The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 14th September 2016

Singapore Economy

Singapore ranks top in sustainability among Asian cities, second globally
Singapore is ranked the most sustainable city in Asia, and second in the world, according to the Sustainable Cities Index 2016 from global design and consulting firm Arcadis.  This marks a major improvement from its 10th global position last year when the index was first launched.  Zurich has maintained the top-ranked city globally, while the third, fourth and fifth places are taken up by Stockholm, Vienna and London respectively in the overall global ranking.

Still too early to pin down Zika’s impact on economy: MTI
It is still too early to gauge the wider economic impact of the Zika menace in Singapore, Senior Minister of State for Trade and Industry Sim Ann told Parliament on Tuesday.  But the government is already taking “strong coordinated actions” to contain the spread of the mosquito-borne virus and any likely spillovers on the economy, she said in response to a query from Nominated Member of Parliament Randolph Tan.  “Singapore remains a safe travel destination and there is no travel restriction by the World Health Organisation to Zika-affected areas,” she said.

Singapore Real Estate

Resale condo prices ease for 2nd straight month: SRX Property
Resale prices of private apartments and condo units on the whole in Singapore have eased for the second consecutive month. SRX Property’s August flash estimate shows that its overall resale price index for non-landed private homes fell 0.8 per cent month on month.  This follows a revised 0.7 per cent month-on-month decline for July. SRX Property had earlier indicated a 0.4 per cent drop for July based on its flash estimate for that month.  Giving a geographical breakdown, SRX Property said that prices in the city-fringe or Rest of Central Region (RCR) and the suburbs or Outside Central Region (OCR) shrank 1.5 per cent and 0.7 per cent respectively. On the other hand, prices in the Core Central Region (CCR) inched up 0.1 per cent.

JLL launches Leedon Park GCB for sale by tender
A sprawling good class bungalow (GCB), situated on one of the highest points of the Leedon Park GCB Area, was launched for sale by tender by sole marketing agent JLL on Tuesday.  The vendors of 17 Leedon Park are expecting offers in the region of S$70 million to S$75 million, which works out to S$1,493 psf to S$1,599 psf on the land area.  Built in the early 1990s, 17 Leedon Park comprises a two-storey bungalow with a built-up area of approximately 9,000 sq ft equipped with a 21 m long in-ground swimming pool and a lavish garden.

Rich Indonesians snapping up Singapore luxury homes as taxman beckons
Never mind that Singapore is experiencing one of the worst property slumps in its history, demand for luxury housing is suddenly coming from an unexpected group: wealthy Indonesians.  This year’s purchases by Indonesian nationals of homes valued at S$5 million or more have already nearly quadrupled from last year’s total.  The stepped-up buying coincides with the passage of a law in Jakarta aimed at getting Indonesians to repatriate or pay taxes on an estimated US$300 billion that had fled to Singapore during previous periods of unrest, lest those who took their money out be found out for tax evasion – a reason cited by three property agents as a primary reason behind the purchases.  Indonesians were the top foreign buyers at the luxury OUE Twin Peaks tower, which went on sale in July.

Companies’ Brief

GLP adds US$1.1 billion of logistics assets to US portfolio
Global Logistic Properties (GLP) is acquiring US$1.1 billion of logistics assets in the US – just a year after snaring US$4.55 billion of industrial assets there.  The mainboard-listed group said on Tuesday that it had entered into a definitive agreement to buy the logistics assets from Dallas-based developer Hillwood Development Company LLC.  The properties, which span 15 million square feet (1.4 million square metres), not only extends GLP’s US footprint significantly but is also “immediately accretive”.

CapitaLand callable bond may be a risky bet for some investors: iFast
Market prices on callable bonds sold by Singapore’s biggest property developer suggest that some investors aren’t fully aware of risks associated with the notes’ structure, according to fund researcher iFast Corp.  CapitaLand Ltd’s S$400 million of securities due in 2022, which the issuer has an option to pay off early at par value on Jan 12, traded at 102.1 US cents on the US dollar on Sept 8, according to Singapore exchange data.  That makes the yield to call, which measures projected gains or losses for investors purchasing the securities now if the firm opts to buy them back in January, minus 0.55 per cent.

Perennial to buy 49.9% of Shanghai eldercare firm
Perennial Real Estate Holdings has agreed to buy 49.9 per cent of the largest private eldercare operator in Shanghai for 735.5 million yuan (S$148 million).  It will inject the capital into Shanghai RST Chinese Medical Co (Renshoutang), which operates 11 eldercare facilities with over 2,400 beds, and four pharmacies, each with a dedicated TCM (traditional chinese medicine) clinic. They are predominantly located in Changning District in Shanghai.  The consideration takes into account the existing operations and business pipeline of Renshoutang, translating to about 12.9 times Ebitda (earnings before interest, taxes, depreciation and amortisation) based on Renshoutang’s full-year financial statements for 2015.

Fragrance buying Chinatown shophouses for S$20.5m
Fragrance Foodstuff, which sells traditional Chinese snacks and bak kwa (barbecued meat), is buying two prime adjoining New Bridge Road shophouses where it has been leasing the ground-floor space for its flagship outlet for about a dozen years.  It is paying S$20.5 million for the two properties, at the corner of New Bridge Road and Pagoda Street and near the Pagoda Street entrance of the Chinatown MRT Station.  Both properties are on sites with a 99-year leasehold tenure with effect from January 1995, translating to a balance lease tenure of about 77 years.

Regal in joint project in China to tap halal market
Developer Regal International Group will develop a halal industry zone within the China-Malaysia Qinzhou Industrial Park (CMQIP).  The Singapore-listed real estate company said yesterday that its subsidiary Million Sunray will work with the park administrators to build various centres for halal certification and review, research and development and exhibitions.  It will also build a halal food processing production line, logistics and warehouse areas.

Views, Reviews & Forum

A deleveraging nudge from fine-tuning of TDSR rules on refinancing
The Monetary Authority of Singapore’s recent fine-tuning of refinancing rules relating to the total debt servicing ratio (TDSR) governing property loans is a strong nudge towards deleveraging.  Stretched borrowers who hold investment properties will have to think about actively managing down their debt, especially as rental income is under pressure and economic growth is easing. Far from stimulating demand for new housing loans, the move also acts as a wake-up call for those inching precariously close to the debt-income ceiling set by the regulator.

Global Economy & Global Real Estate

Big manufacturers in Japan turn upbeat on Q3 business conditions

UK house prices inch up in August

Brexit triggered fastest property deal for biggest wealth fund

China Jan-Aug property investment growth quickens to 5.4%

China industrial output and retail sales rise in August         

China tries to cool property boom just as mortgage bonds triple

Hong Kong govt denies ties with ‘dark forces’ on public housing

Fed looks unlikely to hike next week after Brainard warning

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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