Daily property news 26 Feb 2020


Hewlett Packard signs lease in strong industrial market

Industrial property values have increased by 40 per cent reflecting the tightening of supply and rise in demand in key Sydney markets.

Investment volumes are at about $2 billion, with prime yields averaging 4.70 per cent and secondary yields tightening 47 basis points to an average of 5.38 per cent.

In one of the latest deals, Frasers Property has inked a deal at its Rhodes Corporate Park in Sydney, with a five-year lease with Hewlett Packard PPS Australia Pty Ltd (HP).


Selected brokerage fees to be waived for FLT odd lots following merger

UNITHOLDERS who receive odd lots of Frasers Logistics & Industrial Trust (FLT) units in its proposed merger with Frasers Commercial Trust (FCOT) will not have to pay brokerage fees to certain brokers for odd lots trades carried out within a month of the units being allotted and issued.

In an announcement on Tuesday, FCOT’s manager said it has made the arrangement with DBS Vickers Securities, OCBC Securities and Phillip Securities to exempt from brokerage fees all odd lots trades carried out via DBS Vickers Securities or the online trading platforms of OCBC Securities or Phillip Securities.

The trades must be either an aggregate of 99 or fewer FLT units bought in a single day, or an aggregate of 99 or fewer FLT units sold in a single day, and must take place within one month starting from the date of allotment and issuance of the consideration units. Clearing fees and other regular trading fees imposed by the Singapore Exchange Securities Trading will still apply.


Frasers Property Retail announces Tenant Support Package across 14 malls

Frasers Property Retail is introducing a Tenant Support Package across Frasers Property Group’s combined retail portfolio of 14 malls1 in Singapore, which includes retail properties held under Frasers Centrepoint Trust as well as retail properties managed by AsiaMalls Management2. The relief measures are aimed at helping tenants overcome the business impact of COVID-19 during this period.

Mr Low Chee Wah, Chief Executive Officer, Frasers Property Retail said: “We are cognisant of the challenges that tenants are facing due to the COVID-19 outbreak, and are actively looking to identify ways we can reduce the pressures they are facing. The Tenant Support Package will help stem the immediate cashflow challenges that tenants might be facing due to sudden and unexpected dip in revenue. Together with wider marketing assistance initiatives to encourage shoppers to visit the malls, we will continue to engage our tenants and actively review initiatives that can help mitigate the impact on our tenants’ businesses.”


How direct-to-consumer brands are disrupting retail

When Prince Harry and Meghan Markle landed back in Vancouver last week from a short trip to Los Angeles, the tabloid press focused on Rothy’s shoes that Meaghan was wearing and Away Luggage carry-on that Harry was wheeling on the tarmac.

Rothy’s which makes shoes from 100% recycled plastic water bottles and Away Luggage, which is famous for its sleek polycarbonate suitcases, are part of a bunch of direct-to-consumer (D2C) unicorns, including eyeglass maker Warby Parker, razor makers Harry’s and Dollar Shave Club, recently-listed mattress disruptor Casper Sleep, online menswear retailer Bonobos (now owned by Walmart), cult-like make-up and skincare firm Glossier, actress Jessica Alba’s ethical household product outfit The Honest Company, online bra firm ThirdLove, contact lens maker Hubble, and bedsheet retailer Brooklinen who have forever changed the consumer business by building brands on Internet and selling directly to end-customers.


CDL posts 12.5% rise in 4Q earnings to $87.7m

City Developments Limited (CDL) this morning announced that its 4Q19 earnings have increased by 12.5% to $87.7 million from $77.9 million a year ago. This brings 4Q19 earnings per share to 9.0 cents, 13.9% higher than 7.9 cents in 4Q18.

Revenue for the fourth quarter ended Dec came in at $946.9 million, 20.1% higher than $788.3 million last year, with increased contribution across all business segments.

Property development segment was backed by several Singapore projects including The Tapestry, Whistler Grand and Amber Park, as well as the fully sold 32 Hans Road project in the UK. The inclusion of W Singapore – Sentosa Cove into the group’s hotel portfolio in 2Q19 bolstered the increase for the hotel operations segment


JTC launches two industrial sites

JTC launched two sites on Tuesday under the industrial government land sales (IGLS) programme, one for tender and the other for application.

Available for tender is Jalan Papan (Plot 1), which spans an area of 1.23 hectares. This is the first of three land parcels on the confirmed list under the first half of the 2020 IGLS programme. The tender will close at 11am on April 21.

Meanwhile, the site at 160 Gul Circle is available for application. It is the third of five on the reserve list of the first half of 2020 IGLS programme, and has an area of 0.37 hectares


Park Hotel bags S$237m green loan from UOB

HOSPITALITY player Park Hotel Group has secured a S$237 million green loan from United Overseas Bank (UOB) to refinance the refurbishment of Grand Park City Hall, a hotel it owns and manages.

The loan was issued under the UOB Real Estate Sustainable Finance Framework, the bank said in a joint statement on Tuesday.

In its refurbishment plans in 2017, Grand Park City Hall sought to incorporate sustainable and smart features. The hotel also retained 90 per cent of its building structure to minimise waste during construction.


United Hampshire US Reit prepares to list on SGX

UNITED Hampshire US Real Estate Investment Trust (Reit) has lodged a preliminary prospectus to list a US-focused Singapore Reit on the Singapore Exchange, the Reit manager said on Tuesday.

United Hampshire US Reit has a portfolio of 22 properties on the east coast of the US, consisting of 18 grocery and necessity-based retail properties and four self-storage properties.

The portfolio had an occupancy of 95.2 per cent as at Sept 30, and the grocery and necessity properties have a long-weighted average lease expiry by base rental income of 8.4 years.


Aspial profit slides 55.2% on weaker real estate business

ASPIAL Corporation posted on Monday a 55.2 per cent drop in net profit to S$12.7 million for the year ended Dec 31, mainly due to lower revenue as a result of weaker performance from its real estate business.

Earnings per share stood at 0.66 Singapore cents for the year, down from 1.46 cents for 2018.

Revenue fell 37.6 per cent to S$560.2 million from S$898.5 million previously due to lower revenue from the group’s real estate business.


Straits Trading more than doubles Q4 net to S$29.7m

THE Straits Trading Company’s net profit for the fourth quarter ended Dec 31, more than doubled to S$29.7 million from S$14.1 million, largely contributed by its real estate segment even as the group continues to “exercise prudence when considering new investments” amid the growing scale of Covid-19.

“The business climate is increasingly challenging as markets continue to deal with greater uncertainties and disruptions,” noted Straits Trading in its financial report.

Straits Trading’s hospitality arm Far East Hospitality Holdings, for instance, is expected to take a hit from slow travel demand amid the virus outbreak


Long leases ‘protect Cromwell’s Italy assets from Covid-19 impact’

CROMWELL European Reit CEO Simon Garing believes Covid-19’s impact on its Italian properties will be limited, given long leases locked in at its logistics, industrial and office buildings, which would be less affected compared to retail and hospitality establishments.

Italy is one of the most affected European countries by the Covid-19 virus outbreak, with more than 200 confirmed cases and already seven dead.

While discussing the group’s financial performance for FY19, which came in stronger than projected in its 2017 listing prospectus, Mr Garing said capitalisation rates will likely continue to “firm” in Italy, which will offset expected rental increases when the lease of its main tenant, Agenzia del Demanio, the Italian state property office, comes due.


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