The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 7th October 2016

Top Story

India offers opportunities despite challenges: PM Lee
India holds many opportunities for Singapore and is increasingly open to foreign investment, said Prime Minister Lee Hsien Loong as he wrapped up his five-day working trip there on Thursday. But there are still restrictions and Singapore hopes these can be eased, he added in an optimistic assessment of India’s prospects, tempered by an acknowledgement of its continuing challenges.  India has a lot of potential, with its economy growing by 7.5 per cent a year, said Mr Lee. Politically, Prime Minister Narendra Modi – who came to power two years ago – is also pushing several reforms and setting a new direction for the South Asian giant.

Singapore Economy

3-month Sibor falls to year’s low, renewing battle in home-loan market
The three-month key Singapore interbank offered rate or Sibor has finally cracked, weighed down by domestic liquidity – and DBS Bank has wasted no time in offering cheaper home loans.  Sibor fell to the year’s low on Thursday to 0.87067 per cent, from 0.87242 per cent the day before.  Although the decline is small, it is significant because the sticky three-month Sibor, which is used to price home loans, had barely moved in the past few months.

SMEs stand to gain from Asean Economic Community but challenges seen
Small and medium-sized enterprises (SMEs) in the region stand to gain from the creation of the Asean Economic Community (AEC), but navigating the complexities of international trade will be challenging, according to a report from ACCA.  The report titled SME Development in Asean found that the AEC, created in December 2015, offers significant opportunities for SMEs through the liberalising of trade tariffs and access to global value chains.

Sterling slumps to new low against Singdollar
Sterling plunged to a three-decade low in thin early Asian trade on Friday, hitting a new low against the Singdollar, as a break of key technical support levels triggered a wave of stop-loss orders.  The pound fell almost 10 percent at one point to US$1.1378 before stabilizing around US$1.2415, still down 1.5 percent from late U.S. levels, leaving traders scratching their heads in the absence of news or market events that would justify such a move.

Singapore Real Estate

HDB resale flat prices inch up 0.1% month on month in Sept: SRX
SRX Property’s price index for Housing & Development Board (HDB) resale flats crept up 0.1 per cent month on month in September based on SRX’s flash estimate released on Thursday.  This contrasts with a 0.7 per cent month-on-month fall in August.  The index for last month was down 0.4 per cent year on year and also 11.4 per cent below the peak in April 2013.  According to data compiled by SRX Property, the volume of HDB resale transactions in September shrank 11.3 per cent to 1,666 resale flats from 1,879 flats in the preceding month. However, on a year-on-year comparison, last month’s resale volume was up 10.8 per cent from the 1,504 flats resold in September 2015.

Average retail rents slip in Q3
Retail rents fell in the third quarter on the back of the subdued economy and wary consumers, although Orchard Road and Scotts Road bucked the trend.  Average monthly gross rents for prime first-storey speciality retail shops dipped 1.2 per cent to about $29.30 per square foot (psf) in the three months to September compared with the previous quarter, said property consultancy Edmund Tie & Company yesterday.  This was 9.6 per cent below the peak in the first quarter last year when the average monthly gross rent was about $32.40 psf.

Singapore crushing Hong Kong in race to bring down home prices
On the surface, the property markets in Singapore and Hong Kong have much in common. The two Asian financial hubs have both moved to rein in runaway home prices in recent years as they sought to make housing more affordable.  Yet, consider how home values in the cities have diverged. Singapore has been successful in damping buyer demand with curbs (prices slumped by the most in seven years last month), while restrictions have had little impact on Hong Kong’s gravity-defying market, which is rebounding after a short-lived dip.

A thirst for housing sites despite muted outlook
Despite a muted residential property outlook in Singapore, developers are keen to replenish their land banks as they sit on fairly lean unsold inventories, analysts at OCBC Investment Research said.  In particular, there is firm demand for mass market sites on which projects with carefully calibrated prices have the potential to sell briskly, the analysts said, citing the keen competition in a tender last week for a land parcel at Fernvale Rd.

Sultan Mosque among winners of architectural awards
After a 15-month spruce-up, the gleaming pair of golden domes on top of the Sultan Mosque stand out regally from the surrounding Kampong Glam neighbourhood.  The $4.6 million makeover also involved original timber doors and windows being salvaged and repaired, as well as arches inside the prayer hall being painted green to accentuate their dramatic curves.

Plans for new building for Singapore Red Cross
The Singapore Red Cross (SRC) will have a new eight-storey building in Dhoby Ghaut to support the expansion of its services and community outreach.  The building, which is expected to cost close to $30 million and likely to be ready by 2019 in time for the charity’s 70th anniversary, will offer new services.  These include a day activity centre in the city, an operations and call centre to run an eldercare monitoring service, and new social enterprises to support vulnerable groups.

Companies’ Brief

UOL-UIC joint venture buys Potong Pasir site for S$334m
The en bloc purchase of Raintree Gardens in Potong Pasir by a joint venture (JV) of UOL Group and United Industrial Corporation (UIC) brings the total value of successful en bloc deals in Singapore so far this year to over S$1 billion. The latest deal follows similar successful attempts with Shunfu Ville and Harbour View Gardens in the past six months.  This is a huge improvement from the S$380 million worth of en bloc deals in 2015 and zilch in 2014 – although it definitely still pales in comparison to 2010-2013, when the average annual value of successful deals was S$1.87 billion.

Frasers Centrepoint unit buys Sydney site
Frasers Property Australia, known formerly as Australand, has acquired a 15.19-hectare site in Sydney’s Chullora industrial area.  The Australian division of Frasers Centrepoint Limited intends to develop space on the site with an end-value of A$55 million (S$57.3 million).  The site comprises a six-hectare parcel of land fronting Muir Road that is available for immediate development and an investment component on the adjoining 9.19-hectare parcel that will be subject to a 20-year triple net lease to SUEZ Recycling & Recovery Pty Ltd.

Keppel DC Reit buys data centre in Wales for £34 million
Keppel DC Reit has bought the “shell and core building” of a data centre in the United Kingdom for £34 million (about S$59.7 million) in a bid to ride on growing demand for data centre services in the country, its manager said in a Singapore Exchange filing on Thursday evening.  The data centre in Cardiff, Wales, has been fully leased to “one of the largest global cloud service providers” and the 15-year lease started in June 2016, the Reit manager said. It did not name this company and said the lease has annual rent escalations.

SPH Reit’s Q4 DPU up 1.4% at 1.41 cents
SPH Reit, a real estate investment trust sponsored by media group Singapore Press Holdings (SPH), on Thursday reported an increase in fiscal fourth-quarter distribution to unitholders as operational performance proved resilient.  The Reit, whose portfolio comprises Paragon and The Clementi Mall, announced a 1.4 per cent increase in distribution per unit (DPU) to 1.41 Singapore cents for the three months ended Aug 31, 2016 (Q4FY16), from 1.39 Singapore cents the year before. The Q4 DPU will be paid to unitholders on Nov 16.

Chip Eng Seng, Park Hotel jointly invest in US$65m Maldives resort
Contractor Chip Eng Seng Corporation on Thursday said it would invest with Park Hotel Group in a Maldives resort project worth US$65 million.  The investment was done through a joint venture, with Chip Eng Seng’s unit holding 70 per cent, while Park Hotel’s subsidiary, Grand Park Maldives, took the remaining 30 per cent.  The resort, Grand Park Kodhipparu, is scheduled to be opened in the second quarter of 2017. Park Hotel will manage the 120 all-villas development.

Perennial to buy 49.9% of Shanghai eldercare firm
Perennial Real Estate Holdings has agreed to buy 49.9 per cent of the largest private eldercare operator in Shanghai for 735.5 million yuan (S$148 million).  It will inject the capital into Shanghai RST Chinese Medical Co (Renshoutang), which operates 11 eldercare facilities with over 2,400 beds, and four pharmacies, each with a dedicated TCM (traditional chinese medicine) clinic. They are predominantly located in Changning District in Shanghai.

M&C Hotels in top 40 on global list
Millennium & Copthorne Hotels (M&C), which is majority-owned by property company City Developments, has been ranked the 40th-largest hotel group in the world.  It is the 13th straight year that it has been among the top 40 in the annual ranking by US Hotels Magazine, M&C said yesterday. The latest ranking makes it the largest Asian-controlled hotel group and second only to Shangri-La Hotels and Resorts, outside China and Japan.  US Hotels’ index is released every July and ranks hotel companies based on their portfolio at Dec 31 the previous year.

Views, Reviews & Forum

The ST Guide To…buying property overseas
Property has its place in a diversified portfolio. Given relatively high home prices in Singapore, it is no wonder that many Singaporeans have, over the years, turned to investing overseas.  This was especially the case when Additional Buyer’s Stamp Duty, first introduced in 2011 for Singaporeans buying third and subsequent properties, was imposed on second homes from January, 2013.  The total value of overseas properties snapped up by Singaporeans hit a peak of $1.67 billion in the first half of 2013, although this moderated to $0.4 billion in the first half of last year, according to Monetary Authority of Singapore data.

Global Economy & Global Real Estate

Asia to grow about 5.4% this year and next: IMF

IMF warns US rate hike could disrupt Asian capital flows

China’s Housing Boom Looks a Lot Like Last Year’s Stocks Bubble

Sydney’s Home-Buying Frenzy Is Ramping Up Risk Again

Japan retailers keeping prices low to appeal to frugal buyers

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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