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S'pore IRs spin-off effects underestimated, future retail scene needs variety: analysts
By Jeana Wong, Channel NewsAsia | Posted: 25 July 2006 1840 hrs

SINGAPORE: Singapore is under-estimating the potential benefits of the Marina Bay and Sentosa integrated resorts to the local economy.

This is according to real estate analysts at a gaming industry conference on Tuesday.

They say that the economic spin-offs could be as high as S$10b to $16b, and they cite retail as one sector that has huge potential for growth.

Going by Singapore Tourism Board's numbers, analysts say the integrated resorts are expected to generate about S$4.6b worth of economic spin-offs when completed in 2010.

But they say this is low compared to findings from other cities with such industries.

Based on an expected capital investment of S$6.5b excluding land costs, they say the spin-offs could range between $10b and $16b.

"The government's been using a multiplier of about 0.7, which we believe is conservative.It's good that they are conservative because all of the rest lies in the upside. But we've found that across the last 10, 15 years that the multiplier in some cities is 1.5 to even 2.5 times. So somewhere between the Singapore conservative opinion of 0.7 and maybe upwards of 2 is the answer," saod Peter Barge, Asia Pacific CEO, Jones Lang LaSalle.

Besides boosting jobs and housing demand, retail developers say the integrated resorts will also jazz up Singapore's retail scene.

They say Singapore has the lowest retail space per capita, compared to other major Asian cities like Tokyo and Hong Kong.

The city-state now has only 10.5 square feet of retail space per capita compared to Hong Kong's 13.2.

"There needs to be more retail, and that's across every single merchandise category in every single price point. We really see a lot of different opportunities, high-end, luxury dining as well. Singapore has a great history of food that in particular is weak in the area of world-class restaurants. It's really those three areas. It's high-end retail which is predominantly apparel, world-class dining and also advanced technology entertainment," said Morgan Parker, President, Taubman Asia.

The retail developer, which joined Harrah's-Keppel in the Marina Bay integrated resort bid, says it's watching Singapore very closely for opportunities. - CNA /dt