The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 30th November 2016

Top Story

Central bank backs keeping property cooling measures in place
The property cooling measures are here to stay for a while, at least going by the tone that Singapore’s central bank has set in its latest annual review of financial stability.  In its report released on Tuesday, the Monetary Authority of Singapore (MAS) hinted that it still wants more time for these measures to work through the economy, as global conditions in the form of still low interest rates, weak growth and intensifying political risks weigh on Singapore’s household and corporate balance sheets.  Singapore has introduced several rounds of property cooling measures since the 2009 financial crisis.

Singapore Economy

S’pore has one of lowest tax-GDP ratio among Asian economies: OECD
Singapore is among the lowest-taxed economies in South-east Asia and among economically advanced nations as a whole, according to a report issued on Tuesday by the Organisation for Economic Co-operation and Development (OECD).  Only Indonesia ranks lower than Singapore in terms of the ratio of taxes to gross domestic product (GDP) in six Asian nations surveyed by the OECD – Japan, South Korea, the Philippines, Malaysia, Singapore and Indonesia.  The report, which includes Singapore for the first time, shows that tax-to-GDP ratios in all six countries are lower than the OECD average of 34.2 per cent.

Customer satisfaction up for tourism and F&B sectors: report
The tourism and food & beverage (F&B) sectors showed upticks in customer satisfaction in the third quarter of 2016, according to the Customer Satisfaction Index of Singapore (CSISG).  According to the report, which was released by the Institute of Service Excellence (ISES), the tourism sector saw a 1.7 point increase from a year ago to 71.1 points, while the F&B score rose 2.98 points to 70.1 points.  However, the results also showed a decline in expected quality among locals for certain F&B establishments, which could affect repeat business if the trend continues in subsequent years.

Retiree households least hit by inflation: Singstat
Retiree households enjoyed the largest decline in consumer prices last year, compared with other income groups in Singapore, thanks in part to healthcare subsidies.  Consumer prices for retiree households – those with only non- working persons aged 60 years and above – fell by 2 per cent, said the Department of Statistics Singapore (Singstat) yesterday.  This was mainly due to lower accommodation and healthcare services costs, which make up a bigger share of their spending.

Singapore Real Estate

Housing choice linked to retirement comfort
A young couple who plans to spend S$4,000 per month – at current prices – during retirement would need to save S$2,800 a month during their working years, a study by the central bank on Tuesday showed.  And a large part of this can be in the form of Central Provident Fund (CPF) savings, but only if the couple, each aged 30, makes “prudent housing choices”, said the Monetary Authority of Singapore (MAS) in a report as part of its financial stability review.  “Retirement planning is an increasingly pressing issue for Singapore households as our population ages,” said MAS, noting that the citizen old-age support ratio should decline from 4.7 in 2016 to 2.3 in 2030. This refers to the number of people age 20-64 years for every person who is 65 years old and over.

Foreign demand for Singapore property to continue: JLL
There has been good demand from foreigners for Singapore’s private residential property this year, and real estate consultancy JLL expects the recovery in foreign demand to continue into 2017. It also expects properties in the prime city centre to be the preferred choice.  According to findings from a JLL study released on Tuesday, the number of foreign buyers, excluding Singapore permanent residents, in the first nine months of 2016 rose 11.7 per cent compared to the same period last year, driven by nationals from China, Indonesia, Malaysia and the United States.  The Chinese buyers were the most active, accounting for 29.4 per cent of all foreign purchases from January to September.

Interest rate rise unlikely to hit Reits badly: MAS
Rising interest rates and a looming over-supply in the property market may affect real estate investment trusts (Reits) but the market will stay healthy.  That was the finding of a stress test on the sector by the Monetary Authority of Singapore (MAS), which noted that Reits listed here have enough earnings to absorb the impact of higher interest rates even amid challenging conditions.  Investors like Reits for their stable yield. The sector’s assets have been growing at an annual average of around 7.8 per cent since 2013 and accounted for about 7.9 per cent of total market capitalisation on the Singapore Exchange in the third quarter.

URA, JTC launch four confirmed and reserve list sites
The Urban Redevelopment Authority (URA) on Tuesday released two sites, one at Perumal Road and another at Toh Tuck Road, for sale under the second half 2016 Government Land Sales (GLS) programme.  The residential with first-storey commercial site at Perumal Road was launched for sale under the Confirmed List, while the residential site at Toh Tuck Road is available for sale on the Reserve List.   Together, these two sites can potentially yield about 525 residential units. The tender for the site at Perumal Road will close at 12 noon on Jan 10, 2017.

Singapore office rents to rebound end-2017, CapitaLand Reit says
Singapore’s office rents will remain “a little soft” in 2017 and may pick up only at the end of the year when the amount of new supply of space shrinks, according to CapitaLand Commercial Trust, one of the country’s biggest landlords.  About 2.3 million square feet of space were added this year, driving rents down by 15 per cent, said Lynette Leong, chief executive office of the real estate trust’s manager. Less than 500,000 square feet are being planned annually starting in 2018, with no supply in sight from 2020, she said in an interview with Bloomberg Television on Tuesday.

Cityvibe in Clementi sold for S$71m to Zhao family from China
Cityvibe, a four-storey commercial building near Clementi MRT Station, has been sold in a deal that values the property at S$71 million, BT understands.  The property is on a site with a balance lease term of about 60.5 years.  Under the transaction, which was effected through a sale of shares in the company that holds the asset, an entity controlled by a Zhao family from China is the buyer. Some members of the family reside in Hongkong.

Companies’ Brief

Perennial signs call option to buy 20% stake in London’s Aviva Tower
A day after Perennial Real Estate Holdings said it had raised its stake in the Chinatown Point mall in Singapore, the developer on Tuesday announced that it has signed a call option agreement for the right to buy a 20 per cent stake in Aroland Holdings, which owns Aviva Tower in London.  The call option is based on an agreed property value of £330 million (S$587.8 million) for the 28-storey office building. The option price was derived based on the “as-is” market valuation of Aviva Tower of £323 million, without factoring in any potential redevelopment value.

Cromwell considering listing Reit in Singapore
Australia-listed Cromwell Property Group is considering a Singapore initial public offering in the form of a real estate investment trust (Reit) comprising some European office properties it manages, says a Wall Street Journal (WSJ) report on Tuesday.  Citing people familiar with the matter, WSJ said that these properties are among some 3.7 billion euro worth of assets managed by Valad Europe, a European property funds manager which Cromwell Property Group acquired from Blackstone Group LP’s real-estate business last year for 145 million euros (S$219.2 million).

Lian Beng strikes deal with 11 strata owners to buy Melbourne office for A$51.5m
Lian Beng Group Ltd has struck a deal with 11 strata owners to acquire a freehold office property in Melbourne for A$51.5 million (S$54.8 million).  The purchase was made through wholly owned unit Lian Beng Realty Pte Ltd, which had entered into 16 contracts of sale with 11 vendors for the proposed acquisition of the property at 50 Franklin Street.  The price tag translates to nearly A$4,500 per square metre based on the net lettable area (NLA) of 11,447 sq m.

GuocoLand’s China unit wins tender for 4 land plots at 3.64b yuan
A Chinese unit of Singapore-listed GuocoLand Limited has won the tender for four land parcels in Chongqing at 3.64 billion yuan (S$753.8 million). It will be developing a mixed development comprising retail, business and residential under a project company that will be set up as a wholly owned subsidiary.  In an announcement on Tuesday, GuocoLand said that its wholly owned unit GLL Chengdu Pte Ltd has won the construction land use right for the four plots spanning 48,961 square metres (sq m) in land area, with a total above ground gross floor area of 513,600 sq m.

Views, Reviews & Forum

Building expertise for land reclamation
Dyke construction and coastal management will play an essential role in the evolution of Singapore’s land reclamation efforts. This is to be expected as the effects of rising sea levels, a consequence of climate change, will be felt on islands and littoral states in general. Thus, it is useful to gain experience in the use of seawalls for reclamation when a plot of land, the size of two Toa Payoh towns, is added to the north-western tip of Pulau Tekong – a method that is novel here.

Developments in Johor could serve as warning for property market here
I refer to the letters “Lower stamp duty would make property market more lively” (Nov 23) and “Remove additional stamp duty for S’poreans to encourage investment here” (Nov 21).  We are lucky that our Government has not spared developers and investors from the Additional Buyer’s Stamp Duty.  Let us look at the report “Chinese property investors gamble S$143b on JB being next Shenzhen” (Nov 23).

Global Economy & Global Real Estate

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China said to step up mortgage controls to cool home prices

China forex regulator tightens controls to stem capital outflows: sources

New Zealand’s central bank may take steps to rein in risky mortgage lending

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Local & Overseas Real Estate – Full Article

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