Singapore is priciest Asian country to build in: report

Republic is 10th most expensive country to build in worldwide

(SINGAPORE) Singapore is the most expensive Asian country to build in except Japan and one of the 10 most expensive worldwide, according to a new report from EC Harris.

The consultancy's international construction cost report, which covers 50 countries, found Singapore is the 10th most expensive country to build in worldwide, on a list topped by Switzerland. Hong Kong, the second most expensive Asian country to build in, is ranked 21st globally.

The report does not include values for Japan, as EC Harris did not have any projects there in the past two years. Generally, tender prices in Tokyo are around 20-30 per cent higher than in Singapore and Hong Kong.

Richard Warburton, EC Harris's regional head of cost and commercial management in Asia, said Singapore continues to be the most expensive Asian country except Japan to build in despite a drop in tender prices of 5-8 per cent last year.

'The Singapore market appears to be recovering on the back of sustained demand and strong economic growth,' he said. 'We are also seeing localised 'hot' markets, such as the substantial amount of new office building fit-out activity that is under way.'

This may create supply chain pressures and lift tender prices further. Mr Warburton expects 3-5 per cent growth in general tender prices over the coming year, although a key factor determining this will be how much commodity prices rise, he noted.

Another property and construction consultancy, Rider Levett Bucknall, predicted in April that building tender prices in Singapore could climb 3 per cent this year.

Analysts have said recent hikes in iron ore prices are likely to lead to higher steel prices. Increases in the foreign worker levy and cut in man-year entitlements will also cause construction costs to rise.

According to EC Harris's survey, which benchmarks the cost of building in each country against the UK, the price of construction in Singapore is almost 7 per cent higher than in the UK, where it fell almost 20 per cent from its peak in the previous year.

Hong Kong is Singapore's closest Asian counterpart on the expensive list. It ranks second in Asia, at 7 per cent below the UK benchmark.

China ranks fifth among Asian countries, behind South Korea and Thailand. At the other end of the scale, Sri Lanka is the cheapest Asian country to build in, at 27 per cent of the cost of UK construction.

According to Mr Warburton, the greatest uncertainty in tender price inflation in Asia exists in Hong Kong.

Construction workloads and tender prices in Hong Kong rose steadily throughout 2009, driven largely by government spending on infrastructure. Now there is a sense that a period of readjustment is on the way, Mr Warburton added.

EC Harris calculated the figures through a survey of construction costs in 50 countries. The survey was conducted across the consultancy's offices worldwide, with data collected in cost per square metre format for a wide range of buildings, including industrial, offices, retail, residential and hotels.

Source: Business Times, 4 Aug 2010

Building sector uneasy with cool demand up to May

But prelim figures for June, upcoming projects paint brighter picture

(SINGAPORE) The value of construction contracts awarded in the first five months of the year was less than hoped for, keeping the building industry on edge.

Nevertheless, authorities are keeping their full year construction demand forecast intact as preliminary June figures and upcoming projects paint a brighter picture of the industry.

According to figures released by the Building and Construction Authority (BCA) to the public, construction demand from January to May was $8.17 billion. Some 59 per cent or $4.84 billion of this came from the private sector, and the remaining 41 per cent or $3.33 billion was from the public sector.

The demand up to May - compared with BCA's full year forecast of $21-27 billion - triggered some unease among industry insiders.

'It looks as though the target of $21-27 billion may not be reached this year,' said Rider Levett Bucknall (RLB) managing partner Winston Hauw yesterday. He was giving an update on how the construction sector has fared at a conference organised by the Real Estate Developers' Association of Singapore (Redas).

He cited other figures from BCA that implied slowing construction demand. The value of contracts awarded in April and May was $2.6 billion, which is around 18 per cent less than the $3.1 billion in the same period last year.

Davis Langdon & Seah director Seah Choo Meng shared similar concerns with BT. 'Contractors feel that there is still not enough work in the market,' he said.

Construction demand has come off sharply from the record $35.7 billion in the boom year of 2008. The subsequent economic slowdown forced many private sector projects off the pipeline, and the construction sector was left with excess capacity after completing large jobs.

The arrival of more foreign contractors looking for work as construction demand dries up in markets such as Dubai has exacerbated the situation. 'Competition is high at the moment,' said Lum Chang Building Contractors executive director Tan Wey Pin.

While the current situation does not look too promising, Mr Hauw, Mr Seah and Mr Tan hesitated to write off the year's performance. Construction demand might still meet BCA's full- year forecast if the public sector awards more contracts later this year, they said. One of the most awaited projects is Stage 3 of the MRT Downtown Line.

Still, there is hope. In response to queries from BT yesterday, BCA shared preliminary figures on the value of construction contracts awarded from January to June - about $11 billion.

Going by the agency's mid-year review, another $10 billion to $16 billion worth of contracts are likely to be awarded in the second half.

These projects include the widening of Keppel Viaduct and the conversion of the former Supreme Court and City Hall to the National Art Gallery. Contractors will also be needed for the International Cruise Terminal, Lanxess Butyl's synthetic rubber plant, and various condominium developments.

'This will bring the total construction demand for this year to $21-27 billion, similar to the original projection released by BCA in January,' said a BCA spokesperson.

At yesterday's seminar, Redas launched a new Real Estate Sentiment Index, which it developed jointly with the National University of Singapore's real estate department.

'Redas will work even more closely with higher institutes of learning, professional bodies and government agencies to embark on new initiatives in research and executive programmes,' said Redas president Simon Cheong.

Source: Business Times, 30 Jul 2010

More courses for building specialists

Shortage of industry professionals spurs BCAA, SISV initiative

THE booming construction industry over the years has created a shortage of qualified surveyors and other specialists.

As such, in a release by the Building and Construction Authority (BCA), it was revealed that the BCA Academy (BCAA) and Singapore Institute of Surveyors and Valuers (SISV) will put in place a number of initiatives to build up and strengthen the pool of building professionals within the industry.

Among the specialists in demand include quantity surveyors, land surveyors, valuers and property managers.

To resolve this, the BCAA and SISV will be jointly introducing more academic programmes such as diploma, specialist diploma and degree courses to train new professionals and to upgrade the skill sets of existing ones.

BCAA will also be working with SISV to initiate more dialogue sessions with firms in the industry to facilitate discussion on developing such capabilities.

To further promote the building profession, BCA and SISV signed a memorandum of understanding to share resources, promote educational programmes and jointly create and implement new products and services to drive the local building industry forward.

John Keung, CEO of BCA, said, 'I'm confident that this new collaboration will help elevate the occupational profile in the built environment. BCA looks forward to working with SISV to develop more programmes to train personnel at the technical and professional level to meet the needs of the industry.'

Source: Business Times, 27 Jul 2010

Pinnacle@Duxton wins Chicago award

Judging panel names it the best tall building in Asia and Australasia

THE Pinnacle@Duxton has been named Asia and Australasia's 'Best Tall Building' by the Chicago-based Council on Tall Buildings & Urban Habitat.

HDB's 50-storey residential project in Tanjong Pagar was named alongside Dubai's Burj Khalifa, the world's tallest building and winner for Middle East and Africa at the annual 'Best Tall Building' awards.

Europe's winner was the steel-clad Broadcasting Place in Leeds, United Kingdom, while New York's 55-storey Bank of America Tower took the Americas award this year.

The buildings were chosen less for their height - the Broadcasting Place in Leeds is just 70m, less than a tenth of the Burj Khalifa - and more for their 'design and technical innovations, sustainable attributes, and the enhancement they provide to both the cities and the lives of their inhabitants,' the council said.

It noted that The Pinnacle@Duxton 're-defines urban high density living by weaving continuous Sky Gardens on the 26th and 50th stories through all seven of the tower blocks'.

The overall winner of these four regional best tall buildings will be unveiled this October, at an awards ceremony in Chicago. The ceremony will also honour two individuals - William Pederson of Kohn Pederson Fox Associates and Ysrael A Seinuk of Ysrael A Seinuk PC - with lifetime achievement awards. Both were chosen for their contributions to tall buildings; their portfolios include many iconic skyscrapers.

This year's awards drew an unprecedented number of entries, said the awards committee, headed by Gordon Gill of Adrian Smith + Gordon Gill Architecture. Also on the jury were Ahmad Abdelrazaq of Korea's Samsung, Bruce Kuwabara of Canada's KPMB Architects, Peter Murray of UK's Wordsearch, Matthias Schuler of Germany's Transolar, Mun Summ Wong of Singapore's WOHA, and Antony Wood from CTBUH.

Source: Business Times, 18 Jun 2010

Going green pays off for developers

Eco-friendly projects awarded more floor space under BCA scheme

(SINGAPORE) Going green has its rewards, and some developers have got them in the form of additional floor space for their projects.

The Building and Construction Authority (BCA) told BT that it has received 37 applications for a scheme that grants eco-friendly buildings more gross floor area (GFA).

The agency has approved some of these requests, from companies such as City Developments (CDL), Soilbuild Group, Ascendas and Parkway Holdings.

BCA and the Urban Redevelopment Authority launched the Green Mark GFA Incentive Scheme in April last year to encourage private developers to go green.

If buildings meet certain Green Mark standards, owners can apply for additional GFA beyond the master plan gross plot ratio control. Developments with the Platinum rating can receive up to 2 per cent more GFA (capped at 5,000 sq m), while those with the Gold Plus rating are eligible for up to one per cent more (capped at 2,500 sq m).

The bonus GFA is not entirely free though - developers still have to pay a development charge or differential premium for the space.

Nevertheless, some developers have found it worthwhile to sign up for the GFA incentive scheme. BCA said that of the 37 applications, 10 were for residential projects, six for commercial developments and the remaining 21 for mixed-use and other types of buildings.

Changi City, developed jointly by Ascendas and Frasers Centrepoint, is a project which received bonus GFA. The developers decided to aim for a Green Mark Gold Plus rating partly because of the incentive scheme, said Ascendas Land (Singapore) CEO Tan Yew Chin.

A few other developers were already eyeing the Platinum or Gold Plus rating before the scheme existed. For instance, Soilbuild had drawn up plans for Solaris at one-north with the Platinum rating in mind and 'during the course of the design, the Green Mark GFA Incentive Scheme was introduced', it said.

CDL told BT that environmental sustainability has always been high on its agenda. Its residential project Cube 8 at Thomson Road, which won the Green Mark Platinum award, qualified for 377 sq m of bonus GFA from the scheme. CDL was able to build three more apartments, bringing the total number of units to 177.

Even a healthcare service provider is riding on the green trend. Parkway got an additional 1,447 sq m of GFA at Parkway Novena Hospital, which is likely to receive the Platinum rating. The extra space will go towards 'better diagnostic and treatment facilities', a Parkway spokesman said.

Cushman & Wakefield managing director Donald Han supports the incentive scheme, noting that buildings meeting Green Mark standards would cost developers relatively more to build.

The green movement in Singapore is still in an 'infancy' stage compared with other countries such as the United States and Australia, he said. 'But, we're getting there.

Source: Business Times, 14 Jun 2010

Tiong Seng seals S$146m deal to build environmentally-friendly condominium

Mainboard-listed Tiong Seng Holdings says its unit, Tiong Seng Contractors, has secured a S$146 million contract to design and build an environmentally-friendly condominium.

The contract for the condo, called Tree House, was awarded by Chestnut Avenue, a joint venture between City Developments and Hong Realty.

The 429-unit condominium project is located on Chestnut Avenue, off Upper Bukit Timah Road.

Under the contract, Tiong Seng will design and build four 24-storey towers as well as eco-features and recreational amenities.

This includes 24-storey high green walls which reduce the development’s carbon footprint by filtering pollutants and carbon dioxide.

The walls also collect rainwater for the irrigation of landscaping throughout the development.

Based on its design specifications, Tree House has clinched the Building and Construction Authority’s highest accolade – the Green Mark Platinum Award.

The work is expected to commence on July 1, and completed in 30 months.

With this latest contract win, Tiong Seng’s order book now stands at about S$1.1 billion.

Tiong Seng expects majority of these orders to be fulfilled over the next 12 to 30 months.

Source: Channel News Asia, 8 Jun 2010

78 Shenton Way, 313 and City Square bag awards

THE Building and Construction Authority yesterday announced the three winners of this year's Design and Engineering Safety Excellence Awards.


The winners - 313@Somerset, 78 Shenton Way and City Square Residences - were chosen from 20 entrants by a panel of industry experts.

Another nine projects - including City Square Mall, Changi Terminal 3 and the Singapore Flyer - received merit awards. The BCA Design and Engineering Safety Excellence Award, now in its third year, recognises engineers and project team members for coming up with excellent design in the face of challenges, while maintaining high safety standards. Winners will be presented with their awards at a function on May 26 at the Shangri-La Hotel.

Assessing committee chairman and BCA board member Pek Lian Guan said: 'In our densely built environment, engineers are constantly challenged to overcome constraints and difficulties with creative design solutions. I commend their professionalism and tireless effort in contributing to our safe environment.'

Source: Business Times, 7 May 2010

'Skyrise greenery' reaching new heights

Architects report growing demand for green spaces on rooftops and decks

More building owners are going to great heights - such as the rooftop - to go green.

This trend has the official nod. The Government hopes to see some 50ha of such 'skyrise greenery' by 2030, architects say.

The concept refers to greenery integrated into building structures, like rooftops, walls and sky terraces. It can make a skyline striking when it adorns high-rise blocks.

While there are no figures on how much skyrise greenery there is now, architects say they are getting more requests for their designs to incorporate the concept.

A Singapore Institute of Landscape Architects spokesman said that, given the land scarcity and competition for space, 'the logical solution is to integrate greenery onto built structures, for instance, on roofs, skyrise decks and even building facades'.

There are even annual awards, jointly organised by the Singapore Institute of Architects and National Parks Board (NParks), to promote and recognise the greening of high-rise developments.

Known as the Skyrise Greenery Awards, this year's awards - the third edition - were open for submissions last month.

Said Mr Tai Lee Siang, a director at DP Architects: 'Skyrise greenery is a trend here due to the high density of our developments, where green spaces are desirable and it is insufficient to depend only on ground-level green space.'

Mr Vincent Koo, managing director of DCA Architects, which designed the greenery at One George Street office building, said it also uses skyrise greenery for its other projects like Reflections at Keppel Bay and Marina Bay Residences.

The 23-storey One George Street, in South Bridge Road, won a Skyrise Greenery Award in 2008.

Mr Ng Cheow Kheng, assistant director of Streetscape (Projects) for NParks, said even schools are introducing greenery in their buildings.

He said skyrise greenery can have benefits such as improving air quality by absorbing airborne particles, reducing energy cooling costs and increasing property values.

The Urban Redevelopment Authority (URA) and NParks have a series of incentives to promote skyrise greenery.

The URA's Lush (Landscaping for Urban Spaces and High-Rises) programme encourages developers of high-rise buildings to incorporate greenery from the ground level upwards.

NParks' Green Roof Incentive Scheme encourages owners of existing buildings to green their rooftops.

Malls, too, are heeding the call.

DLQ Design director Lena Quek said DLQ was commissioned to design two sky gardens, with trees and water plants, for the Orchard Central mall. Its design won the first prize in the Skyrise Greenery Awards last year.

VivoCity won an award for its rooftop garden designed by DP Architects in 2008.

DP Architects' senior associate, Mr Paul Appasamy, said many condominium projects being built and launched have sky terraces, as do office buildings in the heart of the Central Business District, such as NTUC Tower in Collyer Quay.

Even Sri Geylang Serai, a public housing development, now has a landscaped deck area on the roof of its multistorey carpark.

Said a Singapore Institute of Architects spokesman: 'People will want to live or work amid well-designed and well-implemented skyrise greenery, therefore it does enhance the value of the property.'

Source: Sunday Times, 2 May 2010

Key Asian cities set to see construction tender prices rise

Construction tender prices in key Asian cities are likely to rise this year as the economy recovers and building activity picks up.

According to a report by property and construction consultancy Rider Levett Bucknall (RLB): ‘Barring any unforeseen change in global market conditions for the year 2010, Asian construction demand is expected to rebound in tandem with a revival of property development.

‘Coupled with an expected rise in commodity prices, construction tender prices are anticipated to register moderate increases for key Asian cities in 2010 compared with the previous year.’

In Singapore, RLB estimates that building tender prices could rise 3 per cent this year, reversing a 19 per cent slide in 2009.

Higher construction costs have a part to play in this. According to a recent report by quantity surveyors Davis Langdon & Seah, the recent rise in iron ore prices is likely to lead to higher steel prices. The upcoming increase in the foreign workers levy and cut in man-year entitlement will also cause construction costs to go up.

RLB recognises that contractors’ costs are set to grow because of these changes. But it does not expect tender prices to surge as a result. Tendering margins ‘are anticipated to remain competitive due to the relatively low construction demand’.

The Building and Construction Authority (BCA) projects this year’s total construction demand at $21-27 billion. This is not far from last year’s demand of $21 billion, but is much lower than the demand of $35.7 billion in 2008.

In Beijing, Shanghai and Shenzhen, construction tender prices could rise 3 per cent this year, RLB says. They remained flat in 2009.

China’s booming property market has contributed to higher construction demand. While Beijing has tried to rein in speculation with measures to cool the market, RLB believes ‘it is unlikely that such measures will have an immediate effect on construction costs’.

Of the 10 Asian cities RLB looked at, Hong Kong could register the biggest percentage increase in building tender prices.

RLB expects these prices to grow 9 per cent this year, reversing a 6 per cent drop in 2009. The construction industry there will benefit over the next 2-3 years with the start of major railway projects, it says.

Source: Business Times, 19 Apr 2010

Construction costs could rise faster: DLS

Construction costs could rise this year more than the 3-5 per cent forecast because of a combination of new factors, says quantity surveyor Davis Langdon & Seah (DLS).

In a report released yesterday, DLS says factors such as the increase in the foreign workers’ levy and reduction in man-year entitlement, announced in March, could add between one and 2 per cent to construction costs.

New iron ore pricing that has become apparent this month is likely to push up the price of steel, which could add another 1.5-2 per cent to constructions costs.

DLS forecast in January that construction costs could rise 3-5 per cent. It expected construction tender prices to remain stable in the first two quarters of 2010 and start to rise in the second half.

It has since found that while construction costs remained relatively stable in the early part of Q1, they started to increase towards the end of March.

For instance, the price of steel reinforcement bars, which fell to about $750 a tonne at end-2009, had risen to about $900 a tonne in March. And now iron ore prices have surged again, and the price has gone up to $950-$1,000 so far.

DLS said just how much further the price will climb – and whether it will surpass the $1,744 a tonne peak in July 2008 – is uncertain at this stage.

Based on the current price of $950 a tonne, the cost impact works out to an increase of 0.8-1.2 per cent for a typical residential development tendered in late 2009-early 2010, DLS said.

Apart from the price of steel, DLS says the uptrend in commodity prices in general will lift construction costs faster than expected.

While commodity prices are recovering from a low base, the price of copper hit US$7,880 a tonne this month and is edging closer to the recent peak of US$8,700 per tonne in April 2008. Copper is also up 150 per cent from its trough price of about US$3,000 a tonne in December 2008.

The price of aluminium has increased about 65 per cent to US$2,205 a tonne, from the trough price of US$1,329 in February 2009.

DLS estimates that commodity prices in general could add 1.5-2 per cent to construction costs.

Looking at rising oil prices, DLS says these could raise plant and machinery costs and add 0.5 to one per cent to construction costs.

A new policy measure that will affect costs are restrictions on construction activity on Sundays or public holidays for construction sites within 150 metres of residential and noise-sensitive areas. This could add 0.5 per cent to construction costs, says DLS.

Based on all of these factors, DLS now expects construction cost to rise more than 5 per cent this year, ‘the actual level depending on the prevailing tendering climate’.

Source: Business Times, 14 Apr 2010

Homes on high

THERE is only one way to go for residential properties in Singapore: up, up and up.

When it comes to building height, the five tallest private residential buildings – perhaps a better description would be ‘residential skyscrapers’ – are all taller than 100 metres. All were also completed within the last four years – a clear sign that property developers here are on a high. And while residential buildings are a common sight in land-scarce Singapore, this wave is interesting because it takes residential building heights in Singapore to a whole new level, placing them alongside commercial skyscrapers.

The mood appears to be an infectious one, with public housing developer HDB following suit with The Pinnacle@Duxton on Cantonment Road. With seven 50-storey blocks that include facilities like skybridges, the development offers a higher standard of living than previously seen in public housing.

At a grand height of 168m, The Pinnacle@Duxton (completed last December) holds the record for being the tallest public housing building in Singapore. It also comes in third place when the comparison takes into account private residential buildings.

Currently, the tallest of all residential skyscrapers in Singapore is one of the towers at The Sail @ Marina Bay, namely the Marina Bay Tower. At 245m, the 70-storey tower is just 35m shy of the three tallest commercial skyscrapers in Singapore: Republic Plaza, UOB Plaza One, and OUB Centre.

The second apartment building of The Sail, Central Park Tower, comes in at No 2 among local residential buildings with a height of 215m and 63 floors. Both buildings were completed in 2008.

The towering heights of The Sail’s two apartment blocks also put them on global building data provider Emporis.com’s list of the 100 tallest residential buildings in the world. The Singapore landmarks rub shoulders with the likes of the Q1 Tower in the Australian city of Gold Coast, the Millennium Tower in Dubai, and The Harbourside in Hong Kong.

The Q1 Tower is the tallest residential building in the world at 323m, while the Millennium Tower, ranked sixth, is 285m. The Harbourside stands at 251m, and is ranked 17th.

The Sail’s two towers are ranked 22nd and 47th, respectively.

Coming in under the two towers of The Sail and The Pinnacle@Duxton is Icon’s Tower 2. The tower on Gopeng Street in Tanjong Pagar is 163m and 46 storeys high. Completed in 2007, it stood as Singapore’s tallest residential building until The Sail came along in 2008.

Rounding up the list of the five tallest residential buildings in Singapore is Newton Suites. Sitting along Newton Road, the 120m tall project has 36 floors, and was completed in 2007.

But this list will soon see changes, with as many as three developments likely to be displaced – another indication that the trend is to go high. The upcoming Altez is set to be 250m tall – just five metres ahead of The Sail’s Marina Bay Tower – and 62 storeys high. To be located on Enggor Street near the Tanjong Pagar MRT station, the development will be completed in 2015.

Marina Bay Suites, too, is set to unseat developments that are currently on the list. Once completed in 2012, the development on Central Boulevard will be 240m tall and 55 storeys high. Over at Shenton Way, 76 Shenton will be 160m tall and 39 storeys high when completed in 2014.

Then there is Sky@Eleven on Thomson Lane, which when completed by this quarter will boast four towers, each 153m tall and 43 storeys high.

The height of these properties has contributed to high home prices at these developments, say property watchers here. Jones Lang LaSalle’s head of research for South-east Asia and Singapore, Chua Yang Liang, said that while height alone will not guarantee a premium in prices, ‘it is common understanding that the higher the units, the better the view and hence higher the price.’

According to data provided by Jones Lang LaSalle Research and URA retrieved on Wednesday, the median unit price for Marina Bay Tower at The Sail in the first quarter of this year was $2,301 per square foot. The highest unit price was $3,204 psf, while the lowest $1,800 psf. At Icon Tower 2, the median unit price was $1,600 psf, with the highest price at $1,925 psf and the lowest at $1,404 psf.

For the yet-to-be completed Altez, which saw its first launch in February, the median unit price was $1,832 psf, with the highest at $2,345 psf and the lowest at $1,675 psf. Over at Central Boulevard, the Marina Bay Suites fetched a median unit price of $2,500. The highest price it saw was $2,980 psf, while the lowest was $2,088 psf.

Dr Chua said that buyers are generally willing to pay more for a higher unit primarily for the view. Also, some are willing to pay a premium if a development is iconic or is often the defining residential development in the area, such as being a landmark or having been awarded a title like the tallest residential building in Asia, etc.

‘Such accolades appeal to some buyers who particularly enjoy the prestige that comes with such iconic buildings,’ says Dr Chua. ‘These landmark buildings appeal to these buyers for the same reason why branded residences have mushroomed in the Singapore residential market of late.

‘As economic affluence rises and buyers mature and become more discerning, creating an aura of prestige, of distinction from the crowd becomes increasingly important and appealing,’ he added.

For Peter Ow, Knight Frank’s managing director of residential services, an apartment on a high floor offers panoramic views and the sense of exclusivity to occupy the tallest level. ‘Residents will feel in sync with the trend that Singapore is increasingly going into the concept of vertical-city living,’ he said.

HDB, like developers in the private sector, is picking up on the trend. It is planning to roll out more of such skyscraper-style flats by ‘building taller buildings with higher intensities to optimise land use where feasible’, it said.

The current trend seems to suggest that the sky is, quite literally, the limit.

Source: Business Times, 10 Apr 2010

Lian Beng wins $78m Far East condo contract

CONSTRUCTION player Lian Beng Group has won a $78 million contract from Far East Group to build Centro Residences, with completion expected by January 2013.

The deal – the second in two weeks for Lian Beng – is for a 34-storey residential tower, multi-storey carpark, clubhouse, swimming pool, playground and ancillary facilities at Far East’s condominium development opposite Ang Mo Kio MRT Station. Work is expected to start this month.

Just last week, Lian Beng said it would be building a condominium at Dakota Crescent for $144 million. Taken together, the two contracts will add $222 million to the group’s order book, lifting it to $820 million.

‘As a group, we have been fairly successful in leveraging our internal resources to provide more value-added activities for our customers,’ said managing director Ong Pang Aik. ‘We are delighted to be able to work with Far East Group on another of its distinctive projects.’

Lian Beng enjoys good control over some key cost components – through ownership of its equipment fleet and ready-mix concrete facilities, in-house civil engineering expertise and an accredited training centre in Bangladesh.

As Singapore’s construction sector continues to see the return of previously deferred public and private projects, Lian Beng believes its experience of handling major projects should place it in a good position.

The group holds A1 accreditation from the Building and Construction Authority (BCA), which allows it to tender for general building contracts of unlimited value.

Lian Beng shares closed unchanged at 29.5 cents yesterday.

Source: Business Times, 17 Mar 2010

Chip Eng Seng buys A$20m site in Melbourne

CHIP Eng Seng Corporation has extended its footprint overseas with the purchase of a A$20.2 million (S$25.8 million) site in Melbourne.

The deal is considerable when it is seen against the property and construction firm’s net profit of $75.3 million for FY2009.

The land parcel is located at Mackenzie Street, in the eastern part of Melbourne’s central business district, and spans around 20,000 sq ft. Chip Eng Seng plans to build a 32-storey tower on the site, with 350 residential apartments and other amenities such as shops.

This site marks the company’s third development project in Australia. It had earlier completed a commercial building and a residential project in Adelaide.

‘With the stabilising world economy, we believe that this is an opportune time for us to expand our development property portfolio,’ said Chip Eng Seng executive chairman Lim Tiam Seng.

‘Melbourne represents a great opportunity as the city is currently experiencing a shortage in supply even as the population continues to increase.’

Chip Eng Seng does not expect the project in Melbourne to have any material impact on its net tangible assets and earnings per share for the current financial year ending Dec 31. It will be funding the site purchase using internal funds and bank borrowings.

As at end-2009, the company had cash and cash equivalents worth $76.1 million and a net debt to equity ratio of 0.15.

Mr Lim expects Chip Eng Seng’s cash position to strengthen further when its joint development projects, The Parc Condominium in the West Coast area and City Vista Residences near Cairnhill, receive their temporary occupation permits this year.

‘This puts us in an excellent position to pursue opportunities in Singapore and the region, as well as allow us to tender competitively for construction pro-jects,’ he said.

Chip Eng Seng’s most recent property launch was that of Oasis@Elias in Pasir Ris. The company has been bidding for land at state tenders in the last few months in a bid to top up its residential land bank.

The counter closed unchanged yesterday at 39 cents.

Source: Business Times, 16 Mar 2010

Building Singapore, brick by brick

CONSTRUCTION has been a flourishing industry right from the earliest days of modern Singapore.

Pioneering building contractors in the 19th century included Lim Loh, who built the Victoria Memorial Hall and the old Parliament House, and Naraina Pillai, the man behind Sri Mariamman Temple, the first Hindu temple here.

Immigrant labourers who assembled this city, brick by brick, included Indian convicts brought over by the British, and samsui women from China with their red roof-like headdresses.

One milestone for the construction industry in colonial Singapore was the setting up of the Singapore Improvement Trust (SIT) in 1927 to build low-cost housing.

Another milestone was the formation of the Singapore Chinese Contractors Association in 1937 to improve work relations among local contractors and ensure regular supplies of building materials. After World War II, the association changed its name to the Singapore Contractors Association to reflect its multiracial membership, and today it is known as the Singapore Contractors Association Limited.

By 1960, there were 400 contracting firms here employing 4 per cent of the total workforce, according to National University of Singapore building professor George Ofori’s book, Managing Construction Industry Development.

The 1960s saw the start of a building boom as Singapore began rapid urbanisation under the People’s Action Party government.

The Housing Board was formed in 1960 to replace SIT. In five years, the HDB built 50,000 homes, more than double that ever built by its predecessor.

To achieve this, then HDB chairman Lim Kim San broke the hold of contractors’ cartels and their price-fixing by allowing anyone to tender.

HDB also adopted standardised specifications and construction methods – still its modus operandi today – to make the flats easier to design and faster to build.

The 1970s was the decade of major civil engineering and high-rise projects like the Benjamin Sheares Bridge, DBS Building and the first passenger terminal at Changi Airport.

The industry here saw an influx of large foreign construction firms, mainly Japanese. They employed or worked with Singapore contractors on these projects.

As some Singapore firms expanded and grew in the 1980s, they formed major joint ventures and partnerships with international firms. Key projects included highways, port development and the building of the Mass Rapid Transit.

The Construction Industry Development Board (CIDB), a statutory board, was set up in 1984 – a time when the industry was becoming increasingly overheated and reliant on transient, low-skilled foreign labour. CIDB launched schemes to upgrade workers’ skills and develop the capabilities of construction firms.

The 1990s were growth years, with construction demand peaking at close to $25 billion in 1997, just before the effects of the Asian financial crisis were felt.

The resulting building slump led to the Construction 21 review of the industry in 1999, which sought to raise productivity, reduce the dependence on foreign workers, and improve on-site safety.

In 1999, the CIDB was merged with the regulatory body at the time, the former Public Works Department’s Building Control Division, to form the Building and Construction Authority (BCA).

The BCA both regulates and develops the construction industry.

The last few years have seen a renewed wave of soaring growth, led by a spike in private sector demand, with the two integrated resorts and a bumper crop of residential and commercial projects.

Construction gross domestic product (GDP) saw double-digit increases between 2007 and last year. A high of $34.6 billion worth of contracts was awarded in 2008.

Construction demand for this year is projected by BCA at between $21 billion and $27 billion. The bulk of the demand is expected to come from the public sector.

The construction industry today remains a major engine of economic growth. It contributes about 6 per cent of Singapore’s GDP, and employs 360,000 people, or roughly 12.2 per cent of the workforce.

Source: Straits Times, 13 Mar 2010

Lian Beng wins $144m condo contract

LIAN Beng Group has bagged a $144 million building contract for a condominium development at Dakota Crescent.

The design-and-build contract was awarded by UOL Development (Dakota) Pte Ltd. The development comprises 616 apartment units in three 19-storey blocks and four 20-storey blocks, and a six-storey carpark building with a roof garden, a swimming pool and other ancillary facilities.

The project is due to commence next month and expected to be completed in March 2013.

Commenting on the contract win, Lian Beng managing director Ong Pang Aik said: ‘This is an encouraging sign of sustained demand for construction services from the private residential sector. Backed by the group’s strong track record and capabilities, we are looking forward to secure more projects.’

The contract is not expected to have a material financial impact on the net tangible assets per share and earnings per share of the group for the financial year ending May 31, 2010. This new contract raised Lian Beng’s order book to about $740 million.

Established in 1973, Lian Beng Group is mainly engaged in building construction, integrated civil engineering works and construction support services.

Lian Beng’s portfolio of residential projects includes Waterfront Key, The Gale, Kovan Residences, and The Ritz-Carlton Residences, Cairnhill Singapore. The group is also in the midst of constructing public projects such as camp facilities at Kranji.

In January, the group reported a 29 per cent growth in after-tax profit to $11.3 million for the first half of its 2010 financial year, compared with $8.8 million a year ago. Revenue rose 4 per cent to $157.6 million

Lian Beng’s share price dropped 3.5 per cent to 28 cents yesterday.

Source: Business Times, 10 Mar 2010

BCA pushing industry into being leaner and greener

Buildability score, energy efficiency certification being revised upwards

THE Building & Construction Authority (BCA) is set to make changes to some of its regulations to push the construction industry towards green building and greater productivity.

The mandatory minimum energy efficiency standard that must be met before a new building can receive a Green Mark certification will be raised by 10 per cent from today’s standard. The energy efficiency standards for other Green Mark levels – Gold, GoldPlus, and Platinum – will also be upped.

BCA will also increase the regulated minimum buildability score so that firms will have to use labour-efficient construction technologies. The industry regulator said that it has not yet decided on the new minimum score, which now stands at 75 – a significant climb from 61 in 2001.

‘The industry can seek government funding to build capability in areas such as prefabrication, precast technology and other construction technology to meet the new buildability requirements,’ said Grace Fu, Senior Minister of State at the Ministry of National Development. She announced the changes in Parliament yesterday.

During the Budget announcement on Feb 22, the government said that it will set aside $250 million to steer the construction sector towards higher productivity. This followed the Economic Strategies Committee last month highlighting the need for strong measures to boost Singapore’s productivity level.

Giving more details yesterday, BCA said that the funds will be used to cover three broad aspects: to co-fund manpower development; to provide funding support to encourage companies to adopt technology and equipment that could lead to significant productivity improvement; and to provide financial support to builders to help them develop capability in more complicated civil engineering projects and building projects.

BCA hopes to get the construction sector to raise the quality of its workforce, design buildings that are easier to construct and adopt more advanced construction technologies. The government has said that it will raise its foreign worker levies from July this year. Yesterday, Ms Fu said that it is estimated that the higher levies could result in 1-2 per cent rise in construction costs for the industry – although the actual cost impact will vary from firm to firm. On the other hand, the $250 million fund will work as a carrot and support the construction firms as they try to adopt productivity improvement measures.

Further upstream, developers and architects will have to design for greater buildability. BCA also wants to raise the energy efficiency standard for new buildings by 10 per cent – which means that the power consumption for new buildings that are Green Mark-certified will be about 10 per cent lower as compared to their older counterparts.

Developers said that they welcomed the move and added that the new target is within reach.

‘The revised standards will definitely improve the long-term sustainability of Singapore and contribute towards our overall energy efficiency goal of 35 per cent savings by 2030,’ said Tan Swee Yiow, Keppel Land’s chief executive for its Singapore commercial business unit.

Added a City Developments spokesman: ‘While the development of green buildings may cost more, by adopting the low-energy passive facade design, we do not foresee the need to increase our present green building investment of between 2 per cent and 5 per cent of our construction cost.’

Source: Business Times, 9 Mar 2010

New measures to reduce noise and save energy

THE National Environment Agency (NEA) will soon start prohibiting construction activities from 10pm on the night before a Sunday or a public holiday to 10am on the day itself. This new prohibition will apply to construction sites within 150 metres of residential areas and noise-sensitive developments that start work from Sept 1 this year.

‘We will implement the changes progressively to give the construction industry sufficient time to adjust,’ said Yaacob Ibrahim, Minister for the Environment and Water Resources, while announcing the ministry’s latest measures in Parliament yesterday. ‘NEA will extend this prohibition to the rest of the day on Sundays and public holidays for sites starting work from Sept 1, 2011,’ Dr Yaacob added.

According to the minister, NEA received 14,000 and 12,000 complaints about construction noise in 2008 and 2009 respectively, compared to 9,000 and 6,000 such complaints in 2007 and 2006 respectively.

This change in policy will create a need for construction firms to rejig their work schedules, CSC Holdings Ltd CEO See Yen Tarn noted.

‘There are certain activities that have to be carried out continuously, one process after another. You cannot excavate something and then let it sit there for 24 hours, for example,’ said Mr See.

Tan Wey Pin, executive director of Lum Chang Building Contractors, also noted that almost all construction sites in Singapore will be situated within 150 metres of a residential area. Currently, his firm’s workers end work any time between 7pm and midnight on Saturday and work from 8am to 5pm on Sunday, excluding overtime.

NEA will also tighten noise standards for new and in-use vehicles, from Oct 1, 2010 and April 1, 2011, respectively. The new-vehicle standards will be based on those currently used in Japan and the European Union.

On the industrial front, there will be a mandatory requirement for companies in the industry sector using more than 15 gigawatt- hours of energy each year to appoint an energy manager that will monitor and report energy use to NEA from 2013, as part of the Energy Conservation Act that will come into force in the same year.

‘NEA will introduce the Energy Efficiency National Partnership, or EENP, in April to help companies build up the necessary capabilities before the mandatory energy management practices come into effect,’ said Dr Yaacob.

Several companies that fall in this category appear to be ahead of the curve.

‘We do more than an energy manager’s job. We have monitored the consumption of energy from Day 1,’ said CV Jagadish, CEO of Systems on Silicon Manufacturing Co Pte Ltd. This year, the company aims to reduce energy usage by almost 4 million kilowatt-hours.

STMicroelectronics will also have no trouble complying with the requirement. ‘Our site electrical manager is our resident Energy Conservation Champion, who constantly drives energy reduction opportunities at our wafer fab,’ said Renato Sirtori, group vice-president and chief financial officer of Asia STMicroelectronics.

Source: Business Times, 9 Mar 2010

Shhh! No noisy work near homes on Sunday mornings

THE noise from construction projects has long been the bane of residents hoping to sleep in on Sundays.

But there is hope for some peace soon.

From Sept 1, all new projects will have to stop work from 10pm on Saturday to 10am on Sunday.

This ban applies to any building project within 150m of a residential area. It also applies to the eve of public holidays and public holidays.

The duration of the ban will be further extended next year, with the stop-work rule stretching from 10pm on Saturday till Monday morning.

It will start from Sept 1 next year and apply to new projects that begin work then.

These measures, announced by Minister for the Environment and Water Resources Yaacob Ibrahim in Parliament yesterday, were greeted with equanimity by contractors.

Mr Andrew Khng, president of the Singapore Contractors Association, told The Straits Times: ‘I don’t think it’s a huge burden. Contractors and workers also need time at the weekend to rest.

‘We will probably work harder during weekdays.’

Currently, contractors can bang away on Sundays as long as the noise level from 7am to 7pm stays under 75 decibels, which is close to the sound of a car travelling on a road.

After 7pm, the noise level has to go down to 65 decibels till 10pm, when all work must stop.

But, said MP Hri Kumar Nair, ‘there will be instances where the work will from time to time exceed the limit but not break the regulations because it is sustained’.

Added the Bishan-Toa Payoh GRC MP: ‘This is of little comfort to those who have had their rest disturbed.’

Dr Yaacob admitted as much when he disclosed that 12,000 complaints were received last year. That is around 33 a day.

It was worse in 2008, when the National Environment Agency (NEA) received 14,000 complaints, up from 9,000 in 2007 and 6,000 in 2006.

MP Lim Biow Chuan (Marine Parade GRC) noted that construction noise in the middle of the night seems louder, as there is no other background noise to drown it out.

The NEA estimates that the new measures will raise construction costs by 2 to 2.5 per cent, and projects will take 10 to 17 per cent longer to finish.

While residents interviewed welcomed the move, they felt more could be done.

Mr David Seah, 54, whose Farrer Road home is a stone’s throw from the construction site of a Circle Line MRT station, suggested that the Government plant more trees and shrubs in his estate to act as a sound buffer.

Mr Seah, who works the evening shift in the food business, said: ‘They should consider people who do shift work.’

To reduce noise from cars and other vehicles, the NEA will introduce standards to match those of Japan and the European Union.

These will take effect from Oct 1 this year.

Source: Straits Times, 9 Mar 2010

Eunos residents working with HDB

FOLLOWING feedback from some Eunos residents about external lift shafts blocking their flats, the Housing Board (HDB) has formed a working group comprising some of them, as well as representatives from the residents' committee, town council and the board.

Formed this year, the group was seen by some residents as a positive step forward. Others remain sceptical that the problem will be resolved.

The issue at Blocks 411, 415 and 417 at Eunos Road 5 came about in 2006, when affected residents found out that the new shafts would be sited in front of their units, which they say blocks off some light and air.

Over the years, the residents have had numerous meetings with their precinct's Member of Parliament and the HDB.

But an HDB bid to solve the problem was dismissed last November by affected residents, who said the designs still did not address their concerns.

Affected resident Chew Keng Woh, a 64-year-old retiree in Block 415, is one of those who has volunteered to be part of the committee.

Commenting on his new role, he said: 'If they can give us 60 per cent (of what we want), let them finish the work.'

It is understood that the feedback process is still under way.



Source, Straits Times 9 February 2010

Global construction industry expected to pick up in 2010: KPMG survey

The construction sector around the world is likely to pick up in 2010 in tandem with the recovering global economy.

Accoring to KPMG’s 2009 Global Construction Survey, 64 per cent of respondents expect to either increase or maintain profits by next year.

The survey sought the view of top management of more than 100 of the world’s leading engineering and construction companies.

The outlook for the construction industry is optimistic despite falling demand and shortage of funding experienced in the wake of the financial crisis.

Construction companies surveyed said they view the financial crisis as an opportunity to get leaner, so that when recovery finally occurs, they will be prepared to succeed.

Meanwhile, 53 per cent of global survey respondents state that their backlog volume of jobs has either gone up or stayed the same in the past year.

The survey also said that government stimulus packages will further help the industry.

Of those surveyed, 82 per cent of contractors in Asia Pacific expect at least a moderate or significant increase in opportunities over the next two years.

Another indicator of the industry’s optimism is its ability to retain its workforce despite the economic crisis.

Some 35 per cent of global respondents have not reduced their workforce at all, and 28 per cent have taken no action with regards to their workforce numbers.

When it comes to competing in a tougher marketplace, the majority of respondents said that a focus on sustainability is a “must-have” to satisfy clients and regulators.

56 per cent of respondents say that sustainability helps position their companies as being innovative and environmentally aware.

Source: Channel News Asia, 28 Dec 2009