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STELLAR economic growth in the past year may have investors smiling, but the Government is keeping a “tight watch” for potential signs of “overheating”— even as it revised its inflation forecast upwards.

Last month, the Monetary Authority of Singapore said inflation this year was expected to be at the upper half of its 0.5-per-cent-to-1.5-per-cent forecast range, and possibly as much as 2 per cent next year.

But yesterday, Trade and Industry Minister Lim Hng Kiang predicted that consumer prices could rise by between 1 and 2 per cent this year.

He said this yesterday while responding to five Members of Parliament’s (MPs) questions on the impact of rising business costs on Singapore’s competitiveness.

Citing last month’s “very high” inflation rate, Jalan Besar GRC’s Lily Neo wanted to know the impact of continued high inflation on Singapore’s economy and asked if restraining measures were in place. Holland-Bukit Timah GRC MP Liang Eng Hwa wondered if business costs would continue to rise “given the tight labour market and office space shortages”.

Mr Lim assured the House that the Republic remained well-positioned — with its lower costs vis-à-vis regional competitors — to attract foreign investments.

It also had a “very strong” pipeline of projects, particularly in the manufacturing sector where new chemical plants and wafer fabrication facilities are slated, he said.

For the first half of the year, inflation averaged between 0.5 and 1 per cent. But the Consumer Price Index (CPI) shot up in July by 2.6 per cent — a “blip” Mr Lim attributed to the impact of the Goods and Services Tax hike.

And even as inflation is set to rise for the second half of the year, it must be seen in context of the low inflation in the previous years — including the difficult economic conditions from 2001 to 2003.

Said Mr Lim: “If you ask me candidly, I’d say we have been enjoying practically 16 quarters of growth. In fact, I’m surprised our inflation numbers are as low as they are.”

Drawing comparisons to the pre-911 economic boom, Mr Lim pointed out that while unit labour cost rose by 5.8 per cent year-on-year in the first six months, it is “still 13-per -cent lower than in 2001″. Similarly, unit business cost for manufacturing increased 2.6 per cent year-on-year — which is still 11 per cent lower compared to six years ago.

“In the past three years, our CPI increased at an average annual rate of 1 per cent, while overall unit labour cost actually declined at an annual average rate of 2.2 per cent,” he pointed out.

Citing recent international surveys, Mr Lim added that Singapore “remains cheaper compared to other global cities in the region” such as Hong Kong and Tokyo.

“More importantly, competitiveness is more than just offering lower costs alone; it is about value creation. London, Tokyo and New York are high-cost locations, but they are thriving global hubs because they offer good value for businesses.”

In this regard, Singapore — with its pool of highly skilled talent, secure environment and “increasingly, vibrancy as well” — has many attributes “not easily replicated by other regional cities”, said the Minister.

Nevertheless, the Government has adopted a “proactive approach” to address the upward pressure on property prices and office rental rates, said Mr Lim, citing the efforts by the Ministry of National Development to increase transparency and supply.

Policy-makers are also working to contain the rising wage costs by not just easing the quota on imported labour, but also tapping female and mature workers.

Said Mr Lim: “The Government will continue to keep a tight watch on business costs. And most importantly, strengthen our competitive advantage and value creation to investors for Singapore to remain on its growth path.”

In a statement to the media, a Monetary Authority of Singapore spokesperson reiterated that “underlying inflationary pressures remain generally well-contained for the current advanced stage of the business cycle”.

The spokesperson added: “MAS’ monetary policy stance of a modest and gradual appreciation of the Singapore Dollar Nominal Effective Exchange Rate policy band remains in place.”

It will continue to “monitor closely the price and cost developments” and review the policy stance in October.

Source : Today - 28 Aug 2007

A slew of changes to the rules governing en bloc sales has been proposed to improve transparency and protect owners’ interest.

This follows a Law Ministry review of the relevant legislation and consultation with the public and industry players.

The amendments to the Land Titles Strata Act were tabled in Parliament on Monday.

The collective sale of Devonshire Lodge, worth S$37.2 million, is set to go before the Strata Titles Board in the weeks ahead.

Like many other cases, it has not been free from objections.

Some owners were unhappy about its valuation and the performance of the marketing agent handling the deal.

Jeffery Lai, Minority Owner, Devonshire Lodge, says: “Actually the whole team is new and they don’t know what to do about it, how to go about doing the so-called the Collective Sales Agreement, or CSA, and things like that…so it turns out that they’ve never done the DC charge on the units and I think they are very close to the buyers.”

Such complaints will be addressed by the proposed changes to the law.

Sales committees will be required to call for a general meeting to discuss issues like the appointment of a lawyer, property consultant and marketing agent.

The measures also seek to improve transparency in the en bloc sales process by providing regular updates on bids received and how sales proceeds will be divided.

Lawyers say these measures may address some issues, but more can be done.

Philip Fong, Partner, Harry Elias Partnership, says: “There are no regulations as to how much information is actually given to the owners, so they know enough to raise questions. So in that sense, what I think would be worthwhile to consider is for the appropriate authority to come up with a code of best practices and if there are deviations from these practices, then they must be justified by the sales committee.”

Owners will also be more involved in deciding who sits on the sales committee.

Under the new ruling, it must be formed by elected home owners at a general meeting of the management corporation.

And they have to declare any vested interests related to the deal.

Industry watchers say they favour regulations that help owners better understand the legal implications of en bloc sales.

These include having a lawyer present to clarify doubts when the owner signs the Collective Sales Agreement, and for key terms and clauses to be listed upfront in the legal document.

Owners who change their minds after signing the deal can also do so but only once and within a 5-day cooling off period.

The Law Ministry says the proposed amendments aim to provide additional safeguards, without making the en bloc sales process unduly onerous. - CNA/ch

Source : Channel NewsAsia - 27 Aug 2007

Majority sellers seek individual legal advice in face of potential lawsuit
Two weeks - that’s all the time the majority sellers of Horizon Towers now have to find a way to salvage the botched collective sale of their development.

If they fail to do so - by the ominous deadline of Sept 11 - each of the 255 owners who signed off on the en bloc sale, along with the sales committee members, will be sued for some $4 million each.

Faced with such a prospect, each majority seller is now understood to be seeking individual legal advice as to how to defend himself against the lawsuit.

Collectively, the sellers also need to decide if and how they should revive the agreement inked with the intended buyers - Hotel Properties (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - for the sale of Horizon Towers.

This comes as HPL and its partners make good on their threat to sue the majority sellers for failing to hold up their end of the deal.

Documents obtained by The Business Times show that the majority sellers, represented by Tan Rajah & Cheah, had received a letter last Thursday from HPL’s lawyers, Allen & Gledhill (A&G). The letter alleged that the sellers are in breach of their agreement, for failing to ‘do everything in their power’ to obtain a collective sales order from the Strata Titles Board (STB) approving the sale of Horizon Towers.

STB had on Aug 3 thrown out the sellers’ application for a collective sales order, on the grounds that it was defective. STB said the sellers had failed to include certain documents in their application and, hence, failed to comply with requirements laid out by the law. The board’s decision meant the en bloc sale of Horizon Towers could not be completed by the agreement deadline of Aug 11.

HPL and its partners then asked the sellers to extend the en bloc sale completion deadline by four months - to Dec 11 - during which time, they wanted the sellers to appeal the STB’s decision and file a fresh application for a new sales order, if necessary.

The sellers said they needed time to consider what steps they should take - but have not reverted since.

The lack of response has now prompted HPL and its partners to take action. ‘Our client is not prepared to wait indefinitely for (you) to extend the (deadline),’ A&G’s letter to the sellers said.

HPL and its partners commenced proceedings in the High Court on Thursday, declaring that the majority sellers are in ‘repudiatory breach of contract’. The buyers are demanding that the sellers extend the original deadline and ‘do everything necessary to obtain the collective sales order’.

HPL and its partners have given the sellers until Sept 11 to do so - failing which, they would sue each of the sellers, for a total of between $800 million and $1 billion. With more than 255 owners - of 173 units who agreed to the sale - being named as defendants, it means each of them could be sued for up to $4 million each.

But should the sellers do as demanded - and a collective sales order is eventually obtained - HPL and its partners will honour their end of the bargain, that is, they will buy the 99-year leasehold Horizon Towers for a total of $500 million.

For their part, the majority sellers have denied allegations that they breached the sales agreement. They have also refused to extend the deadline by four months. But, they have appealed to the High Court to review the STB’s decision.

The sellers, however, declined to say what their next move would be.

Some sellers whom BT spoke to said they would now be reviewing the various options ahead of them, and seeking legal advice as to how to defend themselves against the lawsuits they each face. They will meet on Sept 7 to discuss their fate.

The majority sellers - who make up some 84 per cent of the owners of Horizon Towers - had in February agreed to sell the development en bloc to HPL and its partners.

The $500 million price tag would have meant that the owners of the 199 apartments would have pocketed about $2.3 million each and the owners of the 11 penthouses at least $4 million each.

Still, it’s believed some of the sellers later regretted agreeing to the en bloc sale, when the likes of The Grangeford estate nearby sold subsequently for more than double the Horizon Towers price, on a per sq ft basis.

Some minority sellers - those who didn’t agree to the sale - also filed their objections to the sale, on various grounds.

It was after listening to some of the objections filed that the STB decided not to grant the collective sales order.

The minority sellers are not being sued, since they did not ink the sales agreement with HPL and its partners.

Source : Business Times - 27 Aug 2007

Faced with an increasingly strict set of naming rules, developers are forced to get creative with foreign terms, coined-up words

IF PROPERTY developer Lippo Group had its way, the condominium it is building in Kim Seng Road would be called Trinity rather than Trillium.

But the group’s original application for ‘Trinity Towers’ was deemed too ‘religious’ by the authorities, revealed Lippo’s executive director Thio Gim Hock.

‘It was rejected because it had religious connotations. They even said not to bother to appeal,’ he said. The three-tower project was renamed Trillium, after the name of a three-petal flower.

Now, as Lippo and other developers gear up to launch a slew of new condos, they are cracking their heads over what to name them. It may seem like a small problem, but unexpected rejections such as the one Lippo received can make the task surprisingly knotty.

Indeed, the name game is so important that Mr Simon Cheong, head of luxury developer SC Global, personally names each of his projects - from the iconic The Boulevard Residence to the latest Marq on Paterson Hill.

Larger developers, such as Frasers Centrepoint and City Developments (CDL), pick names from proposals that sometimes number in the hundreds.

At CDL, the final say for condo names lies with executive chairman Kwek Leng Beng. But suggestions are pooled from all sources, including an occasional staff competition. Even Mrs Kwek reportedly put in her two cents’ worth for CDL’s latest project, Cliveden at Grange.

The main reason naming a condo is not as easy as just calling it The ABC lies in a surprisingly strict set of rules for building and estate names, outlined by the Street and Building Names Board (SBNB).

For instance, condo names, according to a fairly recent rule change by SBNB, must not end with ‘park’ - in case the project is mistaken for an actual park.

But more than 100 condos already have that word in their names, including older estates Bedok Park and Clementi Park. To get around the rule, developers have recently taken to using the French word ‘parc’ instead and putting it in front of the name, such as in Parc Emily.

SBNB also advises against using ‘place’ and ‘link’ because the terms are also used for road names. ‘Tower’ can be used only for buildings of at least 30 storeys, and ‘villa’ only for landed houses. And ‘city’ - such as in the 910-unit City Square Residences or the 600-unit Citylights - is applicable only for developments ‘on a grand scale’, says SBNB.

With more and more words struck out over the years, it is no wonder many developers now find it easier to come up with a whole new one.

This has led to the latest rage in condo-naming: coined words, such as in The Lumos in Leonie Hill and The Marq.

‘It’s partly because developers are running out of names, and partly because of the new guidelines on naming projects,’ said Ms Diana Kuik, executive director of Sim Lian Land. ‘It is now a very ‘in’ thing to do as it gives the project a modern feel.’

Sim Lian’s Viz at Holland is a good example. ‘The condo is near Holland Village, and there’s a lot of buzz and activity in the area,’ said Ms Kuik.

‘So we combined ‘village’ and ‘buzz’ to get ‘Viz’. It’s short, easy to remember, and hip-sounding.’

But newly coined names are only one of the current trends in a market where condo names appear to come and go in waves of fashion.

In fact, Ms Kuik said it is often possible to distinguish a condo’s age from its name.

‘If you look at a name, you can tell which era the development was built in,’ she noted. ‘Anything with ‘garden’ or ‘view’ is likely to be in the 1980s. If it’s ‘vale’, probably the 1990s, and if it starts with ‘The’, it’s after 2000.’

Other current naming fads include the almost ubiquitous ‘@’ sign - officially known as the ‘commercial at’ and unofficially used in every attempt to be trendy. At least 30 condos in Singapore boast this symbol. Almost all are new projects that surfaced after the dot.com boom.

Property watchers have also observed that the recent boom in high-end condos has led to a proliferation of names using ‘residences’. Indeed, about half the 50-odd condos in this category - including Marina Bay Residences and The Orchard Residences - are located downtown or in the prime districts of 9 to 11.

A more longstanding trend is foreign words. These have long been de rigueur among developers, who seem to think they add a certain je ne sais quoi (meaning ‘an indescribable attribute’) to a moniker.

For instance, there are 34 condos here with names that start with ‘Casa’, the Spanish word for ‘house’. Another 21 begin with ‘Le’ or ‘La’, the French words for ‘the’.

Some projects are named after actual foreign locations, such as Cote d’Azur in Marine Parade, which sits uncomfortably on the tongues of most Singaporeans.

But while foreign names might sound more chi-chi, they are also more chancy.

One developer related the story of how SBNB once rejected a French name for a condo because the word sounded like ‘danger’ in English.

‘We wanted to name the condo ‘Perle’, which means ‘Pearl’ in French,’ the developer said. ‘But the board said it sounded too much like ‘peril’, so we had to change it.’

Interestingly, while SBNB is sticky on grammatical accuracy in the use of ‘Le’ and ‘La’ - they refer to male and female nouns respectively in French - it appears unconcerned about condo names that begin with ‘De’ or ‘D’.

‘De’ is a French proposition that usually means ‘of’ or ‘for’. It is used as ‘D’ only if followed by a word starting with a vowel.

But Singapore’s condos include such grammatical eyesores as D’Dalvey and D’Hillside Loft. The Straits Times understands that these are considered to be coined words, rather than foreign derivatives, and thus allowable.

As developers try to stay on SBNB’s good side, straightforward combinations of road names and numbers are also getting popular. The latest trend is names beginning with ‘One’, such as One Shenton, which 14 condos have adopted.

But this does not mean developers have no room for creativity, as shown by the unusual 2 rvg and 66 OGR, which stand for River Valley Grove and Orange Grove Road, respectively.

Even if a name does not meet with contention by SBNB, other unexpected circumstances may force it to be changed at the last minute.

Industry insiders, for instance, know that Pharos on the Waterfront was the original name for the CDL condo near the Singapore River that is now called Tribeca. But what they might not know is that the name was changed mere weeks before the condo’s launch because CDL discovered that Pharos referred to a lighthouse that had been destroyed by an earthquake.

‘We didn’t want anyone to make the association,’ said CDL general manager Chia Ngiang Hong with a laugh.

At the end of the day, however, a project’s name is probably one of the lowest factors on a buyer’s list of priorities, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. ‘The product quality and returns potential are the top things people look at. In the final evaluation, buyers almost never consider names.’

Source : Straits Times - 27 Aug 2007

S’pore buyers can preview luxury liner as marketing drive makes stop here

DO YOU feel like you have been living too long in one place and are now longing and pining for life on the high seas? Then try splurging some of that hard-earned money on a plush home onboard a luxury liner.

Four Seasons Ocean Residences

It is a simple - albeit opulence-laden - concept. Your multimillion-dollar home is part of a lavish vessel that plies the world’s oceans, calling at exotic ports along the way.

As the shipboard homes are mega-pricey, there is no chance of being stuck at sea with any of the great unwashed with their sub-prime mortgages - and you can always count on a great ocean view.

Singaporeans can check out the concept next month, when Savills International unveils The Four Seasons Ocean Residences - 112 private residences on a 219m luxury vessel with staff and high-end services - at the Four Seasons Hotel here.

The homes range in size from 797 sq ft to nearly 8,000 sq ft. Most are two- and three-bedders, with features that include floor-to-ceiling windows, living room areas, master bedroom suites with walk-in dressing rooms and bathrooms en suite, kitchens, and staff entrances.

Prices range from 2.885 million euros (S$5.97 million), or about 3,500 euros per sq ft, for a 797 sq ft one- bedder to 30 million euros for a 7,860 sq ft four-bedroom, three-storey penthouse.

The liner - due for completion in 2010 - will offer plenty of entertainment, including four restaurants, an 11,000 sq ft spa, a style casino, a supermarket, a wine cellar and a driving range.

There will also be concierge service and an excursion coordinator to arrange for those exotic and expensive tours. Yearly service charges start from 72,000 euros.

The liner will average about 250 days in port a year and sail to places like Antarctica and events such as the 2012 Olympics in London and the F1 Grand Prix in Monaco.

Developer BV International Ocean Holdings, a joint venture between Bayview Financial and Ocean Development Group, picked Singapore as one of the centres to promote the floating condo.

‘We are focusing on a very select group of people at the highest socio-economic level,’ said Mr Danny Warman, vice-president of Bayview Financial, a privately held United States-based real estate investment and mortgage finance company.

‘Singapore definitely has a significant amount of wealth. It’s one of the most important financial centres in the world,’ he said.

The marketing campaign started in London in May and then moved to New York and South Africa. Singapore will be the first Asian stop.

However, keen buyers can select units only at four global sales events, starting in Hong Kong on Sept 11 to 12. The other ones will be in a city in Europe, the Bahamas and the US.

‘The beauty of it is that owners of the residences would be able to travel and explore the world without having ever to leave their home,’ said Mr Warman.

Because the developer wants to have ‘global diversity’ on board, it will also be marketed in places such as Tokyo, Moscow and Mumbai.

There is only one other floating condo liner - The World of ResidenSea, which set sail from Oslo in 2002 with about 70 residents on board. There were reports at the time that it had trouble selling its residences.

More than a decade later, the market has changed, and more of these floating residences are likely to come. Mr Warman said they are selling a new product with strong branding. ‘As soon as we sell out this one, we will do another one,’ he said.

Source : Straits Times - 27 Aug 2007