Temasek returns -9% in FY2016 – its worst showing since 2009
Temasek continues to increase investments in technology-leveraged companies, as weakness in its listed investments, particularly its more traditional holdings in China and financial services, dragged the Singapore government-owned investment company to its first one-year negative return since 2009. Its net portfolio value shrank by 9.02 per cent to S$242 billion in 2016. Over a three-year period, Temasek’s total shareholder return was 3.25 per cent in Singapore-dollar terms; over a 20-year period, total shareholder return was 6 per cent.
Singapore Real Estate
Nine shop units in Holland Road Shopping Centre up for sale
Nine units of Holland Road Shopping Centre and one unit of 211 Henderson, an industrial building, are up for sale, either collectively at a guide price of just over S$24 million or on a piecemeal basis. All of them are freehold units and are being sold with vacant possession. They are owned by two companies controlled by the Lim family that used to operate Lim’s Arts and Living, out of eight of the Holland Road Shopping Centre units. All nine shop units are on the second level.
Property circuit excited over 2 big deals for good reason
The recent large Singapore office sales – Asia Square Tower 1 for S$3.38 billion and Straits Trading Building for S$560 million – have sparked much-needed buzz in the property investment sales circuit. More than just big money, what excited the market was that the buyers are high-profile investors with long-term investment horizons. Several office building owners have seen a spike in interest from potential buyers and have used the opportunity to launch their buildings for sale – such as 77 Robinson Road and 110 Robinson Road. A fund managed by Alpha Investment Partners is said to be on the verge of granting exclusivity to ARA Asset Management for doing due diligence for the purchase of its half-stake in Capital Square.
SRX Property data differs from HDB flash figures
HDB resale prices fell 0.6 per cent in June 2016, compared with in May, SRX Property’s data showed on Thursday. That amounts to a 0.4 per cent drop in the second quarter, which contradicts HDB’s flash estimates that showed resale flat prices inching up 0.1 per cent in the second quarter. Asked to explain the opposing directions in price movements, ERA Realty key executive officer Eugene Lim said: “We believe the discrepancy could be due to the fact that SRX’s figures do not take into account the do-it-yourself (ie without property agents’ help) transactions that are captured by HDB.
Northwave EC gets 240 e-applications for 358 units, Treasure Crest EC over-subscribed
Hao Yuan Investment’s executive condominium (EC) project in Woodlands, Northwave, received 240 e-applications for the 358 available units by the close of its e-application period on Wednesday. Another EC project by Sim Lian Group in Sengkang, Treasure Crest, was already over-subscribed before its e-application period closes this Sunday, having received 800 e-applications for the available 504 units as of Thursday. Some consultants attributed this divergence of demand trends to locational attributes.
SPH Reit’s Q3 DPU higher at 1.36 cents
SPH Reit, which owns Paragon and The Clementi Mall, reported a 0.7 per cent rise in distribution per unit for the third quarter ended May 31 to 1.36 Singapore cents. The period saw net property income 1.8 per cent higher at S$40 million. Gross revenue rose 1.9 per cent to S$52.2 million on the back of higher rental income achieved from Paragon. Both malls continued to show resilience, achieving positive rental reversion and 100 per cent occupancy. Paragon achieved a moderate rental uplift of 4.9 per cent for new and renewed leases for the three quarters ended May 31. The Clementi Mall recorded positive rental reversion of 4.5 per cent for the same period.
Lum Chang MD and sons launch takeover offer for Ellipsiz
Members of the family that controls construction company Lum Chang Holdings have launched a takeover offer for Ellipsiz, a semiconductor equipment provider. They are offering S$0.38 for each share of the mainboard-listed firm which it does not already own, it said in a Singapore Exchange filing released on Thursday evening. The offer price values Ellipsiz, which offers products and services to the semiconductor industry, at about S$63.5 million.
Amex, CapitaLand tie up in big-data trawl
American Express (Amex) has wrestled a credit-card partnership with CapitaLand Mall Asia that would allow Amex to broaden its reach beyond the affluent segment. Singapore’s biggest retail landlord, meanwhile, is eager to use both loyalty points and data analytics to boost retail spending. Both jointly launched a multi-mall loyalty card on Thursday; this new partnership brings to an end an earlier card partnership forged between CapitaLand and DBS.
Global Logistic Properties
Global Logistic Properties (GLP) said it will commence development of GLP Kobe Nishi II, a 71,000 sq m logistics property in Hyogo Prefecture, Greater Osaka. Development is estimated to cost 10.5 billion yen (S$140.6 million), and will be completed late next year. GLP Kobe Nishi II is a project under GLP Japan Development Venture I, a 50-50 joint venture between GLP and the Canada Pension Plan Investment Board.
Views, Reviews & Forum
Britain’s housing market remains strong
Short-term jitters aside, a combination of economic fundamentals and political imperatives is likely to sustain values in Britain’s housing market over the long term. I spent the weekend after Brexit in London commiserating with some friends who had been in the midst of selling their home in Vauxhall to upgrade to a bigger place. They had been due to close on the sale the day after the referendum, but a few hours after the results were announced, their estate agent called to say the buyer would proceed only if they gave him an additional 10 per cent off the agreed selling price. The buyer’s reason was that, as a commodities trader, it would be negligent of him not to price the increased uncertainty caused by Brexit into the transaction.
Asia investors are at risk from slide in London property prices
From Hong Kong’s central bank to China’s largest property developer, Asian investors have a lot riding on London’s real estate market. Britain’s decision to leave the European Union has clouded the outlook for property, prompting asset managers to freeze withdrawals from real estate funds as investors rushed to redeem their money. Commercial property values could fall about 10 per cent over the next year, led by declines in oversupplied central London, BlackRock said after the vote. Investors from Asia accounted for 12 per cent of the £10.7 billion (S$18.67 billion) of direct real estate investment in the UK in the first quarter, making them the largest international group, according to Jones Lang LaSalle. The country has been among the top five global real estate investment destinations for decades, especially for buyers from Singapore, China and Hong Kong.
Fixed deposit-linked home loans getting more popular
Home loans linked to fixed deposits are the new big thing in the Singapore property financing scene. With the benchmark Singapore Interbank Offered Rate (Sibor) and Swap Offer Rate (SOR) so closely linked to the United States dollar and therefore vulnerable to possible rate hikes by the US Federal Reserve, many home buyers are seeking more predictable loan rates.
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