The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 15th February 2017

Top Story

Prime region leads private-home resale price rise in January: SRX Property
The first month of 2017 saw a continued momentum in the high-end residential property segment, with resale prices in the Core Central Region (CCR) making a 1.9 per cent rise from a month ago and 2.7 per cent increase from a year ago, based on SRX Property estimates.  This helped to lift SRX Property’s overall resale index for the private residential market by 1.1 per cent month on month in January and 0.3 per cent from a year ago.  In the city-fringe or Rest of Central Region (RCR) and suburban areas or Outside Central Region (OCR), resale prices also rose by 1.5 per cent and 0.4 per cent respectively.  But compared to a year ago, resale prices in the RCR and OCR recorded a fall of 0.1 per cent and 1.1 per cent respectively last month.

Singapore Economy

Indonesia drives banner year for S’pore tourism; moderate growth likely for 2017
The Singapore Tourism Board (STB) is projecting modest growth for the local tourism industry this year, after last year’s better-than-expected performance delivered a record number of visitors which hit a new high in spend.  The STB, expecting Singapore to ride on the Asia-Pacific’s burgeoning demand for travel, has forecast arrivals of 16.4 million to 16.7 million for this year; tourism spend is expected to come in at between S$25.1 billion and S$25.8 billion.  But headwinds are expected amid the intensifying regional competition for the tourism dollar.

MAS eases rules on finance companies, opens pipeline of funds to SMEs
The Monetary Authority of Singapore (MAS) said on Tuesday that it will relax its rules binding finance companies and make it easier for small and medium-sized enterprises (SMEs) to get unsecured loans through them.  With this liberalisation, Singapore’s three finance companies will be able to extend collateral-free loans of up to S$550 million to small businesses.  The regulator said it will also relax its policy of barring foreign takeovers of finance companies.

Singapore Real Estate

Real estate sector outperforms overall STI early in 2017
Listed property developers and operators have returned 12 per cent since the beginning of this year, beating the Straits Times Index (STI)’s 8 per cent, according to SGX My Gateway.  The price-to-book (P/B) ratio of the real estate sector has also risen, albeit less drastically, the investor education portal said in an update report on Tuesday.

4,056 HDB flats up for sale in February BTO exercise
The HDB has launched 4,056 flats for sale on Tuesday under the February 2017 Build-To-Order (BTO) exercise.  In this first tranche for 2017, flats being offered span across six projects in the non-mature town of Punggol, and the mature towns of Clementi and Tampines. They range from two-room Flexi to three-generation (3Gen) flats.  A project in Woodlands, originally planned for launch this month, has been deferred, the Housing & Development Board (HDB) said on Tuesday.

Sungei Road flea market to make way for future homes
The Sungei Road flea market will cease to exist come July.  The authorities issued a multi- agency statement yesterday which gave July 10 as the last day of operations for the approximately eight-decade-old flea market.  Singapore’s last free hawking zone will be prepared “to facilitate future residential development use”.

Room for more ‘luxury hostels’ in Singapore
Travelling on a shoestring budget does not necessarily mean cramming into a frills-free backpackers hostel, as RB Hospitality – started by a husband-and-wife team in 2015 – has set out to prove.  The firm operates the Cube boutique capsule hotel in Chinatown, and has three other properties due to be renovated, then used in the same way this year.

Companies’ Brief

CDL buys Shanghai project for 900m yuan
Building up its presence in China, Singapore-listed City Developments Limited (CDL) has entered into a deal to acquire an office project in Shanghai’s Hongqiao district that is in the final stages of construction for 900 million yuan (S$186 million).  The deal involves an indirect wholly owned subsidiary of CDL China entering into an equity transfer agreement to acquire the entire equity interest in Shanghai Meidao Investment Co, which owns the commercial development known as Meidao Business Plaza in the Hongqiao central business district.

Croesus posts higher Q2 DPU on the back of enlarged portfolio
Croesus Retail Trust (CRT) announced a distribution per unit (DPU) of 1.81 Singapore cents for the second quarter ended Dec 31, 2016, up 1.1 per cent from 1.79 Singapore cents a year ago.  But, said CRT, the year-ago DPU was 1.72 Singapore cents if restated to reflect an enlarged unit base arising from a preferential offering of 27.68 million units in August 2016. This would have meant a year-on-year DPU increase of 5.2 per cent.  The higher DPU came on the back of an enlarged portfolio due to acquisitions.

CapitaLand’s Q4 profit surges 73.8% to S$430.5m
Property developer CapitaLand ended 2016 on a strong note with a 73.8 per cent surge in net profit for the fourth quarter ended Dec 31 to S$430.5 million.  This was fuelled by better operating performance, higher fair value gains on revaluation of investment properties and lower impairments.  Operating profit after tax and minority interest (Patmi) grew 16 per cent to S$289.1 million supported by higher contributions from the group’s trading properties and shopping malls in China.

Lum Chang’s quarterly earnings drop 55%
Property and construction group Lum Chang Holdings reported on Tuesday a 55 per cent drop in net profit attributable to shareholders of S$5.5 million for the quarter ended Dec 31, 2016, from S$12.0 million the year before.  Its gross profit was down 32 per cent year-on-year to S$13.9 million for the Dec 2016 quarter. Lum Chang said this was due mainly to the quarter reporting a “higher mix of construction revenue, which generally contributes to a lower margin compared to property sales”.

Parkson Retail Asia in the red in Q2
Parkson Retail Asia sank into the red with a net loss of S$2.23 million for the second quarter ended Dec 31, 2016, versus a net profit of S$2.9 million a year ago.  The losses were due to de-leveraging impact from weak same store sales growth recorded by the group’s operations as well as losses incurred by certain new stores and new businesses.  This is despite a 7.4 per cent year on year rise in revenue to S$111.14 million.

Views, Reviews & Forum

Is the Singapore Reit success story coming undone?
Singapore’s real estate investment trusts (Reits) became popular because they had the things local investors love – steady income, high yields and property. Now, it’s all turning upside down, and holders need to hope that a round of consolidation comes to their rescue.  With most annual reports in, the picture for the industry isn’t inspiring.

Building up new capabilities to change construction industry
The construction industry is ripe for disruption, as S C Ang Consortium is demonstrating, by tapping satellite technology to tackle the age-old process of surveying. In the second of a four-part series on innovation, company founder Ang Soo Cheng tells Wong Siew Ying how high-tech can change the sector.

Developers should accept investment risk
I am concerned about the Real Estate Developers’ Association of Singapore’s (Redas) comments on tweaking the property tax policy to help developers sell their projects later (“Redas calls for review of property tax policies“; Feb 11).  This request is to help developers make a profit.  However, developers made an investment decision. When the investment fails to bring profit, is it reasonable to ask for government help?

Unfair, contradictory treatment of DBSS flats
I read the report “Tying HDB flat prices to market conditions a fair practice: Minister” (Feb 8) and take this opportunity to ask about the double standards in the treatment of Design, Build and Sell Scheme flats.  According to the Central Provident Fund Board, the valuation limit applies to DBSS flats but not Build-To-Order flats because, unlike the latter, DBSS and resale flats are sold at market rates.

Global Economy & Global Real Estate

Fed’s Yellen says rate hike coming; fiscal policy adds uncertainty

Global M&A scene to stay strong in 2017: JP Morgan

China producer prices up in Jan after four years of deflation

China will likely avoid financial crisis: Morgan Stanley

Taking the ‘Chinese’ out of Chinese investment in Australia

Aldar posts flat Q4 profit, foresees lower sales in 2017

BOJ holds more than 40% of Japanese govt bonds

Stamford Land Q3 net profit up 2.6% to S$11.4m

Trump empire to launch Dubai golf course

Carlyle’s Brazilian developer battles mounting lawsuits

Aleppo residents work to save battle-scarred heritage buildings

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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