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 September 2016

Top Story

Few expect September US rate hike, but market risks are rising
Financial markets are expecting only a 20 per cent chance of a rate hike to the 0.5-0.75 per cent target range at the conclusion of Wednesday night’s US Federal Reserve meeting.  Most houses expect a December hike and analysts are highlighting rising market risks. These include a Fed signal of a December rate hike and non Fed-related risks such as the election of unpredictable businessman Donald Trump as US president in November.  Societe Generale’s global head of economics Michala Marcussen said on Sunday that she expects the Fed to lower its long-run interest rate target from 3 per cent to 2.75 per cent.

Singapore Economy

Singapore August CPI seen falling year-on-year, but at milder pace
Singapore’s consumer price index (CPI) is expected to have declined for a 22nd straight month in August from a year earlier, though the rate of decline is likely to moderate from recent months, a Reuters poll showed.  The median forecast from a Reuters survey of 12 economists was for the all-items CPI to have fallen 0.4 per cent in August from a year ago, after declining 0.7 per cent in July.  That would be the smallest year-on-year drop in CPI since July 2015, when CPI also fell by 0.4 per cent.  Downward pressure on prices is expected to have moderated in August, with economists citing factors such as recent rises in the prices of car permits.

Fitch affirms Singapore at AAA with stable outlook
Credit rating agency Fitch Ratings affirmed Singapore at AAA with a stable outlook, citing factors such as strong governance indicators.  It said in a statement yesterday that this reflects Singapore’s high per capita income levels, strong governance indicators, and exceptionally strong external balance sheet and robust fiscal framework.  These are balanced against its “high degree of vulnerability to shocks, because of the economy’s significant trade dependence and a financial sector that is highly integrated with the rest of the world”.

Bond losses show vulnerability of Singapore’s not-really-rich
When Ms Elaine Tham signed an “accredited investor” form with her bank in Singapore two years ago, she took a fateful step toward losing all the money she had set aside for her children’s education.  Based on her financial profile and investment priorities — her need for S$150,000 to pay university fees — a local branch of HSBC Holdings had initially categorised her as a “medium risk” investor. But because the value of her property and car entitled her to “accredited” status, a category reserved for wealthy investors, Ms Tham says she was persuaded to take a riskier path. She agreed to invest S$250,000 in the bonds of a small Singapore energy-services company, Swiber Holdings, which said in August that it won’t be able to repay its bondholders.

Online grocer RedMart ‘seeking buyer’
RedMart, the Singapore online grocer backed by billionaire Facebook co-founder Eduardo Saverin, is seeking a buyer as competition intensifies in the nation, said people with knowledge of the matter yesterday.  RedMart is working with an investment bank on options including a possible sale of the grocer, which delivers products ranging from fresh fruit to frozen dumplings, according to the people.  The company has reached out to potential buyers including supermarket chain NTUC FairPrice to gauge their interest, the people said, asking not to be identified as the talks are private.

Singapore Real Estate

Qingjian tops list of fastest growing firms
Qingjian International (South Pacific) Group Development Co has been named the fastest-growing company in Singapore this year, given its whopping compounded annual growth rate of 642 per cent between 2012 and 2015.  Its pole position in the latest Fastest Growing 50 (FG50) Awards ranking reflects how much the corporate sector has changed over the past decade, said DP Information Group, which compiled the list.  Ten years ago, the bulk of the FG50 companies came from just two industries – wholesale trade and manufacturing, it said in a statement yesterday.

GCB in Lady Hill Road sold at S$24m or S$1,423 psf
The Good Class Bungalow (GCB) market continues to buzz with activity. The latest transactions include an old freehold house along Lady Hill Road in a prime GCB location which changed hands for S$24 million. The price works out to S$1,423 psf based on the land area of 16,863 sq ft.  This seems a relatively low psf price for a prime GCB location but that may have to do with the property’s age – it is said to be about 20 years old and the fact that the plot slides downwards towards the rear.

Sim Lim Square’s road to recovery
Fancy new shops like a boutique camera shop and a hip “audio cafe” are trying to give Sim Lim Square a new lease of life, even as the electronics mall tries to shed its image of being a hothouse of errant retailers with unsavoury sales tactics.  While the tenant mix and general look of the mall have not changed, a few retailers are trying to modernise the 36-year-old mall in order to keep it relevant in the current retail market. Leading the charge are the newly revamped photography shop Song Brothers and self-styled “audio cafe” Zeppelin & Co, both of which opened this year.

Not just a start-up space: Foreign firms embrace co-working in Singapore
Content delivery network and Web security firm Cloudflare was on the lookout for a new office in Singapore earlier this year and even though there were cheaper office spaces available in the rental market, it decided to move into JustCo – a co-working space located in the Central Business District (CBD) along Robinson Road.  “It was just much easier without having to deal with getting furniture and outfitting the office,” general manager of Cloudflare’s Asia operations, Grace Lin, told Channel NewsAsia. “The time spent on doing all that will also mean that I’m not expanding the company, or meeting potential partners and clients.”

Companies’ Brief

HPL appoints IHG to manage upcoming 83-room Maldives resort
Singapore-based Hotel Properties Limited (HPL) has inked a management agreement with InterContinental Hotels Group (IHG) to manage an 83-room resort that will be open in Maldives in three to five years’ time.  This will be the third resort that IHG will be managing for HPL. It will mark the first time that IHG will bring its global luxury brand, InterContinental Hotels & Resorts, to the Maldives, said Jan Smits, IHG’s chief executive for Asia, Middle East and Africa (AMEA).

Lippo Malls trust selling perps with 7% coupon
Lippo Malls Indonesia Retail Trust (LMIR) is selling perpetual bonds offering a tantalising 7 per cent coupon amid a tough environment for high yield debt.  “It looks like the highest (coupon) so far this year,” said a banker.  The expected issue size is between S$100 million and S$150 million, according to a term sheet seen by The Business Times on Tuesday.  LMIR is offering Singapore dollar (SGD) perpetuals NC5. An updated term sheet said the final guidance price for the perps is 7 per cent. NC5 means the issuer will not call or redeem the perps before year five or September 2021.

GSH Corp debuts luxe condominium in KL
SGX-listed GSH Corporation Limited, a regional property developer, announced on Tuesday that its wholly owned subsidiary, City View Ventures Sdn Bhd, launched Eaton Residences, a 632-unit luxury condominium in the heart of Kuala Lumpur’s city centre.  Some 200 units have been released for the first phase of its launch, and as of Sept 20, 2016, about 150 units have been booked through VIP previews and private viewing.  The property is strategically located along Embassy Row, minutes away from the shopping belt of Bukit Bintang in Kuala Lumpur’s triple-A precinct, and is within walking distance of the Twin Towers MRT station.

Global Economy & Global Real Estate

Housing starts, building permits fall in August

US housing starts take a breather; single-family permits rise

Markets brace for 3 key risks

China’s failing property curbs risk bubble that may hurt economy

China should apply more differentiated property policy as prices surge: Xinhua

Billionaire Wang Faces Hurdles in Moving Wanda Listing to China

Chinese couples in divorce rush to evade home buyer rules

Sterling steady as Fed, BOJ take focus off Brexit briefly

Global investors continue to buy emerging market bonds despite sell-off

Luxury London home values to fall most since 2008 on Brexit

Property valuers drop Brexit clauses from most contracts as markets steady

Airbnb lures France travellers while hotels lose on terror fears

Commercial land prices in Japan’s 3 major areas rise at fastest since 2008

Additional Articles of Interest – Local & Overseas Real Estate

Opportunities of luxury retail in a digital world
The land of designer bags and fancy jewellery in brick-and-mortar stores is being upended by China’s slowdown, fickle millennials, and online shopping.  But Srinivas Reddy Professor or Marketing at Singapore Management University (SMU), believes there are opportunities yet.

The Business Times | Wednesday, September 21, 2016

URA to include sales of delicensed projects in private-home price index from 3Q2016
(The Edge Property, Dated 10 June 2016)

URA will include sale transactions of delicensed residential projects in its computation of the quarterly private-home price index from 3Q2016.

Local & Overseas Real Estate – Full Article

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