Complete Property Market Updates of Singapore

May 12, 2008

Developers test waters with condo launches

Filed under: Developer News,General — Propertymarketupdates @ 5:04 am

Sale of Floridian, Quartet on Vanda and Parc Seabreeze have begun

DEVELOPERS are gingerly testing the water for residential launches this week. Far East Organization’s listed unit Orchard Parade Holdings and Wing Tai have begun the official launch of their Floridian condo in Bukit Timah, marked by the start of an advertising campaign.


Resort living: The Floridian is inspired by the Miami coast and will be surrounded by water features

Prices start at $1,615 psf. BT understands the average net price is in the range of $1,600 to $1,700 psf after discounts.

The freehold project has 336 units in 11 towers on a site of 230,000 sq ft. The preview for the development began a few months ago, with six units sold at $1,640 to $1,770 psf.

This week’s official launch sees the release of 75 units in Towers 2 and 9. Units range from two-bedders of 840 sq ft to apartments with four bedrooms (plus study) of 2,373 sq ft. Floridian, designed by DP Architects, is inspired by the Miami coast and will be surrounded by water features. Ground-floor units will have the water’s edge outside their living and dining spaces. The project is near Hwa Chong Institution, Methodist Girls’ School, Nanyang Girls’ High School, Raffles Girls’ Primary School and the Canadian International School.

Another freehold project being previewed this week is Quartet on Vanda, a cluster development of four bungalows in Vanda Crescent off Dunearn Road (near Eng Neo Avenue). Each two-storey unit has an attic, a basement and a swimming pool.

Built-up areas range from 4,844 sq ft to 4,919 sq ft. The units are understood to be priced around $6 million each. Quartet on Vanda is being developed by Stanley Quek’s Region Development.

Over in the eastern part of Singapore, Tiong Aik is understood to have begun the preview of Parc Seabreeze in the Marine Parade/Joo Chiat area last week. The average price for the freehold project is understood to be in the $1,600-1,700 psf range.

Source : Business Times – 9 May 2008

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Merrill CEO is ‘bullish on the world’

Filed under: Community Voices,General,Regulators — Propertymarketupdates @ 4:54 am

JOHN Thain, the chief executive officer of brokerage and investment banking giant Merrill Lynch, talks to BT’s associate editor Vikram Khanna about the crisis on Wall Street, the changes at Merrill and its prospects looking forward.


Mr Thain: Is very optimistic about growth prospects in the region and in particular, in Singapore. Merrill is looking at expanding its wealth management business as new wealth is being created in Asia.

Q: Warren Buffett says the worst of the crisis on Wall Street is over. Do you agree?

A: First, let me say I wouldn’t disagree with Warren on anything!

We’re through with the sub-prime-related credit problems for the most part. But I still believe the US economy is going to go through a difficult period as a combination of falling home prices, rising food prices, rising energy prices and rising unemployment impacts the consumer and that will impact the real economy. So I still believe we’re going to go through at least a couple of difficult quarters, more related to a slowdown driven by the consumer rather than the sub-prime related problems.

Q: How will this slowdown impact financial institutions, particularly Merrill?

A: It won’t impact Merrill so much. The next problem area will be those financial institutions which have large exposures to consumer-related debt – home equity loans, auto-loan receivables, credit-card receivables. And those would be primarily the regional banks.

Q: Looking ahead, do you foresee further restructuring of US financial institutions?

A: We’ve been seeing that. Huge amounts of capital have been raised, and particularly, in the case of investment banks, leverage has been reduced. I think both of those are likely to continue.

Q: Do you foresee Merrill having to raise still more capital?

A: No, I don’t. We’ve raised US$12.8 billion of common and mandatory convertible at the beginning of the year. That was about US$4 billion more than we lost in 2007. And we raised another US$2.7 billion of perpetual preferred. So, right now, our equity capital is US$44 billion, which is just a little under its record high.

Q: You are the first CEO of Merrill who has not been from within Merrill. What are the advantages and disadvantages of being an outsider?

A: I think you have to look at why I decided to come to Merrill and why they offered me the job. It’s first the business mix, the strategy of Merrill. It has an excellent strategy – a combination of the world’s best wealth management business and a world class investment bank and sales and trading organisation. That strategy is very powerful and makes a lot of sense.

There are great synergies between the wealth management business and the investment banking business. You take a company public, you sell it, the wealth management side can manage the wealth, the wealth management side also has great contacts who can provide new IPO opportunities, new M&A opportunities.

Merrill also has a very strong brand and a very strong culture. And it’s a global business; we have a global footprint. The investment banking, sales and trading parts of the business are 60 per cent outside the United States.

So the combination of a very good set of businesses, a global footprint, a very strong brand and a very strong culture was what was attractive to me.

Q: How do you plan to change the corporate culture at Merrill in any way, if at all?

A: The culture is strong and it’s a very good culture. The one place where we want to change that is inside some of the sales and trading businesses. There were too many silos where each of the trading desks were focused only on their own P&L and in many cases, were paid only on the basis of their own P&L. We’re going to move towards a more company-wide focus. And so, compensation will be based on how well the company does as a whole does. We will also change the risk management culture. I brought in a new person, Noel Donahue, to co-head risk, and risk now reports directly to me. And so, the risk management functions and the focus on risk controls is also a change.

Q: You’ve worked at Goldman Sachs, where risk management was part of your job as CFO. Goldman has emerged from the credit crisis relatively unscathed. What did it do right that some other investment banks did not do?

A: One of the things Goldman did right was that it made risk management a very senior-level focus. The risk management functions were just as important as the trading functions. So there was a good balance between the two.

Second, the senior management, right up to the CEO, were very hands-on in understanding the business and understanding the risks of the business.

Third, Goldman’s compensation philosophy has always been oriented towards the firm as a whole. Those three things enabled them to weather this difficult environment.

Q: How do you respond to the public outcry against the compensation policies of financial institutions, which many people say reward excessive risk taking on the upside, without imposing commensurate penalties on the downside?

A: You have to look at how compensation is done and what form it takes. I believe in employees getting a significant part of compensation in the form of equity. Actually, that’s one of the other things we’ve changed at Merrill; we’ve increased the proportion of equity in people’s compensation. When you give them stock, they participate on both the upside and the downside. And I think that’s a very important element in aligning the interests of management with that of shareholders.

Q: Merrill has significant operations across several Asian countries. How do you see the prospects for your Asian operations?

A: The Asian part of our business is the fastest growing and has some of the best opportunities in the world. The wealth that’s being created in Asia and the growth in Asian economies fits our business mix perfectly. As new wealth is being created, we want to expand our wealth management business. As economies grow, companies need access to capital, countries have infrastructure needs which need to be addressed, and that creates a lot of investment banking opportunities and sales and trading opportunities. So I am very optimistic about the growth prospects in Asia and in particular, here in Singapore.

Q: Which Asian countries are you especially focusing on at this time?

A: Certainly, Singapore is one. India is second and China is third. Singapore is one of our major hubs in the region. We also have a very strong presence in India. And China is a big focus because of its growth. We have strong presence there in terms of bringing Chinese companies to the international markets. But we don’t have the licences we need to operate in the domestic market in China, so that’s an important focus – that we get those licences.

Q: Merrill’s advertising slogan is ‘Bullish on America’. Are you bullish on America?

A: We’re bullish on the world, and on the opportunities for both our wealth management business and our investment banking business. We are a global company, not just a US company, and I think there are great opportunities around the world.

Source : Business Times – 7 May 2008

Ho Bee Q1 net earnings dive 62% to $26.1m

Filed under: Developer News,General — Propertymarketupdates @ 4:51 am

Sharp drop in property development revenue

HO BEE Investment yesterday reported a 62 per cent plunge in net earnings for the first quarter ended March 31, 2008, to $26.1 million, from $69.1 million in Q1 2007. Earnings per share were 3.54 cents, down from 9.37 cents the year before. Revenue was $94.2 million, a 62 per cent fall from $245.8 million a year earlier.

The drop in group turnover was largely due to lower recognition of revenue from property development project The Coast at Sentosa Cove.

The Coast project recognised revenue of $26.5 million in Q1 2008, down from $209 million in Q1 2007. This was the main reason for property development revenue falling 64 per cent to $88 million.

Turnover on property investment fared better, driven by higher rental income from office units at Samsung Hub and industrial buildings at HB Centre II and One Tannery Road. At $4.1 million, it was almost 2.6 times that of the $1.6 million recorded last year.

Ho Bee saw strong overall occupancy rates and increasing rents for its investment properties in Q1.

Room and cafe revenue from its hotel operation also did well, rising 71 per cent to $2.1 million.

Sounding a note of caution, Ho Bee said: ‘The global economic and financial uncertainties caused by the US sub-prime crisis will continue to affect the sentiment of both the stock and property markets. With property transactions expected to remain weak in the short term, the group will monitor the market closely.’

Nevertheless, Ho Bee said that revenue and earnings for the next two to three years will be supported by substantial progressive recognition of income from the sale of residential projects such as Vertis at Amber Gardens and Quinterra in Holland Road.

Ho Bee’s share price closed at $1.03 yesterday, two cents down.

Source : Business Times – 9 May 2008

Singapore homes to be wired up with fibre optic link

Filed under: About Singapore,General,Property Add Value — Propertymarketupdates @ 4:49 am

Both bidders for next-gen broadband network propose this lightning-speed technology
 
BESIDES phone and cable points, Singapore homes will soon get one more jack in the wall – for a thin fibre optic cable to hook up to ultra-fast broadband.

The technology, called Fibre To The Home (FTTH), has been proposed by the two consortia bidding to build the island’s new cyber highways. When ready in as early as two years, it promises an almost infinite speed boost for years to come, enabling people to enjoy ‘life-like’ video-conferencing or download a movie in mere minutes.

In the past two years, several technologies have been put up as possible upgrades to Singapore’s existing broadband networks.

But fibre optics now appear to be the way forward, going by what both bidders for the Next Generation National Broadband Network submitted in their bids on Monday.

The new network, first announced two years ago, is expected to shake up the market and offer users faster speeds at a lower price.

While existing wall jacks will remain in place, the new fibre optic link will open up a world of offerings via new, ultra-fast broadband. Each fibre optic cable, no thicker than a piece of thread, has the capacity to deliver services such as phone calls, high-definition TV programmes and tele-medicine.

To hook up, users have to attach a modem similar to what they have now. Both bidders for the project promise that the new cables will be installed with minimal disruption.

The OpenNet group, made up of Axia NetMedia, SingTel, Singapore Press Holdings and SP Telecommunications, says it will use underground ducts which hold existing cables. This means there would be no need to dig up so many roads.

Mr Allen Lew, SingTel’s chief executive officer for Singapore, said it also helps that telecom risers – the vertical shafts in buildings used for running cables – already exist in many apartment blocks here. This means the cables can be run throughout a building without fuss.

Rival bidder Infinity Consortium also promises to keep disruption to a minimum. Comprising City Telecom, StarHub and MobileOne, the group says people will be able to plug in the same way as they do now with the phone and cable TV jacks. ‘This would pave the way for large-scale high-definition TV and medical services,’ said a spokesman.

Already rolled out in Hong Kong, Japan and the United States, FTTH makes use of light signals to transmit information.

An almost unlimited amount of data can be pumped through by simply upgrading network equipment to alter how the light is transmitted.

Copper cables that deliver data with electrical pulses are reaching the limit on how much they can carry.

SingTel’s Mr Lew said its system now offers up to 25 megabits per second (Mbps), but the new, much faster technology will bring services such as more high-definition channels.

While StarHub offers a faster 100Mbps service using current technology, it has also decided to invest in a future network that can be used many decades down the road. Experts say the upgrade will put Singapore up there with the most wired-up countries in the world.

FASTER AND CHEAPER

‘Basically, they (broadband users) will get faster and cheaper broadband. Who would want 3Mbps in future when you’ve got 1,000Mbps?’ – MR MARC EINSTEIN, from research firm Frost & Sullivan

Source : Straits Times – 9 May 2008

Royal Peacock Hotel in Chinatown could fetch around $38m

Filed under: About Singapore,General,Hotel,Land Sale — Propertymarketupdates @ 4:39 am

THE Royal Peacock Hotel in Chinatown’s Keong Saik Road is likely to be sold soon – with a potential price tag of about $38 million.

The owners of the boutique hotel called for expressions of interest, which closed on Wednesday, after attracting at least five bidders.

The keen interest underlined rising interest in the hotel sector in Singapore, analysts said.

The 74-room hotel’s marketing agent, Cushman & Wakefield, said the property’s guide price is $38 million, or more than $500,000 a room.

While the wider property market is quiet, as many buyers and sellers are remaining on the sidelines, the hotel sector offers a different picture.

With rising tourist arrivals and room rates, investors are more than happy to pay ‘tomorrow’s price’ for a hotel located in the city centre, said Mr Donald Han, the managing director of Cushman & Wakefield in Singapore.

A five-star hotel typically sells for $700,000 to $800,000 a room, he said.

The bidders for the Royal Peacock, most of whom are foreigners, are not existing hotel players in Singapore, he said.

The hotel, which opened in 1995, is owned by Grace International, the local property offshoot of a family trading business based in Indonesia. The firm also owns The Scarlet, an 84-room boutique hotel in Erskine Road that opened in late 2004. This is set in 13 two-storey, restored shophouses built in 1868 and a four-storey shophouse.

The Royal Peacock occupies 10 restored shophouses in Keong Saik Road, which was once famous as a red-light district.

The rooms, ranging from 18 sq m to 30 sq m in area, boast period touches such as antique gilt-framed mirrors, plush purple carpets and red walls. They cost between $105 and $185 a night.

The eventual buyer will be looking to enjoy rising room rates, analysts say.

Room rates in Singapore have been rising steadily after staying low for a long period. Average rates are now hovering around $240 to $250, up from just $120 in 2004.

Mr Han said the outlook for the hotel industry remains upbeat, and Cushman & Wakefield is in the process of being appointed as the marketing agent for two other hotels over the next two months. These hotels, with fewer than 200 rooms, are also well-located.

Source : Straits Times – 9 May 2008

HPL in tie-up to develop hotels in Libya

Filed under: Developer News,General,Hotel,World Property — Propertymarketupdates @ 4:35 am

SINGAPORE-LISTED Hotel Properties Limited (HPL) has entered into a joint venture with a Libyan state-owned company to develop hotels and tourist resorts in Libya.

And the first project of its partnership with the Social Security Fund Investments Company (SSFI) is a US$30 million (S$41 million) project to refurbish a top hotel in the country.

The tie-up, on a 50-50 basis, was announced on Wednesday night by Mr Stephen Lau, HPL’s executive vice-president, before they signed a memorandum of understanding (MOU).

He said: ‘With its superb Mediterranean climate, 1,800km of pristine coastline and desert attractions, as well as its heritage sites,  Libya is poised to be an exciting new tourist destination.’

Mr Lau is part of a business delegation accompanying Senior Minister Goh Chok Tong on a four-day visit to Libya which ended yesterday.

The SSFI is owned by the Libyan Pension Fund and has been investing in hotels for more than 25 years, said its board chairman Issa Tuwegiar. It has interests in some 23 hotels and resorts around the country.

The Libyan Pension Fund, to which workers have to contribute 15 per cent of their pay, is worth three to four billion Libyan dinars (S$3.5 billion to S$4.6 billion), he added.

As for its first project, Mr Lau said the refurbishing of the 1970s-era Grand Hotel in Tripoli is expected to be completed in 18 months’ time.

Its 320 rooms will be merged into fewer but larger rooms to cater to more upmarket travellers and businessmen, he added.

Explaining the birth of the partnership, Dr Tarek Elgehmi, executive manager of SSFI, said it had been looking for a partner for some time to upgrade its hotels to five-star standards.

Its top executives met HPL’s officials when they visited Libya as part of a business delegation. Their subsequent visits to HPL properties in Singapore and Asia paved the way for the tie-up.

The signing of their MOU took place on the sidelines of a networking dinner jointly organised by the Singapore Business Federation and the Libyan Businessmen Council here.

Speaking at the dinner, SM Goh urged Libyan companies to ‘look east’ – towards opportunities in Asian countries such as Singapore, Malaysia, Indonesia, Thailand and China.

Explaining his call, he noted that a shift in the global distribution of wealth is gradually taking place, moving away from Europe towards Asia.

He also urged Libyan companies to go through Singapore as it has a good airport and sea port, and is well-placed to serve as interlocutor.

Source : Straits Times – 9 May 2008

HPL in deal to rebuild, refurbish hotels in Libya

Filed under: Commercial,General,Hotel,Land Sale,World Property — Propertymarketupdates @ 4:33 am

Creation of JV with that country’s state pension fund manager is on cards

HOTEL Properties Ltd (HPL) has forged an agreement with Libya’s state pension fund manager to rebuild and refurbish hotels in the country, a deal achieved partly thanks to ‘middleman’ Philip Yeo.

Stephen Yeo, executive vice-president of HPL, said on Wednesday evening at a press conference here that many details have yet to be firmed up. But on the cards is the creation of a 50-50 joint venture company with Libya’s Social Security Fund Investments Company (SSFI), which manages three to four billion Libyan dinars (S$3.5 to 4.7 billion) in assets, to refurbish Tripoli’s Al Kadir hotel to five-star standard for US$30 million.

Other projects include the building of a 50-storey mixed-use tower in Tripoli for around 150 million euros (S$317.5 million), and the redevelopment of a hotel in Benghazi city, according to SSFI chairman Issa Tuwegiar. SSFI manages 23 hotels, resorts and tourism villages in Libya on behalf of Libya’s pension fund.

Hexagon Development Advisors – a consultancy headed by the former EDB and A*Star chief Philip Yeo – helped Ong Beng Seng’s HPL clinch the deal. Mr Yeo is now chairman of Spring Singapore.

The main shareholders of Hexagon – a company set up in February 2007 – are Reef Enterprises, believed to be an HPL outfit, and Ellington Investments, which focuses on energy and power industries. Through his own firm P*Yeo Investments, Mr Yeo has shares in Hexagon. The consulting firm’s senior people include other former EDB officers.

Mr Yeo and Mr Ong are understood to have visited Libya more than once in the past year and have built up a relationship with the Libyan Economic Development Board, a government body inspired in part by its Singapore counterpart.

A joint HPL-Hexagon delegation visited Libya last September to discuss business deals, according to David Ban, Mr Ong’s associate and a consultant at Hexagon who was present at the signing of a memorandum of understanding on Wednesday night.

SSFI’s Mr Tuwegiar said HPL’s expertise in tourism and hospitality is particularly welcome and the agreement was secured quickly, within a few months. HPL has interests in 23 hotels worldwide and has developed numerous luxury residential properties. It also owns shopping and commercial properties plus the Hard Rock cafe franchise in the Asia-Pacific region.

Yesterday morning, Senior Minister Goh Chok Tong met Libyan leader Colonel Muammar Gaddafi for what Mr Goh called an ‘illuminating discussion’ lasting almost an hour.

Mr Goh told reporters that he was interested in finding out the future direction of the Libyan economy. ‘Unless you are sure of the clarity of the direction of the Libya economy it will be a bit difficult for us to consider investing in the economy in the big way,’ he said.

Afterwards, Mr Goh met Libyan Prime Minister Al Bugdady Ali Al-Mahmoudi and witnessed the signing of a memorandum of understanding to further economic cooperation between the two countries. Singapore businessmen remain worried that shifting rules and regulations in Libya could hurt their investments and Mr Goh said he had transmitted these concerns to the Libyan leaders.

Libya has only recently come out of international isolation after United Nations and US sanctions were lifted.

The country has large reserves of oil and gas, as well as 1,800km of coastline and many heritage sites, including Leptis Magna, an impressive Roman ruin that is largely unexcavated.

This has led to a rapid influx of foreign businessmen and tourists, which the country’s infrastructure is struggling to cope with. Libyan government officials say they may need as many as 40,000 more hotel rooms to meet the surge in demand, as there are only about 12,000 rooms at present. Only one hotel is said to be of five-star standard and even then its facilities – for example, Internet access – are still patchy.

Source : Business Times – 9 May 2008

FRHI confirms in-principle sale of Raffles Hotel

Filed under: About Singapore,General,Hotel,Land Sale — Propertymarketupdates @ 4:30 am

RAFFLES Hotel is being sold – as readers of BT were told yesterday. Under an in-principle agreement announced yesterday, Fairmont Raffles Hotels International (FRHI) will sell the iconic hotel to a consortium led by former Credit Suisse investment banker Mark Pawley.

‘Completion is expected to take place at the end of May 2008,’ FRHI added in its statement.

Raffles Hotels & Resorts, owned by FRHI, will continue to manage the hotel under a long-term management contract.

The pricing for the transaction and details of consortium members were not disclosed.

While he was head of Asian Real Estate, Gaming and Lodging business at Credit Suisse Investment Banking in Asia, Mr Pawley was involved with the $1.7 billion sale of the entire Raffles Holdings’ hotel portfolio – including Raffles Hotel in Singapore – to US-based private equity firm Colony Capital in 2005.

Colony later merged that portfolio with Fairmont Hotels & Resorts’ assets to create FRHI.

Colony is today understood to hold about 40 per cent in FRHI while Saudi Prince Alwaleed bin Talal’s Kingdom Hotels International owns the rest.

BT reported yesterday that a preliminary agreement had been inked on the sale of Raffles Hotel and the adjoining shopping arcade and that the price is believed to be in the ‘mid-$600 million range’. The report had also said that the buyer was believed to be a family trust, most likely linked to a European family.

Market watchers yesterday suggested the trust is likely to be a member of the consortium.

Raffles Hotel, Singapore, is just the latest asset FRHI/Colony have sold from the former Raffles Holdings portfolio acquired in 2005.

Last year, FRHI sold 100 per cent equity interest in its two Cambodian hotels, Raffles Hotel Le Royal in Phnom Penh and Raffles Grand Hotel d’Angkor in Siem Reap, to Kingdom Hotels Investments for US$36.4 million and at the same implied enterprise value. It also sold Swissotel Sydney last year.

In late 2006, FRHI sold Swissotel Merchant Court in Singapore to a fund managed by LaSalle Investment Management at a price reported to be in the $300-400 million range.

In its statement yesterday, FRHI said: ‘As part of FRHI’s ongoing business strategy to build a brand-focused global hotel company, FRHI continues to pursue opportunities to monetise its hotel real estate investments.

‘These asset sales are purely real estate transactions that provide an opportunity to realise the value of our very successful investments and provide us access to significant capital for future growth of our management companies.’

‘Similar to FRHI’s past real estate transactions, any hotels that are sold will continue to be part of the company’s hotel collection and will be managed under long-term management contracts.’

Source : Business Times – 9 May 2008

Raffles Hotel looks set to be sold at hefty price tag

Filed under: About Singapore,General,Hotel,Land Sale — Propertymarketupdates @ 4:27 am

Consortium led by banker may buy hotel and adjoining arcade for $650m

MYSTERY buyers are set to acquire the historic Raffles Hotel for more than treble the $200 million it sold for just three years ago.

The 121-year-old hotel and the adjoining shopping arcade are changing hands again after a consortium led by a Singapore-based banker agreed to buy the property, the American and Middle Eastern owners announced yesterday.

The eye-popping price tag is about $650 million, The Business Times (BT) reported yesterday.

The dramatic jump in value of the heritage property is the result of Singapore’s booming hotel industry, market watchers say. Average room rates are now about $240, way up from $136 in 2005.

The identities of the buyers are not yet clear, though the consortium is being led by prominent former Credit Suisse banker Mark Pawley, who declined to comment yesterday.

The BT cited unnamed sources as saying the consortium might be linked to a European family.

As a Credit Suisse banker, Mr Pawley helped arrange the $1.7 billion sale of the hotels of Raffles Holdings to US-based Colony Capital in 2005. The hotel portfolio included Raffles Hotel and the adjacent shopping arcade – valued at $200 million then.

Mr Pawley is chief executive of Singapore-based Oxley Capital Group, a private investment house focusing on real estate and private equity. Oxley told Reuters yesterday that it was not the buyer.

After Colony bought Raffles Holdings, it combined the hotels, including Raffles Hotel, into Fairmont Hotels & Resorts, which it had also acquired.

Yesterday, Fairmont Raffles Hotels International (FRHI) announced that it had reached an in-principle agreement with the consortium led by Mr Pawley to sell its stake in Raffles Hotel.

The deal is expected to be completed by the end of the month, the firm – controlled by Saudi Arabian billionaire, Prince Alwaleed bin Talal – and Colony said in a statement.

FRHI said it continues to look for ways to ‘monetise its hotel real estate investments’.

These asset sales, it said, are ‘purely real estate transactions that provide an opportunity to realise the value of our very successful investments’.

Staff and guests at Raffles Hotel are unlikely to be directly affected by the change.

‘Similar to FRHI’s past estate transactions, any hotels that are sold will continue to be part of the company’s hotel collection and will be managed under long-term management contracts,’ it said.

The BT reported that the sale would come with a 40-year management contract for Raffles Hotels and Resorts, citing unnamed sources.

It also reported a sale price ‘in the mid-$600 million range’. The 999-year leasehold Raffles Hotel has 104 suites. The shopping arcade has a 99-year lease.

Mr Donald Han, Cushman & Wakefield’s managing director, said the hotel sale price would exceed $1 million per room, after taking out the retail component. Generally, a five-star hotel sells for about $700,000 to $800,000 a room.

Back in 2005, concerns were raised about securing the legacy of the hotel, which is a part of Singapore’s history and heritage. But the parties involved have said the hotel’s legacy remains intact.

Source : Straits Times – 9 May 2008

Bank chief was talking about US

Filed under: Community Voices,Financing,General,USA — Propertymarketupdates @ 4:22 am

I REFER to yesterday’s article, ‘Two more slow quarters for OCBC ahead, says CEO’.

Our CEO, Mr David Conner, was responding to a journalist’s request for his views on how long the downturn in the US economy would last.

Mr Conner’s reply was that the US had experienced two quarters of fairly low growth and it was certainly possible this could continue for another two quarters.

The headline gives the misleading impression that Mr Conner was referring to the outlook for OCBC Bank.

Koh Ching Ching (Ms)
Head Group Corporate Communications, OCBC Bank

Source : Straits Times – 9 May 2008

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