The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 25th January 2017

Top Story

S’pore turns to other regional trade deals as TPP crumbles
Singapore is switching gears to shore up its internationalisation efforts, and is urging other member states of a failed Pacific Rim trade pact to do the same.  But even as the city-state works to grow its external pie amid plans to restructure its economy, observers warned of risks down the road for Singapore’s growth and also its financial stability as the US retreats from world trade.  US President Donald Trump on Monday signed an executive order to withdraw the world’s largest economy from the 12-member Trans-Pacific Partnership (TPP).


Singapore Economy

Three-month swap offer rate continues to tumble
The three-month swap offer rate (SOR) has fallen to the lowest point this year, dragged down by the weakening US dollar, bringing some cheer to borrowers with loans pegged to it.  On Monday, the three-month SOR, which is used to price commercial loans fell to 0.737 per cent, down 0.072 points from Friday’s 0.809 per cent. The more volatile SOR, which is updated late at night, has now tumbled 30 points from the one-month high of 1.04 per cent reached on Dec 29.  The three-month Singapore interbank offered rate (Sibor), used to price home loans, was only slightly lower to 0.961 per cent on Tuesday, from Monday’s 0.962 per cent.

S’pore business confidence up slightly in Q4 but still weak: survey
Business confidence in Singapore rose slightly but stayed weak in the fourth quarter of last year, a joint survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) has found.  The Global Economic Conditions Survey or GECS Report for Q4 of 2016 listed declining income, shrinking order books, staff cuts and hiring freezes among the nagging concerns of businesses. The findings were based on 4,551 responses to questions posed between last Nov 24 and Dec 13.

Singapore needs to base its growth on productivity and innovation: Ong Ye Kung
Singapore’s economic growth cannot be achieved through man- power-led growth, but should be based on productivity and innovation, Minister for Education (Higher Education and Skills) Ong Ye Kung said yesterday.  He was giving a preview of an upcoming report on how Singapore can gear its economy for a more uncertain, challenging future.


Singapore Real Estate

Misuse of industrial space ever more widespread
The misuse of industrial space has become rampant, and with tenants having settled into units in new strata projects offering office-like designs and proximity to transport nodes, the trend has become even more conspicuous.  Businesses ranging from law firms and real-estate agencies to accounting and tax advisory firms, recruitment agencies, training providers, commercial schools and boutique investment firms have taken up units in industrial premises such as Oxley BizHub, UB. One, AZ @ Paya Lebar, CT Hub in Kallang, and One Commonwealth.  Market watchers are decidedly split in their views on how hard the government should come down on this issue.

URA sets new design guidelines for public spaces
Owners and developers of certain private developments will soon need to comply with minimum standards for building public spaces according to a set of new design guidelines drawn up by the Urban Redevelopment Authority (URA).  This will apply to owners and developers that are required to provide a public space either according to tender requirements under the government land sales programme or planning conditions for redevelopment proposals.  It will also apply to owners and developers seeking to get gross floor area (GFA) exemption for their first-storey covered public space – meaning that the GFA of the public space will not be included in the maximum GFA they can build up till.

Singapore slips to 7th place in ranking for high-end rental accommodation in Asia
Singapore has fallen to seventh place in a regional ranking for high-end rental accommodation this year. It was the fourth most expensive location in Asia last year.  According to the latest Accommodation Survey published by mobility solutions provider ECA International, rents for an unfurnished three-bedroom apartment across popular expatriate neighbourhoods in Singapore average US$4,535 per month.  Findings also showed that since 2012, average rents in Singapore have significantly decreased.

‘Inflated’ condo loans: UOB drops suit against some
There has been a significant development in the civil suit that United Overseas Bank (UOB) took out against developer Lippo Marina Collection (LMC) and seven individuals.  UOB has dropped five defendants from its suit – over allegedly inflated loans to buyers of condominium units on Sentosa that involved mortgages totalling about $180 million.  While it has not withdrawn its suit against property agents Rick Goh and Aurellia Ho, UOB will forgo any judgment that it may win against the pair, after the duo struck a settlement with the bank. That leaves just LMC in the bank’s sights.


Companies’ Brief

Surbana Jurong: Dismissal of 54 staff could have been better managed
Surbana Jurong, the Temasek Holdings-owned infrastructure consultancy which received flak for the way it recently terminated 54 staff due to what it called “poor performance”, has admitted that it could have handled the situation better.  This came after its management met with two unions – the Singapore Industrial and Services Employees’ Union (SISEU) and the Building Construction and Timber Industries Employees’ Union (Batu) – on Monday.

IHC files police report against ousted executive director
Following the results of the extraordinary general meeting (EGM) that saw the removal of the entire board of International Healthway Corporation (IHC), a police report was filed against Lim Beng Choo, who was ousted as executive director.  In an SGX filing, IHC said: “When members of the Interim Transition Committee and Data Management Corporation Pte Ltd arrived at the Company’s premises at 2 Leng Kee Road, Thye Hong Centre, Singapore, at around 8:20 pm, Ms Lim Beng Choo was seen leaving the premises with her computer and some documents.”

Keppel Reit’s performance affected by difficult office market environment
Keppel Reit, known for its premier office assets in Singapore’s central business district, on Tuesday reported distributable income to unitholders of S$48.7 million for the fourth quarter of 2016, bringing its full-year distributable income to S$208.1 million.  That’s down from a distributable income of S$54 million in the fourth quarter of 2015, and S$217.3 million in FY2015.  Its manager, Keppel Reit Management, acknowledged the difficult year the Singapore office market had in 2016, with the oncoming supply of office space and aggressive leasing efforts from newly completed buildings.

Ascott Reit Q4 DPU dips
Hospitality Reit Ascott Residence Trust (Ascott Reit) reported a 7 per cent drop in its distribution per unit (DPU) to 1.93 Singapore cents for the fourth quarter ending Dec 31, 2016.  This was from 2.07 cents a year ago, after the Singapore-listed real estate investment trust adjusted for a one-off item.  Removing that one-off item, the DPU for the quarter still dipped, but by only one per cent to 2.04 cents.

MIT clocks 0.4% rise in Q3 DPU
Mapletree Industrial Trust (MIT) on Tuesday posted a 0.4 per cent rise in distribution per unit (DPU) to 2.83 Singapore cents for the third quarter ended Dec 31, 2016.  Gross revenue grew 1.4 per cent from a year ago to S$84.45 million while net property income rose 2.5 per cent to S$63.43 million.  The improved year-on-year performance was driven by higher rental rates across all property segments as well as revenue contribution from Phase One of the BTS development for Hewlett-Packard, though these were partially offset by lower portfolio occupancy.

Frasers Hospitality adds ninth property in Jakarta
Hotels and serviced residences owner Frasers Hospitality Group might already be moving to ramp up its presence in Indonesia with the addition of its ninth property in Jakarta, but the group is showing no signs of slowing down as it eyes at least five other cities in the country.  The hospitality arm of Frasers Centrepoint Limited on Tuesday said Frasers Suites Kuningan, located in the prestigious Ciputra World 2 Jakarta – an iconic mixed-use development in the heart of Jakarta’s Golden Triangle – is slated to open in the third quarter of this year.

Parkway Life Reit Q4 DPU up 2.3%
Parkway Trust Management, the manager of Parkway Life Real Estate Investment Trust (PLife Reit), announced on Wednesdaythat PLife Reit’s distribution per unit (DPU) grew 2.3 per cent for Q4 2016 and 2.8 per cent for FY2016.  This is excluding the one-off distribution of divestment gains from PLife Reit’s maiden divestment of seven Japan properties in December 2016.  Its DPU is 3.06 Singapore cents for Q4 2016 and 12.12 Singapore cents for the full year ended Dec 31, 2016.  PLife Reit is one of Asia’s largest listed healthcare Reits.

Suntec Reit’s Q4 DPU slips, S$800m Penang Rd project to be completed end 2019
Suntec Real Estate Investment Trust posted on Wednesday a distribution per unit (DPU) of 2.596 Singapore cents for the fourth quarter ended December 31, 2016, 5.6 per cent lower than the DPU of 2.750 cents seen a year ago.  Distributable income stood at S$66.1 million, 4.9 per cent lowerthan a year ago. Net property income generated was S$60.7 million, 2.9 per cent lower on year due to the divestment of Park Mall and lower income from Suntec City and Suntec Singapore. Gross revenue of S$88.9 million was 1.6 per cent higher than a year ago. This was mainly due to the contribution of 177 Pacific Highway.

Ascendas Reit’s DPU for Q3 FY2017 rises to 3.993 Singapore cents
Ascendas Reit on Tuesday posted a year-on-year rise of 0.047 Singapore cent in distribution per unit (DPU) to 3.993 Singapore cents for the three months ended Dec 31, 2016.  This is despite an increase in the number of units in issue, said Ascendas Funds Management, the Reit manager, in a release after market closed on Tuesday.  Gross revenue in Q3 FY2017 rose 7.6 per cent to S$208.6 million, mainly attributable to contributions from the acquisition of its Australian portfolio and ONE@Changi City. This was partially offset by the divestment of Four Acres Singapore, Ascendas Z-Link and A-Reit City @ Jinqiao.

Roxy-Pacific buys five shophouses for S$17m
Property developer Roxy-Pacific Holdings has agreed to acquire five adjoining two-storey shophouses on Upper Bukit Timah Road for S$17 million in total, it said in a Singapore Exchange filing on Tuesday.  It said the shophouses made up a freehold residential site with an estimated total land area of 10,256 square feet and an existing plot ratio of 2.5 under Singapore’s 2014 land use master plan.  The agreement to purchase was done via its unit RH Capital, and the acquisition will be paid for with internal funds and bank borrowings, Roxy-Pacific said.

Angry investors want Reit manager kicked out
A small group of investors in Sabana Shariah-compliant Reit is so angry over its lacklustre performance that they are campaigning to have the trust’s manager sacked.  The move is the first concerted push by retail investors here to have a Reit manager fired.  They want to kick out Sabana Real Estate Investment Management, which collects multimillion-dollar fees every year for performance, acquisitions and divestments, and replace it with an in-house team better aligned with unit holders.  One disgruntled investor is Mr Koh Yee Kan, who bought into the Reit at an average price of about $1, only to see the price fall steeply, closing at 37 cents yesterday.

GIC buys billion-dollar US headquarters of Deutsche Bank on Wall Street
GIC, Singapore’s sovereign wealth fund, has bought a 95 per cent stake in 60 Wall Street, a 47-storey tower in New York City’s financial district of lower Manhattan that serves as the US headquarters of Deutsche Bank.  The deal values the 1.6 million-square-foot (148,600-square-metre) skyscraper at US$1.04 billion (S$1.48 billion), or about US$640 a square foot, GIC and seller Paramount Group said in a joint statement on Wednesday (Jan 25).  Paramount, a New York-based real estate investment trust, will retain a 5 per cent stake and continue to manage the property. In connection with the deal, the joint venture completed a US$575 million financing of the tower.


Global Economy & Global Real Estate

These luxury home mainstays may be gone in 20 years

US existing home sales fall as supply hits 17-year low

China outbound property investment seen dropping as capital curbs bite

Norway home building set for 38-year high, price drop possible


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