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  Today Online 19 Jan 07
Asia's mini-Monaco by 2015?
STB to put out feelers for interest in developing the Southern Islands into an exclusive yet accessible resort, third IR unlikely
Tor Ching Li

Business Times Singapore 18 Jan 07
Southern Islands home to third IR?

Smaller, more luxurious resort will feature F&B, spa, health and beauty facilities
By Arthur Sim

(SINGAPORE) The Southern Islands may play home to Singapore's third integrated resort, but sources say it will be on a smaller and more luxurious scale than either of the two resorts announced last year.

Total gross floor area for all development on the Southern Islands is not expected to exceed 230,000 square metres. This is smaller than the 570,000 sq m Marina Bay Sands and the 343,000 sq m Resorts World at Sentosa.

Most of the development will likely be on 30 ha of reclaimed land at Lazarus, Renget and Kias Islands. The total development site, comprising all seven Southern Islands, adds up to 115.6 ha - almost a quarter the size of Sentosa Island.

The Southern Islands will be a low-rise, low intensity resort with buildings not more than four-storeys high. A casino component has not been ruled out, but the resort may not have the critical mass to support this. There is also a 10-year moratorium on casino licences following the two awarded for Marina Bay and Sentosa. More likely attractions will be food and beverage, spa, health and beauty facilities.

The resort will be accessed by sea. International arrivals by private yacht will have to be processed through Customs, Immigration and Quarantine (CIQ), expected to be at One Degree 15 Marina Club at Sentosa. Arrivals by helicopter are being considered.

Parts of the islands will remain open and accessible to the public, but the resort will mostly cater to a niche group of high net worth visitors - what the Singapore Tourism Board (STB) calls the 'premium plus customer segment' who seek 'total privacy'.

STB has said that a request for concepts (RFC) for the Southern Islands could be launched as early as Q1 this year, but declined to give an exact date.

Industry watchers are excited by the prospect of new tourism offerings here. David Ling, managing director of hospitality consultancy HVS International, said there is a market for luxury resorts in Asia.

In Singapore, he says, 'the closest we have to one is the Sentosa Resort and Spa'. Mr Ling says luxury class tourists, mostly from Europe, Japan and Korea, think nothing of splurging between US$400 and US$1,200 a night on a villa in Phuket, Bali or the Maldives.

Resorts of this class, however, have ample natural attractions - and Mr Ling wonders whether the Southern Islands' proximity to international shipping lanes could be an issue.

He also says a luxury class resort must be small, with not more than, '30 to 50 keys'. 'If you have about 300 rooms, it will be more like Rasa Sentosa.'

One of the key outcomes of the RFC will be to ascertain the land premium developers are prepared to pay. Most want to maximise the components of a project that make the numbers work - and this could mean building villas for sale.

As such, it is understood that residential developments will be allowed if this is consistent with the islands' luxury positioning. 'In terms of capital values, a residential development will have higher value,' said Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt.

He believes that based on the success of Sentosa Cove, comparable plots of land for villas could be sold for between $7 million and $8 million. And likening the development to The Palms in Dubai, he does not think limited access will be a problem for these 'super-rich'.

Mr Lui also expects the hotel will be small and exclusive, with no more than 200-250 rooms. It will be a luxury hotel with the cost coming to between $500,000 and $750,000 per room. 'It will be a shame if the Southern Islands are marketed at any level less than Sentosa Cove,' he said.

Savills Singapore director (marketing & business development) Ku Swee Yong expects that the residential component on the Southern Islands could be substantial, with up to 400 condominiums, 300 bungalows with 100 hotel rooms.

Mr Ku expects the overall land premium to be lower than at Sentosa Cove because of the infrastructure work that needs to be done. As such, he sees a price in the region of $600 psf per plot ratio, assuming the plot ratio is about 0.8-0.9. He believes the assessment of RFC submissions will be difficult because the concepts are likely to be 'varied'.

Today Online 19 Jan 07
Asia's mini-Monaco by 2015?
STB to put out feelers for interest in developing the Southern Islands into an exclusive yet accessible resort, third IR unlikely
Tor Ching Li chingli@mediacorp.com.sg

BY THE time the Sentosa Cove land parcels are fully sold by the year-end, slices of Singapore's Southern Islands could be up for sale to the world's richest men looking for a mini-Monaco in Asia.

According to documents obtained by Today from a Singapore Tourism Board (STB) presentation, the tourism body is planning to launch a Request For Concepts (RFC) for the cluster of seven islands by the first quarter of this year, and a Request For Proposals by the second quarter of the year.

The Southern Islands resort and residential development should be completed by 2015, in line with Singapore's tourism vision to develop the southern waterfront into a lifestyle resort attraction.

Said a property analyst familiar with the process: "If the net worth of Sentosa Cove residents is between $50 million and $100 million, the net worth of the Southern Island residents will be into the billions."

The desired outcome of the process is to develop the currently rustic Southern Islands Kusu, Sister's, Lazarus, St John's, Tekukor, Kias and Rengat into an "aspirational getaway destination" that will enhance Singapore's reputation as a premium destination for leisure and business visitors, said an industry source.

The Government is willing to consider the development of up to 400 units on the 115.6 ha site, with 100 of these in an exclusive resort, and the remaining 300 as residential plots, he added.

A draft of the RFC obtained by Today stated the resort which should offer services such as spas, fine dining and health and fitness facilities will probably be situated on the reclaimed areas of Rengat, Kias and northern Lazarus Islands. These three islands have already been connected by landfills as early as three years ago.

However, the probability of having a third integrated resort with casino on the Southern Island looks slim.

Merrill Lynch gaming analyst Sean Monaghan cited accessibility as one key obstacle to the building of an IR on the Southern Islands. "It would be a lot easier to expand the existing IRs 10 years from now than to build a new one where accessibility is so limited. And while you may be targeting the high-end market for the Southern Islands, it would be hard to top the multi-billion dollar investments at Marina Bay and Sentosa, which would also have exclusive facilities for high rollers," he said.

Noted one gaming analyst: "There are only so many high rollers in the world. Only in Europe do you see casinos catering solely to the super rich."

According to another source, the Government had studied the feasibility of developing the Southern Islands around five years ago. The Southern Islands had originally been set aside by the Government together with Sentosa to be developed into an integrated resort but feedback from the ground then was that developers were not so keen on developing Sentosa together with the Southern Islands.

However, with the strong signs of growth in the high-end market here and the possibility of hosting international events such as the F1 races analysts think that there will be strong interest from resort developers for the Southern Islands. CapitaLand which had taken part in both integrated resort bids said that it is "interested in the integrated leisure, entertainment and conventions business in China, India and other Asian countries". "Should Singapore present a good opportunity, we will study it," said the spokesperson.

But Mr Mark Advent, chairman of Sentosa IR hopeful Eighth Wonder, said: "I have already told the STB that if a third IR licence becomes available for the Southern Islands, we would be interested in bidding. But not if there is no gaming opportunity."

The eventual developer of the Southern Island will have to run their own transportation to the Southern Islands for visitors. While the uber rich can sail there in their private yachts, the island-hopping masses will probably have to take a ferry from a new jetty that Sentosa Leisure Group is looking to develop between Siloso and Palawan beaches.

One Degree 15 Marina Club chairman Arthur Tay told Today that as of the third quarter of this year, there will be a Customs, Immigration and Quarantine facility at the yacht facility to process yachts entering and leaving Singapore. Helicopter transfers are also under consideration.

The developer will also have to be mindful of the islands' ecosystems, and maintain public access to the foreshores of the islands, except where there are private waterways. They will also be encouraged to integrate the religious structures on Kusu Island such as a Chinese temple and a Malay shrine with the rest of the development.

Other challenges that the developer will have to contend with include the islands' proximity to international shipping lanes. One observer said: "These islands are not set in the Pacific Ocean with unobstructed sea views. Developers will really have to come up with some brilliant idea to make the development unique and worthwhile."

links
Our City Reefs: Uniquely Singapore and the value and not just the price of our reefs
Related articles on Southern Islands Development Plans including the Sentosa IR
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