Property news round up 7 Jan 2018

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Singapore

Big property deals surge to 10-year high

Sales of big-ticket property transactions of S$10 million and above in 2017 surged to their highest level in a decade.

This, however, was short of the record achieved in 2007, show latest figures from Savills Singapore and CBRE released separately to The Business Times.


According to Savills Singapore’s preliminary tally as at Dec 27, investment sales of property reached S$35.64 billion, up 57.3 per cent from the S$22.66 billion in 2016.

This was the best since the record S$41.1 billion during the 2007 property boom.

Based on JLL’s figures, the surge in 2017 was supported by a strong revival in collective sales to S$8.6 billion from just over S$1 billion in 2016.

Better year expected for office and hospitality Reits

With rate hike and sector consolidation fears petering out over 2017, real estate investment trusts (Reits) made a startling rebound to outdo the benchmark Straits Times Index with a 20.6 per cent rise in unit prices last year.

UOB Kay Hian analyst Vikrant Pandey expects to see improvements in distributions per unit (DPU) of 1-6 per cent.

OCBC Investment Research analyst Andy Wong projects a 2.8 per cent growth in DPU, while DBS senior vice-president for group equity research Derek Tan has forecast a 2 per cent DPU growth for next year.

Among the sub-sectors analysts are most bullish about are office and hospitality.

Both are similar insofar as the bulk of their supply expansion had already occurred in 2017, so rentals and room rates are expected to improve respectively in 2018, with the threat of competition from new supply now behind them.

CCR leads charge in condo price surge in Q4

The Urban Redevelopment Authority’s (URA’s) Q4 2017 flash estimates data showed that prices of non-landed private homes in the Core Central Region (CCR) climbed 1.6 per cent in Q4 over the preceding quarter.

This was a steeper gain than the quarter-on-quarter price increases of 0.2 per cent for the city fringe or Rest of Central Region (RCR) and 0.6 per cent in the suburbs or Outside Central Region (OCR).

Colliers International’s analysis of caveats data shows that projects that contributed to the price growth in the CCR during the fourth quarter included mainly ongoing developer launches such as Martin Modern, Gramercy Park and Sophia Hills – which saw median price gains of 8.3 per cent, 4.0 per cent and 1.8 per cent quarter on quarter to S$2,358 per square foot, S$2,912 psf and S$2,038 psf respectively.


Singapore-listed US Reits mitigate impact of US tax rule changes

In a bid to preserve tax transparency, managers of the two Singapore-listed US real estate investment trusts (Reits) have taken certain steps to mitigate the impact of recently announced changes to US tax rules.

Keppel-KBS US Reit and Manulife US Reit, both having similar trust structures that previously enabled them to enjoy tax transparency, said in separate announcements on Tuesday that they have undertaken major steps to address this.

Firstly, they have exercised the redemption of preferred shares within their respective sub-US Reits that own the US properties. Consequently, these sub-US Reits will qualify for exemption from the cap on deductibility of interest expense.

Secondly, the Reit managers have also each commenced a revamp of their trust structures in response to a rule that has rendered their respective Singapore subsidiaries, which lend to their respective parent US Reit, taxable.

Wing Tai names two new board directors

Wing Tai announced on Tuesday that it has appointed Guy Daniel Harvey-Samuel and Zulkurnain Awang as non-executive directors to its board.

Mr Harvey-Samuel will also serve on Wing Tai’s remuneration and nominating committees.

The property company also bid farewell and paid tribute to James Lee Kim Wah, who retired from its board on Tuesday, having turned 80 years of age.

HDB sees resale prices slipping 1.5% for 2017

HDB resale prices edged down 0.2 per cent in the final quarter of last year, making for a full-year price drop of 1.5 per cent, according to flash estimates from the Housing & Development Board (HDB) on Tuesday.

This means the decline in HDB resale prices last year was steeper than the 0.2 per cent dip in 2016.

HDB also said on Tuesday that it will launch its first Build-To-Order (BTO) exercise for 2018 in February with an offering of about 3,600 flats in Choa Chu Kang, Geylang, Tampines and Woodlands.

As announced last month, HDB said the total BTO flat supply for 2018 will be about 17,000 units, keeping the supply of flats on a par with last year’s.

On the (other) waterfront

Jersey City’s ‘residential boom’ holds promise for Manulife US Reit.

Sitting across the water from New York City’s pulsing financial centre, Jersey City’s waterfront district has been known for years as Wall Street West – the quieter sister to Midtown Manhattan with far more affordable rents for back offices and the like.

Today, landlords along Jersey City’s Hudson Waterfront are rising with the tide, brokers say. Hudson Waterfront refers to the part of Jersey City that can be seen if you look across the Hudson River from Manhattan.


“Jersey City is casting off its stigma as a cheap back-office location and undergoing the biggest residential boom in its history. It’s starting to get this cool factor,” Mr Robert Lowe, vice-chairman of brokerage at Cushman & Wakefield (C&W) told the media and analysts during a recent visit organised by Manulife US Reit.

Perennial-led consortium rolls out US$1.2b JV to expand in China

Singapore-listed Perennial Real Estate Holdings is making major inroads into China via a US$1.2 billion joint venture to acquire and develop healthcare integrated mixed-use developments connected to China’s high-speed railway (HSR) stations.

In the first closing of funds, Perennial HC Holdings, the JV vehicle, secured US$500 million, the integrated real estate and healthcare group said on Wednesday, adding that the move is in line with its expansion strategy.

Reits, business trusts, F&B to drive IPOs on SGX in 2018

In a report entitled Equity Capital Markets Watch – Singapore: 2017 Year in Review, PwC said that Reits and BTs would likely continue to be the niche for the SGX. “The year 2017 was a brilliant one for IPOs (initial public offerings) in Singapore.

With the market upturn, we see that real estate investment trusts and business trusts continue to dominate the market making up 88 per cent of total funds raised,” said Tham Tuck Seng, PwC Singapore’s capital markets leader.

City Towers, Sixth Avenue Centre and Kovan Apts join en bloc wagon

THE en bloc fervour shows no sign of abating. Residential and commercial owners continue to be upbeat about the prospects of collective sales as Wednesday saw the announcement of three more projects being marketed en bloc.

The first is freehold development City Towers at 317-325Q Bukit Timah Road, which will be launched for collective sale for S$355 million by tender on Thursday.

The owners’ reserve price of S$355 million includes a development charge (DC) of about S$3.5 million to intensify land use.

It works out to a land rate of S$1,633 per square foot per plot ratio (psf ppr) – lower than the S$1,840 psf ppr achieved for the collective sale of nearby Crystal Tower in December.

Tang Wei Leng, managing director at Colliers International, which is marketing the project, believes that the high-end private residential market is going to recover further, after prices fell by about 20 per cent since June 2013.

“City Towers presents a good opportunity for developers to add a plum District 10 site to their portfolio in preparation for the potential pick-up in prime home prices in the coming years,” she said.


The freehold development – which was completed in the 1960s – comprises 77 units of apartments and maisonettes, a penthouse unit and a shop unit.

Depending on the size of their units, each owner stands to receive S$2.45 million to S$10.17 million from the sale of the development, which she said is more than double the open market value of the individual units.

The sales committee had managed to garner more than 80 per cent approval from owners to launch the tender within just three months.

This is the owners’ fourth attempt at a collective sale.

The upscale Bukit Timah area has seen several successful collective sales recently, including Royalville and Crystal Tower which were both sold to Allgreen Properties for S$477.9 million and S$180.7 million respectively. Off Dunearn Road, Mayfair Gardens was sold to Oxley Holdings for S$311 million.

City Towers sits on a land plot that spans 9,711.3 sq m with a 65 m frontage to Bukit Timah Road.

It is zoned “residential” and has a gross plot ratio of 2.1 under the 2014 Master Plan.

Subject to relevant approvals, the site can be redeveloped to a 24-storey apartment block offering about 190 new homes of 1,098 sq ft each – on the proposed total gross floor area (GFA) of 20,394 sq m.

The site is not subject to the pre-application feasibility study, which requires developers to assess the traffic impact of increasing the number of dwelling units on the area, and propose car-lite initiatives to the to Land Transport Authority for approval.

The second site being marketed is Sixth Avenue Centre, another freehold and mixed-use development which consists of seven shops and 18 apartments.

The development occupies a land area of 1,394.4 sq m.

Flanking a prominent corner with double street frontage along the main Bukit Timah Road and Sixth Avenue respectively, it is zoned for commercial and residential use with a gross plot ratio of 3.0 under the 2014 Master Plan.

The site may be developed up to five storeys with an allowable gross floor area of 4,183.2 sq m.

The building was completed in the 1980s.

Subject to approvals by the authorities, the site can potentially accommodate a development with retail component and 35 apartments averaging 753 sq ft each.

Sixth Avenue Centre has an indicative guide price of S$90.5 million, or a land rate of S$2,022 psf ppr (based on the allowable GFA of 4,183.2 sq m), after factoring in a DC of about S$526,000.

The development is located in an established residential enclave surrounded by condominiums as well as landed homes and good class bungalows. Guthrie House, a commercial building, is situated directly opposite.

Its tender closes at 3 pm on Jan 31.

It is marketed by Savills Singapore, which is also marketing Kovan Apartments, a four-storey freehold residential redevelopment site along Kovan Road.

This latter site comprises 16 units and was completed around 1995.

With a site area of 21,193 sq ft and Masterplan (2014) plot ratio of 1.4, the site can be redeveloped into a boutique development of gross floor area about 29,670 sq ft with 27 units averaging 1,075 sq ft.

It is surrounded mostly by low-rise private residences. The asking price is S$33 million, excluding an estimated DC of S$2.57 million as the site is not fully built to its allowable plot ratio. The tender closes on Feb 5 at 3pm.

GIC joint venture buys US student housing portfolio for US$1.1b

The portfolio consists of 24 assets located in 20 university campus markets across the US, comprising 13,666 beds.


The transaction includes the acquisition of 22 properties from affiliates of Harrison Street Real Estate Capital and the recapitalisation of two communities previously owned by Scion-affiliated private syndications.

Perennial Real Estate and Pontiac Land reach settlement on Capitol Singapore

The pact inked on Jan 3 provides a mechanism for either Perennial or Pontiac Land to purchase all of the others’ shares in the iconic heritage property.

Real estate veteran named ARA assistant group CEO

ARA Asset Management has appointed Chia Nam Toon, who has over 10 years of real estate experience, as assistant group chief executive officer.

He has also taken on a dual role as CEO, Reits & Business Development. His appointment with ARA Asset Management took effect on Jan 2.

Reporting to group CEO John Lim, Mr Chia’s remit includes driving growth opportunities in the existing real estate investment trust (Reits) and the development of new Reits across Asia, the United States and Europe, ARA said.

Low Keng Huat to launch 2 freehold landed projects

Singapore-listed property developer Low Keng Huat will launch two freehold landed projects in the landed residence enclave of Lorong Kismis and Eng Kong Park off Upper Bukit Timah Road this Friday.

One is Kismis Residences, a 31-unit freehold landed development; the other is the adjacent seven-unit freehold strata landed development, [email protected]

For Kismis Residences, the intermediate terrace houses are priced between S$4.155 million and S$4.464 million, while the corner terrace houses are priced from S$5.003 million to S$5.282 million.

Prices start from S$750 per square foot.

For [email protected], the approximate strata areas range from 4,359 to 5,597 square feet. Units are priced from S$3.521 million to S$4.255 million.

Sherman Kwek takes on CEO role at CDL

Sherman Kwek, the elder son of City Developments Ltd’s (CDL) executive chairman Kwek Leng Beng, has assumed the mantle at the Singapore-listed property giant as the chief executive officer.

The younger Mr Kwek, who is 41 years old, took on his current role on Jan 1.

He was earlier appointed as CEO-designate on Aug 11 last year, a day after previous CEO Grant Kelley tendered his resignation.

Mr Kelley has moved to Australia and taken on a new role as CEO at ASX-listed Vicinity Centres, a real estate investment trust company based in Melbourne.

Ascott lands contract to manage nine more properties in China

The Ascott has sealed contracts to manage nine properties with over 2,000 units in China, putting the service residence business unit of CapitaLand on track to achieve its global target portfolio of 80,000 units in 2018, two years ahead of schedule.

With these new properties, Ascott said on Thursday that it has also made inroads into new cities including Harbin and Zhuhai, and widened its presence in Chongqing, Foshan, Shanghai and Wuxi.


This deal also marked a record year for Ascott in China as it added over 5,600 units across 28 properties in 2017, double the over 2,700 units across 15 properties added in 2016.

The service residence owner-operators has exceeded its target of 20,000 units for China in 2017, ahead of its planned schedule of 2020.

More property agents in 2017 due to positive market outlook

According to The Council for Estate Agencies (CEA), it issued 66 new property agency licences and 1,344 new property agent registrations in 2017. These registrations bring the total number of agents to 28,571 as at Jan 1, 2018, a 0.6 per cent increase from 28,397 on Jan 1, 2017.

HDB resale prices up 0.1% in Dec: SRX

Resale prices of Housing and Development Board (HDB) flats edged up 0.1 per cent last month, reversing the 0.1 per cent dip recorded in November, according to flash estimates from SRX Property on Thursday.

There was also a near 20 per cent drop in flats changing hands: 1,585 resale units were sold in December, 19.9 per cent fewer than in November.

The number of transactions, while in line with the property market’s quieter year-end, was still 14 per cent higher compared to the 1,391 units resold in December 2016.

Value of deals in GCB areas rises to five-year high

CBRE’s analysis showed there were 40 transactions last year, up from 37 in 2016, with the total value of deals up 8.4 per cent to S$855.14 million from S$788.53 million in 2016. Sentiment in the sector is set to improve this year.

“Pent-up demand seems to be getting stronger, and the gap between buyers and sellers’ expectations is beginning to narrow,” said Douglas Wong, head, luxury homes at CBRE Realty Associates, who specialises in GCBs.

Realstar Premier Group founder William Wong said: “There is a lot of demand for GCBs from prospective buyers; the only challenge is there are not many owners prepared to put their homes on the market.”

CapitaLand rejigs China focus with mall disposals

Capitaland is divesting its stake in 20 China retail malls for 8.37 billion yuan (S$1.71 billion), in what analysts see as a timely move as the group reconstitutes its portfolio and rejigs its China focus.

The buyers of the assets are China Vanke, Vanke’s subsidiary SCPG, and fund affiliate Triwater.

SPH Reit’s Q1 DPU unchanged at 1.34 cents

SPH Reit posted distribution per unit (DPU) of 1.34 Singapore cents for the fiscal first quarter ended Nov 30, unchanged from a year ago, due to an enlarged unit base.


Its gross revenue for the first quarter grew 1.7 per cent to S$53.5 million on the back of higher rental income. Net property income rose 1.9 per cent to S$42.2 million.

BreadTalk says latest JV with Perennial ‘not a business diversification’

Breadtalk Group has clarified that its proposed investment alongside Perennial Real Estate in China does not represent a diversification of its business.

On Jan 3, BreadTalk said it would co-invest with a consortium of investors in a joint venture to develop healthcare integrated mixed-use developments connected to China’s high-speed railway stations.

The initial committed capital for the joint venture amounts to S$672.04 million and BreadTalk is investing S$33.6 million for a 5 per cent stake.

Nordic Group to buy Tuas property

Precision engineering and systems integration solutions provider Nordic Group has signed an option to purchase an industrial property in Tuas for S$6.2 million from Microdyn-Nadir Singapore Pte Ltd.

The property occupies an area of 5,677.90 sq m, and comprises all buildings and plant and equipment on the plot of land in Tuas Avenue, Nordic Group said on Friday.

Overseas

Anbang unit buys Seoul Tower from Angelo, Gordon for US$225m

An investment fund backed by Anbang Insurance’s Korean subsidiary has purchased the Metro Tower in Seoul from real estate fund manager Angelo, Gordon and Company and local partner Vestas Investment Management, according to accounts in the Korean media.

The fund invested by Tongyang Life Insurance and managed by South Korea’s ANDA Asset Management Co, is buying the 39,908 square metre commercial property near Seoul Station in the South Korean capital for 240 billion won ($225 million) after two different sets of investors backed out of deals last year.

PAG, Hanison sell Hong Kong workshop to Tang Shing-Bor for HK$1.04b

On Thursday, one of the city’s most prolific investors, “Shop King” Tang Shing-bor bought the 29-storey, Success Centre, in the New Territories from a company jointly owned by Payson Cha’s Hanison Construction Holdings and a Cayman-registered company controlled by Hong Kong-based private equity firm PAG for HK$1.04 billion ($132 million), according to an announcement to the Hong Kong stock exchange dated December, 27th.


The transaction occurred less than one year after the joint venture had purchased the 240,485 square foot industrial building at 26 to 38 Ta Chuen Ping Street in Kwai Chung for HK$800 million ($102 million), representing a $30 million profit for the property’s most recent owners in return for holding the asset since February.

Australia home prices slip in December as Sydney slows

Home prices across Australia’s major cities fell in December 2017 as the once red-hot Sydney market continued to cool in the face of tighter rules on investment lending, a relief to regulators but a potential drag on consumer spending power.

Property consultant CoreLogic said its index of home prices for the combined capital cities dipped 0.4 per cent in December from November.

Annual growth in prices slowed to 4.3 per cent, from 5.2 per cent in November and 10.5 per cent in the middle of 2017.

UK’s biggest house-price jumps are outside London

An English spa town and two coastal areas saw the biggest house-price increases in the UK last year, outstripping gains in London’s hotspots.

Cheltenham in southwest England saw a 13 per cent jump in prices in 2017, almost five times the national increase of 2.7 per cent, Bank of Scotland plc’s Halifax division said in a report released on Tuesday.

The average house in the town, famous for its annual horse-racing festival, rose to £313,150 (S$351,427).

Bournemouth and Brighton, both on England’s south coast, saw the next highest gains, with prices rising more than 11 per cent in each.

Weiye in deal to pick up stake in property developer

Weiye Holdings has entered into an agreement through a wholly owned subsidiary to pick up 40 per cent in equity in a property developer, Huzhou Ganghong Zhiye (HGZY), for 8 million yuan (S$1.64 million).


The memorandum of understanding that was signed between the subsidiary, Hongji Weiye (Hainan) Non Movable Property Management Group, and HGZY’s shareholder, Jiangshu Gangda Zhiye, concerns the joint development of land-use rights and co-development of about 57,734 square metres of residential land.

China boosts investment in Sri Lankan mega-project

China will invest US$1 billion in the construction of three 60-storey buildings at a mega-project near Sri Lanka’s main port as Beijing aims to boost its influence in the Indian Ocean.

The deal follows an earlier Chinese investment of US$1.4 billion to carry out reclamation work for the wider Colombo International Financial City development, strategically located next to Sri Lanka’s harbour, the only deep-sea container port in the region.

The countries hope the project, initiated by former Sri Lankan president Mahinda Rajapakse, will create a financial centre in the Indian Ocean comparable with those in Singapore and Europe, drawing billions in foreign investment and thousands of jobs.

Farewell to an architect who re-envisioned the modern hotel

John Portman Jr, an architect whose hotel, shopping and office complexes tower over the major cities of the world, and whose cavernous atriums, replete with waterfalls, fountains, ivy and spiral staircases, redefined the look of the modern hotel, died in Atlanta on Dec 29 at the age of 93.

Mr Portman was perhaps most identified with Atlanta, where his architecture firm, John Portman & Associates, was headquartered, and where he burst to the fore in 1967 with the 22-storey Hyatt Regency, which popularised what would become his signature atrium concept.

Manhattan home resales drop as buyers waver on tax reform

Home resales in Manhattan fell in the final three months of 2017 as buyers wavered ahead of the expected tax overhaul and stood firm in their refusal to overpay.

Sales of previously owned condos and co-ops dropped 11 per cent from a year earlier to 2,127, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate said in a report released on Wednesday.

That was the lowest for a fourth quarter since 2011. Buyers who did commit to a purchase held out for the best deal.


More than 88 per cent of homes that changed hands in the quarter did so at or below the asking price, the firms said.

Allianz plans to double Asian property investments over 3 years

Allianz SE’s property unit plans to double investments in Asia over three years as the German firm is drawing in more money from its insurance operations in the region.

Property investments may swell to 3.75 billion euros (S$6 billion) by the end of 2020 from about 1.8 billion euros, according to Rushabh Desai, Asia-Pacific chief executive officer of Allianz Real Estate.

The “very fast” growth of the Asian insurance operations means the firm is accumulating money that can be channelled back into property investments in the region, Mr Desai said in an interview in Singapore.

Park or playground? New York development hinges on definition

Whether an East Harlem ballpark will give way to what could be the tallest building between Midtown Manhattan and Boston may hinge upon the definition of a park versus a playground.

The latest battle between New York’s preservationists and developers is being waged over a 1.5 acre (0.6 ha) parcel of jungle gym and soccer and baseball fields, known as the Marx Brothers Playground.

Ivanka Trump and Jared Kushner hunting for Washington home

It seems Ivanka Trump and Jared Kushner are looking to put down roots in Washington as the couple has recently been touring homes for sale, people familiar with the search say.

London house market worst in UK with price drop last year

Nationwide Building Society said values in the capital fell 0.5 per cent – the first full-year decline since the 2009 recession – lagging behind a 2.6 per cent increase nationally. It’s the first time since 2004 that the city has ended the year as the slowest-growing region.

Mortgage rates stumble heading into the new year

A week after soaring to their highest levels in months, mortgage rates in the US retreated to where they had been hovering for the past several weeks.


According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average fell to 3.95 per cent with an average 0.5 point. (Points are fees paid to a lender equal to one per cent of the loan amount.) It was 3.99 per cent a week ago and 4.20 per cent a year ago.

London luxury home at ‘unbelievable’ discount

An investor who had agreed to purchase an apartment at the ritzy One Blackfriars project on the banks of the River Thames is offering the two-bedroom home on the 20th floor for 1.8 million pounds (S$3.24 million), more than 22 per cent less than what he had paid in 2013.

The seller, who’s from Asia, wants to offload the property before it’s completed, according to Christian Barr, new homes manager at MyLondonHome, who’s brokering the sale.

Hong Kong home prices unreasonable, unsustainable: SC Capital

Hong Kong’s home prices are at unreasonable levels that cannot be sustained, according to SC Capital Partners, a US$2.6 billion real estate private equity firm.

Despite cooling measures such as stamp duties, investors have persisted with purchases that “violate” investing fundamentals, Suchad Chiaranussati, the founder of the Singapore-based SC, said in an interview.

Li Ka-shing predicts strong demand

THE richest man in Hong Kong has signalled he sees no end in sight for the demand in property that’s been driving up prices in the world’s most expensive real estate market.

“Demand remains very strong,” CK Hutchison Holdings’ billionaire chairman Li Ka-shing said to reporters on Thursday.

“I’m still building hotels and have bought shopping malls, getting rental income for the long term.”