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It will renovate two hospitals and build five new ones in next 5-10 years

PROPERTY company Lippo Karawaci will be pouring US$500 million into its Siloam Hospitals Group in the next five to 10 years to spruce up two of its four hospitals and build five new ones.

The expansion targets middle to upper-class Indonesian patients, about 200,000 of whom have been flying to Singapore each year spending at least US$600 million on medical treatment.

The group hopes to reverse this outflow and capture some of the money spent on health.

With the completion of the exercise, Lippo Karawaci’s president-director, Viven G Sitiabudi, expects to more than triple patient numbers, from 600,000 now to two million.

In the process, 4,000 new jobs will be created, she said.

Phase one of the expansion involves renovating two Siloam hospitals in West Jakarta and Surabaya. Both are assets under the portfolio of First Reit, a Singapore-listed real estate investment trust that Lippo launched in December.

Each hospital now has 175-205 beds, but will be expanded to have 250 beds. Built between 1977 and 1991, these hospitals will now get ‘cutting-edge technologies’ to bring clinical procedures up to date. Further details on the makeover will be forthcoming in the next couple of months, the group promised.

Of the five new hospitals, four will be in Jakarta and the fifth in Bandung. Each hospital will have 250 beds.

The group said its hospitals will each develop an area of speciality, in keeping with trends at other international medical centres.

The new hospital at Semanggi in downtown Jakarta, for instance, will house a cancer centre. Scheduled for opening by December next year, it will be one of Lippo’s first new hospitals to be completed.

Ms Sitiabudi said: ‘Nearly 800,00 people are afflicted with various forms of cancer every year in Indonesia. So it makes sense that our first new project will be the Siloam Hospitals Semanggi and Mochtar Riady Comprehensive Cancer Center.’

She said the renovation of the two hospitals and construction of the new Semanggi facilities will cost about US$50 million.

The developments will be financed in part by the S$100 million raised last year from the listing of First Reit in Singapore, Ms Sitiabudi said.

In a separate announcement earlier, Lippo Karawaci said it was studying the possibility of issuing a second Reit.

But no details were given as to which properties would be included in the portfolio or where the Reit will be listed.

‘Management is convinced that Reit management is an effective way of bringing in foreign capital and promoting the Indonesian property market to the international investment community,’ the firm said in an announcement on its website.

Source : Business Times - 11 May 2007

Having lived in Punggol 21 for more than four years now, I was excited when I saw the two words ‘Punggol perks’ (ST, May 7) accompanied by a map with plans to enliven the estate which is sorely lacking in basic facilities. However, disappointment soon set in as I found there was no mention of a library, more shops or a hawker centre planned.

The reasons often cited by the HDB for being slow to build these facilities are the slow take-up rate of new flats and the small population in the estate. To get more people to move into any new estate, the HDB could first commit to build enough basic facilities to attract people to set up homes there, rather than build these facilities when there is a critical mass of residents. People are naturally attracted where facilities are available.

Launching the Punggol 21 exhibition in 1996, then-minister for national development Lim Hng Kiang said: ‘More Singaporeans will enjoy this 21st-century lifestyle as Punggol 21 will be the model for new towns in future.’ Sad to say, owing to lack of facilities, would-be home owners are giving Punggol 21 a miss.

No definite plans have been announced as to when the town centre and the sports stadium will be built. The PUB’s plans to dam up Sungei Serangoon and Sungei Punggol by 2009 to create two reservoirs where water sports can be conducted are good news. In tandem, the HDB could now plan for more built-to-order flats as the response should be good.

Lee Kok Lin

Source : Straits Times - 11 May 2007

SINGAPORE’S industrial landlord JTC Corporation is inviting companies to submit proposals to manage its upcoming real estate investment trust (Reit).

This is another step towards the completion of its divestment plans, first announced in late 2005 - to enable it to focus on strategic industrial developments.

Last October, the statutory board said it would sell its high-rise ready-built properties via a combination of a Reit and a trade sale. In early February this year, JTC announced the appointment of UBS, Goldman Sachs and DBS Group Holdings as advisers for these sale methods.

JTC’s divestment portfolio comprises up to 40 property clusters with an estimated net floor area of 1.7 million sq m and a value in excess of $1 billion, according to its tender documents.

These include flatted factories, ramp-up and stack-up factories, three multi-tenanted business park buildings and a warehouse.

JTC’s chief executive, Mrs Ow Foong Pheng, said in a statement yesterday that the call for proposals would provide a rigorous process for them to find a suitable manager.

‘One of the objectives of our divestment exercise is to promote active competition in the industrial property market in Singapore, so that existing and prospective tenants may benefit from more options and choices,’ she said.

JTC had also said that it will aim to ensure price stability and achieve fair market value for the properties to be sold.

Singapore’s industrial property market is recovering well, with rising rents and demand as developers snapped up government sites put up for sale.

JTC will evaluate expressions of interest from would-be managers based on individual merit.

It is looking for managers with a proven track record of managing a listed or unlisted industrial Reit or property fund globally, or a Reit or property fund in any sector in the Asia-Pacific.

The proposed Reit is expected to be listed on the Singapore Exchange and may include an offering in the United States.

The deadline for submissions is June 1. Shortlisted parties will be invited to participate in later evaluation stages.

Source : Straits Times - 11 May 2007

Government to share extra sand import costs

To encourage importers to seek alternative sources of sand and granite, the Government plans to share some of the extra costs involved in importing these materials.

Announcing this yesterday at an industry event, Minister for National Development (MND) Mah Bow Tan said: “If you are buying from a different source … the raw material cost may be the same price (but) when you factor in the logistics and transportation, the final cost may be higher, so this is a risk and importers may not be so keen to diversify under normal circumstances.”

But the Government was willing to share the risk and make a commitment to purchase the sand at “a certain price” if importers are not able to sell their stock because of market fluctuations, he added.

The new scheme would mitigate the perceived risks, and encourage importers to seek alternative sources, he told industry executives at the Building and Construction Authority’s (BCA’s) Award night yesterday. Details from BCA are expected soon.

Singapore’s supply of the construction material was disrupted by Indonesia’s decision to ban sand exports in January, with the shortage hitting many industry players and sending prices skyrocketing.

Addressing industry sentiment that the new extradition treaty with Indonesia was likely to see a lifting of the ban on sand, Mr Mah said the two were not related.

“As the Indonesians have said, the sand ban was due to environmental reasons,” he pointed out. “We have indicated that we are very willing to deal with the environmental issue and the offer is still available. If we can work on that basis, I think there may be a resumption of the sand (supply), but I think we will wait and see what happens.”

But even as the situation with Indonesia is being monitored, Mr Mah said that alternate sources and reduced use has helped “restore stability and calmness in the market”. The cost of concrete came down this month to about $170 to $175 per cubic metre, from about $200 in March.

He also urged the industry associations in the private sector to “facilitate” sharing schemes with their players, even as progress payments from the Government are easing the woes of contractors in the public sector.

But diversifying supply was just one of the “prongs” in building a more resilient and sustainable construction sector, said Mr Mah. Another approach is to decrease the dependence on concrete.

Thus the MND is driving research and development efforts into suitable and economically viable alternatives to concrete through schemes such as a $50 million Research Fund for the Built Environment.

Mr Mah noted that some of the 13 proposals picked for funding support under this scheme are geared towards such alternatives.

Source : Today - 11 May 2007

En-bloc disputes

Your apartment is old and in a state of disrepair. Someone comes along and utters the magic words: En-bloc sale.

Hey presto! The value of your property zooms. Overnight, you become a millionaire.

But the spell does not mesmerise some of your neighbours. The lure of big bucks may not compensate them for what they are losing - big homes which they cannot afford to buy with the sale proceeds in today’s rising property market.

The friendly neighbours become enemies, facing off each other in court.

In March, a group of Farrer Court residents launched a ‘bad publicity’ campaign and alleged the place had bad fengshui so other owners would vote for the sale. The property has not been put up for en-bloc sale yet.

The figures tell the tale. The number of applications to the Strata Titles Board from home owners hoping to block the en-bloc sale of their estates has gone up.

In 2004, there were 10 applications. The number rose to 14 in 2005, according to a Straits Times report last August. The figure has already reached 32 as of last August.

Just last week, it was reported that some unhappy home owners at Horizon Towers tried to stop the en-bloc sale even though a developer had agreed to buy it for $500 million in January.

Their reason: The condo next door, Grangeford Apartments, is asking for $660m.

A couple at Waterfront View in Bedok also refused to accept the en-bloc payout and took the matter to the High Court last month.

The owners said the net proceeds were insufficient to fully repay the outstanding bank loan and fully return CPF monies withdrawn to buy the property. They failed in their bid to stop the development from going en bloc.

Industry watchers say greed is also a major factor.

Chesterton International’s head of research and consultancy, Mr Colin Tan, said: ‘No longer are properties treated as homes first. They are now treated as short-term investment products that can be traded like a commodity.’

Lecturer Christine Lim, 49, is worried about all the en-bloc talk going on in her estate, which is located in the West.

She said: ‘My estate may be old but it is still in a good condition. So, why is there a need to talk about going en bloc?’

About a third of the more than 100 en-bloc deals last year fell through, or are still in the market because the majority vote was not achieved or the project did not hit its reserve price, according to a Business Times report in February.

Credo Real Estate, which specialises in en-bloc sales, said it has noticed more resistance to en-bloc efforts of late.

Director Yong Choon Fah explained: ‘This is because property prices are moving up and replacement units are also harder to find as the units in the newer developments tend to be smaller.

‘And when you sell high, you also buy high.’
Source : The New Paper - 10 May 2007