Hopes up as earnings season begins
Just as traders toasted the gains of 2017 a month back, the market could be looking at another annus mirabilisthis year. Earnings season is upon us, which often offers watchers a referendum on the health of a stock. And if the news is especially rosy, company financials could be a shot in the arm for the local bourse. The benchmark Straits Times Index has largely been coasting along at decade-high levels for a week now.
Is collective sale fever cooling?
The collective sale frenzy that shook up the property sector last year with record-setting sums paid by land-hungry developers appears to be cooling, even as the spate of tender launches shows no sign of abating. Sellers are still panning for gold, given four collective sales launches last week alone. Goodluck Garden launched a tender with a reserve price of $550 million, following those of Eunos Mansion and Makeway View, and commercial property ICB Shopping Centre.
Singapore, HK biggest Asia recipients of FDI after China in 2017: UNCTAD
More direct investments flowed into Asia last year despite a decline globally – and China, Hong Kong as well as Singapore were the biggest recipients, according to the United Nations Conference on Trade and Development (UNCTAD). An estimated US$144 billion in foreign direct investment (FDI) went into China, while about US$85 billion landed in Hong Kong, data in UNCTAD’S latest Investment Trends Monitor report shows. Some US$58 billion entered Singapore.
Factory output growth hits seven-year high in 2017; economists see moderation this year
Manufacturers can pat themselves on the back for their stellar performance in 2017, when output grew at its strongest pace since 2010. Overall, Singapore’s industrial output rose 10.1 per cent last year from the year before, at a rate not seen since the post-recession economic recovery, when growth shot up 29.7 per cent.
Recovery in labour market in 2017 sees fewer layoffs; lower unemployment towards year-end
After six years of rising layoffs, there was some relief for workers last year as retrenchments dipped. There were 14,340 retrenchments last year, down from 19,170 in 2016, with improvements coming from the manufacturing and service sectors, according to preliminary full-year data released by the Ministry of Manpower (MOM) on Friday.
Cruise industry added $706m to Singapore’s economy in 2016
The Republic’s cruise industry directly contributed $706 million to the country’s economy in 2016, a 36 per cent increase from 2010. This is according to latest data from the Singapore Tourism Board (STB), and does not include the indirect spending by tourists on goods and services like restaurants and stores. STB announced this on Friday, even as a joint Asean Declaration on Cruise Tourism was officially endorsed at this year’s Asean Tourism Forum.
Singapore Real Estate
Continued recovery in private home prices, transactions expected this year
The recovery in prices and transactions of private homes is expected to continue this year on the back of pent-up demand, improved sentiment and upcoming new launches by developers, consultants say. Rents, too, will likely find their footing in the second-half of the year, thanks to a steep fall in completions of new homes this year.
HDB resale flat transactions up for third year in a row
Resale volume for Housing Board flats rose for a third year in a row – growing 6.1 per cent for the whole of 2017 – as buyers turned to the resale market once more amid easing prices. There were 22,077 transactions last year, up from 20,813 in 2016, 19,306 in 2015 and 17,318 in 2014 – a record low – according to an HDB statement yesterday. This is despite the number of resale transactions falling 1.2 per cent to 5,738 cases in the last quarter of last year, compared with the previous three months’ figure of 5,808.
Retail rents ‘nearing bottom of downcycle’
Property consultants generally continued to be sanguine that rentals for retail space on the island will start stabilising this year. The Urban Redevelopment Authority’s rental index of retail space in the Central Region shed 0.5 per cent in the fourth quarter of last year over the preceding quarter. This follows a 0.2 per cent quarter-on-quarter decline in the index for Q3 2017, and took the drop for the whole of last year to 4.7 per cent.
Office demand strong in Downtown Core; rosier hopes for 2018
The Downtown Core area, which includes the financial district, was the star in terms of net office demand in the fourth quarter as well as the whole of last year. The area saw net demand – as measured by the change in occupied space – of 43,000 square metres (about 463,000 sq ft) in Q4 2017. This was the highest in more than five years (since Q3 2012), based on property consultants’ analysis of latest figures by the Urban Redevelopment Authority (URA).
Developers in Singapore still on the prowl for land
Listed developer Oxley Holdings is holding the largest residential land bank in the Republic, in terms of number of dwelling units, after successfully bidding for several collective sale sites last year, estimates by The Business Times show. After acquiring the huge former HUDC sites Rio Casa and Serangoon Ville as part of a consortium last year, Oxley went on to snap up two other sizeable collective sale sites – Mayfair Gardens and Vista Park – as well as smaller plots Toho Green and Apartment 8.
Rail Mall owners seeking buyers
Rail Mall, a stretch of shopping and dining outlets in a rustic part of Upper Bukit Timah Road, has been put on the market. Besides 43 road-fronting units, the 105,561 sq ft site also comes with 95 carpark lots. Ku Swee Yong, chief executive of International Property Advisor, said the development could be worth S$30 million, or about S$300 psf of land area.
New proptech web-app to unlock myHome’s Wealth
SRX Property, a platform for real estate listings, last week announced the launch of a new resource that uses big data to help homeowners make decisions about how to cash-out of their homes, upgrade, or right-size their properties.
More home-based care options likely for seniors
Singaporeans may soon have the option of remaining at home – with the necessary personal and nursing care around the clock – as they grow old, sickly and less able. A new offering is now under study: assisted living facilities or services, Health Minister Gan Kim Yong disclosed in an interview with The Sunday Times.
Ascott Residence Trust Q4 DPU flat at 2.04 cents
Ascott Residence Trust posted a distribution per unit (DPU) of 2.04 Singapore cents for the fourth quarter ended Dec 31, 2017, flat from the corresponding period a year ago due in part to a rights issue which took place last year. Adjusting for a one-off realised exchange gain, the effects of the rights issue in March last year, contributions from Ascott Orchard Singapore as well as a divestment gain, DPU would have actually gone up by 7 per cent to 2.07 cents.
CDLHT Q4 DPS down after rights issue
The payout from CDL Hospitality Trusts (CDLHT) fell again in the fourth quarter owing to a rights issue last August, but earnings from Singapore are starting to stabilise. There is also “a lot of headroom for further expansion” now that the divestment of two Brisbane hotels in January has lowered CDLHT’s gearing to just over 30 per cent, said Vincent Yeo, chief executive of CDLHT’s managers, on Friday.
Sabana Reit looks for turnaround with old hand at the helm
Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) has appointed real estate veteran Donald Han as the new chief executive officer of its manager, following a strategic review which emerged after howls from disgruntled shareholders over the Reit’s underperformance.
PLife Reit Q4 DPU up 10.6%
Parkway Life Real Estate Investment Trust (PLife Reit) on Friday posted a 10.6 per cent increase in distribution per unit (DPU) for the fourth quarter, lifted by a one-off divestment gain. DPU for the three months ended Dec 31 stood at 3.38 Singapore cents, up from 3.06 cents a year ago. This was boosted by a divestment gain from the sale of four Japan properties, which was announced on Dec 22, 2016.
First Sponsor takes 24.7% stake in 50.4m euro buy of Hilton Rotterdam
First Sponsor group is taking a 24.7 per cent stake in a consortium’s 50.4 million euro (S$81.5 million) acquisition of the Hilton Rotterdam hotel in the Netherlands. The purchase price is the aggregate of the property’s commercial value of 51.0 million euros and the estimated amount of cash and working capital that the target will have at completion, said First Sponsor, a developer of property in China and the Netherlands. The final consideration will be subject to closing adjustments.
ESR-Reit in share swap talks with Viva Industrial Trust
Warburg Pincus-backed ESR-Reit and Viva Industrial Trust (VIT) are in advanced talks for a share swap deal that will turn the combined entity into the fifth-largest industrial Singapore Reit (S-Reit) by market capitalisation. This comes two months after talks between ESR-Reit and the troubled Sabana Reit fell through, in what sources say were discussions for the former to buy out the latter.
Ying Li down 9.6% after married deal disclosure
Shares of Chongqing commercial developer, Ying Li International Real Estate, were hotly traded this week and experienced a roller-coaster ride. This comes after news that its executive chairman and CEO Fang Ming had disposed of some shares in a S$20.7 million married deal with Chinese state-owned China Everbright Group.
Roxy-Pacific, Tong Eng group MD to buy The Wilshire for S$98.8m
Roxy-Pacific Holdings has partnered Tong Eng Group’s managing director Teo Tong Lim to acquire another residential site – this time the freehold Wilshire in District 10 – for S$98.8 million. The 39,130 sq ft site has been collectively sold to a joint venture between Roxy-Pacific subsidiary RP Ventures, which has a 40 per cent stake, and Mr Teo’s private family office TE2 Development, which holds 45 per cent.
Views, Reviews & Forum
Understanding the Reit business model
The key to a company’s success lies in how well it executes its business model. This calls for optimising the allocation of limited resources to generate sustainable cash flows, investing in new products, technologies and services to respond to competitors and devising appropriate responses to changes in the macroeconomic, regulatory and political environment.
Collective sales: Give more weight to structural condition of properties
Mr Matthew Chang’s proposal to tweak the percentage of home owners who must consent before a collective sale is allowed, based on the age of the property, is a commendable one (Collective sales a key part of urban renewal; Jan 21).
Global Economy & Global Real Estate
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