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, 7th July 2016

Singapore Economy

Brexit won’t hurt just UK-EU trade, says World Bank
According to the World Bank, the vote in Britain to exit the European Union (EU) marks the withdrawal of the country from the EU’s project of “deep economic integration” – which raises the possibility that the same factors that engendered Brexit will lead to an interruption of trade openness and integration in other parts of the world.  In a new report, the World Bank said that the process of economic integration – the flows of goods, services, capital, people and ideas – on both regional and multilateral levels has reduced trade costs among members and been the engine of global economic growth in the post-World War II era.

Brexit unlikely to affect trade, investment in East Asia & Pacific
The impact of Britain exiting the European Union (EU) on trade and investment in East Asia and the Pacific (EAP) is not likely to be substantial due to the region’s low exposure to the UK, said the World Bank in a new report.  Direct trade between EAP countries and the United Kingdom (UK) is “limited” as EAP accounts for just 2 and 5 per cent of total UK exports and imports respectively. Trade with the UK is a small share of EAP trade: 10 per cent in Fiji, 3 per cent in Vietnam and less than one per cent for the rest.

Asia-Pacific economic picture outside of China brightens: S&P
Asia-Pacific economies had a pretty good second quarter, said S&P Global Ratings, which believes the macro view looks “a bit more secure” in two key economies in the region – Japan and India. Both have made strong policy decisions in recent months.  In a report titled “Asia-Pacific’s overall economic picture brightens a bit outside of China”, the credit risk research unit of S&P Global Inc also said that Australia’s economic growth has been better than expected.

Private sector output at 5-month high
Operating conditions for Singapore firms picked up slightly last month as output and new orders rose, according to a new survey.  The Nikkei Singapore Purchasing Managers’ Index (PMI) reached a five-month high in June, although this was dampened by a decline in export sales amid lacklustre demand overseas.  Firms also continued to cut staff last month, the survey of private sector companies showed.  The Nikkei PMI posted a reading of 52.3 for June, up from 50.1 in May. Readings above 50 signal an improvement in business conditions on the previous month.

Singapore Real Estate

In high spirits despite post-Brexit hangover
The UK property market has been ranked a top five global investment market for decades, and has been a prime destination especially for regional investors from Singapore, China and Hong Kong.  While the aftermath of Brexit is still unfolding, the immediate effects – gyration in currency markets and a US$3 trillion sell-off in global stock markets before a bounce which started last Tuesday – have been a source of concern, we do not believe that this short-term turbulence represents the onset of a new Global Financial Crisis (GFC).

Claremont hotel going for S$90m
The Claremont hotel along Serangoon Road, near the junction of Owen Road, has been put up for sale. The guide price for the eight-storey, freehold budget hotel is about S$90 million, or S$1 million per room.  Knight Frank, which is marketing the 90-room property through an expression of interest exercise that closes on July 28, were not able to list the room sizes of the hotel at the time of publication.  The Claremont is on 4,838 sq ft of land and has a built-up area of about 30,591 sq ft. The site is zoned for hotel use with a 3.0 plot ratio (ratio of gross floor area to land area) under the Urban Redevelopment Authority’s Master Plan 2014, said Mary Sai, executive director of investment and capital markets at Knight Frank Singapore.

Wing Tai sells stake in condo to joint venture partner CDL
Property firm Wing Tai Holdings has thrown in the towel on its Anderson Road joint venture with City Developments (CDL).  Wing Tai yesterday said it has sold its half share in its joint venture company Summervale Properties to CDL for $410.96 million in cash.  Summervale is the developer of Nouvel 18, a 156-unit freehold residential development in Anderson Road that has yet to be launched.

Companies’ Brief

Greenland to spin off six hotels in Reit or private fund
In what could mark the start of a multi-billion dollar property fund platform for China’s largest state-owned developer, Greenland Group is spinning off six hotels worth S$1.5 billion in first and second-tier cities as a listed Reit or a private fund here.  This comes under its earlier-announced S$5 billion asset securitisation plan in Singapore involving 19 Chinese hotels as it embarks on an asset-light strategy. The developer now carries some US$100 billion worth of investment assets on its balance sheet.

MCT makes S$1.78b purchase from sponsor
Mapletree Commercial Trust (MCT) has agreed to acquire the office and business park components of Mapletree Business City Phase 1 (MBC Phase 1) from its sponsor Mapletree Investments for S$1.78 billion.  This involves the purchase of the strata leasehold interest of an office tower and three business park blocks spanning a total net lettable area of more than 1.7 million sq ft.  A put and call option agreement was entered into on Tuesday between MCT’s trustee, DBS Trustee Limited, and Mapletree’s wholly owned unit Mapletree Business City Pte Ltd.

Views, Reviews & Forum

Investors should guard against complacency in post-Brexit world
IN the week after Britain voted to exit the European Union in a referendum now etched in the collective memory as “Brexit”, stock markets around the world defied expectations by rallying sharply.  Prior to the June 23 vote, experts had warned of probable financial Armageddon because of the uncertainty and volatility that a “Leave” outcome would trigger. After a two-day selloff when “Leave” surprisingly prevailed, stocks soared virtually non-stop: in London, the FTSE gained 9 per cent in a week; and in Europe, the Euro Stoxx 50 surged 6 per cent over the same period.

UK’s lower corporate tax unlikely to affect Singapore
Singapore is unlikely to see any major impact even if Britain does slash corporate tax rates below the level here, say experts.  British Chancellor George Osborne is reportedly planning to cut corporation tax to less than 15 per cent from 20 per cent now in an attempt to woo investments to a post-Brexit Britain. Singapore’s corporate tax rate stands at 17 per cent, just above great rival Hong Kong’s 16.5 per cent.  Mr Osborne did not provide a specific time frame for the rate cut, but said Britain should “get on with it” to reassure investors that the country is still “open for business”, according to The Financial Times.

Funds drawn to S-Reits amid post-Brexit worries
Singapore’s real estate investment trust (Reit) sector has ridden the wave of risk-adverse sentiment following the Brexit referendum late last month, with the larger firms benefiting more.  The FTSE ST Reit index has risen 5.2 per cent since the June 23 vote in Britain, outperforming the Straits Times Index, which rose 2.5 per cent over the same period.  Several research houses have also upgraded their calls on the sector to “buy” or “overweight”.  “With Brexit uncertainty hanging over the global economy, we’ve seen demand for safe havens and high-yielding stocks, like telcos and transport counters,” said Mr Derek Tan, DBS vice-president for group equity research.

Two bumper deals stir up IPO scene
Singapore’s stock market has welcomed a string of new listings this year after a very sluggish 2015, thanks partly to two bumper deals in the trust segment that market watchers said have encouraged other issuers to follow through.  The healthy first half may in turn lead to a sustained pipeline for the coming months, but uncertainty looms due to geopolitical events ahead. 
Eight initial public offerings (IPOs) have been staged this year, with two listings on the mainboard and six on the Catalist, including United Global, which starts trading tomorrow.  A ninth IPO, by Advancer Global, will close today and trading will commence next Monday. Meanwhile, Top Glove was launched for its secondary listing here on June 28.

Hotels catering to growing number of Muslim travellers
To cater to a burgeoning number of Muslim travellers to Singapore, hotels are installing prayer rooms, offering iftar room service menus and providing the qibla – or the direction to Mecca – in its guest rooms.  This comes amid a rise in the number of halal-certified premises in town.  The Muslim travel segment is one of the world’s fastest-growing tourism sectors with an estimated 117 million Muslim travellers last year, representing close to 10 per cent of the entire travel economy globally. The number is expected to reach 168 million by 2020, with a market value exceeding US$200 billion (S$270 billion).

Global Economy & Global Real Estate

Factory orders in May dip after two straight months of rises

Sterling continues to slide, touching 31-year low

Shareholders lose out in Vanke takeover fight

Uniqlo suspends most travel to Bangladesh; hotel cancellations up

Real estate funds in UK freeze withdrawals

Brexit may shatter British dream of a home in the Spanish sun

US landlords help tenants buy their properties

US hoteliers find Airbnb in Cuba, before them

RBA holds rates, stays silent on further easing

France lures London bankers with extra tax break

Billionaire Tom Barrack’s Wine and Polo Pursuits

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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