Property news round up 4th Mar 2018

singapore property residential reit dividend

Few districts see chance of oversupply of homes: study

A NEW study on the upcoming supply of private residential units from development sites sold suggests that oversupply risks, if any, may be contained within certain districts.

Islandwide, only Districts 3, 5, 13, 18 and 19 appear to have a relatively high number of upcoming residential units in relation to the current completed units there – in the proportions of 12 to 34 per cent.

Each of these districts has at least 2,000 units that can be launched from sites sold to developers under government land sales (GLS) and collective sale sites, the study by Cushman & Wakefield shows.

Developers’ war chest of cash keeps collective sale party going

ARE developers still on a prowl for land? That question naturally cropped up when the public tenders of 10 or more collective sale sites closed without concluding a sale in recent months.

But four of such sites have since found buyers under private treaty, which market watchers were quick to attribute to developers’ sustained interest for land though they are proceeding more cautiously than before.

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Keeping this en bloc train going is their war chest of cash reserves built up by massive project completions in recent years.

Estimates from Cushman & Wakefield suggest that developers still have another S$18.9 billion for land acquisitions in the near term.

This is a conservative estimate since it assumes developers re-invest only profits from completed projects.

BCA orders developer to stop work on Kingsford Waterbay

KINGSFORD Development’s condominium project in Upper Serangoon View has hit a snag, after the Singapore authorities issued an order to the developer to stop building works because of its failure to meet certain requirements.

When contacted, the Building and Construction Authority (BCA) confirmed that an order has been issued to the Chinese developer under the Building Control Act for its 1,165-unit project Kingsford Waterbay.

BCA said it had on Nov 22 last year received feedback on suspected construction safety issues at the project.

Banyan Tree to bid for rest of Laguna Resorts & Hotels

BANYAN Tree Holdings Limited said on Monday that it intends to make an offer for the remaining shares it does not already own in its subsidiary Laguna Resorts & Hotels Public Company Limited, but has no plans to delist the Thai-listed unit.

The acquisition will be by way of a voluntary tender offer for 57.08 million shares in Laguna Resorts & Hotels at 40 Thai baht apiece by Banyan Tree and its subsidiary Banyan Tree Resorts & Spas (Thailand) Company Limited.

The offer price represents a 34 per cent premium to the last traded price of Laguna Resorts & Hotels of 29.75 baht immediately preceding the date of the tender offer.

The Estoril at Holland Rd up for sale with S$220m guide price

THE Estoril, a condominium project along 95 & 97 Holland Road, is up for collective sale with a guide price of S$220 million, reflecting a land price of about S$1,625 per sq ft per plot ratio.

Sitting on a freehold site of about 84,600 sq ft and zoned “residential” with a height control of up to 12 storeys, the development comes with a plot ratio of 1.6 based on the 2014 Master Plan.

It has a maximum allowable gross floor area of about 148,896 sq ft, including a 10 per cent bonus area on balconies.

China’s January home prices rise even as top cities post decline

CHINA’S new home prices grew in January although major cities saw early signs of softening, as the government continued its efforts to rein in speculative demand to fend off bubble risk.

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The acceleration in prices across the nation suggests moves by provincial governments to support first-time buyers and upgraders by relaxing some purchase restrictions may be further fanning price gains in a market where fear of missing out is strong and mortgage fraud is rampant.

Average new home prices in China’s 70 major cities rose 5 per cent in January from a year earlier and 0.3 per cent month on month, according to Reuters calculations based on the data from the statistics bureau on Saturday.

Pension funds bid for stake in Sydney road project: sources

AT least two Australian pension funds and one Canadian fund are participating in competing groups bidding for a majority stake in one of Australia’s largest infrastructure projects, people with knowledge of the sale told Reuters.

Australia’s New South Wales government is trying to sell a 51 per cent stake in Sydney Motorway Corporation (SMC), the company building the A$16.8 billion (S$17.4 billion) WestConnex project, which links Sydney’s centre with its fast-growing western suburbs.

Preliminary bids for a 51 per cent stake were due on Monday with final bids due by mid-year.

Three people familiar with the bidding process said local pension funds IFM Investors and AustralianSuper and Canada’s La Caisse de dépôt et placement du Québec (CDPQ) were each part of separate consortia bidding for the stake. The sources did not want to be identified because the details of the sale were confidential.

Windy Heights in Eunos launched for collective sale at S$806.2m

THE owners of Windy Heights in Eunos have put their property up for collective sale, billing it as one of the largest freehold residential redevelopment sites to come on the market in the area.

The property along Jalan Daud comprises four blocks of 192 apartment units, eight penthouses and two commercial units. Under the Government’s 2014 Master Plan, the 23,291 square metres (250,702 square feet) site is zoned “Residential” with a Gross plot ratio (GPR) of 2.1.

It can be redeveloped to accommodate 581 apartments of 100 sq m per unit, based on the current built-up gross floor area (GFA) of 58,150.74 sq m, said Knight Frank Singapore, the property’s marketing agent.

EC supply crunch powers Punggol site to record price

THE under-supply in the executive condominium (EC) market is so acute that all 17 bidders at a state tender for a site in Punggol have placed bids that are higher than the record for EC land set in July 2013, at the previous peak of the residential market.

The top bid for the Sumang Walk site at Tuesday’s tender closing, from a joint venture between wholly-owned subsidiaries of City Developments Ltd (CDL) and TID, was S$583 per square foot per plot ratio (psf ppr).

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This was 64 per cent higher than the top bid of S$355 psf ppr for the Anchorvale Lane site in August 2016, during the last EC tender.

JLL national director Ong Teck described this as “stunning” and “way above market expectations”.

Tulip Garden, Windy Heights join en bloc wagon

DEVELOPERS can add another two more freehold plots to the long list of en bloc projects being pitched to them, with Tulip Garden in Farrer Road and Windy Heights in Eunos launching collective sale tenders.

With seemingly no let up in the number of estates hopping onto the collective sale bandwagon, analysts expect the success rate of such deals to slow with developers getting more choosy as their landbanks fill up.

Residential en bloc sales in the first two months of this year have already topped S$3.1 billion, almost twice the S$1.66 billion seen in the last such market frenzy in 2007, according to Nomura analyst Sai Min Chow.

Sold in 12 minutes: House found with skeletal remains went for S$2.23m

THE Sembawang Hills Estate terrace house where two sets of skeletal remains were found has a new owner.

It was sold on Tuesday for S$2.23 million to a local contractor in a frenzied auction that lasted just 12 minutes.

The auction held by real estate agency Knight Frank was made on behalf of the Public Trustee’s Office, which comes under the Ministry of Law.

Cuscaden Road site up for tender under govt land sales programme

A SITE within the prime Orchard Road district has been launched for sale by public tender on Tuesday under the Urban Redevelopment Authority’s (URA’s) Confirmed List of the first half 2018 Government Land Sales (GLS) programme.

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The 5,722.5 square metre 99-year leasehold site is zoned for residential use under URA’s 2014 Master Plan and has a gross floor area of 16,023 sq m with a maximum building height of 100 m.

The site, which the URA said could potentially yield about 170 residential units, faces Regent Singapore along Cuscaden Road, and is a stone’s throw from Tanglin Mall and Camden Medical Centre.

Hike in DC rates unlikely to derail en bloc fever soon

THE current collective sale market is unlikely to be derailed by the average 22.8 per cent hike in development charge (DC) rates for non-landed residential use in the next six months, say property consultants.

However, they say the latest set of DC rates, payable by developers seeking to enhance the use of a site or to build a bigger project on it, could tame developers’ land bids.

Some en bloc sellers may also need to rethink their price expectations.

JLL senior consultant Karamjit Singh said that generally, in about 20 per cent of en bloc sales, the DC quantum makes up more than 5 per cent of the total land cost.

CDL’s Q4 net profit falls 23% against ‘very strong’ 2016

CITY Developments (CDL) on Wednesday posted a 23 per cent fall in net profit to S$186.7 million for its fourth quarter, but the property developer put it down to an exceptionally strong 2016 that proved hard to beat on a year-on-year comparison.

In FY16, the group’s performance was boosted by a sizeable contribution from Hong Leong City Center (HLCC) in Suzhou, higher profit margin projects such as Coco Palms and D’Nest (which were built on cheaper legacy land bank) and Lush Acres executive condominium, as well as the divestment of its stake in City e-Solutions in Hong Kong, sale of Exchange Tower in Bangkok, and recapitalisation of a Profit Participation Securities (PPS) platform that holds the Nouvel 18 condominium.

CDL’s fund management platform targeting US$5b in assets by 2023

THOUGH admittedly “late to the game”, City Developments on Wednesday said it is planning to build its own fund management platform, with a target to manage US$5 billion in assets by 2023.

This is to tap into some US$5 trillion in private capital from institutional investors in the real estate industry.

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Management also signalled that it will be “very different” from what they have done with their three Profit Participation Securities (PPS) platforms – which are versatile instruments that can achieve multiple objectives including fund-raising and structuring transactions to provide an attractive risk-return profile that investors are willing to put capital to.

GIC, global investors to take 4.4b euro majority stake in AccorInvest

SINGAPORE’s sovereign wealth fund GIC, along with a group of international investors, have signed an agreement to acquire a 55 per cent stake in AccorHotels’ property business arm, AccorInvest.

The majority stake will be sold by the French hotel chain to investors including Saudi Arabia’s sovereign fund, also known as the Public Investment Fund, as well as institutional investors Credit Agricole Assurances, Colony NorthStar, and Amundi, among others.

For AccorHotels, the sale would result in a cash contribution of 4.4 billion euros (S$7.1 billion).

HK warns potential home buyers to assess risks fully before jumping in

HONG KONG’S Financial Secretary Paul Chan said on Wednesday that the city’s red-hot property market will gradually come under pressure as more flats hit the market and interest rates are expected to rise.

Hong Kong is one of the most expensive housing markets in the world, where private home prices shattered historic records for the 15th month in a row in January, rising 1.27 per cent month-on-month and 15.4 per cent year-on-year, the latest government data showed on Wednesday.

Singapore Budget 2018: Constitution protects land & proceeds from its sale as past reserves: Swee Keat

INCLUDE a portion of land sales proceeds in the Budget, or use more of the returns from the reserves – these are tempting suggestions to raise government revenue and easier to swallow than hiking taxes.

But it would be “ill-disciplined and unwise” for the government to do so by amending the rules as a first resort, Finance Minister Heng Swee Keat told Parliament on Thursday.

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Singapore’s approach strikes a balance between present needs and preserving resources for future generations, said the minister in a speech rounding up the three-day Budget debate.

Singapore Budget 2018: Singapore’s population expected to be below 6.9 million by 2030

SINGAPORE is not expected to change its immigration policy, and its population is likely to be “significantly below” 6.9 million by 2030, said Josephine Teo, who is in charge of population matters in the Prime Minister’s Office.

The figure refers to a projection set out in the 2013 Population White Paper for planning purposes, but which had sparked a public outcry.

Mrs Teo also said that Singapore’s population is expected to be below 6 million by 2020, as she outlined the strategies to meet the challenges of a falling birth rate and slow population growth.

How OUE could craft its exit strategy for OUE Downtown

OUE’S full-year results released recently revealed that its revamped Downtown property in Shenton Way helped to contribute to an increase in the group’s revenue.

The mixed-development’s retail podium, Downtown Gallery, opened in May last year, followed by the 268-unit Oakwood Premier serviced residences the following month.

The remaining component, offices, are not a new addition, although the facade of OUE Downtown 1 tower (which includes some office space) was changed.

OUE Downtown has a total gross floor area of about 1.24 million sq ft and is the reincarnation of the former DBS Towers 1 and 2 and DBS auditorium.

OUE, previously known as Overseas Union Enterprise, acquired it in 2010 for S$870.5 million from Goldman Sachs real estate funds, which in turn bought it in 2005 for S$690 million from DBS.

Year’s first successful auction of Sentosa Cove home sold at S$2.4m loss

A TWO-LEVEL penthouse on the sixth storey of The Berth By The Cove has become the first mortgagee sale unit on Sentosa Cove to go under the hammer and be sold this year.

This took place at Edmund Tie & Company’s (ET&Co) auction on Thursday. The property received five bids, and was eventually sold for S$3.25 million, or S$1,105 per sq ft (psf).

This was about S$2.4 million lower than what the last owner paid for the unit in 2011 – at S$5.64 million, or S$1,919 psf. It translates into a 42 per cent loss.

CapitaLand acquires Hanoi site; sets up second fund in Vietnam

CAPITALAND has acquired a prime site for its first integrated development in Hanoi, Vietnam, and has set up its second commercial fund in the country – the CapitaLand Vietnam Commercial Value-Added Fund.

The land in Tay Ho district will be developed into a 25-storey mixed-use development worth roughly US$217 million.

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It will comprise of a 380-unit residence, including small office home office (SoHo) apartments, around 230,000 square feet of office space and over 208,000 sq ft of retail space, CapitaLand said.

The fund – with a lifespan of eight years – has closed at US$130 million. CapitaLand and MEA Commercial Holdings will each hold a 50 per cent stake.

The fund will focus on grade A commercial properties in Vietnam.

New Savills managing director forecasts ‘AAA’ office rental growth to hit 10% this year

BELLS are ringing for landlords amid a shortage in supply in the core CBD area and increased demand from various industry groups, Savills Singapore’s new managing director Marcus Loo told The Business Times yesterday.

He added that the global real estate service provider, which is listed in the London stock exchange, forecasts rental growth for ‘AAA’ grade office buildings to more than double to 10 per cent this year.

Mr Loo will succeed Chris Marriott, who will now focus on his role as the chief executive of Savills South-east Asia, with immediate effect.

Mr Loo was the executive director of Savills Singapore for close to three years.

Frasers Property’s Thai unit prices 3 more debenture offerings totalling up to 5b baht

FRASERS Property said on Friday that its subsidiary, Frasers Property Holdings (Thailand), is making three more offerings under its 25 billion Thai baht (S$1.05 billion) debenture programme.

They are expected to be issued on March 7.

In a filing to the Singapore Exchange, Frasers said that under the programme, Frasers Property Holdings (Thailand) has priced the offering of up to two billion baht in aggregate principal amount of 2.19 per cent debentures due 2021, up to one billion baht in aggregate principal amount of 2.55 per cent debentures due 2023, and up to two billion baht in aggregate principal amount of 3.54 per cent debentures due 2028.

Interest is payable on each series of debentures every six months throughout the tenor of the relevant series of debentures.

The debentures will be guaranteed by the company, Frasers added.

FEC Properties snags Hollandia collective sale site for S$183.4m

The sale price for Hollandia translates to a land rate of S$1,703 per square foot per plot ratio (psf ppr), said its marketing agent Savills Singapore.

In a regulatory filing with the Hong Kong stock exchange, Far East Consortium said it plans to redevelop the site into a high-end residential development with a total gross floor area (GFA) of about 10,000 sq m.

It said: “The acquisition is consistent with the company’s regionalisation strategy and is a great addition to the development pipeline in Singapore following Artra, which was successfully launched last year,” it said.

Australia home prices fall for fifth month in February

HOME prices across Australia’s major cities fell for a fifth straight month in February as tighter rules on investment lending chilled the once red-hot Sydney market, a relief to regulators but a weight on consumer spending power.

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Property consultant CoreLogic said on Thursday that its index of home prices for the combined capital cities slipped 0.3 per cent in February after it fell 0.5 per cent in January.

Annual growth in prices slowed to 2 per cent, from 3.2 per cent in January and 10.5 per cent in the middle of 2017.