DAILY NEWS

Daily News – 28th, 29th & 30th May 2016

Singapore Economy

Local services industry business receipts down 3.8% in Q1
Singapore’s services sector logged an overall decline in turnover in the first quarter of 2016, posting a quarter-on-quarter fall of 3.8 per cent in business receipts. The business services industry recorded the deepest decline of 7.5 per cent, followed by the recreational & personal services industry (- 7.3 per cent), said the Department of Statistics on Friday. On the flipside, the education services industry reported the highest growth of 5.6 per cent in business receipts, followed by the health & social services industry with 2.9 per cent. Business or operating receipts show the income earned from business operations, that is, from goods sold, services rendered, commissions earned and rentals of premises and machinery and equipment.
http://www.businesstimes.com.sg/government-economy/local-services-industry-business-receipts-down-38-in-q1
http://www.straitstimes.com/business/economy/service-sector-takings-flat-in-first-quarter

Singapore Real Estate

50% of Gem Residences sold in a day
Around 50 per cent of new condo Gem Residences was sold in a day, ahead of its public launch today. Such a successful sales result has not been seen in over a year, but experts noted that this likely reflected the appeal of this particular project. “It’s in Toa Payoh, where a launch hasn’t taken place for some time. Toa Payoh is a very established, mature Housing Board estate and there is strong demand for new projects there,” said Mr Eugene Lim, ERA Realty key executive officer. “The attractive pricing also played a part.”
http://www.straitstimes.com/business/property/50-of-gem-residences-sold-in-a-day?login=true
http://www.straitstimes.com/business/property/about-50-per-cent-of-gem-residences-sold-at-vip-launch-on-friday?login=true

PPS3 to be priced ‘much higher than S$2,300 psf’
City Developments Ltd (CDL) has said that the anticipated pricing for a potential residential profit participation securities (PPS) transaction will be “much higher” than the S$2,300 per square foot (psf) cited in a report in The Business Times on Friday, “given the intrinsic value of our assets”. Responding to the report, the property developer added that it would make further announcements if and when a deal on this subject materialises.
http://www.businesstimes.com.sg/real-estate/pps3-to-be-priced-much-higher-than-s2300-psf

Mapletree Logistics Trust to pick up 4 Sydney warehouses for A$85m
Fresh from raising S$250 million through issuing perpetual securities earlier this month, Mapletree Logistics Trust (MLT) has unveiled plans to use up a chunk of the proceeds to scale up in Australia. The logistics real estate investment trust (Reit) announced plans to pay A$85 million or about S$84.4 million for four dry warehouse facilities in Sydney offering a net property income yield of 7.1 per cent in a Singapore Exchange filing on Sunday evening, adding that it expected the acquisition “to be accretive at the distribution level”.
http://www.businesstimes.com.sg/companies-markets/mapletree-logistics-trust-to-pick-up-4-sydney-warehouses-for-a85m
http://www.straitstimes.com/business/companies-markets/mapletree-logistics-trust-buys-4-sydney-warehouses-for-s844-million

Constant mall renovations raise business costs, hurt S’poreans
The constant renovations of our shopping centres and food courts bear examining (“Mall operator banks on revamps to cope with evolving landscape”; May 2). Although it is essential to upgrade old shopping centres and those in disrepair, relatively new ones are also being given makeovers, some of which are cosmetic in nature and with the same tenants playing musical chairs when business resumes.
http://www.todayonline.com/voices/constant-mall-renovations-raise-business-costs-hurt-sporeans

Proposal for Tanglin Club to be high-rise complex
A proposal to redevelop part of The Tanglin Club could add another towering commercial complex near Orchard Road. The club in Stevens Road will hold its annual general meeting (AGM) today. Among the proposed resolutions is a plan by the club’s development and planning sub-committee to add 11 more guest rooms. But former club presidents Joseph Chew and Sim Yong Chan have proposed an even more ambitious plan.
http://www.straitstimes.com/singapore/proposal-for-tanglin-club-to-be-high-rise-complex

Singapore property market may reach bottom before HK
Singapore’s property market may be closer to a bottom than Hong Kong, according to LaSalle Investment Management, which oversees more than US$58 billion in real estate funds. Governments in Asia’s two most expensive residential markets have imposed curbs in recent years to tame prices and improve affordability. As demand has dropped amid a slowdown in the region’s economies, home prices in both cities are in the midst of a correction.
http://www.businesstimes.com.sg/real-estate/singapore-property-market-may-reach-bottom-before-hk
http://www.straitstimes.com/business/property/singapore-property-market-closer-to-bottom-than-hong-kong-says-fund-manager?login=true

BHG signs deal to take over space currently occupied by John Little at Jurong Point
BHG Department Store will take over two floors currently occupied by John Little at shopping mall Jurong Point. It plans to occupy an additional level at Singapore’s largest suburban mall and will eventually operate from a floor area of 49,000 square feet. If realised, this will would make Jurong Point BHG’s biggest outlet in the western part of the island. John Little, which has been with Jurong Point for about 20 years, will exit the mall in the second half of this year, according to a statement from the mall manager.
http://www.straitstimes.com/business/property/bhg-signs-deal-to-take-over-space-currently-occupied-by-john-little-at-jurong?login=true

Retailers get in early before GSS kicks off
The Great Singapore Sale (GSS) officially starts on Friday but a number of retailers have jumped the gun and are holding their mid-year sales earlier. Smaller retailers said that by doing so, they will not have to compete head-on with bigger retailers, which can afford to offer more attractive discounts during the annual shopping festival. “We may not be able to match their discounts. So instead of going against them, we decided to (start) before them this year,” said Mr Kyle Hu, a manager at Huayi Shang Hang, the parent company of retailer Kitchen+Ware.
http://www.straitstimes.com/singapore/retailers-get-in-early-before-gss-kicks-off?login=true

Tough times for luxury watch retailers
Luxury watch retailers in Singapore are facing dismal times if the financial results unveiled this week by Cortina Holdings and The Hour Glass are anything to go by. Both retailers reported a sharp drop in full-year earnings, owing to the sluggish economic outlook and weak consumer sentiment. Net profit at Cortina Holdings plunged 45 per cent to $8.4 million, compared with $15.2 million a year earlier. The Hour Glass booked a net profit of $52.3 million, down by 10 per cent from the previous year.
http://www.straitstimes.com/business/tough-times-for-luxury-watch-retailers?login=true

As the retail sector flounders, flagship stores hope to pull in crowds
As the outlook for Singapore’s retail sector becomes increasingly challenging with rising labour costs, weak domestic and tourist demand, as well as competition from e-commerce, retailers here are spinning out new strategies to lure shoppers back to the brick-and-mortar stores. Their latest weapon of choice: The flagship store. The island-wide sprouting of such stores are the outcome of retailers’ multi-pronged strategies at play, analysts said. The move allows them to take advantage of falling rentals amid the economic slowdown to secure a large space in a high-footfall area while consolidating regional or local operations under one roof.
http://www.todayonline.com/business/retail-sector-flounders-flagship-stores-hope-pull-crowds

Companies’ Brief

SingHaiyi reports fall in Q4 earnings; full-year profit soars 38%
Real-estate based SingHaiyi Group has reported a 47.1 per cent drop in fourth quarter earnings to $8.4 million. This was despite a 63.8 per cent rise in revenue to $8.1 million for the three months to March 31. The increase was mainly due to contributions from the group’s Pasir Ris One project, a more fanciful type of public housing, and sales of completed units from Vietnam Town, a project in the United States.
http://www.straitstimes.com/business/companies-markets/singhaiyi-reports-fall-in-q4-earnings-full-year-profit-soars-38

Regal International Group
Property developer Regal International’s Hisaka International Holdings unit is proposing to sell its entire stakes in its own subsidiaries – Hisaka Mechatronic (Suzhou) and Tech Motion (Shanghai) – to businessman Alvin Yap Ah Seng. The firm said yesterday that Mr Yap is proposing to pay $150,000 for Hisaka Mechatronic and $50,000 for Tech Motion.
http://www.straitstimes.com/business/company-briefs-tat-hong-holdings

Courts’ Q4 net profit falls 36%
Net profit at furniture and electronics retailer Courts Asia fell 36 per cent to S$4.2 million in its fourth quarter ended March 31, 2016, dragged down by a fall in revenue. Revenue in the quarter fell to S$181.3 million, down 6 per cent year-on-year. However, on a 12-month basis, Courts saw a 17 per cent increase in net profit to S$20.8 million, despite minimal growth in revenue.
http://www.businesstimes.com.sg/companies-markets/courts-q4-net-profit-falls-36
http://www.straitstimes.com/business/companies-markets/lower-expenses-lift-courts-full-year-earnings

Views, Reviews & Forum

Solve home-sharing problems with some creativity
The answer to the question asked in last Sunday’s report (“Can S’pore make room and rules for home-share offerings?”) is a definite “yes”, but with some safeguards. The concerns of the anti-home-sharing segment seem to revolve around safety, noise, cleanliness and the use of shared common facilities by strangers. But these can be addressed through technology, regulation and other creative solutions. For instance, some home-sharing services require identity verification, such as scanning of driving licences, to make sure visitors are who they say they are.
http://www.straitstimes.com/forum/letters-in-print/solve-home-sharing-problems-with-some-creativity

Important that homes remain a safe haven, investment for S’poreans
It is not unexpected that views are divided on the issue of home sharing (“Can S’pore make room and rules for home-share offerings?”; last Sunday). To formulate a policy on this issue, I suggest that the government fall back on first principles. Property is the single most important investment for most Singaporeans. The value of their investment must not be adversely affected by possible noise, rubbish and so on, caused by short-term tenants in the neighbourhood.
http://www.straitstimes.com/forum/letters-in-print/important-that-homes-remain-a-safe-haven-investment-for-sporeans

Rates: To raise or not to raise
In the minutes of the April Federal Open Market Committee (FOMC) meeting released on May 18, there were explicit mentions of the Fed considering a hike in interest rates at the June 14-15 meeting, in addition to discussions of the state of the global economy, the US economy, and the lack of productivity growth. Here is an edited excerpt:
Participants indicated that their assessments of the medium-term economic outlook had not changed materially since March and discussed a number of factors suggesting that the apparent softness in spending in the first quarter was unlikely to persist.
http://www.businesstimes.com.sg/young-investors-forum/rates-to-raise-or-not-to-raise