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26th May 2014

Singapore Economy

Labour crunch starting to hurt S'pore economy

Source: Straits Times 

The productivity drive currently under way in Singapore has been taking a toll on local businesses in recent years as the resulting shortage in labour pushes up wage costs. But the pain is now starting to show up more clearly in the country's overall economic figures as well.

Singapore Real Estate

Why property cooling measures were needed

As an essential complement to monetary policy, they contained market bubble: MAS

Source: Business Times / Top Stories

[SINGAPORE] The property cooling measures adopted by Singapore from 2009-13 - known to economists as "macroprudential measures" - were an essential complement to monetary policy and have succeeded in containing the property market bubble, according to Monetary Authority of Singapore (MAS) managing director Ravi Menon.

However, they were introduced during a "highly unusual situation". As such, they will not be a permanent feature of policy and will only be used from time to time.

Mr Menon was speaking last Saturday at the inaugural Asian Monetary Policy Forum, which brought together academics, former central bank governors and economists from several countries to discuss monetary policy issues in the Asian context.

He pointed out that the global financial crisis of 2008-09 forced central bankers to pay more attention to issues of financial stability. Before the crisis, their main focus was on macroeconomic stability - mainly inflation and output.

-By Vikram Khanna

An eye on growing its landbank

Frasers Centrepoint also aims to tap its strength in mixed-use projects and is mulling over a hospitality fund, reports LYNETTE KHOO

Source: Business Times / Companies

SINGAPORE'S property market has cooled somewhat but Frasers Centrepoint Limited (FCL) remains fired up. The global property player is looking to grow its landbank albeit through moderate bids, tap its strength in mixed-use development and scale up its hospitality arm.

In fact, given the speed at which its hospitality business is growing, it is starting to consider having a fund to manage those acquired assets.

"If we have a hospitality fund that can work with us, that will be an attractive proposition," said group chief executive officer Lim Ee Seng. "Nothing has been confirmed, but this is worth exploring."

As part of its buying spree, FCL snapped up Spanish company Teycotel BCN for 948,000 euros (S$1.6 million) last month; the company owns Hotel Porta Marina in Barcelona and the hotel's operator. In Germany, FCL has acquired three greenfield sites that are being developed for serviced residences.

-By Lynette Khoo

MND starting new series of housing conversations

Source: Business Times / Singapore

THE GOVERNMENT is starting a new series of housing conversations on "closer families; stronger ties" to see how best to help couples and their extended families draw closer together for mutual care and support said Minister for National Development Khaw Boon Wan on his blog yesterday.

More married couples are living together with, or close to their parents. According to the recently concluded HDB Sample Household Survey, this figure has grown to 37 per cent in 2013 compared with 31 per cent a decade ago.

For 2013, 50 per cent of couples said they would like to live together or near their parents, but only 37 per cent were able to do so.

Mr Khaw noted that he "strongly supported" this and added that more must be done to help families stay close to one another. But, he said, there is a question of how far policies should go.

More married couples living near their parents

Source: Channel News Asia / Singapore

SINGAPORE: More married couples have chosen to live together or close to their parents in the same HDB estate.

According to the recently concluded Housing Development Board (HDB) Sample Household Survey (SHS), the proportion of those who live together or close by to their parents in the same HDB estate has grown to 37 per cent in 2013 from 31 per cent in 2003.

This was highlighted by Minister for National Development, Mr Khaw Boon Wan, in his blog on Sunday.

The survey also showed that 50 per cent of couples would like to live together or near their parents in 2013, but only 37 per cent were able to do so.

Mr Khaw said families living close to one another make a lot of practical sense. It will also nurture strong family bonds and family values can be passed on from grandparents to their grandchildren.

The HDB has already given priority to Singaporeans who apply for a BTO flat in the same HDB estate as their parents. However, Mr Khaw asked if "absolute priority" can be given.

First-timers who buy a HDB resale flat with or in the same estate as their parents are eligible for the higher-tier CPF Housing Grant of S$40,000 instead of S$30,000.

Mr Khaw questioned if "the difference" should be widened and whether more people will live together with or near their parents as a result of such a move.

He also asked if the HDB should build more 3Gen flats to cater for multi-generational living, but wondered if Singaporeans were "prepared to pay slightly more for the larger size and better location".

Mr Khaw said these are "some areas which we would like to invite Singaporeans to discuss, as a matter of what we value as a people and the priorities we can agree on as a society."

He invited the public to share their views in the upcoming Housing Conversations on "Closer Families, Stronger Ties". 

- CNA/ac

Couples should get more help to live near parents: Khaw

Minister suggests, in blog post, giving them ‘absolute priority’, raising CPF housing grants

Source: Today Online / Singapore

SINGAPORE — National Development Minister Khaw Boon Wan has given a hint of how couples may get added help to live near their parents, such as increasing the housing grants for children looking to move into the same estate as their parents.

Allowing closer living between married couples and their parents was one of the Government’s goals set out in the President’s Address.

Noting that more are living together with or close to their parents in the past decade — the proportion has risen from 31 to 37 per cent — but some were still unable to do so, as the recently concluded Housing and Development Board Sample Household Survey showed, Mr Khaw noted that he strongly supports families living close to one another.

Last year, half of all couples indicated they would like to live together with or near their parents, but 13 per cent were unable to do so, he said.

Saying that more must be done to bridge the gap, he wrote on his blog: “It makes a lot of practical sense, besides nurturing strong family bonds and allowing family values to be passed on from grandparents to their grandchildren.”

Among the possible measures to aid this, he questioned if children who want to be near to their parents should get “absolute priority” to do so. Currently, Singaporeans who apply for a Build-To-Order flat in the same estate as their parents are already given priority. But how will those whose parents do not live in their preferred estate still have an opportunity to live there, he asked.

Another possibility was to further increase the higher Central Provident Fund Housing Grant given to eligible first-timers who buy a resale flat with or in the same estate as their parents — currently S$40,000, versus S$30,000 for other first-timers.

As for the bigger flats built to cater for multi-generational living, Mr Khaw questioned if more of these types of flats should be built at the expense of four- or five-room flats, including in popular mature estates.

Highlighting that these issues involve what society can agree on, Mr Khaw asked for more Singaporeans to provide their views, such as by participating in the new feedback channel at

Office rents here 'may rise fastest in the world this year'

Source: Straits Times 

A lack of office space could drive up rents at a faster pace in Singapore than anywhere else in the world this year, according to a report from property consultancy JLL. JLL analysts told The Straits Times that skyrocketing rents here could in turn entice foreign funds, particularly those from the United States, to invest in the sector.

Global Economy & Global Real Estate

Penang, S'pore sign MOU for two projects

State government identifies them as priority projects

Source: Business Times / Malaysia

TEMASEK Holdings, Penang Development Corporation (PDC) and Economic Development Innovations Singapore (EDIS) have inked a memorandum of understanding (MOU) to develop two projects in Penang.

The projects - Penang International Technology Park and an outsourcing centre called Business Process Outsourcing Prime (BPO Prime) - are expected to have a gross development value of around RM11.3 billion (S$4.4 billion).

Located in Batu Kawan and Bayan Baru, Penang International Technology Park and BPO Prime are expected to be completed over the next five to 10 years.

Both projects have been identified by the Penang state government as priority projects for Penang's development; BPO Prime will be part of the effort by the state government to fulfil Penang's objective of becoming one of the 31 BPO hubs of the future.

-By Mindy Tan

Prawns replace abalone as China property developers go down-market

Source: Today Online / Business

HONG KONG - The Chinese developer behind an eight-storey clubhouse with a billion-dollar view over Shanghai's Huangphu River is turning to lower-end coffee shops and restaurants to fill the space, as a broad anti-graft campaign puts the brakes on conspicuous spending.

The state-of-the-art, steel and glass building was originally designed as a playground for China's elite, including space to mix and mingle with officials from state-owned enterprises based in offices nearby.

"Last year, we originally planned to open a clubhouse in the building, but it became too sensitive," said Vincent Zuo, a manager of research and development at Franshion Properties , which has a market value of $2.7 billion.

"We are now looking to open restaurants and coffee shops," said Zuo, adding that an art museum was another option for the arch-shaped building which sits in the middle of the company's 30 billion yuan ($4.8 billion) cruise terminal complex.

The decision to target middle-market consumers comes amid a crackdown on official corruption and extravagance in China that is forcing some high-end developers and hotel operators to change tactics to adapt to the new environment.

Franshion, a unit of state-owned Sinochem Corp which also operates the five-star Grand Hyatt Shanghai, has shifted its hotel focus more towards private events from government and business dinners. The number of wedding banquets is up 50 percent from last year, said Andy Ding, vice president of Franshion's unit China Jin Mao Group.

At the same time, consumption per head among business clients has dropped by about 30 to 40 percent since the crackdown began in 2012. Where once the average spending was around 1,000 yuan per person, now it is 600 to 700, Grand Hyatt Shanghai's manager Grace Tsou said.


As customers cut back, hotels are reviewing their menus. That means expensive and extravagant dishes such as abalone and lobster are out and cheaper offerings such as tiger prawns are in, said Tsou.

Also, many of these business guests now opt to bring their own liquor to restaurants - for which they are charged a service fee - rather than splurge on expensive hotel drinks.

"Our revenue has felt the impact since 2012, so we have started making changes early, such as adjusting the menu to more healthy food and less extravagant prices," said Jin Mao's Ding, whose company owns the building that houses the Grand Hyatt.

"Normal government activity demand is still there... but the money spent is not as much as in the past."

The crackdown on corruption has already sapped profits at some liquor companies. Remy Cointreau blamed the campaign for a 32 percent fall in sales of its high-end brand, Remy Martin, in the first quarter of this year.

And last month, Kweichow Moutai Co Ltd , China's top seller of fiery and pricey liquor baijiu, posted its weakest quarterly profit growth in three quarters as retail prices have dropped some 60 percent since the end of 2012.

Shanghai Xintiandi, a commercial and residential complex owned by Hong Kong's Shui On Land which houses some of the financial capital's top restaurants, bars, shops and boutiques, has also adjusted its tenant mix.

"Our restaurants are now more targeted at white-collar workers" instead of elite big-spenders, said a manager in the complex, who declined to be named as he was not authorized to speak to the media.


Developers and owners of luxury residential property are also feeling the heat.

"The Beijing market is particularly slow. There's a lot of supply because people are dumping their high-end property into the market because of anti-corruption," said a manager of a property company who declined to be named due to the sensitive nature of the issue.

Industry watchers said owners of property priced around 40,000 to 50,000 yuan ($6,400-$8,000) per square meter had already come under scrutiny.

In another cautious note, Soho China chairman Pan Shiyi said he expects the introduction of a property registration system in June to weigh on market supply.

The database is not only seen as vital for authorities to control a frothy housing market - it would also require local officials to report properties purchased, which could raise questions about how they funded the purchases, industry experts say.

In Beijing's secondary home market, the number of units on sale in April doubled from January to 14,622 units, while average selling prices eased 2.4 percent during the period, according to data from property brokerage Midland Holdings.

Beijing-based real estate agent Pang Jianwei said he recently sold a 178 square meter apartment in central Haidian district for 12.2 million yuan, a 10 percent discount from the asking price. He expects high-end home prices will continue to see pressure.

In Shanghai, a manager at a developer said sales of villas had been hurt as some investors were opting to go overseas.

"It's hard for an ordinary person to have many assets; one has to have power to generate money, and it's difficult for him to be totally clean. These people have to protect themselves and their family so they'd rather invest overseas," said the manager, who declined to be identified. ($1 = 6.2384 Chinese Yuan) REUTERS