Real News‎ > ‎2014‎ > ‎December 2014‎ > ‎

3rd December 2014

Singapore Economy

SG50: Look to the future, too, not only the past

Source: Today Online / Singapore

2015 will be a year of relentless celebrations and commemorations of Singapore’s 50th year of independence. These events will take place at all levels — from grassroots to national — and at all places — such as schools, community clubs and the Padang for the National Day Parade.

Every Singaporean — regardless of political affiliation or past nationality — has reason to join in to mark this milestone in our national journey.

However, amid all the activity, there is the danger that we might end up having a year-long party for the sake of having a party rather than finding deeper meaning and purpose in the celebrations. Even where we do find meaning, there is also the risk that we might misunderstand the significance due to the heavy emphasis that will inevitably be placed on the historical significance of the occasion.

Let me point out four possible misunderstandings and suggest what we should focus on instead.


First, it is natural that much will be made of how Singapore went from Third to First World in one generation. The country’s development is reflected in its modern landscape — from the well-planned housing estates in the heartlands to the towering skyscrapers of the business district. And yes, physical structures can express meaning, but usually only shallowly.

What we should be emphasising more than the quantity of our built-up space is the quality of our people and the society that we collectively constitute. We should not forget that the physical towers are ultimately built on a strong foundation of intangible shared values. Singaporeans are the soul of our urbanity.

And while that is still so, we can be confident that our national character will remain resilient. This is a vital virtue which does not happen or sustain itself naturally. We have to keep working at it.


Second, in that narrative of Third World to First, it will seem that Singapore’s achievements were inevitable and its leaders infallible. We should be mature enough to accept that neither contention is true and that recognition does not take away but adds lustre to the pioneers — both people and leaders.

Singapore could have gone off the track on several occasions — in the face of global economic shocks, such as in 1997 and 2009, and security and biological threats such as Jemaah Islamiyah and the severe acute respiratory syndrome — and these crises presented severe tests.

Our national journey did benefit from extraordinary leadership, but we also got lucky. We set the correct economic direction early, the Cold War made strategic alliances more accessible given our anti-communist stance, we surfed the tide of the Great Moderation in global economics in the ’80s and ’90s, and we have been lifted even higher due to the shifting centre of gravity from West to East.

Singapore’s next 50 years may not come with the same benign conditions. The impression of linear progress in our past 50 years, even if true to a certain extent, should come with the usual caveat in financial prospectuses — that past is no guarantee of future performance. Singapore has to remain nimble and be able to take knocks.

That does not mean that we are failing. It means only that we cannot take for granted our good times, but that if we persevere, there will be more of those better times even while we have to go through bad patches. That more punctuated narrative of progress should be our new definition of success.


Third, the commemorative aspects of the SG50 events may induce a collective nostalgia for things past and stoke a yearning to retain our Singaporean identity. Again, to an extent, this is natural and even to be welcomed, so that we act to preserve some of our past as anchors of identity.

However, if we overdo it, we can get in the way of the essential truth of the Singapore condition — and this is that we survive by continuous adaptation in the face of relentless change. This has been our formula for success, which we must retain.

To do this, we must continue to be willing to take risks and to focus on the longer term.

Adaptation can trigger discomfort and angst among some Singaporeans who wish for stability and predictability. Nevertheless, we have no alternative but to always seize the initiative from events and to plan and act ahead of tomorrow.


This brings me to my final point. A preoccupation with the past, however glorious, during the SG50 year would be unhelpful.

In moderate doses, it is comforting and self-congratulatory, which are both fine. But we could develop an addiction to our own self-gratifying narrative of the past 50 years when we should be focused on generating a new narrative suited to the next 50 years.

SG50 should mark not only Singapore’s past half-century, but also an occasion to look ahead to the coming half-century of independence.

In short, let us continue to make new history and not only celebrate old history. To do so, we will need to make big bets and steer our course as conditions determine. As a small nation, we are not masters of our circumstances, but we are and must remain masters of our choices.

-By Devadas Kri Shinadas, Chief Executive of Future-Moves Group

Singapore 3rd most popular destination in Asia Pacific for retailers: Report

Few barriers to entry and strong supply chains in Singapore are factors that attract international retailers, according to a report by JLL.

Source: Channel News Asia / Business

SINGAPORE: The Republic has been ranked as the third most popular destination in the Asia Pacific region for international retailers, behind Hong Kong and Shanghai, according to a new report by JLL on Wednesday (Dec 3).

The report noted that Singapore is often used as a hub for expansion into other Southeast Asian markets, and international retailers see the city-state as an important market for building brand awareness. Few barriers to entry and strong supply chains in Singapore are other factors that attract international retailers, it added.

Still, there are several hurdles for brands looking to enter the market. With low vacancy rates in prime locations, it is difficult for brands to secure an appropriate retail location, the report said, adding that this supply and demand disparity has led to rental price growth in prime locations over the past few years.

At the same time, landlords now have to give more thought to their tenant mix in order to attract customers, given the influx of new malls, decline in reported tourist arrivals and the rising impact of e-commerce, it said.

Said Mr Tom Hamilton, Director of Retail, JLL Singapore: “In 2015, we envisage a continued growth of international brands entering the Singapore market but with very specific emphasis placed on sourcing stores in the strongest strategic locations.” 

A continued slow-down is expected in the take up of weaker locations, with many existing retailers reining in expansion strategies along with the potential consolidation of store numbers, he added.

- CNA/cy

Singapore Real Estate

Spanish tycoon pays S$4,100-plus psf for pair of Seven Palms Sentosa Cove units

Source: Business Times / Real Estate

The overall Sentosa Cove condo market may be languishing, but SC Global Developments is understood to have sold two units at its Seven Palms Sentosa Cove at what could be a record price in the waterfront housing district: S$4,100-plus per square foot (psf). The overall lump sum works out to S$28.55 million.

-By Kalpana Rashiwala

GIC beefs up real-estate portfolio with US$8.1b purchase of IndCor

IndCor has largest portfolio of warehouses and distribution centres in US, operating in 23 states

Source: Business Times / Real Estate

SINGAPORE sovereign wealth fund GIC has confirmed news that its affiliates will buy US industrial property company IndCor Properties Inc from Blackstone Group LP for US$8.1 billion, making it yet another major real-estate investment for the fund. 

A GIC spokesman confirmed the purchase on Tuesday, following Blackstone's announcement of the deal.

The move gives GIC and its affiliates a significant presence in the US warehousing space, thanks to Chicago-based IndCor's ownership of some 117 million square feet of industrial real estate throughout the country.

The deal also puts paid to IndCor's plans for an initial public offering. Blackstone had been intending to exit IndCor through a share offering that would have valued IndCor at about US$8 billion, but clearly found the sale to GIC - a more immediate realisation of its investment - the more attractive alternative.

The investment by GIC and its affiliates comes at a time when demand for commercial real estate, and prices for such real estate, in major markets is rising. Warehouse properties and logistics-services companies are fetching increased interest from funds as global trade grows. Brookfield Property Partners LP and TPG Capital have been on the acquisition path for such assets too.

Blackstone formed IndCor in 2010, acquiring property when values crashed after the global financial crisis. IndCor now has the largest portfolio of wholly owned warehouses and distribution centres in the US, operating in 29 key markets in 23 states.

"We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States," said IndCor CEO Tim Beaudin in Blackstone's statement. "We are excited about the company's future prospects under new long-term ownership with GIC."

GIC declined to comment further on the deal, which is expected to close in the first quarter of next year.

The sovereign wealth fund has been very active recently in beefing up its global real-estate portfolio, which accounted for 7 per cent of its assets in its most recent annual report.

Just last month, it announced two investments in New Zealand. In the first, it partnered with the country's Goodman Property Trust to co-invest in Auckland's Viaduct Quarter; and, in the second, it agreed to buy a 49 per cent stake in five malls in the country from Scentre Group in a transaction valued at NZ$1.04 billion (S$1.07 billion).

In October, it announced that it bought the entire office component of Pacific Century Place Marunouchi - situated next to Tokyo Station - with a gross floor area of 38,840 sqm of net lettable area, for US$1.7 billion. It also acquired the remaining half of the RomaEst Shopping Centre in Italy, to gain full ownership of the mall, for an undisclosed amount; and it agreed to pay more than 200 million euros (S$325 million) for a 30 per cent stake in Spanish real estate firm Gmp.

The month before, it agreed with Indian developer Brigade Enterprises to jointly invest 15 billion rupees (S$317 million) in residential real estate projects in south India.

In January, it teamed up with New York-based developer Related Cos and the Abu Dhabi Investment Authority to buy Time Warner Inc's headquarters in Manhattan for US$1.3 billion. And, the month before that, it acquired Blackstone's 50 per cent stake in London's Broadgate office complex for a reported £1.7 billion (S$3.5 billion).

Meanwhile, Blackstone has been stepping up its real-estate sales, as it prepares to raise its next global property fund. The private-equity giant has been reducing its stakes in its publicly listed entities, Brixmor Property Group Inc - the second-largest US shopping centre landlord - hotel group Hilton Worldwide Holdings Inc, and lodging company Extended Stay America Inc.

Blackstone has said it plans to raise at least as much as US$13.3 billion - the amount raised in its last fund - for its next fund.

-By Michelle Quah

GIC targets US industrial properties in $10.6b deal

It partners various affiliates to buy IndCor from Blackstone Group

Source: Straits Times / Top of The News

SINGAPORE investment firm GIC has set its sights on warehouses and distribution centres in the United States with the acquisition of IndCor Properties from private equity giant Blackstone Group.

GIC and various affiliates have inked an US$8.1 billion (S$10.6 billion) deal for IndCor, which owns 117 million sq ft in industrial properties across the US.

A GIC spokesman yesterday confirmed the investment. 

These centres are in markets near domestic and global transportation hubs, and major logistics and warehouse and distribution networks in cities such as Las Vegas, Seattle, Denver, Houston and Miami.

The deal is expected to close in the first quarter of next year.

The move marks GIC's expansion into the US industrial estate space in a big way, market observers said.

IndCor has now dropped plans for an initial public offering, Blackstone said in a statement on its website on Monday.

Mr Wong Kok Hoi, the founder of APS Asset Management in Singapore, tips a looming shortage of US industrial real estate as building has slowed in recent years.

"With the economic recovery under way in the US, the shortage of industrial space is likely to force rates up. This is another clever move of the GIC to acquire hard assets where they believe they will make a decent capital gain in the long run, and in the meantime collect a steady stream of rental income," Mr Wong said.

"Based on GIC's recent purchase patterns, it is evident that they have a long-term strategy to purchase office buildings, and now industrial properties, in a meaningful manner," he said.

CIMB regional economist Song Seng Wun said the US logistics segment is poised to benefit from a recovering economy as goods distribution picks up.

"Blackstone has been very busy in terms of buying distressed assets in the US during the downturn, and now it is time to cash out and lock in gains through the sale to GIC," he added.

IndCor chief executive Tim Beaudin said in Monday's statement: "We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States.

"We are excited about the company's future prospects under new long-term ownership with GIC."

Meanwhile, Global Logistic Properties (GLP), one of the largest owners of warehouses and other industrial property in Asia, announced yesterday that it "has not entered into any binding agreement" in relation to the IndCor purchase.

It was clarifying a Wall Street Journal (WSJ) report on Monday that said: "GIC's partner in the acquisition will be Global Logistic Properties... according to people familiar with the matter."

GIC is GLP's largest shareholder. GLP's announcement came yesterday in response to the WSJ story on the deal.

In September, a GIC affiliate and two Canadian pension funds invested US$700 million in XPO Logistics, a provider of airfreight forwarding and warehousing management services in Connecticut.

-By Grace Leong

GIC to buy IndCor Properties for S$10.6 billion

The transaction is expected to close in the first quarter of 2015, and it is considered one of the largest industrial property sales in the world.

Source: Channel News Asia / Business

SINGAPORE: GIC, Singapore's sovereign wealth fund will acquire industrial property company IndCor Properties from investment company Blackstone for US$8.1 billion (S$10.6 billion), according to a press release from the latter on Tuesday (Dec 2).

The transaction is expected to close in the first quarter of 2015, said Blackstone. A GIC spokesperson confirmed the investment in IndCor on Tuesday. The deal is one of the largest ever industrial property sales anywhere in the world.

Blackstone said as a result of the transaction, IndCor will no longer be pursuing an initial public offering (IPO). The company owns and operates a portfolio of 117 million square feet of high-quality industrial properties in key markets throughout the United States.

Mr Tim Beaudin, IndCor CEO, said: “We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the US. We are excited about the company’s future prospects under new long-term ownership with GIC.”

- CNA/kk

Blackstone Said to Score $2 Billion Profit on IndCor Sale

Source: Bloomberg / News

Blackstone Group LP (BX) stands to make a profit of more than $2 billion by selling warehouse owner IndCor Properties Inc. to Singapore’s GIC Pte, according to a person with knowledge of the matter.

Blackstone, the world’s largest manager of alternative assets such as private equity and real estate, said this week that it will sell IndCor to the sovereign-wealth fund for $8.1 billion. The deal pre-empted a planned initial public offering for the property company, which said in September it had confidentially filed with the Securities and Exchange Commission to go public as a real estate investment trust.

The GIC transaction is Blackstone’s largest-ever private sale of a property holding, said the person with knowledge of the matter, who asked not to be named because the financial details are private. The deal will more than double the value of the firm’s equity investment in IndCor, the person said.Peter Rose, a Blackstone spokesman, declined to comment.

Blackstone created Chicago-based IndCor in 2010, after a plunge in property values following the financial crisis, and built it into an owner of more than 117 million square feet (10.9 million square meters) of warehouse buildings across the U.S. Industrial real estate prices in major markets have rebounded from the crash and are within 5 percent of their precrisis peak, according to Moody’s Investors Service.

The sale is the latest in a string by Blackstone’s real estate unit, which has returned more than $16 billion to fund investors since the end of the third quarter of 2013. This year the firm has sold five Boston office buildings totaling 3.3 million square feet, along with shares of hotel operator Extended Stay America Inc. (STAY), shopping-center owner Brixmor Property Group Inc. (BRX)and Hilton Worldwide Holdings Inc. (HLT)

Waldorf Sale

In October, Hilton agreed to sell New York’s Waldorf Astoria hotel to China’s Anbang Insurance Group Co. for $1.95 billion. Blackstone acquired the Hilton chain for $26 billion in 2007 and took it public a year ago.

Blackstone’s Hilton profit, currently valued at about $12 billion, ranks as the largest ever in the private-equity industry. Blackstone, which invested about $6.5 billion of equity in Hilton, has sold about a quarter of its shares since the IPO for $4.8 billion, according to filings. Its remaining 55 percent stake is valued at about $13.9 billion, based on yesterday’s closing share price.

Blackstone’s real estate group, led by Jon Gray, oversaw $80 billion in investments as of Sept. 30. The company began marketing its latest global property fund last month, according to two people with knowledge of the fundraising. Blackstone executives have said they expect that fund will be at least as big as the company’s record $13.3 billion pool that closed in 2012.

-By David Carey and Hui-yong Yu

KepLand in JV to build office tower in Yangon

Its total investment in Grade-A building will be US$47.4 million

Source: Business Times / Companies & Markets

Keppel Land is investing US$47.4 million through a joint venture in Myanmar to develop a Grade-A office tower in Yangon. The group said on Tuesday that it has entered into a conditional joint venture agreement with ShweTaung Group, a major construction firm in Myanmar, to develop a 23-storey office tower in Yangon's central business district.

-By Lynette Khoo

JEP unit signs lease for JTC land

Source: Business Times / Companies & Markets

JEP Holdings' subsidiary, JEP Precision Engineering, has signed a 30-year lease agreement with JTC for an 18,500 square metre parcel of land in Seletar Aerospace Park.

GuocoLand ramps up marketing for new condo in Sims Drive (Amended)

The 2.4 ha Sims Urban Oasis features a sky park and a 300 sqm childcare centre

Source: Business Times / Real Estate

Guocoland is slated to launch its 1,024-unit condo project in a quiet enclave off Aljunied Road only early next year, but has started drumming up interest in the project and its location. A Facebook page for the Sims Drive project and an interactive map showing the nearby amenities, schools and well-known eating places have been launched.

-By Lynette Khoo

GuocoLand hopes project will enliven Sims Drive area

Source: Straits Times / Money

DEVELOPER GuocoLand hopes to transform the dull and dusty Sims Drive area with its Sims Urban Oasis project.

The 1,024-unit development will be a major addition to an area marked by industrial buildings and several blocks of Housing Board flats.

"We are interested in projects... of a certain scale, where we believe we can have an impact (on the environment)," Mr Cheng Hsing Yao, managing director of GuocoLand Singapore, said yesterday.

Pricing is not confirmed, but units will be from one to five bedrooms with the project to be "launch ready" by early next year, although market conditions will determine the actual date, Mr Cheng said. The project's estimated date of vacant possession is in June 2020.

GuocoLand, which will announce details of the project today, bought the 2.4ha, 99-year leasehold site for $530.9 million, or $688 per sq ft (psf) per plot ratio, in April.

Experts estimate that break-even prices will be $1,090 psf to $1,130 psf, with sales possibly at $1,220 psf to $1,300 psf.

Mr Cheng said the site's location is a key selling point. It is a five minutes' walk to Aljunied MRT station, a five-minute drive to the Sports Hub and less than 15 minutes' drive to the central business district.

He noted that small cafes and organic restaurants, including Loysel's Toy and Cafe Melba, have set up shop in the area, a harbinger of more vibrancy to come.

"The area is almost like Tiong Bahru in that it was quite sleepy in the early days," Mr Cheng said.

The size of the development also means it can be more generous with amenities, including a "Skypark" on the 19th storey that will be a vantage point for viewing fireworks at Marina Bay.

GuocoLand intends to have four clusters of homes, including more compact "suites" and small home office units, to cater to different types of home owners, from singles to families and upgraders.

This "broader appeal" is a departure from its previous projects - Clermont Residence at Tanjong Pagar Centre, Leedon Residence in Leedon Heights and Goodwood Residence in Newton, which was completed last year.

The firm had sold 15 units at the 181-unit Clermont Residence by the end of October, 145 at the 381-unit Leedon Residence and 158 at the 210-unit Goodwood Residence.

-By Rennie Whang

JLL buys Henry Butcher's international residential project sales business

Source: Business Times / Real Estate

JLL continues to expand its international residential project sales marketing business, to cater to the strong appetite among Asians for overseas properties. This time around, the property consulting group has acquired Malaysia-based Henry Butcher's international residential project sales unit.

-By Kalpana Rashiwala

7 years on, South Beach to open its doors

Source: Straits Times / Top of The News

SINGAPORE'S largest mixed development will soon be ready for business after seven years of work and frustrating delays.

The 1.65 million sq ft South Beach project in Beach Road, opposite Raffles Hotel, will open in phases over the next 12 months.

Its first corporate tenant arrives early next year.

South Beach is an ambitious project with two towers - of 34 and 45 storeys - comprising an office block, luxury homes and a Philippe Starck-designed hotel.

The development will also have 37,000 sq ft of retail space.

The South Beach, as the hotel is called, will have 654 luxury rooms and direct links to the Suntec City Convention Centre and Esplanade MRT station. It opens its doors in April.

Despite a sluggish property market, the project's office component has done well.

A third of the 500,000 sq ft of office space has been leased, while a further 50 per cent of leases are being firmed up now, said Mr Aloysius Lee, chief executive of the South Beach Consortium.

TMF Group, a multinational professional services firm, will take up 16,000 sq ft, while Rabobank will occupy about 30,000 sq ft at the North Tower office building.

"The South Beach team is currently in advanced negotiation with parties to take up another 10 per cent, and is confident of hitting 90 per cent occupancy by early 2015," said Mr Lee.

There will be 190 residential units, ranging from 950 sq ft two-bedders to 6,500 sq ft five-bedroom penthouses with their own swimming pools.

The Non-Commissioned Officers Club building and three former army blocks, the site of Singapore's first national service enlistment exercise in 1967, will be incorporated into the project to house a 29,000 sq ft private club and hotel facilities.

South Beach is being developed by City Developments (CDL) and Malaysia's IOI Group.

The project was initially slated for completion in 2012, but was hit by delays.

The consortium that secured the 376,296 sq ft plot in 2007 had originally comprised Dubai World unit Istithmar, United States-based Elad Group and CDL, each holding a one-third stake. But the financial crisis in November 2008 led CDL to defer building plans, after which Elad and Istithmar both dropped out.

Preparations to market the project picked up after IOI Group entered the consortium in 2011. The project's residential unit prices are still under wraps.

-By Cheryl Ong

Views, Reviews & Forum

Habitable housing for foreign workers

Source: Straits Times / Opinion

THE dimensions of housing Singapore's non-resident population have grown tenfold over the decades. However, the market has proven generally resilient in catering to the various needs of this demographic, which now numbers 1.6 million - forming 29 per cent of the total population, compared with 2.9 per cent in 1970.

What has caused public discomfit from time to time has been the provision by certain employers of below-par accommodation for lower-paid foreign labour, notably construction workers. It would be scant exaggeration to describe some of these pockets of makeshift housing for foreigners as ghettoes that stand in stark contrast to the spick-and-span built environment that is the product of their labours.

Many of the over 300,000 construction workers here are well housed but there are still a proportion who are packed in quarters built at construction sites, in apartments, shophouses and temporary dormitories. Hygiene and sanitation suffer from overcrowding, workers have to sleep shoulder to shoulder, and demanding work cycles lead to soiled apparel and discarded food piling up within. In some instances, workers were made to live in shipping containers and bathe next to drains, in a shack erected above an underground sewage tank, and at other unsavoury locations.

It's a world that ordinary Singaporeans do not dwell upon until it comes uncomfortably close, as at Serangoon Gardens six years ago when residents campaigned strenuously against a foreign workers' dorm in their neighbourhood. Rather than having a sense of gratitude towards those who undertake dirty and back-breaking work shunned by Singaporeans, many mentally rationalise that foreign workers' villages might be no better than the workers' slums here and that they ought to be thankful for their higher wages.

Naturalising the poor state of such housing ought to be repugnant to any First World society. Instead, Singaporeans ought to support basic standards of human decency, tighter monitoring of such quarters, and stiffer penalties under the Employment of Foreign Manpower Act for employers responsible for deplorable conditions, either wilfully or through neglect. There is no excuse for such acts, especially when there's a range of better options available, including purpose-built dorms for foreign workers. There are 200,000 beds available now in about 40 big dorms. Nine more are to be built with amenities such as cafeterias.

Alongside such efforts, it's also important for more to be done to educate workers on what is deemed inhabitable quarters and what amounts to ill-treatment at a workplace. Acceptable housing must be seen as a must rather than an indulgence.

Home prices down, yet property tax unchanged

Source: Straits Times / Forum Letters

I JUST received my property tax bill for next year and was surprised to see that my property value has remained unchanged for the last 31/2 years. I checked with friends and they, too, face the same situation.

Government data and property analysts' latest reports show that both private and public property prices and rents have dropped over the last 18 months.

Developers and owners are trying to offload properties by lowering prices, resulting in private condominium prices sliding by not less than 20 per cent in many instances.

Some properties have been put up for auction, and owners are defaulting on mortgage instalments.

So it is surprising that the Inland Revenue Authority of Singapore still maintains the same annual values for many properties.

It is time to revise the annual values of residential properties.

-By Daivd Goh Chee Hoe

Companies' Brief

S-Reits ratings to remain stable next year: Fitch

Source: Business Times / Companies & Markets

Ratings on Singapore real estate investment trusts (S-Reits) are expected to remain stable next year, according to Fitch Ratings, although hospitality Reits are likely to face more downside risks than other sectors. "Tourist arrivals into Singapore are likely to remain weak in 2015, due to softer economic growth in China and higher inflation in Indonesia - two key inbound markets," Fitch said in a report released on Tuesday.

CDL Hospitality Trusts

Source: Business Times / Companies & Markets

CDL Hospitality Trusts has entered the hospitality market in Japan with the acquisition of two Tokyo hotels for S$63.8 million. We reiterate "Neutral" with a DDM (dividend discount model)-derived target price of S$1.78, implying an 8.6 per cent total return.

Global Economy & Global Real Estate

China to introduce property registration rules in March

Source: Business Times / Real Estate

China will implement long-awaited property registration rules from March, a Chinese media outlet said on Tuesday, in a move that could give the country's anti-corruption investigators extra ammunition and pave the way for new taxes.

China to implement real estate registration rules

National system an anti-graft tool, paves way for taxes

Source: Straits Times / Asia

BEIJING - China will implement long-awaited property registration rules from March, a Chinese media outlet said yesterday, in a move that could give the country's anti-corruption investigators extra ammunition and pave the way for new taxes.

Under a draft of the regulations published in August, a national registration system will be established sharing information such as property location, area and origin of ownership among government departments including police, taxation and audit authorities "in real time".

The rules have been approved by the State Council, China's Cabinet, and will take effect from March 1 "despite various hindrances", news portal reported, citing unidentified sources. 

The national registration system could potentially act as an anti-graft tool by preventing officials from hiding their assets.

It could also pave the way for nationwide real estate taxes, which are regarded as an effective way to curb speculation, after the country saw years of surging house prices, creating widespread resentment among ordinary Chinese.

Under the system, owners will also need to register land-use rights including categories such as farming and forestry, as well as sea-use rights, the state-owned China Securities Journal reported.

But at the same time prices for real estate - a key driver of the economy - have been falling for months, and the authorities want to avoid a disorderly plunge in the market.

That prompted China's central bank to cut its benchmark lending rate by 40 basis points to 5.6 per cent on Nov 21, reversing in part its drive to cool a sector that many feared had become so bloated by speculative froth that it was crowding out other forms of investment.

But the lowering of the lending benchmark will bring only marginal relief to the sector's biggest headaches - too much unsold stock and tight liquidity.

"The fundamental problem of China's housing market is oversupply," said real estate services firm E-House China's co-president Ding Zuyu, and a few home-buyers encouraged by the rate cut would not change that.

New home prices in China dropped for a seventh consecutive month in November from the previous month, a survey by the China Real Estate Index System showed.

The property registration scheme was included in a landmark property law in 2007, but Chinese media have said its specific rules have been long delayed due to their sensitivity and complexity.

The Ministry of Land and Resources, which is in charge of the registration, has said it aims to have the system operating by 2016.

Public outrage is intense over corrupt government officials who have sought to hide wealth by illegally amassing dozens of homes under false identities. In one high-profile case last year, Gong Aiai, vice-president of a bank in the northern province of Shaanxi and a delegate to the local legislature, was sentenced to three years in prison after she was found to have purchased more than 40 properties under multiple identities.


Australian landlords take record debt as rental yields fall

Source: Business Times / Real Estate

Derwent Wins Approval to Turn Headquarters to Apartments

Source: Bloomberg / Luxury

Derwent London Plc (DLN) plans to demolish its own headquarters in the capital’s exclusive Mayfair district and build apartments as residential values in the city center outstrip offices.

The largest real estate investment trust focused on central London won approval late yesterday to raze a building at 25 Savile Row, a street famous for its high-end tailors, and construct 29 apartments on the land. The Westminster borough council voted in favor of the project, subject to a higher affordable-housing payment, at a meeting.

About 5 percent of the office space in Westminster has been turned into homes or received approval for residential construction. Apartments in Mayfair sell for about 3,000 pounds ($4,715) a square foot, compared with 2,300 pounds for office buildings, according to data compiled by broker Jones Lang LaSalle Inc. (JLL)

“This is a prestigious project,” Sue Munden, an analyst at Panmure Gordon U.K. Ltd., said before the vote. “The discrepancy in values between residential and office space in Mayfair means they are set to make good returns from this.”

The development also will include two stores on the ground floor of the new building.

-By Neil Callanan

NYC’s One57 Sells One Condo in Quarter as Luxury Slows

Source: Bloomberg / Luxury

A single apartment at Manhattan’s One57 was sold in the third quarter, leaving about 25 percent of the ultra-luxury tower’s units without buyers more than three years after they reached the market.

Twenty-four of the building’s 94 condominiums were unsold as of Sept. 30, according to a filing last week on the Tel Aviv Stock Exchange, where builder Extell Development Co. sells debt to investors. The most recent contract was only the third this year at One57, where sales have slowed as the tower faces competition from other projects planned nearby.

“We definitely have seen a slowdown on that super-luxury end,” said Andy Gerringer, managing director at the Marketing Directors, a new-development brokerage not involved with One57. “People know there’s a lot more product coming to the market in that range. They’re either waiting to see what it’s going to be like, or they’re holding off.”

Extell broke ground on One57 in 2009, setting off a high-end residential development boom in midtown Manhattan. At least six skyscrapers aimed at multimillionaires, including Zeckendorf Development Co.’s 520 Park Ave. and Vornado Realty Trust’s 220 Central Park South, are under construction in the area, with plans to begin sales in the coming year. Another tower off 57th Street, 432 Park Ave., recently surpassed One57 as the tallest residential building in the city.

At the end of September, 707 luxury homes were on the market at newly developed properties in Manhattan, more than double the number a year earlier, data from appraiser Miller Samuel Inc. show. The New York-based firm defines luxury as the top 10 percent of all homes by price.

Global Appetite

Luxury resale listings climbed 14 percent to 920, as individual owners tried to profit from a global appetite for high-end Manhattan real estate, said Jonathan Miller, president of Miller Samuel and a Bloomberg View contributor.

“Nobody knows what the depth of that market is and there’s really no way to gauge it,” Gerringer said. “We may be hitting a peak or we may be flattening out right now.”

At Extell’s current pace of one apartment deal per quarter at One57, it would take six more years to sell the remaining units, according to Miller.

Since sales started in 2011, “that would be a nine-year absorption rate, which would be unprecedented in the entire history of New York City residential development,” he said.

Extell’s president, Gary Barnett, acknowledged in an October Bloomberg Businessweek interview that sales slackened at One57 because of all the towers rising around it. He said deals have “picked up” since the first half of the year.

Hepzi Schechter, Barnett’s assistant at Extell, and Nancy Raia, a spokeswoman for the developer at Rubenstein Associates, declined to comment on sales at One57.

Construction Crane

In earlier filings, Extell said the units that have been slow to find buyers are those where views have been obstructed by a construction crane. Deals will pick up once clients can enter the completed building and see actual homes rather than make decisions based on floor plans, the company said in September.

The buyer of the condo that went into contract in the third quarter agreed to pay $10,587 a square foot, according to Extell’s Nov. 26 filing. That’s four times the average for Manhattan luxury sales that closed in the three months through September, Miller Samuel data show.

Carlton House

At Extell’s Carlton House project on East 61st Street, where sales started last year, two units went into contract in the third quarter, according to the filing. Seventeen of the 68 apartments remain unsold.

Extell was a pioneer when it began work on One57, less than a year after the bankruptcy of Lehman Brothers Holdings Inc. ushered in the real estate rout. The building, planned as Manhattan’s tallest residential tower, reached $1 billion in sales after six months. Bill Ackman, founder of New York hedge-fund firm Pershing Square Capital Management LP, is part of an investment group that purchased one of the upper-floor duplexes, paying more than $90 million, a person with knowledge of the deal said last year.

-By Oshrat Carmiel

London’s Garden Bridge Approved by Westminster Borough

Source: Bloomberg / Luxury

A pedestrian Garden Bridge designed by Heatherwick Studio spanning London’s River Thames won local-government approval.

The Westminster borough endorsed the project in a 3-1 vote at a meeting late yesterday. Construction is expected to start in the second half of next year with the opening set for 2018, according to a Nov. 12 statement released by the Garden Bridge Trust.

The bridge will connect the area near the Temple metro station with the South Bank, which features cultural attractions including Royal Festival Hall and the South Bank Centre. Lambeth council last month approved the southern part of the bridge, which is expected to draw 7 million visitors a year.

The plan was developed after Transport for London, which manages the city’s subway, sought proposals to improve pedestrian links across the river. Heatherwick also designed the public park and performance venue planned by billionaire Barry Diller and fashion designer Diane von Furstenberg on the Hudson River off Manhattan’s west side.

-By Neil Callanan

Abengoa Arranges $680 Million Financing With Four Gulf Banks

Source: Bloomberg / News

Abengoa (ABG) SA arranged 2.5 billion dirham ($680 million) of financing with four Persian Gulf banks that will give the Spanish renewable energy company working capital and help it bid for regional contracts, said a banker who worked on the deal.

The financing, a mix of conventional and Islamic loans, was provided by Mashreq Bank PSC and three other lenders, Artur Uluc, director of corporate finance at Mashreq Bank in Dubai, said yesterday. He declined to name the other banks.

Abengoa’s debt plunged last month after the Seville-based company said it accounted for its $630 million of high-yield green bonds as non-recourse debt, which typically does not allow creditors to seek claims directly from the company in case of default. Investors had understood the notes to be recourse debt and the change raised questions about Abengoa’s leverage ratio.

Abengoa’s 8.875 percent notes dropped to 74 cents on the euro from 107 cents in two days and rebounded to 95 cents after Abengoa held a conference call to reassure bondholders.

Abengoa sought out the Gulf banks in June for the working capital, intended to help it secure power and water contracts in the United Arab Emirates, Qatar and Oman, Mashreq’s Uluc said.

The Spanish company has withdrawn about 30 percent of the money provided, he said. He declined to specify the interest rate provided on the facility or the projects the company withdrew the money for. Spokesmen for Abengoa declined to comment on the facility.

Abengoa’s Class B shares climbed 0.6 percent to 1.908 euros by 11:02 a.m. in Madrid trading, paring the loss for the year to 13 percent.

-By Zainab Fattah

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