The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 5th July 2016

Top Story

Brexit adds to the jitters in O&M sector’s recovery
The stabilising of oil prices at US$40 to US$50 has offered the first glimmer of hope to the troubled offshore-and-marine (O&M) sector since the second half of 2014.  But although market players have noted increases in the number of enquiries from new oil-and-gas field developments, the industry as a whole is mindful of its vulnerability to refreshed concerns over the health of the larger macroeconomic environment, especially following the “Brexit” vote.  Ezra Holding’s managing director Lionel Lee told The Business Times in a recent interview that he has seen increased interest in engineering studies for oil-and-gas projects, and that several new projects have emerged for final investment decisions; most of these enquiries had come as recently as in May, he added.

Singapore Economy

S’pore June PMI slumps, putting aside talk of ‘green shoots’
After holding up in the past few months, conditions in Singapore’s manufacturing worsened in June, prompting some economists to put aside talk of “green shoots” for the sector and forecasting that its performance this year will be worse than last year’s.  Said DBS economist Irvin Seah: “Those looking for green shoots in manufacturing may eventually be looking at weeds instead.”  “The talk has been overhyped, and now it’s a pull back to reality. In fact, production levels this year will likely be lower than last year’s,” he added.

Singapore Real Estate

Property cooling steps not going away yet: Report
The pressures on the economy from slower growth and high home prices may prevent the Government from unwinding its property cooling measures, according to Maybank Kim Eng.  It noted that the slowing economy could prompt the Government to steer funds away from real estate speculation into more productive investments, a move that could also control wage inflation.  “We are increasingly convinced that property cooling measures may not be lifted, in order to steer investments to more economically-productive uses in the long run,” said the brokerage’s Singapore research team in a report.

StreetSine launches AI chatbot for property sector
An artificial intelligence (AI) chatbot that acts as a property agent’s personal assistant has been launched for the Singapore property market by real estate software firm StreetSine.  Dubbed Sevi, the chatbot will interact with users in English, and answers property-related queries in real-time, StreetSine said on Monday. The firm operates the Singapore Real Estate Exchange (SRX).  Questions will run the gamut, ranging from market valuations, to listing availabilities and plot ratios; the chatbot can also compare properties and steer consumers to qualified real estate agents. It is believed to be a first for the real estate sector here, StreetSine said.

Industrial property in Jurong up for sale
One of the world’s largest oilfield services company is selling one of its buildings here.  American firm Halliburton, which is consolidating local operations into other premises, wants offers of around $12 million for the standalone building comprising warehousing, production, office areas and a large, open yard space. 
Fixtures such as large cranes have been left at the Jurong site, which Halliburton has vacated.  The firm also has premises in Jalan Ahmad Ibrahim and a large manufacturing facility in Tuas.  The company said earlier this year that it had trimmed 6,000 jobs worldwide in the first quarter, taking the toll to about 33,000 positions cut since late 2014, according to media reports.

Got a property question? Tap Sevi
Another chatbot is in town, and it will answer questions related to Singapore property.  A chatbot is software that uses artificial intelligence to carry on a conversation.  Chatbot Sevi is able to answer questions on topics ranging from market valuations to listing availability and plot ratio, its creators StreetSine said yesterday.  It can also help compare properties and direct consumers to appropriate real estate agents.  “Chatbots are revolutionary in making information accessible. And soon, chatbots will be ubiquitous as an intelligent assistant facilitating transactions in the most natural way,” said Mr Jeremy Lee, StreetSine co-founder and chief technology officer.

Region’s retail sector expected to remain resilient
The region’s retail sector will continue to show “remarkable resilience” despite sluggish prospects in many developed markets and a slowing Chinese economy, according to a report yesterday.  The report noted that the combined retail sales in retail powerhouses Singapore, Indonesia, Malaysia and Thailand are expected to grow from US$650 billion (S$874 billion) last year to US$1 trillion in 2018, at a rate of 15.5 per cent annually.  The four countries together made up 76 per cent of the US$2.45 trillion Asean economy last year.

Companies’ Brief

MMP Resources plans to buy Hokkaido ski operator for S$1m
MMP Resources, formerly known as Sino Construction, is planning to acquire Hokkaido ski operator JRT Trading for 80 million yen (S$1.05 million) in cash. On top of that, it will repay over two years a 37.5 million yen loan that JRT Trading owes.  The group said on Monday that it has entered into a non-binding heads of agreement with the vendor, Clayton Anthony Kernaghan, on the deal.

CapitaLand Commercial Trust
CapitaLand Commercial Trust unit CCT MTN has issued $75 million worth of notes at a fixed rate of 2.77 per cent that will mature in 2022. The proceeds from the notes, which are assigned an A- rating by Standard & Poor’s, will be used to refinance an existing borrowing under a bank loan facility due in 2020.

Tiong Seng Holdings
Tiong Seng unit Tiong Seng Contractors has won a contract from the Ministry of Home Affairs to develop Selarang Park Complex in Upper Changi Road North.  Tiong Seng did not disclose the size of the contract, saying only that it is not expected to have any material impact on the group’s net tangible assets and earnings per share for this financial year.

Stanchart private equity arm buys stake in Phoon Huat
Standard Chartered Private Equity (SCPE) has bought a stake in home- grown company Phoon Huat, the latest in a recent string of mergers and acquisitions across Asia.  SCPE yesterday said it has invested “a significant stake” in Phoon Huat, which is a wholesale supplier of baking ingredients and is well-known for the Red Man brand of products. It operates 13 stores across Singapore.  The deal is said to value Phoon Huat at $150 million to $200 million, an anonymous source told Bloomberg, adding that SCPE plans to eventually acquire full control.

Views, Reviews & Forum

Analysts see further boost to S-Reits amid Brexit fallout
More upside may be in store for Singapore real estate investment trusts (S-Reits), which have risen 5.7 per cent since last Thursday’s UK referendum.  Brokerages such as Religare and RHB expect them to continue to do well over the course of the long drawn-out post-Brexit process, as federal fund rates are expected to stay low this year.  Religare lowered its risk-free rates by 40 basis points (bps) on Monday, and upgraded its view on the sector to a “buy”, with Aims Amp Capital Industrial Reit, Mapletree Logistics Trust and Starhill Global Reit as its top picks.

Parking fee hike after big jump in running costs
The rising cost of operating public carparks here would have spelt big shortfalls for the Housing Board and the Urban Redevelopment Authority (URA), if parking fees had not been hiked.  Since 2002, when the rates were last raised, the cost of operating carparks has risen 40 per cent, the two agencies told The Straits Times.  Without the latest rate hike, HDB stood to lose $100 million a year. This was despite the two agencies earning a total of $667 million from their carparks in their latest financials for 2014/2015.

Global Economy & Global Real Estate

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UK slashing corporate tax to keep investment inflow

Brexit a wake-up call for Asean, says Indonesian minister

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Local & Overseas Real Estate – Full Article

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