Property news round up 15 July 2018

Park Esta aerial view

New M&C CEO gunning for asset-driven growth

MILLENNIUM & Copthorne (M&C) will continue its core strategy of owning hotels, says the company’s new group chief executive.

Speaking to The Business Times days into her new role, Jennifer Fox said growth for the London-listed hotel chain will be powered by acquisitions, management contracts and improving hotel performance.

M&C is also looking into acquiring hotels in what are yet untapped markets for the group, such as Australia and parts of the United Kingdom, as well as key American gateway markets such as Miami.

Chilling effect on property market as cooling measures hit developers, buyers

THE timing of the additional cooling measures came as a surprise on Thursday, as developers have just loaded up their landbanks over the last 18 months in anticipation of blockbuster sales in the second half of the year and beyond. Private property home prices have only risen 9.1 per cent over four quarters since the start of the recovery in 3Q17. This pales in comparison with the recovery in the previous cycle, when prices rose by 38.2 per cent from 3Q09 to 2Q10.

With new cooling measures hurting affordability from first-time buyers to investors, buying demand will take a hit. Primary home transaction volume can take a plunge of easily 30 per cent, as developers will tread cautiously with new launches. Although affordability of the buyers will be impacted, developers are unlikely to slash prices at this juncture, before the dust settles. We could expect a quiet quarter or two ahead with new home sales going back to on average 500 units a month for the rest of the year (with the exception of the month of July as buyers rushed into the three new launches before the new tax rates took effect).

HDB looking at expanding use of floating system for solar panels in open sea

IN LAND-SCARCE Singapore, the quest to harvest more energy from the sun will soon go one step further.

The Housing & Development Board (HDB) – one of the agencies leading the nation’s efforts to ramp up solar energy use – is setting its sights on a novel area of research: the sea.

On Sunday, HDB announced that it will be signing a research collaboration with a landscaping firm in the coming week for the study and development of a floating solar system for coastal marine conditions.

UK group in exclusive due diligence for Manulife Centre

BRITISH property group Chelsfield is understood to be effecting exclusive due diligence on Manulife Centre in Bras Basah Road with a view to purchasing the 11-storey commercial building.

The price is expected to be around S$550 million. This would reflect around S$2,300 psf on the building’s net lettable area (NLA).The building has retail space on street level and offices above. Manulife Centre is being offered on a remaining leasehold tenure of about 96 years.

The deal, if it materialises, would be the biggest office transaction in Singapore so far this year – surpassing the S$516 million that US-based property fund manager AEW is paying for Twenty Anson in a deal entered into in late-June.

Plans for Jurong still intact, no matter how rail project pans out

THE vision for the Jurong Lake District has not changed, regardless of how the high speed rail (HSR) project between Singapore and Malaysia turns out, said National Development Minister Lawrence Wong on Monday.

The fate of the area – touted as Singapore’s second central business district with the HSR terminus as its centrepiece – has been in the spotlight since new Malaysian Prime Minister Mahathir Mohamad said in May that his country plans to scrap the multi-billion dollar rail project.

His pronouncement sparked concerns among Singaporeans that the development of the Jurong Lake District may be adversely affected.

What cooling measures? Weekend buyers still flocking to showflats

DESPITE surprise cooling measures that took effect on Friday, sales at three mass-market properties here continued to garner what experts considered a fair amount of interest over the weekend.

The number of units moved at Park Colonial, Riverfront Residences and Stirling Residences was significantly lower than the more than 1,000 units sold on Thursday, when the projects were launched in knee-jerk reaction to the announced changes to the additional buyer’s stamp duty (ABSD) and loan-to-value (LTV) limits.

But some observers reported weekend crowds at the showflats. Lee Sze Teck, Huttons Asia’s head of research, said: “Enquiries on projects were still streaming in and agents were bringing invites to the showflats.”

Oxley sold homes worth S$1b; expects 12-19% net margins for new launches

OXLEY Holdings, one of the most highly-geared developers listed in Singapore, has sold S$1 billion worth of residential units from five project launches here so far this year.

Net profit margins from these projects range from 15 per cent to 25 per cent, the homegrown developer said in presentation slides filed with the Singapore Exchange.

Overseas, Oxley has attained S$446 million in revenue in project launches. The group has another S$3.1 billion worth of overseas projects to be launched this year.

AA Reit unveils plans to upgrade NorthTech

THE manager of AIMS AMP Capital Industrial Reit (AA Reit) plans to spend S$13 million to enhance the S$102 million NorthTech industrial building in Woodlands.

The works include upgrading its passenger lift lobbies, toilets, drop-off area and external landscaping. A new carpark will also be created while energy efficient air-conditioning system and lightings as well as water efficient fittings will be installed.

NorthTech is a four-storey high-technology, light industrial building with a basement carpark. The S$13 million enhancement initiative is due for completion in the second half of 2019. The Reit has sufficient funding on hand for this project.

Allianz Real Estate putting more in China, eyes new economy, logistics

THE property investment arm of Germany’s Allianz SE expects China to account for up to 50 per cent of its Asia-Pacific fund allocation going forward from 40 per cent now, with focus on the new economy and logistics sectors, a senior executive said.

The insurer and asset manager on Monday said it bought an office tower in a Beijing software park that was fully leased to Chinese tech firms. It expects to complete another purchase in a Shanghai business park “within a couple of weeks”, said Rushabh Desai, Asia-Pacific chief executive at Allianz Real Estate.

“We want to be aligned to the new economy and contribute toward China’s growth in the sector; we’re investing based on that thesis,” Mr Desai said in a recent telephone interview. New economy refers to non-traditional industries such as biopharma and online retail.

Chinese investments in Aussie property dive 81% on capital controls

CHINESE investment in Australia’s commercial property has plummeted to the lowest level in six years as mainland capital controls bite.

Direct investment fell 81 per cent to A$250 million (S$253 million) in the first half from a year earlier, property brokerage CBRE Group Inc said in a report on Monday.

“If these restrictions continue, we expect Chinese investment into Australia to record its lowest year since 2012,” said Ben Martin-Henry, associate director of capital markets and forecasting.

CDL roped in as cornerstone investor of property service provider E-House’s HK IPO

CITY Developments Limited (CDL) will invest HK$237.81 million (S$41.1 million) in property services provider E-House’s initial public offering (IPO) on the Hong Kong Stock Exchange, making it a cornerstone investor alongside Alibaba, China state-owned Overseas Chinese Town Holding, and an associate company of Hong Kong-based Henderson Land Development.

E-House’s main businesses comprise real estate agency services in the primary market (E-House Marketing), real estate data consultancy (CRIC) and property brokerage network services (Fangyou). With a salesforce of 17,000 agents in 186 cities across 30 Chinese provinces, E-House is “widely-regarded as China’s preeminent real estate transaction service provider”, CDL said in a press statement on Tuesday.

The company’s key business of marketing residential projects generated revenue of 3.9 billion yuan (S$796.53 million) in 2017, CDL said.

SPH Reit posts flat Q3 DPU of 1.37 cents

RETAIL landlord SPH Reit has declared distribution per unit of 1.37 Singapore cents for the third quarter ended May 31, unchanged from a year ago.

But net property income marked a 3.8 per cent decline from a year ago to S$40.56 million, mainly due to lower rental income from Paragon. Gross revenue fell 2.9 per cent year-on-year to S$51.77 million.

Paragon recorded a negative rental reversion of 6.2 per cent for new and renewed leases during the nine months of the fiscal year – in other words, lower average rents of renewed and new lease terms compared to that of the preceding lease terms.

GuocoLand bags Casa Meyfort for S$320m

GUOCOLAND on Tuesday announced that it has exercised the option to buy freehold condominium, Casa Meyfort along Meyer Road through a collective sale for S$319.88 million.

The price works out to about S$1,580 per square foot per plot ratio (psf ppr), including an estimated development charge of S$57.2 million.

The Business Times understands that this could be one of the last few collective sales for a private residential property to be hammered out before the newly tightened cooling measures kicked in on July 6.

June resale prices up 0.2%, volumes down 25.5 %

RESALE prices of non-landed homes in June crept up just 0.2 per cent from the previous month as volumes plunged 25.5 per cent, going by the latest flash estimates by real estate portal SRX Property.

Compared to May, the Core Central region (CCR) and Outside Central Region (OCR) recorded a price increase of 0.1 per cent and 0.4 per cent respectively, while Rest of Central Region (RCR) prices remained unchanged.

Year-on-year, prices in June 2018 increased by 10.6 per cent from June 2017. CCR, RCR and OCR recorded a year-on-year price increase of 10.9 per cent, 11.6 per cent, and 9.4 per cent respectively from 2017.

Surbana Jurong bags contract for India’s Pimpri Chinchwad Smart City

SURBANA Jurong has been awarded project management and design services for India’s Pimpri Chinchwad Smart City in partnership with professional services firm KPMG, the urban consulting firm announced on Tuesday.

Surbana Jurong will take the lead in the Area Based Development part of the project, comprising city improvement (retrofitting) and city renewal (redevelopment), and helping to identify suitable innovations and smart solutions for the city. It will design, conceptualise and manage the implementation and deployment of the various solutions for the city, which focuses on liveability, urban design, transportation, water supply, solar, sanitation, healthcare, education, security and surveillance.

Pimpri Chinchwad, in the Indian state of Maharashtra, is one of the cities falling under India’s nation-wide Smart Cities Mission programme, which aims for comprehensive and systematic transformation of cities through planned urbanisation.

ST Engineering and JTC team up to build smart-city platform for Punggol Digital District

WHEN the Punggol Digital District (PDD) is up and running in 2023, workers could have their breakfast delivered to them by drone, thanks to a memorandum of understanding (MoU) signed on Tuesday by ST Engineering and JTC Corporation.

They plan to create a centralised system – called an open digital platform – to manage aspects such as buildings and security and the district’s cooling and waste systems.

It will enable estate managers to optimise and control resources by providing real-time data and pre-emptive solutions.

Three families jointly sell Telok Kurau bungalows for S$37.89m

THREE unrelated families are selling their adjacent bungalows along Lorong H Telok Kurau in District 15 to a developer for S$37.89 million.

The three single-storey bungalows have a combined freehold land area of 24,050 sq ft.

Inclusive of development charge payable to the state, the land rate works out to S$1,132 per square foot per plot ratio (psf ppr) and to a lower S$1,086 psf ppr inclusive of the 10 per cent bonus balcony space.

Under the Urban Redevelopment Authority’s Master Plan 2014, the site is zoned for residential use with 1.4 plot ratio. The site may be redeveloped into a five-storey apartment project with up to 31 units based on a minimum average unit size of 100 sq m stipulated by URA for 1.4 plot ratio residential sites within the Telok Kurau estate.

The new entry point for US luxury homes: US$1m

GOT a million bucks to spend on a new home? Good. Just don’t expect a palace for that amount.

The starting price for the most expensive 5 per cent of US residential properties sold in April was at least US$1 million in more than half the luxury markets that analysed for its latest report.

Sales of million-dollar-plus real estate jumped 25 per cent from April of last year, even as prices at the top of the market rose 4.6 per cent, according to the listings-and-research site.

Creating a competitive and transparent real estate market

SINGAPORE is Asia’s most transparent market, and is well positioned to join the United Kingdom and the United States in the “Highly Transparent” tier as it advances in sustainability, proptech and open-data initiatives.

Based on our Global Real Estate Transparency Index (GRETI), Singapore has remained in the “Transparent” group for a number of years, along with Hong Kong, Tokyo and Taiwan. However, the city-state, which ranks 12 on the index, is on the cusp of moving up into the next tier of transparency.

Market transparency is the foundation which allows investors and corporate occupiers to operate and make decisions with confidence. It enables governments and public bodies to function effectively, providing long-run benefits to local communities and the environment.

Dutch city to unveil world’s first 3D-printed housing complex

THE southern Dutch city of Eindhoven plans to unveil the world’s first 3D-printed housing complex next year, which its inventors believe could revolutionise the building industry by speeding up and customising construction.

Printed in concrete by a robotic arm, the project backed by the city council, Eindhoven Technical University and several construction companies aims to see its first three-bedroomed home go up by June 2019.

Known as Project Milestone, a housing complex of five homes of various shapes and sizes will be built over the next three to five years, financed by private investors, said Rudy van Gurp, one of the project’s managers.

Four freehold shophouses on Macpherson Road put on sale

COMMERCIAL real estate services and investment firm CBRE has launched for sale four freehold shophouses on Macpherson Road, via an expression of interest exercise.

The four properties comprise an intermediate two-storey shophouse, two adjoining two-storey shophouses, and a corner two-storey shophouse.

They are zoned “Residential with Commercial at 1st-storey” with a gross plot ratio of 3.0 and a building height up to four storeys. With a total site area of about 6,089 sq ft or individual land size of about 1,500 to 1,529 sq ft, they can be redeveloped to a maximum gross floor area of about 18,267 sq ft.

Canada pension board to co-invest in China rental housing

CANADA Pension Plan Investment Board (CPPIB) said on Thursday it will invest in China’s rental housing sector with local property developer Longfor Group, with an initial targeted investment of US$817 million.

The companies will invest in China across major cities – Tier 1 and core Tier 2 – via developments, acquisition and master-lease of commercial assets to be converted into rental housing, CPPIB said in a statement.

Beijing-based Longfor, China’s No. 9 home-builder by sales value, is one of the most aggressive players in the policy-supported rental housing sector, with a target to add 45,000 new units in the second half to its 20,000 unit portfolio. It expects operating income from rental housing business to be over 3 billion yuan (S$611.4 million) in 2020.

Asia visitors opt for private apartments over cheap five-star hotel rooms: Agoda

MORE tourists to Asia are opting to stay in privately owned apartments even when five-star hotel rooms are available for as little as US$100 a night, according to online travel booking platform Agoda Services.

Agoda, part of Booking Holdings, is seeking more non-hotel accommodation choices for travellers as many want to live like locals during their trips, chief executive officer John Brown said in an interview in Bangkok.

“A place like Bangkok where five-star hotels here often cost US$100 to US$150 per night – even here, people say I want the experience of living in an apartment,” he noted.

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