from the ground Up

by Jessica Cheam, September 30 2008

Rivals are ‘neck and neck’ in race for global trading role, says expert

SINGAPORE and close rival Hong Kong are “neck and neck” to claim the title of Asia’s first carbon trading hub, said an industry expert.
While Singapore was ahead a year ago, Hong Kong is fast catching up and might clinch the title, said Mr Shane Spurway, head of carbon banking at Fortis Bank.
Hong Kong’s location gives it an advantage as it is so close to China, said Mr Spurway. And although Singapore has been more pro-active in setting up carbon trading infrastructure, Hong Kong is rapidly beefing up its own.
Hong Kong announced in June that it had established the legal framework to allow projects that could sell on their reductions in carbon emissions, added Mr Spurway.
Singapore had already put this in place as it ratified the Kyoto Protocol in 2006.
Recently, a new trading platform called the Singapore Mercantile Exchange (SMX) was also announced. This will allow local investors to buy and sell carbon credits for the first time when it is operational next year.
Hong Kong’s growing interest is due to its search for other revenue streams to support its financial industry, said Mr Spurway. But it is difficult to say who will emerge in the lead, he added.
Mr Spurway, who was speaking to The Straits Times last week on a range of carbon issues, also touched on eco-financing in Asia.
These are projects, regulated by the United Nations under a Clean Development Mechanism set up under the Kyoto Protocol, that generate carbon credits. One credit is one less tonne of carbon dioxide emission produced.
The credits are then traded and bought by firms, normally from Europe, which have to comply with reduction targets on greenhouse gas emissions.
Industry leaders such as Mr Edwin Khew, chief executive of waste-recycler IUT Global, have noted that banks – especially local ones – do not have a good understanding of carbon projects.
The result is that good projects cannot get kick-started without seed money.
Mr Spurway acknowledged the problem but said that banks needed to have their “checks in place”. “They need track records and proven balance sheets to grant funding, so as to protect themselves,” he said.
He foresees that “carbon specialists” will emerge to bridge companies’ ideas with financial institutions.
The carbon market also “really needs entrepreneurs and investors to come in”, as there are many good ideas being generated, but these need to be commercialised and brought to market, he said.
Ultimately, the carbon market will go into full swing only when “America joins the party”, he said.
It is likely that whoever wins the upcoming presidential election will set up a cap-and-trade system, like those in Europe, to impose industry targets, he said.
Asia’s role is extremely crucial as it is a major supplier of carbon credits.
Considering that the bulk of emissions until 2030 will be coming from Asia, “it’s even more important to make industries more efficient. And that’s where carbon trading comes in”, he said.

by Jessica Cheam, The Straits Times, September 30 2008
An appeal by buyers Mergui Development has been granted by the Singapore Land Authority (SLA), to reduce the price of a 1,000 sq m section of a road needed for redeveloping the project.
Developer KSH Holdings, the parent company of a firm in the Mergui Development consortium, told [...]

by Jessica Cheam, The Straits Times, September 30 2008
THEY are among the priciest flats ever launched by the Housing Board, but there has been no shortage of potential buyers.
The 50-storey Pinnacle@Duxton in Tanjong Pagar has attracted 1,467 applications for the 428 four- and five-roomers on offer – that is about 3.5 hopefuls for each unit.
Cheaper [...]

Reading some blogs recently, I came across quite a few disgruntled citizens complaining about the highly controversial F1 which came to town.

On one hand, I’m not convinced that F1 coming to Singapore is definitely a good thing (especially not for the environment), but on the other hand I think it’s too easy for people to complain about it. One example is here, which was written in response to Carl Skadian’s recent commentary on Singaporeans’ indifference to the event.

As much as I disapprove the mind-boggling footprint of the F1, I have to say that I was pretty proud of how amazing our city looked to the world. Considering I have lots of European friends who often ask what Singapore is like, it was a pretty good result judging by the texts I was getting from them about the race. I was even excited enough to attend one of the practice sessions though I’m not an F1 fan. I think people don’t appreciate the full extent of the effort that went into organising the race and making it a historic success. They weren’t lying when it said hosting the sport will put Singapore on the world map.

Not saying that I’m advocating it. Here are more of my thoughts, published on The Straits Times blogs.

by Jessica Cheam, The Straits Times, September 27 2008
WHILE Formula One is not exactly known for its environmental qualities, one company here has taken the step to prove that eco-friendliness has a place alongside high-revving race cars.
The Singapore FreePort company has installed an 86 sq m solar canopy on top of its skylounge hospitality suite [...]

by Jessica Cheam, The Straits Times, September 26 2008
NORWAY is now Singapore’s sixth largest foreign investor, as increasing numbers of firms from the Scandinavian nation site their operations here.
Foreign direct investment from Norway stood at $14.8billion in 2006, up from $8.6billion in 2005, according to the Department of Statistics.
While both nations are starkly different in [...]

by Jessica Cheam, The Straits Times, September 24 2008

Central, Bukit Merah and Queenstown among popular HDB estates

IF YOU want to live in an HDB flat close to the city, be prepared to pay as much as 50 per cent more than if you choose to stay out in the sticks.
Prices for resale flats in estates near the city such as Central, Bukit Merah and Queenstown have left the rest of the country behind in recent years, according to new HDB data obtained by The Straits Times.
And what is particularly striking is how fast that price differential has widened.
PropNex chief executive Mohamed Ismail pointed out that in 1996, the difference between inner city flats and the national average was only around 11 per cent. Now it is around 50 per cent.
Take a four-room flat in Bukit Batok. In 1996, it sold for an average of $252 per sq ft (psf), while a similar one in Queenstown was sold for $280 psf.
The HDB’s latest second-quarter data shows that the Bukit Batok flat would now sell for about $303 psf while the Queenstown flat commands $458 psf.
The price gulf will only widen, say analysts, given the shortage of prized flats, and factors like increasing transport costs that make people more inclined to live closer to their place of work.
In the long run, “unless there’s a successful decentralisation strategy, the gap is unlikely to narrow”, said Mr Colin Tan, head of research and consultancy at Chesterton International.
About 52,000 HDB flats, or 6 per cent of total supply, are in inner city areas.
The new HDB data puts in stark terms how prices can differ.
January to July figures showed that resale prices of four- and five-room flats in estates near the Central Business District were about 48 to 52 per cent higher than the national average.
Popular locations include Smith Street, Tanjong Pagar Plaza, Cantonment Close, Jalan Membina and Stirling Road.
While a four-room flat commands an average price of $295 psf islandwide, this shoots up to $437 psf in city areas – a 48 per cent jump.
Similarly for a five-roomer, the average price of $303 psf spikes 52 per cent to $461 psf nearer the city.
The resale market is the obvious way in but homebuyers also have a chance via the HDB’s balloting exercises.
These are wildly popular, as offered units are in highly coveted central locations surrounded by amenities – and are priced with the HDB’s market subsidy.
In January, in the HDB’s latest ballot, 278 flats in Bedok, Clementi, Queenstown and Jurong West received a staggering 9,901 applications.
The price range for four-room flats was $141,000 to $398,000, the five- room units cost $218,000 to $532,000 and the executive flats $333,000 to $470,000. Prices depended on location and features of the units.
Some homebuyers, however, have baulked at the high cost of new flats.
Auditor Ho Koon Woei, 31, said he noted the new flat prices increasing at least $100,000 on average in mature towns in the last two years.
“Such a hike in prices in a short timeframe makes it more unaffordable for first-timers,” he said.
The HDB has not held a ballot since January, but analysts expect prices of any upcoming new flats in central areas to match the market prices.
While private home prices lost steam and inched up just 0.17 per cent in the last quarter, HDB resale prices rose 4.5 per cent.
Some, such as Mr Tan, feel that the HDB “should be mindful that it does not add to the escalating price trend” in the resale market.
The HDB’s new flat prices would effectively set a price floor – a level at which resale flats will not be sold below.
And if resale flats are priced above new flats, and new flats are pegged to market rates, there is a danger of a price spiral, he added.
“In the pricing of its flats, it should err more towards affordability rather than market pricing,” said Mr Tan.
However, this does not mean that the HDB should offer such low prices that it affects market prices, say analysts.
“If prices are excessively cheap, that will affect the existing prices of city properties,” said Mr Ismail.
Ultimately, he feels demand for city properties will price flats accordingly.
On a psf basis, HDB flats at premium prices are still far cheaper than private homes in the city, which are priced from $1,000psf upwards, he pointed out.
“I wouldn’t be surprised if in the next 15 years, the premium of a city HDB flat achieves 100 per cent more than a flat in suburban areas.”

by Jessica Cheam, The Straits Times, September 24 2009
10-year high comes in year marked by mega deals, strong demand
THE property market’s bull run might have stopped but not before sending land sale revenue at the Singapore Land Authority (SLA) to a 10-year high of $12.4 billion.
Its bumper result for the 12 months ended March 31 [...]

by Jessica Cheam, The Straits Times, September 23 2008
THE fate of the bay windows and planter boxes in private condominiums has been sealed, and homebuyers could see less of such features.
The Urban Redevelopment Authority (URA) is standing by its decision to abolish the exemption of such features in gross floor area (GFA) calculation.
But a recent [...]

by Jessica Cheam in Hong Kong, The Straits Times, September 18 2008

BY JESSICA CHEAM
IN HONG KONG
HONG Kong’s public rental housing system has thrown some ideas out for the Housing Board to mull over.
Senior Minister of State (National Development and Education) Grace Fu, who is leading a Singapore delegation to the territory, said about a third of Hong Kong’s population lives in 670,000 rental flats.
These comprise a wide range of homes catering to different family sizes and circumstances.
The Hong Kong Housing Authority (HKHA), which administers rental housing, provides flats at subsidised rates for as long as 10 years.
It also has “interim” and “transit” housing for families waiting to move into rental flats or those rendered homeless temporarily.
Ms Fu said Hong Kong’s “product offering is wider, and it provides good ideas for us”.
Over the past two days, the Singapore delegation has been meeting officials from the HKHA and the Hong Kong Housing Society (HKHS) and visiting public and elderly housing projects. The delegation is on a three-day working visit that will end today.
Ms Fu told reporters yesterday that Hong Kong has a different priority system for its rental flats. It has three queues – for the elderly, families with elderly members, and singles – with varying average waiting time. The family’s income levels and assets are used in the eligibility criteria, and rents are determined according to incomes and not pegged to market rates.
These are ideas “worth considering as well”, Ms Fu said.
The HDB is currently reviewing the eligibility criteria for rental flats, which have seen a surge in demand in the past year.
The waiting time for a new flat has now stretched to nine to 18 months from just two to six months two years ago.
Aljunied GRC MP Cynthia Phua, a member of the delegation, has suggested that perhaps it is time to review the percentage of rental flats in Singapore, which is now on the “low side”.
One quirky initiative that MPs have suggested is a points-system for tenants that the HKHA uses, where tenants get penalised for anti-social behaviour like littering. If they accumulate a certain number of points, they lose their right to stay in their flats.
Ms Fu stressed that while Singapore can take a leaf from Hong Kong’s rental policy book, the government’s role in each place is very different. Singapore’s focus is on home ownership, while Hong Kong’s is on providing comprehensive, low-cost rental housing, she said.
Another area that the HDB is also studying is housing for the elderly.
The HKHS, a non-governmental housing organisation, is piloting a new, mixed-use development that will integrate private homes with elderly housing, said its chairman, Mr Yueng Ka Sing.
Under this experiment, the first 10 floors of a 34-storey block will be reserved for senior citizens, while younger families can live on the upper floors.
The HKHS also recently rolled out two “retirement resorts” for the middle- to upper-income elderly, where those over 60 years old can pay an upfront sum as a lifetime lease to live in a condominium-like home, with health and medical care provided.