Singapore: A Global City of Opportunities

Distinguished guests

Ladies and gentlemen

Good morning and to all the foreign delegates, a warm welcome to Singapore.

Introduction

2 Singapore is delighted to host the inaugural Cityscape Asia exhibition and conference. This is an excellent opportunity for major investors, developers, and governmental authorities involved in major city developments to share your plans and network with other key movers and shakers.

A Region of Opportunities

3 Why Asia? The Asian economies have been thriving, led by strong and sustained growth in China and India and the much-welcomed revival in Japanese economy. General sentiments are upbeat, and these have in turn led to positive spin-offs in other sectors of the regional economies, including the real estate sector.

4 Singapore is fortunate to be located in the heart of Southeast Asia. Over the years, we have established ourselves as a strategic link and important gateway for global investors. With our central location, political stability and cosmopolitan character, we are well positioned to provide social and economic links between the East and the West. Financial institutions based in Singapore trade around the clock, with Asia-Pacific centres, European and American markets, thus making Singapore a significant hub for 24-hour trading in foreign exchange and securities.

New Areas Of Growth & Exciting Opportunities

5 To further capitalize on our strategic position and the opportunities presented by the buoyant regional economy, we have developed new areas for growth. Let me briefly share with you some of the things that we are doing.

6 We have restructured our economy to ride the wave of globalization. In the manufacturing sector, we are focusing on developing key high value-added industries such as petrochemicals and wafer fabrication. We are also investing heavily in R&D, especially in the areas of biomedical, water technology, and interactive and digital media.

7 We have built up a strong base in biotechnology and biomedicine, with a healthy international reputation and a good concentration of scientists based here. Going forward, more investment will be put into clinical research.

8 Singapore is already one of the leading global players in water technology. Two of the largest water companies in the world, General Electric Water and Siemens Water Technologies, have established R&D centres here. Led by home grown firms like Keppel, Sembawang and Hyflux, Singapore will remain focused on exporting our water technology to countries that have increasing demand for water, such as those in the Middle East and China.

9 In interactive and digital media, our technological university has tied up with a Japanese company to produce Japanese anime, and going forward, there will be many other areas in this industry that we can develop.

10 Being a major global air hub, Singapore will also focus on growing the aerospace industry. We have plans for a big aerospace park to be built in Seletar.

11 With the Marina Bay Financial Centre (MBFC) in place, we aim to attract even more financial institutions and business services, to further strengthen our position as an international financial centre. As the range of financial products and services grows, Singapore will leverage on its sound economic and financial fundamentals, conducive regulatory and business environment, as well as skilled and educated workforce to play an even larger role in global finance and business. Many multinational companies have already chosen to base their regional headquarters in Singapore, and today we are Asia’s leading hub for finance, bioscience, aviation, transport and logistics.

12 Tourism is another priority sector for growth. We have embarked on a number of high impact tourism projects such as the two Integrated Resorts - one at Marina Bay, another at Sentosa; the Singapore Flyer - a 165m giant observation wheel at Marina Bay; and the Gardens by the Bay - three waterfront gardens with a combined area of 100Ha right in the heart of the city. Our target is to double annual visitor numbers to 17 million and triple tourism receipt to $30 billion by 2015.

Promoting Free Trade Agreements

13 Another key strategy we are using to boost economic growth in Singapore is to strengthen our economic ties with key trading partners to achieve greater market access for our exports.

14 For example, in March 2006, we established the Korea-Singapore FTA (KSFTA), which is a milestone in Singapore’s free trade efforts as it is the first comprehensive economic pact between Korea and Singapore. We also started negotiations for the China-Singapore FTA in October last year. We have previously concluded major bilateral trade agreements with other key economies throughout the world, including the US, Japan, India, New Zealand and Chile.

15 Singapore's extensive network of Free Trade Agreements, Avoidance of Double Taxation Agreements and Investment Guarantee Agreements, as well as its comprehensive air, sea and IT infrastructure, provide for the seamless flow of goods and services to markets around the world.

Favourable Prospects in the Property Sector

16 The continued expansion of the Singapore economy will underpin and drive the growth of the property market. Our property market has been performing well over the last two to three years over a broad front across all sectors. Demand for all property sectors have been rising. Annual increase in demand for office space rose to a six year high of 290,000 sq m in 2006. Demand for shop space also grew strongly by 127,000 sq m in 2006, the highest annual increase since 1993. The hotel Average Room Rate (ARR) for 2006 was estimated to reach $164, an increase of 19.6% over 2005. The Average Occupancy Rate (AOR) for hotels in 2006 was estimated at 85%, registering a growth of 1.4 percentage point over that in 2005.

17 Private housing also saw good take-up, with a total of 10,360 uncompleted private residential units sold by developers in 2006, a historical high annual take-up that surpassed the previous record of 9,860 units in 1994. Of these, 24.5% were bought by foreigners, including permanent residents.

Substantial Increase In Foreign Investment In Singapore’s Real Estate

18 Consultants have estimated that the total transaction value of investment by foreign companies in Singapore's real estate amounted to some S$5.4 billion in 2006, as compared to S$900 million in 2004. The investors in our real estate include companies based in the many countries, namely, the U.S., Hong Kong, Australia, Germany, Japan, Middle East and Indonesia.

19 Driven by positive sentiments the attractiveness of the Singapore Government’s plans for key development areas, both local and foreign developers have been buying up development sites sold under the Government’s sale of site programme over the past few years.

20 For example, development of the Marina Bay area has accelerated with the sale of sites for the Marina Bay Integrated Resort, the Marina Bay Financial Centre and the Collyer Quay lifestyle hotel and commercial development.

21 The announcement of the Government’s plans to remake Orchard Road including setting aside S$40 million to improve the area to make it one of the world’s premium shopping streets, has attracted investors to take up three prime sites in Orchard Road over the last two years. These developments will add vibrancy to the Orchard area and enhance its position as a premier shopping destination.

Growth in REITs in Singapore

22 REIT is another growth area. Since the first REIT was launched in Singapore in 2002, we now have the largest REIT market outside Japan. Over the past four years, 15 REITs were listed on the Singapore stock exchange.

23 Singapore has several key advantages for the continued development of REITs. Our pro-investor tax environment aside, Singapore’s REITs are also well-diversified, offering investors exposure to income streams from the office, retail, industrial, hotel and logistics sectors. Several of the REITs listed in Singapore have also diversified offshore to Hong Kong, Australia and other Asia- Pacific countries. With these factors in place, Singapore has the potential to be the hub for REIT listings in the region.

Conclusion

24 These efforts have not gone unnoticed. Singapore, said Merrill Lynch in a recent report dated 30 Mar 2007, is 'becoming the Zurich and Monaco - not just of Southeast Asia - but of all Asia' as it develops into a premier private banking centre and a tourist destination with many exciting new projects. More than just a good place to do business, Singapore is also a great city to live in. We welcome people from different cultures and offer a good quality living environment.

25 Singapore will continue to step up its efforts to enhance our city as a great place to live, work and play. Our vision is to make Singapore a vibrant, global economy – a City in a Garden, with exciting developments, distinctive architecture, and enhanced greenery and waterfront access. Singapore will be an important destination, not only for business and travel, but also for international events and celebrations..

26 This is also a good time to invest in Singapore. Our economy is structurally and fundamentally strong, which in turn supports a healthy recovery in all sectors of the property market. With prime and strategic sites being made available now and in the near future, we look forward to increased participation from local and foreign investors.

27 I am confident that Cityscape Asia will give you a wonderful chance to look at the opportunities available in Singapore and across the region. I wish all our delegates and visitors a wonderful time here in Singapore, at Cityscape Asia.

Thank you.

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