Singapore Real Estate Condo buyers seen to be cautious in H2 URA data shows developer sales diving 68% to 482 units in June compared to May Source: Business Times / Top Stories [SINGAPORE] With a drastic fall in developers' sales of private condos last month, the market is increasingly tilted in favour of homebuyers in the second half of this year. URA data yesterday shows developer sales of private condos plunging 68 per cent to 482 in June from a month earlier. Though fewer launches (418 units) in the traditional lull season of school holidays and the World Cup are to be blamed, consultants do not expect sales to jump when developers ramp up condo launches. PropNex CEO Mohd Ismail warned that the "air of caution" is expected to linger, with monthly sales in the second half expected to be around 600-800 units. This would mean that the estimated 2014 sales of 9,000-10,000 units are 35 per cent shy of the units sold in 2013, he projected. There are fewer "affordably priced mass-market projects" in the pipeline, said Chia Siew Chuin, director of research and advisory at Colliers International. "Furthermore, the slowdown in buying momentum - even for popular projects - indicates that buyers continue to face inertia to commit." Developers were more focused on moving units at existing projects rather than launching new projects in the traditionally slow month. Favourable pricing perceptions enabled certain projects to still garner interest after the initial launch. City Developments' Coco Palms in Pasir Ris, launched in May, sold 55 units at a median price of $1,014 per square foot (psf) in June. The Panorama in Ang Mo Kio managed to move 49 units at a median price of $1,287 psf. It had sold 100 units in its re-launch in May at a median $1,241 psf after developer Wheelock Properties cut prices by some 10 per cent. Another top seller in June was The Skywoods at Dairy Farm Heights, where 19 units were sold at a median $1,235 psf. The project - developed by TA Corporation, Hock Lian Seng Holdings, King Wan Corporation and Far East Distillers under Bukit Timah Green Development - managed to move only 82 units from its launch in September to May. The developers managed to revive interest in The Skywoods after offering some "star-buys" with 3 per cent discount from preview prices and raising the commission for agents, according to sources. Only two new projects were launched last month - Wing Tai-led The Crest in Prince Charles Crescent with 469 units and Roxy-Pacific's 222-unit Trilive freehold condo in Kovan. Both projects had a slow start, with 35 units at The Crest sold at a median $1,682 psf and 19 units at Trilive sold at a median 1,605 psf. Other projects launched in May such as Kallang Riverside and Waterfront @ Faber saw buying interest cooling off, with only six units and 16 units sold respectively in June. Ong Teck Hui, JLL national research director, said: "The fundamental weakness in demand due to the TDSR and other cooling measures prevents any market pick-up from being sustained. After TDSR, there is just not enough demand to continually soak up unsold units, so we are seeing sales progress slowing significantly or even stalling completely after initial launch." More than half of private condos sold in June were in the suburban areas (269 units), while city fringe areas accounted for 35 per cent (167 units) and core central region made up 10 per cent (46 units). URA's data also showed that 49 executive condos (ECs) were sold by developers, down from 59 in May. In the first half, 4,523 private condos (excluding ECs) were sold - 11 per cent fewer than in H2 of 2013, based on the latest data. This is a 56 per cent dive from about 10,182 units sold in the year ago period, which essentially means that sales by developers have more than halved since the TDSR kicked in in June last year. Nicholas Mak, SLP International executive director, said: "As the government is not expected to ease any of the cooling measures and TDSR in 2014, and the local economy is growing at a very moderate pace, there is a growing possibility that the total number of private homes sold by developers in 2014 may fall under 11,000 units. If this happens, it would be the lowest volume since the financial crisis of 2008, when developers sold only 4,264 private homes in that year." Alice Tan, research head at Knight Frank, said she expects third-quarter new sales volume to reach 2,500-3,000 units, "fuelled by the gradual return in interest for a few highly-anticipated mid to large-scale projects such as The Highline Residences and City Gate". "Developers are also likely to launch projects with attractive offers to boost sales performance in the coming quarter."
Mr Ismail noted that prices could come under pressure as the potential pool of buyers shrinks and developers face greater competition, exacerbated by a sizeable residential supply coming on-stream. -By Lynette Khoo Singapore private home sales plunge 68% on-month in JuneThe number of units sold by developers in June fell 68 per cent from the previous month to 482 units, according to data by the Urban Redevelopment Authority.Source: Channel News Asia / Business SINGAPORE: The private housing market returned to the doldrums in June after a burst of activity in the previous months, with developers scaling back new launches in the traditionally slow period. Sales of private homes by developers fell 68 per cent in June from May, brought about by fewer launches and ongoing cooling measures. Excluding executive condominiums, developers sold only 482 new units last month, according to the Urban Redevelopment Authority. This is a sharp decline from 1,488 units sold in May, and lower than 762 units sold in April. Developers only launched 418 units last month, a sharp decline from the 1,819 units launched in May. Year-on-year, sales volume last month was some 75 per cent lower. Observers say the drop in sales volume is expected as the month of June is a "typical lull period" due to the mid-year school vacation, and also the result of loan curbs such as the Total Debt Servicing Ratio which was implemented in late June last year. Nicholas Mak, executive director for Research and Consultancy from SLP International Property Consultants, noted that the World Cup season has also "distracted homebuyers' attention from the property market". However, analysts say the sharp decline from May is not a concern, as the sales volume still remains healthy. The number of units sold in June -- at 482 units -- is still "not too bad". Chia Siew Chuin, director for Research and Advisory at Colliers International, said: "If we are looking at a market situation where there is good or rather modest economic growth, and there is a lack of cooling measures that curb buying, and we still see a very low volume of only a few hundred units, then that's probably an indication that there could be some inherent weaknesses in the market." The lack of competitively-priced new launches is another reason why sales were lower last month. Alan Cheong, Savills Singapore's senior director for Research and Consultancy, said: “There are hardly any big launches in that sweet spot or price point that consumers or investors would come in, whereas in May, we had Commonwealth Towers which was launched at that pricing quantum investors would be willing to take the plunge for.” Realistically-priced older projects proved to be more popular in June. The top performer last month is the 944-unit Coco Palms condominium located in Pasir Ris, which was first launched in May. It moved 55 units last month at a median price of S$1,014 per square foot (psf), close to the median price at its launch. The Panorama at Ang Mo Kio is in second place, with 49 units sold at a slightly lower median price of S$1,287 psf. New project The Crest located at Prince Charles Crescent took the third spot, selling 35 of the 132 units launched. Looking ahead, property watchers say developers of upcoming launches have little flexibility to cut prices. Mr Cheong said: "Coco Palms had that flexibility because the land cost, even factoring the holding cost for so many years, is still pretty low. But for the other projects, they were all bid competitively in the open market. So there is not so much room for developers to lower (prices) before taking a loss." Analysts say the sweet spot for prices is likely to be below S$1.2 million for homes in the city fringe and suburbs to attract interest from buyers. - CNA/cy/nd With fewer launches, new private home sales slumpSource: Today Online / Business SINGAPORE — Private residential property sales slumped again in June after a burst of activity in the previous month, with developers scaling back new launches in the expectation that the school holidays and the World Cup would further sideline potential buyers in an already cautious market. Sales of new private homes plunged 68 per cent from May’s 1,488 units to 482 homes, data released by the Urban Redevelopment Authority (URA) showed yesterday. This came as developers launched only 418 homes last month, compared with 1,819 units in May. Last month’s showing was a reversion to the sort of results seen in the first part of the year, which saw an average of 638 units sold each month between January and April. Analysts said the figures showed that developers are calibrating launches to ensure units do not flood into the market when buyers remain cautious. “Having released a handful of well-received projects in May … developers focused on moving units in previously-launched developments and generally avoided releasing new projects amid the June school holidays and World Cup season,” said Ms Chia Siew Chuin, director of research and advisory at Colliers International. There were only two new project launches last month: Trilive at Tampines Road, which sold 19 out of the 80 newly-offered homes at a median of S$1,605 per square foot (psf), and The Crest at Prince Charles Crescent, which moved 35 out of the 132 debuting units at a median of S$1,682 psf. However, there was stronger demand at two previously-launched developments, which led the sales league table for the month. The 944-unit Coco Palms at Pasir Ris Grove released another 100 homes for sale and sold 55 of them at a median price of S$1,014 psf, making it the best-selling development. The Panorama at Ang Mo Kio, which was re-launched in May at a lower price, came in second by moving 49 condominiums at a median of S$1,287 psf even though no new units were offered last month. These two projects helped the Outside Central Region (OCR) to remain the most active with 269 sales. The Rest of Central Region (RCR) recorded 167 transactions while the Core Central Region (CCR) remained fairly muted with only 46 homes sold. Besides school holidays and the World Cup keeping buyers on the sidelines, sentiment continued to be affected by the various government measures which have hit sales and prices, noted Jones Lang LaSalle’s national director of research and consultancy, Mr Ong Teck Hui. “The fundamental weakness in demand due to the Total Debt Servicing Ratio (TDSR) framework and other cooling measures prevents any market pick up from being sustained. After TDSR, there is just not enough demand to continually soak up unsold units, so we are seeing sales progress slowing significantly or even stalling completely after the initial launch,” he said. The latest set of figures by URA brought total new homes sold by developers to around 4,500 units in the first half of this year, 56 per cent lower than the same period in 2013. Analysts said the cautious sentiment is expected to persist in the coming months. “With the traditional lull period over, launch activity is expected to pick up slightly. However, with fewer affordably-priced mass market projects in the pipeline, buying volume is not expected to improve extensively. Furthermore, the slowdown in buying momentum — even for popular projects — indicates that buyers continue to face inertia to commit,” Ms Chia said. Mr Nicholas Mak, executive director at SLP International Property Consultants, said there is a growing possibility that annual sales may fall below 11,000 units as the property curbs are expected to stay in place at a time when the local economy is only growing moderately. “If this happens, it would be the lowest volume since the financial crisis of 2008, when developers sold only 4,264 private homes.” -By Lee Yen Nee http://www.businesstimes.com.sg/premium/top-stories/condo-buyers-seen-be-cautious-h2-20140716 http://www.channelnewsasia.com/news/business/singapore/singapore-private-home/1264624.html
http://www.todayonline.com/business/property/fewer-launches-new-private-home-sales-slump Now online: an auction site for resale homes source: Business Times / Top Stories [SINGAPORE] A Singapore start-up - hoping to salvage close to $1 billion lost in property transactions here yearly - yesterday launched FindNest, a crowd-pricing platform that lets users auction off or bid for resale properties online. The first-of-its-kind platform, with an open price bidding system similar to online marketplace eBay's, will help uncover the "true" valuation (as determined by the crowd, and not an assessor) of its listed properties, founder Joshua Koh told The Business Times. He cited studies which showed that when agents sell their own properties, these are usually put on the market at least ten days longer and prices are at least 3 per cent higher than when they sell their customers' properties, leading to a loss of some $1 billion in transaction value yearly.
This new platform will not only address the inefficiencies in price discovery and negotiation in the property market, but bring trust and transparency into transactions with agents - one of the start-up's value propositions, said Mr Koh. -By Jacquelyn Cheok http://www.businesstimes.com.sg/premium/top-stories/now-online-auction-site-resale-homes-20140716 GIC said to have backed out of Tokyo property deal Source: Today Online / Business TOKYO — Singapore sovereign wealth fund GIC has backed out of buying a Tokyo property from Lone Star Funds due to a legal dispute over the property’s ownership, said people familiar with the transaction. GIC earlier this year agreed to buy Meguro Gajoen, an office complex and a wedding hall, for about US$1.3 billion (S$1.61 billion). If finalised, it would be one of the largest property deals in Tokyo since the 2008 financial crisis. However, GIC is now cautious about completing the sale due to a lawsuit filed in April by the family of Meguro Gajoen’s founder, Mr Rikizo Hosokawa, said the sources. Both GIC and Lone Star declined to comment. Lone Star gained control of most of the Meguro Gajoen in 2002 by buying debt owed by the founding Hosokawa family from a group of lenders at a discount and made several attempts to sell the property since 2006. Two of Mr Hosokawa’s granddaughters retained ownership of part of the property, which they sold in 2007 to the Japanese unit of Prudential Real Estate Investors, the property investment unit of Prudential Financial, court documents showed. The granddaughters said they sold their holdings to Prudential Real Estate after the investment firm agreed to support their campaign to prevent Lone Star from selling its part of the property to a third party, the documents showed. Prudential Real Estate sold the plot to Lone Star this year around the same time that GIC had made a preliminary agreement to buy the property, the court documents showed.
In their lawsuit, the granddaughters asked the court to void the sale to Prudential because it violated their agreement, the documents showed. AGENCIES http://www.todayonline.com/business/gic-said-have-backed-out-tokyo-property-deal Real Estate Companies' Brief Fitch expects operating profiles of four Reits to stay stable It affirms the trusts' long-term issuer default ratings Source: Business Times / Companies FITCH Ratings yesterday affirmed the long-term issuer default ratings of the four Singapore Reits it rates. It rated Mapletree Industrial Trust at BBB+/Stable and Parkway Life Reit at BBB/Stable; CDL Hospitality Trust and Far East Hospitality Trust both came in at BBB-/Stable. These ratings measure their relative vulnerability to defaulting on financial obligations, as well as to bankruptcy, administrative receivership or similar situations.
Fitch said the operating profiles of the four Reits are likely to remain stable, and that healthy refinancing flexibility and low interest rate risk are likely to offset their high leverage. -By Lee Meixian Indonesia elections won't affect country's healthcare: First Reit Source: Business Times / Companies THE recent Indonesian presidential elections - where Jakarta governor Joko Widodo has as good as been declared victor over his rival Prabowo Subianto - is not expected to impact the healthcare industry or cause any drastic changes to healthcare policies in the short to medium term, First Reit said in its financial statement yesterday. The healthcare Reit's largely Indonesian portfolio will thus continue to deliver strong performance, amid a concurrent rising demand for quality healthcare, it said. It added, too, that its sponsor Lippo Karawaci's strong pipeline of 24 quality hospitals presents strong acquisition opportunities for the Reit. It will be on the lookout for yield-accretive acquisition opportunities in Singapore and other parts of Asia to expand its portfolio.
Besides 11 Indonesian assets (mostly hospitals), First Reit also owns Pacific Healthcare Nursing Homes at Bukit Merah and Bukit Panjang and The Lentor Residence, also a nursing home, at Yio Chu Kang. It also has Sarang Hospital, a rehabilitative and nursing facility in Yeosu City, South Korea. -By Lee Meixian
http://www.straitstimes.com/premium/money/story/first-reits-q2-results-the-pink-health-20140716 M&L Hospitality to build Manchester hotel Complex in university campus to cost over £30m Source: Business Times / Companies SINGAPORE-BASED M&L Hospitality is expanding further into the United Kingdom, with plans for a new hotel complex estimated to cost in excess of £30 million (S$64 million), in the University of Manchester campus. The plan, according to the investment group which has taken a 125-year lease on the university land, is for a 326-key hotel complex comprising 16 storeys of rooms above three levels of hotel facilities including conference facilities and various F&B concepts. This will be the only hotel on the main University of Manchester campus. United Kingdom property company Bruntwood will develop the hotel on behalf of M&L Hospitality while Cycas Hospitality, which is M&L's operator for their Stratford City hotels, will manage the business.
Said Neil Maxwell, chief executive officer of M&L Hospitality: "We are always exploring investment opportunities that have the potential to deliver stable and attractive returns. The UK hotel market continues to achieve solid performance and we are excited about the growth of internationally branded hotels here." -By Mindy Tan Global Economy & Global Real Estate Dublin Land for New $3.4 Billion Suburb Offered for Sale Source: Bloomberg / Luxury A site for a new suburb of Dublin was offered for sale with an asking price of more than 220 million euros ($300 million). The completed project will be valued at about 2.5 billion euros, according to Savills (SVS) Plc, the broker managing the deal. The buyer of the 400-acre (162-hectare) site at Cherrywood can build 37,800 square meters (407,000 square feet) of stores, more than 3,800 homes and about 220,000 square meters of office buildings, Savills Plc said in a statement today. The project, covering an area larger than London’s Hyde Park, needs local government approval. “Cherrywood is a suburban development unlike any other in Ireland,” Mark Reynolds, a director at Savills, said in the statement. “No opportunity of this scale is ever likely to be presented again in Dublin.” Irish real estate is recovering from western Europe’s worst property crash as a shortage of new homes and prime office buildings pushes up values and rents in Dublin. The Irish capital needs as many as 10,000 new homes a year compared with only 1,600 built last year, Ireland’s National Asset Management Agency Chairman Frank Daly said July 4. Tech TenantThe property includes offices leased to companies including units of U.S. computer maker Dell Inc. and Dublin-based medical-equipment maker Covidien Plc, Savills said. Income from the existing 52,500 square meters of office buildings, stores and leisure facilities at Cherrywood Business Park could rise to 10.5 million euros from 7.5 million euros a year when vacant space is leased, Savills director Domhnaill O’Sullivan said in the statement. The site is being sold on behalf of receiver Grant Thornton. It’s part of a larger land parcel that was designated a fast-track zone in April, meaning planning approvals by the borough can’t be overturned by the appeals board. There are three light-rail stops on the land and a journey to downtown Dublin takes about 40 minutes. The value of leased office buildings in Ireland rose 25 percent in the 12 months through June, according to broker Jones Lang LaSalle Inc.’s Irish property index. Dublin home prices jumped 22 percent in May from a year earlier, the biggest increase since August 2006, according to the country’s statistics office. -By Neil Callanan Lone Star’s TLG Is Said to Advance $680 Million IPO Plan Source: Bloomberg / Personal Finance TLG Immobilien GmbH, the German commercial real estate company owned by Lone Star Funds, intends to raise about 500 million euros ($680 million) in an initial public offering this year, two people with knowledge of the matter said. UBS AG and JPMorgan Chase & Co. were hired to manage the share sale planned for Frankfurt, said the people, who asked not to be identified because the details are private. Lone Star bought TLG for 1.1 billion euros from the government last year. Companies including Rocket Internet GmbH and cable TV provider Tele Columbus Group are weighing listings as IPOs reach their highest levels since 2006, according to data compiled by Bloomberg. The EPRA/FTSE NAREIT index of German property stocks has gained over 15 percent this year, compared with 2 percent on the German benchmark DAX index. Spokesmen for TLG, the banks and Lone Star declined to comment. TLG Immobilien managed about 800 offices, warehouses and hotels in eastern Germany when Lone Star bought the company. Its assets include the Hotel de Saxe in Dresden, an office building in Rostock and the Kulturbrauerei, a former brewery in east Berlin that was converted into restaurants, bars and music venues, according to TLG’s website. German companies raised $1.3 billion from IPOs in the first half, according to data compiled by Bloomberg. That compares with more than the $4 billion raised in the same period in 2013. Elsewhere in Europe, IPO volumes climbed to their highest levels since 2006, fueled by private-equity owners looking to exit stakes they acquired before the global financial crisis. Cerberus Capital Management LP plans to sell shares in a German retail-property portfolio that’s valued at about 2 billion euros, people with knowledge of the matter said in October. -By Ruth David London 20% Gain Pushes Up U.K. Home Values Most Since 2010 Source: Bloomberg / Luxury London house prices surged the most since 2002 in May, pushing an index of values across the U.K. to a record, the Office of National Statistics said today. House-price inflation across the country quickened to 10.5 percent in May from a year earlier, the biggest acceleration since May 2010, the ONS said. London property values showed the highest levels of growth in the U.K., rising to 20.1 percent. Excluding London and southeast England, house prices rose 6.4 percent, the largest increase since 2010. London has led the rise in British house prices in the past year, prompting Bank of England financial-stability officials to announce measures last month to limit riskier mortgages and prevent an unsustainable buildup of consumer debt. BOE Governor Mark Carney said today that the biggest risk to Britain’s recovery remains the housing market. “At the moment, house prices still look more likely than not to see clear increases over the coming months, although it is looking increasingly probable that there will be some easing back in house price gains from the recent strong increases,” Howard Archer, an economist at IHS Global Insight in London, said in a note. Even so, June data has indicated that growth may be peaking. A survey last week from real-estate research firm and LSL Property Services Plc showed that U.K. house-price growth slowed in June, while some of London’s most expensive areas posted declines. ‘Not Sustainable’Historic cycles in the U.K. housing market show “extremes in geographic pockets,” Carney told lawmakers on Parliament’s Treasury Committee today, referring to regional differences in property values. These house-price discrepancies mean the BOE needs to improve its “understanding of credit constrained households” and to monitor their “reactions to different rate environments and various tipping points,” he said. Average house prices have been rising “on a long-term trend faster than wages for a very long time now,” BOE official Martin Taylor, a member of the central bank’s Financial Policy, told the committee. “It’s not sustainable indefinitely, but it can go on quite a long time.” Today’s ONS report showed first-time buyers paid a higher average of 11.3 percent for their homes compared with May last year. Prices for existing home owners increased 10.1 percent over the same period. Average house prices increased 0.8 percent between April and May, compared with a rise of 0.3 percent over the same months in 2013. -By Jack Aldane Realogy Agrees to Buy ZipRealty for About $166 Million Source: Bloomberg / Luxury Realogy Holdings Corp. (RLGY), owner of brokerage brands Coldwell Banker and Century 21, agreed to buy ZipRealty (ZIPR) Inc. for about $166 million. Realogy, based in Madison, New Jersey, said it will pay $6.75 a share in cash for ZipRealty, 123 percent more than today’s closing price. Emeryville, California-based ZipRealty operates 23 residential brokerages in the U.S. and an Internet-based marketing platform, Realogy said in a statement. The transaction gives Realogy tools to improve customer service through ZipRealty’s online property-data research, Richard A. Smith, Realogy’s chairman, chief executive officer and president, said in the statement. ZipRealty’s technology platform, honed over more than a decade of development, “provides a seamless digital experience for consumers, brokers and sales associates across the entire real estate transaction life cycle,” Smith said. Realogy said it expects to complete the purchase in the third quarter. ZipRealty’s board unanimously approved the buyout and will recommend the transaction to its shareholders, according to Realogy’s statement. Realogy has about 247,000 brokers and sales associates in 13,600 offices worldwide. Its shares rose 0.4 percent to $37.29 today, and have climbed 38 percent since the company’s initial public offering in October 2012. ZipRealty fell 2.9 percent today to close at $3.02. The shares have fallen 5 percent in the past 12 months. -By Jonathan Lamantia http://www.bloomberg.com/news/2014-07-15/realogy-agrees-to-buy-ziprealty-for-about-166-million.html |