Speech by Prime Minister Lee Hsien Loong at the Official Opening of Marina Bay Financial Centre

Developers and owners of Marina Bay Financial Centre

Ladies and Gentlemen


1.    I am very pleased to be here this afternoon to join you for the official opening of MBFC.

MARINA BAY AND MBFC

2.    The idea of building a business and financial district here goes way back to the 1960s.  Then this was open sea. The Government foresaw that we would need a bigger Central Business District one day, and started reclaiming land at Marina Bay to accommodate this future expansion.

3.    In the late-1990s, as our financial sector took off, we decided to develop a world class business and financial hub here. Many banks and financial institutions were expanding their operations here as we liberalised and opened up our financial sector. Prime office space along Shenton Way was starting to lag behind the needs of businesses and professionals. We felt the need for high quality physical infrastructure to support the financial industry. We saw how Canary Wharf had succeeded in London, with difficulties but eventually success. We explored the idea of building a large scale, high-quality development. DBS was one of the banks which pushed for this. I was then in MAS, and helped them to push for the project from within the Government.

4.    We studied many hubs overseas – Canary Wharf of course; Hong Kong’s International Finance Centre; Shanghai’s Pudong, then just taking off. We identified the features we needed – large floor plates, at least 3,000 m2; double power feed; mixed use development, to work, live and play. None of these were then available in our prime office space.  Eventually, after much discussion and debate as to how best it should be done, whether it should be done, we decided in 2003 to carve out a large land parcel on Marina South for a business and financial hub, and to put it on the Reserve List. This was one of the possibilities; the other alternative site is at the current location of Marina Bay Sands.

5.    It was a bold move at that time. It was the biggest land parcel that the Government had ever sold. Hitherto we had only tendered smaller plots for sale, through straight cash bids, paid fully upfront. One million square feet of space at a time, and we would dole it out building by building as we felt the economy growing. But here we were going five, six, seven million square feet, one big bundle. Big risk for whoever develops it; uncertainty for us as a Government, whether this was a right thing to do and maintain a stable market. So we looked for ways to mitigate the risk, by giving the developer options to phase out the project, to buy the land and build the project in phases, but with a call option on the subsequent phases. And we had to create new rules to do this, because we had never done this before and we had to allow this phasing and we had to price the options properly. By the time the project came on to the Reserve List, the timing did not look so great. The dot.com bubble had gone, 911 had happened, SARS was about to happen, and the market was soft. The vacancy rates were the highest since the 1985 Recession.

6.    But eventually in 2005, SARS came and gone, we sold the site. And the timing turned out right after all – both the global and the Asian economy revived just in time. We caught the winds of growth. The demand for space at the MBFC turned out to be overwhelming. Our concerns about the size of the project and the need to phase the project out and build it gradually over 10 years proved over-cautious. So today, as you have heard, Towers 1 and 2 are fully committed; Tower 3 nearly 90% committed even before completion. Having been personally involved at the beginning of this project more than a decade ago, it gives me great satisfaction to be here today to see it come to fruition. Happy birthday!

7.    The MBFC is the latest addition to our Marina Bay skyline, together with Marina Bay Sands, Gardens by the Bay and many other buildings coming up. It adds three million square feet of prime office space to the CBD, double the office space available at Raffles Place. It has also got residential units; restaurants and outlets. And it sets a new standard for environmentally-friendly buildings, like sky terraces which provide integrated landscape and greenery, and offers a unique work, live and play environment. The companies hosted here are distinguished names – DBS, StanChart, law firms, technology companies. And there are beautiful apartments overlooking the Bay – a marvellous place to catch National Day fireworks, for which we shall not charge any CESS. And there are many lifestyle, retail and food and beverage options – one more place for Singaporeans to enjoy, because many come to the Bay on weekends to relax and to take in the sights.

8.    So I congratulate Keppel Land, Cheung Kong and Hongkong Land on a very successful project!

GLOBAL FINANCIAL SITUATION

9.    Marina Bay will continue to develop. The adjacent site behind this will be the M+S project: Marina One@Marina Bay. And our new downtown is steadily taking shape.

10.    This high quality business environment has strengthened Singapore’s position as a global business and financial hub. Good infrastructure is just one aspect of this. Besides the hardware which we are building, our competitive advantage also lies in good software, for example, a robust and trusted regulatory and supervisory regime; the deep pool of local and global talent; an open economy connected to the world. Above all, an integrated eco-system whose whole is more than the sum of its parts.

11.    Hence the success of our financial industry in Singapore. Banking and financial services account for more than 12% of our GDP. This year, we are expecting it to grow 3%. And our banks are faring well internationally, for example, DBS has been recognised as “Asia’s Best Bank” by The Banker. We are a hub for many high-value financial services, like trade financing, treasury services. Global businesses, such as StanChart’s global Consumer and Wholesale banking worldwide, is managed out of Singapore.

12.    The financial industry in Singapore is now at an important juncture. Domestically, we are qualitatively upgrading the economy, transitioning to a new phase of our development.  Regionally, financial services and flows are growing in tandem with Asia’s dramatic progress.  Globally, the industry is undergoing fundamental scrutiny and review. There are new regulations to manage systemic risks, for example, Basel III, regulating derivatives trading, liquidity requirements. There is new anxiety about tax evasion and money laundering; new political pressure on banks and on bankers.

13.    Within this context, a vibrant financial sector continues to benefit our economy and our people. It creates good jobs for a better-educated workforce and a growing number of PMEs. It catalyses growth in our other sectors – legal services, industry development, social enterprises. It enhances Singapore’s position as a global trading and services hub.

14.    Therefore we must continue to attract high-quality investments to create better jobs for Singaporeans; to develop strong Singapore core of specialists and leaders in finance – MAS is working with the financial institutions on this; to contribute to international efforts to reform and enhance the global financial system. We are a small country, but we do our best. We will improve our framework for international tax cooperation – we just made an announcement yesterday, to combat cross-border tax offences. And we will participate in international bodies, like the Basel Committee on Banking Supervision, which helped develop the Basel III standards; the IMF Policy Steering Committee, which our Finance Minister chairs; and the G20. We also need to continue strengthening our pro-business environment, so that international companies and professionals continue to find Singapore not just a good place to do business, but a preferred place to do business.
 
CONCLUSION

15.    I think we are at a significant milestone. Congratulations once again. Meanwhile we can enjoy ourselves, take in the facilities here and the beauty of Marina Bay.

16.     Thank you very much!