New footbridge for Marina Bay

Wider span designed to ease pedestrian traffic between the Esplanade and Merlion Park

PEDESTRIANS will have more space on a new, broader bridge to be built between the Esplanade and Merlion Park.

To cost an estimated $20 million, the structure will curve over a 220m distance through Marina Bay and complement the existing eight-lane Esplanade Bridge used by vehicles.

The Urban Redevelopment Authority (URA), in documents released this week, could not say when the bridge would be completed. It is now sourcing for consultants for the project.

The 6m-wide bridge is being built mainly to improve the pedestrian’s trek between the Esplanade and Merlion Park.

The Esplanade Bridge’s 2m-wide walkway was built before the two tourist landmarks were redeveloped and, thus, not designed to take large numbers of people, said the URA.

During the National Day Parade and New Year’s Eve, for example, hundreds of people are known to jostle there for a good view of the fireworks that are a fixture on the programmes of these two events.

Bottlenecks also occur on either end of the walkway on the staircases, which were designed as emergency escape routes, not as part of a pedestrian route.

And when marathons are held in the downtown area, the entire Esplanade Bridge sometimes has to be closed off to traffic.

The new bridge, at thrice the width of the walkway, will thus accommodate such sporting events.

When completed, the curved bridge will become part of a smooth 3.5km pedestrian route around Marina Bay linking its attractions.

On the other side of the bay, another pedestrian bridge, one shaped like a double helix, is taking shape next to one being built for vehicles.

This pair of bridges, scheduled for completion by the year end, will link the upcoming Marina Bay Sands integrated resort and the floating platform.

The pedestrian route will make the waterfront promenade even more popular among Singaporeans and visitors, said a URA spokesman.

Source : Business Times – 13 Jun 2009

Marina IR’s progress on track

CONSTRUCTION of the hotel towers at the Marina Bay Sands integrated resort (IR) is on target for completion by next month.

The three hotel towers have been built past level 50 – just five floors away from the 55-storey peak for hotel rooms, Marina Bay Sands announced in a statement yesterday.

The developer said it will hold an official topping-out ceremony early next month, presided over by Las Vegas Sands Corp chairman Sheldon Adelson.

The towers will contain around 2,600 luxury hotel rooms that are simultaneously being fitted out.

The US$5.4 billion (S$7.9 billion) IR will open by the end of the year, though likely not fully.

When completely open, it will comprise a casino, hotel rooms, convention and retail space, as well as various entertainment facilities.

Once the hotel towers reach 55 floors, Marina Bay Sands can start construction of the 56th floor and the 1ha Sands SkyPark on the 57th floor.

The SkyPark, which will stand some 200m from the ground, will have a public observation deck in the world’s largest building cantilever.

Mr George Tanasijevich, general manager and vice-president of Singapore development at Marina Bay Sands, said the topping out will be one of many significant achievements over the next few months.

‘We are putting the roof on the Expo and Convention Centre and are lining up luxury brands and cutting-edge designers for our retail stores.’

Last year, there were concerns that the project would not progress smoothly given the credit crunch. But Las Vegas Sands has assured investors that the Singapore IR is its top priority.

Source : Straits Times – 10 Jun 2009

Marina Bay Sands on target to top out hotel towers next month

Marina Bay Sands integrated resort has said it is on target to top out its hotel towers early next month.

The company said the towers have passed level 50, just five floors away from the peak of 55 storeys.

Las Vega Sands’ Chairman Sheldon Adelson will attend the topping out ceremony.

The integrated resort will feature facilities like casino, convention and exhibition halls, a 2,600-room luxury hotel and an ArtScience Museum.

Marina Bay Sands said that once the development’s three hotel towers reach 55 floors, it will begin to lift and fit together the one-hectare Sands SkyPark.

SkyPark, a rooftop garden 200 metres from the ground, will offer a public observation deck with panoramic views of the city.

The US$5.4 billion Marina Bay Sands is scheduled to open by year-end.

General Manager and Vice President of Singapore Development, Marina Bay Sands, George Tanasijevich, said: “Marina Bay Sands will be a magnificent destination. Topping the hotel towers is a big step but it is just one of the significant achievements for us in the next few months. We are putting the roof on the Expo & Convention Centre and we are lining up luxury brands and cutting-edge designers for our retail stores.”

Source : Channel NewsAsia – 9 Jun 2009

Renewal of interest in Marina Bay apartments

As market sentiment picks up, not only has the number of transactions increased, but prices have also firmed up across the board. The clearest evidence of this is at Marina Bay, where apartments have seen a spike in the number of transactions in the secondary market.

At the 1,111-unit The Sail, which was completed in 4Q 2008, the most recent transaction was a 50th floor, 2,174 sq ft apartment that changed hands in the resale market for $4.1 million, or $1,886 psf. The initial owner bought the property at launch in 2004 for over $2.385 million, or $1,097 psf, so he has seen a 72% capital appreciation on the apartment in about five years.

There are signs that specu-investors have also returned and, if anything, this marks a return of optimism to the property market.

In late April, a 657 sq ft apartment on the 52nd floor was sold for $951,200, or $1,449 psf. The same unit changed hands a month earlier at $867,240 ($1,321 psf), according to a caveat lodged in early March. The last time the unit changed hands in a sub-sale was in early 2007, when it went for $952,650, or $1,451 psf. The original owner had purchased the unit in early 2005 for $576,180,or $878 psf.

“There is a relatively strong buying interest in the market recently,” says Jack Chua, president and executive director of ERA Realty. “Confidence is back in the market; investors who are cash-rich are looking again at property as a form of investment.”

At the 428-unit Marina Bay Residences expected to be completed by mid-2010, there were four transactions ranging from $1,581 to $1,880 psf for caveats lodged from May 1 to 15. The highest price achieved in terms of price psf at the upscale condominium in that timeframe was for a 44th floor, 1,959 sq ft apartment that changed hands in the sub-sale market for $1,880 psf, or a total of $3.68 million.

According to caveats lodged earlier, this unit was one of 10 on the same floor scooped up en bloc by a single party for a total of $23 million, or an average of $1,830 psf. The original transaction was when the development was launched in December 2006.

The first of the 10 units to change hands in a sub-sale was a 1,636 sq ft unit that went for $3.779 million, or $2,310 psf, in June 2007, according to a caveat lodged with URA Realis. The second was the following month — a 1,130 sq ft unit sold for $2.46 million, or $2,180 psf. Subsequently, in August, a third unit was resold — a 732 sq ft unit that went for $1.79 million, or $2,450 psf. The seller pretty much rode the crest of the property boom, with most of the sub-sale prices achieved above $2,000 psf.

There was a lull for about a year before the next transaction in September 2008, when a 710 sq ft apartment changed hands in a sub-sale for $1.25 million, or $1,760 psf. In January this year, a 1,055 sq ft unit was sold for $1.728 million, or $1,638 psf; in April, a 1,227 sq ft apartment was sold for $1.94 million, or $1.580 psf; while the most recent transactions were in the first two weeks of May, as mentioned above.

Source : The Edge – 8 Jun 2009

Right on track but returns have to wait

While the billions poured into Marina Bay are expected to bring in the crowds, the recession and asset re-pricing means it will take a while to recoup that investment.

LAST TUESDAY MORNING, wearing a hard hat, safety harness, safety boots, and accompanied by an entourage of executives from the Urban Redevelopment Authority, Minister for National Development Mah Bow Tan, toured some of the key areas of Marina Bay, Singapore’s equivalent to Canary Wharf in the UK and other major urban development projects around the world.

Sites that Mah visited included the US$5.4 billion ($8.1 billion) Marina Bay Sands integrated resort, the 3.5km double-helix bridge, the rejuvenated Clifford Pier (now Sino Land’s Fullerton Heritage development) at Collyer Quay and the 70-storey The Sail@Marina Bay, considered Singapore’s tallest residential tower.

The tour served as an assurance to the rest of the world that the ambitious transformation of Singapore has not been derailed by the global economic slump. “What we have seen today shows that the progress on Marina Bay is very much on schedule and on track,” said Mah to a group of reporters at an interview at the end of the tour.

Total investment in new developments at Marina Bay today amount to a whopping $22 billion, of which $16.3 billion is from the private sector. The remaining $5.7 billion is in infrastructural works for the bay area. A further $1 billion will be pumped into infrastructure in the longer term.

There is no doubt Singapore’s skyline is going to change in the next two years with the completion of the Marina Bay Sands and the first phase of the Marina Bay Financial Centre (MBFC) by next year, and the progressive completion of the double-helix bridge, the Art Park, and the Gardens by the Bay by 2011.

Three to four years ago, when property markets around the world were booming, the maxim was very much, “If you build it, they will come”. That maxim is now undermined by a global recession in full swing and real-estate prices deflating, especially at the top end of the market. Developers and investors who embarked on multi-billion dollar projects are now facing a much starker reality, far different from the projections made in rosier times. “I don’t think that maxim applies today,” concedes Donald Han, managing director of property consulting firm, Cushman & Wakefield. “The issue now is to build confidence in a market that is dealing with an oversupply situation.”

The Marina Bay Sands resort has a total of 2,600 hotel rooms, of which 1,800 will open by year-end. Meanwhile, the $6.59 billion Resorts World at Sentosa will have six hotels with a total of 1,800 rooms, of which 1,350 will be soft-launched in 1Q2010. The two integrated resorts will contribute the bulk of the 8,000 hotel rooms scheduled for completion over the next two years. Last Tuesday, Resorts World gave a preview of the showrooms for Maxim Tower, Hotel Michael, Festive Hotel, and the Hard Rock Hotel, which will be opening next year.

In the meantime, Singapore’s tourist arrivals and hotel-occupancy levels continue to plummet. Last Thursday, the Singapore Tourism Board reported that March tourist arrivals tumbled 13.2% to 790,000 compared with March 2008. Hotel-room revenue dropped 33.3% to $125 million compared with the same month last year, while average room rates slipped 18.5% to $196 per night. Occupancy rates last month were 74%, a 13.1% drop from March 2008.

However, the government is pinning its hopes on the two integrated resorts and their economic spin-offs in terms of job creation and other sectors of the economy. “It will be a catalyst for tourism because it will be something new for visitors, and I’m sure visitors will come and visit the resorts in Singapore,” says Mah. He acknowledges the inevitability of belt-tightening among tourists given the current recession, but “when it comes to travel and leisure, even in a recession, people will want to enjoy themselves and relax”.

Source: Corporate Locations

Apart from the Marina Bay Sands, the other key development in the bay area is the MBFC, developed jointly by Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong Land and Keppel Land. When fully completed, the entire mixed development will have three million sq ft of Grade A office space, two residential towers with a total of 649 apartments and 176,000 sq ft of retail space.

The first phase is expected to be completed by the end of 2Q2010, and will contain two office towers and the 428-unit Marina Bay Residences condominium tower. “We have 61% of the office space pre-committed to blue-chip tenants some one to three years ahead of completion,” says Wilson Kwong, general manager of Raffles Quay Asset Management on behalf of the consortium. Anchor tenants include Standard Chartered Bank, which has committed to taking up 500,000 sq ft of space and DBS, which is taking up 700,000 sq ft, adds Kwong.

With the completion of the first phase of the MBFC next year, property analysts and consultants expect the market to be awash in new supply. In his April market review, Douglas Dunkerley, managing director of office specialists, Corporate Locations, notes that most new office developments this year, will only be completed in 3Q and 4Q and those within the CBD will collectively provide around 1.5 million sq ft of new space. This will be followed by a short lull until 2H2010 “when a massive wave of space arrives with two million sq ft due for completion inside the CBD and a further two million sq ft will be ready outside the CBD”, he says. On top of that, the secondary supply from major relocations will further exacerbate the situation of chronic oversupply.

Hence, Dunkerley expects the Singapore office market to continue experiencing major adjustments over the next two years as demand has fallen off at a time when massive supply is arriving — “just when it’s not needed”, he notes. “If only this supply had arrived in 2006/07.” That was when there was a chronic shortage of office space. The last time the office market bottomed out was in 2004, when prime rental levels were around $5 psf (or $6 psf for the very best space) in Raffles Place. With the glut of new supply available and fierce competition from new developments, Dunkerley predicts that top rates could come down to between $9 psf and $10 psf per month by year-end, and prime properties could see rental rates fall by another 30% to around $6 psf to $7 psf by the end of next year.

“Historically the office-rental market has lagged behind any recovery in the stock market by around 12 months,” observes Dunkerley. “If there is a firm recovery in the stock market by yearend, then one would normally expect the office-rental market to start recovery early 2011 but, with so much supply, this is likely to be delayed until later in 2012.” (See Charts)

According to URA data, office rents in 1Q2009 fell by 10.7% compared with a 6.5% drop in 4Q2008. The median rental rate for prime office space stood at $11.56 psf per month in 1Q2009, down from $13 psf per month in 4Q2008. Meanwhile, prices for office space are down 12% in 1Q2009, which is more than the 4.9% decrease in 4Q2008.

“If you’ve been around long enough you will know that there will always be cycles — there will be booms and there will be busts,” says Mah. “When we started this [MBFC site] in 2000 and 2001, there was similar apprehension that we were offering land for sale in Marina Bay when there was a glut. Then what happened? When we started building, suddenly we were running out of space, and everybody was saying, ‘Why didn’t you sell more land at that time? You remember that?’”

Mah notes that while there’s a need to be mindful of the economic downturn, and to find means and ways to cope with it, there is also a need to “prepare ourselves for when the economy recovers”.

In the residential sector, it is also a time of reckoning. According to URA’s 1Q2009 report last Friday, prices of non-landed homes (both apartments and condominiums) fell 15% in 1Q2009, compared with a 6.3% drop the previous quarter. Meanwhile, rentals in the core central region fell 10.3% in 1Q2009.

When the market was booming, and condominium prices were spiralling upward, investors were looking for capital appreciation, and rental yield took a backseat. However, with valuations and property prices on a downward trend, investors are once again looking at property fundamentals and rental yields are fashionable once again. At The Sail@Marina Bay, the benchmark for condos in the core central region, based on the caveats lodged in the URA Realis database, there were four transactions done in the week of March 30 to April 6. Of these, three were apartments of 657 sq ft to 678 sq ft sold in the resale market at $1,302 psf to $1,357 psf. A larger unit of 1,184 sq ft was transacted at $1,600 psf. When the first tower was launched in October 2004, prices started from $900 psf, and subsequently at the peak of the market from 2Q2007 to 1Q2008, over 150 units changed hands in the secondary market at $2,000 psf to $3,000 psf, with over six units sold at prices above $3,000 psf.

“The bottom line in any property portfolio is that if the purchase price was at $2,000 psf to $3,000 psf, the question is what kind of rent will you be able to get for your property?” says Cushman & Wakefield’s Han. In the central region, for condominiums like The Sail@Marina Bay and even those at Sentosa Cove, rental rates are now pegged at $5 psf to $6 psf per month, or up to $6.50 psf to $7 psf for fully-furnished apartments and serviced apartment-like offerings, notes Han. At those rental rates, people who bought units at $2,000 psf to $3,000 psf would be looking at rental yields of around 2% to 3% per annum.

There is no doubt that the Singapore skyline is going to change, but it’s taking place at a time of massive price and rental adjustments.

Source : The Edge – 25 Apr 2009

Marina Bay sucks in $22b of investments

Marina Bay has attracted investments of more than $22 billion and while the area still has sites for development, the government has no plans to sell them at the moment.

‘We are in no hurry to release these sites,’ said National Development Minister Mah Bow Tan yesterday. He was speaking to the media after a tour of several projects taking shape along Marina Bay, such as the Marina Bay Sands integrated resort, the double helix bridge and the Fullerton heritage area.

According to Mr Mah, some investors are looking at specific sites and have approached the government, but ‘we will pause for a while’, he said. Of the 360 ha of land set aside for Marina Bay’s development, around 24 ha have been sold, the Urban Redevelopment Authority (URA) said.

The agency has not put up any more sites at Marina Bay for sale through the Government Land Sales Programme. The timing and number of sites to be released ‘will depend on the economic conditions and market demand and subject to more detailed planning later on,’ URA added.

For now, ‘the timing is not right,’ Mr Mah explained. ‘We also want to be sure that the infrastructure is in place and the other developments are up. Then we’ll see what else we want to have that will add to the attractiveness of the bay.’

Of the more than $22 billion pumped into Marina Bay’s development, close to $5.7 billion was the government’s investment in infrastructure. Another $16.5 billion came from private investors both in Singapore and abroad.

The US$4.5 billion Marina Bay Sands integrated resort is one of the most significant projects in the area. In 2006, the consortium behind the Marina Bay Financial Centre (MBFC) also said that they would spend $2 billion on the first phase of the development.

Over the next 10 to 15 years, the government will continue to pump more than $1 billion into infrastructural works to support Marina Bay’s growth and to enhance connectivity within the city.

‘What we have seen today shows that the progress of Marina Bay is very much on schedule and on track,’ Mr Mah noted.

One important project is the construction of the double helix bridge, which will allow pedestrians to cross from Marina Centre to the Marina Bay Sands Integrated Resort in just three to four minutes when it is completed at the end of the year. The bridge, together with an adjacent vehicular bridge and the nearby art park, cost $82.9 million.

The double helix bridge will be part of a 3.5 km long waterfront loop linking key developments along Marina Bay, such as the upcoming MBFC and 50 Collyer Quay. ‘In one or two years’ time, this bay will be alive with people and activities,’ Mr Mah said.

There will also be an extensive underground pedestrian network linked to MRT stations and retail shops. Phase one of MBFC for instance, will have around 93,000 sq ft of retail space both above and below ground level.

MBFC manager Raffles Quay Asset Management may start marketing the retail mall in H2 2009. ‘The exact timing depends on how best we could finalise our plans once all the necessary authorities’ approvals are in place as well as market conditions,’ said its general manager Wilson Kwong.

As for the MBFC, space across its three towers is 61 per cent pre-committed.

‘Given the uncertainty and business volatility, it is inevitable and understandable that interested prospects would take a longer time before making any long-term pre-commitments,’ Mr Kwong said. Nevertheless, MBFC still receives a ‘healthy level’ of leasing enquiries.

According to property consultant Cushman & Wakefield, 1.97 million sq ft of new office space could come onstream this year even as the property market softens. But Mr Mah was not unduly worried by such numbers.

‘While we need to be mindful of the current economic downturn . . . we must also not forget that we have to prepare ourselves for when the economy recovers,’ he said. ‘When it does, we will be ready.’

Source : Business Times – 22 Apr 2009

New Marina Downtown on track for completion by year-end

Singapore will see a glut of hotel and office spaces when projects at the Marina Bay Downtown come on stream in the months ahead, but developers say they are not worried.

Not only is the Marina Bay Sands Integrated Resort on track for completion, the Double Helix Bridge – which links visitors from the Bayfront to Marina Centre – will also be ready by year-end.

Across the waters at the Fullerton heritage site, a new luxury hotel with 100 rooms will open its doors around the same time, while the Marina Bay Financial Centre – comprising office towers, luxury apartments and retail space – will be ready by the second quarter of next year.

They are all connected by a 3.5-kilometre waterfront promenade and an underground pedestrian network.

To date, the Marina Bay area has attracted investments of over S$22 billion. Of this, S$16.5 billion is from the private sector while the rest are government investments. The government intends to invest another billion dollars in this area over the next 10 to 15 years on infrastructural projects.

With the economic downturn and excess hotel and office spaces in Singapore, will Marina Bay be as vibrant as planners envisioned?

Analysts expect rents to fall by up to 50 per cent this year, amid concerns that Singapore may face an oversupply of office space over the next two years.

But when touring the upcoming Marina Bay Financial Centre, National Development Minister Mah Bow Tan says he is confident demand for office space will return when the economy picks up.

He said: “When we started this in 2000, 2001, there was a similar fear, similar apprehension that we were opening land for sale in Marina Bay when there was a glut.

“And then what happened? When we started building, we were running out of space, and everyone was saying why didn’t we sell the land earlier? When the economy picks up, people will find that we are ready.”

It is a sense of confidence shared by the private sector.

The Marina Bay Financial Centre, managed by Raffles Quay Asset Management, is the second largest development here and will add nearly three million square feet of prime office space between 2010 and 2012.

“There are business cycles but real estate is essentially a long-term game. We are very honoured to have 61 per cent of our space pre-committed to world class tenants,” said the general manager of Raffles Quay Asset Management, Wilson Kwong.

According to the Mr Mah, the correction in office rentals will keep Singapore competitive against regional financial centres like Hong Kong.

Over two million square feet of office space are coming on stream in Singapore this year, and market watchers note that rentals of prime office space in Singapore have dropped some 25 per cent in the first quarter of 2009.

Mr Mah adds that the government is not going to introduce any off budget measures to help landlords for now.

So far, urban planners say about 24 hectares out of 360 hectares of land at Marina Bay have been sold.

Besides commercial spaces, more than 100 hectares of land have been set aside for waterfront gardens.

Source : Channel NewsAsia – 21 Apr 2009

Marina Bay Sands appoints vice-president

MARINA Bay Sands has appointed Tony Cousens vice-president of its hotel operations in Singapore.

Mr Cousens, who has been in the hospitality industry for more than 30 years, was formerly a senior-vice president with Dubai-based Jumeirah.

In Singapore he will be responsible for Marina Bay Sands’ 2,600-room hotel and its 2,000 staff.

His appointment comes after Nigel Roberts was named president of Marina Bay Sands in February.

Marina Bay Sands parent Las Vegas Sands (LVS) has seen movement in its upper management ranks too.

Brad Stone was recently named president of global operations and construction. And Michael Leven was appointed president and chief operating officer after the departure of William Weidner. The latter is said to have left over differences with LVS chairman and chief executive Sheldon Adelson about the running of the company.

In November 2008, LVS’s auditor said in a regulatory filing that it had doubts about the company’s ability to continue as a going concern.

LVS has since raised US$2.1 billion of capital, with Mr Adelson and his family pumping in more than US$1 billion.

Bloomberg said last week that Mr Adelson may seek to buy back as much as US$800 million of bank loans, and that he has hired Goldman Sachs & Co to negotiate credit amendments.

Mr Adelson said later in a telephone interview with Bloomberg that LVS is seeking flexibility to reduce debt and meet lender requirements and has ‘no present plans’ to purchase loans.

‘It’s an option more than anything else,’ he said.

Source : Business Times – 31 Mar 2009

Marina Bay as an icon of growth

THE WATERFRONT VIEW from the higher floors of the office towers around Raffles Place has changed dramatically in recent weeks. A trio of 55-storey connected hotel towers at Marina Bay that will make the base of Singapore’s first casino resort soared past its halfway mark late last month. With just 10 months to go before the downtown resort opens, the developers are racing to complete it on time.

Marina Bay Sands is controlled by former billionaire Sheldon Adelson. Once ranked the world’s second richest man, Adelson now has much of his US$600 million ($927 million) or so net worth tied up in his tottering flagship, Las Vegas Sands, which had a close brush with bankruptcy late last year. Just three months ago, the question was whether the $7.5 billion Singapore project would save or sink Adelson and Sands.

Now, with the local economy set to contract by up to 5% this year and show little growth next year, many in Singapore also wonder whether Marina Bay Sands and its competitor resort across the waters — Resort World at Sentosa — will be a powerful-enough engine to help Singapore swiftly back on a robust growth path.

Last November, Adelson injected US$1.1 billion of his own money as part of a US$2.3 billion rights issue to prevent violation of debt covenants and loan default and remove the “substantial doubt about the company’s ability to continue as a going concern” expressed by its own auditors. But, with revenues from casinos, hotels and convention centres in Macau and Las Vegas plummeting, hefty borrowings and huge outlays to complete ongoing projects, Sands has barely kept afloat since then. Indeed, just last week, Adelson conceded that Sands could still be in danger of violating loan covenants towards year-end unless its cashflow improved.

To stay in the game, Sands plans to sell its two Macau malls to avoid defaulting on loans. A fire-sale of Macau retail space might not fetch anywhere near a decent price. Sands expects to raise up to US$2.5 billion. Analysts say it would be lucky to raise half as much in the current market. It is also drastically cutting costs in Macau and Vegas to squeeze out as much savings as it can to keep afloat.

But Sands’ problem isn’t just reining in expenses; it’s also keeping revenues flowing in as the global economy slows and consumption shrinks. The ongoing recession in the US and enforced corporate austerity is hurting Vegas casinos, hotels and conventions. Moreover, tourist arrivals and gaming revenue in Macau have plunged since visa restrictions were imposed last year, limiting the frequency of travel for Chinese citizens to Macau.

In February, Macau gaming revenue fell 15.5% from a year earlier and analysts expect Macau revenues to fall 20% this year. Moreover, with glitzy new casinos like the “City of Dreams” due to open in June and the battle to attract punters getting fiercer, Sands casinos there are losing market share. Although the governments of Hong Kong and Macau as well as Guangdong province have appealed to Beijing to relax visa restrictions, it is unlikely that visitor floodgates will be thrown open anytime soon.

Sands’ business model in Singapore is to use corporate meetings, conventions and exhibitions to lure guests to its hotels and gaming floor. But in the post-credit-crunch world, the MICE (meetings, incentives, conferences and exhibitions) model looks like it could do with an extreme makeover.

Time was when corporate executives and conventioneers jetted to Las Vegas and Palm Springs or other ritzy venues for meetings and conventions. If serious business discussions were the main course, the dessert was frolicking on the Las Vegas Strip.

Sands’ game plan was to bring some of that lucrative MICE business to Singapore. Now, ostentatious corporate spending is suddenly passé. Block booking of first-class travel and luxury hotels by Wall Street investment banks to wine and dine fat cat clients is frowned upon. The days of big bonuses, casino junkets, golden parachutes and mega perks are over, and all convention hubs — Singapore included — are likely to be hit for several years.

Analyst estimates for Ebitda (earnings before interest, taxes, depreciation and amortisation) at the Marina Bay resort range from US$400 million to US$900 million in the first few years of operation. Adelson and his executives dismiss those estimates as too low because they believe Singapore’s low tax rate will help boost its bottom line. “We will save 25% on average on taxes,” Adelson said last week. He claimed Sands could still generate up to US$1 billion a year in Ebitda through Marina Bay by 2012, its third year of operation.

Gaming consultants are betting Singapore will take a 20% slice of the US$5 billion Asian high-rollers’ market within three years. UBS estimates Singapore’s overall gaming revenues could reach up to US$2 billion annually by 2012. Assuming, Marina Bay has more than half of the pie, that’s just US$1 billion. Take away operating expenses and other upfront costs, it’s hard to see how Marina Bay would make anywhere near the money that Sands needs to stay afloat.

“It is somewhat of a leap of faith to believe in a number quite this high,” notes Brian McGill, an analyst with Philadelphia-based securities firm Janney Montgomery Scott LLC. McGill believes that if Marina Bay resort really has anywhere near the sort of potential that Adelson claims it has, the Singapore project might not only save Sands; it could even serve as a catalyst for the company’s moribund stock. If it does, Sands can play its part to help grow and transform Singapore.

Source : The Edge – 8 Mar 2009

IR on target for year-end opening, says Sands

THE Marina Bay Sands integrated resort (IR) will open by year-end, as scheduled, its top suits said yesterday.

It may not look like it to the casual passer-by, but despite the expanse of cranes and other construction equipment at the site, 75 per cent of the building’s structural work is already done.

Giving this assurance yesterday on a site tour for the media, top executives of the IR, several of whom flew in from Las Vegas, said that though construction has just hit the halfway point, much of the hard work has already been done.

Mr Matthew Pryor, the Venetian Macau’s senior vice-president of Asia construction, who also oversees the Singapore works, pointed out that 28 out of 55 floors of the three iconic hotel structures have been completed.

The tough part of the work on this section was securing the sloping section of the hotel towers, but now that this has been done, ’stacking floors atop each other’ will be fairly straightforward, he said.

Five to six floors of the hotels will be built monthly until July, when the blocks will be topped off.

Elsewhere, the four-storey casino building is only awaiting its roof, while there is only the fifth and final floor left to build for the meetings and convention block.

Mr Nigel Roberts, the IR’s president, said: ‘Everyone is working aggressively towards our target opening date. This is our total focus, and we are confident of delivering on all fronts.’

Mr George Tanasijevich, the general manager of Marina Bay Sands, said the apparent lack of visible construction progress on the project had led many to question if it was on schedule.

There were also worries that the impact of the global financial crisis on the books of the parent company, Las Vegas Sands, would sink the project.

But new funds were raised last year, and assurances have been given by top management that the Marina Bay Sands – which the group has described as its crowning jewel in Asia – would be completed as scheduled, even if it is at the expense of its other projects.

Mr Tanasijevich said another reason much construction was not visible was that over 40 per cent of work was done underground. There was a delay, he admitted, because an obstruction – an old sea wall – had been discovered, but this had been taken care of.

Despite their assurances that construction will be completed on time, however, what will be ready for business when the end of the year rolls around remains to be seen.

Marina Bay Sands is still in the midst of negotiating the opening schedule with the Singapore Government.

Yesterday, Mr Tanasijevich would only say that details would be announced in ‘due course’.

But he added that it will try to open sections of all areas of the IR – the retail mall, the meetings and conventions space, the casino and the hotel, so visitors can sample a little of everything.

As for the IR’s prospects in a time of falling tourist numbers – arrivals for this year are expected to drop by between 6 per cent and 11 per cent, to between 9 and 9.5 million people – Mr Roberts said he is confident it will pack in the crowds.

‘Despite the economic conditions, people will still want to come and look at this.’

Source : Straits Times – 5 Mar 2009