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10 condominiums with the most number of unsold units

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20170917 10 condos with the most number of unsold units
20170917 10 condos with the most number of unsold units

For property investors interested to get involved in the market but don’t know where to start, this list of 10 projects with the most number of unsold units can be a good place to kick start your search.

The list below has been ranked from most to fewest number of unsold units, with the highest being Marina One Residences and least being Gem Residences at 79A Toa Payoh Central.

If you see the third column from the right having numbers fairly close to the second column from the right, this means the project has either been selling for some time, or it has been selling well. An example would be Martin modern which has both sold well even though it was launched for a short period of time of 2 months since 22 July 2017.

Project name No of units in project No of unsold units Average price S$psf
Marina One Residences 1,042 648 2,240
Seaside Residences 841 374 1,630
Kingsford Waterbay 1,165 374 1,230
Martin Modren 450 341 2,150
Queens Peak 736 305 1,750
The Crest 469 274 1,640
Parc Life (EC) 628 270 790
Artra 400 246 1,700
Signature at Yishun (EC) 525 226 765
Gem Residences 578 192 1,490


Average prices of units sold

Graphically, this is how the prices of units sold in July based on projects with the most number of unsold units look like.

On the lower end are ECs like Parc Life and Signature at Yishun which have prices which are below average EC pricing of S$790-810 psf.

The higher end sees projects like Marina One Residences at Marina Way and Martin Modern at 8 Martin Place commanding average prices above the psychological S$2,000 psf mark.

Average prices of units sold in July 2017
Average prices of units sold in July 2017


Number of units available for sale

Investors wishing to purchase a unit could look at the following chart to identify which projects have the most number of units available for sale i.e. unsold units. Do take note that not all the unsold units have been launched by the developer. i.e. Even though Marina One Residences has 648 units still left unsold, not all have been launched by the developer (Khazanah Nasional Berhad and Temasek Holdings (Private) Limited).

Buy Marina One Residences to support Temasek Holdings so that Singapore inc can get back their return on investment! And so that Singaporeans can benefit! (Maybe)

No of available units for sale
No of available units for sale


Number of units in project

Lastly, the following chart shows the number of units in each project where there are the most number of unsold units. Even though Kingsford Waterbay has the most with 1,165 units in the project, there is only 357 left unsold. This speaks of its good location at 26 Paya Lebar Crescent, near Hougang MRT, and good views of Sungei Serangoon and Punggol Park.

No of units in project
No of units in project

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28 condominium developments launching for sale in 2018

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Condominium
Condominium

28 new condominiums launching in 2018

There will be a number of new condominium developments coming up for launch in 2018 after the spate of hotly contested bidding of government land sites and en-bloc sales in 2017.

This post will provide a helpful compilation of the condominiums and apartments that are slated to be launched for sale in 2018. The basis for estimation are first the identification of sites that were sold in 2017, then the adding of a few months to account for closing of deal, preparation of land, appointment of consultants by the purchaser etc.

Some of the projects do not have any identifiable name because the developer has not released their decision on what name they want the project to have. In those cases, the development is identified by their former project name for en bloc deals, or name of parcel for government land sales.

This post will be updated occasionally as new information arises on the progress of these condominiums/ apartments.

In the meantime, check out the Google Map for the 28 condominiums that are expected to be launched for sale in 2018.

A breakdown would show that the developments are spread around Central, Eastern and North Eastern part of Singapore. A number of them can be found along the North East (purple) MRT line such as Woodleigh development, ex-Serangoon Ville and ex-Raintree Gardens development. The ex-Goh and Goh building at Bukit Timah is the farthest west development that is present.



For reference, check out the table below. The list will be updated as developers progressively release information such as pricing and number of units of the projects.

Developments launching in 2018
Developments launching in 2018


Contact us for a free consultation if you’re interested in any of these new launch condominiums and apartments. 

I am interested in (required)
1 Draycott Park120 Grange Road1177 Serangoon Road231 Pasir Panjang3 Cuscaden Walk38 Carpmael Road45 Amber Garden494 Upper East Coast Rd8 Hullet RoadAnchorvale ECEx-EunosvilleEx-Goh and Goh BuildingEx-Harbour View GardensEx-Raintree GardensEx-Serangoon VilleEx-Shunfu VilleEx-The AlbraccaFernvale RdGeylang Lor 30Geylang Lor 35Lor K Telok KurauMargaret DriveNew FuturaRio CasaRiver ValleyStirling RdTampines Parcel CWoodleigh

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Popular executive condos sold in July 2017

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Sol Acres
Sol Acres

Executive Condominiums remain popular

Executive condominiums have been a fairly popular property type among home buyers in the recent past.

This has come on the back of rising HDB and private condominium prices, leaving fresh graduates, HDB upgraders and those about 5-10 years in the workforce stuck in the middle.

People like ECs because of the public to private conversion that happens after 10 years. In the shorter term, the EC behaves like a public HDB flat, with no subletting or sale allowed in the first 5 years.

We take a look at how ECs have performed in July 2017.

No doubt the standout project is Hundred Palms Residences at Hougang/Serangoon. All the units in this development were sold out within an afternoon given its fantastic location.

The developer likely knew reception would be strong, given the 2,000 e-applications submitted for the 500+ units there, and priced it at the higher end of ECs around Singapore.

Regardless, the project was well received. Buyers paid a median price of S$843 psf, the highest among all ECs sold in the month of July in 2017.

Project No of units sold Median price S$psf
Hundred Palms Residences 531 843
The Vales 2 836
The Visionaire 65 830
The Terrace 1 802
The Brownstone 24 798
Westwood Residences 33 798
INZ Residence 65 796
Sol Acres 42 794
Parc Life 63 790
Northwave 43 776
The Criterion 62 768
Signature at Yishun 45 765
Bellewoods 2 695

At the lower price end of the spectrum is Signature at Yishun and The Criterion.

Signture at Yishun

Signature at Yishun is located about 1-2km from the nearest MRT station Khatib, though one of its selling point is the view of lower Seletar reservoir.Signature at Yishun

Signature at Yishun view of lower Seletar
Signature at Yishun view of lower Seletar



The Criterion

Right beside Signature at Yishun is The Criterion which also posted one of the lowest selling prices in July 2017 of S$768 psf.

The Criterion clubhouse
The Criterion clubhouse

Long story short, location plays a big factor, regardless of the view one has of a reservoir or beach for that matter.

But for those looking for bang for buck and a lower-than-average purchase price, the Signature at Yishun and Criterion will tick those boxes.


Let us help you if you’re thinking of purchasing a property or are on a househunt. In the meantime, check out the schedule of property events and talks compiled for your convenience.

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Somewhere in the middle

For those looking for an EC that is decently located with average prices, Sol Acres provides good value for money.

With a sun-shiny tag line, “365 days of Happiness”, and a cheerful color scheme, Sol Acres does give the other ECs a run for its money.

Sol Acres EC is located in between Keat Hong and Teck Whye LRT station, which are both respectively 2 and 3 stations from Choa Chu Kang MRT station.

Median prices in July 2017 came in at S$794, which was right in the middle for all ECs where there were units sold in the month.

Sol Acres Logo

Sol Acres
Sol Acres

Graphical sale prices

For the month of July 2017, this is how the sale price of EC units look like graphically.

At the higher price end is Hundred Palms residences while Bellewoods is at the lower end.

Median price EC units sold July 2017




Sought after property type

ECs continue to be a sought after property type among Singaporeans. The unfortunate thing is that there are very few ECs left for purchase due to the government reducing the number of GLS sites for sale in the second half of 2016 and first half of 2017.

From HDB’s website, the next upcoming EC is at Anchorvale Lane.

Anchorvale Lane EC from HDB
Anchorvale Lane EC from HDB

The property is already being marketed as Rivercove Residences. Taking reference from the sale prices in July 2017, the likely starting price of Rivercove Residences is likely to be around S$79x to S$8xx.

Further ahead, there is only one EC site put up for sale by HDB named Sumang Walk.

This site will be put up for sale in Dec 2017. For those who are thinking of buying, the winning developer can only start marketing it after 15 months i.e. Feb 2019.

This is a really strange government policy, but who knows what they’re thinking.

In the meantime, those desperate for a house, no luck for you. :'(

Sumang Walk HDB
Sumang Walk HDB GLS

If you’re interested in overseas investments, we will have some properties in Thailand coming up at prices of S$1xx (total price)!!

No kidding, S$1xx,xxx in total. Not S$1,xxx,xxx like in Singapore.

Use the above form to sign up to our newsletter and keep your eyes peeled.

Keep updated on property developments in the meantime by visiting and liking us at Facebook, Linkedin, YouTube and join our Telegram group.

Guest posting

As we build up the website, we are expanding the range of topics we write about. If you have something to share, feel free to guest post with us.

Recap

  1. ECs continue to be favoured by buyers in the market
  2. Location plays a big factor in popularity. See Hundred Palms Residences for example.
  3. There’s only 2 more ECs visible in the pipeline, Rivercove Residences and one GLS at Sumang Walk.

If you’re a REIT investor, check out the REIT database that can facilitate your investment analysis.

 Share with us, do you think ECs are a good form of investment?


If you’re looking for a house, we can help you with a free consultation. We have new launch condominiums, ECs, resale and commercial properties for sale around the island.

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Parc Botannia property investment potential

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Jalan Kayu

Update: Available units

1+S 506 sqft From S$690k
2Br-C 592 sqft From S$859K
2Br-P 667 sqft From S$913K
2+S 775 sqft From S$995k
3Br-C 861 sqft From S$1.107M
3Br-P 969 sqft From S$1.241M
4Br-C 1,152 sqft From S$1.56m
4Br-P 1,249 sqft From S$1.541m
5Br 1,410 sqft From S$1,696m

For latest information, please contact us using the contact form for pricing and discounts.

Situated in district 28, Parc Botannia is a new launch condominium near Jalan Kayu, a location with growing property investment potential.

Slated to TOP in 2020, Parc Botannia has 735 residential units spread over 4 blocks of 22 stories.

This post is going to introduce the property investment potential condition in Jalan Kayu with specific view on Parc Botannia, a new launch condominium is slated to come to market soon. Investors should keep their eyes peeled on launch prices.

Besides Parc Botannia, there are a number of condominiums presently in the area such as

  • Riverbank @ Fernvale
  • The Greenwich
  • Sunrise Gardens
  • Seletar Springs Condominium
  • H2O residences
  • Seletar park residence
  • The Topiary
  • Mimosa Park
  • Serenity Park
  • Grande Vista

This will soon be joined by new projects such as High Park residences and Belgravia Villas.




District prices at about S$900 psf

Non landed property prices in the D28 is about S$900 psf.

Prices have trended down slightly from S$1,000 psf in 2015/2016.

However, prices are up from S$500 psf in 2010. This translates into an annual gain of about 8.4%.

If you owned an investment property, your total returns comprising capital gains and rental income would be in the 12-13% range (assuming rental income yield of about 3-4%).

Generally, returns for an investor would be quite good.

Furthermore, prices in this district is lower than much of other parts of suburban Singapore which are commanding about S$1,000 to S$1,400 psf.

D28 Jalan Kayu Selatar Price trend

Attractive rents for new condominiums

D28 Jalan Kayu Seletar rents

Rents for D28 non-landed condominiums are about S$1.7 to S$3 psf.

Noticeably, rents for newer condominiums, despite the large supply increase in residential units in the last 3 to 5 years, are substantially higher than condominiums that are more than 10 years old.

As an investor, the focus should therefore be on buying a newer condominium.

Newer condominiums command higher rents, even when adjusted for the supply situation

I think this is quite intuitive because renters would be particular about the ‘newness’ of a place they would be staying in for the foreseeable future.

Given a choice, not many people would want to stay in a worn-down, tired looking unit. And the numbers suggest that renters are willing to pay slightly more for a newer unit.

I think this is due to the mindset of renters being as such, “I will likely be staying here for 2 years so I wouldn’t mind forking out more money per month for a newer unit”.




In D28, some of the newer condominiums coming up are Parc Botannia (completing 2020), High Park residences (completing 2019) and Belgravia Villas (completing 2018).

Parc Botannia Jalan Kayu location

2.5% to 4% yields

Yields for existing condominiums in D28 are about 2.5% to 4% based on transactions in the last 6 months.

As an indication, the condominiums in the district are presently fetching these yields.

Riverbank @ Fernvale 3.8
The Greenwich 3.3
Sunrise Gardens 3.2
Seletar Springs condominium 3.2
H2O residences 3
Seletar park residence 2.9
The Topiary 2.9
Mimosa Park 2.6
Serenity Park 2.6
Grande Vista 2.4

Going by these as a guide, the upcoming new condominium Parc Botannia, and in addition, High Park residences and Belgravia Villas could be fetching about 3+% yields.



Neighbourhood

In the neighbourhood, the most famous landmark would be the Jalan Kayu prata shops.

Other notable amenities and schools nearby include Sengkang Green Primary School, Fernvale Primary School and Pei Hwa Secondary School.

Kindergartens include MOE Kindergarten @ Sengkang Green, PCF at Sengkang West and Chatsworth Kindergarten.

Greenwich V is a popular shopping mall that is about 5 mins drive from the Jalan Kayu road where Parc Botannia is located.

Jalan Kayu Greenwich V

Rental potential

The Jalan Kayu and Seletar has been targeted by the government and Urban Redevelopment Authority (URA) to be the upcoming fourth regional centre.

This follows the first three which are Tampines, Woodlands and Jurong.

New industries are intended to be developed in this cluster, which will contribute to the rentability of properties in the location.

One example of a new industry being developed by the URA is the aerospace cluster.

Notable tenants that will be taking up space in the Seletar Aerospace Park include Rolls-Royce Group, Eurocopter and ST Aerospace.

According to URA, up to 10,000 jobs high value add and high skilled jobs will be created.

For developments in the vicinity such as Parc Boatnnia which is located about 5 mins drive from Seletar Aerospace Park, there is likely to be demand for rental properties by workers in these industries.

Jalan Kayu Seletar Aerospace Park

 

All in all, Parc Botannia is an attractive new launch condominium that is likely to hold its own in a market with rising prices. The neighbourhood has a rustic, charming appeal, nestled off Jalan Kayu.

In addition, there is connectivity to the Tampiness Expressway and amenities such as good schools and a shopping mall.

For investors thinking of renting out the units, there is an immediate catchment of potential renters in the form of workers in the aerospace parks.



Life Asoke Rama 9 – S$1xxk for a Bangkok CBD property

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Life Asoke Rama 9 in Bangkok

12 Oct 2017: All units sold out! 

Update: Pre-launch event 24 Sept Sunday 2-4pm. Official launch 1 Oct Sunday 2-4pm. 

Singaporeans are intimately associated with Bangkok, what with the mango sticky rice, Paad Thai and Chatuchak Market that they get crazy over while there.

Traditionally, Bangkok has been associated more as a holiday destination rather than an investment destination, but things are slowly changing with the development of the country.

There’s tourism, the friendly culture of Thais and a pretty stable residential market in the city.

For those who have a bit of spare cash (read: S$100-200k) and are wondering where to put it, Bangkok may be a decent investment destination.


Not many prime developments come up in the city because of the rather developed and dense nature of it, but when there is, it usually gets snapped up by foreigners pretty quickly.

Unfortunately for the locals, because the wages are quite low compared to the 4 Asian Tigers (Singapore, Korea, Hong Kong and Taiwan), they don’t usually buy up a lot of the properties in the city centre.

Life Asoke Rama 9 is a prime freehold condo in Bangkok Central Business District with prices starting from SGD1xxk.

For those itching to get a piece of an overseas property, this is attractive compared to SGD1,xxx,xxx for Singapore properties. 🙂

Before jumping into the project details, here’s a quick introduction of Thailand and Bangkok.

How’s Thailand growing? GDP growth 3.7% year on year

GDP situation from Financial Times.

Thailand 2Q17 GDP notches fastest growth in 4 years
Thailand 2Q17 GDP notches fastest growth in 4 years from FT

Gross domestic product rose 3.7 per cent year on year in the second quarter according to the National Economic and Social Development Board, coming in above a median estimate of 3.2 per cent from economists compiled by Bloomberg.

That figure was its highest since the first quarter of 2013 when the country recorded 5.2 per cent growth.

Growth in the hotels and restaurants sector rose 7.5 per cent year on year, while retail grew 6 per cent for the period.

GDP rose 1.3 per cent quarter on quarter, in line with the March quarter’s growth and above a median forecast of a 1 per cent rise.

 

And the office sector? Rents are accelerating and growing

According to JLL, the office market in Bangkok is picking up.

JLL Bangkok office property clock
JLL Bangkok office property clock

A healthy office market would make it easier for investors to rent out their office and residential units in Asoke Rama 9 because of demand created by multinational companies.

 

Bangkok: Still has legendary Charm

Bangkok retains much authenticity and charm despite it’s advancement in the past decade.

Despite its rapidly advanced development, Bangkok retains much of its authenticity and charm, making life here feel like an endless holiday.

Hop on a river ferry to grab brunch at a five-star hotel overlooking the Chao Praya River. Explore a winding alley for tasty street food.

Sip a cocktail in the latest speakeasy in Sukhumvit. Get pampered at spas with unbeatable prices.

Shop yourself out at markets and luxury malls. Pop out of town for a beach getaway a 1.5-hour drive away.

Or just laze at home, where every conceivable service can be brought to your doorstep for a fraction of what you’d pay in other major cities.



Where’s the Chinese tourists? They’re in Bangkok

Even with the Junta ruling the country with an iron fist, Chinese tourists continue to enter the country in a big way.

The country’s tourism income has grown 8% in 2017, compared to average annual growth of 3% to 5% per year. The government has set a target of 10% growth in tourism income for 2018.

In accordance with the tourism targets, the country’s tourism authority has set out on a campaign named “Amazing Thailand Tourism Year 2018

Amazing Thailand 2018
Amazing Thailand 2018

Tourism definitely remains a strong driver of Thailand and Bangkok’s growth, with The World Travel & Tourism Council (WTTC) projecting the GDP of Thailand’s tourism sector reaching that of the world’s top 10 in the next 10 years.

To achieve the 10% growth target, seven main areas of tourism will be boosted, namely sports tourism, food tourism, marine tourism, wedding and honeymoon tourism, medical and health tourism, community-based tourism and leisure tourism.

Life Asoke Rama 9 Project details

Project name Life Asoke Rama 9
Address Asoke-Din Daeng Road, Makkasan, Ratchathewi, Bangkok
Developer AP Thailand, one of Thailand’s largest developers

Joint venture with Mitsubishi Estate, leading Japanese developer

Description Proposed Residential Condominium Development with recreational facilities. Infinity pool, fitness and sky lounge on the top floor.
Tenure Freehold
No. of blocks 2 blocks. Tower A and B
No. of storeys 42 storey (Tower A), 45 storey (Tower B), 2 units for shops
No. of units 1,298 in Tower A and 950 in Tower B (including 2 commercial units)

Studio size 25-27.5sqm

1 bedroom from 32sqm

2 bedrooms from 45-58sqm

No. of carpark lots 904 parking lots
Capital growth and rental yields Capital growth expected at 8% p.a. and rental yields of 6% p.a.

 

 


Life Asoke Rama 9

Life Asoke Rama 9

Life Asoke Rama 9

Life Asoke Rama 9

Life Asoke Rama 9

Life Asoke Rama 9

 

Location of Life Asoke Rama 9

Life Asoke Rama 9 location
Life Asoke Rama 9 location
Life Asoke Rama 9 location 1
Life Asoke Rama 9 location

Located a mere 300 minutes from Rama IX MRT station and 600 metres from the Airport Link, Life Asoke Rama 9 is one of the highly anticipated launches this year. The property is  located in Bangkok’s growing CBD, which is the headquarters for multinational companies such as Unilever and AIA, as well as the new Stock Exchange of Thailand. The project will also be located right next to Grand Central Plaza Rama 9, a new shopping complex.

Life Asoke Rama 9 nearby buildings
Life Asoke Rama 9 nearby buildings

The new Central Business District will have Asia’s tallest building, the Super Tower, which is 125 floors high. This will be even taller than ICC Hong Kong. The new CBD will be the new equivalent of Time Square in New York, Raffles Place in Singapore and the Canary Wharf of London.

Up to 70% financing available. Asoke Rama 9 is jointly developed by AP, a listed Thai developer and Mitsubishi Estate, a leading Japanese developer.

Top 10 most expensive properties sold by developers in July

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Expensive house

The Singapore property market has been slowly picking up, with developers hotly contesting for en-bloc sites, a Chinese developer throwing down S$1b for a government land sale site at Sitrling road and buyers snapping up all 531 units in Hundred Palms EC within an afternoon.

Interested in how the property market is faring? This post will show you where developers sold the most expensive units in July 2017.

S$3,000 barrier not broken

The S$3,000 psf pricing psychological barrier has not been broken, but it’s close to being broken with the highest priced unit at Lloyd SixtyFive going at S$2,842.

On average, the selling prices of units sold by developers in July 2017 was S$1,493.

For those thinking of buying a property, this average price would be a good benchmark for you to see if the price you’re paying is above or below average.

If you want to be updated on property developments, visit and like us at Facebook, Linkedin, YouTube and join our Telegram group.

While you’re around, check out this list for properties where transacted prices are much lower than in the past.

Project Median price S$psf
Lloyd SixtyFive 2,842
Onze @ Tanjong Pagar 2,651
The Asana 2,649
Cairnhill Nine 2,449
Goodwood Grand 2,441
EON Shenton 2,357
The Rise @ Oxley 2,353
The Line @ Tanjong Rhu 2,304
Spottiswoode Suites 2,272
Marina One Residences 2,244

Property investment potential in Sengkang and Anchorvale

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Is Sengkang/Anchorvale in an ‘ulu’ part of Singapore? With a lot fun things to do, see and eat in Sengkang/Anchorvale, we’ll show you a side of it that you didn’t know.

Besides things to do, see and eat, the Sengkang/Anchorvale area is being developed by the government. There are quite a number of residential and commercial developments coming up.

For property investors looking to target this location, rentability should not be an issue. Prices would be something to look out for if an investor wants to enter with buffer to make capital gains on the upside.

Sengkang and the anchorvale area is also near an upcoming new launch EC called Rivercove residences. This new launch EC is expected to have about 605 units at an average price of S$8xx psf.

For those interested in property investments in the Sengkang and Anchorvale area, this short guide will get you started.

First up, where is Sengkang?

Sengkang/Anchorvale is located in the North Eastern part of Singapore. These are some of the nearby landspots and neighbourhoods.

  • Seletar Airbase
  • Coney Island
  • Punggol reservoir
  • Ang Mo Kio town
  • Hougang and Buangkok

Sengkang Anchorvale

Sengkang Riverside Park

Sengkang riverside park

This is one gem that not many people would know of.

Sengkang Riverside park is located just across the Punggol reservoir/river from Rivercove residences new launch EC, an up and coming executive condominium with starting prices around S$8xx psf.

The architecture seems very similar to the Marina Barrage, with the arching wave like structure.

This place is perfect for runners looking to pound the pavements, or shutterbugs capturing the sunrise and sunsets.

 

Sengkang Mushroom Cafe

Mushroom cafe

Mushroom cafe 2

No this cafe is not related to Super Mario and the Princess.

This place is great for families because of the wide open spaces and alfresco dining.

Reviews online have it that pricing is decent, with meals going for less than S$10 and good-sized portions.

The mushroom cafe is located inside Sengkang Riverside park, also a stone’s throw away from Rivercove residences new launch EC.


Should you wish to find out more about Rivercove Residences EC, fill in the form and we will contact you within 24 hours.

Prices from S$8xx psf. Launching 1H2018.

My budget is (required)
Up to S$750,000Up to S$1mUp to S$1.25mUp to S$1.5mUp to S$1.75mUp to S$2mUp to S$2.5mUp to S$3mUp to S$4mAbove S$4m





Compass point shopping centre

Compass point

For all your shopping and basic necessities, there is Compass Point Shopping Mall.

Tenants in this mall include

  • Prima Deli
  • Bread Talk
  • Toast Box
  • Singtel
  • Challenger
  • Pepper Lunch
  • MacDonalds
  • Pizza Hut
  • Kopitiam
  • Cold Storage
  • And many others

Frasers has done a good job with the mall by keeping it fresh, relevant and popular with the surrounding residents. You won’t feel that is was in 2002 and now 15 years old.

 

Sengkang Swimming Complex

Fitness buffs fear not! Sengkang Swimming complex has all the facilities you need for a 30 lap swim.

For those with families, there are multiple covered and uncovered water slides and play pools for your young one.

Sengkang swimming complex

 

 

Sengkang floating wetland

Sengkang wetlands

Lucky for those who are into nature and the wild, because Sengkang also has the floating wetland.

This floating wetland is in Punggol reservoir and helps improve the water quality on top of providing a natural habitat for birds and fishes.

There is a boardwalk to bring people close to nature, and provide them with an avenue to enjoy breathtaking views of the area.

For those who are thinking of cycling, there are transport links between Anchorvale Community Club, Sengkang Sports Complex and Sengkang Riverside Park.

Those interested in learning more about the ecosystem may join one of the learning tours conducted by PUB.

Sengkang Wetlands trail




Sengkang Community centre

Sengkang cc

Sengkang CC has the following facilities

  • Singpost
  • SingHealth Polyclinic
  • Singapore Anti-Narcotics Association (SANA)
  • Neighbourhood Police Centre (NPC)
  • Music school
  • Multi purpose hall for badminton, pickleball, table tennis, line dance
  • Basketball court

Convenience is at your doorstep if you’re a resident of Rivercove residences new launch EC.

 

Honey sauce pork knuckle

What’s Sengkang without good food?

Honey sauce pork knuckle at 275D Compassvale Link serves up special dishes such as honey-coasted pork knuckle.

 

Penang Kia Prawn Mee

Penang Kia Prawn Mee

As the name implies, the prawn mee is popular in Penang. The dish is served with prawns, meat, fried shallot, chilli and bean sprouts.

Satisfy your prawn mee food cravings at 205D Compassvale Lane, 544205

 

Growing property investment potential

For those thinking of investing in Sengkang/Anchorvale, here are some basic facts of district 28 where Sengkang/Anchorvale is located.

D28 prices

D28 prices and rents

  • Non-landed freehold prices around S$842 psf; Non-landed 99 year prices around S$748 psf.
  • Rents are about S$3 psf
  • Gross yield (before taking out property taxes, insurance, condo maintenance charges etc) is around 4.2 to 4.7%

This yield level is really good, implying that prices in the Sengkang/Anchorvale area is not as high compared to other parts of the island.

A new launch EC, Rivercove residences, priced at S$8xx psf, is therefore likely to be quite a steal.

Check out the view, looking North, of the Punggol reservoir leading out to the sea.

 

Government’s development plans for North East Singapore

The government has plans for North East Singapore, to develop

  • New and better housing choices
  • Rejuvenate mature towns
  • Enhance quality of life

This 3 pronged vision is likely to see North East Singapore (including Punggol, Sengkang and Anchorvale) develop into a special area. This is going to be much like Tampines, Paya Lebar and Jurong Lake district.

Generally, gentrification,

a process of renovation of deteriorated urban neighbourhoods

can lead to a decrease in vacancy rates and increase in property values.

Examples of gentrifying neighbourhoods in other parts of Singapore is Geylang Serai and Jalan Besar which is now becoming home to hipster young people and the creative community.

New life has been injected into these neighbourhoods, and if the government’s plans follow through, the North East part of Singapore, and Rivercove Residences EC, will likely see improving property values.


Should you wish to find out more about Rivercove Residences EC, fill in the form and we will contact you within 24 hours.

Prices from S$8xx psf. Launching 1H2018.

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Condominiums with low asking prices

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Low price condo

For property investors seeking to make a quick buck in the market, the purchase price is usually a big factor in determining how much capital gain the investor can make over the next few years.

Let’s recap, in general, there are a few ways property investors can get a high return on their investment.

I assume a non-landed residential condominium development.

  1. Rent out the unit with minimal vacancy in between tenants
  2. Sell the unit at a higher price than purchase
  3. Leverage up more
  4. Buy a run-down unit, refurbish it, then rent or sell it at a higher price than if no refurbishment were done

In this post, I’m going to identify a few properties that have prices that are at a substantial discount to their historical highs.

We’ll also see what we can learn as property investors to avoid making losses and generating as high a return as possible.

Let’s dive straight into it.



Properties with recent average prices below historical high

The following is a list of developments with recent average transacted prices far below their highest transacted price.

In the list, the highest transacted prices were usually registered in 2011-2013 which some say is the peak of the Singapore property market cycle, or in 2007 just before the Global Financial Crisis.

Development Date of highest price Price psf Average recent price psf Discount
Avila Gardens 28 Feb 2013 1,700 750 55%
St Regis Residence Singapore 9 May 2007 4,600 2,200 53%
Reflections at Keppel Bay 23 Nov 2011 3,300 1,600 51%
Marina Bay Residences 15 Apr 2011 4,400 2,200 50%
Helios Residences 16 Jan 2013 4,000 2,000 50%
Skysuites 17 2 Jul 2013 2,400 1,200 49%
Draycott Eight 23 May 2007 3,200 1,700 47%

Quick look at the curated list of properties show a number of them being in the prime CBD districts.

These developments for example, are St Regis Residences Singapore, Reflections at Keppel Bay and Marina Bay Residences.


There are other projects in Singapore that have recent transacted prices a way off their historical peaks.

Contact us and we can help you sift through some of them. If you’re looking for new launch condominiums, we can help.

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How do I know property prices are high?

One lesson for property investors can be extracted from this.

“Entry prices are very important”

For some properties, it could take up to 7 or 8 years before prices climb back to the peak, and for other developments, it may not even rise back to the peak.

Generally, as the economy grows, house prices should grow along with it because demand for property is derived (“derived demand”).

This means

demand for property depends on the result of changes in the prices for some other related good or service. 

For example, residential prices rise or fall because of changes in demand and supply of raw materials, tenants (affected by government labour policy), land supply etc.

Office space prices and rents are affected by demand and supply of tenants such as law firms, tech companies (Google, Facebook etc.)

So how does an investor know when prices are high?

One way is to find out the yield of the unit. Yields take into account both the cash flow producing capability of a property and the price of it.

In the Singapore residential market, present rental yields are about 3.2%.

Historically, this is comparable to the 2001 period during the recovery after the Asian Financial Crisis.

Some may say this means property prices are quite high.

Not that simple actually because there are other factors to consider such as bond yields (historically low around the world due to expansionary monetary policy and a low inflation environment), government policy (stamp duties on the supply and demand side), economic growth, technological advances etc.

At the end of the day, one rule of thumb investors can look at is to find out where prices are now compared to historical peaks.

With a built in buffer when a property is purchased at good value, there is more potential for capital gains.

 

In summary,

  1. Entry prices are one consideration on whether a property investor can extract as much value as possible from an investment.
  2. Whether prices are expensive or cheap now depends more than looking at property yields, though it is one indicator.

 

Share with us, what do you look out for before buying a property for investment?


If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT database and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. Check out our “properties” page for more. If you know of anyone who is interested to buy or sell, we welcome referrals. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

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Singapore property outlook 2017 and if forecasters got it accurate

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Narrative and numbers

Property market outlook

What does the property market hold in store for investors and homeowners in 2017 and 2018?

Who wouldn’t like to know? Singaporeans, and Asians in general, have this obsessive attitude towards property ownership, thinking that it can help them get rich.

Get rich yes. Overnight? Rare unless you happen to own a unit in a development that is going to undergo en-bloc. Over time, likely.

Returns for the property asset class have generally tended to be between equities and bonds over the long term. Figures are usually in the mid to high single digit or low double digit range per annum.

As a recap, equities tend to give higher returns but with higher risk. Bonds provide the least return but with the advantage of lowest risk.

Property or REITs provide a return and risk in between equities and bonds.

With the money to be made in the property market eco-system, many have resorted to forecasting the future.

I’ve always been stumped as to how people know how the property market is going to fare in future. Sure, there are educated guesses, but absolute statements like “the market is in a trough”, “the market will pick up next year” imply a prophetic ability of the speaker to know the future.

With that in mind, I decided to do a google search and see how property market forecasters fare with their forecast.

Summary, about 50/50 of property forecasters or armchair critics got the direction of the market wrong.



Finding out if forecasters get things right

  • Search term in google is “Property outlook sg” on 4 Sept 2017
  • Took the search results where the author, in the title, clearly lists out where the property market is headed for the next year
  • Assume that the property market will pick up from today (I wouldn’t know any better, but we need to make an assumption of the property market direction going forward)
  • Compare these forecasts with where the property market will head in future (prices and sentiment up, as mentioned in bullet point above)

Results

  • 50% of forecasters got it wrong.

This implies if I flip a coin 100 times, and for every time there is a heads, I say the market will improve and vice versa, I would be as good, or as dismally wrong as these forecasters.

Let’s see who got it right and wrong.

 

Almost right. The Singapore residential property market was still falling in 2016.

Prop market outlook 7

Wrong. Prices have stabilized this year.

Prop market outlook 6

Right. Property market picking up.

Prop market outlook 5

For purposes of the experiment, this is wrong as we are assuming the market is picking up from now. Though nobody knows.

Prop market outlook 4

Right. Property market bottoming out in 2017. Though nobody knows for sure.

Prop market outlook 3

Almost right. Market bottoming out in 2017.

Prop market outlook 2

Right.

Prop market outlook 1



Moral of the story

  • Forecasting doesn’t work. Nobody knows the future.
  • People can make educated guesses about the future but I reckon most ‘educated guesses’ are a combination of personal intuition, extrapolations from single data points or few trends and anecdotal evidence, all of which are subject to biases.
  • I second what Damodaran, an NYU professor says – use both numbers and stories in investments (Narrative and numbers and Google Talk)

Excerpt from his book

How can a company that has never turned a profit have a multibillion dollar valuation? Why do some start-ups attract large investments while others do not? Aswath Damodaran, finance professor and experienced investor, argues that the power of story drives corporate value, adding substance to numbers and persuading even cautious investors to take risks. In business, there are the storytellers who spin compelling narratives and the number-crunchers who construct meaningful models and accounts. Both are essential to success, but only by combining the two, Damodaran argues, can a business deliver and sustain value.

Through a range of case studies, Narrative and Numbers describes how storytellers can better incorporate and narrate numbers and how number-crunchers can calculate more imaginative models that withstand scrutiny. Damodaran considers Uber’s debut and how narrative is key to understanding different valuations. He investigates why Twitter and Facebook were valued in the billions of dollars at their public offerings, and why one (Twitter) has stagnated while the other (Facebook) has grown. Damodaran also looks at more established business models such as Apple and Amazon to demonstrate how a company’s history can both enrich and constrain its narrative. And through Vale, a global Brazil-based mining company, he shows the influence of external narrative, and how country, commodity, and currency can shape a company’s story. Narrative and Numbers reveals the benefits, challenges, and pitfalls of weaving narratives around numbers and how one can best test a story’s plausibility.

Narrative and numbers
  • My personal view towards investments is “does this investment work in today’s market” i.e. Will it give me my return of say, 10% per annum, if I buy it at today’s price and rent it out at today’s rental levels



3 new launch condo units under S$1 million for investors and homeseekers

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Property investment

It’s true in the 90’s that many people have become rich the property route. I.e. Buying and flipping properties in the run up.

Some have gotten rich through buying new cheap properties, sprucing it up and then reselling it on. Others have looked at properties below a certain price quantum e.g. S$1 million or S$600,000, bought them and then resold when the market realized the properties’ potential.

So it’s not a wonder then that property investments is perpetually on the minds of Singaporeans young and old alike.

At this point of time in 2017, with the market having run up more than 70% since the bottom in 2008/09, are there still hidden gems of properties in the market for investors to sniff out.

Some may say the Singapore property market is fully priced now, others will beg to differ citing reasons such as

  1. Growing and healthy economy with GDP growth of 2-3% in the past year
  2. Easy flow of capital into and out of the country, making overseas investors likely to target the country for property investments
  3. Limited stock of land in Singapore which creates an upward bias in land values





Whatever the case may be, there still are properties in the market that are of a palatable and consumable quantum for investors to target.

In this post, here are 4 new properties that you can consider to get started on your property investment and passive income dream.

Kingsford Waterbay

Kingsford Waterbay

Address Upper Serangoon View, 539999 Hougang / Punggol / Sengkang, Serangoon / Thomson (D19-20)
Type Apartment
Floor size 657 sqft
PSF S$1,216
Tenure 99 years
Developer Kingsford Property Development Pte Ltd
Furnishing Partial
Floor High floor
Selling points Free shuttle bus to Hougang MRT
Short drive to CBD / Orchard via KPE
AMAZING SCENIC RIVERSIDE VIEW!! Rare at this price!!! Don’t miss this chance!
Surrounded by amenities:
Right beside Punggol Park
Near famous eateries
Heartland Mall
Upcoming kovan Marketsquare
Hougang Ave 9 community centre
Surrounded by top schools:
Serangoon Sec (0.16km), Rivervale Pri (0.18km), CHIJ Our Lady of The Nativity (0.65km), Holy Innocent’s Pri (<1km), Nan Chiau Pri
Condo Facilities:
State of the art / LONGEST pool in Singapore’s Condos!!
24hr security
Child play area
BBQ pits




City Suites

City suites

Address
Balestier Road, 329999 Balestier / Toa Payoh, Balestier / Geylang (D12-14)
Type Apartment
Floor size 452 sqft
PSF S$1,703
Tenure 99 years
Developer Corporate Residence
Furnishing Partially Furnished
Floor High Floor
Selling point City fringe, convenient location, huge tenant base.
Stone throw away to amenities, Whampoa food centre & market.
Close proximity to Novena MRT station
Mins drive to Orchard Road Shopping Belt, CBD and Marina Bay Financial District
Easy access via Pan Island Expressway (PIE) and Central Expressway (CTE)
Short walk to Singapore Medical Hub and Medical facilities
Surrounded by Supermarkets, Eateries and Shops
Reputable schools in vicinity that namely Hong Wen School, St Joseph’s
Institution Junior, Balestier Hill Primary School, Farrer Park Primary School, Bendemeer Primary & Secondary School, CHIJ Primary & Secondary (Toa Payoh)
International Schools namely Global Indian international School (Balestier
campus), Italian Supplementary school (Embassy of Italy), Eton House International School (Newton), Insworld Institute and SJI International school

 

Parc Life

Parc life

Address
Sembawang Crescent, 759999 Sembawang / Yishun, North (D25-28)
Type Executive Condominium
Floor size 1270 sqft
PSF S$730
Tenure 99 years
Developer Sembawang Residences Pte. Ltd.
Furnishing Partially Furnished
Floor High Floor
Selling points Located just minutes away from Sembawang MRT Station and Sembawang Bus Interchange
Exclusive development with newly renovated Sun Plaza just 5 mins walk away
Upcoming North-South Expressway make travelling to the city a breeze
Woodlands Causeway Point and upcoming Northpoint City just a few minutes drive away
Various layouts and sizes to cater to different family sizes and lifestyles
Established and reputable developer with many completed properties




Interested in any of the above? Or simply looking to buy or sell one?

Drop us a line. We read every message and reply within 24 hours.

 

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Hey! If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT data tracker and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. If you know of anyone who is interested to do so, please refer them to us. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

We accept guest posts.

Be nice and say hi, visit our Facebook page, or simply drop us a message at the message box in the bottom right corner of this page.


 

 

1:500 trading leverage? Pepperstone trading platform review

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Pepperstone logo

Recently heard about the Pepperstone web trading platform and took a look at it to see if it’s any good. Seems like a pretty neat platform with most of the tools that one would need to trade across the world.

Even though it’s an Australian broker, my experience using it for the past year shows that there’s no difference in currency funding, experience and breadth of instruments to trade compared with a local broker.

Here’s a quick review on what the platform has to offer.

 

Most indices around the world are available for trading.

Indices

Indices

 

Precious metals available for trade though most would trade gold and silver. Note the corresponding currency is the USD or EURO, not your funding currency.

Precious metals

Soft commodities are also available.

Soft commodities

 

Energy like crude oil and natural gas are available.

Energy

 

Last but not least the hottest flavour of the day – bitcoin.

Unlike the other instruments, Pepperstone only allows leverage of up to 20:1. This in itself is already quite a lot.

Given the wild swings in the market, it would be safer for Pepperstone and the individual traders.

Personally though I think that bitcoin has room to run.

Bitcoin

 

The mind boggling thing about the platform is that it allows you to use 1:500 leverage. That’s unbelievable.

I know IG markets allow up to something like 1:2.5.

This is really out of this world.

I guess if you understand the risk and know how to handle it, you could make a real big killing.

Given the big swings in the bitcoin market, you seriously do need to have some guts to use 1:500 on that instrument.

It can swing up and down by 10 to 20% within a day.

Leverage options

 

Pepperstone allows you to trade on their web platform for convenience but they have connections with MetaTrader 4 and 5 if you want to customize your trading experience.

For people on the go, there’s iPhone, iPad and Android trading apps.

Trading platforms

 

One thing that I found really convenient is the range of funding options.

I’ve never seen such extensive options, and some of the funding options are immediate.

No more waiting for 2 days before seeing funds in your account while your trading opportunity slips away.

Instant funding can be both good and bad. Good because you can trade immediately.

Bad because there is virtually no barrier of putting money into the account, and that makes it very tempting to put large sums and trade on them.

Coupled with the amount of leverage possible… only experienced traders should use this combination.

Funding options

 Funding options Funding options

 

All in all, Pepperstone is a good platform to use. The interface is very friendly, funding options are extensive, and there’s more than enough choice of instruments to trade on.

Use the 1:500 leverage option very sparingly though.

For prudence’s sake, stick to 1:100 or below.

6 types of REITs in Singapore and how to invest

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Office

The Singapore REIT market has grown from just 1 in 2004 to 37 in 2017. For someone new to investing, how can one decide on what REIT to invest when there are so many?

In this post, I introduce the 6 types of REITs in Singapore and a few tips on how get started with investing.

The 30,000 feet view

First, the 30,000 feet view on the Singapore REIT market.

There are 6 classes of REITs in Singapore and pictures speak a thousand words so here they are –

Office building

 

Shopping mall

 

Industrial building

 

Hotel

 

Healthcare

 

Data centre





If you didn’t catch that, they are offices, shopping malls (retail), industrial (warehouses, business parks, logistics centres), hospitality (hotels, serviced apartments), healthcare (hospitals, clinics), data centres.

Essentially, a REIT in Singapore falls into one of these few categories.

I’ve listed them in this order because of their popularity.

You’ll see more office buildings, shopping malls and industrial buildings than hospitals or data centres.

Great, I know the big picture. Now, tell me how do I decide on which sector to go into?

Now, that’s a question only you can answer. But I’ll give you some tips.

What are you more familiar with?

If you’re like the general population, you’ll be most familiar with office buildings and shopping malls. Possibly hotels. Hopefully not hospitals. The digital and IT savvy folks may be familiar with data centres.

Invest in what you’re familiar with! – Warren Buffet –

For starters, most people wouldn’t be investing in industrial or healthcare REITs. These are more specialized in nature.

Until such time as you’re more familiar with how a REIT works, what metrics are important to look at and how to get a good sense of a REIT’s performance, stick to what you know.

Like shopping mall REITs, or a REIT that owns the office building you work at.

Why is important to know about which category a REIT is in? That’s because the properties owned by the REIT produce $$, and these $$ goes into your pocket.

Simplistic, but that’s the general idea.

Great, I know the 6 sectors that REITs can be classified into. I want to invest. What REITs can I invest in?

Glad you asked.

We’ll zoom in to 10,000 feet.

The 10,000 feet view

Let’s take a look at the REITs in each of these sectors.

Office

  • CapitaLand Commercial Trust
  • Frasers Commercial Trust
  • IREIT Global
  • Keppel REIT
  • Manulife US REIT
  • OUE Commercial REIT
  • Suntec REIT

Retail

  • BHG Retail REIT
  • CapitaLand Mall trust
  • CapitaLand Retail China Trust
  • Fortune REIT
  • Frasers Centrepoint Trust
  • Lippo Malls Indo Retail Trust
  • Mapletree Commercial Trust
  • Mapletree Greater China Comm Trust
  • SPH REIT
  • Starhill Global REIT

Industrial

  • AIMS AMP Capital Industrial REIT
  • Ascendas REIT
  • Cache Logistics Trust
  • EC World REIT
  • ESR-REIT
  • Frasers Logistics & Industrial Trust
  • Mapletree Industrial Trust
  • Mapletree Logistics Trust
  • Sabana REIT
  • Soilbuild REIT
  • Viva Industrial Trust

Hospitality

  • Ascendas Hospitality Trust
  • Ascott Residence Trust
  • CDL Hospitality Trusts
  • Far East Hospitality Trust
  • Frasers Hospitality Trust
  • OUE Hospitality Trust

Healthcare

  • First REIT
  • Parkway Life REIT

Data centre

  • Keppel DC REIT

That’s quite a handful. 37 in total.




Like I mentioned earlier, go for the sectors you’re familiar with.

Let’s see, I suppose most people are familiar with shopping malls. Now which REIT in the shopping mall category are you familiar with?

CapitaLand Mall Trust that’s for sure. You’ve definitely stepped into one of their malls this week.

They own these malls. Any look familiar? Yeah you bet.

CMT malls

So I earlier asked about why you should be familiar with the category a REIT is in.

The second part to the answer is that – you’ll want to know how Junction 8 or Plaza Singapura is performing, because if they’re lousy malls, they won’t be producing $$, which won’t be going into your $$.

Since you’ve recently been to a CapitaLand Mall, you’ll have an idea of how the tenants are performing, if there are people visiting the malls and if Gudetama Cafe is there (no, it’s in Suntec City Mall, owned by another REIT, Suntec REIT, but that’s a topic for another day).

This is roughly the approach you should take when deciding on which REIT to buy.

The further down we go from 10,000 feet, the more technical it becomes, but that’s for another day.

To recap

  1. Stick to the REIT category you know. There are 6.
  2. Be familiar with the properties the REIT owns. Now go out and start walking (and shopping).

 

Share with us
Have you bought any REITs before?
How did you decide on buying one and not the other?

 


If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT data tracker and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. If you know of anyone who is interested to do so, please refer them to us. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

We accept guest posts.

Be nice and say hi, or simply drop us a message at the message box in the bottom right corner of this page.



How much should you allocate to REITs in your portfolio?

1
Asset allocation

For those who have been working for some time, one question that comes up to me often when I speak with these people is the question of asset allocation. How much of my portfolio should I put in REITs?

To tackle the question, let’s first start with how much you should put in stocks, which is an umbrella term that covers REITs.

One school of though advocates putting a percent into bonds based on your age.

If you’re 30 and have S$10,000 to invest, put S$3,000 into bonds. If you’re 40, put 40% so on and so forth. The remainder goes to stocks.

Another school of thought advocates 4 buckets

  • Ultra aggressive: 100% stocks, 0% bonds
  • Moderately aggressive: 80% stocks, 20% bonds
  • Moderate growth: 60% stocks, 40% bonds
  • Conservative: Less than 50% in stocks.

Yet another school of thought suggests you allocate based on your life stage.

  • Fresh graduate? 100% in stocks
  • Mid career with family? 80% in stocks
  • 40’s to 50’s? 50% stocks
  • Retiring? 30% stocks.





Personally, I go with the “bucket” school of thought mixed with where I am in life. The resulting portfolio is an approximation and moves at the edges as markets rise and fall.

I go with the principle that the allocation to stocks falls as one age.

To round up the first part, let’s see what the various portfolios would have returned you over time.

 

Bottom line – the more you put in stocks, the higher return you get. With higher risk of losing your money though.

Vanguard income

Vanguard balanced Vanguard growth





Now to the second part, how much of your stock allocation should go to REITs?

First, let’s understand the nature of REITs. The returns and risk profile is somewhere in between stocks and bonds.

This means that stocks can give you a higher return over time but with higher risk. Among stocks, REITs and bonds, bonds give you the lowest return but lowest risk.

REITs place you somewhere in between. It won’t bag you a 1000% return stock, but it likely won’t cause you sleepless nights when the market falls too.

In this way, REITs can be considered a standalone class, though technically people bucket it under stocks.

For the sake of this thought experiment, let’s work with 3 asset classes, stocks, REITs and bonds for a 35 year old individual.

Based on his life stage, he would have worked for about 10 years, possibly married or going to. He also might have kids.

For a 2 asset class portfolio, an appropriate asset allocation would be 60 to 70% stocks, 30 to 40% bonds.

For a 3 asset class portfolio, I would venture to say that the appropriate allocation would be 40 to 50% stocks, 20 to 30% REITs and 30% bonds.

The stock component would give this person’s portfolio potential for capital gains.

The REIT component would give him a steady income.

And the bond component would provide diversification gains and reduce the portfolio’s overall risk.

So there we have it, a simple and understandable way to allocate your portfolio.

 

Share with us, how do you allocate your investable funds? What amount goes to stocks, bonds and REITs?

 


If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT data tracker and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. If you know of anyone who is interested to do so, please refer them to us. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

We accept guest posts.

Be nice and say hi, or simply drop us a message at the message box in the bottom right corner of this page.




5 things you should know about Keppel DC REIT

1
Keppel DC REIT logo

Keppel DC REIT released their second quarter 2017 financial results in July. This post is a review of their results and the top 5 things you should know from their announcement.

 

Key highlights

Distribution or dividend per unit in the first half of 2017 has improved compared to the first half of 2016, rising from 3.34 SG cents to 3.63 SG cents.

There’s been an improvement between second quarter 2017 and second quarter 2016 too.

Gearing ratio of 27.7% remains one of the lowest among Singapore REITs. The average leverage for Singapore REITs is approximately 35%.

Distribution or dividend yield of 5.56% is on the slightly lower side compared to Singapore REITs’ average of 6.2%. The lower dividend yield is due in part to price-to-book being on the higher side at around 1.2

This means that investors are possibly pricing in future growth, and many of them want to participate in it. They are therefore aggressively buying Keppel DC REIT’s shares, driving its price up.

Portfolio weighted average lease expiry (WALE) of 9.4 years is on the high side. High is good as it indicates a longer lease length of tenants and therefore security of income.

Key highlights

 

Portfolio update

Going further into the lease expiry profile of Keppel DC REIT, most of the leases are due to expire only after 2022. Only 5.1% of leased area is expiring for the remainder of 2017, with even lesser at 0.9% in 2018, before rising slightly to 2.0% and 1.9% in 2019 and 2020. It thereafter rises sharply to 13% in 2021.

It is likely that WALE for Keppel DC REIT will continue to remain high, given the length of leases signed by data centre tenants.

From the slide appendix, a lot of the tenants have signed leases of at least 3 years, some rising even to 10 years.

Portfolio update

 

Stable portfolio

Keppel DC REIT’s income continue to be generated mainly by colocation tenants.

Co-location is defined by Keppel DC REIT as follows –

“[…]typically entered into by end-clients who utilise colocation space for the installation of their servers and other mission critical IT equipment. Keppel DC REIT is
usually responsible for facilities management in respect of such colocation arrangements […]”

Of their portfolio properties, these are the tenants on a colocation scheme.

  • Keppel DC Singapore 1, 2 and 3
  • Basis Bay Data Centre in Cyberjaya, Malaysia
  • Gore Hill Data Centre in Sydney, Australia
  • Keppel DC Dublin 1 in Dublin, Ireland

Stable portfolio

Prudent capital management

On the financial side, Keppel DC REIT has a healthy 83% of borrowings which are hedged. This means that even if interest rates rise, Keppel DC REIT has locked down at least 83% of the present amount of borrowings into a fixed rate.

This 83% translates into about S$365 million of borrowings.

Presently, the average cost of debt is 2.2% per annum, one of the lowest among Singapore REITs. Despite the alternative asset class that Data Centres is, the REIT has managed to get such a low cost of borrowing and this is likely due to their strong sponsor, Keppel Corporation, and major shareholder, Temasek Holdings.

Prudent capital management

Prudent capital management (cont’d)

Lastly, the forecasted distributions or dividends up to second half 2018 from Keppel DC REIT are hedged. This means that even if the Euro, GBP and AUD depreciates and impacts the revenue that Keppel DC REIT receives in SGD, investors need not worry too much as investors are guaranteed a certain amount.

Hedging by itself is a form of insurance, but it does come with a certain cost. Keppel DC REIT is paying that small amount to ensure that investors get the dividends they deserve.

Another way Keppel DC REIT manages currency fluctuations is by borrowing in currencies that match their investments. So if there are more investments in Europe, Keppel DC REIT will seek to borrow in that currency.

These borrowings can come from European banks or from local banks like DBS, OCBC or UOB.

Prudent capital management 2


If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT data tracker and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. If you know of anyone who is interested to do so, please refer them to us. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

Be nice and say hi, or simply drop us a message at the message box in the bottom right corner of this page.

 

5 REITs with low gearing ratios

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Why is a REIT’s gearing ratio important?

The gearing ratio for a REIT is an important indicator as to how healthy it is. Higher gearing ratios mean that the REIT is paying banks and bondholders a higher amount of interest expense, and that would mean a lesser amount of money available for distribution to you as investors.

If there’s one thing to take away from this post, a lower percentage of gearing is always better than a higher one.

Two reasons for this

  1. Interest expense is likely lower, resulting in a higher net property income margin
  2. These REITs have more debt headroom for future acquisitions compared to other REITs that have a gearing level closer to SGX’s 45% limit.




Average gearing ratio for Singapore REITs

Across the Singapore REIT market, the average gearing level is 34.6%. It differs across various sectors, with office REITs having on average the highest amount of gearing at 36.3%, followed by industrial at 35.7%, hospitality at 34.8%, healthcare at 34.1%, retail at 32.8% and data centres at 27.7%.

How to pick REITs based on gearing levels

If you are looking to pick a REIT, one way to filter out of the 37 available is to pick those that have a lower than average gearing level.

In this case, you’ll know that if interest rates, these REITs won’t get punished by the stock market for having a higher than average gearing ratio.

One thing I know is that institutional investors sometimes like to compare figures to averages. Such as year to date returns versus a past 5 year average, present P/B ratio versus past 5 years etc.

When they start comparing gearing ratios to decide which REITs to take profit on, one filter they would probably use is the individual REIT’s gearing level compared to the market.

Gearing ratio

5 REITs to look at with low gearing levels

Here are 5 REITs that have low gearing for your consideration to invest in.

  1. SPH REIT (25.6%)
  2. Keppel DC REIT (27.7%)
  3. EC World REIT (29.2%)
  4. Frasers logistics and industrial trust (29.3%)
  5. Mapletree Industrial trust (29.8%)

With the exception of EC World REIT, one look at these REITs show they also have some form of corporate governance. The sponsor is strong and reputable, and is likely to be helpful to the share price.

On a macro-basis, these REITs also operate in a decent macro environment. For example, SPH has a balance of one city centre and one suburban mall, allowing it to capture both discretionary and non-discretionary shopper trends.

Keppel DC REIT has good exposure to a fast growing data centre industry. Frasers Logistics is mainly focused in Australia where the industrial trends are healthier than in Singapore while Mapletree have a sizable industrial portfolio outside of Singapore, giving it some diversification benefit.

For more information on Singapore REITs, check out this handy table.


If you find the above interesting and would like to get started on investing in REITs, we would love to be with you on the journey. One place you can get started on finding out more is our REIT data tracker and list of property and REIT events.

We would love to assist if you are on the lookout to buy or sell property. If you know of anyone who is interested to do so, please refer them to us. We have an attractive referral program where you share in the fees or profits of the transaction.

PropertyInvestSG is on the lookout for successful individuals who have experience in property or REIT investments to interview. If you are one or know of someone like this, speak with us today.

Be nice and say hi, or simply drop us a message at the message box in the bottom right corner of this page.