News Highlights Wednesday 7 May 2008

Beach Rd building sold for $70m
An Irish private equity firm Fine Grain Property Consultant and interior design firm Hirsch Bedner Associates have bought 700 Beach Road, currently a small office, home office development named In-City Lofts, for $70 million (about $1,097 psf). They will pump in a further $3.5 million to upgrade the building and reposition it as a boutique office block. Upon completion in August, the property located between Golden Mile Tower and Golden Mile Complex, will be named 700 Beach. The building’s existing net lettable area will increase to 67,000 sq ft and the site’s lease was extended to 99 years starting April 2004. The gross monthly psf asking rent is in the high single-digit range and they are targeting MNCs who are sensitive to the high office rents in the CBD. Analysts say the net property yield will be about 8%. Fine Grain has allocated about $70-80 million more for further property purchases here in the next 6 months and are targeting undervalued assets.

- The Business Times, P9




Sun Venture awarded Scotts Road site
DB&B subsidiary Sun Venture Investments has been awarded a transitional office site at Scotts Road. It bidded $32.99 million or $226 psf ppr for the 97,284.1 sq ft site. DB&B develops and manages property assets and it revealed that the construction costs could be around $35 million, taking the overall development cost to about $68 million, including land cost. DB&B has received between 8-10 expressions of interest from potential tenants. The asking rent of $9.50 psf a month has not put potential tenants off, even though the transitional office building being leased by Prudential Assurance Company Singapore on the other side of Scotts Road is being leased for $6.50 psf a month.

- The Business Times, P9



S'pore ousting HK as top millionaire hub
Singapore is expected to pull ahead of Hong Kong as home to the highest concentration of millionaires over the next decade, sealing its reputation as a wealth centre not just in Asia but worldwide. Last year, Singapore had 23.3% of residents having wealth of more than US$1 million. By 2017, Singapore will see this figure grow to 40.7% - some 436,000 households. The concentration of wealthy households in Singapore, with US$3 million and US$5 million, is on an upward trend. Households with wealth of US$3 million will more than double, while those with US$5 million will almost triple. For China, the average net worth per household is expected to quadruple10 years later.

- The Business Times, P2




Growth bottlenecks are being tackled: PM
In hindsight, the Government should have moved earlier to alleviate problems in Singapore such as rising rents, a shortage of office space and places in international schools for expatriate children. But these bottlenecks in the economy will ease in one or two years, said PM Lee, as a fresh supply of office space, apartments and new school facilities comes onstream. But PM Lee gave the assurance that these constraints are being tackled. For example, the Government is helping United World College South-east Asia to build a new campus in Tampines set to be ready in 2010. And rents should come down as homes which are going en bloc and redeveloped are released.

- The Straits Times, H4



Survey shows inflation has hurt business sentiment in S'pore
Inflation is having a negative effect on business sentiment in Singapore. A recent survey of 202 members of the Institute of Certified Public Accountants of Singapore (Icpas) found that 64% had a neutral to pessimistic view of the local economy. Inflation was cited by 90% of the respondents as their chief concern. But Icpas vice-president believes Singapore's strong economic fundamentals and government support will help the country to ride out the pessimism.

- The Straits Times, H19




Insurers reap one-off gains from changes in CPF rules
The new Central Provident Fund (CPF) rules that kicked in on April 1 sparked a rush by members to withdraw cash from their Ordinary Accounts, so they could place their savings in other higher-earning investments. About $1.72 billion was pulled out of CPF accounts in the first three months of the year, and re-invested in insurance and investment-related products.

- The Straits Times, H20




Swiss insurance group returns to Singapore
Singapore’s ambitions to be a regional re-insurance hub are boosted when one of the world's largest property and casualty insurers opened a branch here. Zurich Financial Services group will provide a full range of products to corporate and commercial customers here and across South-east Asia. It also marks the firm's return to the general insurance market here after it sold its local unit in 2004. Zurich International Life is a unit of the group that offers investment and insurance products to high net worth individuals.

- The Straits Times, H20




Singapore and India explore ways to boost multiple links
India and Singapore discussed ways to deepen relations across trade, economic, defence and culture links during the two-day inaugural India-Singapore Strategic Dialogue (ISSD). The ambassador from India described India-Singapore relations as a 'happy picture', citing the increased bilateral trade between the two countries and the 3,000 Indian companies operating here. Both sides agreed that there was potential for further increase in investment, trade and tourism and greater cooperation in defence and human resources.

- The Straits Times, H7



India’s Gati makes S’pore regional HQ
India’s express distribution and supply chain solutions provider Gati has decided to make Singapore as its regional headquarters as it ramps up expansion into the Asia-Pacific region and globally. Gati currently has about 16 staff here and this is set to rise.

- The Business Times, P19