News Highlights Tuesday 15 April_2008

More than $8b of govt tenders up for grabs
The Government will tender out more than $8 billion worth of projects over the next 12 months - more than double last year's budget and the largest amount in recent years. The $5.8 billion allocated for building and construction already excludes projects put off to ease pressure on resources in the hectic building industry. In total, the deferred projects amount to $3 billion. Major building works over the next year include those on the Gardens at the Bay in Marina Bay and flat-construction programmes. To improve traffic, there will also be large-scale road works implemented, including a new road network at the Jurong Regional Centre. The Seletar Expressway will be widened from Woodlands Avenue 2 to Upper Thomson Road. The Central Expressway (CTE) will also be widened between its junction with the Pan Island Expressway and Yio Chu Kang Road, and a new major road will link the CTE with Yishun Avenue 7. The Tampines Expressway will get a new interchange and a road connection to Seletar Aerospace Park.

- The Straits Times, H18




Record $8b worth of govt tenders up for grabs
The government may have pushed back building projects worth $3 billion to ease the crunch, but it is still calling for tenders of a record $5.8 billion in the construction sector this fiscal year. Building and construction projects include moves to improve traffic on the Central Expressway and the Garden by the Bay project that will keep the Marina Bay area development on schedule. In all, the government tenders for FY2008 will touch $8 billion. Of the tenders announced, some $1.2 billion will go towards the purchase of goods and services and $1 billion will go to tenders in information and communications technology. The timing of the large government tenders against the backdrop of a global demand slowdown could alleviate any potential shortfall of investments in the private sector.

- The Business Times, P1



Prices of homes drop worldwide
The collapse of the housing bubble in the US is mutating into a global phenomenon. As home financing and credit tightens in response to the crisis that began in the sub-prime mortgage market, analysts worry that other countries could suffer the mortgage defaults and foreclosures that have afflicted American states. Further east, in India and southern China, prices are no longer surging. With stock markets down sharply after reaching heady levels, people do not have as much cash to buy property.

- The Straits Times, P15



Stronger Sing$ may weigh down interest rates
Interest rates are poised to fall following the move to let the Singapore dollar appreciate strongly in an effort to fight imported inflation. The MAS will be intervening in the banking system to mop up some of the extra liquidity to moderate the pressure on interest rates. Analysts expect the three-month Sibor to fall to between 0.75 and 1.00% by the forth quarter of this year as capital flows are attracted here by a rising Singapore dollar. Since the MAS decided to reset the Singapore dollar higher, the key three-month Sibor, which is the interbank interest rate, has fallen some 19 basis points to 1.25%. The Singapore dollar is expected to rally to $1.31 by the end of the year against the US dollar. It is not clear if MAS’s move last week will ease inflation significantly, but the more immediate impact of a stronger local dollar could weaken the demand for exports and hurt the profits of foreign companies operating here.

- The Business Times, P1



S’pore strengthens ties with Hangzhou
The Singapore infocomm Technology Federation (SiTF) inked an agreement with the Hangzhou East Software Park (HESP) to facilitate the exchange of technology and business between companies from Singapore and the Zhejiang province. SiTF councilor said that trade missions, business partner matching services, and local marketing events will be among activities that HESP and SiTF will carry out in the coming months. The SiTF-HESP agreement is supported by the Infocomm Development Authority. SITF has had a presence in Hangzhou since 2006 when it established a business exchange office called Hangzhou-Singapore Solutions Centre with HESP. Two other agreements were signed – one was by ESP Aspire – a Singapore company headed by ex-SiTF chairman – with the Hangzhou Dianchi University, to foster exchange of the university’s students with infocomm companies in Singapore. The other was between Singapore’s NCS and HESP. Both agreed to collaborate in the areas of e-government, smart building, Internet security and Hangzhou’s metro train system.

- The Business Times, P10



Crossroads for real estate investment opportunities
While Cityscape Asia is an Asia-focused real estate exhibition and conference, several major western developers are offering developments to Asian investors seeking to take advantage of favourable exchange rates to buy US real estate. Dubai International Capital’s announcement that it intends to invest US$5 billion in Asia over the next three to four years gives clear indication of where the action would be in the future. Over the next 3 days, Cityscape Asia will give an insight into both the emerging and mature property markets in Asia by being the only international property event in Asia to combine a conference and exhibition that maximizes both learning and networking opportunities with more than 6,000 international and regional real estate professionals. It will feature more than 50 speakers and will examine the opportunities in Asia. Cityscape takes place from 15-17th April in Suntec Singapore Level 4, Halls 401-403.

- The Business Times, P33



This year’s hot real estate destinations in India
The real estate boom in India is causing many of the country’s metros and some of the previously popular Tier II towns to saturate at an incredible pace. Property prices there skyrocket beyond the reach of middle-income home buyer, causing them to look a little further afield each year. The fact that IT/ITES (information technology enabled services) companies can benefit from the advantage of cheaper real estate prices in smaller towns had led to the Tier II/III city boom. IT/ITES companies catalyse every other sector of real estate wherever they go, so the retail, residential and infrastructure sectors soon start perking up in those localities. As one destination reaches its peak potential, new ones come into the limelight. Hence, in 2008, there will be an entirely new set of hotspots in the Indian real estate market. Some of which are Vizag, Vadodara, Nashik and Indore.

- The Business Times, P36



CityDev declines 5.2% after UBS downgrades stock to ‘neutral’
City Developments Ltd, led declines in developers after UBS AG downgraded the stock to ‘neutral’, citing falling home prices in the city-state. The FTSE Straits Times Real Estate Index, consisting of 43 companies on the Singapore stock exchange, has declined 13% this year and the benchmark Straits Times Index has fallen 12%. UBS economists downgraded their residential price forecasts for 2008 and 2009 by up to 20%, with middle-segment homes declining 10%.

- The Business Times, P36



Some upside in failed en bloc deals
Recent events surrounding the failed collective sales of Tulip Garden and Makeway View to Bravo Building Construction may just be a ray of hope in an increasingly gloomy property market. Putting a positive spin on the failed deals, Bravo has actually helped the market by withdrawing almost 400 potential units from future supply. This may be less than 3% of the 17,800 new units that CBRE estimates could be launched this year but if more developers follow Bravo’s move, enough potential units could be removed from the future market to mitigate a more serious oversupply situation.

- The Straits Times, P39