Singapore Real Estate Property curbs may be 'eased faster if prices drop sharply' Analysts say Govt could act in such a scenario if many owners are unhappy Source: Straits Times / Top of The News WHILE the Government has said it is not time yet to relax the property market cooling measures, analysts noted that certain developments could prompt policymakers to act faster. One could be a sharp drop in property prices within a short period, the analysts said during a round-table discussion organised by The Straits Times last week. The other would be a groundswell of unhappiness from a large number of home owners caused by sharply falling prices, the panellists added. Their comments at the discussion, held at the Singapore Press Holdings office, comes amid a backdrop of a continued slowdown in the public and private housing markets. On Thursday last week, Monetary Authority of Singapore managing director Ravi Menon said even though prices had eased, it was too soon to lift restrictions. The softening of prices has recently led developers such as Mr Kwek Leng Beng of City Developments (CDL) and Mr Cheng Wai Keung of Wing Tai to urge policymakers to review some curbs. Housing Board resale flat prices have slid 5.3 per cent since June last year while private home prices have fallen 3.2 per cent since September, going by official figures out last week. This was after tough home loan curbs were rolled out in June last year. Even so, experts said prices would likely have to fall a lot faster for policymakers to ease curbs, given that private home prices have climbed about 60 per cent since the global financial crisis in 2009. "I think they (policymakers) are looking for something more pronounced, a double-digit kind of price decrease," said Mr Donald Han, managing director of consultancy Chestertons. "There's more geopolitical risk now... Perhaps next year the Government may want to keep their hands a little bit closer to the button in case they need to unpick certain measures," he added. However, the experts were also quick to stress that a large price drop alone was likely not going to be enough. CIMB economist Song Seng Wun said the speed of a drop is also crucial. "It's not just the quantum but the period of time. If there's geopolitical risk that suddenly adds pressure, it could be compressed within a short period of time." Mr Han agreed: "A 12 per cent drop in six months would be very drastic, but a 12 per cent drop over a two-year period would be quite acceptable. It's a timeline kind of focus for everybody, not just a number." Even then, they agreed that the psychological threshold could be as much as a plunge of about 20 per cent in home prices. This is because many people tend to take a loan of up to 80 per cent of their home's value at the time they buy it. A subsequent 20 per cent drop in the home value could trigger banks to ask borrowers to top up their loan in order to keep their home. Hard data aside, policymakers are likely also keeping an eye on sentiment, experts said. "There have to be a lot of genuine cases saying, 'I cannot stomach a 10 per cent drop', and that will start to get the whole process of relaxation started sooner than later," Mr Han said. "But so far, it's been very quiet." In the meantime, the curbs have helped to stabilise the property market, the experts said. Mr Li Jun, general manager of Chinese developer Qingjian Realty, said the cooling measures benefit the market by preventing a price bubble. "The economy is continuing to grow and the Government is stable in terms of its policies, so in the long term, Singapore is still an attractive place for investment," he added. The fourth panellist was Mr Eric Cheng, who runs real estate agency ECG. -By Melissa Tan Buying a home? Wait... Prices can only get more attractive down the road, says panel of experts Source: Straits Times / Money INDUSTRY experts have advised potential home buyers to wait if they are thinking about plunging into the property market as prices can only get more attractive. They told a round-table session organised by The Straits Times last week that while eight rounds of cooling measures and lending curbs have sent private home prices down by 3.2 per cent over the past nine months, more declines are expected. But buyers who do not want to wait should make offers that factor in this expected fall, ECG Holdings group chief executive Eric Cheng suggested. He was one of four experts, that also included Chestertons managing director Donald Han, CIMB Bank regional economist Song Seng Wun and Qingjian Realty general manager Li Jun, who gave their take on the state of the residential market in a discussion moderated by Straits Times money editor Lee Su Shyan. "Today, if I were to buy, I'll offer a price which is projected six months later - which could be 10 per cent from the asking price," said Mr Cheng. He pointed to the global financial crisis in 2008, during which the market swung up sharply after bottoming for eight months. "This time, it's taking us more than eight months, so I would take a wait-and-see approach. The signs are pretty clear - prices will come down and have to come down." But buyers hoping for a steep fall in home prices may be disappointed, as the panellists noted that home owners have likely enjoyed one or even two sharp price rises over recent years so they are sitting on healthy capital gains and can afford to sit tight. Home prices are also buttressed by a stable economy, with close to full employment, said Mr Song. While a crash is unlikely, the expectations of falling values have led some owners to lower their asking prices. The numbers seem to bear this out. While the number of units resold islandwide climbed 7.9 per cent from May to hit 452 last month, prices slipped 1.4 per cent to an 18-month low, according to flash estimates from the Singapore Real Estate Exchange. But Mr Cheng said this does not necessarily mean sellers are getting the short end of the stick as their next buy is also likely to be at lower prices, contributing to an overall decline in prices. Though some have pointed out that private homes prices are still out of reach, Mr Han said buyers can always turn to Build-To-Order (BTO) flats or even executive condominiums (ECs). "These days, the queue for BTO flats is shorter, and there are a lot of EC projects where you can still get grants. You don't have to get into the private market," he said. But as Mr Li put it, Singapore is still a good place to invest because of the appreciation in property values. "If anybody finds a good location, if the price is right, and the yield can pay for your monthly instalments, it's a matter of choice of whether he wants to own it or not," he said. -By Cheryl Ong http://www.straitstimes.com/premium/money/story/buying-home-wait-20140728#sthash.nSd9ymiJ.dpuf HDB rental market still strong amid weakness in other segments Source: Today Online / Business SINGAPORE — While the cooling measures and loan restrictions have dampened sentiment in various segments of Singapore’s property market, leasing demand for public housing has held up relatively well, with an increase in transactions in the first two quarters this year helping to keep rental rates fairly steady. This trend continues even as data by the Housing and Development Board (HDB) and Urban Redevelopment Authority showed last week that prices of resale public homes and private residences have declined further, hit by measures such as the tighter Mortgage Servicing Ratio, the Additional Buyer’s Stamp Duty as well as the Total Debt Servicing Ratio framework. Analysts point to the increasing number of expatriates who have opted to stay in cheaper accommodation instead of private condominiums as the main support for the HDB rental market. “Many expatriates are on a tighter rental budget, so they turn to HDBs because it’s much cheaper. We know of expatriates whose housing budget has been cut and they don’t really have a choice but to rent HDB flats,” said Mr Chris Koh, director of Chris International. Another group that has propped up demand is new permanent residents (PRs) — the Government ruled in August last year that they would have to wait three years after obtaining residency to purchase resale HDB flats. That prompted new PRs such as Mr Tan SW to extend his lease for a three-room flat in Bukit Batok. “My wife and I got our PR in late 2012. We started hunting for a resale flat hoping that we could move in when our (rental) contract ends but the Government announced the policy, so we ... had no choice ... to extend the contract,” he said. But while rental volume has grown from an average of 6,900 transactions per quarter in 2010 to about 8,500 units every quarter so far this year, that has not translated into an increase in rents: Prices have stayed relatively flat owing to the increasing supply of flats eligible for subletting, analysts noted, with the Singapore Real Estate Exchange’s HDB rental index declining by 3.4 per cent in June this year from the same period last year. That trend comes as HDB data shows that the number of flats approved for subletting has increased, from 126,500 new approvals in 2010 to 179,600 last year. In the first half of this year, around 93,700 flats were added to the pool of flats eligible for rental. Said Mr Eugene Lim, key executive officer of ERA: “There’s a lot of supply. Recently, quite a few condos got their temporary occupation permit, and HDB upgraders who have collected their keys still want to hold on to their flats, so they ... rent out their flats after they have moved to their new condos.” Analysts said this trend is set to continue as homeowners look to reap the higher rental yields that HDB flats can fetch. Said Mr Koh: “HDB flats can command a good 6-8 per cent of rental yield, while the yield for private homes is in the range of 2-3 per cent … As more people are opting to rent out their flats after moving into private units, rents will stay under pressure.”
But while the HDB rental market remains robust, the softening private rental market could start to eat away at demand, Mr Lim pointed out, with condos an increasingly viable option even for tenants who are on a tight budget. This could chip away at HDB rental yields. “Rents have been quite stable because of the supply but now there’s also competition from the condo market. People with a budget of S$3,000 or a little more have options to rent condos, so there’s a cap on the increase of HDB rents,” said Mr Lim. -By Lee Yen Nee Views, Reviews & Forum Companies should pay market rate to rent state land Source: Straits Times / Forum Letter THE Auditor-General found that the PUB had leased a plot of land to the Defence Ministry for a paltry $68 a year ("Improve how grants are given out: AGO"; July 18). Mindef then rented a portion of that land to a contractor for $45 a year. The land could have been leased out at market rate and the money used to fund other useful programmes. Why did Mindef enjoy such a low rent rate and why did the PUB allow it? Why was Mindef's contractor able to enjoy such a cheap lease as well? The ministry now charges the contractor $830,000 a year in rent and is paying the PUB a revised annual rent of $5.43 million. It is a stunning difference. The Singapore Land Authority needs to be more assiduous in regulating state land to prevent monopolies and ensure tenders for government land asset sales or rental are transparent. Government agencies must charge market rate for land they lease out and make sure the state gets the best value for the land. -By Francis Cheng Top US property websites soar on merger report Zillow and Trulia have similar businesses and merger will lead to big cost savings: analysts Source: Business Times / World ZILLOW Inc and Trulia Inc shareholders reaped US$1.9 billion in two days from a deal that hasn't been announced yet. That may be just the beginning. Investors are cheering a merger of the No 1 and No 2 US real estate websites after Bloomberg News reported an agreement may be announced as soon as this week. To gauge just how beneficial a tie-up of Zillow and Trulia might be for shareholders, Telsey Advisory Group says to look to last year's merger of GrubHub Inc and Seamless.
GrubHub, which offered a service almost identical to that of Seamless, has surged 36 per cent since going public in April, outperforming the Bloomberg Initial Public Offering Index. -From New York, US Fears of asset bubbles derailing recovery Cheap money leading investors to pay too much for securities: Officials Source: Straits Times / World PARIS - In a world still struggling to shake off the worst financial crisis for a generation, many economists are worrying that new asset bubbles are already threatening to derail the tepid global recovery. Concern is rising that investors are paying too much for securities in a search for good returns when interest rates are near record lows, creating the bubble conditions for a new market crash. The Bank for International Settlements (BIS) warned last month that financial markets were running ahead of economic reality, calling for governments to stop new debt-driven overspending. The BIS, the so-called central bank of central banks, called for policies that "lean more deliberately and persistently against financial booms and ease less aggressively and persistently during busts". BIS general manager Jaime Caruana said: "During the boom, resources were misallocated on a huge scale, and it will take time to move them to new and more productive uses." Bond rates for European countries hit hard by the euro zone debt crisis, such as Greece, have slumped. This shows that investors do not see bonds as a risk despite their persistently weak economic growth, while equities have bounded to unprecedented levels. Critics argue that is the fault of central banks, which have kept their rates at record lows and pumped their economies full of liquidity first to stave off recession, and then to boost growth. Concern about asset bubbles is also spreading to property markets, with London real estate now on average 20 per cent more expensive than before the onset of the financial crisis. Even the government in Berlin is concerned about high asset prices. United States share markets have posted successive new record highs over recent weeks, although European shares have been somewhat restrained. But Germany's main index, Frankfurt's DAX 30, hit a record high this month. German Finance Minister Wolfgang Schaeuble warned the European Central Bank (ECB) just days ago that its loose monetary policy risked inflating markets to dangerous levels with cheap money. "We cannot just leave the avoidance of bubbles to government supervision," he said, while his French counterpart Michel Sapin warned that "in parts of the property market, there are signs that bubbles are forming". Earlier this month, Ms Christine Lagarde, head of the International Monetary Fund, took a similar line, warning that financial markets were "too upbeat". Central banks have sought to calm concerns, arguing they need to keep rates low to stimulate tepid economic growth or, in the case of ECB, avert the risk of deflation. Mr Mario Draghi, head of ECB, said earlier this month that while markets were looking "frothy", they do not present the systematic risks they did before the global financial crisis. His comments came after ECB unveiled unprecedented new measures last month to prevent the single currency area from slipping into deflation and boost lending. US Federal Reserve chief Janet Yellen has also noted the concern about asset prices, saying she does not think stock markets are in bubble territory, despite the recent surge in all of Wall Street's major indices. But analysts warn that it is the central banks themselves which are fuelling asset prices by keeping their accommodative monetary policy in place for too long. Pending Sales of U.S. Existing Homes Unexpectedly Decrease Source: Bloomberg / Luxury Fewer Americans than forecast signed contracts to buy previously owned homes in June, a sign residential real estate is struggling to strengthen. The index of pending home sales declined 1.1 percent from the month before after rising 6 percent in May, figures from the National Association of Realtors showed today in Washington. The median forecast of 39 economists surveyed by Bloomberg projected sales would rise 0.5 percent. Limited availability of credit and sluggish wage growth are making it harder for prospective buyers to take the plunge, threatening to throttle the pace of the housing recovery. Continued gains in employment and a bigger supply of available homes will be needed to help accelerate the industry’s progress, which Federal Reserve Chair Janet Yellen has said is lackluster. “Unfortunately, I don’t see much of an acceleration in housing demand going forward until we get a significant improvement in the labor market and the income part of it in particular,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who forecast a 1 percent decrease in pending sales. “An uneven recovery in the housing market is really one of the biggest concerns of the Fed.” Stocks dropped as industrial shares sank and investors watched crises overseas before a Federal Reserve policy decision this week. The Standard & Poor’s 500 Index fell 0.5 percent to 1,968.1 at 10:20 a.m. in New York. The S&P 500 Supercomposite Homebuilding Index declined 1.8 percent. Survey ResultsEstimates (USPHTMOM) in the Bloomberg survey of economists ranged from a decline of 3.1 percent to an increase of 3.5 percent. The May reading was revised from a previously reported 6.1 percent gain. Purchases were down 4.5 percent from the year prior, on an unadjusted basis, after a 6.9 percent decrease in the 12 months that ended in May, the association reported. While housing has recovered from its lows, “activity leveled off in the wake of last year’s increase in mortgage rates, and readings this year have, overall, continued to be disappointing,” Yellen said earlier this month during her semi-annual testimony to the Senate Banking Committee. Fed policy makers meet over the next two days to discuss the outlook for central bank asset purchases and interest rates. The pending home sales index was 102.7 on a seasonally-adjusted basis. A reading of 100 corresponds with the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR. Supply Shortage“Supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates,” the group’s chief economist Lawrence Yun said in a statement. Two of four regions showed a decrease in contract signings from a month earlier, led by a 2.9 percent drop in the Northeast. Contract signings fell 2.4 percent in the South, rose 0.2 percent in the West and climbed 1.1 percent in the Midwest. Economists consider pending sales a leading indicator because they track purchase contracts. Existing-home sales are tabulated when a contract closes, usually a month or two later. The housing market has been slow to emerge from a lull induced last year as rising interest rates, tight lending standards and higher home prices combined to make it difficult for some buyers to enter the market. Data paint a choppy picture of residential investment, which subtracted from gross domestic product for the past two quarters in the first-back-to-back declines since 2009. Home SalesSales of previously owned homes rose in June to an eight-month high, with purchases increasing 2.6 percent to a 5.04 million annual rate, led by gains in all four U.S. regions, NAR figures showed. At the same time, confidence among U.S. homebuilders climbed in July, with the National Association of Home Builders/Wells Fargo sentiment measure advancing to a six-month high. Meanwhile, sales of newly built homes declined 8.1 percent to a 406,000 annualized pace in June, and followed a May reading of 442,000 that was a record 12.3 percent lower than estimated last month, Commerce Department figures showed last week. That report followed other data that showed new-home construction declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S. Meritage Homes Corp. (MTH), a homebuilder operating in the South and West, is among companies projecting that a gradually improving economy will boost growth in the industry. The Scottsdale, Arizona-based builder posted revenue and earnings that rose from a year earlier as orders climbed and average sales prices increased. “The U.S. housing recovery has entered a more stable, slower growth phase than we saw in 2012 and the first half of 2013,” Chief Executive Officer Steven Hilton said in a July 24 earnings call. “However, total starts and permits are still well below their historical levels, so we expect to see many years of growth to get back to the more normal levels.” -By Victoria Stilwell Opaque Condo-Buyer Data Prompts CMHC Investor Report Source: Bloomberg / Luxury Canada’s housing agency is set to publish results of a Toronto and Vancouver condominium-owner survey as early as this week as it seeks to address economist and policy maker concern that not enough is known about what’s driving price gains, documents show. Canada Mortgage & Housing Corp. surveyed condo investors -- those who purchased at least one condo that isn’t the owner’s primary residence -- in August and September 2013, according to documents obtained by Bloomberg through an Access to Information request. Most of the content, including the number of people Ottawa-based CMHC contacted, the survey questions and the results, was redacted. Calls are growing louder for more detail about who’s investing in the nation’s condo market, including how much is owned by foreigners, and what the risks are. Policy makers have warned for the past half decade a bubble may be forming in Canadian real estate, and some analysts have said prices are as much as 20 percent overvalued. The lack of condo-ownership data in Canada “is a shortcoming,” Sal Guatieri, senior economist in Toronto for Bank of Montreal, said by phone July 22. “The more data, the better the quality of the data, the better the policy making.” CMHC’s Condominium Owners Survey will be “factual and provides a descriptive profile of condominium investors,” the documents show. The agency expects to release the survey results, which are based on phone interviews with 42,426 households, as early as Aug. 1, Toronto and Vancouver data will be aggregated and results won’t include an estimate of the share of foreign and corporate investors, according to spokesman Charles Sauriol. Lowest RatesNational home sales reached the highest level in four years in June and prices in Toronto and Vancouver are up 12 percent and 29 percent on the year, a realtor report this month showed. Historically-low mortgage rates are adding momentum, and the Bank of Canada has kept its benchmark policy rate at 1 percent since 2010. The survey to be released in August is CMHC’s second attempt. The agency conducted a telephone survey of Toronto and Vancouver condo investors in August 2012 in response to “industry concerns about the extent and nature of condominium investment and its sustainability,” according to a mostly-redacted August 2012 CMHC board presentation. The survey intended to determine what investors planned to do with their units, how long they intended to hold them, what would motivate them to sell, how much they put down and the source of the downpayment. That survey wasn’t publicly released because it “didn’t produce results that were reliable enough,” CMHC’s Sauriol said in his July 25 e-mail. Foreign InvestmentThe housing agency is monitoring foreign investment in real estate by tracking land registry data, hosting investor round tables and conducting surveys into vacancy rates and rents, according to the 2012 board presentation. “There is no comprehensive data source of foreign investors in the Canadian housing market,” CMHC Interim Chief Executive Officer Douglas Stewart said in an Aug. 21, 2013 memo to Canada’s Employment Minister Jason Kenney. “Although some estimates can be gleaned from some municipal land registries, those estimates are not reliable.” Stewart’s memo was in response to Kenney’s questions from a CMHC briefing about foreign investment in the Canadian housing market, the documents show. Kenney also asked about the impacts of changes to the Immigrant Investor Program in Vancouver and Australia’s foreign investment policy. Investor RoundtableParticipants at a Toronto condo investor roundtable that CMHC hosted in March 2012 cited unidentified brokers who estimated foreigners with no ties to Toronto account for about 2 percent to 3 percent of total condo purchases in the city, according to meeting minutes that don’t include participant names or affiliations. The minutes, included with the other documents obtained by Bloomberg, had already been made public. Fifteen percent of the stock managed by rental management companies is owned by foreigners, based on filings of non-resident tax forms, according to the roundtable minutes. Demand for Toronto condominiums pushed prices to new highs in the second quarter. The average price rose 2.8 percent from a year earlier to a record C$554 ($513) per square foot, even as the number of high-rise homes in the pre-construction, under construction and occupancy phases reached a high of 105,027 units in the city, Urbanation Inc., a Toronto-based consulting company, reported July 25. Condominiums account for more than 1.6 million Canadian households, or about 12 percent, and more than half of those are located in the three largest markets Toronto, Vancouver and Montreal, according to Statistics Canada data. “The gap between the importance of the real-estate market to the economy and the lack of publicly available information on it is mind-boggling,” Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce, wrote in an April note to clients. “What is the share of foreign investors in the condominium market?” -By Katia Dmitrieva http://www.bloomberg.com/news/2014-07-28/opaque-condo-buyer-data-prompts-cmhc-investor-report.html IMF Says U.K. Should Stand Ready to Tighten Housing Curbs Source: Bloomberg / Luxury The Bank of England should stand ready to tighten its curbs on mortgages and may need to consider raising interest rates if that fails to rein in housing-market risks, the International Monetary Fund said. Britain’s housing market, while not yet showing the typical signs of a bubble, may pose a risk to financial stability, the Washington-based fund warned in a report today following its June Article IV consultation on the U.K. While “the overall policy mix was appropriate,” rapid adjustment might be required. An increase in inflation would also warrant a change in monetary policy, the IMF said. “Accommodative monetary policy is appropriate for now, given weak inflation pressures, but policy might need to be adjusted quickly if inflation takes off,” the IMF said. “Interest-rate increases may also need to be considered if macroprudential tools are insufficient to deal with financial-stability risks from the housing market.” Bank of England Governor Mark Carney introduced new curbs on mortgages last month, while rules came into force in April requiring tougher mortgage-affordability tests as house prices have surged, particularly in London. The central bank has said macroprudential tools remain its first line of defense against risks in the housing market. The IMF, which raised its U.K. growth forecast last week for the fourth time in nine months, also said today “the economy has rebounded strongly and prospects are promising,” with headwinds from credit conditions and confidence having eased. It noted that the pound is “moderately overvalued.” ‘More Vulnerable’A “steady increase in high-loan-to-income mortgages implies that households are gradually becoming more vulnerable to falls in income and interest-rate shocks,” the IMF said. Officials “should stand ready to tighten these limits should current settings prove ineffective in reining in those risks,” it said. The IMF also said the U.K. must tackle a lack of supply of new homes to find a lasting solution to its housing-market risks. Recent reports suggest measures to cool the market may be starting to work. London house prices stagnated in July, the first month with no growth since December 2012, as demand plunged and properties took longer to sell, Hometrack Ltd. said last week. A survey by Halifax today showed the balance of people saying the next 12 months are a good time to buy a home slumped to 5 percentage points in the second quarter from 34 in the previous three months. Caution WarrantedThere are “some recent signs of deceleration in house prices, but these might only reflect a temporary slowdown as lenders learn new loan-approval procedures” the IMF said, noting that “historical experience of the U.K.’s relatively large house-price swings suggests caution.” IMF official Philip Gerson told reporters on a conference call today that the fund doesn’t have a specific forecast for when the central bank might begin tightening policy. The fund did say in its report that the BOE could take steps to minimize uncertainty around future policy by publishing the Monetary Policy Committee’s preferred path for interest rates, instead of one conditioned on market expectations. That could remove “a step markets have to take to deduce the MPC’s thinking,” the IMF said. “Uncertainty around the interest-rate path could be indicated by a fan chart, just as with the current GDP and inflation forecasts, to make it clear that the path is simply a projection rather than a promise.” -By Svenja O’Donnell Blackstone Buys $543 Million London Office Tower From Brookfield Source: Bloomberg / News Blackstone Group LP (BX) agreed to purchase an office tower near the Bank of England in the City of London financial district from Brookfield Property Partners LP (BPY-U) for 320 million pounds ($543 million). Blackstone will acquire the 330,000 square-foot (30,657 square-meter) building at 125 Old Broad Street where tenants include broker DTZ and law firm King & Spalding LLP, Brookfield and Blackstone said in a statement today. “This is our second investment in London this year within our core plus strategy,” Ken Caplan, head of European real estate at New York-based Blackstone, said in the statement. “We continue to believe strongly in London.” Investors have been competing to buy London office buildings to gain from rising values and rents. The value of workspace in central London climbed 1.8 percent in May from a month earlier, according to Investment Property Databank Ltd. Rents for the best office buildings in the City of London increased more than 9 percent to 60 pounds a square foot in 2013 and will rise to 65 pounds this year, according to broker Knight Frank LLP. “The proceeds of this sale will be reinvested into our significant City development program now well under way,” Martin Jepson, president and chief operating officer of Brookfield Property Partners’ European office division, said in the statement. Blackstone bought Alban Gate, an office building in the financial district, for 300 million pounds from Carlyle Group LP earlier this month. -By Neil Callanan Delta International to Raise $90 Million for African Properties Source: Bloomberg / News Delta International Property Holdings Ltd. (DLI) plans to raise about $90 million over the next two months to fund the purchase of office and retail developments in Africa. “We will buy shopping centers and offices that have tenants in place,” Louis Schnetler, 50, who will take over as chief executive officer on Aug. 1, said by phone today. “The fundraising will be half in equity and half through asset-backed loans.” Delta, which last week added a listing in South Africa to its primary one in Bermuda and is 25 percent owned by Johannesburg-based Delta Property Fund Ltd. (DLT), owns a shopping mall in Morocco and is finalizing the acquisition of three office developments in Mozambique. The company is also targeting deals in Ghana and Nigeria, Africa’s biggest economy, according to Schnetler. “There is a pipeline of assets that we can acquire,” he said. “It can be anything between $200 million and $250 million. We wish to grow the fund and not just keep it at this level.” -By Kamlesh Bhuckory |