DAILY NEWS

Daily News – 21st April 2016

Top Stories

Architects also hurting from real estate woes
The real estate downturn has filtered down to architecture and engineering services firms, which were hit by surging redundancies last year – and industry players warn that the situation could worsen this year. It has been the larger architecture firms where rumours of retrenchment are most rife, though no firm has been willing to confirm this. Last year’s official jobs data is telling. Based on the Ministry of Manpower’s labour report for 2015, the number of redundancies in the architecture and engineering services segment was 940 last year; the figure was 240 in 2013 and 350 in 2014. (Redundancies are those who are retrenched and those who are released early from their contracts.)
http://www.businesstimes.com.sg/real-estate/architects-also-hurting-from-real-estate-woes

Singdollar rallies, interest rates fall on US$ weakness
The Singapore dollar has risen some 1.5 per cent in less than a week to S$1.34 on Wednesday, more than reversing last Thursday’s drop following the surprise easing move by the Monetary Authority of Singapore. Consequently, the key three- month Singapore interbank offered rate has fallen below one per cent to 0.99975 per cent. Analysts offer several factors for the Singdollar’s surprising strength, from weak US economic data to inflows into regional markets, but warned that the rally may not last given the fundamentals.
http://www.businesstimes.com.sg/banking-finance/singdollar-rallies-interest-rates-fall-on-us-weakness

Singapore Real Estate

Shops and shophouses overtake residential units in auctions
Hops and shophouses overtook residential properties in total sales value in auctions in the first quarter of this year, a report by Knight Frank released on Wednesday shows. Some S$5.5 million worth of shops and shophouses were sold in auctions in Q1, more than double the residential sector’s S$2.5 million. This marked the first time since the second quarter of 2014 that the residential sector was not the top pick in the auction market though it still dominates the number of listings.
http://www.businesstimes.com.sg/real-estate/shops-and-shophouses-overtake-residential-units-in-auctions

CapitaLand pays S$2.7 million extension charge for The Interlace
CapitaLand yesterday said it has paid an extension charge for unsold units at The Interlace condominium while reporting a 35.4 per cent on-year increase in first quarter net profit to S$218.3 million. The property developer said it has paid S$2.7 million in extension charges for the 127 unsold units, or S$21,000 (S$7 per square foot) on a per unit basis. Units in the 1,040-unit condominium along Depot Road had to be sold by March 13, 2016, and have now been given a six-month extension.
http://www.todayonline.com/business/capitaland-pays-s27-million-extension-charge-interlace

Companies’ Brief

CapitaLand’s net profit for Q1 rises 35.4% to $218.3m
Gains from divesting a Beijing property boosted first-quarter earnings at real estate firm CapitaLand. Net profit rose 35.4 per cent to $218.3 million for the three months to March 31 over the same period a year earlier, but revenue fell by 2.3 per cent to $894.2 million. The decline in turnover was mainly due to the absence of a fair value gain of $59.6 million from the change of use of Ascott Heng Shan Shanghai in the previous year, and lower revenue recognition from its development projects in Singapore and Vietnam.
http://www.businesstimes.com.sg/companies-markets/divestment-related-gain-buoys-capitaland-q1-earnings
http://www.straitstimes.com/business/property/capitalands-net-profit-for-q1-rises-354-to-2183m?login=true

Manulife’s Reit IPO in Singapore back on track
Canadian financial services group Manulife has started pre-marketing for an initial public offering (IPO) in Singapore of its US office Reit (real estate investment trust), a plan it had shelved for nine months due to market conditions. It is now said to be aiming for a May 20 listing. A report by FinanceAsia on Tuesday, which cited bankers familiar with the situation, said that the deal could raise around US$500 million, above the previous S$569 million target.
http://www.businesstimes.com.sg/companies-markets/manulifes-reit-ipo-in-singapore-back-on-track

Views, Reviews & Forum

Makeshift patching will not fix defects of S’pore’s housing market
The first part of this article (“Singapore property may be heading for long-term drop in value”, BT, April 20) touched on three of the six “defects” in our property market that might lead to a long-term decline in property values. The first three points are: the issue of demand being exhausted with the last six years of massive supply; the Additional Buyer Stamp Duty; and the Total Debt Service Ratio framework. In this second part, we consider the next three “defects”.
http://www.businesstimes.com.sg/opinion/makeshift-patching-will-not-fix-defects-of-spores-housing-market

Fewer homes put up for auction in Q1, interest switching to shophouses: Knight Frank
A total of 141 properties were put up for auction in the first quarter of the year, with residential properties accounting for a lion’s share of the listings. In a report out on Wednesday, real estate consultancy Knight Frank said it is the first time that the number of auction listings fell below 150 since the fourth quarter of 2014. Of those that were placed for auction in the first quarter, 85 were residential properties. This was fewer than the 118 units in the last three months of 2015.
http://www.straitstimes.com/uncategorized/fewer-homes-put-up-for-auction-in-q1-with-interest-switching-to-shophouses-knight?login=true