The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 26th January 2017

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Singapore private home prices down 3.1% in 2016, after 0.5% decline in Q4: URA
Prices of private residential properties declined by 0.5 per cent in fourth quarter of 2016, easing significantly from the 1.5 per cent drop in the previous quarter.  For the whole of 2016, prices fell 3.1 per cent, less than the 3.7 per cent decline in 2015.  Analysts say the residential market is showing signs of stabilising even as private home prices slipped for the 13th consecutive quarter, going by final data for the fourth quarter from the Urban Redevelopment Authority (URA) on Thursday (Jan 26).

Strata industrial units continue to lose their lustre since 2012 peak
The shine is coming off industrial units.  Waning investment yields and demand from end-users have kept a lid on buying interest. The numbers say as much.  The number of strata transactions has been falling since the peak of 2012. Based on the caveats lodged, the figure dipped by a fifth (20.7 per cent) last year from the year before; the 849 such units sold in 2016 made for the fourth straight year of decline.

Singapore Economy

S’pore improves ranking further in survey on least corrupt nations
Singapore remained the country perceived to be Asia’s least corrupt in 2016 and moved up a notch in the global rankings, according to an annual survey by Transparency International (TI).  Singapore’s position in the Corruption Perceptions Index improved to seventh in 2016 from eighth the year before, according to information gathered from independent institutions over the previous 24 months. It remained the highest-ranked Asian jurisdiction, a position it has held since at least the past five surveys.

Singapore Real Estate

HDB resale prices fall 0.1% in 2016
The resale prices of Housing and Development Board (HDB) flats fell by 0.1 per cent in 2016, according to the latest figures from HDB released on Thursday (Jan 26).  For the fourth quarter of 2016, the Resale Price Index saw the same drop when compared to the previous quarter, it added.  Resale transactions dropped 9.1 per cent from 5,514 cases in the third quarter to 5,012 in the fourth quarter of 2016. However, the full year of 2016 saw transactions rise by 7.8 per cent from 19,306 in 2015 to 20,813, the agency said.

Industrial prices, rents continue decline in Q4, but occupancies inch up: JTC
Prices of industrial space in Singapore fell a further 3 per cent in the fourth quarter of 2016, while rentals dipped 0.5 per cent, according to official JTC statistics released on Thursday morning. For the full year, industrial prices and rentals have retreated 9.1 per cent and 6.8 per cent respectively.  Occupancy levels bucked a falling trend to increase 0.4 percentage points to 89.5 per cent in the fourth quarter, but compared to a year ago, they are still down 1.1 per cent.

Singapore property comeback seen boosting large developer stocks
Yes, you heard it right – Singapore’s home prices are set to make a comeback after a three-year losing streak. And analysts think property developer stocks are the best way to play that rebound.  Amid a restructuring push to boost a slowing economy, the government could signal its intention to reconsider property cooling measures as early as the budget speech in February, Carmen Lee, head of research at Oversea-Chinese Banking Corp said in an interview.

10-storey commercial building to replace Park Mall
The sleepy corner of Dhoby Ghaut that housed Park Mall is getting a new lease of life.  Singapore-listed developer SingHaiyi Group yesterday unveiled plans for a new 10-storey building, which is now under construction at 9 Penang Road, near Orchard Road.  The mixed-use project will have two wings comprising eight levels of office space, with a total of about 352,000 sq ft of net lettable area, and a 15,000 sq ft floor for retail.

Companies’ Brief

Cambridge trust optimistic about new sponsor
Warburg Pincus unit e-Shang Redwood will be a good sponsor for Cambridge Industrial Trust (CIT), given its vast experience and contacts in the logistics and e-commerce sector, acting CEO of the trust manager Shane Hagan told reporters in an earnings call on Wednesday.  In fact, he prefers this new sponsor to the previous one, which “didn’t have anything from a real estate perspective to offer”, he said.

OUE Hospitality Trust’s Q4 DPS falls to 1.36 cents
OUE Hospitality Trust’s distribution per stapled security (DPS) for the fourth quarter ended Dec 31, 2016, fell to 1.36 Singapore cents, while higher master lease income from its hotel business and lower property expenses from its retail business bolstered net property income (NPI).  The decline in DPS from 1.7 Singapore cents in the year-ago period was due to the enlarged number of stapled securities arising from the rights issue in April 2016.

Sias to Sabana Reit: Address unitholders’ concerns
An investor watchdog group has asked Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) to address unitholders’ concerns, in a tussle that has already drawn at least one analyst’s view that the counter may be re-rated soon.  In what may be the first move of its kind, unhappy unitholders want to call for a meeting to remove the current manager of Sabana Reit. In the worst-case scenario, they are willing to liquidate the trust.

PLife Reit’s Q4, FY DPU lower in absence of one-off gain
In the absence of divestment gains, Parkway Life real estate investment trust (PLife Reit) posted a distribution per unit (DPU) of 3.06 Singapore cents in its fourth quarter, down 9.2 per cent year on year.  The one-off capital distribution was due to the divestment of seven Japan properties in December 2014 and the total amount of S$9.11 million was paid out to unitholders over FY2015.  Excluding the one-off gain, the DPU from recurring operations for the three months from October 2016 grew 2.3 per cent year-on-year, the healthcare Reit’s manager, Parkway Trust Management Limited, said in a filing to the bourse operator on Wednesday.

MBC 1 acquisition boosts MCT’s Q3 DPU
Led by its accretive acquisition of Mapletree Business City 1 (MBC 1), Mapletree Commercial Trust (MCT) achieved a 9.6 per cent year-on-year increase in distribution per unit (DPU) to 2.28 Singapore cents for the third quarter ended Dec 31, 2016.  The acquisition of MBC 1 was completed on Aug 25, 2016.  The higher DPU was also supported by continued healthy performance from the trust’s four other buildings – VivoCity, PSA Building, Mapletree Anson and Bank of America Merrill Lynch HarbourFront.

Suntec Reit Q4 DPU falls 5.6%, net property income down 2.9%
Suntec Real Estate Investment Trust (Suntec Reit) posted a 5.6 per cent dip in its distribution per unit (DPU) for the fourth quarter ended Dec 31, 2016.  It was at 2.596 Singapore cents, lower than the DPU of 2.750 cents seen a year ago, Suntec Reit reported on Wednesday. Its distributable income also fell, standing at S$66.1 million, 4.9 per cent lower than a year ago.  Its net property income generated for the quarter was at S$60.7 million, 2.9 per cent lower year-on-year, due to the divestment of Park Mall and lower income from Suntec City and Suntec Singapore.

Fragrance Group to buy Imperial Hotel in Blackpool for £12.8m
Fragrance Group Limited announced on Wednesday its intention to acquire the Imperial Hotel Blackpool in the United Kingdom.  The property developer and hotel operator has entered into a contract to purchase the four-star hotel for £12.8 million (S$22.9 million), it said in a press release.  The historic Imperial Hotel is located on the shores of the Irish Sea and is less than 1.6 kilometres from the nearest train station.

CapitaLand Retail China Trust to pay S$0.0237/unit as Q4 property income dips
CapitaLand Retail China Trust’s net property income slipped 1.5 per cent to S$34.8 million in the fourth quarter of 2016.  The China-focused mall owner will pay 2.37 Singapore cents per unit for the quarter.  For the full year ended December, the real estate investment trust’s net property income slipped one per cent to S$139.7 million. Full-year income available for distribution declined by 2.8 per cent to S$86.7 million.

Perennial-led consortium sells 70% stake in TripleOne Somerset for S$305m
Perennial Real Estate Holdings has led a consortium of vendors to sell a 70 per cent stake in the TripleOne Somerset mall to Hong Kong-listed Shun Tak Holdings for S$305 million.  Perennial, which will receive about S$101 million for the 20.2 per cent interest that it is selling, will retain a 30 per cent share in the mall. The real estate developer said it will use its share of the proceeds to fund existing or future investments.

CDL Hospitality Trusts to pay S$0.0311/unit in Q4; net property income falls 0.3%
CDL Hospitality Trusts’ net property income declined by 0.3 per cent to S$37.69 million in the fourth quarter of 2016, but distribution per stapled security for the quarter will increase by 3.3 per cent to 3.11 Singapore cents.  The trust, which is a stapled group comprising CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust, posted a 0.4 per cent increase in net property income, to S$137.5 million, for the full year ended 2016.

GIC buys tower housing Deutsche Bank in New York
GIC Pte Ltd, Singapore’s sovereign wealth fund, bought a 95 per cent stake in 60 Wall St, a 47-story tower in lower Manhattan that serves as the US headquarters of Deutsche Bank AG.  The deal values the 1.6 million-square-foot skyscraper at US$1.04 billion, or about US$640 a square foot, GIC and seller Paramount Group Inc said in a joint statement.

Prescription for minority IHC investors: Healthy dose of caution
Activist fund managers are becoming more popular in Asia and, in Singapore at least, minority shareholders are hitching a ride.  The new fad could bring a healthy dose of extra corporate governance, plus a focus on the interests of non-controlling stockholders.  But, even if value is being unlocked in the process, small investors need to tread with care.

Global Economy & Global Real Estate

US home sales drop as supply tumbles to 17-year low

A US$90b debt wave shows cracks in US property boom

US home mortgage applications at highest since June

Americans are flipping houses like it’s 2006

Trump Hotels chain sees significant US expansion

Dollar hits seven-week low on Trump worries

Overseas demand drives further recovery in UK commercial property: Rics

Trump’s planned Bali hotel risks angering the gods, and the locals

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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