The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 12th January 2017

Top Story

Private home rents down 6.2% in 2016: SRX
Rentals for condominiums and apartments are taking a hit over the huge supply of private homes available for rent and the business uncertainty among corporates.  In December, rents fell by 1.3 per cent from the previous month, going by the SRX Property price index for non-landed private rentals released on Wednesday.  This was driven by rental slides in the Core Central Region (city area) and Rest of Central Region (city fringe) of 1.7 per cent and 2.6 per cent, respectively. Only the Outside Central Region (suburbs) escaped unscathed, with rents staying unchanged for the month.  For the full year, it is down 6.2 per cent.

Singapore Economy

Budget 2017: Short-term help with costs top on firms’ wishlist
Help with rising manpower costs and soaring rents, better incentives for research and development (R&D) and a more collaborative approach to regional expansion.  These topped the wish lists of panellists at a pre-Budget roundtable organised by the Institute of Singapore Chartered Accountants (Isca) at the Four Seasons Hotel yesterday.  The 15-member discussion – co-chaired by Isca president Gerard Ee and MP (Holland-Bukit Timah GRC) Liang Eng Hwa – said long-term economic transformation is key but businesses also need short-term help to tide over this period of slow growth.  Singapore Business Federation chief executive Ho Meng Kit said the business climate has been difficult and is expected to worsen, with many companies hoping next month’s Budget will contain measures to help them manage costs in the short-term.  “Longer-term issues are important but sentiment among businesses is more focused on short-term issues…The Budget (will hopefully) contain some immediate help for businesses,” he added.

Singapore interest rates fall on seasonal factors
Singapore interest rates have fallen sharply in the second week of the New Year on seasonal factors and a relatively weak US dollar.  The more volatile three-month SOR or swap offer rate fell to 0.868 per cent on Tuesday, from 0.902 per cent on Monday. It has lost 17 points from the one-month high of 1.04 per cent on Dec 29. The SOR, which is used to price commercial loans, is updated late at night.  The key three-month Sibor or Singapore interbank offer rate – a benchmark for home loans – stood at 0.967 per cent on Wednesday, down for the third day. The one-month high was 0.973 per cent on Jan 5.

Singapore Real Estate

Local composites industry to get a lift
Singapore will be the manufacturing base for the world’s first lift made of composite materials such as fibreglass and carbon fibre-reinforced polymers.  The elevators will be 10 times lighter than a normal lift of the same capacity. Its relative lightness – 150kg compared to a 1,500kg traditional lift of the same capacity – means this lift does not need a counterweight to help its motor move the lift.  Counterweights can take up to a third of the space in a lift shaft. The composite lift can thus maximise shaft space; a lift shaft for a traditional six-person cabin can accommodate a composite lift that officially carries 11 people.

Companies’ Brief

Lian Beng’s Q2 net profit down 75%
Construction firm Lian Beng Group posted a 75 per cent drop in net profit for the second quarter ended November 2016 to S$5.72 million on the back of a 62 per cent decline in revenue to S$49.22 million from a year ago.  For the half year period, net profit slipped 67 per cent to S$18.4 million on the back of a 55 per cent drop in revenue to S$120 million mainly due to lower revenue generated from the construction segment and ready-mixed concrete segment.  Quarterly earnings per share came in lower at 1.14 Singapore cents, from 4.53 Singapore cents a year ago.

KepLand to sell 80% stake in Indonesian JV for S$57m
Keppel Corporation Limited’s property unit Keppel Land has agreed to divest its 80 per cent effective stake in an Indonesian joint venture for 529 billion rupiah (S$57 million), a move that is expected to yield an after-tax profit of about S$32 million.  Its wholly owned subsidiary Meadowsville Investment Pte Ltd entered into an agreement on Wednesday to sell its 80 per cent stake in PT Sentral Tunjungan Perkasa (PT STP) to PT Indadi Land, the group said.  The balance 20 per cent of PT STP is held by Meadowsville’s joint venture partner, PT Pusindotrida.

SPH Reit grows Q1 distributable income by 3%
Singapore-based mall investment trust SPH Reit posted a 3 per cent increase in distributable income for its first fiscal quarter as lower operating expenses uplifted a modest increase in revenue.  SPH Reit, whose sponsor, Singapore Press Holdings, owns The Business Times, said income available for distribution grew to S$36.4 million for the three months ended Nov 30, 2016. The trust is distributing 94 per cent of that, or S$34.2 million, representing a distribution per unit of 1.34 Singapore cents.

GLP renews 3.6m sq ft of leases with US customer
GLP, the mainboard-listed logistics company said to be in talks on the possible sale of the firm, announced on Thursday that it has extended 3.6 million sq ft of leases with a customer in the US.  GLP has signed long-term lease extensions with a global appliance company at three US facilities in Columbus, Ohio; Atlanta, Georgia; and Orlando, Florida.  GLP said: “The Ohio property is in the largely institutional south-eastern submarket near Rickenbacker Airport, which provides excellent proximity to key distribution channels throughout the Midwest.”

Warburg Pincus forming consortium to bid for GLP: sources
Warburg Pincus is forming a consortium to bid for Global Logistic Properties Ltd, the Singapore-based warehouse operator, according to people with knowledge of the matter.  Warburg Pincus has been speaking with banks and potential bidding partners about an offer for the industrial property owner, which has a market value of about US$8.2 billion, the people said.  GLP, which has assets in China, Japan, the US and Brazil, has asked for first-round offers by early February, people with knowledge of the matter said previously.  The company said last month it would conduct a strategic review of options to improve shareholder value following a request from its biggest investor, Singapore sovereign wealth fund GIC Pte Ltd.

Views, Reviews & Forum

Club acquisition par for the course
The recently announced acquisition of Raffles Country Club (RCC), following the gazetting of Jurong Country Club for acquisition in 2015, might make some Singapore golfers believe that they are an endangered species. Given the closure of Keppel Club and Marina Bay Golf Club, when their leases expire in the next 10 years, there will be 13 golf clubs in Singapore by 2030, down from 17 now. This figure itself represents a decline from 22 clubs in 2001. Notwithstanding its reputation as a game for the rich and the powerful, golf is a relaxing and gracious sport that has a legitimate place in the recreational life of the nation. In turn, Singapore’s best golf courses place it firmly on the golfing map of the world.

Global Economy & Global Real Estate

Home sale agreements are falling through more frequently across US

US set for growth this year, says top analyst

Even Trump building isn’t immune to India’s real estate woes

UK government expects to lose Brexit court case, making contingency plans: report

For many people in China, headline inflation of 2% is just a cruel joke

Analyst who foresaw yen fall expects more losses ahead

Additional Articles of Interest – Local & Overseas Real Estate

Promising outlook for real estate in 2017 as capital continues to target Asia-Pacific
There is no denying that 2016 was an eventful year, with Brexit and the surprising US presidential election result grabbing headlines around the globe. By comparison, the economic and political landscape in Asia-Pacific was rather more sedate. But as we look ahead to 2017, how will these ongoing global dynamics shape the economies of this region and, more specifically, the real estate sector?  Despite uncertainty, 2016 delivered high levels of activity, with new investors allocating capital to property in Asia-Pacific. With most economies in the region on a robust growth trajectory, real estate markets were resilient. Investors took the shock of last June’s Brexit vote in their stride and transaction volumes in this part of the world were similar to 2015. Based on our data, intra-regional capital flows trended slightly higher, but capital flows between the regions fell y-o-y, in part because investors preferred markets closer to home in times of uncertainty.

Local & Overseas Real Estate – Full Article

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