Local assets under management rise 9% to S$2.6 trillion in 2015
A newly-released Monetary Authority of Singapore (MAS) report showed that despite turbulent markets, Singapore’s asset management industry enjoyed a reasonably good year in 2015, bolstered by its position within Asia and inflows into alternative strategies. Assets under management (AUM) in Singapore grew 9 per cent to S$2.6 trillion in 2015, said the 2015 Singapore Asset Management Survey, MAS’s annual survey of the local asset management industry. The number of fund managers registered and licensed with the MAS grew by 37 to 628 in total.
S’pore estimated to rank 7th in world’s top overseas travel spenders, says Visa
International travel by Singapore households are expected to double by 2025, and spending is expected to rise to US$44.9 billion (S$61.5 billion) by then, placing the Republic as the seventh highest overseas spender globally, according to a report by credit card company, Visa. The amount would also place Singapore in the top three in the Asia Pacific region.
Singapore Real Estate
Property agencies, agents keep exiting sector amid tough market
In a “survival of the fittest” situation in the challenging domestic property market, property agencies and agents are continuing to bow out of the industry. The latest annual report of the Council for Estate Agencies (CEA) showed fewer licensed property agencies and registered property agents around at end-March this year compared to a year ago. The number of licensed property agencies has slipped 3.5 per cent to 1,372 as at end-March 2016 from 1,422 a year ago. CEA granted 58 new licences in FY2015/16 compared to 109 in FY2014/15. Some 108 licences were not renewed compared to 136 a year ago. This comes as some firms have stopped offering services in estate agency work, although they continue to handle other types of work such as property management. There are also others that have merged with other agencies or left the industry, CEA said.
The impact of fintech on real estate
Fintech is the new buzzword for the banking and financial services industry. The financial technology, or “fintech”, sector comprises firms using technology and innovation to disrupt the traditional ways that banks and financial institutions (FIs) do business to better meet consumers’ evolving financial services needs. While many banks and FIs view the rise of the fintech sector with concern, the more agile institutions are embracing fintech firms to make them partners in their business growth. With supportive government policies in Singapore and significant venture-capital backing, fintech is poised to disrupt more than just the banking industry. The emergence of these firms is generating demand for startup hub space and going forward, will likely have a major impact on the office footprint of traditional banks.
Fall in ratio of complaints to property transactions
People seem to be less unhappy with their property agents and agencies these days. Complaints against them have steadily declined as a proportion of total transactions, partly as a result of enforcement and professional development of the industry. In the year ended March 31, there were just over four complaints for every 1,000 transactions, according to the Council for Estate Agencies’ (CEA) annual report, which was released yesterday.
MOH, URA to launch call for proposals on nursing homes
The Ministry of Health (MOH) and the Urban Redevelopment Authority will soon be launching a call for proposals to develop and research solutions for future nursing homes, said the ministry yesterday as it responded to suggestions for the long-term care sector in a report by the Lien Foundation and Khoo Chwee Neo Foundation issued yesterday. The MOH said it agreed that more efforts are needed in developing the sector and a more diverse range of aged care services, and that it will study the suggestions on assisted living services. It will also continue to provide a mix of nursing home designs and room types and continue to develop innovative designs, but noted that the additional cost of building and operating nursing homes with all single- or double-bedded rooms only “will be significant”.
High-end homes see price uptick
Being the crème de la crème of the non-landed residential market, homes in the Core Central Region (CCR) are commonly referred to as high-end or luxury homes. According to the Urban Redevelopment Authority (URA), the CCR comprises postal districts 9, 10, 11, Downtown Core and Sentosa. The URA CCR Non-Landed Residential Price Index rose 0.3 per cent quarter on quarter (q-o-q) in Q2 2016, marking a second consecutive quarter of increase after 11 quarters of price decline since Q2 2013 to Q4 2015. That said, flash estimates showed a 1.8 per cent price drop in the third quarter; the actual statistics for the full quarter will only be released at end-October.
Property’s place in investment portfolios
There is talk aplenty of doom and gloom in Singapore’s real estate sector, but in the past few months, certain sub-sectors have begun to show signs of stabilising, and even green shoots of recovery. No doubt the government has been hard-nosed in its stance that the property cooling measures should stay. This has perhaps led some investors to rejig and reduce the real estate allocations in their investment portfolios. But is this the right approach?
Price rebound for landed homes may exceed other residential types
Like their non-landed counterparts, since the third quarter of 2013, or the immediate term after the implementation of the Total Debt Servicing Ratio (TDSR) regime, the landed property market has seen declining prices and transaction volumes. We will analyse this market by looking at some statistics for the period from the first quarter of 2013 to August 2016. From this analysis, we come to realise that there are some common features between the landed property market and its non-landed counterpart, that seem to go against intuition.
Will million-dollar HDB flats be the new norm?
From the onset, public housing policy has been the bedrock of Singapore’s asset ownership programme. Today, 80 per cent of Singaporeans live in HDB flats. HDB flats have evolved from being just a home to also becoming an investment asset – and a stepping stone to a higher standard of living. By many measures, Singapore’s public housing programme has been a resounding success. Undoubtedly, HDB has played, and will continue to play, an important role in the building of an inclusive society – by making housing available and home ownership affordable, and reducing the barriers across income and racial groups.
ECs still popular among the sandwiched class
Executive condominiums (ECs) were originally conceived to cater to the aspirations and needs of the so-called “sandwiched” class – those whose household income exceed the ceiling for public housing, but are not yet able to comfortably afford a private condominium. Currently, the monthly household income ceiling to qualify for an EC purchase is set at S$14,000, versus S$12,000 for those purchasing the Housing and Development Board’s (HDB) build-to-order (BTO) flats.
Who’ll benefit from new MRT stations?
An old adage in real estate investment – “location, location, location” – suggests that real estate investors should focus more on the location than the physical attributes, tenure and stage of the market cycle. Given that each property is a unique and non-movable asset, prices at choice locations will be more resilient in an uncertain economy and will appreciate more than other assets when the economy picks up.
A human centric approach to designing the future workplace
The concept of the workplace is evolving. Historically, the quest was to design the perfect workplace focused on the infrastructure and physical design, taking into account technological transformations, with business cost efficiency being a major driver. This approach, however, often neglected the human aspects and how the talent interacted in and around the space and how productivity was maximised. http://www.businesstimes.com.sg/hub/property-2016/a-human-centric-approach-to-designing-the-future-workplace
The case for private investment in S’pore’s industrial properties
Amid stringent government policies, private property owners require astute advisers to hunt for viable investment opportunities in a tight industrial property market. Singapore’s industrial landscape has undergone notable shifts in ownership and policies over the past decade, as the economy progressed in diversity and value-added activity. In the decade from 1997 to 2006, an average 34.3 per cent of island-wide available industrial stock was owned by public entities, and this proportion has fallen to around 24.9 per cent over the period from 2007 to the first half of 2016.
Narrowing gap between Grade A and B office buildings
According to the Ministry of Trade and Industry, Singapore’s economy grew 2.1 per cent year on year (y-o-y) in Q2 2016, the same rate of growth as the previous quarter. With looming concerns over the weaker global outlook and the impact of Britain’s vote to leave the European Union, its economic growth forecast for 2016 also narrowed to 1 per cent to 2 per cent instead of the 1 per cent to 3 per cent projected earlier.
Call for more housing options beyond nursing homes for seniors
There is hardly any other housing options for elderly Singaporeans besides nursing homes and this is an issue that needs to be urgently addressed, a study on the state of nursing homes here recommended. The number of elderly living alone increased from 6,000 in 1990 to 29,000 in 2011 and is estimated to reach 92,000 by 2030. If these people find themselves in need of a place to live should they grow frail and do not have anyone to care for them at home, they can check themselves into only a nursing home now because there are hardly any other types of housing options available.
How can hoteliers survive supply influx, weaker demand?
Not too long ago, the idea of hosting our first Asia-Pacific regional conference was mooted. A few potential city locations were suggested by my regional colleagues. Naturally, Singapore was my choice, as aside from being a staunch home-based supporter, I wanted to show our hospitable side and impress the lot. When it came to a vote among the key stakeholders, Bangkok ended up being the overwhelming favourite – again! Incidentally, Shanghai was second and a distant third was Hong Kong.
Heeton divests iLiv@Grange en-bloc
Heeton Holdings has finally sold its entire interest in the completed iLiv@Grange project. This was through a sale of shares in a wholly-owned subsidiary of Heeton which in turn owns 100 per cent interest in the company that developed the 30-unit freehold project. The deal values the entire 16-storey project (on an en-bloc basis) at S$95 million, which works out to S$1,623 per square foot based on the total strata area of 58,534 sq ft.
United Engineers, OUE in play on stake talk
Developer OUE said on Wednesday that it is not involved in any ongoing discussions to buy a stake in United Engineers (UE), but shares in both companies remained in play nevertheless. On Wednesday morning, UE opened 11 cents higher at S$2.64. It then traded between S$2.69 and S$2.57 before closing at S$2.61, up eight cents or 3.2 per cent. Some 5.6 million shares worth S$14.7 million changed hands.
Ascendas sets up new S$3b funding programme
Industrial developer Ascendas, part of the government-owned Ascendas-Singbridge urban development group, said it has set up a S$3 billion Euro Medium Term Note programme. DBS, OCBC and HSBC are joint arrangers and dealers. Under the programme, Ascendas can issue notes or perpetual securities denominated in any currency. The new funding programme is an addition to an existing S$1 billion multi-currency medium term note programme.
CapitaLand to have 6 malls in India by 2019
Property developer CapitaLand on Wednesday said it plans to open two more malls in India over the next three years, bringing the total number of its operational malls in the country to six by the end of 2019. CapitaLand’s two upcoming malls are Forum, Mysore, and Forum, Cochin, opening next year and in 2019 respectively. These are managed by its unit, CapitaLand Mall Asia.
KepLand divests Myanmar hotel for US$41m
Developer Keppel Land (KepLand) is divesting its full stake in Wiseland Investment (Myanmar) to Myanmar-based hospitality group Eden Hotels and Resort Co for US$41 million. Wiseland Investment owns and operates the 250-room Sedona Hotel Mandalay. Situated in the heart of the city, the hotel opened its doors in 1997 and spans a site of four acres. The divestment is in line with the company’s strategy to recycle capital for higher returns, parent Keppel Corp highlighted in a release to Singapore Exchange. Wiseland Investment entered into a conditional sales and purchase agreement (SPA) with Eden Hotels on Wednesday, it added.
UOL, UIC buy Raintree Gardens en-bloc for S$334.2m
Property developer UOL Group said associate company UVD (Projects) Pte Ltd has bought the Raintree Gardens residential development at Potong Pasir Avenue 1 for S$334.2 million after an en-bloc tender. The site had been launched for collective sale in September. Raintree Gardens, a former HUDC estate, was built in the late 1980s. The purchase will be funded by bank borrowings and internal resources, UOL said. “The acquisition is in the ordinary course of the group’s business, and would enable the group to replenish its land bank for residential development in Singapore.”
OKH Global appoints Lock Wai Han as CEO
Property developer OKH Global on Wednesday announced the appointment of Lock Wai Han as chief executive officer (CEO) and executive director, with effect from Oct 5. The 49-year-old replaces former CEO Celine Tang. She remains on the board as the company’s non-executive chairman. Mr Lock was formerly director at the Criminal Investigation Department, Singapore Police Force, and CEO of CapitaMalls Asia (China).
Views, Reviews & Forum
Evergrande may well hold the key to China’s IPO back door
Asian investors often say that Evergrande is too big to fail. The real estate group may be putting that notion to the test, and in the process could unleash a flood of deals back home. On Tuesday, China’s largest developer by assets announced a plan to inject some of those into a property company listed in Shenzhen. That way, Evergrande will be able to raise equity in China without having to go through the lengthy and increasingly difficult process of getting approval for a stock offering. For Evergrande, any avenue to increase the equity on its balance sheet is good news. Credit rating agencies already say there’s a high possibility the company won’t be able to pay its debts.
Tweak cooling measures to avert property market risks
In his commentary “Time to tackle real estate’s structural changes” (Sept 30), the writer recommended certain changes to normalise the market situation before real estate, “the bedrock of Singapore’s economy”, is weakened further.
Although his warning may have come too late to prevent us from falling over the cliff, the remedial proposals could be used to prevent a future repetition of the current situation.
Global Economy & Global Real Estate
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Additional Articles of Interest – Local & Overseas Real Estate
Local & Overseas Real Estate – Full Article