Property news update: Co-working continue to grow, lendlease REIT to IPO in Singapore

GIC Dexus

Shell Cove’s Waterfront Tavern site sold following tender

Shell Cove’s Waterfront Tavern is a step closer to welcoming its first customers after exclusive agency HTL Property announced the sale of the site to the locally based Balmoral Hospitality Group. “On behalf of our clients Shellharbour City Council and Frasers Property Australia, we’re delighted the tender process extracted such a high level of offers, culminating in the Balmoral Hospitality Group’s successful bid” commented HTL Property’s National Director of Pubs.

Coworking spaces in Singapore tripled since 2015 to 3.7m sq ft: Colliers

Co-working workspaces now take up 3.7 million sqft in net lettable area of Singapore’s commercial space, tripling from 1.2 million sqft in 2015 to become one of the top 6 occupier sectors, said Colliers International. Its research projects that number to grow by 24% in 2019, driven by demand from multinational corporations on top of new start-ups. Flexible workspaces now account for 5% of Central Business District Premium and Grade A offices, said the report. In terms of distribution, 83% of flexible workspace resides in the CBD, 12% in the city fringe and 5% in the suburban area.

Singapore Property Trust IPOs Surge to Six-Year High

Singapore real estate investment trusts are on a money-raising spree. Lendlease Global Commercial REIT began taking investor orders on Tue for an initial public offering that could raise as much as S$740.3m (US$538m) in what would be Singapore’s 3rd-largest IPO this year. REITs have raised US$1.63b in Singapore IPOs so far this year, the highest since 2013 when first-time share sales by the sector fetched US$2.18b, according to data compiled by Bloomberg. REITs also account for the bulk of all IPOs that have taken place in Singapore in 2019, representing 97% of all fundraising.

Victoria to slip back into housing deficit as approvals slump

Victoria is headed for a stark shortage of housing after a collapse in new housing approvals last year shrank the pipeline of new homes and pulled the country’s second-largest state back into a development deficit, the Urban Development Institute of Australia says. New dwelling approvals sank to 59,719 in the 12 months to Jun from 75,613 a year earlier, which the UDIA’s Residential Development Index report calculated would result in a decline in completed dwellings to 46,581 from 58,978, based on its estimate that 78% of approvals became homes.

House & Condo Show presales up 10%

The 41st House & Condo Show, which opened its doors from September 12 to 15, secured presales worth 3.5b baht from homebuyers. The figure rose 10% from the fair last year, said Churat Chakarakul, who was in charge of organising the fair. The value of bank loan applications during the fair was 4b baht.

JustCo Expands Network of Co-working Centres in Shanghai with Newly Secured Space at LL Land Tower

JustCo, Asia’s leading flexible coworking space provider, further expands into Shanghai, with a newly secured space at LL Land Tower. Slated to open in Q4 2019, this marks JustCo’s 3rd and largest space in Shanghai, spanning 35,000 sqft across 2 levels. In fuelling JustCo’s accelerated growth across Asia Pacific, the investment of US$177m from Singapore’s sovereign wealth fund GIC, and multi-national property company, Frasers Property Limited, played a crucial role in allowing JustCo to gain stronger foothold in the market and also ramp up its technology solutions.

Mapletree Logistics Trust to buy Australia warehouse for A$18.4m

Mapletree Logistics Trust has entered into a conditional forward purchase agreement to acquire a warehouse in Australia for A$18.4m (S$17.4m) from Wooreddy Investments. The property is a 1-storey logistics facility to be constructed in Truganina, Melbourne. It will also be equipped with an ESFR sprinkler system and a 2,000 sqm super canopy, a differentiating feature that allows users to operate under any weather conditions.

Non-housing building expected to bounce back

Construction of non-residential property is expected to bounce back from recent short-term weakness and hit record highs despite the void in the retail sector and no big projects on the horizon. According to forecasts by BIS Oxford Economics, construction not related to residential property is expected to grow moderately by 7% in the 2020 and 2021 financial years, driven by the sector dominated by publicly funded projects.

Build-to-rent to rise above Pitt Street Metro station

Oxford Properties will lead the commercial development above Sydney’s new Pitt Street Metro Station with the city’s first build-to-rent project in the CBD, one of most significant initiatives yet in the nascent accommodation sector. Oxford, the real estate arm of Canadian pension fund giant OMERS, as well as Grocon and CPB Contractors, form the winning consortium that will take on the project, the NSW government confirmed on Tue.

Sydney median house price rises in June quarter

Sydney’s median house price rose to A$875,000 in the Jun quarter, marking the first increase in a year as buyers returned to the market after the federal election and greater optimism about prospects for the property market. The rise, however, failed to arrest a steady decline in Sydney’s residential index for detached homes, which fell for a 6th straight quarter.

Beachfront site opens Gold Coast up to rival development

After 3-and-a-half years of negotiations a property developer has amalgamated a large 8400 sqm beachfront site on the Surfers Paradise strip of the Gold Coast next door to a A$1b development under construction. The new site on Old Burleigh Road is directly to the north of Jewel, which has been touted as Australia’s largest beachfront mixed-use development and is under construction by Yuhu Group.

New property player steers away from hot spots

Neo Group, a new property development company, opted to stay away from the high competition in the horizontal housing market, by selecting three locations in the heart of Ladprao for its projects, highlighting “Value for Money”, “Great Location”, and “Perfectly Balanced Design” to serve the needs of all lifestyles. The new property development company with old faces who have been in the industry for more than 10 years, specialises in land and development as well as project feasibility study with large organisations.

China new home prices rise at weakest pace since Oct 2018

China’s new home prices grew at a slower pace in Aug as a cooling economy and existing curbs on speculative buying put a dent on overall demand. Wary of property bubbles, Chinese regulators have vowed to refrain from stimulating the property sector as they roll out measures to boost the broader economy hit by the Sino-US trade war and slowing consumer demand. Average new home prices in China’s 70 major cities rose 8.8% in Aug from a year earlier, compared with a 9.7% gain in Jul and the weakest pace since Oct 2018, Reuters calculated from official National Bureau of Statistics data on Tue.

China’s US$64 billion property management market ripe for consolidation as developers seek growth amid slowdown

China’s 450b yuan (US$63.6b) property management market is likely to see some consolidation, as the mainland’s real estate companies look for alternative sources of growth amid declining profit in the wake of the government’s cooling measures, according to DBS Bank. Hong Kong-listed property managers spent more than 3b yuan (US$424m) on M&A last year, up from just under 1b yuan in 2015, DBS added. The Singapore-based bank, however, did not have projections for this year.

CapitaLand receives international recognition for sustainability efforts

CapitaLand has been listed on Dow Jones Sustainability World Index and the Global Real Estate Sustainability Benchmark, receiving international recognition for its sustainability efforts. The real estate developer is 1 of 2 Singapore companies on the DJSI World Index this year, and has been listed on the index for 8 years running.

FLT to be included in GPR 250 Index Series from Sept 23

Frasers Logistics and Industrial Trust will be a constituent of the GPR 250 Index Series from Sep 23. Published by the Dutch firm Global Property Research, the series comprises two indices: the GPR 250 Index, representing the 250 most liquid listed property securities globally, and the GPR 250 Reit Index.  The latter is a subset of the GPR 250 Index, covering all companies having a Reit-like structure. To qualify for inclusion in both indices, companies must have a free float market cap of at least US$50m and must derive at least 75 per cent of their operational turnover from property activities.

Retail CEOs disagree on how online and bricks-and-mortar can co-exist

Scentre Group, which owns Westfield malls, said Australian retailers were ahead of the pack in combining digital and bricks-and-mortar offerings. That view was countered by online fashion retailer The Iconic’s chief executive Erica Berchtold, who said a traditional bricks-and-mortar store might not be a fit for her business. Ms Berchtold said while she might not be keen on a traditional store she was open to other “physical touchpoints”.

Co-working group JustCo is on the hunt for a co-working office tower

JustCo is on the hunt for an entire co-working office tower in Australia as the flexible working sector takes another leap forward. The plan for a whole-tower co-working hub comes just the group is set to open its first tower in the hip Gangnam district in Seoul, South Korea, called JustCo Tower.

HK turmoil: SGX-listed hospitality, retail, F&B firms to feel bigger impact

A number of Singapore-listed companies may start to see the impact of Hong Kong protests showing up in their bottomlines in their next quarterly earnings release, with those in the hospitality, retail and F&B sectors to suffer a bigger hit, say analysts. “We expect hospitality players and retail landlords to be the most impacted as the protests have directly impacted the visitor arrivals and footfall in shopping malls.

OUE to sell Downtown serviced apartments and business for combined $289 mil

OUE has entered into sale and purchase agreements to sell OUE Downtown Serviced Apartments and its direct wholly-owned subsidiary, OUE Downtown, for a total of S$289m. First, indirect wholly-owned subsidiary Alkas Realty has signed an agreement to sell the OUE Downtown Serviced Apartments, together with all plant, machinery and equipment on the property, to DHI Holding for S$287.1m. At the same time, direct wholly-owned subsidiary OUE Downtown, together with the assets of the business, will be sold to DHI Downtown for S$1.9m.

Two hospitality assets flipped for 30-70% profit in just months

2 Singapore hospitality assets – 1 along Orange Grove Road and the other in Outram Road – have been flipped for handsome gains after holding periods of just under a year. The Outram Road deal, involving the distinctive barrel-shaped Wangz Hotel, yielded a gross gain of about 30% or S$14m over a period of just 3 months. During the 10 months, the site on Orange Grove Road was rezoned from residential to hotel use.

Singapore’s asset management industry grows at slower 5.4% pace in 2018: MAS

Despite a challenging year for global financial markets in 2018, Singapore’s assets under management increased further by 5.4% to S$3.44t, according to an annual poll by the Monetary Authority of Singapore. This growth was mostly thanks to a 15% surge in alternative assets to S$646b last year, which was supported by strong inflows and continued valuation gains across private market asset classes including private equity and venture capital.

New app by UOB, SoReal helps SMEs buy commercial properties faster

Small and medium-sized enterprises (SMEs) will be able to invest in and get loans for commercial properties quicker, with a new mobile app launched yesterday by United Overseas Bank and property portal SoReal Prop. SMEs can search for and get valuations for properties such as offices and warehouses on the new RealCommercial mobile app, which provides listings from SoReal, an online property platform founded by ERA Realty, Huttons Asia and PropNex Realty last year.

1-Net North Data Centre sold for $200.2 mil

DataCentre One, a JV between Keppel Infrastructure Trust and WDC Development, has sold 1-Net North Data Centre for S$200.2m. Located at 18 Riverside Road, 1-Net North Data Centre has 200,000 sqft in available area. The facility has achieved Uptime Institute Tier 3 certification, and conforms with the Monetary Authority of Singapore’s Threat Vulnerability Risk Assessment specifications. It offers stable, secure and high-powered infrastructure for digitised content.

Chinese tourists come to Australia to buy property

Chinese buyers have Australian property set firmly in their sights again, as a new survey reveals nearly a third of Chinese tourists plan to shop for property while they’re on holiday. Property portal Juwai’s new survey of Chinese consumers found that 27% of mainland Chinese tourists planned to look at properties over the next year as part of their travels, and that Australia was their No.1 destination to go shopping. Juwai said demand for Gold Coast real estate in particular was likely to increase as buyers continued to return to the Australian property market.

New home prices rise in just 55 of 70 Chinese cities, the lowest in 18 months, amid Beijing’s efforts to cool the market

The Chinese government’s efforts to take the heat out of the property market appear to be paying dividends, with new data pointing to a slowdown in price gains as a growing number of developers slashed their prices. The average cost of a new home rose by 0.58% in Aug, the smallest increment in 6 months, according to calculations based on the data released on Tue. It was slightly lower than Jul’s growth of 0.59%, while prices grew 0.66% in Jun.

No room for third-tier developers’: Mirvac backs safety laws

The company has previously backed the recommendations of the 2018 Shergold-Weir report on improving building quality, and this time also took aim at substandard developers. Mr Penklis told The Australian Financial Review that a key part of Mirvac’s quality assurance process was bringing in an independent structural engineer to review building designs.

Boon for UK households as inflation falls to near 3-year low

Inflation in Britain fell to a near 3-year low in Aug, official figures showed Wed, a boon for households at a time of acute Brexit uncertainty. The Office for National Statistics said Wed that consumer prices rose 1.7% in the year to Aug, down from 2.1% the previous month. The Aug rate is the lowest since Dec 2016, when inflation was rising in the wake of the vote to leave the European Union, which prompted a plunge in the value of the pound and an increase in the cost of imports.

House prices in Britain rising at slowest rate for seven years

House prices in Britain are rising at the slowest annual rate for 7 years as Brexit uncertainty dampens consumer demand. Dragged down by steep declines in London and the south, national house price growth for the country at large dropped to 0.7% in Jul from 1.4% a month earlier, hitting the slowest growth rate since 2012, said the Office for National Statistics. House prices fell in four of nine English regions, with the biggest decline in the north-east where the average cost of a home slid by 2.9% over the year.

Mapletree Industrial Trust raises S$400m through private placement

Mapletree Industrial Trust has raised S$400m through an oversubscribed private placement of 176.6 million new units at an issue price of S$2.265 per unit, the top end of the issue price range of S$2.211 to S$2.265. The issue price represents about a 1.5% discount to the adjusted volume weighted average price (adjusted VWAP) of S$2.2985 per unit, and a 2.7% discount to the VWAP of S$2.3278 for all trades done on Mon up to the time the placement agreement was signed on Tue.

CBRE gets into the co-working game with Hana

CBRE, which already has an investment management and development arm, started co-working business Hana last year, aiming to tap a growing demand for flexible space by blue-chip clients. The business that has 2 locations in Dallas, Texas and Irvine, California, last week  announced the opening of its first 3 UK sites and it saw scope to expand further, Hana said.

WeWork London Building Deals Falter Amid IPO Market Fallout

Deals for two major London buildings leased mostly to WeWork are on the ropes. Saudi Arabia-based Sidra Capital has pulled out of a 90m pound (US$112m) deal as the flexible-office giant’s planned initial public offering got an increasingly rocky reception from investors, according to people familiar with the matter, who asked not to be identified discussing private negotiations. Separately, talks have stalled on the sale of WeWork Waterloo, which the company describes as the largest co-working facility in the world, according to other people with knowledge of the negotiations.

All eyes on Phahon Yothin, Vibhavadi

The Phahon Yothin and Vibhavadi Rangsit area has turned into the most sought-after location for residential development in Bangkok due to several factors, and the BTS Light Green line extension will be added as the final missing piece. It will be the 2nd extension to be opened this year following the MRT Dark Blue Line extension. The extension will increase accessibility and ease traffic on what has been known as one of the most congested roads in Bangkok.

Mandarin Oriental announces hotel in Nanjing

Mandarin Oriental Hotel Group has announced that it will manage hotel in Nanjing, the capital of Jiangsu Province in China, scheduled to open in 2022. Mandarin Oriental, Nanjing will be located on the Qinhuai River and in close proximity to historic landmarks including the Gate of China, which forms part of one of the longest ancient city walls in the world built by the first emperor of the Ming Dynasty over 600 years ago.

Asean lagging behind in sustainability efforts, experts say

Southeast Asia is lagging behind in sustainability efforts despite being most vulnerable to climate change, say experts at the BNP Paribas Sustainable Future Forum on Wed. Rintaro Tamaki, president of the Japan Centre for International Finance, believes Asia still has far to go in terms of a region-wide, integrated environmental policy to tackle the threat of climate change. And this is despite the region facing numerous cross-border environmental issues. At the sidelines of the event, Tamaki tells The Edge Singapore that little attention is being paid to the use of fossil fuels and carbon emissions in the region.

Landlords taking on more risk as co-working grows

Co-working hubs have been steadily filling gaps in our biggest office markets but a sudden shift in gear as operators pursue larger chunks of space and even entire buildings carries high risk and could spell trouble for office tower landlords, experts warn. Upon entering the market, big co-working companies initially took up small vacant spaces, often of just a few hundred square metres but activity has intensified and the co-working/serviced office sector in Sydney – the largest market in Australia – has increased tenfold from 16,000 sqm to 160,000 sqm in the past 3 years, according to Savills data.

Mapletree Industrial Trust to raise at least S$350m from private placement

Mapletree Industrial Trust looks to raise at least S$350m through a private placement to partially fund its joint purchase of a North American data centre portfolio worth US$1.37b, which the trust said would cost it about S$965m. It is issuing 158.3 million new units at an issue price of S$2.211 to S$2.265 per unit, with an upsize option to issue up to 22.6 million new units that would raise at least another S$50m.

Charter Hall Retail REIT buys into Sydney malls portfolio

Charter Hall Retail REIT has bought a 20% stake in a A$281m portfolio comprising 2 suburban Sydney malls as the ASX-listed fund progressively weights its portfolio towards dominant convenience-focused centres. The remainder is held by Charter Hall itself, the listed fund manager led by David Harrison, which has the listed retail REIT as part of its stable of funds.

Why co-working is here to stay

The extraordinary twists and turns of WeWork’s IPO saga should not distract the owners and occupiers of office space in Australia from the real growth, and real value, in co-working. Co-working or flexible office is here to stay, to grow and to evolve. The Global Coworking Unconference Conference estimates that during 2015-17, the number of members using flex offices around the globe near tripled to 1.7 million, with another 3.4 million members to sign up by 2022.