The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 17th March 2017

Singapore Economy

Doubts over whether US reflation boost will lift S’pore banks
The reflation boost for Singapore banks remains a question, even as the US Federal Reserve expectedly lifted interest rates by 25 basis points this week.  For one thing, hopes of higher loan pricing by the Singapore banks must be tempered when weighed against heightened competition for top-tier customers. Analysts also pointed to unknowns over the issue of future rate hikes, as the market is also awaiting more details on US fiscal policies meant to boost growth.  “Singapore banks are in no man’s land,” said a report this week from Jefferies. It met Hong Kong-based investors this month, and had discussions on the Singapore market that were focused on the banks.

Chun Sing calls for network effect in payment system
Achieving network effect for a common payment system to take off is more important than which payment system is better, Minister in the Prime Minister’s Office and Secretary-General of National Trades Union Congress Chan Chun Sing said yesterday.  He urged businesses to explore partnerships to bring various payment platforms together to achieve network effect, where the system becomes more valuable when more people use it, during a dialogue session at the Lianhe Zaobao Singapore Budget 2017 Business Forum.

Singapore sees slow start to M&A activity: Thomson Reuters
The mergers and acquisition (M&A) scene in Singapore is witnessing its slowest start since the first quarter of 2013.  According to data compiled by Thomas Reuters, the value of announced M&As involving Singaporean companies reached US$7.7 billion in the first three months of this year, down 21.0 per cent from the US$9.7 billion seen in the same period in 2016. Announced deals fell 38.1 per cent to 146, from 236 a year ago.  “This is the slowest start for overall Singapore M&A activity in terms of value since first quarter of 2013,” Thomas Reuters said.


Singapore Real Estate 

Fed rate hike: Expect to pay more monthly on home loans
Home owners in Singapore can expect to pay a higher monthly instalment on their housing loans, on the back of a rate hike by the United States Federal Reserve.  The US central bank raised its benchmark federal fund rate – the rate banks charge each other for overnight loans – by a quarter of a percentage point on Wednesday.  Given that Singapore interest rates are closely correlated with those in the US, this will tend to push up rates on credit cards, mortgages, vehicle loans and bank savings accounts.

Braddell Road flyover project deadline extended to June
After having been delayed three times, the troubled Braddell Road flyover project has a new deadline.  It is now slated to be completed by June, the Land Transport Authority (LTA) said yesterday. Its original deadline was end-2015.  A spokesman for LTA told The Straits Times that it had been working closely with the public works project’s main contractor, Feng Ming Construction (FMC), to “rectify, review and improve” safety measures after a stop-work order (SWO) stalled progress on Feb 23.

Firms welcome easing of land-use rules
Analysts and local industrial firms have welcomed a move by the Government to pilot a more flexible approach to industrial land zoning.  More relaxed industrial land zoning will help firms cope with changing business needs as they dial back manufacturing operations here, in favour of more research and development, they said.  The Government earlier this month said that it will pilot the more flexible approach in a new JTC Corporation multi-tenanted building in Woodlands North Coast that is due to be completed at the end of 2019.


Companies’ Brief

CapitaLand said to be eyeing Asia Sq Tower 2
Real estate developer and fund manager CapitaLand is said to be in exclusive negotiations to acquire Asia Square Tower 2 from BlackRock, PERE reported on Thursday.  The publication, which reports on news in the private real estate markets, cited sources familiar with the transaction as saying that the price that CapitaLand has agreed to pay for the 46-storey prime commercial building in Singapore’s Marina Bay district is more than S$2,700 per square foot (psf).  When contacted, John Saunders, Head of Asia Pacific for BlackRock Real Estate, said: “Asia Square is a trophy grade-A office building in Singapore, often considered as one of Asia’s best such developments.

AIMS AMP Reit to raise S$50m with 3.6% five-year bond issue
AIMS AMP Capital Industrial Reit said it plans to issue S$50 million of 3.6 per cent fixed rate notes due March 22, 2022, as part of a funding programme.  The notes are in denominations of S$250,000. Net proceeds will be used to partially repay a credit facility due in November.  Chief executive officer of the Reit (real estate investment trust) manager, Koh Wee Lih, said in a press release that the issuance will extend the Reit’s debt maturity profile from 2.1 years to 2.5 years.

Blackstone said to put Sime Darby Singapore property on sale
Blackstone Group LP plans to sell one of the office and retail assets it acquired last year from Malaysian palm-oil producer Sime Darby Bhd, according to people familiar with the matter.  The New York-based private equity firm expects to fetch about S$300 million for the Sime Darby Centre in the Bukit Timah area, which it bought for just under S$200 million, said one of the people, who asked not to be identified because the information isn’t public.

GIC JV acquires US student housing portfolios for $2b
A joint venture entity formed by sovereign wealth fund GIC, the Canada Pension Plan Investment Board (CPPIB) and The Scion Group has acquired three United States student housing portfolios for approximately US$1.6 billion (S$2.3 billion).

ERA Realty targets China market in expansion abroad
Singapore’s largest real estate agency, ERA Realty, has its sights set on the competitive Chinese market, and a return to the local bourse, said chief executive Jack Chua.  He said in an interview with The Straits Times yesterday that the company aims to enter China by the second half of next year.  “We are working on a plan now. China is a big market – if you want to go in, you must be very careful,” he said, adding that the firm is looking for the right partner.


Views, Reviews & Forum 

Does ARA’s delisting via a scheme of arrangement make sense?
There are many reasons for a company to be listed on a stock exchange. One key reason is to be able to tap public funds as and when extra capital is needed for expansion and growth. Beyond the initial public offering phase, listed companies can continue to raise public funds through various methods, such as preference shares, rights issues, retail bonds or perpetual securities.  Private placements to institutional investors are also a viable option to raise additional funds.

Prefab buildings have to meet same stringent standards
We thank Mr Chee San Chuan for his feedback (Ensure prefab homes do not have built-in problems; March 10).  Buildings adopting Prefabricated Pre-finished Volumetric Construction (PPVC) have to comply with the prevailing building control requirements in the Building Control Act and Regulations, as well as the regulatory requirements of other relevant technical authorities.  In addition, most prefabricated bathrooms today are constructed using concrete and are no different from conventional cast on-site bathrooms in terms of maintenance.


Global Economy & Global Real Estate 

Fed delivers a hike and a subtle message

New US home construction rebounds in February

Housing starts in US climbed to four-month high in February

Top NYC rents need to fall 15% to absorb glut

Art as shaped by a city’s playgrounds

China lifts short-term rates after US Fed move

Qingdao and Nanjing to impose new property curbs

Hong Kong’s Richest Men Prove Resilient Against Property Curbs

Asian real estate still attractive after US rate hike – LaSalle Investment

Penang ups landed property threshold

Malaysia’s Iskandar Waterfront to raise S$476m to shrink debt


Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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