Property news round up 13 May 2018

Amber 45 photos (7)

5 top office Reits deliver minus 3.2% return in 2018

THE five largest office real estate investment trusts (Reits) on the local bourse with assets in Singapore have brought home an average negative total return of 3.2 per cent year-to-date as of May 3.

This brings their one-year and three-year total returns to 14.3 per cent and 21.8 per cent respectively. They maintain a 5.6 per cent average distribution yield.

The four that have reported their results for the first three months of 2018 averaged a distribution per unit (DPU) of 2.09 Singapore cents, down an average 4.5 per cent from the year-ago period.

Straits Real Estate eyes adaptive China retail

STRAITS Real Estate (SRE), a subsidiary of Straits Trading Company (STC), is exploring more investments in China’s retail scene, seemingly undeterred by the explosive growth of e-commerce there.

This is because it finds that offline sales, including sales at shopping centres, have continued to expand despite the online competition, and Chinese retailers have in fact adapted quickly to changing consumer needs by reinventing themselves with new offerings.

In a recent interview with The Business Times, Desmond Tang, chief executive officer of SRE, says: “Obviously there’s been a lot of talk and concern about e-commerce, how retail is being beaten up.

If I’m on this and I look around all the markets that we understand, including some European and Japanese markets, I’d think the Chinese retailers have been the most adaptive to the whole new world of e-commerce.”

Also read: SPH to acquire Rail Mall for S$63.2m

CSC Land sells 85% of Twin Vew units on launch weekend

CSC LAND Group saw a “strong response” at the weekend launch of Twin Vew in West Coast Vale, the Chinese developer’s head honcho has said.

Buyers snapped up 442 of the condominium’s 520 apartments – including four of its six penthouses – for a take-up rate of 85 per cent.

They coughed up an average sales price of S$1,399 per sq ft (psf) for the 99-year leasehold development, which is expected to be ready by the fourth quarter of 2021.

UE Q1 net profit up 3% to S$9m

UNITED Engineers (UE) has posted a net profit of S$9 million for the first quarter, up 3 per cent from a restated net profit of S$8.72 million in the same period last year as operating losses from its property development division narrowed while operating profit from its engineering and distribution business tripled.

Revenue in the three months ended March 31 was S$105.25 million, down 1 per cent from a restated S$106.11 million in the same period last year after retrospective adjustments arising from the new SFRS financial reporting framework.

Revenue from property rental and hospitality fell 5 per cent from a year earlier to S$31.3 million.

Operating profit before interest for the division also fell 5 per cent to S$16.4 million on lower revenue and profit contribution from UE BizHub West.

UE BizHub West had initially been flagged for possible redevelopment, but UE said in April that it may be better to continue operations for now.

Keppel DC Reit to raise S$303m from private placement to acquire Jurong data centre

KEPPEL DC Reit is seeking to raise some S$303.1 million in a private placement, with the majority of proceeds going towards paying for the acquisition of a new data centre, it announced in an exchange filing on Monday.

The real estate investment trust is looking to place 224 million new shares at S$1.353 each, which is a 4.9 per cent discount to the volume-weighted average price of S$1.4220 per share for trades last done on the Singapore Exchange on May 4.

Citigroup Global Markets Singapore and DBS Bank are joint bookrunners and underwriters for the placement, which represents a 19.9 per cent increase in the total number of units current in issue.

Also read: Good performance by Mapletree REITs

Vinhomes share sale raises US$1.35b in Vietnam’s biggest issue

AN INITIAL Equity offering of Vinhomes JSC, the residential property development unit of Vingroup JSC, raised about US$1.35 billion in Vietnam’s biggest-ever issue after being priced at the top of an indicative range, sources said on Monday.

The company is betting on rising home sales to drive up its business at a time when foreign and local investors are pouring money into the country, attracted by strong economic growth and a slew of sales by state-owned and private companies.

Existing Vinhomes investors are selling about 268 million shares, or 10 per cent of the firm’s equity capital, at 114,700 dong (S$6.73) each, versus an indicative range of 110,500-114,700 dong, said the sources, who are familiar with the matter but did not want to be named as terms of the pricing were confidential.

Property investment sales could hit S$46b in 2018: Colliers

FUELLED by the ongoing collective sales fever and a possible upturn in other segments, the property investment sales market here could grow 15 per cent year-on-year to S$46 billion in 2018.

This would beat 2007’s record S$40.187 billion, according to Colliers International in a May 7 report, and the market could grow a further 5-10 per cent in 2019.

The first quarter of 2018 alone has already recorded an 89 per cent year-on-year increase in total investment sales to S$11 billion.

Elias Green condo targeting en bloc

HOME owners at the sprawling Elias Green condominium in Pasir Ris may be the next to be on the collective sale market – but some observers wonder if their reserve price may be too high.

If a buyer is willing to cough up S$780 million, owners at the 419-unit development could each walk away with S$1.7 million to just below S$2 million.

Alan Loh, the chairman of the collective sales committee, told The Business Times that the 516,877 sq ft development will begin collecting signatures on May 12.

But he said it is likely that they will reach the required 80 per cent consent since 83 per cent of owners have already paid up fees meant for expenses such as lawyers and property valuation.

Also read: What differences are there between REITs with Singapore assets vs overseas assets?

Perennial Q1 profit falls 86.7% in absence of one-off gain

THE absence of a one-off gain from the partial divestment of TripleOne Somerset last year has resulted in an 86.7 per cent fall in first-quarter net profit to S$5.14 million for Perennial Real Estate Holdings.

Revenue in the three months ended March 31 was S$14.95 million, down 26.1 per cent in the absence of revenue from TripleOne Somerset, which Perennial now accounts for as an associate.

Excluding TripleOne Somerset’s revenue contribution in 2017, Perennial’s revenue was 10.1 per cent higher in the first quarter, mainly attributable to Perennial Qingyang Mall, Chengdu.

Singapore condo resale prices up 0.6% in April but volume dips 1.7%: SRX

CONDO resale prices in Singapore edged up 0.6 per cent to a 12-month high in April over March, but volume of sales dipped by 1.7 per cent, according to flash data from real estate portal SRX Property released on Tuesday.

Resale prices of non-landed private properties are up by 5.4 per cent in the first four months of the year, and 9.5 per cent higher than a year ago, the data showed.

The monthly price change for March was shaved slightly to 1.4 per cent, from an earlier estimate of 1.5 per cent.

Ava Towers to launch en bloc sale bid with reserve price at S$248m

THE owners of Ava Towers are putting their freehold condominium development up for tender in their first attempt at a collective sale.

Their reserve price of S$248 million for the site along Ava Road in the Balestier area translates to a land rate of about S$1,374 per square foot per plot ratio (psf ppr), said marketing agent ERA Realty Network.

Given the site’s high development baseline, there is no development charge payable for redevelopment up to a gross plot ratio of 2.8.

Ascott forms JV with Huazhu Hotels, CJIA

CAPITALAND’S serviced residence arm, The Ascott, is setting up a joint venture with Nasdaq-listed Huazhu Hotels Group and apartment rental firm CJIA Apartments Group to expand its Citadines brand in China.

With a market capitalisation of US$10.4 billion, Huazhu has the third largest market share in China’s midscale hotel segment with a total portfolio of over 380,000 hotel rooms.

Its subsidiary CJIA collaborates with over 100 property management firms to offer 10,000 apartments.

Also read: Divergence in SRX property and rental trends

Condo rents fall 0.9% in April; HDB rents rise 0.4%

RENTS of non-landed private homes in Singapore fell by 0.9 per cent in April 2018 over March, while rents of HDB flats rose by 0.4 per cent over the same period, according to flash estimates released by real estate portal SRX Property on Wednesday.

Year-on-year, rents for private apartments and condominiums dropped 0.8 per cent from April 2017. They are down by 19.6 per cent from their peak in January 2013.

Going by location, rents in the prime districts or core central region (CCR) slipped the most – by 1.3 per cent.

Rents in the city fringes or rest of central region (RCR) and outlying areas or outside central region (OCR) dropped by 1.1 per cent and 0.2 per cent respectively.

Twenty-two apartments at former AA Centre seeking up to S$90 million

SOME 22 private apartments in 336 River Valley Road, previously known as AA Centre, have been put up for bulk sale by tender.

Their indicative price is S$2,200 per square foot to S$2,300 psf, or about S$86 million to S$90 million in total.

The property, known as 336 RV, sits on a site area of about 33,757 sq ft.

The land is zoned “residential” use with a plot ratio of 2.8 and a height restriction of 10 storeys. 336 RV, which is within walking distance to Somerset MRT station, is a 14-storey freehold residential cum commercial development, with 90 basement car-parking lots.

GIC, Canadian pension fund buy Seoul office building for 418b won

GIC and the Canada Pension Plan Investment Board (CPPIB) on Wednesday said they have entered into a joint venture partnership to buy a Grade A office building in Seoul, the Kumho Asiana Main Tower, from Kumho Asiana Group, the parent of Asiana Airlines, for 418 billion Korean won (S$520.1 million).

Following this transaction, CPPIB and GIC will each own a 50-per-cent stake in the property, which is located in the centre of Gwanghwamun, a core office, government and cultural precinct in Seoul’s central business district.

The property was sourced and will be managed by DWS, formerly Deutsche Asset Management.

Oxley to redevelop Dublin city centre site

MAINBOARD-LISTED developer Oxley Holdings will develop mixed-use properties on a 1.96 hectare site in Dublin’s city centre as part of an agreement with Ireland’s national public transport provider Córas Iompair Éireann (CIE).

The site is located near Connolly Station and is part of CIE’s push to enhance passenger experience in the station, which sees about 30,000 passengers a day, and revamp the city centre.

Oxley is entitled to develop mixed-use properties including residential, commercial, hotel and student accommodation.

Also read: The Affinity Condo (former Serangoon Ville) at Serangoon 

Cromwell European Reit posts Q1 DPU above forecast

CROMWELL European Reit’s first quarter results were boosted by a better-than-expected performance from its light industrial segment.

Distribution per unit (DPU) for the period from Nov 30, 2017 to March 31, 2018 came in at 1.45 euro cents, 3.5 per cent higher than its initial public offering forecast of 1.4 euro cents, the group said on Thursday.

That came as Q1 income available for distribution was also 3.5 per cent above forecast at 22.8 million euros (S$36.4 million).

Frasers Property enjoys 74.2% surge in Q2 profit

CONTRIBUTIONS from overseas acquisitions and development profits in Singapore fuelled a 74.2 per cent surge in net profit for Frasers Property Limited (FPL) to S$124.1 million in the second-quarter ended March 31.

Revenue for the quarter rose 19.3 per cent to S$841.7 million, thanks largely to revenue recognition on sales settlements in China and Australia as well as maiden contributions from business parks in the UK.

The group said that while it remains keen to expand its business in Europe and the UK, it is still on the look-out to acquire development sites in Singapore, where it is slated to launch a 500-unit project at Jiak Kim early next year.

A H-Trust’s Q4 DPS increases to 1.72 Singapore cents

DISTRIBUTION per stapled security for Ascendas Hospitality Trust (A H-Trust) in its fourth quarter ended March 31 expanded to 1.72 Singapore cents from 1.37 Singapore cents in the previous year.

Its Q4 income available for distribution less the amount retained for working capital was S$19.5 million, up 26.3 per cent from the year-ago period, mainly helped by a fee of S$4.1 million it received which is related to its divestment of two hotels in Beijing, announced in late January 2018.

For continuing operations, gross revenue fell 5.9 per cent to S$49.73 million, while net property income dropped 9 per cent to S$21.96 million from the preceding year.

CDL posts 16.3% drop in Q1 net profit

New Futura is a 124-unit freehold luxury condo in Leonie Hill Road in prime District 9.

The average price for the North Tower will be higher than about S$3,350 per square foot (psf) achieved for the 62 units sold in the 64-unit South Tower, released in January 2018.

The South Tower units include a duplex penthouse, which The Business Times understands went for S$36.28 million or S$4,630 psf.

The buyer of the 7,836 sq ft unit – occupying the top two levels of the 36-storey tower – is understood to be a Chinese citizen who is an executive director of a Hongkong-listed company in the beauty and healthcare business.

CDL’s lower first quarter bottomline was due to compressed profit margins for The Criterion executive condo (EC) in Singapore – compared with higher profit margins achieved for the year-ago period from projects such as Coco Palms, D’Nest and Suzhou Hong Leong City Center, as well as the absence of contribution from Commonwealth Towers, a joint venture project that was completed and sold last year.

Also read: Greater Southern Waterfront shaping up to be a key strategy in Singapore’s growth 

UOL Q1 profit down 8%; group launching Amber45 this weekend at S$2,200 psf

UOL Group, which is launching its freehold residential project Amber45 this weekend at an average price of above S$2,200 per square foot (psf), said its net profit for the first quarter ended March 31 fell 8 per cent to S$73.82 million.

Its net profit would have been higher if not for the S$7.6 million amortisation and depreciation of fair value uplifts in the first quarter in respect of the consolidation of United Industrial Corporation (UIC) as a subsidiary from Sept 1, 2017, it added.

Pan Pacific Orchard also took a S$6.6 million accelerated depreciation charge following the decision to cease operations in the second quarter of 2018 for redevelopment.

Singapore property investment sales could hit record in 2018

SINGAPORE’S property investment sales market rebounded in 2016, surged to a 10-year high in 2017 and could end 2018 on a record high, according to recent JLL data.

Investors continue to be drawn to Singapore by its unique proposition – the opportunity to reap returns not only in the short-term, but also in the long-run, thanks to the city-state’s future-proofing features that help maintain its competitiveness over time and economic cycles.

This is a powerful combination given today’s turbulent political and uncertain economic climate and against a backdrop of rapid technological transformation.

Indeed, in JLL’s 2018 City Momentum Index, Singapore is the only city in the Asia-Pacific region, and one of only two globally along with Seattle, to be ranked in the top 30 for both short- and long-term dynamism out of 131 established and emerging business hubs across the globe.

Prime districts enter the collective sales fray in 2018

AFTER making its way through the suburbs and city fringe last year, the collective sale fever is sweeping homes in Singapore’s prime districts this year, helping to push this year’s sale value for residential sites above levels seen last year.

So far this year, there have been 15 residential collective sales valued at S$4.44 billion in the Core Central Region (CCR), which comprises Districts 9, 10 and 11, the downtown core and Sentosa.

This surpasses the eight deals worth S$1.05 billion transacted in the whole of 2017, said Colliers International.

On May 10, the sale of Villa D’Este in Dalvey Road for S$93 million pushed the total transaction value in residential collective sales sites this year to over S$8.2 billion, higher than last year’s S$8.13 billion.

Also read: Analysis on Viva Industrial REIT

REITs update

REITs 13 May 2018