PM upbeat about Singapore economy

PM upbeat about Singapore economy


He is confident Singapore will be able to weather uncertain global outlook


SINGAPORE is sailing into choppier waters amid uncertainty in the global economy, but Prime Minister Lee Hsien Loong is confident of Singapore’s economic prospects.


In his annual May Day message, Mr Lee sketched out the uncertain outlook due to the financial crisis in the United States.


But he maintained: ‘However the US financial problems play out, I am confident of our ability to cope…our economic fundamentals are sound and we are in a strong position.’


Buoyant industries such as tourism, construction and marine engineering will buffer Singapore from the effects of a US recession, he said.


The economy is still on track to grow by 4 per cent to 6 per cent this year. The job market is also expected to be full of jobs chasing workers.


‘In both manufacturing and services, many vacancies are waiting to be filled,’ the Prime Minister said.


Latest job figures released yesterday buttress this point.


They show that a record 68,400 jobs were added to the economy in the first three months of the year, exceeding the 62,500 jobs created in the previous quarter and 49,400 in the same quarter last year.


Still, despite the job boom, the unemployment rate climbed from 1.7 per cent in December to 2 per cent in March.


HSBC Bank economist Robert Prior-Wandesforde attributed this phenomenon to an expanding pool of job seekers, possibly a result of more foreigners seeking jobs here.


In his speech, Mr Lee also urged workers and employers to aim for ’sustainable’ wage changes this year, in anticipation of a year ahead that will be ‘much more challenging’ than 2007 had been.


‘Realistic settlements will address the concerns of workers, and yet allow companies to respond quickly to sudden changes in the economic environment,’ he said.


For now, the economy is still doing well although ‘dark storm clouds have gathered’.


Pointing to the sub-prime mortgage loan crisis in the United States, Mr Lee said: ‘We must watch closely how the situation in the US unfolds, and be ready to respond if things take a turn for the worse.’


Addressing the hot issue of rising inflation, Mr Lee said Singapore cannot shield itself completely from this worldwide phenomenon.


But the strong Singapore dollar has helped to maintain the purchasing power of workers’ salaries, he noted.


The Prime Minister also assured the people about the food situation here.


Singapore has enough supplies of food, notably rice, and ‘we can buy what we need from many sources’, he said.


Also, help will be given to those struggling to cope with the higher cost of living.


Relief measures from the Government total $3 billion, ranging in form from tax rebates and Medisave top-ups to the GST offset package and Growth Dividends given to every Singaporean from the last Budget surplus.


The first payout of the Growth Dividends was yesterday, with a second due on Oct 1.


Noting that Singapore’s strength is the strong cooperation among unions, employers and the Government, Mr Lee said this enabled them to take a ‘rational approach’ and act in Singapore’s collective best interest.


PM Lee added: ‘The external turbulence will put our solidarity under stress.


‘But we must not end up arguing among ourselves, or, worse, quarrelling over how to divide what we have, or else we will all be worse off.’


Source : Straits Times

PM Lee cautions S’poreans to prepare for economic slowdown

PM Lee cautions S’poreans to prepare for economic slowdown


SINGAPORE : Prime Minister Lee Hsien Loong has cautioned Singaporeans to be prepared for a slowing economy in the next few quarters.


Speaking in Malay, Mandarin and English at the May Day Rally, Mr Lee told workers that Singapore’s economy may have done well so far in 2008, but developments in the US economy may still have an impact on the country.


Mr Lee gave the stark reminder when he joined more than 1,500 workers at Labour Day celebrations.


Mr Lee said the US sub-prime crisis has spread through its banking system and beyond. While the immediate danger is over, there is still the ripple effect.


He painted three scenarios of how the US economy might affect Singapore.


The first scenario is a mild recession but with growth at the end of the year.


Second, if the US problems persist, it’ll slow Singapore’s growth as well, even going into 2009.


The third scenario is a severe US downturn which most analysts agree is unlikely to happen.


Mr Lee believes the first two scenarios are more likely.


“For this year, we can still achieve a 4-6 percent growth which MTI (Ministry of Trade and Industry) has projected. But remember, the 4-6 percent (growth) is for the whole year. The first quarter was good, (but for the) second, third and fourth quarters, prepare for a slowdown (which) may last into next year. This is one major uncertainty affecting our economy,” said the prime minister.


“Employers and workers have to bear this in mind when you negotiate your CAs (collective agreements) this year. You have to ensure that any built-in wage increases are sustainable and if the companies are still doing well, reward the workers with higher variable bonuses, and keep it flexible,” he added.


Another concern is the rising cost of living.


Mr Lee said the government had just given out the first instalment of Growth Dividends to some 2.4 million Singaporeans. The second payment is due in October.


Overall, each household can expect some S$5,000 to cope with the rising costs.


On the issue of foreign labour, PM Lee said foreign workers are willing to work longer hours to keep the airport, factories and hotels open 24 hours a day throughout the year. That gives Singapore a more competitive edge, he said, adding that keeping foreign workers away is not the answer.


“It’s because we have the foreign workers here, that’s why our economy has grown, that’s why the employers, …companies are here, and that’s why Singaporeans have jobs. You send away the foreign workers,… a few hundred thousand (of them), Singaporeans (won’t) go into those jobs, the companies will close or leave. I think the Singaporeans unemployment will go up, and hardship will go up,” said PM Lee.


For those who have difficulty finding jobs, Mr Lee said there are many schemes to help them get employed. For example, the Workfare Income Supplement gave out S$300 million this year, benefiting some 300,000 low-wage workers.


More jobs are also on the horizon, with some 10,000 available at the Marina Bay Integrated Resort. – CNA /ls


Source: Channel NewsAsia

URA closes tender for transitional office site at Scotts Road

URA closes tender for transitional office site at Scotts Road


SINGAPORE: The Urban Redevelopment Authority has closed the tender for the transitional office site at Scotts and Anthony Roads.


It was launched for sale on 28 February on a 15-year lease.


The land parcel attracted four bids with Sun Venture Investments putting it the highest at S$32.9 million.


Scotts Development was next with a S$32 million offer.


Centurion Scotts tendered for the site at S$24.8 million and Hersing Corporation at S$22.8 million. – CNA/vm


Source: Channel NewsAsia

Transitional office site gets top bid of $226 psf ppr

Transitional office site gets top bid of $226 psf ppr


Offer is 7% below last week’s top bid for nearby plot




THE Urban Redevelopment Authority (URA) has closed the tender for a transitional office site at Scotts Road/ Anthony Road – receiving a top bid of $32.99 million.


This works out to be $226 per square foot per plot ratio (psf ppr) for the 97,284.1 sq ft site which has maximum permissible gross floor area of 145,926.2 sq ft.


Four bids were received with the highest bid coming from Sun Venture Investments, a subsidiary of interior design and build firm DB&B Developments Pte Ltd. Its bid was 3 per cent higher than the next highest bid of $32 million from Scotts Development Pte Ltd.


DB&B chief executive Billy Siew Kim Leng said that if it is awarded the site, it intends to lease the building fully. Already, Mr Siew said that it is talking to two potential tenants who may lease the entire building.


While Mr Siew did not say who these might be, a check with the DB&B website reveals that its current clients include ABN Amro Bank and Korea Development Bank.


If awarded, this will be the first development project for DB&B. Still, Mr Siew said this is the normal progression in terms of ‘vertical integration’ for its business.


He also said he was bullish on the office sector and is setting its sights on a monthly rental of $9.50 psf.


Cushman and Wakefield managing director Donald Han agreed that the site could eventually attract big companies. ‘I think corporations would be favourable to an address like this.’


He also said that as long as the locations were good, there would still be developers interested in such sites. ‘The entry level is low so it would be good for new developers,’ he added.


The potential over-supply of new office space after 2010 is not likely to affect demand for this site either. Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘The future supply is likely to be more spaced out than originally expected due to construction delays.’


Even so, Mr Ku estimates that rentals for transitional office space in the Scotts Road area is more likely to be around $7 psf a month.


While the DB&B’s bid is about 7 per cent lower than the top bid for the neighbouring transitional office site last week, Knight Frank director (research and consultancy) Nicholas Mak believes it is very likely that the government will award this site to DB&B, ‘taking into consideration that this average price of $226 psf ppr is slightly higher than the price paid for the first transition office site at Scotts Road last August’.


He added: ‘In an effort to ease the office space crunch, up to now, the government has awarded four transition office sites, which could yield about 650,000 sq ft of office space.’


Source: Business Times

Developers vie for top ‘green’ honours

Developers vie for top ‘green’ honours


Keppel Land wins its first platinum for Ocean Financial Centre, slated for completion in 2011




THE battle for the Green Mark platinum award is heating up.


Last year, City Developments fired the first salvo, claiming two of the seven platinums, the highest rating given out by the Building and Construction Authority for environmental friendliness.


But this year, rival developer Keppel Land has bagged its first platinum for Ocean Financial Centre, a massive 43-storey office block to be built on the site of the present Ocean Building and Ocean Towers. This is also the first given for an office tower, said Tan Swee Yiow, chief executive officer of Singapore Commercial at Keppel Land.


City Developments had won two platinums last year and three more this year – two condominium projects, Cliveden and Solitaire, and the Tampines Grande office building.


But because of its more complex energy needs, getting the Ocean Financial Centre certified platinum was more difficult than for a similar residential tower or commercial building, Mr Tan said in an interview.


‘If you want to talk about energy savings, probably the easiest way is to build a lot of concrete walls up. But the challenge is how to make an iconic architectural statement and at the same time achieve energy savings,’ he said.


The green features that helped Keppel Land clinch the platinum award could add ‘5 to 10 per cent’ to development cost, said Mr Tan, declining to be more specific because tenders have yet to be called. While the features will not come cheap, Mr Tan said that ‘at this moment we can’t say that we can charge a premium for its greener features’.


‘To us it’s a necessity. This is a historical site, so it’s very visible and the extra cost is justifiable. Our client mix will also appreciate the features,’ he added.


The Ocean Financial Centre is slated for completion in 2011 and will offer 850,000 sq ft of prime office space. It will be a redevelopment of Ocean Building and Ocean Towers, now on the same site.


Ocean Building has already been torn down; some of the debris will be recycled for use in the new building. Ocean Towers will be demolished later to make way for a five-storey car park and grand plaza integrated into the entire Ocean Financial Centre complex.


Mr Tan said that among its extensive energy-saving features was a 400-sq-m roof-mounted solar panel array. Along with efficient lighting panels and air conditioning, this would save nine megawatt hours a year, enough to power a 50,000-sq-m office space.


The complex will also have a roof-top garden and rainwater-harvestin g features which could save 42 million litres of water a year, Mr Tan said, enough to fill 21 Olympic-sized swimming pools.


As well, a small chute running down the middle of the tower can be used for waste paper disposal, he said, adding this was an ‘in-house’ innovation probably not replicated elsewhere as yet, adding there would be sprinklers and safeguards so that a carelessly discarded cigarette butt would not cause an inferno.


The company is aiming to achieve at least Green Mark gold or gold plus ratings for all future projects, he said.


Source: Business Times

JTC offers 1.9ha one-north site for sale

JTC offers 1.9ha one-north site for sale




A COMMERCIAL site slated for mostly office use near the existing Buona Vista MRT Station has been made available for application under the reserve list.


The 1.9-hectare site can yield close to 1.3 million square feet of gross floor area, of which 21,528 sq ft are for ground-floor retail use.


The 99-year site is in the biomedical hub of one-north and is being offered for sale under the Government Land Sale Programme for first-half 2008 by JTC Corporation.


The plot could be worth about $500 million assuming it fetches $400 per square foot of potential gross floor area.


JTC Corp said the plot will be developed into a high-rise commercial building that will provide office space for the business support companies of the research institutes at one-north. The plot is next to a new MRT station that will open under the Circle Line in 2010.


Cushman & Wakefield managing director Donald Han said the development, which will have about one million sq ft net lettable area, will benefit from spillover office demand from the surrounding biomedical facilities, as well as commercial office tenants and government departments relocating out of the Central Business District.


‘This is a sizeable investment, so bidders will be the big boys potentially looking at developing a project on a built-to-suit basis for anchor tenants. The end-product will be very suitable for sale to a Reit. It’s pretty untested ground, but the plot could fetch about $350-$420 psf per plot ratio (psf ppr). The breakeven cost will be about $1,000 to $1,100 psf of net lettable area,’ Mr Han added.


Colliers International managing director Dennis Yeo estimates the site to be worth a slightly higher $400-$500 psf ppr, reflecting a breakeven cost of around $1,200 psf of net lettable area. ‘Assuming an average rent of about $7 psf, the net yield will be about 5 to 6 per cent,’ he added.


Source: Business Times

Prepare for external turbulence

Prepare for external turbulence


LAST year was a good year for Singapore and its workers. The economy grew robustly, many jobs were created and workers enjoyed good wage settlements. In unionised companies, bonuses were the highest since 1990. The mood was upbeat.


This year will be much more challenging. Our economy is still doing well, but dark storm clouds have gathered. The sub-prime mortgage loans crisis in the United States has become a much broader problem. A US recession has probably already started. The question is how long, and how severe, the downturn will be.


The US government has acted boldly to stabilise the economy. They hope growth will be back on track by the second half of this year. But there is a possibility that the financial problems will worsen, and push the US economy into deeper trouble. Then Europe and Japan would be more seriously affected, and the impact on Asia and Singapore much more severe. This is one big uncertainty that we must be prepared for.


Our first priority is to keep the economy competitive and growing. This means continually upgrading and diversifying the economy. We are strengthening our ties with the vibrant Asian economies and tapping new areas of growth. Industries like tourism, construction and marine engineering continue to do well, and will buffer us from the effects of a US recession. We still expect to grow by 4-6 per cent this year. But we must watch closely how the situation in the US unfolds, and be ready to respond if things take a turn for the worse. We have the resources and the ability to do so.


With continued growth this year, the labour market will remain tight. In both manufacturing and services, many vacancies are waiting to be filled. As major projects like the integrated resorts come on stream, many more jobs will be created, from front-line operations to supervisory and managerial positions.


In this environment, the vast majority of workers with useful skills and qualifications will have no difficulties getting a job. They should take advantage of the many opportunities for continuous education and training to refresh their skills and knowledge.


But older, low-wage workers remain vulnerable. They are less nimble in learning new skills and need more structured training. The Government is doing all it can to help them. We are working with the NTUC to help older workers upgrade their skills, become more employable and do better for themselves. Through the Workfare Income Supplement, we are rewarding those who make the effort by topping up their takehome pay and CPF savings.


Another major issue is the rising cost of living. Like other countries, Singapore is affected by higher global inflation. We cannot insulate ourselves completely from worldwide price increases. However, the policy of the Monetary Authority of Singapore to keep the Singapore dollar strong has moderated the impact of imported inflation.


Singaporeans are understandably concerned by the recent sharp increases in food prices, including essentials like rice. We need not worry about a food shortage, because we have adequate supplies and can buy what we need from many sources. At the same time, we can and will directly assist those who are adversely affected by the higher cost of living. This is why this year’s Budget included the Growth Dividends, personal income tax rebates, Medisave top-ups and many other relief measures, targeted especially at lower- and middle-income Singaporeans. Together with measures such as the GST offset package, the Government will be giving out more than $3 billion to Singaporeans this year.


Low-wage workers have already received their Workfare Income Supplements. On April 30, all Singaporeans received their first payout of Growth Dividends. A second payout will come on Oct 1. Altogether, a low-income family living in a three-room HDB flat can expect benefits of around $5,000 this year, far larger than the increase in their cost of living due to higher inflation. Middle-income families will also enjoy benefits that will offset the increased cost of living.


I hope that workers and employers will take into account these important factors in their wage settlements this year. They should aim for sustainable wage adjustments, and put increases into variable bonuses as far as possible to make our wage structure more flexible. Realistic settlements will address the concerns of workers, and yet allow companies to respond quickly to sudden changes in the economic environment.


Singapore‘s great strength in tackling these challenges is the strong tripartite cooperation we have built up over the years. Because of the mutual trust among tripartite partners, we are able to take a rational approach.


We must do our best to consolidate and strengthen this partnership. The external turbulence will put our solidarity under stress. But we must not end up arguing among ourselves or, worse, quarrelling over how to divide what we have, or else we will all be worse off.







Singaporeans are understandably concerned by the recent sharp increases in food prices, including essentials like rice. We need not worry about a food shortage, because we have adequate supplies and can buy what we need from many sources.


Source: Straits Times

Not feasible to raise en bloc consent level to 99%

Not feasible to raise en bloc consent level to 99%


I REFER to the letter ‘Raise en bloc consent level to 99%’ by Ms Susan Prior (April 19) .


Her letter seems to me to be a way of asking the relevant government authorities to revert to the 100 per cent consent ratio for collective sales. How so?


For apartment buildings and condominiums with 50 units or fewer, a 99 per cent consent ratio means that 49.5 units have to agree to the collective sale.


As this is absurd, rounding up to the nearest whole figure means 50 units, that is, 100 per cent. Similarly, for developments with 99 units or fewer, a 99 per cent consent ratio means 98.01 units. Rounding up means that 99 units have to agree, or 100 per cent again. Over the years, how many projects that had been sold collectively had 99 units or fewer each?


I would say a significant number, going from my clippings of such reports published in the papers.


If Ms Prior’s suggestion is adopted, these developments would not have succeeded in being sold collectively.


However, I do agree that fairly new condominiums should not go under the en bloc hammer. My proposal is for the relevant authorities to consider disallowing buildings less than 20 years old from being demolished, unless there are extenuating circumstances, like a structural defect.


This does not prevent developers from buying and refurbishing them via a collective sale if they find that option financially viable.


Secondly, to allow for urban renewal to continue but at a more gradual pace, the consent ratio could be amended as follows: Buildings 20-24 years old (80 per cent); 25-29 years old (75 per cent); 30-34 years old (70 per cent); 35-39 years old (65 per cent); more than 40 years old (60 per cent).


Ace Matthews







‘Why not put an immediate stop to this entire flawed, resource-wasting, socially divisive process and revert to a… supply-and-demand property market situation?”


MR DENNIS BUTLER, responding to a letter by Madam Ong Boot Lian calling for an end to the collective property sale mediation process


Source: Straits Times