/ Archives /

NEWS HIGHLIGHTS - 2 TO 8 JUN 2003

Government

New scheme for sale of food from vans

The URA has launched a new one-year pilot scheme that will allow vans to be stationed at carparks to sell food and beverage. Five carparks - Orchard Road (Somerset MRT station), Queen Street (Bugis Village), Kallang Road (Lavender MRT station), North Bridge Road (Bugis MRT station) and Angullia Park (Far East Shopping Centre)- have been designated. Hours of operation are between 7am and 10.30 am daily and rents range from $190 to $280 per month. The vans are allowed to sell pre-cooked food only. Operators who are successful in their application can start from 1 July. - 3 Jun 2003

Economy/Finance

NUS Consulting estimates one point drop in GDP growth if visitor arrivals fall 25%

NUS Consulting estimated that a 25% decline in visitor arrivals this year will reduce the GDP growth by one percentage point and raise the unemployment rate by about 1.5 percentage points. However, if the visitor arrivals fell by 40%, GDP growth will be trimmed by 1.7 percentage points and the unemployment rate will increase by 2.3 percentage points. In absolute terms, the 25% and 40% declines in visitor arrivals will cause the GDP to lose $1.6 billion and $2.6 billion respectively. - 6 Jun 2003

MAS survey: economy to grow by 1.5%

In its latest quarterly survey of professional forecasters, the MAS said that economists expect the economy to expand by 1.5% this year, down from the 3.9% growth forecasted earlier. The 1.5% is at the mid-point of the official forecast of 0.5-2.5%. For the second quarter, economists surveyed expect the GDP to fall by 1.9% year-on-year largely because of the Severe Acute Respiratory Syndrome (Sars) and the slowdown in manufacturing activity. The commerce sector is expected to shrink by 4% in the second quarter. - 4 Jun 2003

Highest write-off for credit card debt in April

For the month of April, banks wrote off $15 million in credit card debt. This is the highest monthly amount ever recorded. Rollover balances (amount of debt not cleared at the end of the month) have also risen, from $1.8 million in April 2001 to $2.4 million in April 2003. These figures reflect the lacklustre economy and rising unemployment. - 4 Jun 2003

Investment

Meritus Negara to be put up for sale

The Meritus Negara Singapore hotel in Claymore Road will be put up for sale by public tender. The valuation of the 198-room hotel is $82 million but sources believe that the bidding would be 10-15% higher than the valuation, considering the prime location for a hotel or private residential redevelopment on the site. The latter use is possible as the URA relaxed the hotel zoning guidelines in August last year. The $82 million translates to $744 psf/plot ratio based on the site area of 39,328 sq ft and a plot ratio of 2.8. - 4 Jun 2003

Pacific View up for en bloc sale

Pacific View in Pasir Panjang Road has been put up for en bloc sale. The sale is expected to fetch $24 million to $28 million or $316-$369 psf based on the strata area of 75,950 sq ft. The low-rise condominium has a site area of 62,239 sq ft and a plot ratio of 1.4. - 3 Jun 2003

Asset Securitisation/REITs

CMT's fixed-rated notes receive AAA ratings

CapitaMall Trust's (CMT) US$72 million fixed-rate notes were rated as "AAA" by international ratings agency Fitch. The proceeds of the notes will help finance CMT's purchase of IMM Building in Jurong for a total price of $264.5 million. It will be funded by the issue of 119.8 million additional CMT units and up to $147 million of debt. - 7 Jun 2003

Plaza Singapura may be included in CMT: sources

BT sources said that CapitaLand's Plaza Singapura may be included in the CMT's portfolio within the next two years. The freehold shopping centre has committed occupancy of over 90% after signing up John Little and Marks & Spencer. Other new tenants in the mall include Carrefour, Best Denki and Spotlight. At the end of last year, the property was valued at $673 million or $1,419 psf based on the net lettable area of 474,074 sq ft. Sources said the earnings before interest tax depreciation and amortisation yield is about 6.5%. - 6 Jun 2003

Residential

Good response to Chip Bee Gardens work-live project

JTC Corp's pilot work-live project at Chip Bee Gardens was well received as all eight units in the first-phase have already been tenanted. It has also received good response for the 11 refurbished units in phase two, which will be ready by August, with one unit already taken up and "keen interest in remaining units". JTC was appointed master tenant of Chip Bee Gardens by the SLA in July last year. The estate comprises 349 units of terrace houses, 40 apartments and 20 retail shops. The units are between 1,313 sq ft and 1,421 sq ft in size, and cost $2,630 to $2,830 a month. The rental fee includes service and conservancy charges and unlimited broadband access. - 5 Jun 2003

More new launches and relaunches on the way

Clydes Residence, a freehold project in Farrer Park, which comprises 48 apartments, was launched at $600 psf in the weekend of 7-8 June. NTUC Choice Homes is planning to launch its 579-unit condominium project in Ang Mo Kio called Grandeur 8. Far East Organization (FEO) will launch at least four 99-year leasehold projects this year:

• Central - its home-office project along Singapore River and above the soon-to-open Clarke Quay MRT station. Central will have shops, cafes, an office tower and 347 apartments. The apartments, mostly 500 to 800 sq ft, can be used as offices.
• Astor in Kembangan - 55 units
• Orchard Scotts in Cairnhill - only 150-190 units will be for sale · Lakeshore, near Lakeside MRT station - 850 units

FEO expects to sell 1,800 private homes and executive condominiums this year, and estimates that total new home sales will be 5,000-5,500 units. With the pick-up in sales activity in the past few weeks, developers seemed keen to clear the unsold homes in their projects at lower prices. It was reported that prices of units at Gardens At Bishan were reduced by 10-15% to $500 psf compared to last year and some 60 units were sold. The average prices of Arris and Alessandrea were also reduced by around 10% and 5% respectively. - 3 & 4 Jun 2003

Project sales update

Sold to date:

• Icon - 454 sold out of the 556 units launched
• Gardenvista - 50 units sold out of 84 units launched

In the weekend of 31 May to 1 June, the sales were as follows:

• The Linc - Keppel Land's freehold project; 10 units sold at the soft launch. It was officially launched at the average price of $790 psf on 7-8 June.
• Regal 35 - Summer Investments' freehold project, five units sold at the public launch
• Rio Gardens - Hoi Hup's freehold project, five units sold at the soft launch

- 3 & 5 Jun 2003

HDB

23% more HDB owners downgraded to smaller flats in 2002

HDB statistics show that a total of 5,523 households moved to smaller homes in 2002, compared with 4,475 in 2001 and 4,342 in 2000. Between 2001 and 2002, the number rose by 23%. According to property agents, the number of downgraders seems to be higher now than during the Asian financial crisis. The two reasons cited for this trend are "economic downturn and job uncertainty", and "families with grown-up children who have moved out of the family home". For private property owners, a lower number of 2,343 bought resale flats in 2002, compared to 2,519 in 2001. However, this does not necessarily mean they are downgrading since they can still retain their private homes. - 5 Jun 2003

Industrial

Singapore's manufacturing sector contracted in May

The Purchasing Managers Index (PMI) in May contracted by 0.5 point over the previous month's to show a reading of 49.4. The electronics sub-sector PMI also declined by a sharper 2.9 points to 48.4. The contraction recorded in the manufacturing sector was due to the reduction in orders for manufactured goods, mainly in the key electronics industry following the effect of Sars. - 4 Jun 2003

Retail

Franchising on the rise

The Franchising and Licensing Association (FLA) said that about 500 new franchise operations opened in 2002, 17% more than in 2001. The total number of franchises is 3,000 of which 40% are food & beverage, and 20% each education, services and "others". The increase in the number of franchises last year was due to set-ups by retrenched middle managers, which made up half of the new franchises. The remaining were established by entrepreneurs, including fresh graduates who had difficulties finding employment. - 8 Jun 2003

In Brief

• Popular bookstore opens its flagship at The Majestic mall. Taking up 10,000 sq ft, the store is the chain's 38th store.
• Fashion label Ermenegildo Zegna has opened a new outlet carrying its Zegna Sports line of sports and casual wear. The 900-sq ft store is at Ngee Ann City.
• Courts has given its logo a new look and relaunched its Bukit Timah flagship outlet. It has altogether 12 furniture outlets and one IT store. - 7 June 2003

Plaza Singapura secures John Little, Marks & Spencer

Taking over the Courts space in Plaza Singapura will be department stores John Little (15,660 sq ft on Level 2) and Marks & Spencer (9,350 sq ft on Level 3). They will open in October this year. This underscores the mall's positioning as a "family-oriented mall". Other anchors are Spotlight (27,000 sq ft on Level 5), Carrefour (80,000 sq ft in Basement 1 and 2) and Best Denki. - 6 Jun 2003

Funds from BreadTalk's IPO for its expansion

Bakery chain BreadTalk intends to use the funds from its initial pubic offering (IPO) for expansion in Singapore and China, as well as diversification. In the pipeline are three more BreadTalk outlets in Singapore and a new restaurant in Paragon. The 6,700-sq ft restaurant is a franchise of Din Tai Fung from Taiwan that specialises in "xiao long bao" and chicken soup. - 5 Jun 2003

HarbourFront shops having tough time

Retailers at the new HarbourFront Centre (formerly World Trade Centre) were reported to be still struggling with poor sales in spite of the Great Singapore Sale. Most attribute the poor visitor traffic to the façade, which is still under construction and makes the mall appear to be uncompleted. The lack of a proper entrance also deters visitors from going in. This is compounded by the loss of cruise passengers due to Sars. - 5 Jun 2003

Clarke Quay Satay Club revamped with new concept

Satay Club at Clarke Quay will reopen in June with a new concept. It will offer not only traditional satay but also satay with exotic meat, Asian dishes and a wine bar, all served by waitresses on in-line skates. There will be just three satay stalls, instead of the previous 10, at the 10,000-sq ft venue. It is now run by a single operator and has a single payment point. - 4 Jun 2003

Great Singapore Sale draws shoppers

The Great Singapore Sales appears to have succeeded in getting shoppers to return with attractive bargains. The first weekend's sales were "better than expected", according to the Singapore Retailers' Association. Centrepoint's malls and Wisma Atria reported higher visitor traffic. While retailers are enjoying robust sales during this event, some noted that this could be due to pent-up demand; others wondered what will happen after the Sale ends and reiterated the need to continue with good ideas and offers. Retailers expect larger crowds the second weekend when the school holidays start. - 3 & 4 Jun 2003

Imperium now only for banquet events

Tung Lok's Imperium Chinese Dining will be repositioned as a restaurant for banquets only for events and weddings. The 650-seat restaurant at Ngee Ann City will no longer serve walk-in diners. This will help reduce operational costs. A total of 156 banquet bookings have been secured this year while those for weddings have reached 90% of all weekend nights. Tung Lok's other restaurant, Ling Zhi at Far East Square, will be expanding and taking over the House of Mao space next door. - 2 Jun 2003

Hotel/Tourism

SHA believes current slowdown in travel industry may be long-term

The Singapore Hotels Association's (SHA) chief executive said the local travel industry "may never be out of the woods". Even if the number of visitor arrivals improved, the volume is expected to be down by 25% to 30% for the whole of this year and as well as next year. According to a survey conducted by the SHA, 33 respondents said losses could amount to $28 million from April to June and an estimated $60 million in total. Losses at the hotels' food and beverage outlets from March to May are estimated to hit another $60 million based on replies from 24 respondents. The SHA also said the supply of new hotel rooms must be closely monitored. Fortunately there was no significant increase in the number of new hotel rooms during the recent Sars crisis, which would have worsen the situation. In 1986, the industry saw a doubling of room supply. Present occupancies in hotels are about 30% to 35%. - 7 June 2003

Business travel to Singapore resumed

An ST poll of 16 foreign companies shows that all have resume business travel to Singapore. Some said they lifted travel bans after Singapore was declared Sars-free while some even began doing so before the official announcement based on Singapore's successful efforts at containing Sars. - 7 June 2003

Sentosa to have new light rail, theme park and hotels

The latest developments at Sentosa include a new light rail system, linked to the future HarbourFront MRT station to three stations on the island. The current monorail will be dismantled in 2005, a year before the new system begins. A 30-ha to 50-ha theme park, comprable to Sunway Lagoon and Dreamworld, will also be built. It will feature water-based activities and is likely to be at the former Asian Village site. Two hotels will be added to the current three. One will be a tourist-class hotel on Palawan beach and the other will be an upmarket "destination resort". Each hotel is expected to bring in up to $100 million in investment while the theme park will see $300 million. - 6 Jun 2003

$200-million tourism recovery plan unveiled

The STB announced a $200-million tourism recovery plan to help the industry. The STB will provide $50 million, the Civil Aviation Authority of Singapore $10 million (through its air traffic development plan announced earlier) and the remaining $140 million will be expended by the industry players themselves. The $60 million from the government serves as financial incentives for the industry to bring in more visitors. The STB's contribution will also go to media campaigns. This scheme is seen as the second of a three-phase approach to aid recovery, where the STB partners industry players to promote Singapore. The first was focused on confidence-building in the form of the Step Out! Singapore campaign and the third will be a global campaign involving mega events. Overall, the recovery plan is expected to attract four million visitors, generating receipts of $4 billion, in the next seven months. Total arrivals for the year are expected to be six million. In 2002, 7.6 million tourists spent $9 billion here. - 5 Jun 2003

More flights restored at Changi Airport

Airlines are restoring up to one-third of more than 600 cancelled flights per week at Changi Airport. At the same time, Changi Airport has also launched a $10-million incentive scheme to bring in more flights and passengers. This will go to financial rewards for airlines if their passenger load is increased over the May figure and promotions at the airport for passengers. The scheme is in addition to the Sars relief package from the Civil Aviation Authority of Singapore. In a separate report, heads of major Asian and European airlines said that the downturn in travel demand caused by Sars has bottomed out but recovery will be slow. - 2 & 3 Jun 2003

Infrastructure

North-East Line to start operating on 20 June

After months of delay, the North-East Line, which has 16 stations, extending from HarbourFront Centre to Punggol, is scheduled to start operating on 20 June. It will be Singapore's first driverless mass transit system. The 20-km project was due to be completed last December but it was delayed due to operational problems. - 8 Jun 2003

Corporate/Industry News

Hong Fok returns to the black

Despite a 12% decline in its turnover, Hong Fok saw a gain of $7,000 in net profit for first quarter ended 31 March 2003. Given the global uncertainty, the group does not expect to be profitable this year. - 7 Jun 2003

Sources: The Business Times (BT), The Straits Times (ST)

Note: All currencies are expressed in Singapore dollars unless otherwise stated.

Abbreviations:

  Provided by CB Richard Ellis