The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 9th June 2016

Top Stories

Land for private housing in H2 GLS list up a tad from H1
Land for private housing including executive condominiums (ECs) that will be offered by the government in the second half of the year is slightly more than in the first half. This is mainly due to a 39.1 per cent rise in the confirmed list supply to 2,170 homes (no ECs), from 1,560 (635 ECs) in H1.  Putting things in perspective, National Development Minister Lawrence Wong said in a blog post that the increase was to match the actual committed supply of 2,130 units in H1; the number includes the 570 units from a reserve-list site in New Upper Changi Road that was triggered in January this year and subsequently sold the following month.

MAS adjusts securities crowdfunding rules to facilitate retail access
The Monetary Authority of Singapore (MAS) will modify proposed rules on securities crowdfunding to better accommodate retail participation, in a shift from earlier proposals that mostly focused on accredited and institutional investors.  Following a public consultation exercise, MAS has moved to close a loophole that allowed some crowdfunding platforms to use an exemption for promissory notes in order to reach retail investors – without the platform being licensed or the issuer having to publish a prospectus.

Singapore Economy

S’pore’s productivity growth ahead of comparable economies
Productivity growth in Singapore is higher than in other high-income economies, according to ICAEW’s latest Economic Insight: South East Asia report released on Wednesday that assesses recent productivity trends in the region.  Using average output per worker growth as a measure for average productivity growth, the report found that Asean has had an impressive productivity track record over the period 2000-2015, with average output per worker rising 3 per cent per annum. It attributed the strong productivity growth to a range of positive structural trends such as sectoral shifts throughout the Asean economies.

New licensing regime set for crowdfunding platforms
Crowdfunding platforms that deal with debt and equity have to obtain a licence to operate, said regulators as they set policy on the industry for the first time.  The move by the Monetary Authority of Singapore yesterday clarifies a grey area and comes at the end of a public consultation process that took over a year.  It also comes as government agencies grapple with how to regulate emerging tech-related players such as Uber and Airbnb.

World Bank cuts global growth forecast this year to 2.4%
The risks of a sharp downturn in the global economy are rising as troubles mount in emerging markets and growth in advanced economies remains lacklustre.  This was the sombre message underlying a new report from the World Bank, which has cut its forecast for global expansion this year to 2.4 per cent, “roughly… the same insipid pace we experienced last year”.

S’pore tipped to become No. 2 offshore financial centre by 2020
Singapore’s proximity to large markets such as China and Indonesia will likely make it one of the fastest-growing offshore financial centres worldwide over the next four years, ranking only behind Switzerland.  It is estimated that Singapore and its regional rival Hong Kong will increase their combined share of the world’s offshore assets to 23 per cent, up from 18 per cent in 2015.  The Asia-Pacific region will also continue to gain share in the total global wealth to 2020 as the economic balance shifts to the East, said the report from the Boston Consultancy Group (BCG).

Singapore Real Estate

Le Méridien back in Singapore with rebranded hotel in Sentosa
The former Mövenpick Heritage Hotel in Sentosa is being rebranded as the 191-room Le Méridien Singapore following a renovation and conversion, marking the return of the brand to Singapore after nearly a decade.  Le Méridien Hotels & Resorts, which is under Starwood Hotels & Resorts Worldwide, said on Wednesday that it had inked an agreement with Treasure Resort.  Stephen Ho, president (Asia Pacific) of Starwood Hotels & Resorts Worldwide Inc, said: “We are excited to welcome Le Méridien back to Singapore with a property that can truly represent the new direction of the brand.”

PPS not a panacea for every CDL high-end residential project
BT recently reported that Singapore-listed City Developments Ltd (CDL) may be at the preliminary stages of exploring the possibility of carrying out a third profit participation securities (PPS) exercise – this time for a portfolio of 48 apartments in three of the property developer’s completed projects in Singapore’s Core Central Region.  It is interesting to look at the merits of this latest exercise but one needs to be clear from the outset that the PPS scheme is not necessary suitable or a panacea for every CDL high-end residential project. The reason lies in the Qualifying Certificate (QC) rules.

Tuan Sing in JV for Batam integrated development
Luxury property developer Tuan Sing on Wednesday announced a 90:10 joint venture with private Singapore developer Habitat Properties to develop a site in Marina City, Batam, into an integrated mixed development township.  This will comprise hotels with MICE (meetings, incentives, conferencing, exhibitions) facilities, retail, tourist facilities and attractions, and residential properties.

Commercial/residential site next to Woodleigh MRT sparks market interest
Property market observers were all agog on Wednesday about a choice commercial and residential site along Upper Serangoon Road right next to Woodleigh MRT Station that will be launched on the confirmed list in December this year.  It is for a mixed-use development that could yield an estimated 825 private homes and about 15,000 square metres gross floor area (GFA) of commercial space.

Investors look again at office property
The blockbuster deal for Asia Square Tower 1 in Marina Bay and a record offer for the Straits Trading Building in Battery Road in the span of a week have suddenly perked up interest in the lacklustre office property market.  Analysts told The Straits Times yesterday that news of these deals will likely prompt investors to review other commercial assets on the market.  Mr Shaun Poh, Cushman & Wakefield’s executive director of capital markets, said: “Whether it will translate to actual sales, and at what price, will depend on the returns requirement of the investor.

Slight rise in potential supply of homes through govt land sales
In the second half-year land sales programme, the Government has broadly kept up its cautious approach to supplying fresh development sites in an uncertain global economic environment.  But in a modest shift from recent Government Land Sales (GLS) programmes where the total number of homes on offer had been steadily cut, the potential supply of homes is up marginally this time.  Minister for National Development Lawrence Wong said in a blog post that the rise comes as there has been a slide in remaining unsold private homes as well as a pick-up in new home sales over the past year.

Companies’ Brief

Starhill Global Reit
Starhill Global Reit has raised the base rents for its Toshin master lease, which is 5.5 per cent higher than the existing rate, and is effective for three years starting June 8, 2016.  The rate is based on the average of three market rental valuations by independent licensed valuers.  The Toshin master lease accounted for about a fifth of the Reit’s portfolio gross rent in March 2016. Toshin is also the Reit’s largest tenant.

CapitaLand has opened a co-working facility in the central business district with a joint venture partner. Called the Collective Works Capital Tower, the 22,000 sq ft space occupies the 12th floor of the 52-storey Capital Tower. It is run in partnership with co-working space operator Collective Works.

Views, Reviews & Forum

More bonds a boon for investors
The recent launch of two new bond frameworks means small investors can look forward to a wider range of plain vanilla retail bonds, up from the 11 on offer now.  For many years, retail investors in Singapore lamented that they did not have access to corporate bonds, especially when there are attractive regular interest payments or coupons on offer. While there are about 1,900 bonds issued by companies listed on the Singapore Exchange (SGX), they are available only in large denominations of at least $200,000 and most are offered only to institutional and accredited investors.

Ban reverse parking in front of eateries, shops
In the photo accompanying the story on Tuesday (“URA bans new eateries in 3 areas due to parking woes”), cars in front of the row of eateries in Upper Thomson Road were reverse parked, with their rears facing the restaurants.  In Australia and the United States, such parking is prohibited by law.  Where there are eateries and shops, only forward parking is allowed.  The laws there provide for a fine for reverse parking in front of eateries and shops.

Sovereign ratings downgrades likely to outpace upgrades in 2016, says S&P
Sovereign downgrades are likely to outpace upgrades in 2016, Standard & Poor’s Ratings Services said in a a report released on Wednesday (Jan 7)  Sovereign ratings, which are credit ratings of a country or sovereign entity, give investors insight into the level of risk associated with investing in a particular country. Obtaining a good sovereign credit rating is usually essential for developing countries in order to access funding in international bond markets.  S&P said that among the 131 sovereigns it rates globally, negative outlooks at 25 outstripped positive outlooks at eight by a ratio of 3 to 1, as at Dec 31, 2015.

Global Economy & Global Real Estate

S&P warns of sovereign downgrades linked to debt burden

Japan’s GDP grows more than initial reading in 1st quarter

ECB snaps up corporate bonds to boost Eurozone

Hong Kong desperately seeking Chinese tourists

Japanese warming to home auctions amid pain of negative rates

EU exit could temper UK house price rises: poll

Tours of Ceausescu’s villa eschew mention of his dictatorship

A $16 Million Westchester Lake House With Golf Greens, Illegal Beach

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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