Singapore's REIT market expected to grow 200% in five years

Singapore's S$10 billion ($6.4 billion) real estate investment trust industry may triple in market value in the next five to 10 years as more assets become available, the city-state's biggest developer said.

CapitaLand, which manages three of Singapore's 13 property trusts, said tax breaks and other incentives helped boost investor interest in the industry. The developer sold shares in the first Singapore REIT, CapitaMall Trust, in 2002.

Singapore has “deregulated our rules and regulations,” Liew Mun Leong, CapitaLand's chief executive officer, said in an interview. “There are a lot of properties and assets that can be put into REITS. If we have our way, we can do much more.”

Singapore will probably retain its lead over Hong Kong as the biggest REIT market in Asia excluding Japan and Australia in the next four years because it has the most “liberal” tax policies globally, Goldman Sachs Group said in June. The city-state decided to forgo taxes for REIT payouts to individuals and cut taxes on dividends for overseas investors.

Singapore developers are adding variety to REIT assets to continue attracting investors. Property prices are rising as well. But for how long? Is it a bubble waiting to burst?

Let us know what you think.

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Singapore budget carriers circling around result of Changi-KL route

Singapore said it's waiting for Malaysia's decision on whether to allow discount airlines to fly the route between the island state and its neighbor's capital city, Transport Minister Raymond Lim said.

Lim, who is also the second minister for foreign affairs, said Singapore hasn't heard from Malaysia, which has completed a study to allow budget carriers to fly the route. “We await their proposal,” Lim said. “We have been ready to expand air services agreement for quite some time now and it's timely to do so. It's a great pity that we have not revised this particular agreement for the past 20 years.”

Singapore Airlines Ltd. (SIA) and Malaysian Airline System Bhd. (MAS), which currently dominate the flights between the city-state and the Malaysian capital of Kuala Lumpur, in September 1988 agreed to divide their combine revenue on the route.

“The route, a cash-cow for Malaysia Airlines and Singapore Airlines, is in the sights of Tiger Airways, AirAsia and Jetstar Asia, which all promise to offer significantly lower fares,” Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation said in a Sept. 6 bulletin.

Although it may mean a dip in revenue for state carriers SIA and MAS, greater access between the two countries will boost tourism, benefit their economies and fuel traffic at their airports. The move may also hasten a 2008 air services agreement, where the 10-member grouping of the Association of Southeast Asian Nations, or Asean, must allow carriers freer access in the region.

MAS is strongly opposed to opening up this route.

So will it happen? Liberalisation is important but would Malaysia protect MAS? Would we see SIA and MAS step back for Tiger and Airasia to take centrestage?

Let us know what you think.

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Singtel set to tackle Starhub for EPL licence

As the Reds of Manchester United toppled Chelsea off the summit of the EPL in recent weeks, another red seeks to do the same, here in Singapore. With its bid to air the highly popular EPL matches as well as its application for a commercial cable-TV license, Singtel is set to challenge Starhub for dominance of the local cable-TV market.

The soccer matches it plans to broadcast will be those held between August 2007 and May 2010, Singtel said in a statement. It also plans to use its existing infrastructure for the new service, the company said.

"Our intention is to offer pay-TV services to deliver high definition content over Singtel's telecommunications network," the phone company said. “We are also working with other content partners to provide entertainment services."

The license, if granted, would break Starhub's monopoly as the sole commercial cable-TV operator in the island-state of 4.4 million people. The two companies are already competing in areas such as fixed-line and wireless phone services, as well as offering Internet connections to consumers.

But Starhub is unperturbed. "We have always said that we welcome competition when the competition brings fresh content and a variety of new channels to the market," Jeannie Ong, Starhub's spokeswoman, told Bloomberg. "We are certain that our competitor is aware that entering the pay-TV business will be a difficult venture, and is likely to be loss-making for a long time."

It seems that the battle of cable-TV providers has just begun. And like the EPL, it is a mouthwatering prospect, with the possibility of new channels and lower prices for all. But will Singtel still be able to win the masses over to its cable service even if it doesn't get the EPL rights? What can Starhub do to protect its patch of grass? What can Singtel offer that Starhub doesn't already have?

Stay tuned.

And tell us what you think.

- Zaky Jailani

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