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19 July 2019 / Issue 29

By in Weekly News Review with 0 Comments

Top News for the Week


GuocoLand mounts drive to be leader in urban rejuvenation

Having gone into building integrated developments in addition to condos in the last decade, GuocoLand is starting to think about the next steps for its Singapore business.

GuocoLand Singapore’s group managing director Cheng Hsing Yao said that it is contemplating new asset classes, business lines or even possibly a Reit.

But for now, one of its main focus is Guoco Midtown on Beach Road, its second integrated development project in Singapore, to be completed in 2022.

The S$2.4 billion Guoco Midtown will feature a 30-storey office block, a residential tower Midtown Bay and an array of public spaces. Mr Cheng hopes that this – along with its first integrated project Guoco Tower – will build the group’s reputation as a leader in urban rejuvenation here and abroad.

With Guoco Midtown, Mr Cheng’s goal is to rejuvenate the Beach Road area, similar to how, he said, Guoco Tower enlivened the Tanjong Pagar area with an influx of corporates and their staff to work and dine.

He sees Midtown as the “missing link” connecting the various developments in the City Hall; Bugis and Marina Centre sub-markets.

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‘High-rise’ schools in the city?

Guocoland Singapore has been trying to push the envelope on what an integrated development here could look like.

For example, at its first such project at Guoco Tower, it created a 150,000 sq ft park in order to create a “clear focal point” for the Tanjong Pagar district.

GuocoLand Singapore’s group managing director, Cheng Hsing Yao, said: “We could have built a six-storey building on top of the MRT station but we wanted to preserve the feeling of that large public space.”

At Guoco Midtown, it will allow residents at the condo component and office tenants alike to use facilities at Midtown Hub, a “social and business club” at an annexe block with facilities like a swimming pool and jogging circuit.

The idea is to make the integrated development “an extension of the residential space,” he said. But to make city living more attractive, Mr Cheng suggested integrating mixed developments in the city elements like enrichment facilities or childcare centres – or even integrate “high-rise” schools into developments.

For such efforts to become reality it may require not just the private sector but also the Government to play a role, he added.

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June new home sales up 26% year on year

Demand for new homes in June – typically a slow month in the Singapore property market due to the school holidays – appeared resilient although developers sold fewer units.

Figures released by the Urban Redevelopment Authority showed that, compared with a year ago, sales last month rose 25.5 per cent to 821 from 654 units booked last year. Including executive condominiums, developers moved 822 units.

Some 670 private homes were launched last month, down nearly 52 per cent from 1,394 in May, and down 7.7 per cent from 726 units a year ago.

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Belmont Rd bungalow auction price: $42m

A Good Class Bungalow (GCB) at 80 Belmont Road will be auctioned next week in a mortgagee sale with a guide price of $42 million.

That works out to a price tag of about $1,557 per sq ft.

The auction will take place on Tuesday at 2.30pm at the Connection Room on Level 3 of Amara Singapore Hotel.

The two-storey freehold property has a land area of 27,000 sq ft and floor area of 15,714 sq ft. Its sprawling grounds include a covered car porch, lift, swimming pool, playground, basketball court and landscaped garden.

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Singapore Shopping Centre on en bloc market with S$255m reserve price

Singapore Shopping Centre has put itself on the collective sale market with a reserve price of S$255 million.

The seven-storey retail and office development, located at 190 Clemenceau Avenue in the Orchard area, spans a land area of 2,449.8 sq m.

It is zoned for commercial use under DMP19 with a plot ratio of 4.2+.

The development also has a “prominent triple-road frontage onto Clemenceau Avenue, Penang Road and Penang Lane” and is located opposite Dhoby Ghaut MRT.

The tender closes on Sept 9.

Link to the story:  price


WeWork leasing 21-storey tower in CBD

CapitaLand Commercial Trust (CCT) will lease out 21 Collyer Quay – a 21-storey building in Singapore’s financial district currently occupied by HSBC – to United States co-working giant WeWork.

The move marks WeWork’s expansion in Asia. The tower will be its biggest property in Singapore and has a net lettable area of about 200,000 sq ft.

The lease with WeWork will start in the second quarter of 2021 for a period of seven years, said CCT, without disclosing financial details of the new deal.

CCT’s lease deal with Hongkong and Shanghai Banking Corp, a unit of HSBC Holdings, will end in April next year.

WeWork’s new lease will give it rare signage rights in the country’s financial district. Rents for grade A buildings in Singapore’s CBD surged 12.7 per cent last year.

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Beauty World Plaza’s second en bloc try ends with no takers

Beauty World Plaza’s second en bloc attempt at an unchanged reserve price of S$165 million failed to draw any takers.

Its collective sale tender, launched on June 17, without a single bid. The first launch was in late November last year.

The 24,817 sq ft mixed-used development has since moved into the 10-week private treaty period, The private treaty period allows owners to negotiate with interested buyers.

The land rate works out to S$2,189 per sq ft per plot ratio. No development charge is payable for redevelopment to the maximum permissible gross floor area of about 75,362 sq ft.

The estate has in-principle approval for the redevelopment of the residential part to serviced apartments.

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MPH’s last two stores to close

MPH Bookstores is closing its last two outlets in Singapore, citing high rental costs. Its Raffles City outlet will put up the shutters on July 28, while the outlet at Parkway Parade will close on Sept 1.

The bookstore chain’s general manager of business development, Ms Ivy Tan, said the high rental cost is no longer sustainable for the two outlets.

MPH is, however, looking at opening a new outlet, though it would not say where.

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Over 40 new standards to be developed for new tech, business processes

The Singapore Standards Council (SSC) will in the coming months develop more than 40 new standards for nascent technologies and business processes such as additive manufacturing and video analytics, in its push to keep pace with economic transformation and new technologies.

Enterprise Singapore (ESG), which oversees the execution of the Singapore Standardisation Programme led by the SSC, said the council will rope in more experts in these emerging fields to lead and support the development of these standards over the next year. This will be important especially for nascent areas “where greater collaboration and discussion are crucial to identify the new and unaddressed needs for standards development”, said ESG.

Standards are sets of specifications designed to enhance market acceptance, innovation and quality in various materials, products, methods and services. These benchmarks are reviewed every five years.

Links to the story: business-processes


Public sector rolls out measures to ensure safety of personal data

The entire public service will have to conform to a common framework to safeguard citizens’ personal data, with new measures being rolled out after a spate of breaches in the past year.

The aim is to make databases unusable in case information has been wrongfully extracted from them. The measures, some of which are already in place, will also detect unusual data transmissions and limit users’ access rights.

Sensitive files will now have to be encrypted. Highly sensitive information about individuals, such as their HIV status, will be hidden away in a separate system with tighter controls. The personal information of ministers and other important people will also be kept in separate systems with more stringent protection.

The 13 technical measures announced are the first of many to come from a new Public Sector Data Security Review Committee convened by Prime Minister Lee Hsien Loong in April.

More measures, including ways to better manage third-party vendors and train public servants on data security practices, will be revealed later and included in the committee’s final report due in November this year.

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What Singapore’s first dementia care village in Sembawang could be like

Dementia care villages, such as the one planned for Gibraltar Crescent, encourage residents to live as independently as possible despite their age and condition.

One such village is De Hogeweyk in Amsterdam, where patients are encouraged to shop for their daily needs at a supermarket and eat at restaurants.

Rather than being confined to a room or a bed, residents there are allowed to wander around the village. They also live with other residents in an apartment and have to manage the household with help from staff.

This style of living is said to help slow the rate of decline in dementia patients by discouraging dependency.

The Ministry of Health (MOH) and the Urban Redevelopment Authority said the Gibraltar Crescent village is meant to complement home-based care and dementia daycare services currently available in Singapore.

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Singapore, Indonesia eye new cooperation projects

Singapore and Indonesia are on the lookout for opportunities to work together more closely in infrastructure, investment and human resource development – three of the key areas Indonesian President Joko Widodo has flagged as crucial to helping his country weather turbulence in the global economy.

The age of digital disruption and shifts in global value chains will bring challenges, but it also offers new opportunities, said Singapore’s Foreign Minister Vivian Balakrishnan.

He was speaking to Singapore media as he wrapped up a three-day working visit to Jakarta, which included a meeting with his Indonesian counterpart Retno Marsudi, as well as a call on Mr Joko. The trip, he said, gave him the opportunity to gain a deeper appreciation of Mr Joko’s priorities as the President gets set to start his second term in October.

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Q2 growth slumps; full-year recession not expected, says Heng Swee Keat

Singapore’s economic growth in the second quarter slumped to its worst showing in a decade, far below what analysts had anticipated.

Growth slowed to 0.1 per cent in the second quarter, according to flash estimates by the Ministry of Trade and Industry (MTI).

Deputy Prime Minister Heng Swee Keat, however, put out word that a full-year recession is not on the cards at this point.

Manufacturing was the key drag, shrinking 3.8 per cent from the previous year and 6 per cent from the last quarter.

Links to the story: recession-fears


Higher chance of MAS easing monetary policy in Oct: Analysts

Singapore’s central bank is increasingly likely to ease monetary policy at its semi-annual meeting in October in a bid to boost an export-reliant economy being choked by the US-China trade war, economists said.

Seven of 11 economists polled by Reuters said they expect MAS to loosen policy in October, with the other four forecasting no change.

There is the growing prospect that Singapore could slip into recession later this year, with its core manufacturing sector being particularly affected by the US-China tensions. Core inflation, another key consideration for MAS, is at the lower end of its target band.

The central bank manages monetary policy through exchange rate settings rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed policy band.

MAS can use several tools to change policy, but most commonly, it will adjust the so-called slope of this band, which determines the pace at which the currency can move.

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IMF: Singapore’s financial sector oversight among world’s best, but 2019 growth outlook is weaker

The International Monetary Fund (IMF) has reaffirmed Singapore’s financial sector oversight to be “among the best globally”, and described the country’s economic fundamentals as strong, and its economic policies as sound.

This was its third financial sector assessment programme (FSAP) done on Singapore, with the last one done in 2013.

The IMF said the overall sector is resilient, with healthy buffers to withstand severe adverse shocks.

The IMF said Singapore’s financial system was resilient even under very adverse scenarios, as demonstrated by stress tests, including that of large-scale global financial market turmoil.

Meanwhile, the IMF lowered its 2019 economic growth forecast for Singapore from 2.3 per cent to 2 per cent.

Singapore’s economy grew just 0.1 per cent in the second quarter, its slowest annual pace in a decade, raising possibilities of a recession and monetary policy easing.

Links to the story: but-2019-growth-outlook


Retail sales fall 2.1% in May, sliding for 4th straight month

Takings at the till dropped for the fourth consecutive month in May as wary consumers kept a tight rein on their purse strings.

Retail sales slid 2.1 per cent over the same period last year, according to figures released by the Department of Statistics, although that still beat the expectations of analysts in Bloomberg, who tipped a fall of 3 per cent.

If motor vehicles are excluded, sales would have dropped 1 per cent year on year against a 2.1 per cent fall in April.

May’s estimated total retail sales value was about $3.7 billion with online making up about 5.3 per cent of this. Analysts remain cautious regarding the retail outlook for the rest of the year.

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Singapore construction sector may face long slowdown in medium term: Fitch

Singapore’s construction sector faces increasing risks of a protracted slowdown in growth in the medium term, due to the poorer global economic outlook over the next few years, Fitch Solutions Macro Research said in a report.

The sector will see growth weakening to 2.7 per cent in 2020 and 0.5 per cent in 2021 in real terms, Fitch said.

However, in the short term, the construction sector is likely to grow by 3 per cent, supported by an expected short-term stronger performance in the buildings sector.

Link to the story: term-fitch


Singapore exports register biggest fall in over six years

Singapore exports endured their biggest fall in more than six years amid the worsening global trade climate – and analysts say a recovery in the second half of the year is now looking less likely.

Non-oil domestic exports (Nodx) fell by double-digits for the fourth straight month in June, with shipments in the key electronics sector sinking by around a third.

The broad-based slide comes shortly after economists trimmed their full-year growth forecasts for the Republic, with flash figures for second-quarter growth last week coming in at just 0.1 per cent. The recent set of bad data has dashed any hope of a recovery in the second half. Typically, by the middle of the year, we should see numbers stabilising. But instead, we see further decline. The pace of decline has also accelerated.

Nodx slumped 17.3 per cent compared with a year ago, down from a revised 16.3 per cent fall in May, Enterprise Singapore said. It was the biggest year-on-year drop since February 2013 and sharply below analysts’ expectations of a 9.6 per cent fall in a Bloomberg poll.

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Tokyo-Seoul dispute adds to Singapore exporters’ woes

A new battlefront triggered by the South Korea-Japan trade dispute and possible structural shifts in the electronics supply chain battered Singapore’s June exports, with the electronics sector suffering its worst performance in a decade.

Non-oil domestic exports (NODX) fell by 17.3 per cent year on year, widening May’s 16.3 per cent slide. On a seasonally adjusted, monthly basis, NODX slid by 7.6 per cent to S$12.9 billion, against an increase of 5.8 per cent in the month before.

Export performance hit a six-year low in June and is the fourth straight month of double-digit decline – on contractions in both electronics and non-electronic sectors. Economists – already fretting over the full-year gross domestic product (GDP) outlook after shockingly poor second- quarter flash estimates last week – now warn that the Republic is trailing its regional electronics peers as well.

Electronic shipments, which have been on a downward jag since late 2017, shrank by 31.9 per cent in the sector’s worst showing since 2009.

Singapore’s total trade decreased by 7.2 per cent year on year in June, as both exports and imports fell – widening a slip of 2.2 per cent in May.

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Rolls-Royce, A*Star pump extra S$8m into joint lab

Rolls-Royce and the Agency for Science, Technology and Research (A*Star) announced that they are investing a further S$8 million into their joint lab with Singapore Aero Engine Services (SAESL).

The investment brings the total investment into the five-year collaboration to S$69 million, and will fund a sixth workstream focused on developing advanced maintenance, repair and overhaul (MRO) technologies for repairing high-value engine components.

As with the initial investment in 2017, the funds will be used to develop technology solutions in A*Star’s Advanced Remanufacturing and Technology Centre (ARTC) for problem statements from Rolls-Royce and SAESL. The five original workstreams in the first phase were focused on smart assembly systems, integrated remanufacturing technologies, advanced fan blade manufacturing, future manufacturing processes and knowledge-based manufacturing.

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Rolls-Royce, NTU partnership enters 2nd phase with $88m boost

As the global aviation sector continues to take off, innovations that will be developed here aim to make the industry both more efficient and environmentally sustainable.

These include the development of energy storage solutions for hybrid-electric aircraft which, coupled with the use of other technology, could cut aircraft carbon emissions by as much as 30 per cent, said Rolls-Royce central technology director David Smith.

He said prototypes of such aircraft will be in the air within a year, with the technology likely to become more commonplace within the next decade.

This is among 29 projects being developed as part of an $88 million second phase of a research partnership between the British engineering giant, the Nanyang Technological University (NTU) and the Government.

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JTC, NTU to start advanced manufacturing training programme for undergrads

Singapore plans to maintain manufacturing at 20 per cent of its gross domestic product (GDP) but the changing nature of the industry requires a more skilled and talented workforce.

To meet this demand, JTC has teamed up with Nanyang Technological University (NTU) and manufacturing companies to launch an advanced manufacturing talent training programme for undergraduates.

“Investments in technology and infrastructure must go hand in hand with investments in our workers, so that they are equipped with the right skills to support companies in their growth and transformation,” said Senior Minister of State for Trade and Industry Chee Hong Tat in his speech at the launch of the NTU-JTC Industry Talent Development Programme.

The programme is a collaboration with eight industry partners to equip students with advanced manufacturing skills and competencies through industry internships and projects. The participating companies are: the Agency for Science, Technology and Research (A*Star), Bosch Rexroth, ISDN Software, Konica Minolta, Delta Electronics, PBA Group, Shimano (Singapore) and Sodick Singapore.

Links to the story: programme-for-undergrads


Singapore firm budgets up to S$15m for a full smart factory

Amid manufacturing headwinds, Fong’s Engineering and Manufacturing is prepared to spend up to S$15 million to launch a full-fledged smart factory in the next three to five years, in a bid to boost revenue and productivity.

Fong’s, which manufactures high-end medical devices largely for US medical devices companies, aims to run its production round the clock with minimal human intervention, aided by an integrated manufacturing shop floor with advanced robotics and autonomous robots.

The system will also come with Industrial Internet of Things (IIoT) capabilities for collecting data, allowing the company to track the performance of individual machines and conduct production planning.

One of its three production lines has already been transformed, for over S$3 million, said Jeremy Fong, chief executive officer at Fong’s, during the launch of the company’s smart factory journey on Tuesday.

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Singapore ‘Fort Knox’ maximum-security vault said to be up for sale

Asia’s “Fort Knox”, a private, maximum-security vault in Singapore, is up for sale.

Le Freeport, a multi-storey repository for fine art, precious gems and even JPMorgan Chase & Co’s stash of gold, has been seeking a buyer since as far back as 2017, so far without success, according to people familiar with the matter.

Owner Yves Bouvier, a Swiss art dealer, has been embroiled in a five-year legal brawl with a Russian billionaire and has been selling assets.

Opened in 2010 at a cost of about US$100 million, the vault sits on a large tract of government land with direct access to the runways of Changi Airport.

Formerly known as the Singapore Freeport, the building was heralded as part of the city-state’s effort to boost its wealth management industry and become a regional hub for luxury collectibles and bullion trading.

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Cleaning robots to be available island-wide by March 2020

Made-in-Singapore robots that clean up public spaces – and sing and rap while at it – will be available island-wide by March next year.

They were designed and developed by Singapore-based manufacturer LionsBot International, which set 300 such robots to work at Gardens by the Bay.

LionsBot, which lays claim to being the world’s first company to lease out robots on a subscription model, will rent out these machines to six cleaning companies, including Chye Thiam Maintenance and Absolute Maintenance Services.

Leasing these robots costs between S$1,350 and S$2,150 a month; designing and developing them cost S$5 million over two years.

These smart machines give productivity a lift by doing more than human workers can and making fewer mistakes in manual and repetitive tasks.

Links to the story:  2020


Row of six Joo Chiat shophouses up for sale

A row of six three-storey shophouses in Joo Chiat Road has been put for sale via public tender. To be sold as a bundle, the conservation shophouses are located at 454, 456, 458, 460, 462, and 464 Joo Chiat Road.

They sit on a freehold site of about 7,400 sq ft and the total existing built-up area is around 13,000 sq ft.

The property is zoned for commercial use with a plot ratio of 3.0 and a maximum allowable gross floor area (GFA) of some 22,200 sq ft, under the Urban Redevelopment Authority’s Draft Master Plan 2019.

The buyer can choose to either immediately receive stable rental income based on the current GFA, or value-add to the property and fully maximise the allowable GFA by building a rear extension, subject to the authorities’ approval.

Alternatively, the buyer can configure the space to suit his or her own-use requirements or to cater to the needs of the tenants.

Links to the story: tender


Property speculators hope for investment paradise in south-west China

Real estate in eastern and southern cities is under a policy lockdown that has suppressed big price gains since 2017. Central China is slowing after hitting dizzying heights, while the sparsely populated north and west draw only the bravest of speculators.

But Xishuangbanna, thousands of miles from Beijing and Shanghai, ticks many boxes for profit- driven investors. Besides lush landscapes, it has few restrictions on home purchases.

And for the price of a bathroom in Beijing or Shenzhen, investors can get an apartment with a view of the Lancang River.

Big-name developers such as Ping An Real Estate, Dalian Wanda Group, Sunac China Holdings and Agile Group Holdings have all rushed to build to homes there.

Many investors are also betting on Xishuangbanna’s location in the Belt and Road network spearheaded by Chinese President Xi Jinping.

Property investors are also piling into other Yunnan cities such as Tengchong and Ruili. In neighbouring Guangxi Zhuang Autonomous Region, the port cities of Fangchenggang and Beihai are seen as strategic places to buy, as they are maritime nodes on the Belt and Road network.

Link to the story: china


Smaller London home-price drop shows market is stabilising

London house prices fell less than usual this month as sellers held back in a sign that the market may be stabilising.

Home values in greater London slipped 0.2 per cent, compared with an average 0.6 per cent drop for July over the past five years. From a year ago, prices slid 1.7 per cent to an average £617,941 (S$1.05 million).

The average time taken to sell a property held steady at 67 days, a tentative sign that the market is “bottoming out”. The number of new sellers in the capital was down 18 per cent from a year earlier, with the scarcity of listings worst in the centre of the city.

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Lee Sze Teck Head, Research




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