Property news round up 22 Apr 2018

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Analysts make light of March fall in developers’ home sales

MARCH private home sales dived almost 60 per cent from a year ago – but industry players are unfazed, citing a dearth of new launches as the main cause.

Sentiment remains buoyant and, with the slew of launches rolled out this month and more to come, buyers are expected to be drawn out; developers and their marketing agents will be kept busy.

There were only two new launches last month – The Tapestry in Tampines and 8 Hullet off Cairnhill Road. Developer City Developments’ project, The Tapestry – the bigger of the two projects – moved 329 units in March at a median price of S$1,408 psf.




Rivercove Residences EC units 80% sold at average S$965 psf

RIVERCOVE Residences wrapped up the first ballot and booking exercise for the executive condominium (EC) with nearly 80 per cent of its 628 units sold at an average price of S$965 psf.

Located in the Anchorvale Lane neighbourhood of Sengkang, it is the sole EC launch for this year and is being developed jointly by Hoi Hup Realty and Sunway Developments.

First-time buyers can walk in to select and book any of the remaining units from April 15 onwards at the sales gallery.

Shophouse deals cross S$500m year to date

THE buzz in the shophouse market continues, with deals crossing the S$500 million mark year to date.

Industry players point to a high likelihood that total transactions this year will match, if not surpass, last year’s S$1 billion, citing strong demand especially for conservation shophouses in Districts 1 and 2.

A 999-year leasehold corner shophouse at 64 Club Street in the Central Business District has just been put on the market with an indicative guide price of around S$25 million.

This works out to S$4,450 per square foot based on the estimated built-up area of 5,618 sq ft.

Faber Garden on the market for S$1.18b

WITH a reserve price of S$1.18 billion, the freehold Faber Garden at Upper Thomson could be Singapore’s largest collective sale deal so far this year and the second largest ever, if it succeeds.

The site at Angklong Lane is being launched for sale by public tender on April 17.

At the reserve price, the 233 residential apartment owners will receive a gross payout between S$4.38 million and S$6.75 million, while the three commercial shop units will receive a gross payout of approximately S$1.99 million and S$4.83 million, according to Galven Tan, executive director of capital markets at CBRE, the marketing agent.

Strict short-term rental rules likely to have limited impact

GIVEN the stringency of the newly-proposed regulations for the rental of homes for short-term stays, the impact on Singapore’s leasing landscape will be limited, say property-market experts.

The Urban Redevelopment Authority (URA) on Monday began a public consultation on its proposed framework for regulating short-term stays, which could affect home-sharing platforms such as Airbnb.

Cushman & Wakefield Singapore head of research Christine Li, referring to the proposal that residents representing 80 per cent of the share value have to be in support of short-term rentals, said: “There might not be a significant impact on strata-titled properties due to the requirement for an 80 per cent consensus.”




Construction for Singapore’s end of high-speed rail expected to start in 2019

THE Land Transport Authority (LTA) has called tenders for the design and construction of tunnels and associated facilities for Singapore’s end of the high-speed rail project connecting it with Kuala Lumpur.

Construction is expected to start next year.

“We called the tenders for the design and construction of twin bored tunnels and associated facilities on April 6, and the design and construction of cut-and-cover tunnels leading into the Jurong East terminus on April 11,” an LTA spokesman said.

The tunnels are constructed using tunnel-boring machines, which are preferred for longer stretches of underground excavation as they cause less disturbance to surface utilities, buildings and structures.

Keppel DC Reit DPU down 4.8% in Q1

KEPPEL DC Reit has posted a first-quarter distribution per unit (DPU) of 1.80 Singapore cents, down 4.8 per cent from 1.89 Singapore cents in the same period a year earlier.

Excluding the one-off capital distribution of 0.15 Singapore cent per unit recorded in Q1 a year earlier in relation to Keppel DC Singapore 3, the adjusted DPU for Q1 2017 would be 1.74 Singapore cents.

DPU in the three months to March 31 would therefore be 3.4 per cent higher than the adjusted DPU in Q1 2017, owing mainly to higher contributions from Keppel DC Dublin 2 and higher variable income from Keppel DC Singapore 1.

However, this was also partially offset by lower rental income from Basis Bay Data Centre and Gore Hill Data Centre as well as higher finance costs and manager’s fees.

Keppel Infrastructure Trust’s Q1 DPU flat

KEPPEL Infrastructure Trust (KIT) yesterday reported a distribution per unit (DPU) of 0.93 Singapore cent for the first quarter of 2018, unchanged from the same period a year ago.

Profit attributable to unit holders rose 10.9 per cent to S$7.5 million for the quarter, due mainly to higher contributions from City Gas, a producer and retailer of piped town gas, and lower professional fees incurred for the outage in Basslink.

Basslink, an Australian subsidiary, owns and operates the electricity interconnector between the grids of the states of Victoria and Tasmania.

Metro unit to invest S$114m in Jakarta residential project

PROPERTY development and investment group Metro Holdings has tied up with the Trans Corpora Group (Trans Corp) to develop, market and sell two residential towers in Bintaro, Jakarta, for a total investment value of 1.33 trillion rupiah (S$127 million).

Metro has committed to fund 90 per cent of the investment, or about 1.20 trillion rupiah (S$114 million) through its unit, Metro Property Investment (MPI).

The Lee Kim Tah Group, which owns the remaining 10 per cent of MPI, will contribute 10 per cent.

The Bintaro project will occupy a site area of 1.6 hectares and comprise two residential towers with a combined 1,400 apartment units and 170 small office home office “SoHo” units.




E-commerce gives boost to warehouse Reits

FORGET your fancy office towers. The future lies in warehouses. But not just any old dusty depot. It’s got to be big enough, smart enough and close enough to consumers.

Pick right and you could beat the returns of every other kind of property this year. Real estate investment trusts that specialise in industrial properties, such as Prologis Inc, Rexford Industrial Realty Inc and Terreno Realty Corp, are outperforming Reits that focus on malls, residential rentals and office buildings.

The three companies all returned more than 16 per cent in the past year, crushing other types of real estate – and handily beating their own peers in the Bloomberg Reit Industrial/Warehouse index, which reaped 8.3 per cent.

The swankiest home address? It’s Marina Bay, not Orchard Road

MARINA Bay and its surrounds may be deposing the Orchard area as the place to live in as its work-live-play concept takes hold and mega-office complexes like the Marina Bay Financial Centre and Asia Square Tower draw expatriates to luxury homes in the business district.

Non-landed luxury home prices in District 1’s Raffles Place, Cecil, Marina and People’s Park areas; and District 2’s Anson and Tanjong Pagar outperformed the overall Core Central Region (CCR) in the first quarter of 2018.

Prices in the two districts rose 9.3 per cent year on year to S$2,147 psf, compared to a 6.2 per cent increase to a record S$2,046 psf in the CCR, which also includes Districts 4, 9, 10 and 11.

That price is close to the peak of S$2,207 psf recorded in the first quarter of 2013, according to an OrangeTee & Tie report based on caveats downloaded on April 5.

First Reit improves Q1 DPU to 2.15 cents

DISTRIBUTION per unit for First Real Estate Investment Trust (First Reit) in its first quarter of 2018 edged up to 2.15 Singapore cents from 2.14 Singapore cents in the preceding year.

That came as Q1 income available for distribution for the healthcare Reit increased 1.8 per cent to S$16.9 million from the previous year.

Gross revenue increased 5.8 per cent to S$28.7 million, thanks to contributions from Siloam Hospitals Buton & Lippo Plaza Buton and Siloam Hospitals Yogyakarta, acquired in October and December 2017 respectively, as well as higher rental income from existing properties in Indonesia and Singapore.

Keppel-KBS US Reit posts DPU of 2.32 US cents

US OFFICE landlord Keppel-KBS US Reit delivered distribution per unit (DPU) of 2.32 US cents for the period since listing from Nov 9, 2017, to March 31, 2018, beating its forecast by 0.4 per cent.

This translates to an annualised distribution yield of 6.73 per cent, based on unit trading price of US$0.88.

Thanks to a stable portfolio performance and a one-off compensation income, the Reit’s net property income of US$22.3 million surpassed its IPO forecast by 5.2 per cent.




Asia Gardens sold en bloc for S$343m to consortium

ASIA Gardens, located along Everton Road in the Spottiswoode enclave, has been sold for S$343 million via collective sale to a consortium here led by developer Sustained Land.

The other partners are builder-cum-developer Ho Lee Group and an investment holding company fully owned by Loi Pok Yen, logistics company CWT’s group chief executive.

Owners at the 23-storey freehold development, which has 80 apartment units and four penthouses, are expected to receive gross sale proceeds of between S$3.476 million and S$7.73 million per unit.

GIC-backed Vietnam developer Vinhomes planning US$2b IPO

VINGROUP JSC, Vietnam’s biggest developer, is targeting an initial equity offering of as much as US$2 billion for its luxury residential arm, people with knowledge of the matter said.

The Hanoi-based group’s Vinhomes JSC unit is considering seeking a valuation of US$13 billion to US$16 billion in the share sale, according to one of the people, who asked not to be identified because the information is private.

Vinhomes, which began gauging demand for the offering on Tuesday, aims to finalise a list of cornerstone investors by the end of this week, the person said.

IMF hits out at New Zealand ban on foreign home buyers

THE International Monetary Fund (IMF) has criticised New Zealand’s “discriminatory” ban on home sales to foreigners, saying it’s unlikely to improve housing affordability.

“Foreign buyers seem to have played a minor role in New Zealand’s residential real estate market recently,” the IMF said in a statement on Tuesday, after concluding its annual Article IV mission to New Zealand.

If the government’s broader housing policy agenda is fully implemented, that “would address most of the potential problems associated with foreign buyers on a less discriminatory basis”, it said.

China’s property investment up 10.4% in Q1

CHINA’S real estate investment posted its fastest year-to-date growth in three years and new construction accelerated in the first quarter, but property sales slowed as borrowing costs rose and demand appeared to soften.

Property investment grew 10.4 per cent in January-March from the same period a year earlier, compared with a 9.9 per cent rise in the first two months, data from the National Bureau of Statistics (NBS) showed on Tuesday.

This matched the year-to-date growth seen in the January-February 2015 period.




Widening public-private home price gap may not dent upgrading demand

IS THE growing divergence in prices of resale public housing flats and private homes snuffing out the Singaporean dream of owning a condominium?

While price data might underscore such fears, market watchers note that there are many mitigating factors to keep the upgrading momentum from owners of Housing & Development Board (HDB) flats going, who sell their flats to move to private housing.

First, the truth be told, price indices do not tell the whole story, said Edmund Tie & Company CEO Ong Choon Fah.

Room for foreign manpower policy review in longer term: Heng Swee Keat

SINGAPORE’S tight foreign manpower policies will stay in place for now to encourage companies to transform, but there is room for review in the longer term, said Finance Minister Heng Swee Keat.

The government is sticking to its stance in the short term to signal the importance of raising productivity, he said at a media briefing on Wednesday.

“Our priority in the coming years must be to continue to develop Singaporeans.

At the same time, a well-calibrated inflow of foreign manpower can complement our people,” he said.

Keppel Reit’s Q1 DPU dips to 1.42 Singapore cents

KEPPEL Reit’s distribution per unit (DPU) dipped to 1.42 Singapore cents for the first quarter ended March 31, 2018 from 1.45 Singapore cents in the year-ago period.

That came as Q1 income available for distribution edged up 0.2 per cent to S$48.2 million.

For the three months ended March 31, gross revenue slipped 0.3 per cent to S$39.7 million.

Net property income (NPI) dipped 0.6 per cent to S$31.2 million.

Ascott Reit DPU up 9% in Q1 on acquisitions, forex gains

ASCOTT Residence Trust (Ascott Reit) saw distribution per unit (DPU) rise 9 per cent to 1.28 Singapore cents for the first quarter ended March 31, after adjustment for one-off items, in results released yesterday.

This was up from the restated DPU of 1.17 Singapore cents in the same period a year before, following a rights issue in April 2017. The gain came as unitholders’ distribution rose 16 per cent to S$29.2 million.

This was on the back of contributions from acquisitions in 2017 and a realised exchange gain of S$1.6 million arising from divestment proceeds from two serviced residences in Shanghai and Xian in China, as well as the repayment of foreign currency bank loans with the proceeds.




Choon Kim House launched for collective sale

FREEHOLD Choon Kim House, located along Upper Serangoon Road, has been launched for collective sale, its sole marketing agent JLL announced on Wednesday.

Owners of the four-storey cum attic, mixed-use development are expecting bids above S$55 million.

This would translate to a land rate of S$1,287 per square foot per plot ratio (psf ppr), or S$1,257 psf ppr after factoring in the 10 per cent bonus balcony for the residential component and inclusive of a development charge payable currently estimated at around S$4.9 million.

Even millionaires have cost worries if they live to a 100

CLOSE to half of Singapore’s millionaires expect to live to 100, and this is driving significant changes to their spending, investing and legacy behaviour, a study by UBS has found.

UBS Investor Watch Research has found that 46 per cent of those polled in Singapore expect to live to 100, compared to 53 per cent globally.

The expectation of a long life is creating anxiety, however, as 42 per cent worry that their wealth will not support them till age 100.

Of these, 66 per cent worry about the rising costs of healthcare, and 63 per cent worry about whether they can afford their current lifestyle in retirement.

Lian Beng JV buys Sembawang Shopping Centre from CapitaLand Mall Trust

LIAN Beng-Apricot Sembawang (LBAS) is buying Sembawang Shopping Centre from CapitaLand Mall Trust (CMT) for S$248 million, a price tag that is almost the double the suburban mall’s latest valuation.

LBAS is a 50-50 joint venture company of home-grown construction firm Lian Beng Group (Lian Beng), and Apricot Capital, the private investment firm of the Super Group’s Teo family.

The sale is among the largest in value in recent years for a standalone retail mall with an original 999-year leasehold, said Colliers International, which brokered the deal.

Oxley, SC Global, Super Group bosses take shares in Lian Beng spin-off

THE public tranche of property developer SLB Development’s initial public offering (IPO) was about 20.6 times subscribed, ballot results on Thursday showed.

SLB’s offering comprised 238 million new shares at S$0.23 apiece.

The size of the public tranche was a mere 8 million shares.

The remaining 230 million shares were placed out. Overall, SLB’s public and placement tranches combined were 1.7 times subscribed.




Kampong Bugis master developer tender to be launched in 1 to 2 years

A TENDER for a master developer to redevelop Kampong Bugis near the Kallang River into a car-lite residential precinct will be called in the next one to two years, The Business Times understands.

The land up for tender, likely to stand at about 13 ha, is expected to have a 99-year leasehold. It includes a cordoned-off 3.14 ha area, which is where Kallang Gasworks used to stand; the facility ceased operations when national gas production was relocated to Senoko Gasworks in 1997.

The area will exclude existing developments on the fringe of the total 17-ha area, such as the freehold Riverine by the Park and Kallang Riverside Condominium and the Sri Manmatha Karuneshvarar Temple.

Frasers Logistics buys nearly S$1b in European properties

FRASERS Logistics & Industrial Trust (FLT) is making its first foray into Europe with the acquisition of 21 German and Dutch properties worth 596.8 million euros (S$972.8 million).

At a media briefing on Friday, Robert Wallace, chief executive of Frasers Logistics & Industrial Asset Management, the manager of FLT, said that a huge push into the market was needed because Europe requires significant economies of scale and a platform presence.

He said: “If you go in on a piecemeal basis, you get pushed around to a certain extent, and you will not have market prominence to get the results that you need.”

CapitaLand Mall Trust Q1 DPU up 1.8%, gross revenue hits S$175.2m, up 1.8%

CAPITALAND Mall Trust (CMT) has posted a first quarter distribution per unit (DPU) of 2.78 Singapore cents, up 1.8 per cent from 2.73 Singapore cents in the same period last year.

Gross revenue in the three months ended March 31 was S$175.2 million, up 1.8 per cent on higher occupancy for IMM Building, Clarke Quay, The Atrium@Orchard and Plaza Singapura, as well as higher car park income.

Net property income rose 4.7 per cent to S$125.7 million.

Frasers Commercial Trust’s Q2 DPU dips to 2.4 Singapore cents

FRASERS Commercial Trust (FCOT) has posted a distribution per unit (DPU) of 2.40 Singapore cents for the three months ended March 31 – the second quarter of its financial year – down 4.4 per cent from 2.51 Singapore cents a year before.

Gross revenue for the quarter fell 18 per cent year-on-year to S$33 million, while net property income (NPI) fell 25.3 per cent to S$22.4 million.

In a results filing yesterday, FCOT said that the poorer performance was due mainly to lower occupancy rates for properties in Singapore, and Australian properties Central Park and 357 Collins Street; the absence of a one-off payment in relation to a termination of lease in Central Park; and the weaker Australian dollar.




Critical points for all parties when navigating collective sales

AS 2018 GEARS up to be another bumper year for collective sales, stakeholders in the collective sale process should take some time to understand their respective rights and obligations.

The Land Titles (Strata) Act (LTSA), which governs collective sales in Singapore, has been substantially revised since 2007 to introduce more transparency in the collective sale process, and to make it fairer for both objecting and majority subsidiary proprietors (SP).

Some key changes include: Taking into account the total area of the lots in the property, and not just the share value, held by the consenting SPs when determining whether the requisite number of SPs have consented to the sale;

Allowing SPs to rescind their agreement within five days of signing the Collective Sale Agreement;

Imposing restrictions on SPs attempting a new collective sale after a failed attempt. For example, if the motion for the constitution of the collective sale committee (CSC) was defeated at a prior general meeting convened for that purpose, SPs may not form a new CSC for two years;

Greater guidance on the formation and proceedings of a CSC. For example, certain duties of the CSC are now expressly prescribed, such as convening a general meeting to obtain the SPs’ approval for the apportionment of the sale proceeds and the terms of the CSA.

REITS

21 apr 2018 REITS