The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 21st April 2017

Singapore Economy

China demand drives Singapore oil storage sales to 11-month peak
Crude oil sales from storage tanks around Singapore rose to an 11-month high in March, with nearly half of the volumes going to China and traders clearing inventories ahead of record shipments to Asia expected to arrive in April.  Traders sold a total of 22.6 million barrels of crude from storage in Singapore, southern Malaysia and northern Indonesia in March, Thomson Reuters Eikon trade data showed. Around half of the volumes went to China, partly to help quench the still-growing demand from the country’s independent refiners.

Singapore Real Estate

OrangeTee beefs up team with hires from rivals
Singapore’s fourth-largest property agency is getting a shot in the arm with its recent hiring of some veteran associates from rivals ERA Realty Network and Savills Residential – a move that has stoked rumours that they may be bringing along many more agents with them.  But such concerns were swiftly dismissed by their previous agencies, and the impact of their migration seems muted for now.  Gary Chua, a former executive group division director at ERA Realty, moved to OrangeTee last week; two other executive group division directors Jason Tan and Jay Ong have just resigned to join OrangeTee.

Two sites up for tender to yield 1,160 homes
A plum landed plot in Hougang at Lorong 1 Realty Park and a large non-landed site at Stirling Road have been launched for sale, with consultants expecting keen demand for both.  The plot in Hougang, which can yield 50 landed homes, is expected to be a bigger draw for small- and mid-sized developers, market watchers said.  Developers can choose to build conventional landed housing or strata-landed housing on the 1.34 ha site in the mature landed enclave of Hougang. The 99-year leasehold site is on the Confirmed List of the Government Land Sales (GLS) programme.

Mapletree and GIC snapping up student housing to lift returns
GIC and Mapletree Investments are going back to school.  Singapore’s sovereign wealth fund and the real estate investor helped fuel a record US$16.2 billion (S$22.6 billion) of student housing acquisitions this year, and a further US$3.3 billion of deals were struck in the first quarter of this year, according to Real Capital Analytics.  Student accommodation offers better returns than offices and residential housing, making it an attractive asset for pension and sovereign wealth funds looking for stable income and higher yields.

Companies’ Brief

Associated firms boost Keppel Q1 bottom line
Despite a 28.4 per cent fall in group revenue to S$1.25 billion, Keppel Corporation emerged from the first quarter with a 23.7 per cent rise in net profit to S$260.4 million.  This comes as the conglomerate’s share of results of associated companies for the three months ended March 31, 2017, shot up to S$170.3 million, from S$13.7 million a year ago. Keppel attributed the surge to higher contribution from associated firms in the investment and property divisions.  While the offshore and marine (O&M) segment continued to struggle in Q1, the investment segment recorded a net profit of S$125.3 million, against a loss of S$4.4 million a year ago.

GuocoLand Q3 profit up on higher sales, progressive revenue recognition
Peoperty developer GuocoLand Limited posted a net profit of S$29.57 million for its third quarter ended March 31, 2017, up from S$11.31 million a year ago, in part due to movements in foreign exchange and fair value changes on foreign exchange hedges.  Revenue rose 63 per cent to S$271.08 million from S$165.95 million year on year, contributed by higher sales and progressive revenue recognition from Singapore’s residential projects.

Frasers Centrepoint’s Australian arm seals deals on Sydney hotel, commercial space
The Australian arm of Singapore-listed Frasers Centrepoint Limited, together with a joint venture partner in a Sydney Central Park development, has entered into option agreements with an impact investment fund on the sale of a hotel and commercial space in Sydney.  Located in the north-west corner of the Central Park precinct, the development is due for completion in mid-2018.  Frasers Property Australia, through Frasers Centrepoint, said this in a release to the Singapore Exchange on Thursday morning before the opening of the market.

CapitaLand Mall Trust’s Q1 DPU steady despite revenue dip
CapitaLand Mall Trust’s (CMT) distribution per unit (DPU) for the first quarter stayed unchanged at 2.73 Singapore cents, the trust said on Thursday.  This was despite gross revenue for the three months ended March 31, 2017, dipping by S$7.8 million or 4.3 per cent to S$172 million from a year ago, mainly due to the closure of Funan. The mall ceased operations for redevelopment from July 2016.  Net property income was S$120.1 million, 6.1 per cent lower than S$127.9 million in the corresponding year-ago quarter, mainly due to lower gross revenue.

Views, Reviews & Forum

Singapore property market: Get ready for the upturn
Near the peak of the property cycle in 2013, I recall walking into a showroom one Saturday morning to be greeted by an agent who excitedly proclaimed that purchasing a unit was just like buying vegetables. With property prices trending in only one direction – up – one shouldn’t think too much. The bustle around me, reminiscent of a wet market, only added emphasis to her words.  Fast forward to the present, where private property prices have declined for 14 consecutive quarters. Unlit windows form the dark mosaics of new developments, political gyrations are putting markets on edge, and the Fed is approaching its task of interest rate normalisation steadfastly, after a long period of stasis. Instead of exuberance, caution is the prevailing sentiment of the day. Amid the swings in market sentiments, it is important to keep a close watch on fundamentals. While Singapore’s property market has lost its lustre in recent years, the winds in the sails are shifting. If fundamentals are anything to go by, home prices are set to bottom next year and head for a recovery.

Pedestrianising will only worsen woes of malls
Shopping is no longer restricted to Orchard Road, where premium shops and foodcourts charge premium prices.  With big shopping malls sprouting up in neighbourhood centres and within walking distance of homes, there is little incentive to go down to Orchard Road.  The people who can afford premium shopping tend to be those who drive.

Lazada, RedMart and others team up for e-membership scheme ahead of Amazon’s entry
Online shopping portal Lazada and online supermarket RedMart have teamed up with other online services in Singapore to launch a membership programme in anticipation of the launch of e-commerce giant Amazon here.  The programme, called LiveUp, will offer users benefits such as rebates and discounts for Netflix, Uber, UberEats and Taobao Collection.  New users can sign up at a fee of S$28.80 for the first year. Subsequently, membership fees are at S$49.90 per year.

Finding opportunities in key risks to global stock markets
Global stock markets might be on the edge of a cliff. Here are 20 key risks that could trigger a sharp drop in share prices worldwide, which will also create opportunities:

Italian banks will fail. They hold about one-third of the eurozone’s bad loans of some one trillion euros (S$1.5 trillion). Five years ago, about 10 per cent of borrowers in Italy were in trouble. Now this proportion exceeds 18 per cent.  Of course, the government and the European Central Bank will try to control and save the situation. But even the approval of a 20 billion Euro fund to rescue Banca Monte dei Paschi di Siena SpA and other troubled lenders would not help much. We thus might witness Italy’s biggest nationalisation since the 1930s if the government takes Monte dei Paschi into public ownership. About 360 billion euros of bad loans might easily turn into much a greater number if things start to go wrong.

Global Economy & Global Real Estate

US labour crunch on the rise amid economic growth: Fed

Japan manufacturers’ confidence at highest since 2007: survey

Johor developers ‘should drop inflated prices to clear glut’

WTC exec moves to NY transport agency

Nightmare for Florida’s coastal homeowners

Greenwich Homes Get Cheaper and Finally Start Selling Again

Nobu Ignores Toronto Housing Bubble Drama With New Condo Project

Paris Home Price Surge Means Less Value for Brexit Bankers

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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