Fixed-interest debt fortifies S-Reits against chill from rising rates
Rising interest rates are known to hurt Real Estate Investment Trusts – but in the latest round of hikes, Singapore-listed Reits (S-Reits) appear to have rate-proofed themselves well. Analysts tracking the sector point to several factors why they are in better shape to weather the interest rate headwind this time round – the chief reason being their hedging foresight in opting for fixed-rate financing.
Singapore core inflation dips to 1.8% in September
Singapore’s core inflation came in at 1.8 per cent last month, dipping slightly from August’s 1.9 per cent. Headline inflation remained unchanged from August, at 0.7 per cent, even though the market expected the year-on-year rise in consumer prices to quicken. Inflation came in below market expectations, with analysts predicting core inflation at 1.9 per cent and headline inflation at 0.8 per cent, according to a Bloomberg poll.
Interest rate trajectory: different endings
There is no doubt to pundits about the direction of interest rates, but each has a different view on where the trajectory would end. The US Federal Reserve raised interest rates by a quarter of a percentage point on Sept 26 to a range of 2 per cent to 2.25 per cent – its third time this year and the eighth since it started raising rates in 2015. It is forecast to raise rates again in December, followed by three more hikes in 2019.
New body will link players to work on projects
A new organisation launched yesterday will serve as a one-stop platform to bring together different players in the region’s fast-developing infrastructure sector. Besides helping different parties collaborate, Infrastructure Asia will have capacity-building workshops and training to find solutions to issues that can crop up during major projects. It will also provide advice to help improve the bankability of projects.
Singapore Real Estate
Building structure, lift ops not affected by paper in wall: HDB
Paper wrappers were found stuffed inside a wall at a Woodlands Housing Board block lift landing, raising concerns among some residents. A resident of Block 729 Woodlands Circle saw the wrappers exposed during renovation works and was worried about the block’s structural safety, Chinese-language newspaper Shin Min Daily News reported on Saturday.
Keppel-KBS US Reit launches rights issue to raise US$93.1m
The manager of Keppel-KBS US Reit on Monday night announced the launch of an underwritten, renounceable rights issue to raise gross proceeds of around US$93.1 million. Both Keppel Capital Investment Holdings and KBS SOR Properties will take up their full entitlement of the rights units, but the Reit manager will not be subscribing for its pro rata share of the rights units.
Mapletree Industrial Trust resumes distribution reinvestment
Mapletree Industrial Trust’s distribution reinvestment plan (DRP) will resume and apply to its distribution per unit (DPU) for its second quarter ended Sept 30. This means unitholders can choose to receive their distributions declared in the form of units or cash or a combination of both, so they can buy new units without incurring additional transaction related costs.
Solar panel maker in S$585m sale, leaseback deal
The Singapore unit of Norway-headquartered solar firm REC is understood to have entered into a proposed S$585 million sale-and-leaseback transaction on its Tuas South property. The deal with Australia-based Logos Property, is one of the biggest of its kind here, and involves only the real estate; the fully-integrated solar-panel manufacturing facility it houses will continue to operate as normal.
Global Economy & Global Real Estate
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