The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 6th May 2016

Top Story

EC e-applications not translating to sales
The strong interest expressed for recent executive condominium (EC) projects in the form of e-applications have not resulted in actual launch sales – a trend industry players say is pointing to a potential supply overhang of ECs in the short-term, one which could take one to three years for the market to digest.  Though most of them say a conversion rate of 20 to 30 per cent from e-applications would be reasonable in today’s market, half the 14 EC projects launched since 2014 have fallen short of a 20 per cent conversion rate in their launch weekend.

Singapore Economy

Whole-economy PMI slumps to 49.4 in April
Singapore’s economy could be off to a soft start in the second quarter of 2016.  In a sharp about-turn, the whole-economy purchasing managers’ index (PMI) fell to 49.4 in April – a drop from March’s 52.0 reading, and the first contraction in almost a year.  Indeed, the latest Nikkei Singapore PMI reading signalled a renewed decline in the health of the private sector, said Markit, the financial information services provider which compiles the index.

Singapore Real Estate

DRB-Hicom calls off sale of The Verge
More than four months after it announced the proposed sale of The Verge mall in Little India, DRB-Hicom has officially called off the deal.  The termination was due to the inability of the buyer, a Singapore-incorporated vehicle controlled by Keith Tang, to fulfil its contractual obligations on the agreed completion date, DRB-Hicom said in a regulatory filing with Bursa Malaysia on Thursday.  The move did not come as a surprise to industry watchers here. Some said Mr Tang’s company, Evolutyon Real Estate Investment Holding, may not have found acceptable funding for the deal.

HDB resale volumes in April hit 3-year high as prices stabilise
Resale volumes of HDB flats rose to a record monthly high since November 2012, according to SRX Property estimates.  HDB resale data compiled by SRX Property showed that an estimated 1,828 HDB resale flats were sold in April. That’s a 10.3 per cent increase from the 1,657 transacted units in March, and 13.5 per cent higher than a year ago.  ERA Realty key executive officer Eugene Lim noted that the jump in resale volumes was a result of stabilising prices.  Prices continued to moderate by 0.1 per cent from a month ago, figures from SRX Property on Thursday showed.

Frasers Centrepoint Trust to enter Australian market wombat-style
Frasers Centrepoint Trust (FCT) is planning to leverage its sponsor’s presence in Australia to expand the geographical coverage of its thus-far largely-domestic portfolio.  At a panel at Thursday’s Bank of Singapore Investor Forum, the CEO of the retail Reit Chew Tuan Chiong likened his strategy to how farmers Down Under allow wombats to stay on their land, while keeping out pests such as rabbits and kangaroos.

The challenge of retail in Asia
Retail – or the expansion of mono-brand point of sales – is the only route to growth for brands today, especially in Asia. Yet, the growing costs of doing retail business, the advent of e-commerce, the current market turbulences and the economic uncertainties are all making life more difficult for established retail brands, what more new entrants. Brands that are not strong in retail and, as a consequence, are not strong in Asia, now face daunting challenges to penetrate the market and catch up with their long-established competitors.

Companies’ Brief

Hit by performance fees, A-Reit’s Q4 DPU falls 8.1% to 3.41 cents
Ascendas Real Estate Investment Trust (A-Reit) has posted an 8.1 per cent year-on-year drop in fourth quarter distribution per unit (DPU) to 3.41 Singapore cents, from 3.71 cents in the same period a year ago.  This was mainly due to performance fees of S$9 million, A-Reit’s manager said on Thursday.  “Otherwise, Q4 estimated DPU would have increased by 1.3 per cent, mainly due to contribution from new acquisitions but partially diluted by the higher number of A-Reit units in issue,” it added.

Property developer Oxley sparkles in March quarter
Homegrown property developer Oxley Holdings racked up an impressive showing for the March quarter, reporting an over-300 per cent jump in net income attributable to its shareholders.  Its net profit surged to S$51.2 million for the three months ended March 31, 2016, up 329 per cent from the S$11.9 million recorded the year before.  Adding in sums attributable to non-controlling interests, Oxley’s net profit was up 218 per cent to S$72.3 million, from S$22.7 million the year before.

Roxy’s Q1 profit dives; group to launch six projects in 2016/17
Roxy-Pacific Holdings’ first-quarter net profit attributable to equity-holders shrank 79 per cent to S$9.89 million from the same year-ago period.  Revenue for the three months ended March 31, 2016, eased 48 per cent to S$102.98 million. Roxy said that revenue from the property development segment, which made up 86 per cent of the group’s turnover in Q1 FY2016, declined 52 per cent to S$88.3 million in Q1 FY2016 from S$184.3 million in Q1 FY2015. The drop was due chiefly to an absence of revenue recognition following the completion of Centropod@Changi, a commercial development that obtained its Temporary Occupation Permit in Q1 2015. The decrease was partly offset by revenue recognised from the Whitehaven, Trilive and LIV on Sophia developments in 2016. (E-paper, Page 55)

CK Tang brothers in move to complete succession planning
The Tang brothers’ move to consolidate holdings in CK Tang, a Singapore retail icon, to bolt down succession plans has triggered a cash offer for roughly 2 per cent of shares that they do not own. In doing so, the brothers have made public that they do not intend to create a Reit (real estate investment trust) for the department store property.  An offer document published on Thursday showed Tang Holdings acquired the 98.2 per cent of shares held by several parties including Tang Wee Kit, who runs Tang Holdings, and Kerith Holdings, which is controlled by Tang Wee Sung.

New estate agents association names its inaugural CEO
The newly minted Singapore Estate Agents Association (SEAA) has appointed real estate veteran Wong Cheong Hong, the former key executive officer of Dennis Wee Realty, as its inaugural chief executive.  As part of the string of common services it is rolling out for members, SEAA also inked a memorandum of understanding (MOU) with the Singapore Mediation Centre (SMC) on Thursday.  Under the pact, the SMC is identified as the preferred dispute resolution channel to provide a mediation platform for disputes between estate agents arising from commission and related agency services, which is currently not under the purview of the Council for Estate Agencies (CEA).

Views, Reviews & Forum

Smart property for a smart nation
Last month, the Singapore Institute of Surveyors and Valuers (SISV), an association of private valuation firms, declared that automated valuation models (AVMs) are “not considered valuations (in accordance with the SISV Valuation Standards and Practice Guidelines)”.  What are AVMs? Where are they used? And why should property watchers care?  An AVM is a computer-generated valuation of a property that incorporates big data, algorithms and best practice methodologies. According to the International Association of Assessing Officers, most developed countries employ AVMs, including the United States, Canada, Sweden, Germany, Australia, New Zealand and the United Kingdom.

Global Economy & Global Real Estate

Britain’s economy slows to near-stall pace in April

‘Go small’ approach helps boost Oxley’s home sales in Cambodia

Goldman Sachs tips 20% drop in HK home prices

Crown Resorts sells US$800m stake in Macau casino venture

Affordable homes on NYC housing authority land

Seven Over-the-Top Equestrian Estates Across America

London home prices see parents jeopardise their own finances to help kids

F&N to invest over S$70 million in Malaysia

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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