The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 19th, 20th, 21st and 22nd April 2019

Singapore Real Estate

Reits have cushion against tenants in trouble: DBS
Issues with tenants are “unavoidable” but are unlikely to concern real estate investment trusts (Reits) as most of them are diversified and have measures in place, said DBS Group amid news of some Reits being briefly impacted after CWT’s parent defaulted on a loan agreement.  “It’s unavoidable, things happen to tenants,” said DBS head of capital markets Eng-Kwok Seat Moey on Thursday, when asked how corporate tenants in trouble could drag down Reits in Singapore’s office and logistics space.

Spaces for a mobile workforce
More than two-thirds of global employees now work remotely every week, and over 50 per cent do so for at least half of the week, according to a comprehensive international study by International Workplace Group (IWG), a global operator of leading workspace providers.  The study, a poll on flexible working attitudes – surveyed over 18,000 professionals from a range of different industries across 96 countries.


Singapore Economy

Singapore will manage economic cycles: Heng
The Singapore economy will go through cycles and the government is prepared for that, Finance Minister Heng Swee Keat told Singapore media in San Francisco on the sidelines of a tech forum on the last day of his 11-day trip to the US.  “If there is a need for us to use counter cyclical monetary and fiscal policy to manage that, we will,” he said on Saturday in response to a question on whether there was concern over signs of a slowdown in the economy.

Heng to Singapore firms: Be innovative, tech-savvy but leave no one behind
Singapore companies must take innovation and technology seriously, be able to change quickly – and yet not leave workers behind, Finance Minister Heng Swee Keat told an audience at a conference in San Francisco.  Speaking at the two-day Bridge Forum CEO Summit, he said he was impressed by the innovative, entrepreneurial mindset of Silicon Valley-based businesses after having sat through presentations at the event.


Companies’ Brief

CapitaLand’s first closing of discretionary property equity fund raises US$391.3m
CapitaLand has raised US$391.3 million for its first discretionary real estate equity fund. Investors include institutional investors such as pension funds, insurance companies and financial institutions from Asia and Europe, the real estate group said.  It is the fund’s first closing; fundraising commenced nine months before, in July 2018.

CCT says negative rent reversion may hit growth
CapitaLand Commercial Trust (CCT) on Thursday posted a 3.8 per cent increase in distribution per unit (DPU) to 2.2 Singapore cents for its first quarter ended March 31, 2019, up from 2.12 cents paid out a year ago.  This came on the back of a 8 per cent rise in distributable income to S$82.7 million, mainly due to better performance of the trust’s portfolio as well as its distribution of tax-exempt income of S$3.4 million, which it didn’t have a year ago.

Keppel Corp posts lower net profit of S$202.9 million
Keppel Corporation is targeting a mid-to long-term return on equity (ROE) of 15 per cent, even as it reported a 40 per cent drop in first quarter net profit to S$202.9 million.  The fall was mainly due to smaller gains from en bloc residential sales by its property arm, the conglomerate said.

Surbana Jurong to draft plan for Mexico’s inter-oceanic corridor
Urban and infrastructure consultancy Surbana Jurong will develop a strategic plan for Mexico’s inter-oceanic corridor and a masterplan for two economic development areas there.  The project was awarded by Mexico’s state governments of Veracruz and Oaxaca.  This marks a “significant milestone” for Surbana Jurong as it continues to expand its presence in the North American market, the company said in a statement yesterday.

Fresh prospects in Australian student housing for Wee Hur
“A crisis is also an opportunity.” So goes the Chinese proverb that local property group Wee Hur Holdings took to heart when a dip in the market here threatened its business in 2014.  Rather than digging its heels in amid the downturn, the mainboard-listed group chose to look overseas and has since found a new growth avenue in the purpose-built student accommodation (PBSA) market in Australia.

Sabana Reit posts lower Q1 DPU
Sabana Shari’ah Compliant Industrial Reit’s (Sabana Reit) distribution per unit (DPU) for the first quarter eased to 0.75 Singapore cents per unit, down nearly 15 per cent from 0.88 cents a year ago on the back of lower revenue and net property income (NPI).  Gross revenue fell 11.8 per cent year-on-year to S$18.52 million, partly due to the divestment of its Tai Seng drive property in Q1 2019 as well as lower contribution from properties at 151 Lorong Chuan, 8 Commonwealth Lane and 34 Penjuru Lane.

Croesus Retail Trust unit sells stake in Japan mall for 20.8b yen
Croesus Retail Trust’s trustee-manager said on Monday that Mangosteen TMK, in which the trust indirectly holds 49 per cent of the preferred shares and 27.27 per cent of specific shares, has sold its entire interest in a Japanese shopping mall – Croesus Shinsaibashi – for 20.8 billion yen (S$251.9 million).  The sale price was arrived at on a willing-buyer and willing-seller basis, taking into account the valuation of the property, trustee-manager Croesus Retail Asset Management said.

Metro JV acquires Grade-A Tampines office building
Metro Holdings unit Metrobilt Construction has entered a 50:50 joint venture to acquire 7 and 9 Tampines Grande, a premium Grade-A office property, the group said on Thursday night. While the purchase price was not disclosed, sources put the figure to be S$395 million. Metro’s 50 per cent capital commitment for the investment is about S$45.6 million.  Metro said the investment is in the ordinary course of its property investment and development business.

Tiong Seng unit bags S$190m contract
Mainboard-listed Tiong Seng Holdings’ wholly-owned subsidiary has been awarded a contract worth about S$190 million, the construction firm announced on Thursday after market close.  TiongSeng Contractors (Private) Limited was awarded the contract by Areca Investment for a proposed residential development in Outram comprising 774 units with four levels of basement carparks, swimming pool and communal facilities.

Nanshan-backed W Capital has more than 10 IPO pipeline deals
Having built up the investment banking business in Tata Capital Markets and AMFraser Securities from scratch in his 16 years in investment banking, Wayne Lee decided last year to venture out with his own investment banking outfit.  The company, W Capital Markets, was one of three that received the issue manager and Catalist sponsor accreditation from the Singapore Exchange (SGX) earlier this week…


Views, Reviews, Forum & Others

Growing signs of correction or pause in uptrend of Reits sector
Over the last five months, the FTSE ST Real Estate Investment Trust Index (FSTAS8670), an index for the Singapore Reits sector, soared over 14 per cent, significantly outperforming the Straits Times Index.  The rally, fuelled by the current dovish interest rate environment, has led the index back to all-time highs since its peak back in early 2018. However, due to recent developments, there are growing signs of a possible correction or pause in the uptrend. This gives investors reason to approach the sector from more of a perspective of safety.

Smart designs in Punggol Northshore Residences
While on the train ride home, imagine talking to the air-conditioning unit in the living room to get it running so the flat will be cool by the time you get home.  Then, a swipe of the finger and the coffee machine is heating up the devil’s brew. Far fetched?  The first smart-enabled public housing estate will be ready to be occupied next year.

Singapore hotels don’t kid around when it comes to family vacations
When it comes to family vacations, the kids are often the boss – and Singapore hotels are pulling out all the stops to woo them, realising that kids could well be the make or break factor for many potential guests.  Vincent Ong, the vice-president of marketing of Club Med’s East and South Asia and Pacific, said: “Children do actually hold a very influential role in driving their families’…

Win, lose or draw: Analysing the extension of the two casinos’ duopoly
Analysts and commentators have roundly concluded – after the Singapore Government’s announcement on April 3 – that the joke is squarely on the two integrated resorts (IRs).  Several analysts, including Morgan Stanley’s, quickly declared the Government as the big winner; and JP Morgan decried the “unnecessary large investments” in the decision to extend the duopoly concession to 2030 in return for an additional investment of $9 billion by the two operators.

What Jurong Lake District needs is sci-fi theme park
What Jurong Lake District needs is a science-fiction theme park, not Singapore’s version of Tokyo’s Odaiba mixed development area, as the two precincts are like chalk and cheese in many ways (New large-scale tourism development to be built in Jurong Lake District, April 16).  Instead, our equivalent of Odaiba is the Greater Southern Waterfront precinct at Tanjong Pagar, including Sentosa.

Develop Jurong Lake District into wellness precinct
I suggest the authorities study the feasibility of implementing a concept of wellness at the Jurong Lake District as a unique offering to locals and tourists (Jurong Lake District to host new tourism hub from 2026, April 17).  According to the Global Wellness Institute, the global wellness economy in 2017 was worth US$4.2 trillion (S$5.7 trillion) and is expected to grow at an average of 5 per cent over the next 10 years.

Will Jewel be Changi’s game-changer?
Last week, Changi Airport’s shiny new Jewel offered a sneak peek to excited visitors who came in floods to shop, eat and see the sights under the distinctive dome. While the S$1.7 billion project started out in 2013 as a means of capacity expansion, airport operator Changi Airport Group took it further, planning and developing a huge retail and tourist destination with attractions under the same roof.

Strengthen Singapore as a tourist destination
Globally and at home, the economy is off to a sluggish start this year.  Earlier this month, the International Monetary Fund cut its global outlook, its third downgrade since last October. It forecasts the global economy will grow 3.3 per cent this year, the slowest since the financial crisis of 2008-2009.

Clouds gathering on economic horizon
The Singapore economy has started 2019 on a sluggish note and the signs are that the weakness may persist through mid-year. But there could be a turnaround during the second half of 2019. After expanding by an above-potential 3.2 per cent last year, flash estimates based on January and February data, released last week by the Ministry of Trade and Industry, revealed that the Singapore economy grew at only 1.3 per cent year on year during the first quarter of 2019, the slowest pace since the global financial crisis of 2008.

Keeping the attraction alive
Chia Ngiang Hong, President, Real Estate Developers’ Association of Singapore (REDAS)
To keep pulling in repeat visitors and new ones, Singapore must continually invest and reinvent by bringing in a diversity of new attractions, break new grounds and upgrade the service quality of our workers. As a small island, our “hardwares” could be constrained; hence we should focus on the “software” aspects.

Why Kingsford, the developer that bought Normanton Park en bloc, is blocked from selling units
Singapore — Within Singapore’s exclusive Sentosa Cove enclave is a two-storey house shaped like a grand piano, with a swimming pool on its roof, a living area that opens out to the waterfront, a black Rolls-Royce in the porch and a blue Bentley parked nearby.  The property, on an 18,794 square-foot plot, put owner Cui Zhengfeng in the news in 2014, when he paid S$33 million for it. The board chairman of the Hong Kong-linked Kingsford Development Pte Ltd is a Chinese national turned Singapore citizen.

Commentary: Ride-sharing should reduce congestion, not increase it
Singapore: Singapore has one of the most respected transport systems in the world. Inexpensive and high-quality train and bus services, minimal road congestion, and widely available taxi and ride-sharing services make it one of the easiest cities to move around in the world.  Effective investments, electronic road pricing, and the certificate of entitlement (COE) are major reasons for Singapore’s transport success.

Entrepreneurs, can you help make the Sentosa experience seamless for visitors?
Singapore — Improving Sentosa’s transport infrastructure, having an integrated mobile application for all its attractions, and finding more ways to cater to visitors seeking nature and nostalgia.  These are some opportunities that entrepreneurs can exploit under a new scheme launched by the Sentosa Development Corporation (SDC) this week, suggested business owners and analysts approached by TODAY.


Global Economy & Global Real Estate

US March retail sales hit 18-month high

Labour shortages, trade uncertainty weighing on US economy: Fed report

New York to get tough on buildings that bust greenhouse gas limits

World’s tallest modular hotel set to rise in Manhattan

Qatar fund buys chunk of US$5.6b Manhattan portfolio

Mansions Are Piling Up in Greenwich

Blackstone seeks buyer for resort

Property agents hope Brexit extension will dispel housing market gloom

Japan inflation edges higher but BOJ still in a bind

Japanese April factory sentiment slumps to 30-mth low

Thai growth on track if next govt formed by June: Central bank

Abu Dhabi opens up freehold land and property to foreign buyers

Accor’s Q1 RevPAR held back by weakness in Asia, N America

Milan’s Elite Soon to Have Clubhouses All Their Own

Turf houses are Iceland’s architectural jewels


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