Property news round up 17 Dec 2017

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Heeton set for growth after QC pain

Boutique property developer Heeton Holdings is ready to move on with its growth strategy after clearing its overhang of unsold units at two projects – [email protected] and The Lumos – which had cost it painful qualifying certificate (QC) penalties in the past couple of years.

CDL sweetens offer for M&C Hotels

CDL, a majority shareholder which currently holds 65.2 per cent of M&C, has raised the offer price to 620 pence per share, up from 552.5 pence earlier.

This offer, which CDL said is final and will not be raised further, values M&C at about £2.01 billion (S$3.64 billion), compared with the previous valuation of £1.8 billion.

Cities tweak house plans to retain millennials

‘Missing middle’ – bigger – homes are built to discourage millennials starting their own families from leaving

Chinese co-working space operator opens second Singapore outlet

Prominent Chinese co-working space operator UrWork is opening a second Singapore location in the first quarter of next year.

The company, which is backed by Alibaba’s Ant Financial and Sequoia Capital among others, launched its first overseas branch at Ayer Rajah Crescent in July.

Its new outlet will be at Suntec City and is part of the firm’s efforts to become a bridge between South-east Asia and China, founder and chief executive Mao Daqing said.

Home prices ‘could rise by 8% next year’

An “up cycle” for Singapore property may last into 2020, Morgan Stanley said, with estimates that home prices will climb by as much as 8 per cent next year.

Mr Wilson Ng, a property analyst at Morgan Stanley, said developers’ valuations are attractive based on discounts to net asset value and price-to-book ratios.

He has “overweight” ratings on CapitaLand and City Developments (CDL).

WeWork leases 10-storey tower in Shanghai for biggest ever co-working centre

US co-working giant WeWork has leased an entire grade A office building in downtown Shanghai, where the $20 billion startup will open its largest-ever shared office centre.

The take-up of the 27,000 square metre tower in the China Overseas International Center near Xintiandi surpasses other jumbo-sized leases by WeWork in New York and London.

Norway’s $1T sovereign fund enters Asia with $823m Tokyo bet

Norway’s sovereign wealth fund is making its first foray into Asian real estate, by buying a majority stake in a set of five retail and office properties in Tokyo for 92.75 billion yen ($823 million).

Norges Bank Investment Management (NBIM) has formed a joint venture with Japan’s Tokyu Land Corporation to acquire the 12,300 square metre portfolio from Samuel Lee Tak-yee’s Veloqx Group.

NBIM will take a 70 percent stake in the assets while Tokyu Land will pick up the remainder and manage the properties.

CPPIB invests $248m in Goodman Hong Kong logistics fund

The Canada Pension Plan Investment Board (CPPIB) is expanding its Asia logistics partnership with Australia’s Goodman by investing HK$1.94 billion ($248 million) in a Hong Kong warehouse development scheme first established by the Australian builder in 2006.

LaSalle completes first Korean logistics project under $485m fund

The 467,207 square foot (43,405 square metre), multi-storey facility, called Logiport Icheon, is located within 40 miles of Seoul’s Gangnam district.

LaSalle acquired the site for the project in February 2016 and has already signed lease agreements with a number of multinational firms.

Blackstone buys back 10% of European warehouse platform Logicor from CIC

A Blackstone property fund is buying back a 10 percent stake in European warehouse platform Logicor, which the private equity giant sold to China Investment Corporation (CIC) for $13.8 billion earlier this year.

Joy City selling loss-making W hotel in Beijing for RMB 2b

Joy City is selling the 349 room, five star hotel to Tianfu Fund Management Co for RMB 1.36 billion in cash, with the buyer also agreeing to repay shareholder loans of RMB 895,600 and other debts totalling RMB 62.3 million in return for the three-year old property.

Is CDL’s sweetened offer more palatable to M&C shareholders?

The fund managers who had criticised CDL’s original offer are yet to give any indication of how they plan to vote.

Fidelity International, with a 2.7 per cent stake in M&C, declined to comment on the revised offer of 620 pence (S$11.20) a share, up from 552.5 pence earlier.

Completion period for EC sites extended to 5 years

The longer PCP starts with the EC site in Sumang Walk in the Punggol area, which was launched on Tuesday by the Housing & Development Board (HDB) under the confirmed list of the second-half 2017 Government Land Sales (GLS) Programme.

When contacted, a spokeswoman for HDB noted that the four-year PCP for EC sites had been in place since 1997 and that the extended time frame for completion is in response to developers’ requests.

With this change, the PCP for EC sites is now the same as that for private housing sites sold by the state.

Another Cairnhill site joins en bloc fray

Cairnhill Heights, a freehold private residential site at Cairnhill Rise, has just obtained consent from more than 90 per cent of owners.

The site will be launched for collective sale tender on Dec 19, and the tender will close on Jan 19, 2018.

The owners are asking for a sale price of more than S$80 million, which reflects a land rate of about S$2,045 per square foot per plot ratio (psf ppr), inclusive of a development charge of S$8.2 million payable for a plot ratio of 2.8.

Condo resale prices continue to rise in November

Resale prices of private condominiums in Singapore continued their climb, posting a 0.5 per cent increase in November from a month ago.

This was boosted by transaction prices in every region – the city centre, city fringe, and suburbs – and came after a 1.3 per cent price increase in October, too.

According to SRX Property flash estimates on Tuesday, all three regions recorded year-on-year price increases, with the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) registering gains of 7.1, 7.3 and 5 per cent, respectively.

World’s 2nd tallest building opens after two-year delay

China’s tallest skyscraper, the Shanghai Tower, has been quietly opening and filling office space.

More than 60 companies now occupy office space on its 128 floors – including some big names in China finance, such as Ant Financial, controlled by Alibaba Group Holding Ltd’s billionaire founder Jack Ma.

The building’s basement burger joint, Fatburger & Fatbar, is positioning itself as a go-to spot for after-work drinks.

Country Garden scraps Shanghai spin-off amid tighter IPO scrutiny

The planned listing of Guangdong Country Garden Property Services Co was cancelled because of a recent change in policies by the Chinese authorities, the developer said in a filing to Hong Kong’s exchange late on Monday.

Aussie curbs on property lending fuel shadow market

Australia’s push to control a housing bubble by reining in bank lending to property developers has unleashed a highly profitable market for shadow lenders, including international hedge funds.

The lenders are funding some developers at more than double the interest rate for the same type of loans that banks were providing just a few months earlier, a reflection of how some construction firms have been forced outside the regular banking system to secure financing.

Singapore interest rates finally catching up with US counterpart

Government opts for balanced approach to state land sales for H1 2018

For the first half of 2018, MND is offering land that can potentially yield about 8,045 private homes, including executive condominiums (ECs), and 63,960 square metres gross floor area (GFA) of commercial space via the confirmed and reserve lists.

This is compared with the land supply for 8,125 private residential units (including EC units) and 83,590 sq m GFA of commercial space via the two lists, in the current H2 2017 slate.

Choice of attractive sites beckons developers

Most of the six residential sites, old and new, on the confirmed list are expected to be in good demand with their appealing attributes, say property consultants.

UOB partners Shanghai home rental platform Mamahome

UOB will support Mamahome’s expansion into Singapore by integrating the UOB Virtual Account Solution into Mamahome’s online Web service and mobile app.

Through the solution, tenants will receive a unique virtual account number assigned to the property they are leasing to pay their rent.

The unique identifier enables Mamahome to identify and reconcile quickly and easily the property-related payments it receives.

Singapore condo rents slip 0.3% in Nov; HDB rents ease 0.5%: SRX

Private non-landed home rentals slipped by 0.3 per cent in November from a month ago, a gentler decline from the 0.7 per cent dip in October, flash estimates from SRX Property showed on Wednesday.

The main drag in November came from the Outside Central Region (OCR), which saw rents drop by one per cent in November, followed by a 0.5 per cent fall in the Rest of Central Region (RCR).

Rents in the Core Central Region (CCR), however, increased by 0.8 per cent.

Derby Court, Parkway Mansion finally sold – above reserve price

RH Developments Pte Ltd, a subsidiary of Roxy-Pacific Holdings, won the tender for Derby Court with a bid of S$73.88 million.

Derby Court’s sale price of S$73.88 million is above the reserve price of S$62 million for the collective sale tender.

Sole marketing agent for Derby Court, JLL, said that the tender for the property drew seven bids comprising local and foreign developers and funds.

It indicated that owners can expect to receive gross sales proceeds of between S$3.36 million and S$6.65 million per unit.

Manhattan luxury condo sales skew apartment prices: report

The number of apartment sales priced above US$10 million has doubled since 2013 when the post-crisis recovery was fully in swing, CityRealty’s 2017 Year-End Manhattan Market Report said.

The number of units that sold for less than US$1 million plunged by 35 per cent over that period, the report found.

China property price rally likely to stall in 2018: poll

China’s home price growth is likely to stall in 2018 as a surprise boom in smaller cities is expected to lose steam while measures to tighten credit and other property curbs continue to constrain the market, a Reuters poll showed on Wednesday.

China has imposed an array of measures to crack down on property speculation since early 2016, but prices in October still crept up 5.4 per cent from a year earlier, largely driven by a buying frenzy that has spread from the big metropolises to the country’s less-regulated smaller centres.

NZ property sales jump in Nov; house prices rise

HAVING suffered a slow period after an inconclusive general election, New Zealand property sales jumped 17.8 per cent in November, helped by seasonal spring demand and buying by foreigners before the new Labour-led government imposes a ban early next year.

It was the largest October to November increase in six years, the Real Estate Institute of New Zealand said. On a seasonally adjusted basis, the rise was 4.5 per cent.

Gaw Capital sells Shanghai’s Cross Tower to World Union Fund for reported RMB 2.7b

Gaw is flipping the Huangpu district building, which it bought in April 2013 and finished renovating and repositioning last year, to a core property fund controlled by local real estate private equity firm World Union Investment Management.

The price of the deal, as reported by market sources who spoke to Mingtiandi, represents a more than 59 percent jump over the reported RMB 1.67 billion ($270 million) price that Gaw paid for the asset less than four years ago, and values Cross Tower at RMB 63,800 ($9,639) per square metre of gross floor area.

100 subscriptions received for 38 units at “Monterey”

Market news said that Wheelock Properties (20 HK, Not Rated) received over 100 subscriptions for the 38 flats from its “Monterey” project in Tseung Kwan O.

The deadline to subscribe will be tomorrow as the developer will put the 38 units on sale on Friday.

The 38 units include 4 studious, 6 one bedroom flats, 11 two-bedroom flats, 11 three bedroom flats, 5 four bedroom flats and 1 special unit.

Ex-secretary buys home for HKD34m

Former secretary for financial services and the treasury Ceajer Chan Ka-keung recently bought a luxury home in Mid-Levels for HKD33.93 million.

Chan, who left the government in June, bought the 1,404 sellable square foot home with two parking lots in Amber Garden for about HKD24,000 psf.

“The Center” buyers seeks 90% to fund deal

The Beijing-backed buyer of tycoon Li Ka-shing’s “The Center” for a record HK$D0 billion is seeking to borrow up to 90% to fund the deal, according to a term sheet seen by insiders.

Property agents roped in to fight money laundering, terror funding

The Council for Estate Agencies (CEA) has set out checklists to better guide real estate agencies and salespersons in carrying out their know-your-customer procedures to guard against cases of money laundering and financing of terrorism in big-ticket property transactions.

With this, it will be mandatory for salespersons to complete a checklist on customer due diligence for every property transaction, both sales and leases, and submit it to their agencies.

Property agencies will also have to submit to CEA the completed estate agent’s checklist for CEA’s inspection as and when required by the council. They are also required to conduct self-assessment using the checklist periodically, and retain the completed checklist for record purposes.

United Engineers offers to buy up rest of WBL

United Engineers (UE) has made a pre-conditional voluntary unconditional cash offer for all the shares of WBL Corporation (WBL) it does not already own; the move follows Yanlord Land Group and Perennial Real Estate’s acquisition of a one-third stake in UE earlier this year.

UE has made the offer for WBL through its wholly owned subsidiary, UE Centennial Venture Pte Ltd, which currently owns 67.59 per cent of WBL.

Oxley buys Chevron House, Vista Park, stake in Vietnam project in deals totalling over S$1b

Oxley Holdings, headed by Ching Chiat Kwong, continues its property buying spree. In a span of less than 24 hours from late Wednesday to Thursday evening, it announced three acquisitions totalling over S$1 billion.

These comprise Chevron House for S$660 million, the Vista Park collective sale site in South Buona Vista Road for S$418 million and a smaller deal in Vietnam.

The mainboard-listed group said it has entered into a sale and purchase agreement with Deka Singapore to buy Raffles Place office building Chevron House.

The S$660 million price works out to about S$2,526 per sq ft on an existing net lettable floor area of 261,280 sq ft.

FCL, FCOT buy UK business park for £174.6m

Frasers Centrepoint Limited (FCL) and the manager of Frasers Commercial Trust (FCOT) on Thursday said their subsidiaries have entered into a share purchase agreement to acquire on a 50-50 basis Farnborough Business Park (FBP) in the United Kingdom for £174.6 million (S$314.8 million).

The seller is HEREF Farnborough Holdco, which holds the title to the property. FBP is a 46.5-hectare freehold business park comprising 14 commercial buildings with a total net lettable area of about 555,000 square feet located in Thames Valley, west of London.

ESR-Reit acquires property in Ang Mo Kio

ESR-Reit (Real Estate Investment Trust) has acquired an 80 per cent interest in a special purpose vehicle that owns a leasehold interest in a property situated within the Serangoon North Industrial Estate in Singapore for S$240 million, marking its largest acquisition to date.

The property in 7000 Ang Mo Kio Avenue 5 comprises a six-storey multi-tenanted high specifications production block and a five-storey multi-tenanted ancillary office block connected by a covered linkway.

CEReit’s stabilising manager behind a third of volume since IPO

The stabilising manager for Cromwell European Reit (CEReit) has bought 27.89 million units from the open market since the trust’s Nov 30 initial public offering (IPO), accounting for one third of the counter’s trading volume since listing and helping to support its market price.

The latest round of purchases on Wednesday comprised 1.795 million units bought between 0.54 and 0.55 euro apiece, according to filings with the Singapore Exchange. Those units represented 58.4 per cent of the total units traded on Wednesday.

Co-working space startup WeWork calls Funan home

Co-working startup WeWork is leasing 40,000 square foot (sq ft) of space in the integrated development.

WeWork’s space will be located across two floors at Funan’s North Office block, which is linked to the retail section of the development. WeWork’s co-working space will feature a smart office with facial recognition turnstiles and optional card-less entry into the office, said Tony Tan, chief executive of the trust manager.

17,000 BTO flats to be launched in 2018, keeping supply steady

These new flats will be spread around mature and non-mature towns.

These include the upcoming Tengah town, the first time that Housing Board flats will be launched there.

Sembawang, Yishun and Sengkang will also see flat launches in the second half of the year that feature a shorter wait time of 2½ years, compared with the typical three to four years.

Housing slump gathers pace in Sweden with buyers losing faith

Nationwide apartment prices declined a monthly 3 per cent in November, adding to October’s 1 per cent drop, according to data from Svensk Maklarstatistik AB.

House prices fell 1 per cent in the month, after being unchanged in October. The housing market in the largest Nordic economy is rapidly cooling after years of price increases that were driven largely by a housing shortage and ultra-low interest rates.

But supply is now outstripping demand and stricter mortgage rules as well as growing apprehension among households are driving prices lower, led by high-end apartments in Stockholm.

China’s new home sales in Nov rebound

China’s new home sales rebounded in November, climbing the most in five months.

Sales by value, excluding affordable housing, increased 12.4 per cent from a year earlier to 1.02 trillion yuan (S$204 billion), according to Bloomberg calculations based on data released on Thursday by the National Bureau of Statistics.

Sales fell the two previous months.

The upswing comes even as officials have sought to tame a surge in property demand by rolling out restrictions on home purchases.

OUE H-Reit obtains S$980m facilities to partially refinance debt

The new facilities comprise two term loan facilities and two revolvers, according to a filing with the Singapore Exchange.

The lenders are BNP Paribas, DBS Bank, OCBC Bank and Standard Chartered.

Proceeds of the new facilities will be used to repay part of an existing S$630 million syndicated facility dated July 2013; a S$295 million syndicated facility dated January 2015; and a S$270 million syndicated facility dated June 2016.

Some of the proceeds will also be used for working capital and general corporate purposes.

Naked Hub acquires Shanghai’s Raise Office in latest co-working milestone

Asia’s fast-growing flexible office sector has chalked up another merger, with Shanghai-based naked Hub acquiring local rival Raise Office, a co-working operator with four centres in the mainland financial hub.

Through the recently-announced deal, the set of Raise Office properties will be upgraded and rebranded as naked Hub locations, adding to the latter’s network of 14 centres in Greater China. Raise Office founder Frank Wang will join the naked management team as Head of Expansion, China, reporting to the company’s CEO Jon Seliger.

News Corp Launches $2bn ‘Millennium Square’ Precinct

Australian media giant News Corp has confirmed plans that it will be developing a $2 billion “world class innovation and media hub” in Brisbane’s Bowen Hills.

Brisbane’s property industry had been awash with speculation of the development, which has been in the pipeline since 2015.

The proposed urban redevelopment, “Millennium Square” will take up the company’s current four-hectare base in Bowen Hills, which has been the company’s Brisbane base for the past 50 years.

Proptech Fever Sweeps the Industry As Investors Brace for the Next Big Thing in 2018

According to experts around the globe, the property technology – or proptech sector – may well be poised to follow the trajectory of its sister-sector.

According to CB Insights, approximately US$6 billion in venture capital has been invested globally in proptech since 2011, of which 70 per cent was in the last two years.

With an estimated $3 billion in capital invested in proptech this year alone, it comes as no surprise that a handful of unicorns – start-ups with a valuation in excess of $1 billion – have started to emerge.

Listed Property Rises on Westfield Sale to European Landlord

News of Tuesday’s $33 billion takeover of Westfield has well and truly flooded Australian news media – after resuming trade today, shares in Westfield have soared nearly 14 per cent to $9.68 and $22 billion has entered the local market.

Propertylink Acquires Sydney Business Park for $48 Million

Propertylink Group have successfully negotiated for a $48 million modern business park asset within the Lane Cove Business Park at 18-20 Orion Road while simultaneously working to acquire adjacent land for future development.

The Business Park acquisition reflected a capitalisation rate of 7.11 per cent.

Brookfield Nabs Major Tenant for Bourke Street Skyscraper

The National Australia Bank is set to consolidate its offices and become the anchor tenant in Brookfield’s $800 million Bourke Street project.

NAB has signed a 12-year lease on Brookfield’s 156 metre skyscraper as superannuation fund-backed ISPT agree to acquire a 50 per cent joint venture interest in the development.

Charter Hall Commences Construction on Wesley Place With 50% Leasing Pre-Commitments

Four big names have committed to moving their operations into Charter Hall’s $600 million Wesley Place office development, securing 30,000sqm of leasing pre-commitments.

TelstraSuper, Cbus Super, Wesley Mission Victoria and Uniting Church in Australia have committed to long-term leases within the development – representing about 50 per cent of forecast income for the asset.

Sales of new homes moderate as yr-end holidays begin

“With the onset of the year-end holiday period and the market moving in favour of sellers, there is no hurry for developers to continue launching more units from their projects.Of the 450 private homes launched in November, only 47 units were new releases from previously launched projects, a 76.7 per cent plunge from the previous month and the lowest monthly figure in the year.This has reduced buying options, contributing to moderate sales figures.”

Although the 450 private homes launched is 86 per cent higher than the month of October, it is a 67 per cent drop from a year ago. From January to November this year, about 11,127 new private homes have been sold, 39 per cent higher than the same period in 2016.

National Aerated Water building in Serangoon to be conserved

The main building of a former bottling factory, the National Aerated Water Co, will be partially conserved by the Urban Redevelopment Authority (URA).

The main building comprises a two-storey L-shaped structure facing Serangoon Road. Other features that will be retained include its signage tower, a balcony with brick parapets, Art Deco timber transom panels and a concrete sun shading ledge that spirals out of a circular window.

The conserved building will be integrated into a new residential development and kept fenceless along the main road and the river.

UEL’s cash offer for WBL a ‘cautious, risk-management approach’

On Thursday, UE made an offer to pay S$2.07 per share for the shares in WBL it does not already own – the same price that YPI paid OCBC for their WBL shares in July.

At present, YPI owns 10 per cent of WBL, and is committed to acquire another 19.9 per cent from OCBC and related parties unless an outside party makes a competing bid before Dec 18.

Sunac China plans HK$7.82b share sale for working capital

The Tianjin-based developer said it planned to sell 251.5 million new shares to chairman Sun Hongbin’s Sunac International Investment Holdings Ltd at HK$31.1 per share, or an 11.9 per cent discount to the stock’s previous close.

Malaysia’s Eco World acquires 70% in UK sites

Malaysian property developer Eco World International Bhd said on Friday that it had acquired a 70 per cent stake in a dozen British sites, agreeing to pay £64.9 million (S$117 million) for half of the assets first.

Eco World said it would buy the stake in a unit of construction group Willmott Dixon which owns the 12 sites in Greater London and southeastern England, and would become joint development manager with its British partner.

The acquisition will be done in two stages, and the purchase consideration for the remaining six sites was not finalised yet.

Falling prices and new mortgage rules boost Canadian home sales

The recent drop in Canadian real estate prices and tougher regulations that kick in on Jan 1 are beginning to juice sales. Brokers reported a 3.9 per cent jump in transactions in November, the Canadian Real Estate Association said on Thursday.

That’s the second biggest increase in two years and marks a fourth consecutive rise in transactions, the longest streak since early 2016.