Property news round up 1 July 2018


JLL, Lendlease launch proptech accelerator in Singapore

GLOBAL real estate giants JLL and Lendlease are partnering to launch an accelerator in Singapore to kickstart innovation in real estate, an industry said to have been slow to tech advancements. But unless both companies commit to a substantial investment and a long-term plan to “transform legacy businesses”, the accelerator will yield limited benefits, observers said. Propell Asia – described as the first Singapore-based regional property technology (proptech) accelerator – opens for applications on Monday.

HDB closer to solar power target after awarding latest tender

SOLAR panels are set to be installed in blocks of public flats managed by the West Coast and Choa Chu Kang town councils, in a move to reduce Singapore’s carbon emissions and, in turn, the effects of climate change. Work will begin in the current third quarter, said the Housing & Development Board (HDB) on Sunday when it announced that the tender for the job had been won by a consortium made up of Sembcorp Solar Singapore and Japan’s Kurihara Kogyo. This is the third such contract to be awarded and it involves 848 HDB blocks and 27 government sites that include 22 educational institutions and the Choa Chu Kang Columbarium.

Also read: Recent Singapore en bloc deals

As housing prices soar, New Zealand tackles surge in homelessness

NEW Zealand is known to many outsiders as a beautiful, affluent country, the place where the “Lord of the Rings” movies were made. But for Joseph Takairangi and thousands of others, they know it better for the expensive housing that lies far out of their reach. On a recent cool night in a misty rain, Mr Takairangi and some of his friends were looking for somewhere to spend the night. They had decamped to a parking lot after being ejected from a stretch of takeaway food shops in Henderson, an Auckland suburb.

CWT chief buying Good Class Bungalow for S$36m

CWT’s group chief executive Loi Pok Yen is understood to have entered into a deal to buy a two-storey freehold bungalow along Coronation Road West for S$36 million. The price works out to S$1,416 per square foot, based on the land area of 25,429 sq ft. Located within the Oei Tiong Ham Park Good Class Bungalow (GCB) Area in District 10, the property is being sold by the wife of Tee Yih Jia’s executive chairman Sam Goi. She had paid S$28 million in 2013 for it. On the site is a two-storey villa with five bedrooms and a swimming pool. It is in liveable condition, but agents believe that the property, which is about 30 years old, is ripe for redevelopment.

ARA to fully acquire Cache’s Reit, property managers in deal with CWT

ARA Asset Management (ARA) has agreed to acquire all the shares that it does not already own in the Reit manager and property manager of Cache Logistics Trust (Cache) – the third time an industrial Reit manager may be changing hands in recent years. While this will end the sponsor-Reit relationship between global logistics player CWT and Cache, analysts believe the network of ARA in the region may far outweigh the benefits of having pipeline acquisition assets from CWT. CWT currently owns 40 per cent of the issued shares of the Reit manager, ARA-CWT Trust Management (Cache) Limited, and 60 per cent of the issued shares in the property manager, Cache Property Management Pte Ltd.

Also read: Increase in new private home sales and prices in May

PropNex to list at S$0.65 per share come July 2

PROPNEX Limited has successfully registered its prospectus to go public; and has also sought to clear the air over questions raised about some numbers in its prospectus. The company on Monday announced that it has registered its prospectus for a listing on the mainboard on July 2 at S$0.65 per share. The initial public offering (IPO) consists of 42.5 million shares, comprising 40.375 million placement shares and 2.125 million public offer shares. Also on Monday, executive chairman and chief executive Ismail Gafoor issued a separate statement in response to a story published in the Business Times and Straits Times on June 21.

Singapore among region’s top cross-border investors in commercial real estate

SINGAPORE was the third-highest source of commercial real-estate capital outflow in the Asia-Pacific last year, with a 35 per cent growth in cross-border purchases to US$19.9 billion. This is based on Knight Frank’s Active Capital: The 2018 Report, which lists the sources and destinations of cross-border investments in global commercial real estate. The figure includes exports to the United States (US$6.6 billion), Australia (US$3.3 billion), and the United Kingdom (US$2.8 billion), which place in the top 20 highest specific market-to-market outflows.

Condo in Bidadari to debut soon

PARK Colonial, a new condominium in the Bidadari enclave and next to Woodleigh MRT station, is set to be launched on July 14. Jointly developed by CEL Development, Heeton Holdings and KSH Holdings, the estate on a land area of 19,547 sq m will comprise six towers with 805 residential units. The one- to five-bedrooms units will be priced at an average of S$1,700 per sq ft; one-bedders will start at around S$780,000. The 99-year leasehold project, with a British colonial-inspired design, is scheduled to be completed in 2022.

Also read: Non landed private homes and HDB rents increase in May

China to protect a quarter of land from development by 2020

CHINA aims to keep a quarter of its land off-limits for development by 2020 and increase forest coverage to more than 23 per cent of its total landmass, the country’s cabinet said. At least 25 per cent of China’s land would be protected by the country’s new “ecological red line” scheme by the end of this decade, the State Council said on Sunday. China has published a slew of policy documents in recent months aimed at improving surveillance, strengthening law enforcement and raising industrial standards as it plans to extend its war on pollution until 2020.

Dalvey Court up for S$160m en bloc sale

DALVEY Court owners have put the condominium development near the Singapore Botanic Gardens up for collective sale with a reserve price of S$160 million, according to a press statement on Monday. The freehold, nine-storey building in District 10 comprises 32 apartment units on 4,103.1 square metres, or 44,165 square feet, of land off Bukit Timah Road. The site is zoned “residential” under the Urban Redevelopment Authority’s Master Plan 2014, and may be built up to 1.6 times the site area, also known as the plot ratio. There is a 12-storey height control on the site. The reserve price represents a land rate of about S$2,009 per square foot per plot ratio, based on a gross floor area of 7,400.69 sq m, or 79,660 sq ft. Marketing agent Cushman & Wakefield estimated that a potential developer may build up to 93 apartments based on an average unit size of 70 sq m. There is no development charge payable for the site, and no requirement for a traffic impact study.

Keppel looks to sell stake in Vietnamese developer

KEPPEL Land is looking to sell a 30 per cent stake in Vietnamese developer Quoc Loc Phat Joint Stock Company (QLP) for 702 billion Vietnamese dong (S$41.2 million), and to offload its remaining 15 per cent stake “at a later stage”. Keppel Corporation made the disclosure on Monday evening, saying that Keppel Land has signed a sale and purchase agreement with Pham Quang Hung, a shareholder of QLP, for the divestment. QLP is a Vietnam-incorporated real estate developer, primarily operating in Ho Chi Minh City, Vietnam. Keppel Land holds a 45 per cent interest in QLP through two subsidiaries. Keppel Corporation said that “(Keppel Land) regularly reviews its portfolio and the proposed divestment is in line with (Keppel Land)’s strategy to recycle assets to seek higher returns”.

Also read: APAC Realty limited stock review

SISV, SGX launch reporting guide on real estate valuation

A VALUATION reporting guide for listed companies, real estate investment trusts (Reits) and initial public offerings was launched on Monday by the Singapore Institute of Surveyors and Valuers (SISV). This is the result of a collaboration with the Singapore Exchange (SGX) to review valuation practices and the reporting carried out by real estate valuers that are engaged by listed issuers. “This guide is aimed at meeting investors’ need for clarity and completeness of information,” said Tan Boon Gin, CEO of Singapore Exchange Regulation. “We encourage listed companies to use this guide as quality disclosures on matters such as valuations are crucial to their investors.”

Easing of supply pressures a boon for hoteliers in 2018

HOTEL room supply entering the hospitality market is expected to ease this year, which will help bolster the industry and give certain hotel players a boost. After the boom in supply injection in recent years, new room supply is expected to slow down to a compound annual growth rate (CAGR) of 1.3 per cent from 2017-2020, according to data from CDL Hospitality Trusts (CDLHT), which incorporated data from Horwath and the Singapore Tourism Board (STB). In comparison, 2014-2017 saw a CAGR of 5.5 per cent. This year, the supply pipeline is only expected to clock 2.5 per cent growth, before easing further to 0.8 per cent and 0.6 per cent in 2019 and 2020 respectively. This, in tandem with rising visitor arrivals, appears to be helping revenue per available room (RevPAR).

Hwa Hong acquires 2 freehold commercial plots from CDL

HWA Hong Corporation has acquired two commercial freehold plots in Jalan Besar in Singapore from City Developments Limited (CDL) for S$13.8 million in total. The option to purchase was exercised by Hwa Hong’s indirect wholly owned subsidiary Global Trade Investment Management Pte Ltd (GTI) on Tuesday. The two sites have a combined land area of about 300.1 square metres (3,230 square feet) and are zoned “commercial” with a gross plot ratio of 3.0.

H2 industrial land supply to be close to H1 level

WANING interest for land among manufacturers is believed to have prompted the government to keep the supply of industrial land for sale in the second half of this year similar to that in the first half. Under the Confirmed List of the Industrial Government Land Sales (IGLS) Programme, six industrial sites will be launched in the second half of the year by government agency JTC. Another seven sites under the Reserve List will be made available for application, said the Ministry of Trade and Industry (MTI) on Tuesday.

China Development Bank tightens property redevelopment oversight

CHINA Development Bank (CDB) has halted funding for new shantytown redevelopment projects, and has transferred approval authority from its local branches back to the policy bank’s headquarters, a source at the bank told Reuters late on Monday. The source said new funding is being reined in due to concerns about risks associated with rising debt for local governments, the primary recipients of the loans used to fund shantytown redevelopment. Existing projects are operating normally, said the source who spoke on condition of anonymity.

Goodluck Garden en bloc sale goes to court

THE owners of Goodluck Garden condominium will soon head to court to settle the fate of its collective sale after the Strata Titles Board (STB) issued a stop order on Wednesday afternoon.

Objections by seven minority owners were not withdrawn following what Business Times understands was two rounds of mediation by STB, with the first taking place on June 1 and the second on June 19.

This means that the board will be unable to approve the en bloc application and the collective sale committee (CSC) will have 14 days to apply to the High Court to seek approval for the sale – BT understands it will do so, and a hearing of the application to the High Court could happen in early September this year.

Also read: AirBnb cancellations in Japan due to minpaku law

Govt keeps H2 GLS housing supply on par with H1

THE government is seen taking a balanced approach in ensuring adequate residential land supply in the second half of this year to meet homebuyers’ demand without exacerbating a potential supply glut, consultants say.

It has kept residential land supply in the second half of 2018 under the government land sales (GLS) programme on par with that in the first half of this year, again preferring to keep the majority (66 per cent) of total residential land supply under the Reserve List to be triggered for sale only by market forces.

Six sites on the Confirmed List for H2 2018 comprise four private residential sites, including one executive condominium (EC) plot, one “white” site and one hotel site. They can collectively yield 2,705 private residential units (including 695 executive condominium or EC units), 42,200 square metres of gross commercial space and 390 hotel rooms.

EpiCentre plans to move into regional property on RTO plan

CATALIST-LISTED EpiCentre Holdings could be going into the regional property business through a reverse takeover, it said on Wednesday.

It is also axing a rights-cum-warrant issue, turning instead to a fresh share placement, in a move that executive chairman and acting chief executive Kenneth Lim said is meant to snag strategic investors to support the new businesses.

The news follows loss-making EpiCentre’s planned exit from its core Apple reselling business here, which was announced on Tuesday evening.

CapitaLand acquires prime mixed-use site in Chongqing worth 5.7b yuan

CAPITALAND has acquired all the shares in a company that owns a 32-hectare prime mixed-use site in Chongqing, in a move that will boost its residential pipeline in China by more than 2,100 units.

The amount payable is 2.2 billion Chinese yuan (S$454.3 million), which includes the agreed value of the property at 5.7 billion yuan, the group said on Wednesday.

The land parcel comprises two greenfield sites that will yield 1,900 residential units and a shopping mall with a combined gross floor area (GFA), excluding car park, of 335,000 square metres when fully developed by 2022. It also includes brownfield sites with an inventory of 223 residential units and 100,000 sq m of office and retail space that are completed or soon-to-be completed.

Also read: Comparison between Fraser REITs

Oxley reaps revenue of S$249m from The Verandah Residences

ALL 170 units of Oxley Holdings Limited’s The Verandah Residences have been sold within three months of its official launch on April 7, the property developer announced on Wednesday.

Sales from the residential project, the first of four such projects Oxley has launched this year, yielded a total revenue of S$248.8 million. Oxley purchased the 89,620-square foot freehold site in July 2017 for an average price per square foot (psf) of S$964 per plot ratio, and sold the units at S$1,795 psf.

It has 100 per cent stake in the project, which is located at the former 231 Pasir Panjang Road and comprises 167 apartments in four blocks of five-storey buildings, and three strata houses. The project is situated close to MRT stations, major shopping malls, a wide range of food and beverage choices and recreational facilities like The Southern Ridges and Kent Ridge Park.

Sunway Property builds presence in Singapore

MALAYSIAN conglomerate company Sunway Group’s property division, Sunway Property, is building up its presence in Singapore through new projects and land bank acquisitions.

This includes a S$530 million en bloc acquisition of Brookvale Park condominium, located on prime 999-year leasehold land in Clementi.

The project will be undertaken by a 30 per cent Sunway owned joint venture with Hoi Hup Realty and S. C. Wong.

NYC moves to collect data on hosts to curb illegal Airbnbs

IN an unusually crowded City Council hearing on Tuesday, lawmakers took on Airbnb as they discussed a bill aimed at cracking down on illegal online home-sharing listings that have turned residential apartments into year-round hotels for tourists.

The bill, which is almost certainly to pass with a veto-proof majority, would cap one of the most fractious battles in New York City to regulate companies of the sharing economy. Council members are expected to vote on it later this summer.

If passed, the bill would require online rental services, like Airbnb, to disclose the addresses of its listings and the identities of its hosts to the city’s Office of Special Enforcement on a monthly basis. Hosts would also have to list whether the dwelling was their primary residence and whether the entire unit or a portion was available for short-term rentals. Companies that fail to share the data would be fined up to US$25,000 for each listing that they did not disclose.

NZ plans to draw in more overseas workers to build homes

NEW ZEALAND’S government said on Wednesday that it will propose new steps, such as fast-tracking visa procedures, to draw in more overseas workers to build houses, in its latest attempt to address labour shortages blamed in part for a chronic housing crunch.

Dealing with the housing shortfall has been touted as a priority for the Labour-led government, which took the helm in October after campaigning to build tens of thousands of homes in a programme dubbed KiwiBuild.

The government will include KiwiBuild workers on a skills shortages list, which speeds up visa approvals for plumbers, electricians and other overseas workers when companies cannot fill vacancies locally, Immigration Minister Iain Lees-Galloway said in a statement.

Also read: Tre Ver condo in Potong Pasir by UOL and UIC

Ageing Hong Kong waterfront gets a timely face-lift

WATERFRONT developments are recognised worldwide. San Francisco has Fisherman’s Wharf. Sydney has the Sydney Harbour. And by next year, Hong Kong will have Victoria Dockside.

New World Development is transforming a section of the ageing Hong Kong waterfront into a modern art and design district, combining retail, residential and commercial interests.

Perched on the tip of the Kowloon Peninsula overlooking Victoria Harbour, the US$2.6 billion, three million-square-foot endeavour boasts a shopping complex, a redesigned promenade and a skyscraper with Class A offices and a hotel. It will bring art to the masses, its developer said, and encourage hurried residents to slow down and interact with nature – two new ideas in Hong Kong urban design.

Canberra Link EC site likely to be hotly contested

THE scarcity of land parcels released to build executive condominiums (ECs) could turn developers’ attention to plots in Canberra Link and Anchorvale Crescent under the government land sales (GLS) programme, consultants say.

The Canberra Link site was launched on Thursday for sale under the Confirmed List of the H1 2018 GLS programme, while the site in Anchorvale Crescent was released for application under the Reserve List. Sites on the Reserve List will be put up for tender only when a developer has indicated a minimum price that is accepted by the government.

On Thursday, the government also launched a private residential site at Jalan Jurong Kechil for sale on the Confirmed List and released another site at Clementi Avenue 1 under the Reserve List. Together, these four sites can yield about 1,920 residential units.

Is ESR building its own ‘mini pan-Asian GLP’?

ARA Asset Management’s (ARA) acquisition of CWT’s shareholdings in the Reit and property managers of Cache Logistics Trust this week comes as an opportune time for both buyer and seller.

For the seller CWT, this raises cash that would be welcomed by its new parent the debt-ridden Chinese conglomerate HNA Group.

HNA has undertaken a series of asset divestments and restructuring in order to repay its borrowings.

While it was not announced how much CWT would receive from the sale of the managers, assuming similar valuation multiples as the recent transaction of Viva Industrial Trust’s (VIT) Reit manager, JPMorgan analyst Brandon Lee estimated the price tag for Cache’s Reit manager at S$20-25 million. Although, frankly, this does not go very far in paring HNA’s billions of dollars in debt.

Also read: Emerging trends in real estate by PWC and ULI

Singapore ranks 12th in global real estate transparency index

SINGAPORE ranks 12th in JLL’s Global Real Estate Transparency Index (GRETI) 2018, which scores countries based on their investment performance, market fundamentals, governance of listed vehicles, regulatory and legal frameworks, transaction process and environmental sustainability.

Along with Hong Kong and Japan, the three mature Asia-Pacific economies are on the brink of joining the “highly transparent” tier.

According to JLL, they have significant opportunities to advance real estate transparency through the use of proptech (property technology).

Stirling Residences open for preview this Saturday

MEGA residential project Stirling Residences will be open for preview this Saturday by joint venture developers Logan Property from Hong Kong and Nanshan Group of China.

Secured with a record S$1 billion bid last May, the 1,259-unit development is located in District 3 near Queenstown MRT and spans almost 230,000 square feet.

The 99-year leasehold development consists of one to four-bedroom units, ranging in size from 441 sq ft for a one-bedroom unit to 1,346 sq ft for a four-bedroom apartment. Six four-bedroom penthouses ranging from 1,959 to 1,970 sq ft are also available.

Auction sales in Q2 down 33%

THE auction market in the second quarter has seen a total sales value of S$19.64 million, according to an Edmund Tie & Company analysis released on Wednesday. This was a 33 per cent decrease from the S$29.48 million transacted in Q2 2017.

The company noted that the figures do not include private treaty sales and units transacted before or after the auction.

Edmund Tie & Company said Q2 2017’s sales value was higher because that quarter saw the auctioning of several big-ticket items.

Koh Bros’ maiden Korea project 96% sold

KOH Brothers Group’s first project in South Korea has been 96 per cent sold within three months of its launch, it said in a Singapore Exchange (SGX) filing on Thursday.

All the 99 apartment and 53 retail units are sold out, and 14 out of the 194 “Office-tel” SoHo units are left on the market.

Located in the Gangnam district in Seoul, the freehold Nonhyeon I’PARK is near the core business districts of COEX and Teheran-ro.

Additionally, 75 per cent of all the units in the mixed-use development were sold in the first seven days of its launch in March 2018, reflecting what the company called its “strategic and timely expansion into South Korean real estate market”.

Also read: CCT acquires Frankfurt office building for 343m euro

CCT sells Twenty Anson for S$516m in biggest pure-office deal this year

CAPITALAND Commercial Trust (CCT) is selling Twenty Anson, a 20-storey office building in Tanjong Pagar, to an undisclosed buyer for S$516 million, in the biggest pure-office, real-estate deal this year.

The announcement by the trust’s manager on Friday confirms a report by The Business Times last month that such a divestment was in the works as part of CCT’s ongoing asset portfolio reconstitution.

After several bids were weighed, the development fetched a price that was 19.2 per cent above the valuation of S$433.0 million carried out last December.

The price is also 20 per cent higher than the S$430.0 million CCT paid for it in 2012.

UOL Group CEO to retire end-Jan, 2019; CapitaLand group CEO to relinquish some roles

UOL’s group chief executive Gwee Lian Kheng will retire on Jan 31 next year, after 45 years of service.

Mr Gwee, 77, will remain as director on the board.

He joined the company as group financial controller and company secretary in 1973; in 1987, he became the executive director and general manager of the company.

Since then, the company has gone from total assets of about S$749 million to nearly S$20 billion as at March 31 this year, UOL Group noted in a statement.

PropNex’s IPO public tranche 24.6 times subscribed

THE INITIAL public offering (IPO) of PropNex closed with its public offer tranche 24.6 times subscribed.

The homegrown real estate services group, which will make its trading debut on July 2 at 9 am, said that the 2.125 million shares that it offered for public subscription at S$0.65 apiece drew 1,796 valid applications for roughly 52.24 million shares. The public offer closed at noon on June 28.

Its 40.375 million placement shares at the same price were fully placed out.

Chinese firm eyes ‘strata-sales’, high debt for flipping Hong Kong towers

A CHINESE company plans to emulate a risky property strategy in Hong Kong that was used last year to buy a skyscraper from the tycoon Li Ka-shing, taking on a high degree of debt and selling off individual floors before the transaction closes.

Henglilong Investments Ltd is hoping to borrow 80 per cent of the US$2 billion cost of a deal to buy two office towers, and sell certain floors of the buildings separately, said three sources with knowledge of the matter.

The deal would be similar to the one used by a consortium that bought The Center skyscraper from Mr Li last year for US$5.2 billion.

JLL aims to conquer Canadian real estate with a boost from tech

JONES Lang LaSalle Inc’s Canada division is out to become the top commercial real estate services company in the nation, tapping tech to propel growth.

“Are we going to go to blockchain leases? We’re doing the research there,” Brett Miller, JLL Canada’s chief executive officer, said in an interview, referring to a digitised, distributed ledger technology. “The whole process that used to be done manually, of identifying clients’ needs, coming up with a fit plan, surveying the market, touring the market, making offers – well, that’s got streamlined with all sorts of technology.”

JLL has developed a tool called Blackbird, “a Google Earth on turbo”, as Mr Miller put it, which displays the company’s databases as a 3-D map, and launched an international venture fund to invest up to US$100 million in companies that use technology to improve protocols ranging from development and investing to leasing and management.

Residential sector dominates property investment sales in Q2

THE residential sector once again dominated property investment sales in the second quarter of 2018 with S$7.1 billion of sales. This accounted for 65 per cent of the total investment volume. The residential collective sales market is now keeping at a more sustainable pace.

During Q2, 15 sites worth a total of S$3.8 billion found buyers. This compares with Q1 where 16 sites with a total price tag of S$5.8 billion were sold. A sizeable number of the projects that were launched in the second quarter were in the prime areas, and this has presented developers with a good number of quality projects to cherry pick.

The preliminary real estate investment volume amounted to S$10.9 billion in Q2, a 9 per cent quarter-on-quarter increase from the tally of S$10 billion in Q1.

REITs Asia Pacific 2018 conference

To get up to speed on how Asia Pacific markets are performing and to hear from experts in the field, the 5th edition of the REITs Asia Pacific 2018 conference is a perfect place to get started.

Register for the conference here with the code “PISREITS” to secure your seat now!

Organized specially for institutions such as banks, developers, funds, REITs, lawyers and government agencies, the conference will be held at Sheraton Towers Singapore on 2 Aug 2018.