The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 14, 15 and 16 January 2017

Singapore Economy

SGD bond issuance gets off to slow start in 2017
The local bond market has got off to a slow start in 2017 with only one issue sold so far, despite a considerable pick-up in investor sentiment and increased volumes in the secondary market.  In contrast to Mapletree Investments’ sole S$625 million 4.5 per cent perpetual bonds last week, five deals worth S$991 million were issued over the same period last year.  “The market has just started; there are real flows and secondary market volume is picking up nicely,” said Clifford Lee, DBS Bank’s head of fixed income.

Festive season fails to boost retail sales as slump continues
Retailers here had little to cheer about in the lead-up to the year-end festive season last year, as sales continued to slide across almost all segments of the industry.  November retail sales rose 1.1 per cent on the whole, thanks largely to higher takings at car showrooms.  Excluding cars, however, retail sales fell 2.1 per cent over the same month a year earlier, in the 10th straight month of contraction.

Jan-Nov visitor arrivals up 8% but growth may be slowing
Singapore received 14.89 million visitors in the first eleven months of 2016, up 8 per cent year on year, but it appears that much of the growth was driven by a stronger first half.  Preliminary estimates from the Singapore Tourism Board (STB) showed that the growth in arrivals was comparatively slower from August onwards, with October registering a decline of 0.9 per cent. In contrast, growth for the first five months of 2016 were all in double-digits.

Economic growth, families to be top priorities for Budget 2017
Economic growth and support for families will take top priority in the upcoming Budget, Minister for National Development Lawrence Wong said yesterday.  These were the two areas of national interest that drew the most suggestions, out of the more than 7,500 items of feedback the Government received in recent weeks.  “These are not surprising because these are issues that are at the top of people’s minds now,” Mr Wong told the media, after joining 100 People’s Association grassroots volunteers and community partners at a pre-Budget talk in Ang Mo Kio.

Private-sector financier with a public remit
Clifford Capital is leading discussions with Singapore government agencies to develop infrastructure debt as an asset class here.  The Temasek-backed structured finance company has been contributing ideas to the Government on how to set up an infrastructure debt takeout facility that will enable institutions to invest in long-term infrastructure debt instruments, while giving banks an avenue to recycle their infrastructure project finance loan book.

Singaporeans’ inflation expectations inch up on uncertainty, fears of anti-trade fervour: SMU surveyInflation expectations in Singapore have edged up from their lowest level since September 2011, said the Singapore Management University (SMU) on Monday (Jan 16).  Weakness in global growth, exacerbated by the political and policy uncertainty particularly surrounding global trade in the US and Eurozone, might have prompted Singaporean households surveyed in December to believe that prices one year ahead might be inching up, SMU said.  This was according to the latest quarterly Singapore Index of Inflation Expectations (SInDEx) survey conducted by SMU’s Sim Kee Boon Institute for Financial Economics (SKBI).

Singapore Real Estate

Punggol residents now have a town square
Pig, fish and poultry farms once filled the landscape but today, Punggol has become Singapore’s first eco-town.  Yesterday, it claimed another first: the Punggol Discovery Cube – the first visitor centre in an HDB town where people can learn more about how the area has developed.  Its opening coincided with that of the new Punggol Town Square. Both were launched by Deputy Prime Minister Teo Chee Hean.  With a standing capacity of 1,000 people, the 1,620 sq m square just beside Waterway Point shopping mall will give residents a space to take part in activities together, including mass exercises.

Financials favoured over Reits
If there is one trend worth highlighting about trading stocks in the past two months, it is the divergence between the performance of bank stocks and those in the real estate investment trust (Reit) sector.  Reits have been one of the most popular investments in recent years, thanks to their mouth-watering yields which beat the next-to-zero returns offered on bank deposits hands down.  But in the past two months, they have markedly underperformed the market, with the FTSE ST Real Estate Investment Trusts Index falling by as much as 8.6 per cent in that period. Since the start of the year, however, they have been able to recover some of their losses.

AHTC has resolved 5 issues flagged in past audits, says KPMG
The Aljunied-Hougang Town Council (AHTC) has made progress in resolving governance issues to do with related-party transactions, its independent accountant KPMG said.  In its latest monthly progress report on the town council run by the Workers’ Party (WP), KPMG said AHTC has resolved five governance and financial problems flagged in past audits.  They relate to issues such as the incomplete disclosure of transactions with related parties in financial statements and weaknesses in the approval of payments to related parties, among other things, KPMG said in its 10th monthly report that the WP made available online yesterday.

Centralised system to monitor lift, contractor performance across PAP town councils
A group of People’s Action Party (PAP) town council members, lift engineers, and specialists is developing a centralised system to monitor lift and contractor performance across all 15 PAP town councils.   Currently, each town council monitors the performance of lifts in their area.  The new system is being developed amid calls for greater scrutiny of lift standards following a spate of lift-related injuries in recent years. One lift contractor, Sigma, has been barred from new HDB projects due to delays and a higher-than-usual breakdown rate.

HDB bans firm Sigma from new lift projects after breakdowns
A company which has installed some 3,500 lifts in Housing Board estates has been banned from tendering for new HDB projects.  Lifts installed by Sigma Elevator have, over the past two years, been breaking down more often than usual in their early stages of operation, confirmed the HDB.  It was responding to queries after The Straits Times (ST) found that more than half the major reported cases of lift incidents in 2015 and last year involved Sigma as manufacturer or maintenance contractor.

PSA gears up for move to Tuas
Port operator PSA Singapore has started relocating from the Tanjong Pagar Terminal ahead of the big move to eventually consolidate all container port activities at the upcoming Tuas mega-port.  The Straits Times understands that PSA has in recent months moved some workers from the city site to the Pasir Panjang Terminal, where they will pick up new skills, such as those related to operating automated equipment. No workers were retrenched.  The port leases for the terminals at Tanjong Pagar, Keppel and Pulau Brani are due to expire in 2027. The move to Tuas is expected to take place before then.

Companies’ Brief

SPH Q1 profit falls 43.8% to S$45.7m on restructuring charges
Singapore Press Holdings’ (SPH) net profit fell 43.8 per cent to S$45.7 million for its fiscal first quarter as retrenchment and restructuring-related charges exacerbated a decline in the core media business.  On a per-share basis, earnings slipped to three Singapore cents in the three months ended Nov 30, 2016, from five Singapore cents a year earlier. No dividend was declared for the quarter, in line with the group’s existing practice.  SPH, a media and property company, owns The Business Times.

Dasin Retail Trust prices IPO at 80 cents, to raise S$121 million
Dasin Retail Trust, a business trust holding three shopping malls in Guangdong province, has priced its Singapore initial public offering (IPO) at 80 cents per unit, raising S$121 million in gross proceeds.  Its IPO prospectus was registered with the Monetary Authority of Singapore on Friday. The public offering consists of a retail tranche of two million units and an international placement tranche of 149.8 million units.  Another S$25 million will be raised from 31.25 million units issued to cornerstone investors China Orient Asset Management and Haitong International Investment. The market capitalisation of the trust is slated to be S$440 million.

Dozens of Surbana staff lose their jobs
Temasek Holdings-owned infrastructure consultant Surbana Jurong has terminated the employment of a number of employees as part of a performance management review, The Straits Times has learnt.  All of the affected workers are based in Singapore, where the firm employs about 3,000 workers.  Surbana would not say how many workers have been laid off, but a spokesman said that less than 0.5 per cent of its global 13,000-strong workforce had been affected. That could mean up to 65 workers have lost their jobs.

Global Economy & Global Real Estate

Global equity market rally likely to slow down

San Francisco’s health conference tonic for hotel revenue

Carson grilled on his vision for housing

Amazon’s Bezos buys US capital home for US$23m

After years of problems, Trump hotel in Toronto is put up for sale

US Reits to perform well despite rising rates: Cohen & Steers

China December exports down as trade tensions with US loom

China’s big cities target slower growth in 2017

Loans growth at OCBC’s Chongqing branch triples y-o-y in Nov

Wanda posts first sales decline in 11 years

Billionaire Li Ka-shing to acquire Australia’s Duet Group in A$7.4b deal

HK court rejects short seller’s appeal bid in China Evergrande case

Power play at Vanke seen ending with 15.3% stake sale

German building boom set to continue as home demand soars

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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