The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 3rd November 2016

Top Story

Singapore PMI at 50 in October; electronics expands to 50.8
Singapore’s manufacturing sector stayed in expansionary territory in October, albeit just barely.  The latest reading of the Purchasing Managers’ Index (PMI) stood at 50, marking the second month of expansion. However, this was a marginal dip of 0.1 point from September’s 50.1 – the first above-50 reading after 14 consecutive months of contraction.  Last month’s weaker expansion was attributed to slower overall factory output and lower employment, although new orders and new exports posted marginal improvements, said the Singapore Institute of Purchasing and Materials Management (SIPMM).

Singapore Economy

Financing emerges as new cost challenge for SMEs: survey
Small and medium-sized enterprises (SMEs) continue to face cost challenges on the usual three fronts – manpower, materials and rents – but a new one has cropped up, and it is the cost of financing.  The 2016 SME Development Survey carried out by DP Information Group found this to be now the fourth biggest cost issue among SMEs. Last year, it was named as an issue by 6 per cent of the survey sample; this year, it was 22 per cent.  SMEs still identified manpower costs as their top challenge, but while 75 per cent of the survey respondents cited this as an issue in 2015, only 72 per cent did so this year.  The percentage of SMEs with materials cost challenges also fell, from 37 per cent last year to 33 per cent this year; ditto for those naming rental cost as an issue, from 36 per cent in 2015 to 24 per cent this year.

Outlook 2017 to offer pointers for Singapore businesses
Offering information to help business operators chart their course more confidently – that’s what The Business Times hopes to do with a two-day seminar that will address the key issues challenging businesses in these difficult times. Entitled Outlook 2017, it will be held over the mornings on Nov 15 and 16 at the Marina Mandarin Hotel.  “The economic downturn is compounded by Brexit, China’s slowdown, the US elections. . . You can only make the best of whatever information you get, be cautious and wait out this difficult period,” said Monica Tung, who manages For Earth Singapore, a company that provides solutions for wastewater treatment and management.

Singapore Real Estate

TwentyOne Angullia Park owner in talks with bidders
CS Land, formerly known as China Sonangol, is in talks with several parties for the sale of 38 unsold units in its flagship project TwentyOne Angullia Park along Orchard Road.  One of these parties is understood to be a consortium led by Ben Yeo, former managing director of engineering and property group Guthrie GTS, although a family member declined to “respond to market rumours” when BT tried to contact Mr Yeo.

Site where iconic Queenstown cinema once stood sold for S$78m
A prime commercial-zoned piece of vacant land – where the former Queenstown cinema and bowling centre once stood – has been sold for S$78 million. The price for the site, which has a balance lease term of 57 years, is understood to work out to about S$756 per square foot of potential gross floor area.  Located a stone’s throw from Queenstown MRT Station, the site is at the corner of Commonwealth Avenue and Margaret Drive; it comprises two lots of land adding up to 32,305 sq ft, net of some land to be set aside for road widening.

Kuik family member buys GCB for S$16m in Oct when 60 landed units sold
A member of the Kuik family that founded the Sim Lian Group snagged a Good Class Bungalow (GCB) last month in Chestnut Drive for S$16 million while Nasrat Muzayyin, a director and shareholder of several oil trading companies here, picked up a bungalow in District 11 for S$22.24 million.  These were among some 60 caveated landed residential transactions worth S$336.76 million last month.  This followed a lively third quarter that saw 375 landed homes changing hands for S$1.6 billion in total, after some 321 deals were transacted for S$1.34 billion in the second quarter.

China developer’s bond issue hints at broader woes
In days of negative rates, it’s hard to get excited about anything, even high-yield bonds from China. A small dollar debenture offering by a property developer, however, has generated some heated chatter in Hong Kong and Singapore.  Zhengzhou-based Central China Real Estate Ltd told investors on Monday that it was planning to sell about US$200 million of dollar securities at an indicated 6 per cent.  Usually in Asian markets, after a deal is announced with a price level, it gets completed at the close of business in New York at the latest. Instead, portfolio managers in Asia woke on Tuesday morning to an announcement that the deal was still outstanding but was now offered at an indicative yield of 6.75 per cent, the level at which it was eventually sold.

Prime commercial spaces put up for sale
A total of nine commercial units, all with attractive amenities nearby, were offered for sale yesterday at three prime locations across Singapore.  Seven of the units, with a total of 5,102 sq ft of space, are on the second floor of Thomson Plaza. They are up for tender with an indicative price of about $20 million. This works out out to be $3,920 per sq ft (psf), said its sales agent PropNex Realty.  Mr Ken Bay, associate branch director of PropNex Realty, said: “Besides the upcoming Thomson-East Coast MRT line, there is plenty of development and upgrading in the precinct that will bring about more traffic to this vicinity.”

HDB shops go digital with display signboards equipped with CCTV cameras
At the corner of Block 201D, there is Ali’s Hairdressing & Beauty Salon. Looking for O Smile Shoe? Turn right and it is round the corner.  Visitors trying to navigate the maze of shops at the foot of HDB blocks often get lost. But now, shoppers in Tampines Street 21 can refer to large, luminous digital signboards along the walkways.  Similar to shopping mall directories, these screens display maps of HDB shops in the neighbourhood, and point out the nearby ATMs, AXS and SAM machines.  Going digital has taken the heartland quite a while. But Tampines Merchant Association has taken the plunge in the hopes that it can help the heartland shops in its neighbourhood resist stiff competition from suburban malls and online retailers. Shops in other parts of Singapore said they may follow in its footsteps.

Companies’ Brief

Strong performance, one-off gain lift OUE’s Q3 earnings to S$107.6 million
Hotel group and developer OUE said its third quarter net profit soared to S$107.6 million from S$15 million in the same period last year, lifted by a big one-off gain.  The results were achieved on the back of an increase in revenue for the three months to Sept 30 by more than four times to S$419.1 million, from S$99 million previously.  The robust performance was underpinned mainly by contribution from the property development and property investments divisions.

GLP shares surge as much as 14.5% on talk of takeover interest
Shares of Global Logistic Properties Limited (GLP) surged on Wednesday on market talk that it has attracted takeover interest from an investor group that includes China’s sovereign fund.  But the group said that it is “not in discussion with the above referenced investor group at this time”, after the share price movement prompted a trading query from the Singapore Exchange (SGX).  GLP shares closed 8.7 per cent higher at S$1.945 with 138.96 million shares traded after it lifted its trading halt at 2pm. They had spiked up by as much as 14.5 per cent intraday, before a trading halt was imposed at 12.30pm.

Mapletree Investments acquires student accommodation portfolio in US
In line with its strategy to expand beyond Asia, Mapletree Investments has acquired a portfolio of seven student accommodation assets in the United States, marking its maiden acquisition in the biggest student accommodation market worldwide.  Mapletree bought the portfolio from US-based Kayne Anderson Real Estate Advisors but declined to reveal the sum invested. Collectively, this gives it nearly 6,000 beds across the US assets.  The portfolio caters to Tier 1 US universities with high enrolments, which had compounded annual growth rate of more than two per cent over the last decade, Temasek owned-Mapletree said in a release. The assets are located across six states – Oregon, Alabama, Georgia, Texas, Virginia and Indiana – and cater to seven universities where accommodation supply is limited in the sub-markets.

Rowsley swings into the black for Q3 with net profit of S$5.39m
Real estate company Rowsley swung into the black with a net profit of S$5.39 million for the third quarter ended Sept 30 versus a loss of S$4.21 million in the same quarter last year, lifted by new contributions from the group’s UK hospitality business and its engineering consultancy, Squire Mech.  Revenue rose 40 per cent to S$24.6 million, bolstered by S$3.8 million in contributions from the UK hospitality group, S$2.5 million from Squire Mech which was acquired in August and an increase in RSP’s revenue of S$0.8 million. RSP is the group’s architectural, engineering and master planning consultancy.

Views, Reviews & Forum

China’s property bubble poses dangers – and not only for China
This year began with a rout in China’s bubbly stock markets, an event which reverberated around the world. Since then, those markets have been relatively subdued, but other bubbles have emerged and grown – some of them potentially more damaging to both China and the global economy than the stock market bubble.  China’s bubbles span a wide variety of asset classes, ranging from art and antiques to soymeal and iron ore futures, and above all, real estate. They are partly the result of a dearth of investment opportunities in China’s slowing real economy and the lack of deep, liquid financial markets.

Global Economy & Global Real Estate

Fed holds rates steady, sets stage for December hike

Airbnb challenges new law that punishes people renting its homes

British house price growth runs out of steam in October: Nationwide

Millennium & Copthorne’s London hotels get a boost from pound’s fall

China debt risks stoke internal debate over lowering 2017 growth goal

Fast-growing China provinces can’t quit investment addiction

Vancouver Home Sales Fall 39% as New Rules Chill Market

Property tycoon buys WCT with eye on infrastructure jobs: analysts

UEM in talks to sell Iskandar sites to investors

Additional Articles of Interest – Local & Overseas Real Estate

Real-estate opportunities in a challenging environment
Rocked by global market uncertainties, Singapore’s economy is expected to remain subdued for the rest of 2016, with the possibility of it going into a recession within the next 12 months, according to Song Seng Wun, director and economist at CIMB Private Banking. Song was speaking at The Edge Property 360 seminar on “Pockets of Opportunity in 2017” on Oct 22 at the HDB Hub Auditorium.  The Monetary Authority of Singapore has said that the government’s forecast is for growth to come in at the lower end of the 1%-to-2% range for 2016, and “only slightly higher” for 2017. However, inflation is expected to stay low.

Local & Overseas Real Estate – Full Article

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