean a sale price of about $100 million given the $2,500 psf it could command in today’s market, say some consultants.

Others sound a note of caution as the Abelia’s land area is far smaller at 14,000 sq ft, although as Knight Frank’s head of research and consultancy Nicholas Mak says: ‘The whole stretch of Ardmore Park is valuable land, and the price it can fetch will depend on the size and the shape of the parcel.’

Whatever price it might command, it will be small beer compared to Mr Lim’s stake of just under 5 per cent in palm oil giant Wilmar International, which is worth around $1 billion.

While Abelia is only 11 storeys, it dominates the area - at least for the next few months.

It is surrounded on three sides by the building site for Wheelock Properties’ 36-storey Ardmore Park II. The site was occupied by Habitat Two and Ardmore View, which were sold en bloc last year.

But Mr Lim is not fretting about the noise and dust as modern piling methods have reduced much of the impact.

Anyway, he can always get away for the day in one of his flashy cars sitting in that spacious
 
Source : Sunday Times - 29 Jul 2007