The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 29th June 2016

Top Story

Stress tests for banks becoming more crucial: Hng Kiang
Given the fragility of global markets in a low-growth, low-rate environment, stress tests on banks will become an increasingly important and integral part of risk management in the financial sector, said Monetary Authority of Singapore (MAS) deputy chairman Lim Hng Kiang on Tuesday.  This imperative has emerged even as the unexpected result of the United Kingdom’s vote to leave the European Union weighs on market confidence and an already-listless global recovery, he said at the 43th annual Association of Banks in Singapore dinner.

Singapore Economy

Central banks lead fall in global public investors’ assets in 2015
Weak oil, gold and commodity prices, low growth and divergence in monetary policies led to a fall in central banks’ assets in 2015, even as sovereign funds posted their slowest assets growth in more than a decade, says an annual publication of the Official Monetary and Financial Institutions Forum (OMFIF).  The 500 central banks, sovereign wealth funds and public sector pension funds ranked in the 2016 edition of Global Public Investor managed assets totalling US$28.99 trillion at the end of last year, US$854.7 billion down from the end of 2014.

S’pore investors more optimistic than HK ones: study
Even as Asia succumbs to the impact of “Brexit”, Singapore investors are more optimistic about the performance of their current investments than their Hong Kong counterparts, Hong Kong marketing research firm CSG has found.  Its study has revealed that 65 per cent of Hong Kong investors believe that the performance of their current investments will worsen over the next 12 months, but only 53 per cent of Singapore investors feel this way.

Singapore Real Estate

Moderate, calibrated industrial land supply in H2
Moderate and calibrated. These words from property watchers pretty much summed up the second half industrial government land sales (IGLS) programme announced by the Ministry of Trade and Industry (MTI) on Tuesday.  In line with its policy of ensuring adequate land supply for industrialists without exacerbating the risk of an oversupply, the government is rolling out seven industrial sites on the Confirmed List totalling 3.99 hectares in site area.  Another five sites spanning 7.71 hectares are placed on the Reserve List, to be triggered for public tender when there is a minimum acceptable bid. The 12 sites combined have a total area of 11.7 hectares.

Completed apartment, condominium prices in May down 0.8%: NUS

Prices of completed private apartments and condos fell 0.8 per cent in May from the previous month, led by small units and units in non-central areas.  The prices of units of up to 506 square feet fell 1.1 per cent, while those of units in non-central areas dipped one per cent, said the latest flash estimates from the National University of Singapore (NUS). In April, prices of small units fell 0.1 per cent, while those of condos in the non-central region rose 0.1 per cent.  Units in the central region underwent a more modest 0.5 per cent price decrease in May, after inching up 0.4 per cent in April.

More properties go under the hammer in Q2: JLL
The total sales value of properties that went under the hammer surged to S$13.76 million in the second quarter of this year, a 102.4 per cent jump from a year ago. This also marked a major acceleration from the dip in the first quarter when only S$5.88 million worth of properties were sold, data from JLL shows.  There are still auctions to be held in this final week of June.  Mortgagee sales made up 66.7 per cent of the units sold in the second quarter, but just about 43 per cent (59 out of 139 listings) of the listings this quarter.

Quek Leng Chan pips S’pore cousin to top bids at URA tender for Martin Place condo site
Malaysian tycoon Quek Leng Chan has pipped his Singaporean cousin Kwek Leng Beng to emerge as the top bidder for a rare District 9 private residential site offered at a state tender.  A unit of Mr Quek’s Singapore-listed GuocoLand bid S$595.1 million, which works out to S$1,239 per square foot per plot ratio (psf ppr) for the plot at the corner of Martin Place and River Valley Close.  This is 1.2 per cent higher than the second highest bid of S$588 million or S$1,224.22 psf ppr from a four-way consortium involving Hong Leong Holdings’ Intrepid Investments, City Developments’ unit Verwood Holdings, TID Residential and Garden Estates. All four are part of the Singapore Hong Leong Group helmed by Mr Kwek.

Companies’ Brief

Oxley gives assurance on UK business
Singapore-listed property developer Oxley Holdings on Tuesday commented on the implications Brexit will have on its UK business.  For its London exposure, the group has the Royal Wharf Project, a 363,000 square metre waterfront township development in East London; a 20 per cent stake in UK property developer Galliard; and a plot of land at Deanston Wharf where development has not started yet.  Oxley said it expects limited impact on currency conversion from the British pound to the Singapore dollar as it uses a natural hedge on currency fluctuation by having both the cost of construction and bank loans settled in the pound.

Sim Lian launching EC in Sengkang
Mainboard-listed Sim Lian Group on Tuesday announced the launch of its executive condominium (EC) project, Treasure Crest, with units priced at S$735-S$755 per square foot (psf) on average.  E-applications for the 99-year leasehold development will open on July 1 and close on July 10, while balloting and booking will take place on July 16.  Treasure Crest is a 504-unit EC in Sengkang New Town and is located near several transportation nodes, lifestyle amenities and schools. The project is also situated near other ECs in Sengkang, such as Bellewaters and The Vales.

Views, Reviews & Forum

Loans still available for London property, but banks sound caution
Be careful, and watch the risks, banks here are telling customers looking for financing for London properties in the wake of the “Brexit” vote, with at least one bank reviewing its London property loans programme.  Responding to talk in the market that the bank is not taking in fresh loan applications for London properties, a UOB spokeswoman said the bank is reviewing its loan financing business for London properties.  UOB currently provides financing for London properties in Zone 1 to 4.

Sterling finds respite after the pounding
After four days of being hammered for Brexit, the British pound finally found some respite yesterday as investors began to feel that the historic sell-off in sterling had been overdone.  European shares also opened higher for the first time since Britain voted last week to secede from the European Union, while Asian bourses received a boost from signs that central banks in the region are taking action to stabilise markets.  The pound strengthened slightly to US$1.33 yesterday after settling at a 31-year low of US$1.32 on Monday. It also strengthened to $1.80 against the Singapore dollar after weakening to $1.79 on Monday.

How Brexit affects Singapore
Britain is only No. 22 on the list of Singapore’s trading partners, which means the United Kingdom’s shock vote to leave the European Union (EU) – the world’s largest trading bloc – may have only a marginal impact in the immediate term.  Singapore could emerge from this relatively unscathed, economists say, as its non-oil domestic exports to Britain account for less than 1 per cent of total shipments, while imports from Britain constitute about 2 per cent of Singapore’s total imports.  The value of Singapore-British trade for the first five months of this year came to $4.94 billion, up from $4.69 billion in the same period last year.

What Brexit means for the rest of us
In a shock for financial markets which had been increasingly confident that Britain would vote to remain in the European Union, a victory for the Leave outcome by 52 per cent to 48 per cent triggered an abrupt bout of “risk off” in financial markets late last week.  I suspect it was probably also a shock to many Britons themselves some of whom seem to be going through a bit of Bregret (thinking they were just delivering a protest vote against the establishment and assumed that Remain would win anyway). Of course, it wasn’t a good week for Europe either. This note tries to put it all in perspective.

London’s loss may be Asia’s gain as property funds seek safe havens like Singapore
London may have just shed its safe-haven property market tag with the UK’s vote to break away from the European Union. That’s good news for real estate markets in Asia that offer stability.  Singapore, Hong Kong and Australia, which face headwinds including oversupply and high prices, may see money flowing into property as investors flee to safer assets as volatility picks up, according to global commercial real estate services firm CBRE Group.  “Capital will look for safe havens, countries that offer stability,” Henry Chin, head of research for Asia-Pacific at CBRE, said in an interview in Singapore. “Mature, developed markets will look attractive again.”

Global Economy & Global Real Estate

Q1 GDP revised upwards after gains in exports, software investment

Can Britain exit the Brexit?

Britain scraps plans to sell stakes in RBS and Lloyds banks

$15 Million Can Buy You a Small Piece of Hamptons History

Battered sterling gets a reprieve, yen’s rally pauses

Sydney to get A$1.5b hotel and casino complex

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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