The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 27th July 2016

Singapore Economy

S$100m fund set aside to boost quality and standards ecosystem
The government has a budget of up to S$100 million over the next five years to enhance Singapore’s quality and standards (Q&S) eco-system, Deputy Prime Minister Tharman Shanmugaratnam announced on Tuesday.  The money will also be used to support small and medium-sized enterprises in their standards adoption projects, he said.

S’pore may overtake London in fintech amid Brexit fallout
Amid the “Brexit” fallout, Singapore could be the first to overtake London as the fintech capital of the world, an MIT report this month showed.  “The next two to four years will see the outcome of the (fintech) race unfold. Where is the smart money going?” said the report. “One thing’s for sure: Brexit uncertainty in London means greater opportunity for other regions around the world.”

Changi Airport ranks 3rd in traveller spending
Changi is one of only three airports that raked in more than US$1.5 billion (S$2 billion) in spending by travellers last year.  Actual amounts were not stated but Changi was ranked third, behind South Korea’s Incheon and Dubai, in a recent study by Swedish duty-free and travel retail consultancy, Generation Research.  Globally, travellers spent a total of US$62 billion at duty-free and airport shops last year, about 3 per cent less than the US$63.8 billion in 2014.  Asia was the only region where spending increased.

S’pore banks facing earnings stumble as bad loans, sibor bite
Earnings reports due soon from Singapore’s largest banks may show their second-quarter profits were crimped by higher buffers for soured loans and a faltering rally in domestic interest rates.  Interbank borrowing costs have slumped this year as the local dollar strengthened, causing the three-month Singapore interbank offered rate to fall by 0.31 percentage point since December and by 0.13 percentage point in the April-June period. That may curb growth in banks’ net interest margins as banks price their domestic loans in part on interbank rates. Margins have risen over the past year in tandem with a rally in Sibor.

Singapore Real Estate

Inadequate monitoring of car park operations by HDB: AGO report
The Housing and Development Board (HDB) had inadequate monitoring of car park operations and enforcement, the Auditor-General’s Office said in a report released on Tuesday (Jul 26).  The AGO test-checked the records of five car parks at HDB’s industrial estates for the period of April 2014 to August 2015, and found 113,103 instances where vehicles were not charged parking fees.

Changes to Town Councils Act ‘should retain its spirit’
The ongoing review of the Town Councils Act (TCA) could aim to give authorities the power to intervene should potential wrongdoings surface and clearly spell out what is required of town councils in terms of governance, said political watchers and experts.  Despite the need for greater oversight, the observers said the statute should keep to its original intent, which was to give elected Members of Parliament a degree of autonomy over the running of a town.  Their comments came after National Development Minister Lawrence Wong said last Sunday that the review of the statute — announced in 2013 — could be finalised by the end of the year.

Mandai masterplan tweaked to lower impact on environment
Changes have been made to the initial plans to transform Mandai into a mega wildlife and nature attraction, so as to reduce the impact of the development on the environment and biodiversity in the area.
For example, there has been a switch in the locations of the new Bird Park and Rainforest Park; two nature-themed indoor education areas have been merged into one, and the entry points to the new attractions have been decentralised.

Companies’ Brief

Marina Bay Sands Q2 earnings dip 1.7% to US$357m
Marina Bay Sands saw its Q2 profit for the three months ended June 30 slip 1.7 per cent year on year to US$357 million as earnings were impacted by lower table game revenue.  Net revenue for the quarter was marginally lower, inching down 0.4 per cent to US$710.1 million mainly due to a slight drop in revenue from its casino business. Casino revenue – which contributes to the bulk of top line – came to US$556.7 million, or down 1.6 per cent, compared to the corresponding quarter a year earlier.

Mapletree Commercial Trust’s DPU up 1% in Q1
Amid a challenging landscape for office and retail property, Mapletree Commercial Trust (MCT) reported a one per cent increase in distribution per unit (DPU) from a year ago to 2.03 Singapore cents in the fiscal first quarter ended June 30.  Gross revenue rose 5.2 per cent to S$73.38 million on the back of positive contributions from VivoCity, Mapletree Anson and PSA Building. Net property income (NPI) increased by 3.7 per cent to S$56.28 million, with NPI margin sustained at a healthy level of 76.7 per cent.

Fullerton eyes defence, China real estate
Demand for Asian fixed-income assets continues to rise as investors remain stuck in a low-growth world where bond yields in many developed markets have dipped below zero.  Demand is so strong that Fullerton Fund Management closed its popular SGD Income Fund to new investors yesterday after clients committed more than $2.1 billion in assets to it.  The fund invests mainly in investment grade corporate bonds with a focus on Singdollar bonds. It has generated 6 per cent annual returns since its 2012 launch.

Views, Reviews & Forum

Rate cuts are better than negative rates
Monetary policy has become increasingly complicated. We have rising interest rates in some parts of the world. We have falling interest rates in other parts of the world. Some central banks have taken rates negative. For investors, it is important to understand how such changes in monetary policy affect the economy at large.  Lower rates can boost economic growth in three ways. Traditionally lower rates may encourage borrowing. This is old fashioned supply and demand. If the price of borrowing goes down, the demand for borrowing goes up. The problem is that borrowing is not just about the price of credit. Borrowing also depends on confidence. Borrowers need to be confident about their future. Lenders need to be confident about the borrower’s future. If there is a lack of confidence then borrowing is not likely to be encouraged by falling interest rates.

Global Economy & Global Real Estate

June new-home sales rise at fastest pace since Feb ’08

Yen reaches two-week high against euro

Sun Hung Kai slices margins to push sales, beats target

Brooklyn developer Leser Group taps Israeli market for 125m shekel bond issue

Mainland Chinese underpin HK luxury rents: Savills

New York’s first zoning resolution turns 100

Overseas buyers of Vancouver homes face additional tax

Negative interest rates force Japan pension fund to adopt riskier investment strategy

Wanda boss heads for record M&A year with US$16b in deals

Knocking on India’s Smart Cities door

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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