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, 30th and 31st July 2017

Top Story

Private home sales in primary, secondary markets surge
Latest official data shows a surge in private home sales across both primary and secondary market, which is seen as supporting a firming in prices.  Data from the Urban Redevelopment Authority (URA) released on Friday also showed smaller quarter-on-quarter declines in prices and rentals of private homes, offices and retail space. Vacancies continued to rise for office and retail space, however, but held steady for the residential segment.

Singapore Economy

S’pore economy on track to pick up pace: IMF
Singapore’s economy is on track to pick up pace into next year as the improved global outlook along with rising public spending spill over into private consumption, the International Monetary Fund (IMF) said.  But its small, open economy is also facing mounting global geopolitical risks and rising uncertainty.

Resident jobless rate, layoffs fall but job market stays weak
Although resident jobless rate and layoffs fell in the second quarter of 2017, the job market in Singapore remains weak, with mixed views among economists.  While some felt there are green shoots appearing, one cut his full-year job projections by half. Quarter on quarter, resident unemployment rate fell to a seasonally adjusted 3.1 per cent in June 2017, from 3.2 per cent in March 2017, while the jobless rate of citizens was 3.3 per cent in June, down from 3.5 per cent in March.

Developed markets into sustained expansion: BlackRock
Developed economies are cruising at slightly above trend rates since the Great Financial Crisis of 2009, helped by subdued financial market volatility, fading fears of deflation and fewer near-term political risks.  The low financial market volatility, characterised by recessions and financial crises, does not necessarily signal that markets are complacent.

GoSpree: Great deal of offers
More than 26,000 people have downloaded an app that offers discounts and deals at various retail shops, food and beverage outlets, hotels and attractions.  Some 200 brands have also come on board the GoSpree app, an initiative by the Singapore Retailers Association (SRA) to reach out to younger tech-savvy shoppers and boost sales during the ongoing Great Singapore Sale (GSS).

Singapore electricity sector to see shake-up with full liberalisation
The future of Singapore’s electricity sector is starting to take shape as the country approaches the last leg of a long journey in the liberalisation of the market.  With 25 electricity retailers slugging it out for a pie of the market that will be fully liberalised next year, the range of new services they will offer – by tapping various new technologies and new business models – will no doubt bring immense benefits to end-consumers.

Amazon Prime Now hard put to deliver
I’m sure you heard of Amazon’s arrival in Singapore this week. Not only did the e-commerce giant make its much-anticipated move on Thursday into the Republic as a launchpad to South-east Asia, but it also made Amazon history by offering its exclusive ultra-fast delivery service, Prime Now, outside the US for the first time.

Singapore Real Estate

Property sector leads list of buyouts from Singapore Exchange
The year 2017 is shaping to be the year of the property buyout.  As firms continue to plot their exits from the Singapore Exchange (SGX), analysts say this indicates that valuations are still low – though the situation is not as bad as a year ago.  They cite tech, property, industrials, consumer and oil and gas names as potential candidates for further mergers and acquisitions (M&A) activity.

HDB Q2 resale transactions jump 32.5% despite flat prices
Public housing data for the second quarter (Q2) of the year showed resale flat prices inching down 0.1 per cent – dipping lower than the index in first quarter (Q1). It dwindled from 133.9 in Q1 to 133.7 in Q2.  Despite that, the Housing and Development Board (HDB) resale market saw a spike in transaction volume in the last quarter, it said in a press release on statistics for its resale and rental market in the second quarter of the year.

Retail rents, prices slide again but at a slower pace
Retail space in Singapore continued to post sluggish numbers as market conditions remained challenging, but the latest figures from the Urban Redevelopment Authority (URA) released on Friday showed declines easing somewhat.  URA’s retail property rental index edged downwards by 1.2 per cent in the second quarter of this year over the preceding quarter – a smaller drop than the 2.9 per cent quarter-on-quarter decrease in Q1.

EC demand tipped to stay buoyant
Executive condominiums (ECs), a hybrid of public and private housing, have also been swept up in the resurgent property market.  Demand for ECs was brisk in the second quarter as developers shifted 954 new units even though no fresh project went on sale.

Signs of turnaround in office property market
There may be light at the end of the tunnel for the office property market this year, but retail is still in the doldrums.  Conditions for retail and office spaces continued to be challenging, although declines in prices and rents appear to be easing, according to Urban Redevelopment Authority data.

Dunearn Court eyeing $38.8m in collective sale bid
The 12 owners of the Dunearn Court condominium have put the property on the market for $38.8 million, with substantial gains likely from the sale.  The tender comes hot on the heels of a slew of collective sale deals sealed in recent months amid rising optimism in the private residential market.  The asking price works out to a land rate of about $1,443 per square foot (psf) per plot ratio, said marketing agent Knight Frank, adding that no differential premium is payable.

East Coast Park to get more facilities, open spaces
East Coast Park will be upgraded with more open spaces and amenities when improvement works at three sites are completed by end-2019, the National Parks Board (NParks) announced yesterday.  The sites where the former Goldkist Chalets, Big Splash and Raintree Cove are located will be turned into nodes – centres of activity for people to congregate around – that will help spread out human traffic to the other parts of the park.

BLOCK71 opens new facility for startups in Jakarta
BLOCK71, the blue, seven-storey industrial building in one-north widely touted as Singapore’s startup hub, on Friday opened a new incubation space in Jakarta.  Observers hailed its setup, but said having Indonesian partners would be integral to giving Singapore startups access to the Indonesian market.

Companies’ Brief

CDL Hospitality Trusts posts strong Q2 results; DPS down
A stellar performance of Grand Millennium Auckland and an inorganic contribution from The Lowry Hotel in Manchester, UK boosted CDL Hospitality Trusts’ (CDLHT) results for its second quarter ended June 30, 2017.  Distribution per stapled security (DPS) for Q2 was 2.08 Singapore cents, down 3.7 per cent from the year-ago period’s 2.16 Singapore cents.

Higher rents drive MGCCT’s first-quarter DPU growth
Commercial landlord Mapletree Greater China Commercial Trust (MGCCT) achieved a slight improvement in results for the first quarter ended June 30.  This was mainly driven by higher average rental rates from its properties and a lower value- added tax (VAT) rate for its Gateway Plaza property in Beijing compared to the year-ago period.

Fortune Reit’s DPU rises 3% for first half
A slight improvement in Hong Kong’s retail sector lifted the results of retail landlord Fortune Reit for the six months ended June 30, it said.  But while it acknowledged that the retail market had shrugged off an extended setback for the last two years, it said it was too early to conclude that the market was on track for a full recovery.

Higher taxes, cash retention lower Starhill’s Q4 DPU
Straight-lining rent adjustments, higher withholding taxes for Malaysia income and higher cash retention led Starhill Global Reit to report a lower distribution per unit (DPU) of 1.18 Singapore cents for its fourth quarter, less than the 1.29 Singapore cents that it paid out in the corresponding quarter a year ago.  Straight-lining rent adjustments refer to periods when its tenants are undergoing renovations and the Reit decides to grant them rent-free periods, so the annual rent is averaged over the remaining months.

UIC Q2 net profit falls 33% on fair value losses
Property group United Industrial Corp has reported a 33 per cent fall in net profit to $74.7 million in the second quarter after booking a fair value loss on investment properties reversing gains a year ago.  In the three months that ended June 30, UIC took a fair value loss of $3 million, reversing from a $51.5 million fair value gain in the same period a year earlier.  Removing these effects, UIC’s net profit from operations was $77.7 million, 29 per cent higher year on year.

FLT posts better-than-expected DPU in third quarter
Frasers Logistics & Industrial Trust (FLT) recorded distributable income above its initial public offering forecast for the fourth straight quarter, the manager said yesterday.  Third-quarter distribution per unit was 1.75 Singapore cents for the real estate investment trust, which deals in Australian industrial property.  Net property income was A$30.8 million (S$33.4 million) for the three months to June 30 while revenue came in at A$40.2 million.

CapitaLand cannot evict art gallery: British High Court
Britain’s High Court has dealt a blow to Singapore’s CapitaLand after it ruled that the property giant was not allowed to evict a tenant in order to redevelop a prime space in the heart of London.  The legal battle first went to a London County Court in January, which ruled in favour of CapitaLand. The tenant, S Franses art gallery, appealed to the High Court, which earlier this month overturned the lower court’s decision and ordered CapitaLand to pay its tenant’s legal costs for both hearings.

Views, Reviews & Forum

Up, up and away?
This week’s topic: What’s behind the apparent improvement in property market sentiment? Would a turnaround at this point be sustainable?

What is a Reit?
A real estate investment trust (Reit) is an investment trust, similar to mutual funds and unit trusts in that it pools funds from public investors (unit holders) to invest primarily in property such as malls, office buildings and hotels.  Reits give investors a chance to own a portion of these real estate (analogous to shareholders owning part of the company whose shares they own) and thus claim a portion of the income from these assets.  Singapore listed its first Reits in 2002 and, according to an Ernst and Young report last year, is now the sixth-largest Reit market in the world (third in Asia, after Japan and Australia, and ahead of Hong Kong). Reits in Singapore are also called S-Reits.

Is Singapore’s Property Slump Finally Ending?: QuickTake Q&A
Singapore home prices have ground steadily lower since reaching a record in 2013, when the government imposed the last of a slew of measures to cool a red-hot market. Authorities in the Southeast Asian island-state loosened some of those restrictions in March, raising speculation that the end was nigh for the cooling measures — and those falling prices.  Transaction volumes have certainly perked up and real estate shares are on a tear.

Global Economy & Global Real Estate

US investment opportunities are ‘not over’

US economy rebounds to 2.6% growth in Q2

As New York rezones east midtown, new towers may be long way off

HK’s LKK buys Walkie Talkie tower in London for record £1.28b

Europe’s luxury retailers appear to be back with emphatic bang

China’s growth quality to improve but risks remain: IIF

Construction of China PPP projects has entered ‘fast lane’

Construction boom reaches China’s small cities

HK’s next housing problem – for the dead

Macau billionaire found guilty of bribing UN diplomats

Kuching hotel purchase under investigation

Australia new homes sales fall sharply in June

Dubai developer Nakheel targets growth in recurring revenue

Japan industrial output increase hints at more stable growth

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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