Singapore Economy Productivity drive a marathon without finish line, says PM Resource constraints and developed economy make push more pressing Source: Straits Times / Top of The News SINGAPORE'S productivity push is for the long haul and faces many challenges, but there are reasons to be optimistic, Prime Minister Lee Hsien Loong said yesterday. Singapore started promoting productivity more than 30 years ago, but this drive is even more pressing today given Singapore's developed economy and resource constraints, Mr Lee said at the launch of the National Productivity Month. He laid out a three-pronged approach to the productivity drive. First, there are incentives and schemes to help firms upgrade. Second, foreign worker inflows are controlled to put pressure on employers to upgrade workers. But firms still get enough access to manpower so that they can survive and Singaporean jobs are not lost. "As I said last week, I don't expect any further major measures to tighten our foreign worker numbers. But we will give companies time to adjust to the measures and to retool themselves," he said. The third prong is making the productivity drive a national effort. Mr Lee set out the different roles which players should take. For instance, firms must have a "productivity mindset" and dare to change, while workers must hone and improve their skills. Customers also need to embrace new models such as self-service. The National Productivity Month is organised by the Singapore Business Federation (SBF) and Singapore National Employers' Federation and includes conferences, exhibitions and study trips. At the event yesterday, Mr Lee also told the audience of 800 businessmen that the economy is reaching a mature stage of development, and is growing at a slower pace of about 3 per cent a year. There is less free land and the manpower situation is tighter, making the productivity push all the more important. Productivity is important not only for growth, but is also crucial for raising incomes, he added. A tight labour market may make wages rise in the short term, but longer-term rises can be sustained only by higher productivity. Still, there are challenges, said Mr Lee. Social attitudes that over-value qualifications must change, and some sectors such as construction have been slow to improve. But there are also encouraging signs, he added. Sectors such as precision engineering are making steady progress. Even in slower sectors such as food and beverage, firms are changing. "Productivity is a long haul, a marathon without a finish line, but so long as we have confidence and keep working at it together, we will stay in the race and (stay) ahead in the race," he concluded. Mr Lee was given a brief demonstration of a flying robot waiter, which can deliver food and drinks to patrons automatically.
News of no further major foreign labour curbs is a relief, but "that shouldn't stop us from improving our productivity", said SBF chairman Teo Siong Seng. -By Janice Heng Productivity push must continue: PM Source: Today Online / Singapore SINGAPORE — The Government is aware of the difficulties companies here are facing as Singapore pushes for economic restructuring, but improving productivity is now more important than ever given the Republic’s current economic and manpower constraints. Prime Minister Lee Hsien Loong said this yesterday as he launched the National Productivity Month (NPM), adding that Singapore will succeed in this current push following decades of similar efforts. “I know that many businesses and workers are trying hard to cope with change — and indeed it’s hard,” Mr Lee said in his opening address to about 800 business leaders attending the event. “We do have some challenges in changing social attitudes that overvalue paper qualifications … In several sectors, progress in upgrading productivity has been slow, such as construction and some services industries.” Mr Lee’s comments come as productivity growth remains mixed in recent years despite the slew of Government support policies. In the second quarter this year, overall productivity shrank by 1.3 per cent year-on-year as the retail, construction and food services sectors recorded declines. Still, he was upbeat. Saying that the productivity push is a nation-wide effort, Mr Lee added: “Looking at our productivity journey over the last half a century, we can be optimistic that our restructuring journey will be successful.” He was referring to Singapore’s efforts to raise productivity levels since the 1970s when the National Productivity Board was set up. In 1981, then-Prime Minister Lee Kuan Yew had also launched a National Productivity Movement in an effort to boost Singapore’s labour skills and productivity levels to those of the advanced economies. And now, as Singapore transforms into a developed economy with a slower growth rate and tighter manpower supply, productivity has become “more important, not less”, Mr Lee noted. “Not only is productivity important to grow our economy, but it’s also crucial for raising the income of workers,” he said. To this end, the Government will continue with its three-pronged approach — by treating productivity as a national effort where everyone has to play a part; as well as supporting companies in their productivity investments and encouraging mindset change among employees and consumers. Urging Singaporeans to be open to change, Mr Lee said: “Customers must be ready to embrace new business models, such as self-service formats.” The other prong is controlling foreign worker inflows. But as foreign employment growth in the second quarter fell to the slowest pace since 2009, Mr Lee sought to reassure businesses, saying, “As I said last week, I do not expect any further major measures to tighten our foreign worker numbers. We will give companies time to adjust to the measures and to re-tool themselves.” The Singapore Business Federation — which co-organises the NPM with the Singapore National Employers’ Federation — welcomes that decision, its chief operating officer Victor Tay told TODAY. “The next two years will be essential for businesses to deliver more sustained productivity improvement, following years of mixed progress. So the Government’s pledge to cease further curbs is important, because it gives business clarity and certainty,” he said on the sidelines of the NPM launch. Also combining the efforts of several Government agencies, the NPM will go on until Oct 30, offering exhibitions, workshops, seminars and overseas study trips to highlight innovative productivity solutions, especially for less productive sectors such as retail, food and beverage, and construction.
And investments in these solutions are quite affordable now, even for small and medium enterprises (SMEs), SBF chairman Teo Siong Seng said. “There is no lack of technologies, and there are a lot of Government schemes — such as the Productivity and Innovation Credit scheme — that SMEs can tap. The challenge of improving productivity is not so much about costs. It is really more about companies’ willingness to try to adopt changes to their processes and mindset,” he said. -By Wong Wei Han
http://www.todayonline.com/singapore/productivity-push-must-continue-pm Singapore Real Estate Shophouse, terraced house to be auctioned in estate sale Source: Straits Times / Money TWO freehold properties will be up for auction as a result of an estate sale, said property firm and consultancy Colliers International yesterday. The properties up for sale, resulting from the owner's death, are a two-storey conservation shophouse in Beach Road and a terraced house in Devonshire Road. This comes amid a rebound in the number of mortgagees who have put properties up for auction, as more borrowers default on loans. The home owners find it harder to sell their properties on their own. But, as a whole, the auction market has not fared as well, thanks to government measures such as the additional buyer's stamp duty. So far, $57.6 million worth of properties has gone under the hammer in the first three quarters, well down from the $87.7 million that changed hands over the same period last year, according to earlier reports. The shophouse, which has tenants, has an indicative price of $5.1 million and a land area of 1,381 sq ft. Values of shophouses in the area have registered healthy growth, according to data from the Urban Redevelopment Authority. The average transacted price of shophouses in the Kampong Glam district was $4,700 per sq ft (psf) this year, up 20 per cent from a year ago. The two-storey terraced house to be auctioned also has tenants, and has an indicative price of $4.4 million. The property's land area is 1,405 sq ft, with a plot ratio of 2.8, said Colliers. "The property has a unique facade, which will appeal to a niche group of buyers who appreciate properties that are architecturally distinct," said Ms Grace Ng, deputy managing director of Colliers.
Both properties will be auctioned on Oct 29, at Amara Hotel. -By Cheryl Ong HDB trying out two new solutions for lift upgrading Source: Straits Times / Singapore THE Housing Board is testing two new lift solutions in a bid to help more blocks qualify for the Lift Upgrading Programme (LUP). It is also looking for a second town for its Greenprint programme, launched in 2012 to bring sustainable living to public housing estates. The $5 billion LUP, which provides for lifts to be built on every floor of older HDB blocks, ends in December, after 14 years. In all, it will give such access to about 5,000 blocks built before 1990. About 200 blocks look set to be left out of the programme, because they either have too few units to share the costs, or have severe site constraints. But National Development Minister Khaw Boon Wan said the HDB will test two new solutions at non-residential sites before introducing them, in a trial effort, at suitable residential blocks. If successful, "HDB can then offer the solution to more low-rise blocks which are presently not eligible for the LUP", he said in a written reply to Mr Png Eng Huat (Hougang). Installation works for both lifts are being carried out at buildings where they will be tested, and will be completed by year end. The HDB will test the pneumatic vacuum elevator, which relies on air suction to move a lift car up and down, at Block 190 Toa Payoh Central, a commercial building. The vertical platform lift - a belt-driven system often used in private homes or churches - will be tested at a multi-storey carpark in Petir Road. Both these lifts move slower than current systems but would be less costly to install, the HDB said. Despite these efforts, Mr Khaw cautioned that some blocks will still not be able to have lifts on every floor. Meanwhile, those who require direct lift access because of medical conditions can ask the HDB for help, he said. As for Greenprint, the HDB is exploring extending eco-friendly initiatives to another town to get more feedback, Mr Khaw said in a reply to Non-Constituency MP Yee Jenn Jong. It is trying out initiatives such as rooftop solar panels and a rainwater harvesting system in estates in Jurong East. The trial is expected to be completed next year.
The successful initiatives from these pilot efforts will be replicated in other housing estates. -By Rachel Au-Yong HDB studying solutions to bring direct lift access to more householdsTwo types of lifts - a Vertical Platform Lift and a Pneumatic
Vacuum Elevator - are currently being constructed and should be completed by
year's end. Both are less costly to install compared to the current lift
systems. Source: Channel News Asia / Special Report SINGAPORE: The Housing Development Board (HDB) is studying two possible solutions to bring direct lift access to more households. This was announced in a written reply by the Ministry of National Development (MND), in response to questions from MP for Hougang, Mr Png Eng Huat, on Tuesday (Oct 7). Mr Png had asked for an update on the new technology and solutions in place to provide direct lift access to those not eligible for the Lift Upgrading Programming (LUP). The lifts - a Vertical Platform Lift and a Pneumatic Vacuum Elevator - are currently being constructed and should be completed by year's end. The Vertical Platform Lift uses a simple belt-driven system to move the platform vertically, while the Pneumatic Vacuum Elevator uses air suction to move the lift car up and down.
The Pneumatic Vacuum Elevator uses air suction to move the lift car up and down. Its advantage lies in the ease of installation. (Photo: MND)
The Vertical Platform Lift uses a simple belt-driven system to move the platform vertically and does not require a large machine room. (Photo: MND) The speed of the two lifts is slower, but both are less costly to install compared to the current lift systems. The MND said it plans to test two types of lifts at two non-residential sites - a multi-storey carpark and a commercial block – to see if they are technically feasible and acceptable to residents, especially the elderly and the disabled, before considering their suitability. Currently, some low-rise blocks and those with severe site constraints are ineligible for LUP. There are currently about 200 such blocks and they are mostly blocks with very few benefitting units to share the LUP cost. Mr Png also asked if there would be an LUP Exercise specifically to provide direct lift access for these 200 blocks. "There will likely still be blocks which are unsuitable for the new lift solutions and cannot enjoy the direct lift access with current technology. HDB will continue to explore other measures to improve direct lift access for residents in these blocks," said the MND in its reply, adding that those who require direct lift access due to medical conditions can approach HDB for assistance. The Government launched the LUP in 2001 to provide direct lift access for residents in HDB blocks. Since then, it has benefited about 500,000 households from 5,000 blocks. The LUP, which is highly subsidised by the Government, cost a total of S$5 billion. - CNA/ek http://www.channelnewsasia.com/news/specialreports/parliament/hdb-studying-solutions-to/1402944.html 1,312 households granted more than 2 HDB loans between Jan 2013 and Jun 2014 Source: Channel News Asia / SIngapore SINGAPORE: Between January 2013 and June 2014, a total of 1,312 households were granted an HDB loan, even though they had already taken two HDB loans previously. They were among the 25,000 households who were granted mortgage loans during that period. The National Development Ministry said households who were granted more than two loans are exceptions to the rule, and HDB evaluates such requests on a case-by-case basis. It said these are typically flat buyers who have a steady income and are in urgent need of housing but are unable to secure financing from the banks due to poor credit records. The ministry said this in a written response to MP for Hougang Png Eng Huat, who asked how many flat owners had taken more than two loans from HDB and what was the qualifying criteria for such loans.
- CNA/xk http://www.channelnewsasia.com/news/singapore/1-312-households-granted/1402910.html CEO Conversations Source: Business Times http://epaper.businesstimes.com.sg/jr/jrpc.php?param=2014-10-08 (Pg 37 to 54) Views, Reviews & Forum Home Protection Scheme: Start coverage once payment is made Source: Straits Times / Forum Letters THE Home Protection Scheme is a compulsory mortgage insurance scheme for those using their Central Provident Fund savings to pay for the mortgage instalments of their HDB flats. One of the problems with it is that coverage does not start when one signs the Agreement for Lease for a new HDB flat; it starts only after the collection of keys. Buyers are already committed to the purchase of the flat by paying a down payment when they sign the Agreement for Lease. However, prior to the collection of keys, should one of the buyers die or suffer from permanent incapacitation, there is no insurance coverage. Can the authorities consider starting the coverage as soon as the first down payment is made?
Also, would the HDB refund the down payment on compassionate grounds when the purchase is foiled by unfortunate events such as death or permanent incapacitation? -By Wilfred Ling Help those affected by old resale levy Source: Straits Times / Forum Letters THE resale levy is certainly an obstacle to retirees buying a home from the HDB for the second time ("Waive resale levy for elderly flat buyers" by Mr Francis Cheng; Sept 29). There is another group of home owners who are in more dire straits. These are people who sold their first HDB flat before March 3, 2006, when the resale levy policy was revised. Those who sold five-room flats were subjected to a levy of 25 per cent of the resale price, or 90 per cent of the market valuation, whichever was higher.
I hope the Government can look into their plight and help them to retire comfortably. -By Simon Chan Kok Kwong http://www.straitstimes.com/premium/forum-letters/story/my-point-20141008 Lower property tax as prices fall Source: Straits Times / Forum Letters PROPERTY rental and sale prices have fallen since the middle of last year. Developers have slashed prices and offered discounts; owners who faced difficulty renting out their apartments have been forced to lower rents. Also, the property outlook for the next two years does not look good because of slower Asian economic growth and rising interest rates.
It is timely for the Inland Revenue Authority of Singapore to review annual property values and lower the property tax. -By David Goh Chee Hoe http://www.straitstimes.com/premium/forum-letters/story/my-point-20141008 Global Economy & Global Real Estate China's Anbang Insurance Group buys Waldorf-Astoria for US$1.95b Source: Business Times Builder shortage seen for London luxury homes Source: Business Times http://www.businesstimes.com.sg/real-estate/builder-shortage-seen-for-london-luxury-homes Allied World to Take Blue Vista Stake in Real Estate Bet Source: Bloomberg / News Allied World Assurance Co. (AWH) agreed to take a stake in private-equity firm Blue Vista Capital Management LLC in a push into real estate investing. The insurer will also invest $225 million of its portfolio with Blue Vista, Allied World said in a statement today that didn’t disclose the size of the stake. Allied World has turned to outside firms to help oversee a portfolio of more than $8 billion. The Zug, Switzerland-based insurer last year joined Crescent Capital Group LP, the investment manager co-founded by Milwaukee Brewers owner Mark Attanasio, in a bet on junk-rated debt. In 2012, Allied World agreed to take a stake in MatlinPatterson and invest $500 million with the firm. Such deals allow the insurer to benefit from management fees charged to other investors. “This is Allied World’s first foray into investing in the real estate sector,” John Gauthier, the former Goldman Sachs Group Inc. executive who is president of Allied World Financial Services, said in the statement. “We selected Blue Vista as a partner based on their prudent investment strategy.” Blue Vista was founded in 2002 and has raised more than $1.1 billion of institutional equity, according to the statement. The Chicago-based firm invests through limited partnerships and has bet on assets including student housing. Its clients include pension plans, insurers and wealthy individuals. -By Laura Davison Buffett Says ‘No-Brainer’ to Get Mortgage to Short Rates Source: Bloomberg / News Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), said he was puzzled by the sluggish rebound in U.S. home construction amid near record-low interest rates and a broader recovery in the economy. “You would think that people would be lining up now to get mortgages to buy a home,” Buffett said today at a conference hosted by Fortune magazine in Laguna Niguel, California. “It’s a good way to go short the dollar, short interest rates. It is a no-brainer. But so far home construction pickup has been slower than I had anticipated.” Housing starts slumped in August from the highest level in almost seven years to a 956,000 annualized rate, Commerce Department data show. Slow wage growth and tighter lending standards have kept some would-be borrowers from buying a home. Buffett, 84, whose Omaha, Nebraska-based company has units that build houses and make carpet, paint and bricks, reiterated today that he expects home building to pick up as the market rebounds from the deepest slump in more than seven decades. “Household formation falls off dramatically in a recession, at least initially,” he said. “But that doesn’t last long. Hormones kick in and in-laws get tiresome, too.” Vacancy rates for U.S. apartments have been at 5 percent or less since the first quarter of 2012, according to Reis Inc., a property research firm. Car DealershipsOther parts of the economy have come back faster than housing. Buffett said today that he was surprised by the rate of increase in auto sales, in particular, and that he would have anticipated housing to be better given that carmakers are on pace to sell almost 17 million vehicles in the U.S. this year. Buffett agreed last week to buy Van Tuyl Group, a collection of 78 car dealerships, in a bet that the industry will consolidate. The company will be renamed Berkshire Hathaway Automotive. Buffett also emphasized the appeal of 30-year fixed-rate mortgages, which can be refinanced if rates fall or remain outstanding if rates rise. That provides a way to bet against higher borrowing costs, with a hedge against a decline. Shorting interest rates is a bet they will rise. The average rate on at typical 30-year, fixed-rate mortgage was 4.19 percent last week, Freddie Mac surveys show. That compares with the 6.14 percent average during the past two decades. “It’s an incredibly attractive instrument,” Buffett said. “It’s a 30-minute instrument if you’ve been wrong on interest rates and it’s a 30-year instrument if you’ve been right on interest rates.” Berkshire is the largest shareholder in Wells Fargo & Co. (WFC), the biggest U.S. home lender. -By Noah Buhayar http://www.bloomberg.com/news/2014-10-07/buffett-says-no-brainer-to-get-mortgage-to-short-rates.html Chow Channels De Blasio in Plans for Toronto Housing Source: Bloomberg / News Olivia Chow plans to emulate the affordable housing policies of New York Mayor Bill de Blasio and the traffic-fighting strategies of Chicago if elected to run Canada’s largest city. Chow said she’d seek to allocate 20 percent of each new residential tower to affordable housing in a push to add 15,000 low-income rental units in Toronto, reminiscent of De Blasio’s platform. She would also fight gridlock by raising the fee developers pay when blocking city streets during construction like Chicago does. “I learned from New York,” Chow said in an interview at Bloomberg’s Toronto office yesterday. “We have similar challenges. We have a prosperous city, but we also have some neighborhoods where people are getting left behind. Bill de Blasio in New York said ‘No one should be left behind’ and a focus on investing in children is where I’m coming from.” House prices in the city of 2.6 million residents soared 7.7 percent last month to a record and drivers face one of the longest rush-hour commutes in North America. Congestion costs the city and its surrounding area as much as C$11 billion ($9.9 billion) a year, according to the Toronto-based nonprofit research institute C.D. Howe Institute. Chow is up against John Tory, an ex-Rogers Communications Inc. executive in Toronto’s Oct. 27 municipal election and Doug Ford, a city councilor who entered the leadership race when his brother and incumbent mayor Rob Ford dropped out after being diagnosed with cancer. Rob Ford garnered international attention last year after admitting he smoked crack cocaine. Housing SurgesAfter a strong start at the beginning of the campaign Chow has fallen behind, garnering 22 percent of support in a Forum Research poll of 1,218 voters conducted yesterday. Ford, who like his brother has emphasized tax cuts, surged to 37 percent support, according to the poll, which had a margin of error of 2.8 percentage points. Tory is in the lead at 39 percent, the poll said. Chow, a former federal member of parliament for the New Democratic Party, said that many people can’t afford to live and work in the city, which crimps economic growth. “The affordability of housing” is a crisis situation, said Chow. “People pay far too much of their income because the rent is too high, they can barely afford it. Which means they don’t have a lot of money left to go out, buy a meal.” There were about 91,000 people on the waiting list for affordable housing last year in the city, according to the Ontario Non-Profit Housing Association. Kids NutritionAt the same time, there are more condo towers under construction in Toronto than any other city in North America. Home prices last month climbed 7.7 percent to C$573,676 from the same month the previous year. The International Monetary Fund said that the high household debt and overvalued housing market pose a risk. “We are continuing to get a lot of immigrants coming to the city,” Chow said when asked about the housing boom. “As long as we keep growing, there is housing demand. The vacancy rate is very, very low.” In New York, De Blasio was voted in with a platform that prioritized public housing. So far he’s pushed to construct or preserve 200,000 affordable-housing units, provide rent subsidies and universal, all-day pre-kindergarten. Chow’s platform includes expanding after-school programs by about C$3.2 million per year, adding C$2 million a year to the kids nutrition program she started while on the school board as a local Toronto politician in the 1980s, and investing C$15 million to create 3,000 new child-care spaces in the city. Federal FundingOn transit, a central issue in the campaign, Chow said she’d raise the fee for developers blocking city streets to help traffic flow more freely. She would also push the provincial and national governments to inject more cash into the transit system in North America’s fourth-largest city. “What we need is a provincial and federal government that returns some of our tax dollars back to the city,” she said. Without long-term funding from the other levels of government, Toronto can’t plan development, she said. “It’s not just me saying it, it’s big cities saying that we have to change how we work together. That’s what’s holding Canada and municipalities back.” -By Katia Dmitrieva http://www.bloomberg.com/news/2014-10-07/chow-channels-de-blasio-in-plans-for-toronto-housing.html Deutsche Bank Said to Explore Selling U.S. Real Estate Source: Bloomberg / News Deutsche Bank AG (DBK) is exploring the sale of about $2 billion of U.S. commercial real estate loans held by the bank’s Special Situations Group, according to a person with knowledge of the matter. Germany’s largest lender is considering a joint venture with a private-equity firm, said the person, who asked not to be named because the talks are private. The assets comprise distressed mortgages and other types of debt. Amanda Williams, a spokeswoman for Frankfurt-based Deutsche Bank, declined to comment on the potential sale. Deutsche Bank is seeking to take advantage of rising real estate values and investor appetite for higher-yielding debt. Financial institutions around the world are also shrinking their businesses because of stricter capital rules and before the implementation of the Volcker Rule, a provision of the 2010 Dodd-Frank Act that restricts banks’ ability to trade with their own money. The Special Situations Group is overseen by Jonathan Pollack, the New York-based global head of commercial real estate for Europe’s biggest investment bank. In the aftermath of the financial crisis it bought distressed assets including a portfolio of loans from Capmark Financial Group Inc. in 2012. Private EquityAlternative-asset investing firms including Oaktree Capital Group LLC (OAK), Ares Management LP (ARES) and Apollo Global Management LLC are expanding their real-estate offerings as they diversity their revenue streams. Oaktree this year hired Ben Bianchi, the former global head of Deutsche Bank’s Special Situations Group, as the Los Angeles-based firm raises its first real estate debt fund. Oaktree is seeking returns net of fees in the high single digits with its real estate debt strategy, John Frank, the firm’s vice chairman, said on a February conference call. The group is seeking opportunities that carry less risk than those pursued by its real estate opportunities funds, and the debt strategy has appealed to investors seeking yield, Frank said. Deutsche Bank is a dominant player in the commercial-mortgage bond market where loans on everything from strip malls to skyscrapers are packaged into securities and sold to investors. The bank has been the top underwriter in the U.S. since 2011, according to the Commercial Mortgage Alert, an industry newsletter. -By Sarah Mulholland and Devin Banerjee http://www.bloomberg.com/news/2014-10-07/deutsche-bank-said-to-explore-selling-u-s-real-estate.html |
