Staying Competitive in the Global Economy
– The Singapore Experience

Mr Kurt Roeloffs, Chairman, REIW Asia
Distinguished guests
Ladies and gentlemen

Introduction

       It gives me great pleasure to welcome all of you to the Real Estate Investment World (REIW) Asia Conference 2008. To all the foreign delegates, a very warm welcome to Singapore.

2.    Since 2002, REIW Asia has grown to become a premier event for the Asian real estate market. Singapore is honoured to be able to continue to host this event; to serve as a focal point to bring together real estate investors, professionals and government agencies from across the world, to network, understand the region better and to uncover new business opportunities.

Resilient Asia

3.    The recent shake-up in the financial markets and rising inflation has caused much uncertainty over the health of the global economy. As part of an integrated global economy, economic uncertainties in other parts of the world, such as the US, will inevitably have implications for Asia.

4.    However, there are reasons to believe that Asia will be resilient and that the growth momentum across Asia, can withstand the challenges posed by the current financial and economic uncertainties. Indeed, Asia’s macroeconomic fundamentals are much healthier compared to a decade ago. Progress has been made to its banking systems while corporate balance sheets have also improved. Stronger external positions are also seen in most Asian countries, with current account running surpluses, large foreign reserves and diversifying exports.

5.    In fact, some analysts are of the view that Asia is looking more attractive now amidst the current economic uncertainties in the US and Europe. There is a good basis for this optimism about Asia. Asia’s share of the global GDP has almost doubled from 19% in 1980 to 36% today. By 2020, according to the Asian Development Bank, this figure will rise to 45%^[1].

Singapore Remains an Ideal Investment Location

6.    In particular, I would argue that Singapore remains an attractive location for investments for two key reasons – its strong economic fundamentals, and the quality living environment it offers for locals and global talents alike.

7.    In terms of economic performance, Singapore has leveraged on the wave of growth of the region and is among the fastest growing economies in Asia with a strong 7.7% growth last year. The outlook is promising. Despite the current uncertainties, our growth forecast for the medium term remains at 4 to 6%^[2].

8.    A fast growing sector is the financial services sector. Strong growth in areas such as fund and wealth management has propelled the sector to grow by a phenomenal 17%^[3] in 2007, the highest growth over the past 10 years. This growth is also spurred by the growth in the Real Estate Investment Trust (REIT) sector. Singapore is now the second largest REIT market in Asia with 21 listed real estate trusts, with a combined market capitalisation of about US$20 billion^[4].

9.    The strong growth in Singapore’s financial sector has led Mastercard to rank us a close second to Tokyo, as Asia’s most important centre for commerce, in its Worldwide Centre of Commerce Index released this month.

10.   What makes Singapore increasingly attractive is also its quality living environment. The liveable environment in Singapore – clean, green, healthy and safe --- has served as a key competitive advantage for companies located here in their global talent attraction efforts.

11.   For both 2007 and 2008, Mercer Human Resource Consulting has ranked Singapore as the city with the best quality of life in Asia, excluding Australia and New Zealand. In the recent 2008 Zeitgeist Cities Ranking by Hub Culture, Singapore was rated one of the top 20 cities based on their strength in ‘innovation, change and vibe’. Not forgetting that Singapore is also the best city for Asian expatriates to live in, based on ECA International’s survey findings this year.

12.   Despite achieving all the above, Singapore is putting in place new plans to further support future growth and sharpen our attractiveness as a magnet for investments and new businesses.

13.   We are building new capacity for growth through our development plans for Marina Bay. The extended financial district at Marina Bay will be more than twice the size of London’s Canary Wharf, providing office space equivalent to Hong Kong’s main business district Central. This will allow us to double the size of our existing financial district to provide the capacity to support the growth of the financial services sector. This financial district is expected to take 15 years or more to realise, in tandem with the pace of economic growth and market demand.

14.   But Marina Bay will not be just a hub for financial institutions. The Bay will have a comprehensive range of amenities --shopping, dining, cultural and entertainment -- to create a 24/7 live-work-play environment for all working there. We have also set aside 100 hectare of prime land for the development of three-world glass gardens in Marina Bay. Together with the government’s investment of US$3.3 billion to provide excellent infrastructure and connectivity for the Bay, this will become a truly premier global waterfront address for businesses.

15.   The exciting development plans for this precinct have already caught the eyes of international financial institutions and real estate players. A nucleus of office developments is taking shape with One Raffles Quay, the upcoming Marina Bay Financial Centre and Marina View sites. Overall, private investment in the Marina Bay has reached some US$12 billion.

16.   Other than the Marina Bay area, the Government will also open new growth areas which present investment opportunities for you. The Ophir-Rochor corridor, just 700 meters from here, will be one such area that can cater to the needs of financial institutions and other business services.

17.   Outside the city centre, the Jurong Lake District will provide an alternative location for company headquarters, business services as well as companies in the science and technology sectors. There will also be new growth areas in Kallang Riverside and Paya Lebar Central. The development of these new growth areas, which will be done in a calibrated manner in tandem with market demand, is expected to materialize within the next 15 years.

18.   To further sharpen our differentiating factor as a liveable city, the URA has recently released a comprehensive Islandwide Leisure Plan. This plan is a blueprint that will guide the implementation of a greater variety and quality of recreational choices across the island. Besides new green spaces, the Leisure Plan presents a whole host of other recreational options, from water activities in rivers and reservoirs, to new sporting facilities close to homes, to exciting lifestyle hotspots. So Singapore in the future will be a great place to live and work for a cosmopolitan workforce in our city.

19.   These development plans will open up many opportunities in Singapore’s real estate market, from the provision of quality homes, to new hotel, leisure and retail investment and development opportunities. The Urban Redevelopment Authority (URA) of Singapore is exhibiting the plans for some of these precincts in the adjacent room. I would like to invite you to view these plans.

Conclusion

20.   In short, notwithstanding current market turmoil, the outlook for Asia, including Singapore, remains optimistic. Asia still offers a diverse range of investments that can match different interests and risk appetites. The strong turn-out at this year’s REIW Asia clearly supports this view. It is very encouraging to learn than more than 400 companies and 700 delegates are represented here. This is a reflection of how enticing Asia’s economies and its real estate markets have become in recent years and the vast opportunities here.

21.   The REIW Asia conference will be a useful meeting ground for experts to explore these opportunities. On this note, I wish you a successful conference.

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