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, 8th and 9th October 2017

Top Story

Collective sale fever: How much longer will it last?
The spate of megacollective sales in recent months – witness the blockbuster deals struck by Amber Park and Normanton Park last week – will surely lead to more home owners trying their luck at getting that pot of gold.  Developers seem willing to oblige as well. They have shown their hunger for land in their willingness to shell out record amounts. The $906.7 million price tag for District 15 condominium Amber Park by a joint venture between units of City Developments and the Hong Leong Group is the highest paid for a freehold site in a collective sale.

Singapore Economy

Headline GDP in 2018 may surprise on the upside
While Singapore’s external environment still faces many downside risks, some bullish economists say 2018 headline economic growth could come in at between 3 and 3.5 per cent.  This would be the economy’s best showing in four years and would build on the strong full year 2017 performance, which has already seen several surprises to the upside in recent quarters.

Singapore firms continue to hedge USD exposure
Singapore companies are generally a cautious bunch, they take no chances with their US dollar exposure and hedging remains an ongoing activity, said banks.  The US dollar’s weakness in 2017 has seen the Singapore dollar, in line with most other currencies, strengthen – to as much as 8 per cent in early September – hurting exporters. Importers on the other hand have been enjoying a tidy windfall.

Q3 economic growth likely to hit 3-year high
The Singapore economy likely grew at its fastest pace in three years over the July to September quarter, buoyed by the surging manufacturing sector.  But economists are cautious about the longer-term outlook, noting that electronics manufacturing – the brightest spot in the economy this year – might yet lose steam as export demand tapers off.  In addition, growth has largely been coming from trade-dependent sectors, with local demand yet to pick up decisively.

Economic growth estimates may lift STI
Renewed cheer over the local property market helped lift the Straits Times Index (STI) to a strong finish last week. This week, solid economic numbers might do the trick.  A rebound by the Big Three banks and a property-stock rally helped local shares end on a positive note last Friday, ending at 3,291.29, up 2.2 per cent for the week.  The trigger was last Monday’s flash estimates from the Urban Redevelopment Authority. It showed a rebound in the private residential property price index in the third quarter, for the first time in four years – a sign that property bulls have seized on as evidence that the property bear market is over.

Amazon in Singapore challenged by air-conditioned malls and Alibaba
As pushes into Southeast Asia with a new venture into Singapore, the online retailer is facing some tough hurdles. Shopping in air-conditioned malls is practically a national sport, and e-commerce rivals moved in long ago.  Delivery delays also marred Amazon’s debut in July, when on-the-ground operations began with Prime Now two-hour deliveries. Even when including orders placed on its main US website, Amazon lags behind local web store Lazada and its parent, Alibaba Group Holding.

Singapore Real Estate

Owners moving fast to catch collective sales wave
Even though the success of en bloc deals is not guaranteed, more property owners are giving their consent to collective sales – and they are acting fast.  The collective sales committee (CSC) for the 209-unit Vista Park condominium in Pasir Panjang, for instance, is expecting the requisite 80 per cent approval from owners within three weeks of the first extraordinary general meeting (EGM) that was held on Sept 28.

Keep an eye on land bids
The spate of aggressive land bids in recent months has prompted even the president of the Real Estate Developers’ Association of Singapore to sound an alarm this week. Mr Augustine Tan believes these record-setting bids are not sustainable, as cooling measures are still in place and Singapore’s population growth remains slow amid manpower curbs.

Standoff in Florence Regency en bloc sale amid risk of oversupply in area
Three bidders for Florence Regency, a privatised HUDC estate in Hougang, are refusing to raise their bid prices to match the S$629 million valuation for the development, signalling that – even amid en bloc euphoria – developers are still keeping in view the risk of oversupply in the area.  JLL, the marketing agent for the collective sale, is courting other developers in the hope of closing a deal under private treaty within 10 weeks of the close of the public tender.

LMG Realty buys Nassim Road bungalow for S$23.7m
Lee Metal Group unit LMG Realty has picked up a bungalow in the Nassim Road Good Class Bungalow (GCB) Area from seasoned bungalow investor Thomas Chan for nearly S$23.69 million.  The price works out to S$1,782 per square foot on this plot of freehold land measuring 13,292 sq ft. A bungalow more than 30 years old sits on the site, which LMG Realty is expected to redevelop.

Jalan Besar Plaza to go en-bloc again for S$390m
With the collective sale market fever hot again, the owners of Jalan Besar Plaza hope it will be third time lucky.  The public tender for the mixed-use development will be launched on Tuesday (Oct 10) and closes at 3.30pm on Nov 10, said marketing agent Huttons Asia.

Standout buildings clinch prizes at Fiabci-S’pore awards
There is plenty of sparkle and flair in the urban landscape here, going by the gongs bestowed at a major awards gala last night.  Prizes – judged on criteria such as design, functionality, and community and environmental impact – were conferred on 18 real estate projects that will now go on to compete on the world stage next year.

Companies’ Brief

Soilbuild warrants – leveraged play on construction sector
The property market looks like it’s picking up steam with the number of en bloc deals that are being struck. On Thursday for example came news that Amber Park has been sold en bloc and on Friday, it was Normanton Park. This then begs the interesting issue of whether the flow-through will benefit construction firms. If so, then casting our eye on the construction sector for interesting, long-dated warrants, we come across Soilbuild Construction Group, which has warrants in issue.

KOP, Sam Goi in share placement deal
Real estate, hospitality and entertainment group KOP Limited entered into a placement agreement with businessman Sam Goi Seng Hui last Friday, where Mr Goi will subscribe for up to 221,592,443 new ordinary shares at a placement price of S$0.05 each which will raise up to S$11.08 million for KOP.  The placement price represents a discount of about 4.76 per cent to the volume weighted average price of S$0.0526 as at Oct 5 for each share of the company.

Buoyant en bloc market lifts CDL, UOL
City Developments Limited (CDL) and UOL Group enjoyed a bump in share price and trading activity on Friday, driven by a buoyant en bloc market that some observers think is sustainable.  On Friday, CDL hit a high of S$11.68 before closing at S$11.60, up 1.67 per cent from Thursday, with about 5.6 million shares worth S$65.3 million changing hands. CDL’s average three-month volume is 1.7 million shares.

Global Logistic gets SGX nod, aims to be delisted by April 14, 2018
Global Logistic Properties (GLP) and its offeror are aiming to take the company private by April 14, 2018 after receiving in-principle approval from the Singapore Exchange (SGX), the group announced on Monday morning.  The offeror is Nesta Investment Holdings Limited, a wholly owned subsidiary of Nesta Investment Holdings MidCo Limited, which is owned by a group comprising Hopu, Hillhouse Capital, SMG, Bank of China Group Investment and Vanke Group.

Parkson Retail auditor raises going concern doubts
Parkson Retail Asia’s independent auditor has raised a “material uncertainty” about the department store operator’s ability to remain as a going concern, the company announced on Friday after the market closed.  It said, however, that its Malaysian parent Parkson Holdings Bhd has given an undertaking to provide financial support for 12 months from the date of the board’s approval of the audited financial statements. Parkson Holdings controls about 68 per cent of Parkson Retail’s shares.

Views, Reviews & Forum

En bloc fever benefits only a few
The world of high finance and big money can often feel disconnected to what is happening on the ground.  En bloc fever reached another height this week, but HDB and unemployment data tell a different story.

Hidden value in hotels
Before the resurgence of global economic sentiment this year, hotel stocks languished.  On the surface, they seem like an inferior property asset versus stable yield plays like real estate investment trusts (Reits).

Building on productivity push
To raise productivity in construction, a sector that is struggling with profits and efficiency, the Building and Construction Authority said last week that it will announce public projects that require higher levels of prefabrication ahead of time.

Windfall, but got to move again
Investor Careene Tan, 58, found her ideal home in a spacious three-bedroom apartment in Normanton Park after a year-long hunt.  But barely two months after moving in with her two dogs and splashing out $30,000 on renovations, Madam Tan received news of a startling windfall last Thursday.

Analysts turning bullish a cause for worry?
Global stock markets are in a jubilant mood, with widely watched market barometers such as the Dow Jones Industrial Average and S&P 500 hitting record highs almost daily.  The buoyant sentiment has rubbed off on the Singapore market.

Global Economy & Global Real Estate

Fed official repeats call for gradual interest-rate hikes

Why an end to Fed’s QE won’t derail Asian assets

US baby boomers fall behind in paying off mortgages

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UK house prices up at fastest pace since February

Cities make for healthier, happier people: report

China’s answer to Airbnb sets sights on Japan as tourism booms

Why top-down approach to cool Toronto housing is an uphill battle

Sydneysiders warm to idea of moving to tropical north

Malaysia’s August exports grow 21.5% on strong global demand

When historical Delhi village of Hauz Khas turns into party central

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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