The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 1st September 2016

Toy Stories

Direction of DC rates reversed for three use groups – for six months
The government has reversed the direction of development charge (DC) rates for three key use groups for the Sept 1, 2016, to Feb 28, 2017, period – on the back of improved sentiment in the property investment sales market.  DC is payable for enhancing the use of some sites or to build bigger projects on them. On average, DC rates have been raised by 2.7 per cent for non-landed residential use, 0.6 per cent for commercial use and 1.4 per cent for the use group that covers hotels and hospitals. However, DC rates remain unchanged for landed residential, industrial, place of worship/civic and community institution, and other use groups.

Singapore Reits hitting their limit over compliance rules
Singapore real estate investment trust (Reit) managers believe the stricter rules that kicked in for the sector this year have raised the Republic’s Reit hub status. But they are quick to add that a breather is needed on compliance rules.  Any more, and it will be too painful to bear, and may even result in a “diminishing returns” situation, they say.  At a roundtable discussion organised by Macquarie Securities on Wednesday, Reit managers were asked for their wish list: what changes they would like to see in the Reit code that governs them.

Tourism industry keeps careful watch on Zika outbreak
Local tourism players say they have so far not had a spike in cancellations for travel and accommodation following the Zika outbreak in Singapore, but are nonetheless monitoring the situation.  The rash of infections comes a fortnight before the Formula One Singapore Grand Prix, and not long before the fourth quarter, typically the peak travel season.  The latest Health Ministry update on Wednesday put the number of locally-transmitted Zika cases so far at 115; a pregnant woman was among the 24 new cases announced on Wednesday.

Singapore Economy

Singapore companies to benefit greatly from TPP
Member states in the Trans-Pacific Partnership (TPP) are likely to see an increase in cross-border mergers and acquisitions (M&A) activity in the years following full ratification of the treaty; and Singapore is set to become one of the prime beneficiaries of such growth, said international law firm Freshfields Bruckhaus Deringer.

Bank loans fall for 10th month in a row
Bank loans fell for a 10th straight month in July as the sluggish economy continued to weigh on business activity and sentiment.  Overall, loans slipped to $597.2 billion, down 2.2 per cent compared with July 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.

Surprise surge in financial sector lending in July
A surprise jump in loans to financial institutions and for trade lifted bank lending in July by 1.1 per cent from the month before, making it the strongest month-on-month jump since June 2015.  Loans through the domestic banking unit, which captures lending in all currencies but mainly reflects Singapore-dollar lending, stood at S$597 billion, up from S$590 billion in June.  The figure for June was in turn a 0.4 per cent dip from that in May.

UOB latches onto 500m yuan in Asean-Chongqing investment flows
United Overseas Bank (UOB) said on Wednesday its China arm has facilitated cross-border investments of more than 500 million yuan (S$102 million) between Chongqing and South-east Asia since the start of this year. Close to 90 per cent was investment flows between Chongqing and Singapore.  The number of companies that UOB’s Chongqing branch has worked with in the last seven months rose by 35 per cent. Most come from the automotive manufacturing, trading and services, and infrastructure sectors.

Uniqlo opens largest SE Asia store in Singapore on Friday as Japanese company looks abroad
Casual clothing chain Uniqlo is taking its biggest chance in South-east Asia.  The unit of Fast Retailing Co is opening a store on Singapore’s iconic Orchard Road that will have 2,700 square metres (29,000 square feet) of shopping space on three floors of Orchard Central. The store will be Uniqlo’s largest in the region as the brand looks for growth outside Japan to revive flagging profits at its parent.

Asian bonds still attractive, says UBS fixed income manager
Asian bonds have given phenomenal returns, and will continue to do so, regardless of pending interest rate hikes, said Ashley Perrott, UBS Asset Management (Singapore) head of Pan Asia Fixed Income.  There are not many alternatives for investment for investors looking for income in a safe way, said Mr Perrott in a recent Business Times interview.  US equities find it challenging to grow revenues, with earnings having been boosted by cost cutting, he said. “There’s a limitation on how much you can continue to cut.”

S’pore August market cap flat after July’s nine-month high
Singapore stocks lost a bit of ground in August, with the total value of the market dropping marginally to S$860 billion from July’s nine-month high of S$860.4 billion.  But the August overall market capitalisation is still higher than end-2015’s S$856.4 billion. In year-on-year terms, it is up 0.7 per cent from August 2015’s S$853.6 billion.  Losers outnumbered gainers 352 to 267.

Singapore Real Estate

Tepid activity in strata commercial, shophouses seen for H2 2016
Activity in the strata office market and shophouse segments remained muted in the first half of this year, as seen in a decline in the number and value of caveats lodged. But strata retail transactions enjoyed a lift from the launch of Centrium Square.  This divergence in trend is nothing but a blip, Knight Frank observed, noting that buyers’ sentiment in the strata retail space has not changed amid waning occupancies and a supply deluge.

Former HUDC estate in Potong Pasir up for collective sale
Raintree Gardens, a 175-unit residential development in Potong Pasir, has just been launched for collective sale.  The tender was put up by JLL on Wednesday, after more than 80 per cent of Raintree Gardens owners by development share value and strata area gave their consent to the collective sale.  They are expecting a minimum price of S$315 million or about S$1.8 million per unit, which translates to S$759 per square foot per plot ratio on the potential gross floor area, inclusive of differential premium payable for a lease top-up to a fresh 99 years and for site intensification.

Singapore Land Authority launches online service MyProperty
The Singapore Land Authority (SLA) has launched a new online service, MyProperty, to let property owners view their title deeds and boundary plans.  Currently, the public have to buy the information via SLA’s Integrated Land Information Service or over the counter, paying a fee of S$5.25 to S$16. With MyProperty, property owners can now view their title information without charge. The online service is now available at and property owners can access the service by logging in with their SingPass.

Sengkang’s Compass One to open with fresh look on Sept 1
Close to a year of renovation work and two name changes later, the much-talked-about Compass One mall is finally opening its doors on Thursday (Sept 1).  The revitalised mall, located at Sengkang and formerly known as Compass Point, will see a change from its previous appearance — where the mall had sported a nautical theme. They decided to change it as they felt that the theme of a ship was “quite an old concept”, said Ms Sharon Tan, Compass One’s general manager.

AHTC seeks extension of deadline for finance report
The Aljunied-Hougang Town Council (AHTC) has asked the Housing Board to extend the deadline for submitting a report on its finances by another month to end-September. The original deadline was yesterday.  The report on the town council’s past payments is part of an ongoing scrutiny of its governance and finances following the discovery of major lapses in these areas by the Auditor-General’s Office.

Companies’ Brief

CapitaLand unveils mall management strategy
CapitaLand is expanding into third-party retail mall management, a move which analysts say can boost profitability but may lead to brand dilution if not executed well.  The property giant said on Wednesday that CapitaLand Mall Asia, its wholly owned shopping mall business subsidiary, has signed its first third-party management contract to manage the retail component of a China integrated development.

Roxy-Pacific to buy Harbour View Gardens for S$33.25m
A unit of property developer Roxy-Pacific Holdings has inked a conditional agreement to buy a freehold residential site at Pasir Panjang Road for S$33.25 million, it said in a Singapore Exchange filing on Wednesday evening.  It said the site, known as Harbour View Gardens, has an estimated total land area of 30,745 square feet and an existing plot ratio of 1.4 for residential apartment development.

Ascott Reit gets new chairman
Ascott Residence Trust’s (Ascott Reit) manager on Wednesday announced that Tan Beng Hai will replace Lim Jit Poh as chairman of the board, from Sept 1, 2016.  Mr Tan is an existing independent director of the company, and is a Fellow of the Institute of Chartered Accountants in England and Wales, UK. He was awarded the Public Service Star Award in 2010, the Friend of Labour Award in 2000, and the May Day Meritorious Service Award in 2013.

Views, Reviews & Forum

S-Reits a safe haven in hunt for yield
With uncertainty and volatility in the global economy, Singapore real estate investment trusts (S-Reits) are shaping up to be a safe haven for local investors hunting for yield, OCBC Investment Research (OIR) analysts said on Wednesday.  Indeed, the asset class has “sharply” outperformed the Straits Times Index (STI) so far this year, and with interest rates likely to stay low for longer, S-Reits will continue to be attractive to investors, according to OIR, which has an “overweight” call on the sector.

JTC: Purchase offer is consistent with market practice
We refer to the article “JTC makes early-buyback offer for Jurong Country Club notes” (BT, Aug 26, 2016).  Prior to 2003, Jurong Country Club (JCC) was a proprietary club under Jurong Country Club Limited (JCCL), a wholly owned subsidiary of JTC. In 1993, to raise capital for a new clubhouse and upgrading works at the golf course, JCC sold 196 memberships bundled with notes issued by JCCL. Each membership with note was priced at S$150,000, comprising S$30,000 for the membership and S$120,000 for the note. The notes were interest-free, unsecured and due for redemption on Sept 1, 2033. In comparison, we understand memberships without notes were trading in the secondary market at S$105,000 to S$119,000 between 1992 and 1993.


Global Economy & Global Real Estate

Federal Reserve officials push financial stability to centre of rate debate

US housing market turnover to improve over coming year 

U.S. private payrolls rise solidly; pending home sales jump

UK home prices rise the most in five months in August

China’s hottest property market imposes curbs to cool prices

Evergrande shopping spree to continue even as debt soars

Nexus Capital buys more China Vanke shares

China’s yuan edges up in cautious mood on fear of intervention

Australia home prices accelerate in August: CoreLogic

BOJ more likely to go for easing with limp July data

South Korea’s August house price growth slows for 8th straight month: Kookmin

Norway fund pays US$453m for stakes in San Francisco office buildings

Tencent skyscraper doubles as IoT test lab

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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