The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 28th, 29th and 30th October 2017

Top Story

Leasehold favoured over freehold properties in current en bloc fever
Developers’ love for freehold property in residential en bloc sales in the past appears to have given way to a preference for leasehold assets in the current en bloc cycle.  A Cushman & Wakefield study finds that the proportion of leasehold property sold in residential en bloc deals – by number of units sold – has risen to 92 per cent in 2016 and 83 per cent in 2017 year-to-date.

Singapore Economy

Singapore’s GDP growth strengthening and spreading to more sectors
Singapore’s economic recovery is gathering pace, with growth rates accelerating over two straight quarters thanks largely to a sustained increase in global electronics demand, the Monetary Authority of Singapore (MAS) said.  While pockets of weakness remain in some sectors, growth is broadening beyond trade-related industries, with economic expansion expected to remain steady in the coming year, the central bank noted in its latest macroeconomic review out on Friday.

Economic restructuring showing promising results: Heng Swee Keat
Singapore’s economy is looking better this year, with restructuring efforts producing promising results, but the work is not done yet, said Finance Minister Heng Swee Keat.  Making his first ministerial community visit yesterday since suffering a stroke in May last year, Mr Heng urged employers, the business community, unions and workers to push on with efforts to transform their industries.

Job market turning a corner as retrenchments fall, vacancies rise
Singapore’s labour market – which has been mired in the doldrums – is showing signs of turning the corner amid a rosier economic outlook, the Monetary Authority of Singapore (MAS) said.  Retrenchments are down and more companies are hiring – though the recovery is expected to be gradual, the central bank noted in its latest macroeconomic review out on Friday.

S’pore is second-largest Asian investor in the US
It might come as a surprise to many but Singapore is a major investor in the US, with investments ranging from banking to agriculture and telecoms.  Singapore has made US$73 billion (S$100 billion) in investments cumulatively across more than two dozen US states, making it the second-largest Asian investor in the United States after Japan.

Singapore Real Estate

Private home prices ‘on firm ground’ after index shows uptick
Property analysts said the 0.7 per cent quarter-on-quarter increase in the official private home price index for the third quarter is a reflection of firmer prices in the last 21/2 weeks of September.  The figure beat the 0.5 per cent increase in the flash estimate.  “With private home price indices in all segments in positive territory, the price recovery appears to be broad-based, supporting the likelihood of prices continuing to rise,” said Ong Teck Hui, national director of research and consultancy at JLL.

9,300 new homes to result from slew of en bloc sales, warns URA
The Urban Redevelopment Authority (URA) has flagged the addition of a significant number of housing units to the existing supply pipeline from the redevelopment of en bloc sale sites – but analysts are not alarmed.  Among the reasons these market watchers cite is that they expect an inflow of overseas talents into Singapore to mop up the supply, and that not all these units will hit the market at the same time.

Tanglin Shopping Centre in third bid at collective sale
An ageing Orchard Road landmark is on track to becoming the latest in the en-bloc parade.  The 170-odd owners of strata-titled Tanglin Shopping Centre are making a third try for a collective sale, following previous attempts in 2011 and 2014.  They will elect a sale committee at a meeting on Nov 3.

Q3 office rents back in growth mode, reversing long downtrend
Figures released by the Urban Redevelopment Authority (URA) on Friday suggest that the office market has turned a corner, with rentals rising 2.4 per cent in the third quarter, reversing the downward trend for the past nine consecutive quarters.  This came as the nett amount of occupied office space islandwide increased by 10,000 sq m in the quarter, compared with an increase of just 1,000 sq m in the previous quarter. Net demand and absorption in the downtown core micro-market was even stronger at 13,000 sqm.

Analysts cautiously hopeful retail slump over after Q3 data
The retail slump in Singapore could be nearing its trough. The latest figures from the Urban Redevelopment Authority (URA) show a moderation in the decline in rents, down 0.2 per cent in Q3, compared to a steeper 1.2 per cent drop in the previous quarter.

HDB resale flat transactions drop 3.2% in Q3
Following a four-year high in the last quarter, Housing & Development Board (HDB) resale flat transactions fell by 3.2 per cent in the third quarter of this year, said HDB on Friday. There were 5,808 cases in the third quarter, down from 6,001 in the second quarter.

Go green with property tax notices
The taxman wants home owners to go green by choosing to receive electronic notices for their property tax instead of paper notices.  Around 500,000 home owners will be given the choice to receive an e-property tax bill.  If you are among them, expect to be notified by the Inland Revenue Authority Of Singapore (Iras) by letter early next month. However, you can also opt out by following the instructions in the letter.

Savills Investment sees HK property as among riskiest
Hong Kong’s sky-high prices and low affordability rank it as one of the riskiest property markets for Savills Investment Management, which is avoiding the city in favour of Japan and Australia.  “Hong Kong is highly, highly expensive,” Kiran Patel, who helps manage US$18 billion as chief investment officer at Savills Investment, said in Singapore. “Even with the lowest cost of capital, it is hard to justify today. We don’t think you can keep going up one year after another.”

Companies’ Brief

Suntec Reit’s Q3 DPU dips on enlarged unit base
Suntec Reit’s Q3 distribution per unit (DPU) declined 2.1 per cent to 2.483 Singapore cents per unit, owing to a larger unit base, while both gross revenue and net property income rose for the quarter under review.  In May, some 95.7 million new units were issued after S$166.5 million worth of debt held as convertible bonds were converted to equity.

CDLHT’s DPS down 3% in Q3 due to effect of rights issue
CDL Hospitality Trusts posted on Friday a lower distribution per stapled security (DPS) for the third quarter, due to the effect of a rights issue that was completed in August.  For the three months ended September 30, 2017, DPS stood at 2.29 cents, down from 2.36 cents the year before.

Frasers Hospitality’s earnings rise on better overall performance
The addition of Novotel Melbourne on Collins and better performance from all country portfolios apart from Singapore and Japan helped lift Frasers Hospitality Trust’s (FHT) distributable income in the fourth quarter.  FHT, a stapled group comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust, on Friday said distributable income rose 8.5 per cent year-on-year to S$23.8 million, boosted by the Australia, United Kingdom, Malaysia and Germany portfolios.

Yoma Strategic’s Q2 profit down on absence of fair value gain
Absence of fair value on financial assets weighed down Myanmar-based conglomerate Yoma Strategic Holdings’ second quarter FY2018 earnings even as revenue grew.  Net profit for the three months ended Sept 30 plunged 56.8 per cent year on year to S$3.7 million, led mainly by a fall in other income. Profit for the six months was down 36.3 per cent to S$6.4 million.

GLP’s independent adviser finds privatisation bid ‘fair and reasonable’
The independent financial adviser for Global Logistic Properties’ (GLP) independent directors has deemed a proposed privatisation to be fair and reasonable, according to scheme documents despatched on Friday.  Evercore Asia, which was appointed after Singapore’s Securities Industry Countil found the previous appointment of ANZ to be non-independent, said that it considered, among other things, that the S$3.38 per share is a premium over historical prices and over a sum-of-the-parts valuation of the business.

Ascott bags contracts to manage two properties in CBD, Ophir-Rochor Corridor
The Ascott Limited, the serviced residence arm of CapitaLand, is stepping up its presence in Singapore with new contracts to manage two properties in the CBD and the new Ophir-Rochor Corridor.  Both properties will operate under the Citadines brand, it said on Monday.

Starhill Global Reit DPU down 7.7% in Q1
Starhill Global Reit has posted first-quarter distribution per unit (DPU) of 1.2 Singapore cents, down 7.7 per cent from 1.3 Singapore cents in the same period a year earlier.  Income available for distribution in the three months to Sept 30 was S$26.7 million, down 9.3 per cent.  Gross revenue dipped 4.1 per cent to S$53 million due to a one-off S$1.9 million pre-termination rental compensation for a retail lease at Wisma (which has been filled up), as well as lower contributions from offices and the overseas properties except for David Jones Building and Myer Centre Adelaide.

Lattice80 tenants in the dark about move
What has been dubbed as Singapore’s largest fintech hub is vacating its premises by December, a move that has surprised the fintech start-ups working there as they were not given due notice.  Lattice80, which runs a two-storey co-working space that provides office space to fintech start-ups, has plans to move to another location, but has so far kept mum about its plan to its tenants.

FJB sews up new look for profitability
FJ Benjamin Group (FJB) CEO Nash Benjamin kicked off this interview arranged to garner deeper insights into the luxury retailer’s future plans, with a song.  “Where do I begin?” the younger brother of Frank Benjamin, the trailblazing founder of FJB, crooned to the tune of a popular love song from the ’70s. The humour belies the challenges the family has had to confront in recent years, where Singapore retailers are either struggling to survive or have bled into oblivion from haemorrhage.

Views, Reviews & Forum

Too early to herald recovery
Data on the property market has been slightly more upbeat in recent months, after years of being weighed down by a combination of slow economic growth and market cooling measures. But it might be too early to herald a return to boom times.  The private residential market seems to have turned the corner in the third quarter, with prices rising after almost four years of decline.

Cutting red tape in housing sales
The Housing Board has stepped up to the plate of digital change by refining its resale procedures. The key benefit: Resale transaction time will be halved to eight weeks from next year. This will be achieved via an upgraded resale portal – to make it easier to file applications and conduct eligibility checks.

The bull charges on
This week’s topic: Is the current market ‘exuberance’ rational and sustainable?

Global Economy & Global Real Estate

US economy grew at 3 per cent in Q3

NY returns some neighbourhoods to nature to fend off storms

Hamptons mansions pile up as buyers fight over smaller homes

London house-buyers benefit from Brexit impact on prices

Billionaires Keep Bubbling Up in China’s Soaring Property Market

ECB weighs options for ending QE programme with short taper in 2018

Saudi megacity to be floated: Crown Prince

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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