Property news round up 31 Dec 2017

singapore property residential reit dividend

FCL enters German last-mile logistics sector

Frasers Centerpoint Ltd (FCL) is set to expand its European logistics property footprint with an announcement over the weekend of a purchase of six German logistics facilities for about 257 million euros (S$408.6 million).

The purchase, which will boost the group’s proportion of recurring income, also marks the mainboard-listed group’s entry into the German last-mile logistics sector.

FCL said its wholly-owned subsidiaries have entered into a sale and purchase agreement with ECE Projektmanagement, a Hamburg-based developer, owner and manager of commercial real estate, for the acquisition of the six cross-dock facilities, which total 75,478 square metres (sq m) of lettable area on 426,439 sq m of land.

World’s most expensive home to hit market at US$500 million

“LET’S say you’re a superwealthy single dude who just sold your company,” said Nile Niami. “You’ve just moved to LA, and you don’t know anybody, so you hire someone to fill your house with partyers.

“You want everyone to know who you are, but you don’t want to talk to anybody.

So you go sit in your VIP room.” Mr Niami was giving a tour, and, unlike most home tours, this one started in the nightclub.

Also read: Capitaland acquires Main Airport Centre in Frankfurt, Germany

It will have multiple bars, its own coat room and LED ceilings playing images of moving clouds.

Beyond the floor-to-ceiling glass walls there is a swimming pool, along with panoramic views stretching to downtown and the Century City neighbourhood.

The house is entering its fifth year of development. When it’s finished in the spring, it will be one of the largest private homes in America – 100,000 square feet – and, at an asking price of US$500 million, will bill itself as the most expensive, as well.

Holy Land Christians resisting Greek Orthodox Church’s land deals

Beside a nondescript stretch of highway linking Bethlehem to Jerusalem, there’s a large shiny rock and a cluster of olive trees.

This place, called Kathisma or “seat” in Greek, is said to be where the Virgin Mary rested and drank from a well, not long before giving birth in a stable to Jesus.

Today, the only clue to that history is the ruins of a Byzantine church, with a vibrant mosaic floor peeking through mud and smashed beer bottles.

And while the ruins themselves remain in the hands of the Greek Orthodox Church, all the surrounding East Jerusalem property has been leased by the church to an Israeli company, according to municipal records.

The Greek Orthodox Church, which serves as a custodian for many such Christian sites in Israel and the Palestinian territories, is coming under increasing criticism from its followers for repeatedly giving up control of its property, either through land sales or multi-decade leases.

RBS to pay US$125m to settle California mortgage bond claims

Royal Bank of Scotland Group plc (RBS) will pay US$125 million to resolve claims that it made misrepresentations while selling mortgage-backed securities to two large California pension funds, the state’s attorney-general has announced.

The settlement announced last Friday by California attorney-general Xavier Becerra was the latest by RBS aimed at resolving claims stemming from its sale of mortgage-backed securities, which were at the heart of the 2008 financial crisis.

SingHaiyi to raise S$143m for property investments through rights issue

It announced on Tuesday that it is proposing a renounceable non-underwritten rights issue of up to about 1.44 billion new shares at S$0.10 each, to be issued on the basis of one rights share for every two existing shares to shareholders.

Most of the proceeds will go towards property investments, either through direct acquisition of real estate or the acquisition of vehicles holding the real estate, it said. The remainder will be used for general corporate and working capital.

First Sponsor expands in Europe with S$89m buy

Mainboard-listed First Sponsor Group is expanding its presence in Europe with its second acquisition in Amsterdam, two weeks after it made a move to buy a hotel in Germany.

The investment holding company that develops and sells residential and commercial properties in China and the Netherlands has proposed to acquire a second office building in Amsterdam’s central business district for 55.5 million euros (S$88.4 million), which includes transaction costs, through its wholly-owned subsidiary.

Also read: Soilbuild REIT’s divestment of KTL Offshore

The proposed deal, entered to on Dec 22, is for the majority apartment rights of Meerparc, a mixed-use office property in the Netherlands.

JTC puts Tuas and Braddell Rd sites up for bidding

JTC has launched a confirmed list site at Tuas South Link 3 and a reserve list site at Braddell Road under the second-half 2017 Industrial Government Land Sales (IGLS) programme.

It said on Tuesday that this is the last of eight confirmed list sites and the last of six reserve list sites for the second half of 2017.

The 0.63 hectare site at Tuas South Link 3 (Plot 23) is zoned for Business-2 development and has a 20-year tenure with a maximum permissible gross plot ratio of 1.4.

The 0.97 hectare site at Braddell Road is zoned for Business-1 development with a 30-year tenure and a maximum gross plot ratio of 2.5.

Chinese court auctions skyscraper on Taobao

A Chinese court is auctioning a skyscraper on the country’s largest e-commerce website – with a sky-high starting price of 553 million yuan (S$113.5 million).

The 39-storey building in Taiyuan, northern Shanxi province, along with the land on which it sits, goes on the block on Jan 2 on Taobao, Alibaba’s e-commerce platform.

Construction on the skyscraper began in 2006. Standing 156 m high and with over 76,000 sq m of floor space, it was originally designed to be a hotel, state media Xinhua reported on Monday.

Why bigger is not better for retail

Stores such as Sears, Walmart, Target, Macy’s and Nordstrom are banking on smaller, more focused areas.

Office market starts shifting in landlords’ favour again

It took a while, but the high end of Singapore’s office rentals finally hit the bottom this year – earlier than expected.

This was because the take-up rate for Grade A office space in new developments in the Central Business District (CBD) was more robust than anticipated. Another reason was the rosier economic outlook.

Most property consultants expect the upward rental momentum to continue next year, citing expectations of continued healthy demand for office space from the likes of tech companies and co-working operators.

Govt trims industrial land supply after market responds to previous spike

The Ministry of Trade and Industry (MTI) on Wednesday said that it is launching six sites in the Confirmed List and seven sites in the Reserve List, with a total site area of 12.56 hectares (ha) for the next six months.

The latest launch figures are a slight dip from the eight Confirmed List sites and six Reserve List sites, with a total site area of 13.9 ha, that were launched in the second half of 2017.

Xi’s tighter grip will put a crimp on Chinese real estate

A national property tax is back on agenda, and it promises to depress rentals and property prices.

A ministerial demotion in China looks set to upend the country’s property market. President Xi Jinping is preparing to sidestep traditional policy shops such as the Ministry of Finance (MOF) to put decision-making into the hands of a smaller group of individuals.

Also read: The Tapestry condo by CDL new launch

One consequence of that action will be an accelerated push to pass a national property tax.

Oxley unit takes stake in Australian developer

A subsidiary of international property developer Oxley Holdings has taken a 25.5 per cent stake in an Australian firm.

The mainboard-listed group on Wednesday said in a filing with the bourse operator that Oxley Australia has subscribed for more than 4.8 million fully paid shares in Pindan Capital Mermaid Beach (PC Mermaid Beach), which has an issued share capital of A$19 million (S$19.7 million).

The remaining share capital, comprising 14.2 million shares, is held by Pindan Capital Investments, a wholly owned subsidiary of Pindan Group.

US homeowners rush to pre-pay 2018 tax ahead of deduction cap

Homeowners in American states with the highest property taxes are looking to pre-pay their 2018 bills ahead of a US$10,000 cap on the deduction for state and local levies, including property taxes, in the tax overhaul that US President Donald Trump recently signed.

In New York, residents are peppering local officials with questions about how to pre-pay their 2018 property tax bills in the current year in the hope of deducting them from 2017 taxes, The New York Times reported.

House prices in 20 US cities up by the most since mid-2014

Housing prices in 20 US cities accelerated more than forecast in October, rising by the most since mid-2014 as lean inventories continued to prop up values amid steady demand, according to data from S&P CoreLogic Case-Shiller.

A lingering shortage of previously owned homes is keeping housing prices elevated. That has allowed homeowners to recover the equity lost during the housing collapse and recession a decade ago.

Hotels recast themselves as their city’s social hubs

To grow profits and to fight back against the challenges posed by Airbnb, they also aim to entertain non-guests.

Based on a wave of new hotel amenities ranging from bowling alleys to theatres, the future of hospitality looks a lot like the past, when hotels were social hubs.

Competitive forces and a basic business drive to boost revenue are producing a new class of hotels with entertainment features that go beyond the celebrity chef-run restaurant in the lobby.

Mainland co-working startup Urwork raises $45m in Series C cash at $1.3b valuation

Beijing-based URWork has raised RMB 300 million ($46 million) from a trio of mainland investment firms in a series C funding round that values the mainland co-working provider at RMB 9 billion ($1.3 billion), according to a recent announcement by the company.

The investment led by Shenzhen-based Qianhai Wutong Mergers and Acquisitions Funds makes two year old flexible office startup UrWork (Beijing) Venture Investment mainland China’s first co-working unicorn, as the country’s rapidly expanding office market shows a taste for space as a service.

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

Keppel Land buys Wuxi site for RMB 2.5b with plans to build 2,755 homes

Singapore’s Keppel Land has purchased an 18 hectare residential site in Wuxi, China, for RMB 2.53 billion ($387 million) via a government land tender, the company announced on Monday.

Approved for development of a gross floor area of about 360,500 square meters, the government-backed southeast Asian developer says it intends to build a total of 2,755 homes on the site in eastern China’s Jiangsu province, just over midway on the high speed rail line from Nanjing to Shanghai.

Investors sing ‘My Reit will go on’

Reits continue to offer yields of between five and six per cent; the FTSE ST Reit Index was at its highest since May 2013 on Thursday.

Also read: How interest rates affect property

Singaporean investors are not known for being romantics. But in yield stocks, they have found the love affair of a lifetime. Income plays, notably real estate investment trusts (Reits), continue to be snapped up as Singapore stocks head for the finishing line in 2017.

The FTSE ST Reit Index hit a new high on Thursday and is at levels not seen since May 2013.

That was before the “taper tantrum” began on worries around US tightening monetary policy.

On the second last day of 2017 trading, the benchmark Straits Times Index (STI) rose 0.22 per cent or 7.43 points to end at 3,399.10 points.

CapitaLand, Lum Chang buy Frankfurt office building for 234.3m euros in cash

A join venture between CapitaLand and Lum Chang Holdings has acquired an office building in Frankfurt for 234.3 million euros (S$375.1 million) in cash.

CapitaLand, a real estate developer, holds 94.9 per cent of the joint venture and paid 222.3 million euros of the consideration. Lum Chang, a construction company, holds the remaining 5.1 per cent.

The freehold, multi-tenanted building known as Main Airport Center will be CapitaLand’s first office building in Germany.

The Wilshire launches en bloc sale; guide price at S$1,525 psf ppr

Savills Singapore, the marketing agent for the District 10 property’s collective sale, said that the indicative guide price is S$98.07 million, which works out to S$1,525 per square foot per plot ratio (psf ppr) based on the existing gross floor area (GFA) of 64,310 sq ft.

The Wilshire, which is on a 39,130 sq ft site, is about 500 metres from Farrer Road MRT Station.

Owners stand to receive gross sales proceeds ranging from S$3.7 million to S$6.8 million per unit respectively, based on the indicative guide price.

IRS sets limited conditions for prepayment of property taxes

The Internal Revenue Service (IRS) announced on Wednesday (Thursday morning, Singapore time) that US taxpayers could prepay their 2018 property taxes only if they have already received a tax assessment from their local government and they make payment by Dec 31 this year.

The announcement both clarifies who can prepay property taxes but also threatens to create confusion in state and localities across the country where taxpayers have been rushing all week to prepay property taxes after US President Donald Trump signed into law a new Republican tax bill before Christmas.

The tax legislation limits the value of the state and local tax deduction to US$10,000 and bans prepayment of local and state income taxes. But it left vague whether people could prepay their property taxes.

Hillview, Sengkang private housing sites up for tender

The Urban Redevelopment Authority (URA) on Thursday launched two sites that will provide new private housing at Sengkang Central and Hillview Rise for sale by public tender.

The two sites come under the confirmed list of the second half 2017 Government Land Sales (GLS) programme.

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

Together, the two sites can potentially yield about 1,235 residential units, the URA said. The 37,300 square metre Sengkang land parcel is zoned for commercial and residential purposes, and is near the Buangkok MRT station.

The 14,300 square metre Hillview Rise site is only for residential use.

Global Yellow Pages acquires majority stake in blockchain firm FundPlaces

Global Yellow Pages (GYP) on Friday said that its subsidiary is looking to acquire a majority stake in proptech company FundPlaces, and that it would do this by subscribing for new shares representing about 50.11 per cent of the company for S$2.004 million.

FundPlaces uses blockchain technology to operate an online platform, which allows investors to invest in the development, financing and ownership of real estate projects globally.

CapitaLand’s subsidiaries and associates divest stakes in six malls in India

Capitaland Limited said its subsidiaries and associates have agreed to divest their respective stakes in six malls in India and in the property manager of these malls for S$71.5 million.

The six malls, which have been sold to Prestige Retail Ventures Limited, are each held under a special-purpose vehicle.

The malls are in Bangalore, Mangalore, Hyderabad, Mysore, Cochin and Udaipur.

The group said on Friday that the 50 per cent equity interest in CapitaLand Retail Prestige Mall Management Private Limited (CRPMM), which manages the properties, was sold to Prestige Estates Projects Limited.

Last-minute rush to prepay taxes gives rise to confusion, anger

In Hempstead, a Long Island town in New York where the typical property tax bill tops US$10,000, residents have lined up all week to prepay those taxes for next year.

They have been trying to save thousands of dollars before the new federal tax bill, which goes into effect on New Year’s Day, sharply limits deductions for state and local taxes.

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

But late on Wednesday, the IRS issued new guidance that those people may not be able to save the money after all, because a loophole that they were hoping to exploit might be narrower than thought.

HK property market shatters price records for 13th month in a row

Private home prices in Hong Kong broke historic records for the 13th straight month in November, with the ascent showing no immediate signs of ending and analysts expecting the rise to continue into next year.

Prices rose by 1.08 per cent in November, marking the fastest pace of growth in six months, according to data compiled by the Rating and Valuation Department released on Friday.

The index, which began its climb in April 2016, surged 13.1 per cent year-on-year.

The city’s flats are ranked the second-most expensive in the world after Monaco, according to data from property consultancy Knight Frank, which shows US$1 million would only buy 200 sq ft of prime property in Hong Kong, as opposed to 270 sq ft in New York or 320 in London.

Soilbuild Reit sells Tuas property for S$55m

The trustee of Soilbuild Business Space Reit has signed a put and call option agreement to divest to SB (Pioneer) Investment its Tuas property, commonly known as KTL Offshore after its tenant, for S$55 million.

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

The buyer is a wholly owned subsidiary of Soilbuild Group Holdings, which is the sponsor of Soilbuild Reit.

The property is currently leased to KTL Offshore under a lease agreement which expires in August 2021.

US home values soar in 2017, renters shell out record

In a hot housing market, the value of all US homes soared to a record this year, as did the monthly payments by renters, online real estate giant Zillow said on Thursday.

With the steady increase in demand for housing driving prices and rents higher, the value of all homes was up nearly US$2 trillion, according to the year-end data.

The 6.5 per cent increase over 2016 was the biggest gain in four years and drove the total to nearly US$32 trillion.

Sydney office squeeze worsens as buildings are torn down for Metro

Australia’s infrastructure boom has kept Sydney’s office rents the world’s fastest growing for a second year.

Prime office rents in Sydney surged 30 per cent in the 12 months ended Sept 30, according to Jones Lang LaSalle.

Commercial space in the city is being squeezed as buildings are torn down to make way for a A$12.5 billion (S$13 billion) metro line, while developers are cashing in on the housing boom by converting harbourside towers into luxury apartments.

“You can’t dump a planned infrastructure spend on an economy and not expect things, particularly in the office sector, to be buoyant,” said Kevin George, executive general manager of office and industrial at Dexus, Australia’s largest office manager.

Also read: PWC ULI real estate Asia Pacific outlook 2018

Tenants needing to find new space because buildings were being demolished or converted “was the icing on the cake”, he said.

Australia’s Crown Resorts signs several deals to cut debt

Australian casino operator Crown Resorts said on Thursday that it had signed several deals to divest assets to cut debt, including selling interest in a site on the Las Vegas Boulevard for US$300 million.

Crown Resorts has been retreating from a decade-long foray into Macau, the other big global gaming hub, amid a broader Chinese crackdown on corruption.

In May, it quit its remaining stake in Macau-focused Melco Resorts and Entertainment, freeing up cash to pay off debts.

Last week, the casino operator was slapped with a class action lawsuit for allegedly failing to inform shareholders of a marketing campaign in China that resulted in staff arrests and a slump in the share price.