More art than gold in Singapore's Fort Knox

 

 

On Monday 4 April 2011, 15:28 SGT

By Kevin Lim

SINGAPORE, April 4 (Reuters) - Just outside Singapore's Changi airport is an innocuous low-rise building ringed by high walls that holds more gold, art, antique cars and fine wines than almost any other location in the world.

Singapore Free Port is a high-security facility for storing precious metals and other collectibles of the wealthy. It opened a year ago and already plans to double its size within the next two years as Asia's numbers of the seriously rich increase.

"In Singapore you touch not only Chinese clients but also Indian, Malaysian, Indonesian, Japanese, Korean, everybody," Chairman Yves Bouvier told Reuters in an interview.

"Changi Airport is a good airplane destination. It's not the same in Hong Kong where you touch only China."

For Singapore, the facility complements the city-state's huge private banking industry by providing wealthy clients with a place to store their valuable collections. Boston Consulting Group estimates private banks in Singapore manage about $500billion in assets. [ID:nSGE69001D]

Singapore Free Port describes itself as a Fort Knox, and it boasts of security features that are comparable to the world's most impregnable building that is the depository of the United States' bullion reserves.

The facility has armed guards and is ringed by security cameras. Visitors must pass through two checkpoints and undergo a full body scan before they can go inside the building, and staff need to key in passwords and pass a biometric check to access different parts of the complex.

Photography is not allowed and the vaults are locked except when goods are being transferred. Visitors are always escorted by armed security guards and usually catch only glimpses of wealth.

A giant metal sculpture dominates the lobby, with long corridors leading to the vaults protected by gates and motion sensors.

Most of the vaults are temperature and humidity controlled-- Singapore Free Port is one of only two facilities in the world designed to store valuable collectibles. The other, called Swiss Freeport, is in Switzerland and both are majority owned by the same company.

Art collections take up most of space at the facility, but it also houses rare wines, antique and limited edition sports cars, bullion and jewellery, cigars and carpets.

Singapore Free Port, which is fully tenanted, has already obtained land next to its existing facility and plans to build another 25,000 square metres of storage space to double the size of its operations, Bouvier said.

"The land is already there," he said. Construction of thenew space will take 18 to 24 months because of the technicalcomplexity of the facility.

Singapore and Hong Kong are vying to become the hub for Asia's fast-growing art market, which has taken off in recent years as rapid economic growth creates an increasing number of millionaires in China, India and most recently Indonesia.

Bouvier, who is also chairman of Natural Le Coultre, the firm that runs Swiss Freeport, said Singapore FreePort is already fully leased. Existing tenants will have first bite at the new space when it becomes available.

The firm has no plans to expand its operations in Europe noris it looking to build similar facilities in other parts of Asia, he added.

"There is less crime here than anywhere else," Bouvier said,adding that Singapore government support, and its minority stake in the facility, were also important factors in his firm's decision to set up in the city-state.

He declined to reveal how much his firm and partners had invested in Singapore or say how much the expansion will cost.

ART COLLECTORS

Singapore Free Port's tenants include British auction house Christie's, which is using the space to store antiques and other high-value collectibles for clients. Christie's also uses the facility to exhibit and sell artwork.

Investment bank JPMorgan , through another Singapore Free Port tenant, operates a vault where clients can store gold and other precious metals.

Asked whether he was concerned about rivals setting up competing facilities in Singapore or elsewhere in Asia, Bouvier said the operations were not easily replicated as new entrants had to understand security as well as the transporting, handling and storing of valuables.

"Our products are very expensive and it is very difficult for people who are not professionals to handle them." (Editing by Raju Gopalakrishnan)