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JTC Corporation releases its North Buona Vista Drive (LX 1-1) site for sale under the government’s reserve list .

The 99-year lease site is located at the junction of North Buona Vista Road and Commonwealth Avenue West.

Under the Reserve List system of the Government Land Sale programme, the site would only be put up for tender after the minimum bid price received from a developer is found acceptable by the government. Interested developers will then have up to 8 weeks to submit their tender bids. - CNA /ls

Source : Channel NewsAsia - 30 Apr 2008

Singapore property developer CapitaLand said on Wednesday net profit in the first quarter fell 59 percent year-on-year to S$247.5 million (US$181.9 million).

The decline came mainly from an absence of exceptional gains, said CapitaLand, the largest developer in Southeast Asia.

Last year’s first quarter profit of S$608.1 million included an exceptional gain of S$426.8 million from the sale of an office tower in the central business district, it said.

Revenue in the March quarter was S$631.3 million compared with S$637.0 million a year ago.

CapitaLand said it remained in a strong position to expand further in the region, despite widespread worries about the global economy stemming from a crisis which originated in the US sub-prime or higher-risk mortgage sector.

“The continuing global credit crunch would have, as expected, caused uncertainty in the general economic and business environment in Asia,” said Richard Hu, chairman of CapitaLand.

“However, the group has strengthened its financial footing and is well-positioned to capitalise on any opportunities that may arise,” he said.

Chief executive Liew Mun Leong said the company would continue to concentrate in Asia.

“We will continue our geographic growth and Asia focus as we believe that Asian economies will grow faster than the global average for the foreseeable future,” he said.

CapitaLand sees “vast opportunities” in Vietnam, where it is building 6,000 residential units over the next three years, said Liew.

CapitaLand is 40 percent owned by Singapore’s investment firm Temasek Holdings.

Source : Channel NewsAsia - 30 Apr 2008

Keppel Land has entered into a joint venture with Sunsea Yacht Club to develop its first integrated residential cum marina lifestyle development in Zhongshan, Guangdong.

Keppel Land will have an 80 per cent stake in the venture to develop the waterfront homes in the affluent Pearl River Delta region of Zhongshan.

Targeted at the upper-middle to upper income segments, the proposed residential project covers a total area of 82 hectares.

When completed, it is expected to yield about 300 high-end luxurious villas with private berths, and 2,500 condominium units and serviced apartments.

Residents can look forward to a luxurious waterfront lifestyle enhanced by a marina clubhouse with related amenities, including fine dining restaurants, berths for about 550 boats, a boating school and comprehensive recreational facilities. - CNA/vm

Source : Channel NewsAsia - 30 Apr 2008

The recent climb enjoyed by equity and property prices was driven more by strong economic growth than by low interest rates, according to a study by the Monetary Authority of Singapore (MAS).

Empirical research by MAS shows that economic activity exerts a larger influence on asset prices in Singapore than borrowing costs.

‘Asset price inflation reflects an underlying increase in income growth augmented in part by favourable sentiment towards domestic assets,’ says the study, featured in the MAS macroeconomic review report released yesterday.

The MAS report also says: ‘This linkage has been misunderstood by some analysts, who expressed concern that the increase in domestic liquidity, in and of itself, has fuelled the run-up in asset prices.’

Private housing prices increased by 31.2 per cent for 2007 as a whole, and some market analysts had felt that the central bank should raise interest rates to rein in property inflation.

This was because while overseas investors were driving property prices up, the inflow of foreign funds continued to add to domestic liquidity and kept borrowing costs low.

But as the MAS report mentions, ‘the factors behind the increase in liquidity are much more complex in view of Singapore’s monetary policy framework’.

Domestic interest rates have dropped since September last year as US interest rates fell and the Singapore dollar grew stronger.

The benchmark three- month domestic interbank rate fell by 144 basis points from August 2007 to 1.31 per cent at the end of March 2008.

As interbank rates fell, banks also started offering cheaper and more innovative mortgage packages.

Source : Business Times - 30 Apr 2008

MAS says financial services, IT sector vulnerable but core activities insulated from US

Global headwinds have gathered speed in recent months, but domestic and regional support should prevent the Singapore economy from sliding into a sharp downturn in 2008, says the Monetary Authority of Singapore (MAS).

While it still expects Singapore’s GDP growth to come in at around 4-6 per cent this year, ‘barring a sharp downturn in the US economy’, the central bank says the economic outlook in 2008 will vary significantly from industry to industry, with certain sectors more vulnerable to the US downturn.

And in the event of a protracted US recession, along with a widespread decline in global and regional economic activity, Singapore’s growth will be more severely hit, as even the more resilient activities will not go unscathed, MAS warns in its latest Macroeconomic Review. In any case, even in the baseline scenario, Singapore’s growth momentum is expected to ease from its double-digit sequential pace in Q1 over the next few quarters.

Advance estimates based only on January and February data have the Singapore economy growing almost 17 per cent in Q1 over the preceding Q4 2007. In year-on-year terms, the flash Q1 GDP growth was a robust 7.2 per cent.

The slowdown this year, after four years of above-7 per cent growth, will bring the economy closer to its potential output path, with the output gap narrowing markedly by 2009, MAS says. The economy has racked up a positive output gap, having expanded above its 4-6 per cent medium-term trend potential over the last four years.

MAS remains broadly optimistic about Singapore’s growth outlook, as a good 30 per cent of the economy - core activities such as construction, marine transport and pharmaceuticals - are relatively insulated from the US.

Another big core of activities, accounting for some 37 per cent of GDP, enjoy strong domestic and regional support. But even these sectors - transport hub services, tourism-related activities, business services - would be affected if the US downturn deals Asia a tough hand.

But the most vulnerable to a US and global downturn are ’sentiment-sensitive’ financial services such as the wealth advisory, equities, brokerage and treasury markets, as well as the IT-related cluster. They account for about one-third of the economy.

And while the growth outlook is a little murky, inflation remains the bigger concern, with further upside risks to global oil and food prices. MAS expects inflation in Singapore to stay high in 2008 ‘due to a confluence of external and domestic factors’.

Consumer price inflation could average above 6 per cent in the first half of 2008, and ease to about 4 per cent in the second half, partly as the GST hike effect wears off, it estimates.

‘On a sequential basis, inflation should moderate over the rest of the year and come closer to its historical average rate of increase of 0.3 per cent,’ it adds. MAS expects the 2008 inflation rate in the upper half of the 4.5-5.5 per cent forecast range, with underlying inflation - minus private accommodation and private road transport - coming in at 3.5-4.5 per cent.

The central bank also reiterates that its latest monetary policy decision to re-centre the policy band will help to ease inflation pressures and provide support to the economy as it slows to a more sustainable growth pace.

The half-yearly Macroeconomic Review also cites empirical evidence of first signs of a ‘weak synchronicity’ in economic activity between the US and Asia - as opposed to a full decoupling.

Latest trade data, it says, suggest there is some short-term substitution as regional exporters seek out opportunities in the growing China and Middle East markets to partially offset the drag in US demand.

One economist who was a little surprised by the MAS’ latest assessments is HSBC Bank’s Robert Prior-Wandesforde - he reckons the central bank is a bit hopeful about the inflation forecast for the year. He thought the 4.5-5.5 per cent inflation forecast range should have been revised up, and that the economy would quite easily hit the top end of the 4-6 per cent GDP growth forecast.

Source : Business Times - 30 Apr 2008