The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 30th, 31st July and 1st August 2016

Top Story

Demand for turning condos to serviced apartments wanes
The surge of interest in 2015 among property owners to convert residential developments to serviced apartments may have lost some steam this year. Some market watchers attribute this to a pick-up in residential sales while others point to a soft patch ahead for serviced apartments.  Applications for such conversions jumped to 12 last year from five in 2014, and provisional permissions rose in tandem to eight last year from zero in 2014, the Urban Redevelopment Authority (URA) told The Business Times.

Singapore Economy

Savvy investors ‘can benefit from Brexit-like events’
Destabilising global events such as the failed Turkish coup and Brexit can potentially benefit savvy investors, said investor Jim Rogers. He was speaking at Invest Fair 2016 on Saturday, organised by ShareInvestor and The Business Times.  Steve Quirk, executive vice-president of TD Ameritrade who spoke in a panel discussion at the same event, dispelled the myth of US Republican presidential candidate Donald Trump’s apparent unelectability, urging investors to take his victory into account when entering the market.

Singapore shares open 0.26% higher on Monday
Singapore shares opened higher on Monday (August 1), with the benchmark Straits Times Index at 2,876.26 in early trade, up 0.26 per cent, or 7.57 points.  Around 68.2 million shares exchanged hands.  Gainers beat losers 78 to 39.

Bank loans down for 9th straight month in June
Bank loans fell for a ninth straight month in June as the sluggish economy continued to weigh on sentiment. Overall, loans slipped to $590.5 billion in June, down 2.7 per cent compared with the same month last year, due largely to a decline in business lending.  Bank loans last suffered a similar extended decline in the 1980s, when total lending shrank for 12 months in a row, from May 1986 to April 1987.  Business loans fell 6.2 per cent year on year in June to reach $345.1 billion, the 10th straight month of decline, according to preliminary data released yesterday by the Monetary Authority of Singapore.

Local services firms more upbeat in hiring
Firms in the services sector, though still pessimistic about future business conditions, are planning to add more workers this quarter.  But the manufacturing sector, turning marginally pessimistic, is expected to cut down on hiring during this quarter.  Results of surveys of firms’ business expectations for the third quarter were released separately on Friday. The Economic Development Board (EDB) shared its findings on the services sector, while the Department of Statistics (DOS) reported on manufacturing.

Emerging markets back in the black
After years of blistering growth, emerging markets (EM) sunk into a disappointing rut following the global financial crisis. Stock markets in these economies were pummelled by weak commodity prices, sluggish export growth and political disruptions.  Since mid-2011, the MSCI Emerging Markets Index, a representation of mid and large caps across 23 emerging markets, has returned minus 11 per cent, a far cry from the 49 per cent upswing of developed markets.

Rise in EP qualifying pay could affect bottom lines, say observers
Recruiters and companies said the move by the Ministry of Manpower (MOM) to raise the qualifying monthly salary for Employment Passes (EP) would likely place a strain on businesses’ bottom lines, but it could help to draw Singaporeans back into industries where pay was depressed.  Foreign professionals will need to be paid at least $3,600 from next January if firms want to hire them on EPs, up from $3,300 now, the ministry announced last week.

Singapore Real Estate

Queen Astrid Park GCB fetches S$44.5m
A charming single-storey bungalow on a sprawling site in Queen Astrid Park has changed hands for S$44.5 million. The buyer is understood to be a family member of Goh Hup Jin, son of billionaire paint tycoon Goh Cheng Liang. The transaction was an estate sale.  The price works out to S$1,271 per square foot based on the freehold land area of 35,011 square feet. Located at the corner of Queen Astrid Park and Coronation Road West, the site has potential for subdivision into two smaller Good Class Bungalow (GCB) plots. The bungalow is tenanted.

Need for Reit sponsors to be more committed
Debt-laden Chinese developers have been quick to spot the beeline yield-hungry investors here have been making for real estate investment trusts, but they may not find it so easy to cash in.  It makes sense for these developers to spin off their assets into a Reit but there is a big snag: the accounting scandals triggered by S-chips some years ago are still fresh in the minds of investors and this understandably makes them look at Reits launched by mainland firms with a wary eye.

HDB bags award for green innovations
The greening of Punggol Waterway has helped the Housing Board (HDB) bag an engineering award from the Institution of Engineers Singapore (IES).  The team of HDB engineers responsible for enhancing the 4.2km-long waterway – the longest man-made waterway here – was recognised for their green innovations. The engineers, from HDB’s Building and Research Institute (BRI), had cultivated freshwater-tolerant mangroves and designed a scalable, modular platform for floating wetlands.

Companies’ Brief

MGCCT’s Q1 DPU rises 9.1% to 1.85 cents
Mapletree Greater China Commercial Trust (MGCCT) on Friday reported a 9.1 per cent rise in distribution per unit (DPU) for the fiscal first quarter ended June 30 to 1.85 Singapore cents, thanks to an enlarged portfolio and higher revenue.  Gross revenue rose 11.9 per cent to S$84.96 million and net property income (NPI) jumped 11.2 per cent to S$69.42 million for the quarter compared with the previous year. Distributable income for the period grew 10.6 per cent to S$51.26 million from the preceding year.

Roxy-Pacific’s Q2 profit rises 53% to S$19.9m on fair value gains
Real estate developer Roxy-Pacific Holdings’ net profit rose 53 per cent in the second quarter to S$19.9 million as fair value gains from Sydney investment property gave a boost to a more modest top line.  On a per-share basis, net profit was 1.67 Singapore cents for the three months ended June 30, up from 1.09 Singapore cents a year earlier.  Net earnings for the half-year period was however down 50 per cent at S$29.8 million, or 2.5 Singapore cents per share.

Starhill Reit FY16 DPU up 1.4%
Starhill Global Reit said its distribution per unit (DPU) for the financial year ended June 30 was up 1.4 per cent to 5.18 Singapore cents. Income distributed to unitholders for FY16 was S$113 million – an increase of 2.4 per cent year-on-year.  For the fourth quarter ended June 30, the DPU was stable at 1.29 Singapore cents. Income to be distributed to unitholders for Q4 2016 remained at S$28.1 million, which was the same as the previous corresponding period.

CDLHT says hotel rates will stay competitive amid supply
Hotel room rates are expected to stay competitive as more supply comes on board, said CDL Hospitality Trusts (CDLHT) as it on Friday reported a 0.9 per cent fall in distribution per stapled security (DPS), reflecting lower net property income.  It said industry room inventory will continue to grow by an estimated 28,662 rooms in 2016, further increasing room stock by 4.7 per cent. “Room rates are likely to remain competitive as new hotels seek to build their base business,” the trust said in a media statement.

Frasers Hospitality Trust sees Q3 distributable income rise
Third-quarter distributable income at Frasers Hospitality Trust (FHT) rose 11.3 per cent to $20.9 million, boosted by the addition of Sofitel Sydney Wentworth and Maritim Hotel Dresden, which made its maiden contribution in the quarter.  But these factors were partially offset by a weaker performance at InterContinental Singapore and at the London properties following concerns over terrorism and Brexit.  Distribution per stapled security (DPS) was 1.51 cents for the three months ended June 30, down from 1.56 cents a year earlier. The reason was an enlarged number of stapled securities, which increased from 1.21 billion to 1.39 billion over the period.

FEHT expects S’pore hospitality industry to stay competitive
Far East Hospitality Trust (FEHT), which posted lower second- quarter results, said Singapore’s hospitality industry is expected to remain competitive amid an increase in hotel rooms supply and soft corporate demand.  “Despite the growth in visitor arrivals recorded in the first five months of the year, the average spending on rooms has not correspondingly increased,” it said on Friday.

School property in Hillside Drive goes for $68m
Private equity investment firm Lucrum Capital has sold its 81,468 sq ft school property in Hillside Drive for nearly double what it paid in 2012.  Hong Kong-listed China Maple Leaf Educational Systems has picked up the property for $68 million, the Chinese international school operator said earlier this week.  The property – the premises of the former CHIJ St Joseph’s Convent – comprises about 30 classrooms, including a music studio, science labs and art studios, a multi-purpose hall, and a design and technology room. It is leased to international school Hillside World Academy, formerly known as the Chinese International School.

Boutique developer eyes Catalist listing
Boutique developer Propspur Holdings is eyeing a listing on the Singapore Exchange Catalist board in the next 12 to 18 months, as the firm seeks to expand its pipeline of projects in the United States, Asia and Australia.  The firm was set up by chief executive Tin Chew and managing director Benjamin Song in April this year.

Views, Reviews & Forum

2005: Singapore rolls dice with casino plans
Singapore put aside its long-held opposition to casinos in 2005 with a decision to develop two integrated resorts that would transform the Sentosa and Marina areas.  There was no hesitance by Prime Minister Lee Hsien Loong, who had just taken over the nation’s premiership, to tackle a controversial and game-changing topic early in his new role.

Funding Societies sees overheating in crowdfunding
Even as regulations soon come into force for Singapore’s crowdfunding scene, there are fears among a few that the floodgates have been flung open too soon for new players to enter this nascent segment.  Crowdfunding platform Funding Societies sees more “negative competition” ahead, said its co-founder Kelvin Teo in an interview with The Business Times, warning that the market remains opaque and that platforms can window-dress loan defaults to the disadvantage of yield-hungry investors.

Time for Singapore to consider changes to grow its tourism receipts
Asia is on the cusp of a theme park boom. Shanghai Disneyland opened in June, Wanda City opened in May and 14 more Wanda theme parks are set to open by 2020. And by 2018, Universal Beijing, 21st Century Fox World Malaysia, Six Flags, multiple new Legolands, and many other smaller theme parks will be popping up across Asia.

Global Economy & Global Real Estate

US stocks end week on flat note

Investors start buying London property again

Thousands of Maryland homes certified as lead-free may not be

China economic woes, ecology fears hit reclaimed city off S’pore

China steps up campaign to curb rising risks in financial sector

Australia home price growth slows in July: CoreLogic

Sinarmas Land and KOP to develop Nuvasa Bay areas in Batam

UK mortgage approvals fall to 13-month low on Brexit jitters

NZ building consents up 35% in the year to June

US GDP grows 1.2% in Q2 as inventories fall

Asian shares edge up as soft US GDP cuts Fed rate hike bets

China’s July official manufacturing activity 49.9, down from 50 in June

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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