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The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 2nd August 2016

Top Story

Surbana Jurong snaps up Australia’s SMEC for S$400m
In its largest acquisition to date, Surbana Jurong Pte Ltd has bought Australia-based engineering consultancy firm SMEC Holdings Ltd (SMEC) for S$400 million.  This immediately scales up the Temasek unit into the largest development consultancy group, based in the Asia-Pacific, with over 95 offices across more than 40 countries in Asia, Australia, the Middle East, Africa and the Americas.

Apple pockets S$10m and counting from Apple Pay deal in S’pore
Apple Inc is expected to collect roughly S$10 million from Singapore banks and financial institutions here that now offer Apple Pay to customers, The Business Times has learnt.  This is on top of relatively high transaction fees that the tech giant will earn from leeching off banks’ existing payment systems – all of which speak to the looming control that Apple has after building up a cult of iPhone users. And this power has pushed the backs of financial giants against the wall.

Singapore Economy

More bad loan woes ahead for S’pore banks: Moody’s
Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank’s (UOB) first-half financial results revealed a further weakening in their asset quality and profitability, Moody’s Investors Service cautioned yesterday, noting a worrying uptick in their non-performing loan (NPL) ratios resulting from exposure to the oil and gas sector.  The NPL ratios of the two lenders rose to new highs in the second quarter. OCBC reported an increase in its NPL ratio for oil and gas loans (which include offshore marine borrowers) to 7.5 per cent, from 7.1 per cent at end-March. UOB did not disclose its oil and gas NPL ratio, but has indicated that most of new NPLs recognised in this quarter relate to oil and gas borrowers.

STI starts month in positive territory
Local shares began the month on a higher note after weaker-than-expected growth in the US assured traders that a rate hike is unlikely soon, and Asia remains in play.  The more optimistic mood sent the benchmark Straits Times Index (STI) up 23.8 points or 0.83 per cent to 2,892.5, led by Jardine Cycle & Carriage, which rose $2.42 or 6.17 per cent to $41.65.  Elsewhere in the region, Hong Kong was up by 1.09 per cent after fresh Caixin factory data beat analysts expectations, although Shanghai dipped 0.87 per cent amid concern over reported curbs on wealth management products.

Singapore Real Estate

NUS-Redas index shows easing in developer bearishness in Q2
Developer sentiment in Singapore improved slightly in the April through June period from the first three months of the year but it was still gloomy overall, the latest NUS-Redas real estate sentiment index report released on Monday showed.  The report, which came out a week after the Monetary Authority of Singapore said the property cooling measures would stay in place, also found that 52.9 per cent of property developers surveyed expect a “moderate decrease” in residential property prices in the next six months.

RevPAR growth augurs well for tourism sector
The grass is looking greener for Singapore’s tourism industry as the first five months of this year saw upscale and mid-tier hotel segments faring the best with their RevPAR (revenue per available room) rates increasing, according to the recent Hotels MarketView report by CBRE Singapore.  From January to May, upscale hotels recorded a RevPAR growth of 2.1 per cent to S$225.64 and mid-tier hotels posted a RevPAR growth of 2.7 per cent to S$147.90.

Crowne Plaza Singapore Changi Airport opens S$82m wing
With upcoming developments in Singapore’s aviation hub over the next few years, including Changi Airport’s Terminal 4 and Jewel Changi Airport, Crowne Plaza Singapore Changi Airport has opened a new extension in anticipation of the increasing numbers of visitors to the airport.  OUE Hospitality Trust said in a statement that a unit of the sponsor – OUE Airport Hotel Pte Ltd (OUEAH) – will provide an income support arrangement for the hotel for about three years, or when the rental top-up payments exceed S$7.5 million, whichever is earlier.

Companies’ Brief

OUE Hospitality Trust’s Q2 DPS falls 39.5% to 0.92 cent
OUE Hospitality Trust on Monday reported a 39.5 per cent drop in distribution per stapled security (DPS) to 0.92 Singapore cent for its second quarter ended June 30, 2016.  This compared with 1.52 cents that it paid out a year ago. The lower distributions were partly due to an enlarged unit base following a rights issue in April 2016, but also partly due to poorer performance from its hotels and mall.

Keppel Land opens retail mall in Ho Chi Minh City
Property developer Keppel Land has opened a retail mall in Saigon Centre in Ho Chi Minh City, anchored by the city’s first Takashimaya department store, it said in a press release on Monday.  It said the mall forms part of Saigon Centre’s Phase Two and its space has been fully committed, adding that Japanese retailer Takashimaya is leasing about 15,000 square metres of retail space for what it intends to be its flagship store in Vietnam.

A-Reit plans private placement to raise at least S$150m
The manager of Ascendas Real Estate Investment Trust (A-Reit) has proposed a private placement of 64 million new units in the Reit at issue prices between S$2.344 and S$2.417 apiece to raise gross proceeds of at least S$150 million, it said in a Singapore Exchange filing on Monday evening.  The placement will be to unspecified “institutional and other investors”. The trust manager said that it planned to use about S$108.5 million – 72.3 per cent of the gross proceeds – to partially fund the proposed purchases of two Australia properties: a business park in Sydney and a logistics property in Melbourne.

OKP Holdings posts 15.6% drop in Q2 profit
Construction firm OKP Holdings has reported a 15.6 per cent fall in net profit to S$2.5 million for the second quarter.  Revenue for the three months to June 30 fell to S$24 million, down 11.6 per cent from the same period a year ago, mainboard-listed OKP said in a Singapore Exchange filing on Monday.

Keong Hong Holdings moves to SGX mainboard
Homegrown building construction, hotel and property development and investment group, Keong Hong Holdings Limited has transferred its listing from Catalist to the mainboard of the Singapore Exchange (SGX).  Keong Hong’s shares will start trading from Tuesday at 9am, the group on Monday said in a filing to the SGX.

Frasers Property Australia acquires 10-ha site in western Sydney
Frasers Property Australia (formerly Australand) has exchanged contracts with Australia-based Hanson Concrete to acquire a 10-ha site adjacent to its Eastern Creek Business Park in western Sydney.  The site at Kangaroo Avenue Eastern Creek, which will accommodate up to 60,000 sqm of built form, complements Frasers Property Australia’s previously developed 100-ha Eastern Creek Industrial Estate, said the Australian division of Frasers Centrepoint Ltd.

Frasers Hospitality Trust sees Q3 distributable income rise
Third-quarter distributable income at Frasers Hospitality Trust (FHT) rose 11.3 per cent to $20.9 million, boosted by the addition of Sofitel Sydney Wentworth and Maritim Hotel Dresden, which made its maiden contribution in the quarter.  But these factors were partially offset by a weaker performance at InterContinental Singapore and at the London properties following concerns over terrorism and Brexit.  Distribution per stapled security (DPS) was 1.51 cents for the three months ended June 30, down from 1.56 cents a year earlier. The reason was an enlarged number of stapled securities, which increased from 1.21 billion to 1.39 billion over the period.

Global Economy & Global Real Estate

China’s July PMIs mixed, as economy settles

China new home prices rise faster in July

Hong Kong housing price rebound may be short-lived, analysts say

NY Fed president urges caution on rate hikes, cites risks to America

South Korea July house price growth slows to over 1-yr low: Kookmin Bank

Australia cities home prices up for 7th straight month in July

Property rights key to alleviating poverty: economist

Construction spending falls to one-year low in June

Asian shares subdued, RBA rate decision awaited

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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