Speech By Mrs Lim Hwee Hua,Minister Of State For Finance And Transport, At 14th ASEAN Valuers Association (AVA) Congress Opening Ceremony, 3 July 2006, 10.15 am At Meritus Mandarin Hotel

Dr Lim Lan Yuan, President of Asean Valuers Association

Distinguished Delegates from the Asean countries

Ladies and Gentlemen

Good morning

Introduction

1. It gives me great pleasure to join you this morning for the opening of the 14th Asean Valuers Association Congress, organized by the Singapore Institute of Surveyors and Valuers or SISV.

14th AVA Congress

2. I congratulate the SISV for organising this event for the members of the Asean Valuers Association. The Asean Valuers Congress provides a valuable platform for networking and facilitating the understanding of regional real estate markets and cross-border transactions. By exchanging ideas on valuation practices and sharing views on various valuation issues, participants can gain new ideas and perspectives to better meet the new challenges and exploit the fresh opportunities for the profession.

Opportunities for Growth in Asia

3. The theme for this Congress, "Valuation in Asia", reflects the opportunities offered by the strong growth of the Asian region. Asia is enjoying unprecedented growth rates, with the average growth rate of East and South East Asia for 2006 expected to reach 7.2%^[1], and this is not including India, one of the fastest growing economies in the world. Together with the influx of foreign investment into the region, there has been an increase in cross-border investments in real estate; as property companies expand their operations to invest in China, Chinese developers are also moving overseas to tap into foreign capital funding. This means that Singaporean and Asean valuers will increasingly have the opportunity to conduct valuations beyond their traditional domestic markets. To tap into such cross-border opportunities, valuers need to keep up with all the new developments in Asia and the issues that would affect the valuations of properties, such as changes in legal frameworks and even specific political events.

4. As property markets in Asia develop, new business models have emerged. I am referring to the development of the Asian Real Estate Investment Trusts or REITs market. As at December 2005, the Asian REIT market has reached US$31 billion in market capitalization, at the astonishing annual compounded growth rate of over 200% in less than 5 years. In Singapore, the Government has actively promoted the REIT market through revised regulations and tax incentives, and this has enabled us to develop Singapore into the leading REITs hub in Asia. Other countries like Hong Kong, Malaysia, Taiwan and Thailand are also taking steps to attract REIT players and to launch their own REITs. To tap into the fast-growing REIT, valuers will have to venture into the realm of finance, which will require a better understanding of the complex real estate transactions and the underlying business model of REITs in order to conduct valuations.

5. The increasing sophistication of real estate transactions has resulted in an increasing use of technology such as the use of financial analysis software for valuation purposes. In this computing age, valuers must therefore make sure that they have the technical savvy-ness to keep in touch with the latest technical improvements.

Building Up Competencies

6. To take advantage of the opportunities and overcome the challenges, there are three areas that the valuation industry can focus on. Firstly, the industry must aim to promote service innovation. As new business models emerge in the real estate sector and advancements are made in technology, valuers must be prepared to exploit the latest technological advancements and improvements in financial modeling to offer new business solutions.

7. Secondly, upgrading is a key necessity for all professional services. Valuers must continuously seek to update their knowledge and improve their competence to maintain their relevance in today's fast-changing and knowledge-based economy.

8. Last but not least, industry associations like AVA and the SISV must seek to organise more training courses to raise the level of professionalism in the industry. I am happy to note that for the current AVA Congress, half a day has been set aside to provide valuation training on general valuation and REITs, and I understand that the SISV also conducts customised trainings when requested by foreign valuers.

9. However, more can be done to help valuers in this region acquire new skill sets and competencies. Part of Singapore's economic strategy is to develop ourselves as the regional centre for quality services, based on our competitive advantages of being a major regional financial centre and a robust legal structure. For the valuation industry, I hope that SISV can act as the training centre and the conferencing hub for valuers in this region. SISV already has the valuation expertise that comes from the long and established valuation industry in Singapore, and a developed property market in Singapore.

Conclusion

10. To conclude, I would like to wish all participants a very fruitful time at this congress. I hope you will use this opportunity to forge regional alliances and promote greater understanding. To our overseas delegates, I wish you a memorable and pleasant stay in Singapore.

11. On this note, I am pleased to declare the 14th Asean Valuers Association Congress officially open.

^[1] Asia Economic Monitor, Dec 2005.