The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 24th January 2017

Top Story

Town councils ‘must plan finances for HDB infrastructure upgrading’
The Ministry of National Development (MND) has called on town councils to plan ahead to ensure that their long-term finances are sustainable, and to build up their sinking funds as HDB estate infrastructure gets older.  The ministry said in a statement on Monday that this prudence will ensure that the town councils are able to pay for major expenses, which include repainting of the public housing blocks, maintenance of building facades and the replacement of lifts and water pumps

Singapore Economy

Inflation turns positive after two years of negative readings
Inflation turned positive last month for the first time in more than two years – a potent sign that prices are on track to climb at a faster pace this year, on the back of gradually recovering oil prices.  The consumer price index – the main measure of inflation – inched up 0.2 per cent last month compared with the same month a year ago.  Though a tiny increase, this followed 24 straight months of sliding readings from November 2014 to October last year, and a reading of zero per cent in November.

Singapore Real Estate

Anti-speculation property measures have their side effects
Qualifying certificate (QC) rules have generally been effective in curtailing property speculation, but pressured developers, using innovative ways to escape the harsh penalties, raise the question of whether the policy’s efficacy outweighs some of its unintended consequences.  QC rules were enacted to prevent foreign developers from hoarding or speculating on residential land in Singapore. After the global financial crisis, developers tended to delay their project launches and hold out for a good launch window.

New HDB rental rules for work permit holders
Since Jan 1, non-Malaysian work permit holders from the manufacturing sector have no longer been eligible to rent a whole Housing Board flat, and can only rent rooms.  Those currently renting can stay on until their existing subletting approvals expire.  The rule change, reported by Chinese daily Lianhe Zaobao yesterday, affects about 3.5 per cent of HDB households that are subletting all or part of their flats.  It is unclear how many households this represents. As of Sept 30, there were 52,394 wholly sublet HDB flats. The HDB does not release figures on the number of flats that are partially sublet.

UOL plans to buy 69,858 sq ft site at 45 Amber Road for S$156m
UOL Group has clinched an option to purchase a freehold 69,858-square-foot site at 45 Amber Road for S$156 million.  The site, which currently holds a horticultural and gardening retail centre, has a plot ratio of 2.0 and is being sold by Sin Lian Huat Co.  The District 15 site is within walking distance of the upcoming Marine Parade and Tanjong Katong MRT stations, which are estimated to be completed in 2023.  UOL has two weeks to exercise the option, and 12 weeks after that to complete the deal.

Companies’ Brief

Banyan Tree to form JV with property developer China Vanke
Resort operator Banyan Tree Holdings is tying up with real estate developer China Vanke to form a joint venture, Banyan Tree China (BTC), which will develop and manage projects in hospitality, senior living and wellness.  Under the deal, the ownership of Banyan-Tree branded hotels and assets in China will also be consolidated in BTC. The initial paid-up capital of BTC is estimated at up to two billion yuan (S$414 million).  BTC will be initially controlled 50:50 by Banyan Tree and Vanke through the injection by Banyan Tree of all its China-owned assets into BTC at valuation, said Banyan Tree in a press release on Monday.

Frasers Commercial Trust Q1 DPU stable at 2.51 cents
Frasers Commercial Trust (FCOT) posted stable distribution per unit (DPU) of 2.51 cents for the fiscal first quarter ended Dec 31, 2016, and announced a S$45 million makeover for Alexandra Technopark that will commence in mid-2017.  Its fiscal Q1 DPU was unchanged from a year ago, even though no management fees were taken in units this time compared to some 23 per cent of the management fees in the year-ago period being taken in units.  Jack Lam, CEO of the Reit manager, noted that the stability and diversification of the portfolio has been bolstered by the acquisition of 357 Collins Street in August 2015, which is enjoying full occupancy in a strong Melbourne market and has no leases expiring until fiscal 2018.

Mapletree Logistics posts steady Q3 DPU, higher revenue
Mapletree Logistics Trust (MLT) on Monday reported a steady distribution per unit (DPU) of 1.87 Singapore cents for its third quarter, on the back of a 7.4 per cent increase in gross revenue to S$95.5 million.  The higher revenue for the three months ended Dec 31, 2016, was due to contributions from four acquisitions in Australia, Malaysia and Vietnam completed in FY17, as well as the completed redevelopment of Mapletree Logistics Hub at Toh Guan in Singapore and the extension building in Moriya Centre in Japan.  Higher revenue from existing properties in Hong Kong as well as higher translated revenue from the stronger Japanese yen also lent a boost.

Lower capital distribution, bigger unit base dent Cache Logistics Trust’s Q4 DPU
Singapore-listed real estate investment trust (Reit) Cache Logistics Trust’s fourth quarter distribution per unit (DPU) shrank 10.8 per cent year-on-year to 1.85 Singapore cents, due to a lower capital distribution and an enlarged unit base compared to the year-ago period.  In the same period in 2015, sales proceeds from the disposal of Kim Heng warehouse lifted capital distribution.  At the same time, out of the DPU of 2.074 cents in Q4 2015 was an advance distribution of 0.90 cent and based on nearly 785.6 million units. The number of units in Q4 2016 entitled to distribution is almost 900.5 million. Excluding the effect of capital distributions, the Q4 FY2016 DPU, to be paid on Feb 27, would have fallen by 3.9 per cent year on year.

Keppel Infrastructure Trust Q4 DPU unchanged despite drop in earnings
Keppel Infrastructure Trust, which runs Singapore’s sole producer and retailer of town gas and other utilities plants, posted a distribution per unit of 0.93 Singapore cent for the fourth quarter, unchanged from a year ago.  This was in spite of a 11.6 per cent fall in its net profit to S$7.7 million compared with the previous year, no thanks to a time lag in the adjustment of gas tariffs to reflect actual fuel cost, as well fair value losses from financial derivatives.  As a result, earnings per unit dipped to 0.2 Singapore cent from 0.22 Singapore cent in the previous year.

Keppel DC Q4 DPU lower on bigger unit base
Keppel DC Reit has achieved a distributable income of S$14.77 million for its fourth quarter ended Dec 31, 2016, up 2 per cent year-on-year.  Gross revenue for the three months climbed 8.4 per cent to S$26.84 million while net property income went up 14.2 to S$24.94 million. Property expenses dropped 35 per cent to S$1.9 million.  The quarter’s distribution per unit (DPU) fell 20.1 per cent to 1.31 Singapore cents from 1.64 cents. The three months saw an issue of 242 million new units under a pro-rata preferential offering. There was also a period of 1.5 months for which there was no income contributed by KDC SGP 3 as the acquisition was completed later than expected.

Revaluation losses pull Soilbuild Reit’s Q4 DPU down by 2.7%
Soilbuild Business Space Reit reported a 2.7 per cent drop in distribution per unit (DPU) to 1.570 Singapore cents for its fourth quarter ended Dec 31, 2016, down from 1.614 cents a year ago.  The drop was mainly due to revaluation losses amounting to S$50.9 million, even though the Reit reported stronger gross revenue and net property income for the fourth quarter.  In a Monday release after market close, its manager said that gross revenue rose 6.1 per cent in Q4 to S$21.7 million, while the full-year figure was S$81.1 million, some 2.3 per cent higher.

Ascott Reit’s Q4 DPU dips 7%
Ascott Residence Trust announced on Tuesday that its distribution per unit (DPU) for the fourth quarter ended Dec 31, 2016, was 1.93 Singapore cents, down 7 per cent from 2.7 cents a year ago, after adjustment for a one-off item.  If unadjusted, DPU for Q4 was 2.04 Singapore cents, still a one per cent decline year-on-year.  Unitholders’ distribution grew 6 per cent to S$33.9 million, up from S$32.06 million the year before.  This came on the back of a net realised exchange gain of S$2 million arising from the repayment of foreign currency bank loans with the divestment proceeds from Fortune Garden Apartments and the repayment of shareholders’ loan from the group’s subsidiaries.  Revenue went up 6 per cent to S$126.75 million, while gross profit went up 3 per cent to S$58.2 million.

IHC board removed after heated EGM
A heated boardroom battle at Catalist-listed healthcare group International Healthway Corp (IHC) came to a head on Monday afternoon as shareholders voted to remove the entire board at an extraordinary general meeting (EGM) that lasted over two hours.  The outcome put yet another feather in the cap for Oxley Holdings duo Ching Chiat Kwong and Eric Low, who are cementing their reputation as shareholder activists after being linked to the recent ousting of the chairman and co-founder of another Catalist company, video and artificial intelligence firm Artivision Technologies

Lendlease adopts WELL building certification at Paya Lebar Quarter
Paya Lebar Quarter by Lendlease, a S$3.2 billion mixed-use development, is the first in Singapore to register for the International WELL Building Institute’s (IWBI) WELL Core and Shell Certification for nearly one million square feet of Grade-A workspaces across its three office towers.  Administered by public benefit corporation IWBI, the WELL Building Standard (WELL) is the world’s first building standard focused exclusively on increasing the well-being and productivity of occupants.

Shui On Development to issue senior notes
Property developer Shui On Development has entered into a purchase agreement with Standard Chartered Bank and Deutsche Bank in connection with a senior notes issue of an aggregate principal amount of US$500 million due in 2021.  The offer price will be 99.384 per cent of the principal amount of the notes. The notes will bear interest at a rate of 5.7 per cent per annum, payable semi-annually in arrears on Feb 6 and Aug 6 of each year, commencing Aug 6, 2017.  At any time prior to the maturity date of the notes, Shui On Development may at its option redeem the notes, in whole or in part, at a redemption price equal to 100 per cent of the principal amount of the notes redeemed.

Acesian Star countersues Takenaka for S$22m over proposed Changi Airport T4 work
A subcontractor for work at Changi Airport’s Terminal 4 has counter-claimed against a contractor for damages worth at least S$22 million.  In a release to the Singapore Exchange on Monday night, the board of directors of Acesian Partners Limited said that its wholly-subsidiary, Acesian Star (S) Pte Ltd, has served a notice of arbitration on Takenaka Corporation last Friday in relation to subcontract work on the ACMV (air conditioning and mechanical ventilation) system (airside) at T4.

Nicholas Chua promoted at Ho Bee Land
Nicholas Chua Wee-Chern has been promoted to group director (business development) at Ho Bee Land. He was formerly associate director at the property group.  Mr Chua, 41, is the son of Ho Bee board chairman, group CEO and substantial shareholder Chua Thian Poh.  In a filing with Singapore Exchange on Monday, Ho Bee said: “The promotion was recommended by the executive directors and board chairman/group CEO in recognition of Mr Nicholas Chua’s contributions to the growth of the group’s business over the past few years.”

Global Economy & Global Real Estate

Retail malaise puts pressure on US chains to shutter more stores

NY office landlords competing for tenants

Starwood said to be selling London Tower project on Brexit

Good times seen coming to an end for China’s real estate bonds

Wanda’s driving too fast down boulevard of broken dreams

China orders more than 100 golf courses shut

China to strengthen market regulation by 2020

Blackstone to launch Asia real estate fund with target of at least US$5b: sources

Colombian builder, 27, hopes to build Trump hotel one day

Japan January flash manufacturing PMI shows fastest expansion in almost three years

Dubai Duty Free cuts prices as post-Brexit pound hits sales

Jump of 930% Baffles Danish Property Firm With Near-Zero Equity

These Luxury Home Mainstays May Be Gone in 20 Years

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Local & Overseas Real Estate – Full Article

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