Property wrap: Minbu villa re-launches en bloc

The massive crowd in the snake queue after booking (Rivercove Residences)
The massive crowd in the snake queue after booking (Rivercove Residences)

Minbu Villa, a freehold 36-yr-old 34-unit high-end condominium along Minbu Road (Novena area), has re-launched its en-bloc bid at S$146m or S$1,355 psf (no development charge is required due to high development baseline) on GFA of 107,593 sqf, which translates to average selling price of S$2,100-2,200 psf to achieve PBT margin of 5-10% on breakeven of S$2,000 psf.

In-principle approval has also been granted by the government to acquire a 2,109 sqf adjoining piece of state land, which would further lower the land rate by S$34psf.

Over 60% of owners have also signed a supplemental agreement to lower the reserve price by 11% , which translates to a land rate of S$1,200 psf, and would be binding if at least 80% of owners agree.

The tender will close on 18-Dec-18. Consultants estimate that at least 60 sites have closed their tenders without a buyer this year. (Source: The Business Times and URA)

ERA Realty Network’s collaborations with CBRE Realty Associates and HSR international Realtors have added about 500 real estate salespersons to its agent count which now stands at 6,542. ERA has also won more projects this year with 66 so far.

There were 35 project appointments which accounted for more than 14,700 units this year, 28 projects are already in the pipeline for 2019. (Source: EdgeProp)

Chinese developers are facing drastically higher cost of financing due to higher US interest rates, growing investor aversion to risk in China and China’s cooling property market.

Chinese property developer, Times China Holdings, is currently offering a yield of 11% on a two-year bond, vs. a three-year bond at a yield of 6.25% it had issued in January.

Meanwhile, heavily indebted developer, Evergrande Group, sold US$1b of two-year bonds at 11% yield on Monday.

Chinese developers are rushing to the market and offering ever-higher coupons to attract investors before their offshore borrowing quotas expire at the end of the year.

Only 15 companies across the Asia Pacific have paid double digit rates for bonds of at least US$100m in the past two years, twelve of these are Chinese property developers. ( Source: The Business Times, Bloomberg )

First REIT (FIRT) has fallen 16% in three days to S$0.975 in a sharp sell-off amidst concerns over the REIT’s main revenue contributor and sponsor, Lippo Karawaci, which had seen a credit rating downgrade by Fitch Ratings from B to CCC+ in early November over concerns about its liquidity risks as a result of uncertainty over its asset sales.

This had been “potentially exacerbated” by an alleged bribery linked to the Lippo Group’s US$21b Meikarta property project near Jakarta which Indonesian authorities are investigating.

Lippo Karawaci had said that Fitch’s decision was unsubstantiated due to its strong balance sheet and that the company was making headway in an asset divestment plan that would raise IDR 6tn in net cash, including the sale of its stake in First REIT’s manager to OUE and OUE Lippo Healthcare for S$99m and the sale of its 10.6% stake in First REIT to OUE Lippo Healthcare for S$103m.

Market watchers believed that the sell-off had been triggered by institutional investors exiting their stake. (Source: The Business Times)

ARA Asset Management eyeing Brisbane office property at 133 Mary Street, which forms part of the A$200m Quadra Pacific Office portfolio. (Source: The Australian)

ARA Asset Management could revisit an IPO in another 1-2 years , according to Ng Beng Tiong, CEO of ARA Private Funds & Assistant Group CEO, ARA Group.

ARA has more than doubled its AUM to S$78b after its privatization over a year ago.

This bring the company closer to its AUM target of S$100b by 2021, which has rekindled speculation on its plans for a second IPO. (Source: DealstreetAsia)

Oxley Holdings (OHL) Deputy CEO Low See Ching has raised his stake in OHL to 29.78% after paying S$0.295/sh for 300,000 shares. (Source: The Business Times)

Residents who oppose the collective sale of their private home still have to pay any seller’s stamp duty that applies to them, according to Second Finance Minister Lawrence Wong.

The reason being that the collective sales committee is given the powers to enter into a sale-and-purchase agreement on behalf of all owners when its gets the consents of the required majority of residents in the property. ( Source: The Business Times )

Cartier has reopened its ION flagship boutique, which has been remodeled and expanded to become Cartier’s gateway in South-east Asia.

The 688 sqm boutique will re-open this Saturday and will be marked by a two-week-long public exhibition that showcases selected iconic Cartier collection pieces. ( Source: The Business Times )

Hong Kong property: The property market has started to soften after 48 months of stellar growth around 50%.

The Centa-city Leading Index registered a 3.2% decline since end-July.

The contracting building and construction and cost of ownership transfer component of GDP in 3Q18 also reflects this pessimism.

The confidence of Hong Kong’s businesses in China, particularly in the Greater Bay Area, has been hurt by the escalation in trade tensions.

Hong Kong is the largest source of realised foreign direct investment for China (53.1% share in 2017), especially in the Guangdong province (63.8% share in 2016).

Meanwhile, Guangdong’s exports accounted for 51.7% of its GDP in 2017, well above the national average of 18.6%.

Pressures on the property market could rise if unfavourable business conditions prompt owners to liquidate their holdings.

The government’s latest vacancy tax imposed in July (to encourage property developers to clear unsold units) has not helped.

Even so, the fall in property prices is not expected to be drastic but moderate and manageable.

The sector is supported by longer-term factors such as a low unemployment rate (2.8%) and the demand-supply imbalance (See Hong Kong: Stormy Seas Ahead, 25 October).

Mixt Chatuchak, 1st & only shopping centre in world-famous Chatuchak weekend Mkt, will open in Jul ’19. There will be 700 shops spreading over 60,000m2. Deved by Siam Piriya Devt. (Nation)

SM Prime says to build 1st Philippine Ikea store in Manila, will occupy >50% of the 121,000m2 mixed-used bldg. Will be World’s Largest Ikea Store. The project will be launched at end-20. (Co)

Chinese backed Poly Australia sold 40 apts at its new 100-unit Melb project Summit in Doncaster over the w/e, as quieter off-the-plan sales continue. (AFR)

Capitaland Mall Trust unit issues HK$555M of notes. The notes were issued under the Singaporean real estate investment trust’s S$3.50 billion multicurrency medium-term notes program