Property news round up 10 Dec 2017

Singapore property reits dividend yield

BNP Paribas takes 8 floors in Taikoo place as multinationals flee HK’s Central

BNP Paribas, a $2.4 billion financial giant, has decided that it may not have the cash to maintain an address in Hong Kong’s Central district and is picking up stakes for Quarry Bay.

The company, which is the world’s sixth-largest financial services institution, has recently signed a lease for eight floors in Swire Properties’ Lincoln House in Taikoo Place covering some 100,000 square feet.

Evergrande buys jumbo Chongqing project for $498m

Mainland homebuilder China Evergrande Group is doubling down on western China by buying a 320,000 square metre office, retail, and residential project in Chongqing as part of a RMB 3.29 billion ($498 million) deal.

The transaction comes just over two years after the company paid $903 million for a mixed-use project in the same city.

Phoenix announces sale of pair of Hong Kong properties for combined $322m

Phoenix Property Investors seized the opportunity presented by Hong Kong’s surging real estate market by announcing the sale of a pair of properties in the city this week for a combined $322 million.

The two sales bring the income of Phoenix and its partners from sales of commercial projects in Hong Kong this year to over $397 million, as the city’s world leading office rents have driven competition for office properties in the city.

Both disposals are of properties that had been acquired under the $750 million Phoenix Asia Real Estate Investments V, which Phoenix closed on in 2013 and manages on behalf of its partners.

Realign HDB policies to reflect changing reality

While Housing Board policies favouring married couples were enacted in the first place to encourage citizens to get married and have children, it is a fact that Singapore’s fertility rate is plunging and the number of people choosing not to have children has increased.

Also read: real estate 2018 capital market outlook trends

HDB’s policies may have been conceived with the best of intentions, but despite all the measures to attract the stork, reality has somehow dictated otherwise.

Singapore retailers enjoy higher Black Friday sales this year

This year’s Black Friday weekend beginning on Nov 24 saw shoppers flock to online and bricks-and-mortar shops to snag some good buys, with stores in Singapore pulling out all the stops to attract consumers.

Online marketplace Qoo10, which started having Black Friday sales last year, recorded a sales value of $10.1 million for the Black Friday weekend between Nov 24 and 26 – surpassing last year’s sales by more than 50 per cent

During Lazada’s Black Friday sale, which lasted from Nov 24 to 27, shoppers were offered discounts of up to 80 per cent off, as well as flash deals.

Keep cool in hot property market

Collective sale fever may be going strong, property prices are rising again and sales volumes are picking up, but regulators have given a clear warning that these signs may be more cause for caution than celebration.

The Monetary Authority of Singapore (MAS) said in its 2017 Financial Stability Review published last Thursday that there is “excessive exuberance” in the property market as well as risks from rising land prices and a possible oversupply of housing stock.

Apac Realty CEO upbeat about S’pore property market

Apac Realty, which owns the largest international real estate agency in Singapore, listed on the SGX mainboard on Sept 28. Its three main business segments are real estate brokerage services, franchise agreements, and training and other ancillary services.

Mr Chua expects blue skies ahead with the domestic property market on the cusp of a revival. “There’s quite a bit of pent-up demand in the market over the last few years following the Government’s cooling measures,” he noted. “Unsold units have been depleted significantly, from 40,000 units to 17,000 units, while collective sales have surged.

Also read: Look out for these 10 things when investing in Chinese REITs

Post collective deals, these sellers, who need to get new homes, have flooded the market,” he added. “On the supply side, land costs remain high and are still rising, with the margin between land cost and the finished unit narrowing in per sq ft terms. That’s worrying for many buyers.”

How the ferry is changing the Brooklyn-Queens waterfront

East River ferry is enjoying a revivaI and changing the perception of mass transit. While it isn’t quite driving deals yet, it is the talk of the town

Work halts at NYC condo tower after council rules it’s too tall

New zoning designation requires builders to spread their new buildings wider, rather than higher

Wanda slide out of $3b ski resort investment as downhill run began

Wang’s Dalian Wanda Commercial Properties quietly sold off its equity in the $3 billion Changbaishan International Resort in northeastern China to a close associate this past June, just as Beijing authorities ordered tighter scrutiny of the high-profile developer’s finances, a recent report has revealed.

Local developers place 9 of 10 bids for $1.3b south Hong Kong Island site

The tender for the 600-home site adjacent to the Wong Chuk Hang MTR station on the south side of Hong Kong Island closed last Friday after attracting 10 bids, with Shenzhen-based property giant China Resources Land the only mainland firm to enter the fray.

Also read: 8 things to know about the real estate market from MAS’ financial stability review

Singapore’s GIC puts Brisbane back on map with $281m office tower deal

Singaporean sovereign wealth fund GIC has taken on Brisbane’s biggest office deal of the year by purchasing a downtown office tower for A$370 million ($281 million) in the northern Australian city.

GIC is buying the 41-storey Santos Place tower from Malaysian fund management company Permodalan Nasional Berhad (PNB).

Wanda hotel unit changes hands for $470m amid restructuring drive

Chinese billionaire Wang Jianlin is continuing to restructure his commercial property empire, by personally purchasing a controlling stake in Dalian Wanda Group’s Hong Kong-listed hotel unit for HK$3.67 billion ($470 million).

Through the proposed transaction, a vehicle wholly owned by Wang will buy a 65 percent stake in Wanda Hotel Development Company from Wanda Commercial Properties Overseas, which is majority owned by Wang, at HK$1.20 per share.

Cheung Kei pays $363m for former Bear Stearns London office in second UK deal

Chinese developer Cheung Kei Group has made its second London real estate play by buying a Canary Wharf office building for £270 million ($363 million), adding another deal to this year’s surge of Asian investment in the city.

The Shenzhen-based firm is buying the 319,000 square foot (29,636 square metre) 5 Churchill Place from Syrian investor Wafic Said’s Saïd Holdings at a value of £846 ($1,138) per square foot, reflecting a net initial yield of 5.2 percent.

Agile group jumps over capital barriers to buy $51m Hong Kong site

Guangzhou-based Agile Group Holdings bought a 10,000 square foot (929 square metre) residential site at 992 to 998 King’s Road in the Quarry Bay area.

The mainland group bought the former subsidised housing project via a collective purchase from its previous owners for HK$400 million ($51.2 million).

Singapore’s CDL and friends acquire Frankfurt hotel for $100m

Singapore mainboard-listed developers First Sponsor Group and City Developments Ltd, together with privately-held Singapore holding firm Tai Tak Estates jointly announced an agreement to purchase the Le Méridien Frankfurt Hotel for an expected €85.0 million ($100.1 million) including transaction costs.

The deal for the historic 300-room hotel is the second German acquisition this year for the CDL Group, which also controls LSE-listed Millennium and Copthorne Hotels, and sees the Singapore developer teaming up with some familiar partners in this new market.

Plans for more transparent Sibor seen benefiting borrowers

Proposals to reform Sibor, the Singapore interbank offered rate used by banks to price consumer loans, should benefit borrowers as efforts get underway to make the benchmark setting process more transparent.

Also read: PWC ULI real estate Asia Pacific outlook 2018

The two main proposals call for changes in the way Sibor is calculated and for the rarely-used 12-month Sibor rate to be scrapped.

Rare prime-area shophouse portfolio for sale

A portfolio of nine conservation shophouses and a commercial building in District 1 near the Singapore River are being put up for sale by tender.

The total guide price of the 10 properties is S$91.6 million.

URA to launch tender for West Coast Vale reserve list site

A developer has committed to bid at a price of not less than S$379.988m for the 1.9ha residential site.

Mori bets on luxury condo demand in Tokyo

It is constructing 3 buildings at a cost of 400b yen in Toranomon district; project will include units priced from 1b yen.

Two tender closings signal developers’ unabating land appetite

FCL leads Jiak Kim Street tender with S$955.4m bid; Allgreen emerges tops for Fourth Avenue site with S$552.96m bid.

Two Airbnb hosts in Singapore charged over illegal home-sharing

Two men in Singapore were charged on Tuesday with providing unauthorised short-term stays to tenants. The Straits Times understands they had used popular home-sharing service Airbnb.

This is the first time someone is being hauled to court under new regulations against home-sharing since they kicked in on May 15.

Repeated warnings on property market exuberance may have muted impact

Despite a series of warnings from the government on the risks of excessive exuberance in the property market, it remains to be seen whether market participants will pay heed and exercise prudence – going by the still-bullish land bids tabled since the latest warning.

The government and developers are not even seeing eye-to-eye about the state of the property market and its attendant risks to stability to begin with.

Dennis Wee Realty hit with record S$66,000 fine

DWR also faces a12-month ban for not warning investors of risks in overseas property purchases.

Spring Court restaurant owner pays S$52.9m for Jervois Green

Jervois Green, a four-storey freehold development at 100A Jervois Road, has been sold for S$52.9 million to investors led by Mike Ho, third-generation owner of Spring Court, one of Singapore’s oldest Chinese restaurants.

Also read: This REIT has an 8.2% dividend yield

The price works out to a land rate of S$1,601 per square foot per plot ratio inclusive of an estimated S$6.95 million development charge.

Singapore property bulls ignore MAS warning into 2018

Property developers in Singapore may extend their share rally into 2018 on a reviving home market, according to money managers and analysts, who say the central bank’s warning on a potential oversupply may not play out for years.

After double-digit gains this year, Morgan Stanley sees a 42 per cent jump in shares of CapitaLand, the nation’s largest developer, and a 24 per cent increase in City Developments, the second-biggest, in the next 12 months.

Hong Kong’s premium office space ranked world’s most expensive

Premum office space in Hong Kong has topped the charts as the world’s most expensive for the second consecutive year, outpacing prices in No 2 Midtown New York by 66 per cent, according to property consultancy JLL.

Offices at the top end of the Hong Kong market command an average of US$323 per square foot (psf) per year in occupancy costs, which include rent, service charges and government taxes.

Brookvale Park in Sunset Way up for en bloc sale

Brookvale Park, located along Sunset Way in Clementi, has been launched for sale by tender for a minimum price of S$530 million. Built in 1983, the 373,008 square feet (sq ft) site is zoned “Residential” with a gross plot ratio of 1.6.

According to sole marketing agent JLL, the 999-year leasehold site could be potentially redeveloped from its current 160 units into a residential development of 550 units across 12 storeys, with an average unit size of 1,100 sq ft.

Condos a bright spot in recovering Toronto, Vancouver markets

Toronto home sales and prices were down in November from a year earlier, while in Vancouver sales and prices jumped sharply year-over-year, separate reports showed.

CapitaLand inks S$10m tie-up with EDB to upskill staff, test new technologies

Property developer CapitaLand has set out to accelerate its innovation push with a S$10 million programme in training and technology, in partnership with the Singapore Economic Development Board (EDB).

First Sponsor acquires Frankfurt Hotel in joint venture with CDL and Tai Tak

First Sponsor Group Limited has taken the step to acquire the Le Méridien Frankfurt Hotel in Germany for about 85 million euros (S$135.9 million), in a move made in partnership with its key shareholders City Developments Limited (CDL) and Tai Tak Estates Sdn Bhd.

HDB resale prices dip 0.1% but volume up 11.2%

HDB resale prices continued to weaken, edging down 0.1 per cent in November from a month ago, while sales volume continued to strengthen with a 11.2 per cent increase, SRX Property flash estimates showed on Thursday.

The price dip last month was smaller than the 0.2 per cent month-on-month decline in October. October’s figure was revised up from a 0.3 per cent drop.

Also read: Read the wealth report on how Singapore fares as a wealthy nation

From a year ago, HDB resale prices in November were 2.3 per cent lower, and 12.6 per cent below their peak in April 2013.

Singapore to seek public views on short-term home rentals through Airbnb

The move comes as strict rules on short-term property rentals in the city-state, a keen early adopter of the sharing economy, have invited complaints as it seeks a balance between encouraging new disruptive industries and keeping them in line.

Chinese co-working unicorn UrWork to open 2nd Singapore branch in Suntec City

It has 100 co-working sites in 33 Chinese cities and is the country’s largest co-working space operator.
The company plans to expand globally into 35 cities with 160 locations over the next three years.

Chinese capital controls send tremor through Australian property

Developers turn focus to local buyers as China investors are finding it hard to seal their deals.