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, 22nd & 23rd May 2016

Top Stories

1996: Curbs take property market by surprise
A runaway property market led the Singapore government to fire off a surprise barrage of measures in 1996 aimed at curbing speculation.  The array of measures followed multiple angles of attack. Some of those measures included capping housing at 80 per cent of a property’s value, banning foreigners from taking Singdollar home loans, imposing taxes on gains from sales within three years of the initial purchase, and additional stamp duties. The government also lifted the supply floodgates, increasing the pace at which land for private housing was released, from 6,000 units in 1996 to between 7,000 and 8,000 in 1997.

Warehouses may hit crisis-level vacancy in coming quarters
The vacancy rate of warehouses in Singapore could hit close to 12 per cent in the coming quarters – around global financial crisis levels and up from the current 9.6 per cent in Q1 2016.  It is no secret that the industrial property market is now soft, but global property investment management firm TH Real Estate believes that a severe supply overhang will cause the vacancy rates to spike.  That said, this will be “very short-term” and is no cause for alarm.

New panel set up to boost productivity drive
The government has set up a new Council for Skills, Innovation and Productivity (CSIP), and appointed Deputy Prime Minister Tharman Shanmugaratnam as the chair of this tripartite body.  The council, set up on Friday, will advance the efforts by the SkillsFuture Council and the National Productivity Council.  Mr Tharman, who is also the coordinating minister for economic and social policies, is also the chairman of these two councils.

Rising interest rates worrying for Singapore economy: economists
The expected rise in interest rates will further weaken Singapore’s already slowing economy, said economists at a high level discussion last week.  But manoeuvring space for further monetary policy response in order to stoke inflation and growth remains tight, as Singapore remains highly indebted, they added.  Over a three hour session on Wednesday, attendees of the 25th Singapore Economic Roundtable talked of a Singapore economy that faces stresses on multiple levels.

Exits from SGX will continue, but who’s next?
Battered by a regional economic downturn and dismal trading volumes, Singapore’s stock market is seeing a raft of well-known names leave.  And going by the criteria of low public ownership ratios and depressed valuations, numerous companies are ripe for a takeover.  Larger Singapore Exchange (SGX) firms that fit the profile of companies potentially going private include Fraser and Neave (F&N), Keppel T&T, Genting Hong Kong, Guocoland, NSL, Chip Eng Seng and Boustead Singapore. Smaller firms include Challenger Technologies, Soo Kee Group, Design Studio Group, and Cheung Woh Technologies.


Singapore Real Estate

Shunfu Ville sale may be one-off
News of the $638 million collective sale of Shunfu Ville last Friday must have been heartening for many owners of flats in ageing condos but the champagne should be kept on ice for a while longer.  Only one collective sale took place last year – mixed-use Thong Sia Building in Orchard – and none was completed in 2014.  This has not been for want of trying. Owners at Normanton Park and Amber Park are among those who have tried their luck in recent years and come up short. So while news of a collective sale could rekindle some excitement in the market, Shunfu Ville is likely to be the exception for some time.  Pricing has been the main stumbling block in most cases.

UOL buys second London property, for £99m
Continuing to diversify its recurring income streams, property developer UOL Group has inked a deal to buy 110 High Holborn in London for £98.75 million (S$199 million) from UBS Central London Office Value Added Fund.  The mixed-use property is located in the heart of London’s Midtown, between West End and City of London, near the Holborn underground station. It consists of offices and retail space arranged over basement, ground floor and eight upper floors, UOL said on Friday.

Stars of Kovan units fetch even less than expected
Cheung Kong Property Holdings has sold around 60 units of its private condominium project Stars of Kovan at an average price of S$1,408 per square foot – lower than the average pricing that it had indicated ahead of the VIP pre-sale over the weekend.  The one-bedroom to three-bedroom units ranged between S$1,227 and S$1,554 psf, the firm told The Business Times. The Stars of Kovan units were priced from S$666,400 to S$1,412,600.

Park Hotel Group signs deal to manage first Malaysian hotel
Park Hotel Melaka has signed a management agreement with a subsidiary of Jaya Mapan Sdn Bhd.  The group will manage Park Hotel Melaka, which is scheduled to open in the first quarter of 2019. The signing ceremony on Friday marked the debut of Park Hotel Group in Malaysia.  The hotel, to be located five minutes away from the commercial area in Melaka Raya, is expected to have 245 rooms.

Parkway Parade reopens but work remains
Parkway Parade opened its doors to shoppers yesterday morning for the first time since a fire on Sunday night, but there were signs that not everything was back to normal.  A burning smell lingered on level two outside clothing store Fox Kids and Baby, where the blaze was believed to have broken out.  No fewer than 10 stores remained closed, while at least two lifts and two escalators that were affected remained shut for maintenance.

Other privatised HUDC estates that also went en bloc
Just five privatised Housing and Urban Development Company (HUDC) estates have been successfully sold en bloc so far. These are:
1) Farrer Court – The 618-unit development remains the priciest en bloc deal by quantum to date. It went for about $1.34 billion in June 2007. The D’Leedon by CapitaLand current sits on the plot of land.
2) Gillman Heights – Now The Interlace by CapitaLand, the 607-unit development went for $548 million in February 2007.
3) Waterfront View – The 583-unit development was sold for $385 million in May 2006. Currently four condos stand in its place: Waterfront Waves, Waterfront Key, Waterfront Gold and Waterfront Isle.

Almost 88,000 households applied for elderly-friendly home improvement scheme
Nearly 88,000 households have applied for a Housing and Development Board (HDB) programme to enhance home safety for the elderly since it was introduced in July 2012.  Out of this number, about 52,500 households have opted for the programme called Enhancement for Active Seniors (Ease), together with the Home Improvement Programme (HIP), the HDB said on Sunday (May 22).

Co-working spaces help to keep costs down
Instead of typical offices, some foreign companies have been renting shared working spaces here to expand into Singapore and the region quickly, while keeping costs down.  Hong Kong-based Giles Publications, which provides copywriting, translation and design services, is one of them.  Last November, it moved to JustCo, the largest so-called co-working space in the central business district (CBD) spanning five floors at 120 Robinson Road.  “We have just two employees here – myself and a copywriter. When you’re still growing and not sure how big you’re going to be, co-working offers you flexibility to expand,” said managing editor Beatrice Seilern.

Can Singapore make room and rules for Airbnb and other home-sharing offerings?
From stylish apartments to cheerful single rooms, tourists in search of alternative lodgings in Singapore are spoilt for choice.  The website of Airbnb, a leading player in the home-sharing market here, has options such as a Kallang shophouse for $249 a night, a Tiong Bahru flat for $114 or a room in East Coast with queen-sized bed and balcony for a mere $48.  According to Airbnb, there are about 6,000 properties listed on its website here.

Asia a fast-growing region for home-sharing firm Airbnb
Airbnb is perhaps the name most synonymous with home rental websites.  With about two million listings across more than 190 countries, the San Francisco-based firm is arguably the largest of its kind.  In 2012, Airbnb opened its Singapore office, which also serves as its Asia-Pacific headquarters.  It recently moved into a three-storey office in Cecil Street.  There are about 6,000 properties in Singapore listed on the website, an Airbnb spokesman said, adding that Asia is one of its “fastest-growing regions”.

Extra cash spurs some to open homes to strangers
The chance to make new friends, a passive income and a weak rental market are among the reasons why people here offer their homes and rooms for short-term rentals even though the practice is illegal.  One such host on home-sharing website Airbnb told The Sunday Times that he started letting out his condominium unit at the end of last year as he found it increasingly difficult to find a long-term tenant.  The 56-year-old businessman, who asked to remain anonymous, said: “The rental market now is horrible. I started doing this to defray my mortgage and maintenance costs on the apartment.”

Direct Home founder unfazed by haters
When former property agent Kiegan Chia started his own business in February, he quickly learnt that his ex-colleagues were unhappy about his emergence as a competitor.  Negative Facebook comments soon started coming in from old workmates but Mr Chia, who spent five years as an agent, has no regrets.  He realised being a property agent was a “dying trade” when National Development Ministry statistics showed that almost a quarter of HDB transactions in the resale flat market were handled by the buyers and sellers themselves.  “The property market has always been very opaque,” he says.  “Agents like to project the image that properties are very hard to sell and the transaction paperwork is very complicated.

Contractors call for review of approach to workplace safety
Contractors have raised concerns that stiffer safety measures implemented a week ago by the Ministry of Manpower (MOM) could send firms that are already strapped into deeper crisis.  In a statement yesterday, the Singapore Contractors Association (Scal) said the more stringent measures would worsen the “dire situation for meeting deadlines and financial penalties” for errant firms.  “It will have serious consequences on the viability of the construction firm,” said a spokesman.  MOM’s new measures require companies found to have poor workplace safety and health standards to stop work for at least three weeks, a week longer than before.

The Big Read: After decades at the top, Orchard Road faces a time of reckoning
Once a famed shopping haven for Singaporeans and tourists alike, Orchard Road is at risk of going out of fashion, never mind the opulence and grandeur of new and refurbished malls lining the 2.2km boulevard.  Even on weekends, the crowds have visibly thinned and vacancy rates have risen — at some of the older malls, more than half the shops on entire floors are empty.  Faced with the combined onslaught of online shopping and the mushrooming of suburban malls in housing estates, it is little wonder that Orchard Road is feeling the heat. But crucially, say shoppers, retailers and experts, it has failed to adapt to changing consumer trends and respond to competition.

The need to get retail bond offerings rated
In the aftermath of the 2008 global financial crisis, one key question raised in the United States was the role credit ratings agencies might have played unwittingly in fomenting the worst banking calamity to hit the world in decades.  Critics of credit ratings agencies there have noted that over the years, the verdict given by these bodies in assessing the quality of a bond would usually mark the last word on the subject. Quite simply, these agencies had earned enormous trust from investors – at least until the calamitous events of 2008.

New rules mean bigger buffet of retail bonds for investors
The retail bond space has just become exciting with the launch of two new frameworks last Thursday. Small investors can look forward to a wider range of retail bonds over time, up from the current 11.  Under the new rules, firms that issue bonds can do away with the need to issue a prospectus – which requires time and effort to prepare – to offer bonds to retail investors.

Challenger beefs up its online retail presence
The impending closure of Singapore’s Funan DigitaLife Mall next month coincides with the opening of a new chapter for its anchor tenant, Challenger Technologies – it will move online in a big way.  The homegrown mega supermarket known for all things tech since 1982 is aiming to earn as much as half its revenue from its revamped e-commerce portal,, in five years, up from a very small percentage now.


Companies’ Brief

Osim moves on to buy back rest of its shares
Massage chair firm Osim International has moved ahead with its plan to delist the company from Singapore Exchange (SGX) after the close last Friday of its offer to buy all remaining shares.  In an announcement to SGX yesterday, Osim said that Vision Three, the vehicle set up by founder Ron Sim for the offer, had acquired just over 96 per cent of the issued shares in Osim.  Having crossed the requisite 90 per cent threshold, Vision Three would now move ahead to compulsorily acquire the remaining shares held by shareholders who did not accept the offer.

OKH Global
Property developer OKH Global Ltd said that it has entered into a loan agreement on Friday with Haiyi Holdings Pte Ltd, the controlling shareholder of real estate company SingHaiyi Group Ltd, for a S$10 million loan.

Soilbuild Reit
Soilbuild Business Space Reit (SBREIT) reported that it has issued a writ of summons against Technics Offshore Engineering Pte Ltd (Technics), which is a tenant. SBREIT is claiming (i) a sum totalling S$2.2 million for the tenant’s default in payment and other outstanding sums, continuing arrears in rental until judgement, (ii) S$11.8 million security deposit, equivalent to 18 months’ rent, (iii) interest at the rate of 8 per cent per annum until the date of full payment, and (iv) other legal costs on an indemnity basis as a result of default by the tenant.

Yoma Strategic Holdings
Management indicated that the strong growth in the group’s non-real estate segments has added recurring income streams complementing its core real estate business, and also proposed a final cash dividend of 0.25 Singapore cents. We understand that there was a gradual improvement in Yoma’s real estate business after the smooth transition to Myanmar’s new government after the Nov 15 elections.

Lacklustre debut by Manulife US Reit
Manulife US Real Estate Investment Trust (Reit) has put up a lacklustre performance on its debut on the Singapore Exchange’s mainboard.  The Reit opened lower at 2pm on Friday at 82 US cents apiece, 1.2 per cent below the offering price of 83 US cents.  At about 4pm, the counter was trading at around 77.5 US cents, with 37 million units having changed hands.


Views, Reviews & Forum

Retail industry must face the music on rising costs
I read about the diminishing number of shops selling CDs and DVDs in Singapore with great concern (“Music sales up on popularity of streaming services”; Monday).  At first glance, some may simply attribute this to the rise of digital downloads.  But there is more to it than this, and it would serve the entire retail industry well to take heed.  With cheaper discs available direct to our doorstep from places such as Amazon, and with iTunes and other online sources easily accessible, the modern consumer is spoilt for choice.

Global Economy & Global Real Estate

Foreigners buying homes in Aussie state face tax hike

C$ weakens to a six-week low as retail sales, oil fall

Interest in British property ‘will rise whatever the result’

Berlin cracks down on home-sharing

China’s Sunac says land purchases from other developers to continue

Smaller expat packages hit HK luxury home rentals

Genting Singapore still a cash cow, says chairman Lim Kok Thay

Sydney housing market stalls as election jitters sideline sellers

Condos at NYC’s ‘Ground Zero Mosque’ site get global financing

Silicon Valley mansions linger on market in real estate slowdown

Buy a Massive, Newly Renovated French Château for $11.4 Million

US property market ‘looking good’

One month away, Brexit prospects recede amid global warnings

Gap to close 75 overseas Old Navy, Banana Republic shops


Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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