The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 31st December 2016, 1st, 2nd and 3rd January 2017

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CFE expectations need to be set right
As Singaporeans bid a sluggish 2016 adieu, expectations are running high for the Committee on the Future Economy’s (CFE) report – expected later this month – to be the panacea for all economic ills.  But experts say those anticipating big bang recommendations should temper such expectations, given the constraints surrounding Singapore’s more mature economy. The seeds may be cast for future growth, but there will unlikely be quick cures for Singapore’s economy.

Singapore economy expected to grow 1% to 3% this year
Singapore’s economy is expected to have grown by more than 1 per cent last year, lower than initial forecasts, Prime Minister Lee Hsien Loong said yesterday.  Yet the country is “not doing badly” considering the global uncertainty, he added, noting that despite the easing off in demand for workers, unemployment remains low and jobs are still being created.  The Government had narrowed its growth forecast for 2016 to between 1 per cent and 1.5 per cent. It expects growth to be between 1 per cent and 3 per cent this year.

Singapore Economy

Bank lending limps along in November
Gains in bank lending eased in November from the previous month, reflecting weakening growth in business and consumer loans amid more pessimistic times for the economy.  Bank lending in Singapore in November was up 0.4 per cent from a month earlier, compared to the 0.8 per cent growth in October, preliminary data from the Monetary Authority of Singapore on Friday showed.

Slight gains in market cap in spite of bumps
Given the scary plunge in the China market earlier in the year, the high-profile delistings and the handful of large listings over the past 12 months, it is something of an achievement that the total market value of firms on the Singapore Exchange (SGX) managed to eke out slight gains in 2016.  Total market capitalisation came in at $879.4 billion at the close of trading yesterday, up 1.98 per cent from the $856.4 billion market cap on Dec 31 last year.  A market cap gain of less than 2 per cent over 12 months is nothing to write home about but the SGX, investors and companies were battling problems on multiple fronts, not least the number of big companies like Osim International and Neptune Orient Lines that delisted.

Singapore labour market expected stay tepid in Q1
The official quarterly data coming out of the Ministry of Manpower (MOM) since April has painted a grim picture of the labour market in the first nine months of 2016, drawing comparisons with the big cuts in jobs and workers in the last recession in 2009.  Going by the first three quarters’ data – the final quarter’s data is still not out – the labour market in the past year was indeed in its worst shape in six years. And MOM wasn’t the only one making reference to 2009 to underline the labour market’s deterioration.

Banks hope for warmer Asean ties to brace anti-trade chill
ASIAN banks are hoping for a closer huddle within the region amid the chill of anti-trade sentiment in the wake of Brexit and the US elections, with Indonesia in vogue this year.  As it is, the banks are already tackling a host of tougher regulations, slower global growth, and the continued digital disruption to the industry. Singapore banks, in particular, have also been hurt by their portfolio’s oil-and-gas exposure because of the double whammy of the plunge in oil prices, and the leverage borne by several oil-and-gas players.

Singapore Real Estate

Private home prices fall for 13th straight quarter but decline eases to 0.4% in Q4: URA
Singapore home prices dropped for a 13th quarter, extending the longest losing streak on record but with the slow decline easing in the last three months of 2016.  An index tracking private residential prices dipped 0.4 per cent in October-December period, compared with the 1.5 per cent fall in the third quarter, according to preliminary data from the Urban Redevelopment Authority on Tuesday (Jan 3).  For the whole of 2016, prices have fallen by 3 per cent, compared with the 3.7 per cent drop in 2015, URA said.

Old Thai Embassy building torn down
The old Thai Embassy building which sat in Orchard Road for more than five decades has been demolished, and a makeover is under way.  The Straits Times understands that a Thai pavilion will be built on the land where the old building once stood, with landscaping in front of it.  Consular services and embassy officials have already moved to another five-storey building – one of several – constructed inside the complex. Works on these were completed in 2012.

Time of plenty in office rental market
The Singapore office rental market has been languishing amid a ramp-up in new completions and weak demand.  Quite a common view held by some landlords (including office Reits), as well as analysts, is that things will start to improve in 2018 and beyond when the supply of new completions will be “very limited”.
Let’s take a closer look at the supply.  Approximately 1.8 million sq ft net lettable area of offices were completed in 2016 – in projects such as Guoco Tower, SBF Center and Duo Tower. In 2017, another 3.1 million sq ft office space is expected to be ready from projects such as Marina One, UIC Building, Arc 380 and Vision Exchange, based on data from JLL.

Companies’ Brief

Launch of S’pore’s 1st startup stock exchange expected by mid-year
A startup stock exchange that aims to help early-stage companies find funding for their businesses, bridging the financing gap between crowdfunding sites and traditional stock exchanges, is expected to be launched in Singapore this year.  Plans for the exchange are still in a nascent stage. But Curacao-based Startup Stock Exchange (SSX), which was acquired in May 2016 by the International Stock Exchange Group (ISEG) for an undisclosed sum, hopes to get it up and running by the middle of this year. 

Valiram eyeing further expansion in 2017
Malaysia-based retail and lifestyle group Valiram plans to scale up its network this year, leveraging on its core brands to fuel growth across the region.  The family-owned business will add New Zealand to its geographical portfolio as well as deepen its presence in existing markets such as Malaysia and Vietnam.  Starting with humble beginnings as a textile merchant in Kuala Lumpur in 1935, it branched out into airports with a textile store at Subang Airport in 1996 and later a stand-alone Dunhill boutique at Kuala Lumpur International Airport (KLIA) in 1998. The early 2000s saw the launch of the multi-brand Swiss Watch Gallery store in Penang International as well as the expansion of its retail portfolio with brands such as Coach, Montblanc, Hermès and Godiva at KLIA.

Imperium Crown to exit Japan property market
Just two years after entering the Japanese property market, Imperium Crown wants to sell off all its properties in Japan, blaming in part softer rents in that market and saying the return on capital on its buildings was “not commensurate with the capital investment”.  The Catalist-listed property investment group will call an extraordinary general meeting to get the green light from shareholders for the disposal, it said in a Singapore Exchange filing on Friday. Its decision came after it reviewed its business earlier this month.

GIC to buy 50% of Watermark mall in UK
Sovereign wealth fund GIC is increasing its stakes in retail property on England’s South Coast.  It is buying a 50 per cent stake in the Watermark, a newly opened shopping mall in Southampton, for £48.5 million (S$86.2 million), it announced yesterday.  It bought the stake from European property developer Hammerson. The two companies previously worked on a joint venture for the Westquay shopping centre, which is adjacent to the Watermark.

STB appoints new chairman and board members
Singapore Tourism Board (STB) has appointed a new chairman and four new board members, among others, the Ministry of Trade and Industry (MTI) announced on Friday.  Chaly Mah Chee Kheong, former chief executive officer of Deloitte Asia-Pacific and South-east Asia and former chairman of Deloitte Singapore, will take over from Chew Choon Seng as the chairman of STB on Jan 1, 2017.  Mr Chew will be stepping down after completing a six-year tenure.

Views, Reviews & Forum

Analysts see a brighter year ahead after flat 2016
In the end, 2016 turned out to be a year of sound and fury, signifying nothing – at least on the surface.  After trading ended on Dec 30, 2016, the benchmark Straits Times Index (STI) closed the year at 2,880.76 points, almost unchanged from the end-2015 close of 2,882.73 points.  But the total value of the 753 companies listed on Singapore Exchange (SGX) tracked by The Business Times was S$879 billion, up 2.7 per cent from S$856 billion a year ago.

Property fund of AIMS under attack from wind-up attempt
Singapore-listed Australian fund AIMS Property Securities Fund (APW), is currently under attack from minority unitholders who have convened a Jan 3 meeting to vote on a motion to wind up the fund.  The motion was initiated by Samuel Terry Asset Management, a Sydney-based boutique investment management company, which claims to have amassed substantial support from other unitholders to go against APW’s majority shareholder, AIMS Financial Group.

Growth strategies to tackle change and thrive
Key lessons in 2016: “The obvious one is that politics is very unpredictable as seen in Donald Trump’s presidential election win. On the whole, I think there will continue to be uncertainty, but it’s not all bad.  There are some bright sparks. I think Chinese President Xi Jinping should be consistent with his economic policies.  The One Belt, One Road initiative will provide a lot of opportunities for companies, including ourselves as we are plugged into the regional and global markets. China accounts for about onethird of our business and its economy is still growing at 6 to 7 per cent. Slower growth, but not no growth.”  Top business priorities in 2017: “An area we want to focus on is helping Singapore retailers strengthen their online-to-offline strategy through our e-commerce fulfilment business. We are exploring solutions with the Singapore Tourism Board to enhance the shopping experience, for example, by offering services to ship purchases to anywhere the customers want – be it to their home, to the hotel or the airport.

Ensuring safe escalator use
The world’s first-ever escalator was installed in 1896 on New York’s Coney Island – as a novelty ride.  Today, the device has become a ubiquitous people-mover, and in Singapore, there are more than 6,000 of them.  But for all their speed and convenience, escalators are also potential sites for accidents, especially when people do not exercise care while using them.  Last Thursday, the Building and Construction Authority (BCA) said that since Nov 1, it had received reports of 63 incidents – or about one a day – relating to the use of escalators. The BCA said that 95 per cent of the cases were attributed to “user behaviour”.

Prevent touting by renovation contractors
The report, “I’m not a cheat, says renovation contractor” (Dec 15, 2016), highlights an area of concern.  It was mentioned that the contractor approached the flat owners when they were collecting the keys to their Build-To-Order flats, so the touting would have taken place on the Housing Board’s premises.  If this is indeed the case, then the HDB must step up enforcement against illegal touting in new estates and its offices.

Global Economy & Global Real Estate

Yuan set to be worst-performing Asian currency

Diminished in 2016, what lies ahead for Malaysia?

Asia-Pacific loans hit three-year low despite China M&A boom

Trump’s Indonesia projects create potential conflicts

As US living costs soar, DC homelessness doubles national average

German manufacturing growth nears three-year high in December

Growth in China’s factories, services slows in December 

Global equity raising down over 25% in 2016; bankers see a shaky 2017

Slow economic growth in eurozone will cause election uncertainty in 2017

S Korea’s Dec exports up for second straight month

Kenyans tackle huge housing shortage to stem spread of slums

Gentrification splits famous London district of Brixton

HK to sell first commercial site in Central since 1996

NYC subway expansion brings relief and fears

GNC ends 2016 as worst year since IPO

HK less of a paradise for shoppers from China

Australian home prices boast best year since 2009, rise nearly 11%, says CoreLogic

He came, he saw empty bushland, he built a city

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