Property news round up 24 Dec 2017

singapore property residential reit dividend

Ascott adds Africa to portfolio following S America addition in April

The serviced residence unit of CapitaLand has secured contracts to manage two properties in Accra, the capital of Ghana, in what has been a record year of growth as the company added 18 new cities across nine countries and added over 21,000 units to its portfolio. Following the latest acquisition, it now has 69,464 units.

Keppel-KBS US Reit rides positive office market dynamics

The Reit, which listed on the Singapore Exchange (SGX) main board on Nov 9, 2017, is the second US-focused office Reit on SGX.

It has an initial portfolio of 11 freehold office properties in seven key growth markets in the US, with an aggregate net lettable area (NLA) of over 3.2 million sq ft, and an appraised value of nearly US$830 million.

The properties comprise central business district (CBD) and suburban office buildings located in the West Coast (Seattle, Sacramento), Central Region (Houston, Austin, Denver), and East Coast (Atlanta, Orlando).

The portfolio enjoys a high committed occupancy rate of 90 per cent and a stable lease expiry profile of 3.7 years, with no single year having more than 20 per cent of total leases expiring. This ensures stable cash flows for the Reit.

Hatten Land unit mops up remaining stakes of firms that own sites in Malacca

Malaysian property developer Hatten Land Limited’s wholly owned subsidiary is planning to acquire the remaining minority interests in two development sites in Malacca for about RM28.9 million (S$9.6 million).

Also read: Singapore property outlook 2018 – 3 things to look out for

US tax bill upends long-time perks of owning a home

The bill will increase many homeowners’ monthly housing costs by scaling back deductions that allow them to reduce mortgage interest and property taxes.

And by roughly doubling the standard deduction, it reduces the incentive to buy homes by making far fewer homeowners eligible for preferential tax treatment.

Hong Kong’s Kingboard buys KPMG London HQ for $533m

Hong Kong-listed Kingboard Chemical Holdings (KCH) has agreed to buy 15 Canada Square from KPMG and its real estate affiliate KPMG CW Properties for just two pounds short of £400 million ($533 million).

The deal includes provisions for the “big four” accounting firm to lease back the 14-storey grade A office tower from its new owners for 25 years.

A $4.8b proptech surge takes on Asia’s old school real estate players

Many of Asia’s largest property developers and investors still conduct their business using tools that haven’t changed dramatically since the popularisation of the spreadsheet thirty years ago.

That old school way of life may be under threat, however, as investors put nearly $5 billion into tech startups determined to grab a piece of the region’s lucrative real estate sector.

Gaw Capital eyeing further Singapore property buys

Last Friday, GCP completed its S$342 million acquisition of PoMo, a nine-storey office and retail development in Selegie Road, and intends to revamp the asset, particularly its retail component, to tap the student population from the educational institutions in the area.

The group also owns Hotel G along nearby Middle Road; this is a revamp of the former Big Hotel that GCP picked up for S$203 million in late 2015 and forked out another S$10 million to refurbish and rebrand the asset.

Also read: Oxley’s purchase of 21 Meyappa Chettiar Road for S$21.5m

Keppel Corp unit acquires two residential sites in Vietnam

Keppel Corp’s subsidiary, Keppel Land, has entered into two conditional sales and purchase agreements to acquire two prime sites in Ho Chi Minh City, which will yield about 1,550 homes in total. The two sites will have a total development cost of US$297 million.

China home prices still on steady growth as buyers shrug off govt curbs

Average new home prices in China’s 70 major cities rose 0.3 per cent in November from the previous month, in line with October’s price gains, Reuters calculated from National Bureau of Statistics (NBS) data out on Monday.

The majority of the 70 cities surveyed by the NBS still reported a monthly price increase for new homes. Fifty cities reported higher prices in November, unchanged from October, indicating broad strength in markets nationwide.

Fosun sells tower as China cracks down on outbound deals

A Fosun Property partnership sold an office tower for A$150 million (S$155 million) to a joint venture involving Australia’s Propertylink Group, according to a Propertylink statement on Monday.

The purchase price in 2015 was A$116.5 million.

Fosun characterised the disposal as part of its normal buying and selling of properties.

Also read: Lippo mall, a REIT with an 8.2% dividend yield

Prime London property market shows signs of life

The capital’s three most expensive boroughs – the City of Westminster, Camden, and Kensington and Chelsea – each saw sales jump by more than 20 per cent in the third quarter, according to a report from LSL Acadata published on Monday.

The surge indicates that “momentum is returning” to prime central London after a year of tumbling property prices.

Swire to resurrect ghost mall in Beijing’s Sanlitun

The approximately 30,000 square metre property is located on North Gongti Road, directly to the west of Taikoo Li Sanlitun. After the upgrade, the property will be temporarily renamed West Taikoo Li Sanlitun to complement the existing North and South Taikoo Li Sanlitun projects.

Jiak Kim St bid: FCL can opt for long-term play

Frasers Centrepoint Ltd’s (FCL’s) winning bid earlier this month for the Jiak Kim Street plot has been deemed to be bullish.

The S$1,732.55 per square foot per plot ratio (psf ppr) is some 40 per cent higher than the S$1,239 psf ppr that GuocoLand paid in June last year for a nearby site which it is developing into the Martin Modern condo.

FCL’s bid set a new high for a 99-year leasehold pure private residential site or residential site with first storey commercial use sold at a state tender.

M&C Hotels fight drags on; CDL’s Kwek addresses dissenters

In a sternly worded letter to shareholders delivered late on Monday night, the billionaire boss of City Developments (CDL) Kwek Leng Beng sought to swat away what he said was a “disingenuous” argument put forth by a trio of minority investors seeking to block CDL’s takeover of M&C on the basis that CDL’s offer was deceptively or unrealistically low.

“This final offer is final and will not be increased,” wrote Mr Kwek, who is the executive chairman of CDL and chairman of M&C. CDL owns 65.2 per cent of M&C, and is trying to privatise the hotelier by offering minorities 620 pence (S$11.20) a share.

IFA advises SingLand shareholders to accept UOL offer

THE Australia and New Zealand Banking Group (ANZ) has, in its capacity as independent financial adviser (IFA), advised Singapore Land shareholders to accept the mandatory unconditional cash offer made by UOL Group Limited.

Also read: 11 things to know about Capitaland Retail China Trust’s acquisition of Rock Square in Guangzhou

UOL had earlier this year made the offer for all the SingLand shares it does not already own, at S$11.85 apiece in cash.

CapitaLand to acquire office site in Shanghai for 838m yuan

Capitaland China, a wholly owned unit of CapitaLand, has entered into a conditional agreement with an unrelated party to acquire a commercial site in Wujiaochang decentralised business district, Shanghai, for 838 million yuan (about S$171 million).

The site is next to CapitaLand’s Innov Center, an operational office with ancillary retail that was acquired in June 2017. To date, Innov Center is about 40 per cent leased in six months since the acquisition.

ABR to buy 50% of Bintan Lagoon Resort

ABR Holdings said on Tuesday that its wholly owned subsidiary, ABR Land, has entered into an agreement to buy 50 per cent of Bintan Lagoon Resort for S$65 million in cash. ABR runs chains such as Swensen’s and Yogen Fruz here, but has been diversifying into property in recent months.

In September it acquired a 1,179.83 sq m plot in Kuala Lumpur for RM3.556 million (S$1.1 million). Bintan Lagoon Resort comprises a 413-key resort hotel, two 18-hole championship golf courses, 58 villas and leisure and food and beverage facilities, siting on a site measuring approximately 311 hectares.

GIC to acquire 43% stake in Shinjuku property for 62.5b yen

SINGAPORE’S sovereign wealth fund GIC will acquire a 43 per cent stake in Shinjuku MAYNDS Tower, a large-scale Grade A office property in Tokyo, from Daiwa Office Investment Corporation for 62.5 billion yen (S$747.7 million).

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

Daiwa Office Investment Corporation will retain the same stake as that of GIC, with the remaining stake held by a domestic company, according to a press statement.

Shinjuku MAYNDS Tower is a 34-storey office building located in the newly-redeveloped area south of Shinjuku Station, offering access to the main JR Shinjuku Station, as well as direct underground access to multiple subway lines.

West Coast Vale site put on sale from state land sales reserve list

Consultants varied in their expectations for the bidding response for a new plot of residential land at West Coast Vale that was released for sale by public tender by the Urban Redevelopment Authority (URA) on Tuesday.

The site was available for sale on the reserve list of the second half 2017 government land sales (GLS) programme.

Earlier in the month, the URA received an application from a developer who committed to a bid price of at least S$379.988 million, or S$643.53 per sq ft per plot ratio (psf ppr), for the site.

The 99-year leasehold plot has a site area of 19,591.5 square metres (sq m), and a permissible gross floor area of 54,857 sq m. It can be developed into about 730 housing units.

Hong Kong’s community malls that people simply can’t avoid

FORGET Gucci and Rolex. Grocery stores, hair salons and tutoring centres may have the brightest future for Hong Kong retail as high-end malls get squeezed by forces beyond their control.

Also read: Review of Capitaland REITs

That’s according to property consultants including Savills, Jones Lang LaSalle and CBRE Group, which all say that community shopping centres targeting local customers are better suited to weather a downturn that has battered luxury retailers.

In Hong Kong’s biggest deal involving malls this year, Gaw Capital Partners led a group including Goldman Sachs in a US$2.9 billion purchase of 17 shopping centres located below public housing estates, where residents walk through the malls to get to their homes.

Sino Land buys Mong Kok site for fourth new project in five weeks

Developer Sino Land teamed with Chuang’s Consortium International to grab a site in Hong Kong’s Mong Kok district yesterday for an estimated HK$1.8-2 billion ($230 -256 million), according to a statement released by the city’s Urban Renewal Authority.

The purchase of the plot at the government auction marks the fourth residential site the Singapore-linked property group has acquired in the last month, bringing the value of land purchased by the company and its joint venture partners within the last five weeks to around HK$36 billion ($4.6 billion).

Evergrande and Vankie team up to acquire 2 parcels in Shenzhen

Two of China’s largest property developers China Evergrande Group (3333 HK, Not Rated) and China Vanke (2202 HK, Not Rated) are to acquire two land parcels that would jointly launch a new harborfront commercial center in Shenzhen.

Evergrande is paying CNY5.5 billion for 10,400 square meters and Vanke CNY3.1 billion for 17,800 square meters, according to an announcement from the Shenzhen Land & Real Estate Exchange Centre yesterday.

The two sites, located at the Super Headquarters Base in Nanshan district’s Shenzhen Bay, would provide the core of a development to possibly include the headquarters of their companies.

S-Reits could carry out more equity financing in 2018

Singapore-listed real estate investment trusts (S-Reits) are likely to do more equity fund-raising exercises in 2018 to fund part of their acquisitions, given the profound run-up in their unit prices this year, which has consequently lowered the cost of capital.

The FTSE ST Reit Index has gone only one way – up – this year, rising about 20 per cent year-to-date on the back of stronger macro-economic conditions and better fundamentals in sub-sectors such as the office and hospitality markets.

Also read: PWC ULI real estate Asia Pacific outlook 2018

A DBS Group Research report dated Dec 15, 2017 put the valuations of S-Reits at 1.1 times price-to-book, and a forward yield of 5.8 per cent, versus its forecast of 6.8 per cent the year before.

Fortune Reit sells HK mall for HK$2b to repay loan

The real estate investment trust manager plans to use the net proceeds from the sale for general corporate purpose and working capital, including repayment of an existing bank loan amounting to HK$1.1 billion.

The development comprises of the shopping centre and the sub-basement of the entire residential and commercial development known as Provident Centre.

HK’s underused military land a potential goldmine – but a minefield for government

As Hong Kong seeks more land to help ease a worsening housing crisis, some lawmakers and activists are urging officials to take a fresh look at little-used swathes of more than US$100 billion worth of real estate controlled by the Chinese military.

The Hong Kong garrison of the People’s Liberation Army (PLA) still occupies some 19 sites across the global financial hub it inherited from the British military when the former colony was handed back to China in 1997.

Wanda plans large-scale capital ties with retail giant Suning

China’s Dalian Wanda Group said it expects to form significant capital ties with retail giant Suning Commerce Group and outlined a rapid expansion for its real estate empire – bullish plans that come at a time when it is seeking to reassure investors about its finances.

Wanda has invested heavily in entertainment and sports assets over the last few years, but like other Chinese conglomerates its deal-making has drawn the gaze of domestic regulators looking to stem perceived risky spending overseas.

The latest in apartment technology: fridge cams and robotic valets

THE latest in technology for apartments encourages residents not to lift a finger, except maybe to touch their phones.

Also read: 3 things to watch in Singapore’s property market

Developers are certain that buyers want gadgets that could, say, help shuffle boxes of books to storage areas, or allow a peek inside the refrigerator when they’re at the grocery store and can’t remember if they need milk.

Gigantic mall in US looks for ways to survive retail blues

King of Prussia Mall’s owner turning retail space into other uses to Internet-proof property.

Moody’s places Lippo Retail Trust’s rating for downgrade

Moody’s Investors Service has placed the “Baa3” rating of Lippo Malls Indonesia Retail Trust (LMIRT) on review for downgrade, citing the deteriorating credit quality of key entities within the Lippo group, which contribute around one-third of the trust’s revenue.

If a downgrade does occur, the rating could drop to “Ba1” or below, which is junk bond territory. The credit rating agency has up to 90 days to finalise the rating.

Controlling unitholder of FSL Trust to divest all shares in its sponsor

The controlling unitholder of FSL Trust is looking to divest all its shares in FSL Holdings, which is the sponsor of the shipping trust.

The trustee-manager of FSL Trust said after Thursday’s trading close that Godan GMBH is in discussion with short-listed strategic investors for a potential sale of all of its shares in FSL Holdings.

Also read: 10 things to look out for in Chinese REITs

Sabana Reit appoints COO as acting CEO

Sabana Shari’ah Compliant Industrial Real Estate Investment Trust’s (Sabana Reit) manager has appointed its chief operating officer (COO) Aw Wei Been to be its acting CEO from Jan 1, 2018, while it continues its search for a new chief executive.

Its current CEO Kevin Xayaraj – who has been with the manager Sabana Real Estate Investment Management since 2010 – tendered his resignation in May, after a unitholders’ revolt over the Reit’s proposed acquisition of a Changi South property.

US tax reform may mean lower prices for Manhattan buyers

The US tax overhaul sent on Wednesday to President Donald Trump for his signature is likely to push down home prices in high-cost New York markets such as Manhattan and Westchester County to the north.

This will happen as buyers demand discounts to cover higher carrying costs, said Jonathan Miller, president of appraiser Miller Samuel.

Kovan Lodge, Ampas Apartments up for en bloc sales

Huttons Asia on Thursday announced the launch of the tenders for two collective sales: Kovan Lodge, which has an asking price of S$43 million, and Ampas Apartments in the Balestier area, with an asking price of S$105 million. Both properties are freehold.

Logistics firm Logos buys Tuas property

Logistics real estate company Logos on Thursday announced that it has acquired an industrial property in Tuas, which it intends to redevelop into a modern food processing and logistics facility for an estimated development cost of S$79 million.

Also read: Top 5 cheapest and most expensive Singapore properties

The food processing and logistics facility will have five floors, with ancillary office space, offering a total net lettable area of about 27,000 square metres.

A decade after bubble, Spanish real estate a hot buy again

Spanish real estate is hot property once again. Investment in malls, warehouses and offices this year is set to reach the highest since 2007, just before the bursting of a decade-long property bubble tipped the economy into the worst slump in the nation’s democratic history.

Banks are clearing the way for the turnaround, beating their eurozone peers in ridding their balance sheets of foreclosed assets and luring foreign buyers to heavily discounted properties.

Russians, Chinese seeking out Greek properties Investors can get a golden visa to the country and also take advantage of the low prices to benefit from future capital gains as the market recovers.

Sales of new homes moderate as yr-end holidays begin

Ong Teck Hui, national director of research and consultancy at JLL, said: “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.”

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

By using United Engineers (UE) to make a cash offer for WBL, the Yanlord Perennial consortium which took control of UE and bought a small stake in WBL in July appears to be taking a more cautious approach to its recent investment.

Smartkarma insight provider Foo Sze Ming wrote in a note on Friday: “This transaction is not exactly the outcome that we have previously envisaged. It appears that Yanlord Perennial Investment (YPI) has chosen to take a more cautious, risk-management approach towards its UEL investment.”

Also read: 3 adventures Capitaland has been having in Vietnam in 2017

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.

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.

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

PROPERTY developer Sunac China Holdings Ltd said on Friday it would sell HK$7.82 billion (S$1.35 billion) worth of new shares to its major shareholder, the second share placement in five months after it vowed to slash its debt ratio.

The highly-leveraged company has tapped offshore financing channels after a string of high-profile purchases led to increased scrutiny of its credit risks in China, including a US$6.52 billion deal with Dalian Wanda Group and a US$2.2 billion stake in Leshi Internet.

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.

Also read: 3 highlights about Singapore property from the wealth report

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.

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.