Property news round up 25 Feb 2018

Pearl bank singapore

GCBs remain a draw for Singaporeans

A FEW notable personalities from the corporate world have been involved in transactions in Good Class Bungalow (GCB) Areas since the start of the year.

The Business Times understands that Simon Israel, chairman of both Singtel and Singapore Post, is buying an old single-storey bungalow that is ripe for redevelopment along Binjai Park in District 21 for S$18.26 million.

This works out to S$1,300 per square foot based on the freehold site’s land area of 14,047 sq ft. The rectangular plot is at a cul de sac.

Last year, Mr Israel sold a bungalow in Andrew Road, which is part of the Caldecott Hill Estate GCB Area, for S$25.6 million or S$1,152 psf on a land area of about 22,220 sq ft. The freehold house was designed by Chan Soo Khian of SCDA Architects.

Singapore Budget 2018: Impact of buyer’s stamp duty hike to be felt most for big-ticket purchases

THE impact of the 1-percentage point hike in the top marginal buyer’s stamp duty (BSD) rate on the portion of a residential property’s value exceeding S$1million will be felt most for big-ticket purchases. JLL senior consultant Karamjit Singh said: “These include expensive condo units, bungalows and what is happening more rampantly nowadays – land and en bloc property purchases by developers.”

Property consultants generally said that as the bulk of residential property deals are below S$1.5 million, the change to the BSD is expected to have only a mild impact on property demand.

Singapore Budget 2018: Reit ETFs to enjoy tax transparency

TAX transparency treatment for Singapore-listed real estate investment trusts (S-Reits) will soon be extended to exchange traded funds (ETFs) invested in these Reits – a long-awaited move cheered by market watchers.

Taking effect on or after July 1, the tax concessions for Reit ETFs will ensure parity in tax treatments between investing in individual S-Reits and Reit ETFs.

Industry players noted that the much-lobbied move is positive for the growth of the Reits sector and will strengthen Singapore’s status as a Reits listing hub.

Singapore Budget 2018: New Infrastructure Office for projects in Asia

TO HELP firms tap infrastructure opportunities in Asia, such as those created by China’s Belt and Road Initiative, Singapore will set up an Infrastructure Office this year.

It will bring together local and international firms across the value chain – from developers and institutional investors to legal, accounting and financial services providers – to develop, finance and execute projects.

“As Asia’s growth will raise infrastructure demand, we seek to forge stronger partnerships in infrastructure development and enhance connectivity in the region,” said Finance Minister Heng Swee Keat.

Singapore Budget 2018: Bigger handouts under enhanced Proximity Housing Grant

SINGLES who buy a resale public housing flat to live near their parents will now receive S$10,000 under the enhanced Proximity Housing Grant (PHG) scheme.

The one-time grant is currently given only to singles who buy a resale flat to live with their parents.

Under the enhanced PHG, the grant for this category of singles is now increased to S$15,000. For families buying a resale flat to live with parents or children, the PHG grant is also raised from S$20,000 to S$30,000.

Frasers Property to buy German, Austrian logistics assets

FRASERS Property is set to acquire 22 logistics and light industrial assets in Germany and Austria mainly owned and managed by developer Alpha Industrial for 282.5 million euros (S$460.5 million).

The assets include 16 completed logistics and light industrial facilities, with a combined gross leasable area (GLA) of 393,800 square metres that are located in key industrial and logistics hubs in Germany and Austria.

With a tenant base of reputable national and international corporations and weighted average lease expiry of 6.2 years, the portfolio will contribute stable, recurring income to Frasers Property Europe (FPE), Frasers Property said.

Singapore developers seeing some en bloc fatigue?

A SPATE of en bloc sales, coupled with a rebound in the property market at the start of the year, may indicate that Singapore developers will be more cautious in adding to their landbanks and about their pricing strategies, analysts say.

Collective apartment sales in the first two months of 2018 totalled over S$3.1 billion, almost twice the S$1.66 billion seen in the last peak of the en bloc market in 2007, Nomura analyst Sai Min Chow wrote in a note dated on Monday.

The sales appear to be cutting into the willingness of developers to pay premium prices after three of four deals transacted last week were sold at asking prices, he said.

Singapore Budget 2018: Buyer’s stamp duty hike better than wealth taxes

WHILE some sort of tax on the wealthy had been expected in Monday’s Budget, few thought it would take the form of a hike in buyer’s stamp duty (BSD).

The move however, has received praise from tax consultants and other experts.

They say it’s less disruptive and easier to implement than alternatives such as capital gains tax or estate duty, which could hurt Singapore’s reputation for wealth management and its competitiveness as a financial hub.

“The introduction of any wealth tax – gift tax, inheritance tax – would run contrary to the initiatives that Singapore has rolled out over the years in successfully developing the wealth management industry,” said Goh Siow Hui, tax services partner at Ernst & Young Solutions.

Singapore Budget 2018: Implicit message in buyer’s stamp duty hike

THE surprise hike in the top marginal rate of buyer’s stamp duty (BSD) has been touted by officialdom and market watchers as a move towards a more progressive tax system, by placing a heavier burden on the wealthier.

While it is not expected to derail the nascent recovery of the residential market, it may still have a dampening effect on market sentiment, serving as a timely reminder to developers and potential homebuyers not to be too carried away in market euphoria.

Though industry players were already anticipating a move by the government to make taxes more progressive in Budget 2018, it came in the unexpected form of a hike in the top marginal BSD rate.

buyer stamp duty bsd singapore Budget 2018Developer stocks in knee-jerk reaction to change in buyer’s stamp duty

DEVELOPER stocks took a hit on Tuesday in knee-jerk reaction to news that the government is raising stamp duties on home purchases costing more than S$1 million.

But most analysts see any correction as a buying opportunity as they do not expect residential transactions and prices to take a significant hit.

Their selective “buy” calls on developer stocks following the Budget announcement, however, failed to stem their fall.

The FTSE Straits Times Real Estate Holding and Development Index, a weighted index tracking the sector’s performance, marked a 1.7 per cent drop on Tuesday.

Consumer, property in play post-Budget

IT was a subdued day for the region, with the Straits Times Index (STI) falling 11.35 points, or 0.33 per cent, to close at 3,476.53.

But as usual, a flatlining index belied intense volatility on the sidelines. Consumer and property stocks were in play after Budget announcements on a higher Goods and Services Tax (GST) and Buyers’ Stamp Duty (BSD).

There was some cheer when an expected GST whammy to the consumer will not be materialising as fast.

However, an unexpectedly higher BSD dealt a blow to the real estate sector.

Singapore residential developers like UOL (-3.3 per cent) and City Developments (-3 per cent) fell after it was announced that the top marginal BSD rate, for properties exceeding S$1 million, will go up by 1 percentage point.

For many residential transactions clustering at just over the S$1-million mark, the higher rate might be trivial.

Indeed, a number of brokers said the recent price dip was an opportunity to buy developers.

Court rules against S$17.5m collective sale of Beauty World Food Centre

A POTENTIAL S$17.5 million collective sale of the Beauty World Food Centre has been stalled, after the High Court on Tuesday declined to give three of its trustees the power to go ahead with the deal.

In a decision delivered in chambers, the court said the price may not be the best available because the option to purchase was granted to the interested buyer before a valuation was made.

However, this does not preclude the trustees from going back to court to ask for the power for another collective sale, their lawyer, Jimmy Yap, told The Straits Times on Tuesday.

Mr Yap said he will be discussing the options with his clients.

Trump Jr to give foreign policy speech on ‘unofficial’ India trip

THE US president’s eldest son, Donald Trump Jr, is making what’s been dubbed an unofficial visit to India to promote his family’s real estate projects.

But he’s also planning to deliver a foreign policy speech on Indo-Pacific relations at an event with Indian Prime Minister Narendra Modi. Beginning on Tuesday, the junior Mr Trump will have a full schedule of meet-and-greets with investors and business leaders throughout India where the Trump family has real estate projects – Mumbai, the New Delhi suburb of Gurgaon and the eastern city of Kolkata.

Spain’s property market recovers to pre-crisis levels

SPAIN’S real-estate market, hit hard when a bubble burst in 2008, has recovered transaction levels that were last seen before the economic crisis even if property prices still remain lower, official figures showed on Monday.

Boosted by strong economic growth, close to 465,000 property sales or purchases were recorded in 2017, “the highest annual figure since 2008”, a report by Spain’s national property register showed. That represents a rise of close to 15 per cent from 2016.

Singapore Budget 2018: Banks & developers eye imported services

GST Residential property developers too, will soon be charged for GST for such services sourced from abroad, tax experts said.

So home buyers may want to watch the price of name-dropping when it comes to residential properties.

“They (developers) do hire brilliant architects,” quipped Lam Kok Shang, head of global indirect tax services, Singapore, at KPMG. But what is clear is that in the business arena, the actual pinch should mainly be felt on financial services firms and property developers. Charities, as well as restructured hospitals, will also be affected, tax experts said.

This GST move only hits specific sectors because most other businesses buying imported services are eligible for a GST refund as long as the imported service is regarded as an input that is used to make taxable supplies of goods and services.

So the government levies GST on the final product or service sold here. But banks, insurers, and residential property developers are part of the minority that sell goods and services that are exempted from GST.

The taxman does not collect GST on bank loans sold to customers, on life insurance, or on homes sold.

EL Development buys Singtel’s Hill Street property

SINGTEL is selling its Hill Street property – for which planning approval has been granted for redevelopment into a hotel – to homegrown-property group EL Development.

The price is between S$115 million and S$120 million, which works out to about S$1,830 per square foot per plot ratio, The Business Times understands.

The unit land price is inclusive of a differential premium to change the use of the site, as well as a lease-upgrading premium; the total that EL Development will have to pay the state for these two premiums exceeds S$130 million.

9,999-year Guillemard site up for sale at indicative price of S$99m

A 9,999-year leasehold residential site in Guillemard Road/Jalan Molek has been put up for sale by a single, unnamed owner at an indicative price of S$99 million.

The tender for the site, located at 1 to 21A Jalan Molek and 217 to 223A Guillemard Road will close on March 20 at 3pm.

The site comprises 15 two-storey terrace houses that are within walking distance from the Mountbatten, Dakota and Aljunied MRT stations, said Cushman & Wakefield, which has been appointed as the exclusive marketing agent for the sale.

It is zoned “residential/institution” with a plot ratio of 2.8, with the terrace houses sitting on a land plot of about 37,131 sq ft, with a baseline gross floor area (GFA) of around 77,071 sq ft.

Pomex Court up for sale for at least S$37m

POMEX Court in 50 Lorong 101 Changi Road is set to be put up for collective sale, with a minimum price of S$37 million, or S$998 per square foot per plot ratio.

The tender will be launched on Feb 22, said Century21, which is handling the en bloc sale. It will close on March 21 at 3pm.

Built more than three decades ago in 1986, Pomex Court is a freehold residential site in District 15 that sits on 26,471 sq ft of land.

Its nearest MRT stations are Eunos and Paya Lebar.

The site is zoned for residential use with a 1.4 gross plot ratio, which means that it can be redeveloped into a building of up to five floors.

AccorHotels’ 2017 profits beat expectations

ACCORHOTELS, Europe’s largest hotel company, posted a forecast-beating 10.1 per cent rise in like-for-like operating profits for 2017, helped by cost controls and robust demand in all key regions except Brazil.

The French company said discussions about opening up the capital of its property unit AccorInvest to a group of French and international investors were in their final stages.

AccorHotels, which has more than 4,000 hotels ranging from the budget Ibis to the luxury Sofitel brand, competes with InterContinental, Marriott and Starwood.

Barangaroo: Sydney’s hot new district

IT’S almost impossible to think the Sydney Opera House, which receives more than eight million visitors each year, could ever be outdone by anything else on Sydney Harbour.

But take a five-minute taxi ride west of the harbour’s iconic bridge, and you’ll find Barangaroo, a new waterfront development that’s proving to be quite the competitor.

At 22 hectares, Barangaroo is about half the size of Vatican City – a former wasteland in the middle of the city that’s now filled with restaurants, shops, offices, residential buildings, and a gleaming urban park.

It’s one of Sydney’s largest and most ambitious regeneration developments since the 2000 Olympics, with a US$6 billion price tag that the New South Wales government has justified in the name of sustainable urban renewal.

Gerald Crescent bungalow on offer at over S$35m

A HOUSE that was at the centre of a high-profile dispute – between a former tour guide from China and a Singaporean widow who owns it – has been put up for sale with an expected price of above S$35 million or S$1,100 per square foot on land area.

Madam Chung Khin Chun’s bungalow in Gerald Crescent sits on a plot that is about half the size of a football field.

Her niece Hedy Mok, the appointed deputy public trustee for the estate’s administration, reportedly said earlier that the bulk of the proceeds from the land sale would go to charity.

Australia’s Westfield says ‘No Plan B’ as Unibail deal shrinks

AUSTRALIAN shopping mall giant Westfield Corp ruled out trying to increase a US$16 billion buyout from France’s Unibail-Rodamco after a decline in the European firm’s shares drove down the deal’s value, saying there was no Plan B.

The refusal by the world’s No 4 mall owner to recut the deal may frustrate investors, with analysts estimating they will get A$2.5 billion (S$2.64 billion) less than when the companies announced the offer in December.

Unibail’s Paris-listed shares were down 15 per cent after the announcement. “There’s nothing in anybody’s hands today,” Westfield co-chief executive officer Peter Lowy said on an analyst call on Thursday, referring to likely moves in both companies’ stock prices before shareholders vote on the deal in mid-2018.

Li Ka-shing unit is buyer of City Towers

JAPURA Development, linked to Hong Kong tycoon Li Ka-shing’s Cheung Kong empire, is the party that clinched City Towers in Bukit Timah Road through a collective sale this month, The Business Times understands.

The award of the freehold collective sale site was announced by its marketing agent Colliers International late on Feb 7, hours after the tender for the en bloc sale had closed, but the buyer’s identity was not disclosed.

This marks the Cheung Kong group’s first acquisition in the ongoing wave of collective sales in Singapore that began last year.

Redas chief: BSD tweak unlikely to derail housing recovery

SHOULD buyers be expecting higher home prices with the recent hike to the top marginal rate for buyer’s stamp duty (BSD)?

The answer may be “yes”, going by comments from Augustine Tan, president of the Real Estate Developers’ Association of Singapore (Redas). He said on Friday: “In the purchase of sites from the Government Land Sales (GLS) programme or private collective sites, the substantial premiums paid by developers for residential sites, together with the one per cent hike in the buyer’s stamp duty may translate into higher prices for new projects in the future.”

But though the new revised buyer’s stamp duty “may add some friction to transaction volumes as buyers remain price-sensitive, it is unlikely to derail the recovery”, he told some 620 guests at Redas’ annual Spring Festival lunch.

EL Development plans a hotel with over 300 rooms on Hill St

EL Development is planning to develop a mid- to high-end business hotel with more than 300 rooms on the Hill Street site that it is buying for S$118 million from Singtel.

“We have not finalised on the concept for the hotel and are also in the process of sourcing for an operator,” said EL Development managing director Lim Yew Soon.

He added that the price works out to about S$1,855 per square foot per plot ratio inclusive of an estimated S$140 million that is payable to the state, comprising a differential premium (to change the use of the site) and a lease upgrading premium (for one of the site’s two land lots).

Oxley blocks UE’s bid to buy WBL shares from Yanlord Perennial

IN a surprise turn of events, minority shareholders of United Engineers (UE), including property developer Oxley Holdings, have foiled a bid by UE’s new shareholder, Yanlord Perennial Investment (YPI), and UE’s former shareholder OCBC to sell their WBL shares to UE.

Voter turnout was low – only 27 per cent of UE shares were voted during an extraordinary general meeting (EGM) on Friday.

Of the votes cast, 67.44 per cent rejected the deal. Oxley, which has a 15 per cent stake in UE, cast the swing vote. Excluding Oxley’s stake, about 74 per cent of the votes were cast in favour of the resolution.

APAC Realty Q4 net profit up 60% to S$7.9m

PROPERTY broker APAC Realty reported net profit of S$7.9 million for the three months ended Dec 31, up 60 per cent year-on-year, in a Singapore Exchange filing last night.

Revenue that quarter rose to S$128.7 million, up 63 per cent.

Fourth-quarter earnings per share were 2.22 Singapore cents, up from 1.59 Singapore cents a year before.

Abandoned Upper Thomson house with grim past to be put up for state auction on Feb 27

HOW much will property-crazed Singaporeans pay for an abandoned house where skeletal remains were found? The answer may be revealed next week.

One of Singapore’s most storied houses at Sembawang Hills Estate, where two skeletal remains were found about 10 years apart, will be put up for sale by auction by the government next Tuesday.

The Public Trustee’s Office (PTO) took ownership of the house in 2015 after it remained in a dilapidated state for more than a decade.

It has appointed real estate company Knight Frank to auction the house at 17 Jalan Batai next Tuesday.

The house belonged to a pair of reclusive sisters, former civil servant Pearl Tan Leen Hee, and Ruby Tan. They would have been 81 and 68, respectively, in 2006.