DAILY NEWS

Daily News – 04th July 2019

Singapore Real Estate

Latest state tenders yield mixed bag of results
An executive condominium (EC) housing plot along Canberra Link in Sembawang pulled in eight bids at a state tender on Wednesday, with the top bid coming in 1.4 per cent higher than that for an adjacent EC site sold last September. On the other hand, a private housing site along Clementi Avenue 1 drew more moderate interest, with only five bids. The top bid there was also below the expectations of at least one property consultant, Tricia Song of Colliers International.
https://www.businesstimes.com.sg/real-estate/latest-state-tenders-yield-mixed-bag-of-results

Higher gearing limits will improve Reits’ DPU
The proposed higher leverage limits for real estate investment trusts (Reits) could lower overall cost of capital for the asset class, and allow room for portfolio growth, given the greater certainty of deal completions. In addition, distribution to unitholders could also increase, as debt-funded property acquisitions are likely to be accretive to distribution per unit (DPU) since the rental yields of the acquired assets will probably exceed the interest rate of borrowings.
https://www.businesstimes.com.sg/companies-markets/higher-gearing-limits-will-improve-reits-dpu

Landscape firms eyeing govt contracts must give workers bonus from 2020
Workers involved in landscape maintenance will receive bonuses from Jan 1 next year, and annual increments in their basic wage package from 2023 to 2025. The move follows recommendations put out in the addendum to the Tripartite Cluster for Landscape Industry (TCL) report. The full addendum was released on Wednesday and accepted by the government on the same day.
https://www.businesstimes.com.sg/government-economy/landscape-firms-eyeing-govt-contracts-must-give-workers-bonus-from-2020

Singapore Economy

June PMI falls to 3-year low; electronics contraction continues
Singapore’s manufacturing sentiment worsened further in June, with the Purchasing Manager’s Index (PMI) contracting for the second straight month, and the beleaguered electronics sector shrinking for the eighth month in a row, according to Wednesday’s release by the Singapore Institute of Purchasing and Materials Management (SIPMM).
https://www.businesstimes.com.sg/government-economy/june-pmi-falls-to-3-year-low-electronics-contraction-continues
https://www.straitstimes.com/business/economy/manufacturing-electronics-sectors-continue-decline
https://www.channelnewsasia.com/news/singapore/singapore-factory-activity-manufacturing-shrinks-june-2019-11688118
https://www.todayonline.com/singapore/singapores-factory-activity-contracts-second-straight-month-june

Companies’ Brief

CapitaLand eyes positive re-rating for enlarged Ascott Reit-BT
Sooner than expected, the union of CapitaLand’s two hospitality trusts has been set in motion. Marriage has been in the air ever since CapitaLand agreed to acquire Ascendas-Singbridge in January, and Ascott Residence Trust (Ascott Reit) is making its offer for Ascendas Hospitality Trust (A-HTRUST) against the backdrop of a Singapore Reit rally that has pressed on all year long.
https://www.businesstimes.com.sg/companies-markets/capitaland-eyes-positive-re-rating-for-enlarged-ascott-reit-bt
https://www.straitstimes.com/business/companies-markets/capitaland-to-merge-ascott-reit-ascendas-unit
https://www.channelnewsasia.com/news/singapore/capitaland-ascott-reit-ascendas-merge-hospitality-trust-11685978

FLT to buy 12 properties for A$645m from Frasers Property
Frasers Logistics & Industrial Trust (FLT) is planning to acquire 12 freehold logistics properties – nine in Germany and three in Australia – from its sponsor Frasers Property for A$644.7 million (S$612.5 million). FLT, a real estate investment trust (Reit), entered into sale and purchase agreements with Frasers Property’s subsidiaries, FLT’s manager said on Wednesday.
https://www.businesstimes.com.sg/companies-markets/flt-to-buy-12-properties-for-a645m-from-frasers-property
https://www.straitstimes.com/business/companies-markets/flt-acquiring-12-properties-for-613m-from-sponsor

Chip Eng Seng to open elementary school in Singapore
Chip Eng Seng Corporation’s wholly-owned subsidiary CES Cambridge (CESC) has entered into an agreement with The Perse School Cambridge International (TPSCI) to set up an elementary school in Singapore by early-2020. TPSCI is a wholly-owned subsidiary of The Perse School, an independent school in Cambridge, United Kingdom.
https://www.businesstimes.com.sg/companies-markets/chip-eng-seng-to-open-elementary-school-in-singapore

UOL-UIC tie-up places top bid for Clementi Ave 1 site
A state tender for a 99-year leasehold private housing site along Clementi Avenue 1 has attracted five bids. Units of UOL Group and United Industrial Corporation (UIC) teamed up to place the top bid of S$491.3 million, which works out to S$788.31 per square foot per plot ratio (psf ppr).
https://www.businesstimes.com.sg/real-estate/uol-uic-tie-up-places-top-bid-for-clementi-ave-1-site
https://www.straitstimes.com/business/property/uol-uic-tie-up-in-top-bid-for-clementi-ave-1-site

Ohmyhome announces first overseas expansion into Malaysia
Local proptech startup Ohmyhome is expanding into Malaysia, its first market outside Singapore. It is first launching its services and mobile application in Greater Kuala Lumpur, with plans to expand into Johor underway, the startup said in a press statement.
https://www.businesstimes.com.sg/real-estate/ohmyhome-announces-first-overseas-expansion-into-malaysia

UrbanAgents taps AI for ‘results-based’ home sale commissions
Using artificial intelligence (AI), techpreneur Michael Cho has already created a tool that can predict the value of a Singapore HDB or condo unit. Now, he’s taking it a step further. His agent referral platform now allows property agents to earn less or more commission, based on how the sale price they secure differs from that auto-generated value.
https://www.businesstimes.com.sg/real-estate/urbanagents-taps-ai-for-results-based-home-sale-commissions

Eagle Hospitality Trust executes US$341m interest rate swap
Eagle Hospitality Real Estate Investment Trust (EH-Reit) has entered into a US$341 million interest rate swap agreement with Bank of the West in the United States. This consists of three swap transactions of about US$133.67 million with a three-year tenure, US$103.67 million with a four-year tenure and US$103.67 million with a five-year tenure. The percentage of floating debt hedged is 90.7 per cent.
https://www.businesstimes.com.sg/companies-markets/eagle-hospitality-trust-executes-us341m-interest-rate-swap

Views, Reviews, Forum & Others

Merger of Ascott Reit, Ascendas Hospitality Trust makes sense
CapitaLand’s announcement on Wednesday that it would merge Ascott Residence Trust (ART) and Ascendas Hospitality Trust (A-HTrust) should not be a surprise to market watchers, following the merger of their respective parents. The two Reits (real estate investment trusts) had been subject to much speculation since January after ART’s parent, CapitaLand, announced its S$11 billion acquisition of Ascendas-Singbridge, A-HTrust’s parent.
https://www.businesstimes.com.sg/real-estate/merger-of-ascott-reit-ascendas-hospitality-trust-makes-sense