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5th July 2014

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Property crash not likely: Tharman

Source: Straits Times

The property market is unlikely to crash as the Government acted quickly to prevent a huge bubble from forming, Deputy Prime Minister Tharman Shanmugaratnam said. But he added that the overall movements of the property cycle are determined by market players. In a wide-ranging dialogue with DBS chief executive Piyush Gupta at the annual DBS Asian Insights conference yesterday, he said the Government had taken each step to temper over-exuberance in the real estate market knowing that what it did might not be enough, but also knowing that if it did too much, it might engineer a crash.

Singapore Property Prices Likely To Drop Again: Finance Minister

Source: Bloomberg / Luxury

Singapore Finance Minister Tharman Shanmugaratnam said he expects property prices to fall further, days after data showed home values in the city-state dropped for a third consecutive quarter.

“I don’t think the cycle is over,” Shanmugaratnam said yesterday at a conference hosted by DBS Group Holdings Ltd. in Singapore. “I think further correction would not be unexpected.”

The Singapore government has taken steps since 2009 to curb speculation in the property market. An index tracking private residential prices in Singapore fell 1.1 percent to 209.3 points in the three months ended June 30, following a 1.3 percent decline in the previous three-month period, according to preliminary data released by the Urban Redevelopment Authority on July 1.

Among measures introduced to cool the property market, lenders must consider a borrower’s debt when granting mortgages, the Monetary Authority of Singapore said in June, 2013. Home loans should not lead to a borrower’s total debt-servicing ratio rising above 60 percent of his or her income, it said.

-By Sanat Vallikappen

Singapore Real Estate

Home sweet $1m home

Source: Straits Times

The total home price that most buyers can afford has fallen steeply after tough loan curbs were introduced a year ago. Consultants reckon the new "sweet spot" is up to $1.2 million in total for a new home, down from as much as $1.4 million before the total debt servicing ratio (TDSR) framework was imposed in June last year.

Anson House sold for $172m to European fund manager SEB

This is the fifth time in eight years the office building is changing hands

Source: Business Times / Wealth 

ANSON House was transacted earlier this week at $172 million, BT understands.

European fund manager SEB is acquiring the 13-storey office block from CBRE Global Investors, which had put up the property for sale earlier this year at an indicative pricing of $175-180 million.

The $172 million price translates to $2,252 per square foot on net lettable area of 76,362 sq ft for the building, which is on a site with about 82 years of remaining lease. JLL and CBRE brokered the transaction through private treaty.

This is the fifth time the office block has changed hands in the past eight years.

-By Kalpana Rashiwala

Area west of Orchard Road may get boost

Source: Straits Times 

The broad, leafy boulevards to the west of the Orchard Road shopping district have been relatively quiet compared to the bustling eastern end but change is in the wind. The precinct - which stretches from Far East Shopping Centre to Tanglin Mall - is a fairly posh one, populated by wealthy expatriates in ageing luxury apartments and dotted with embassies.

Floating hawker centre on the grill

Source: Business Times / Singapore

FANCY a steaming bowl of laksa while feeling a cool breeze coming off a waterway around you?

This could soon be a reality if Spark Architects gets its way. The company, whose projects include the redevelopment of Clarke Quay and Raffles City Beijing, is proposing a floating hawker centre that melds food and waterscapes into one - and generates its own electricity to boot.

Called Solar Orchid, the self-contained, lightweight floating pods will accommodate the food stalls and table settings; the pods can be configured in different ways, with a typical cluster of seven pods seating around 120 people. The canopy of each pod will incorporate thin-film photovoltaic cells that generate power for the facility.

Spark director Stephen Pimbley said: "It's about capturing the energy of food, and the energy of water in a very different type of environment."

-By Raphael Lim

Real Estate Companies' Brief

Hospitality stocks attractive as tourism booms

Source: Straits Times 

It comes as no surprise that Frasers Hospitality Trust - the latest IPO to hit the market - is attracting a warm response from investors. The tourism industry in Asia is booming and this has boosted the demand for hotel rooms and serviced apartments in the region. This, in turn, has whetted investors' appetite for stocks in the hospitality sector.

CapitaCommercial Trust

Source: Business Times / Wealth

We attended the topping-out ceremony of CapitaGreen, which is on track to complete by the year-end. CapitaCommercial Trust (CCT) also announced that it has secured YTD pre-commitment of 21 per cent (150,800 sq ft) of total net lettable area for CapitaGreen versus 12 per cent three months ago.


Close: $1.665 |

Maybank Kim Eng Research | July 2

Sinarmas Land

Source: Business Times 

Sinarmas Land (SML) has one of the largest and most diversified landbanks in Indonesia and offers steady and resilient growth. Armed with a solid balance sheet and healthy cash flows, SML is embarking on an international expansion to broaden its revenue base.

Views, Reviews & Forum

No need to ease property curbs

Source: Straits Times 

There has been an ongoing debate for some time over whether property cooling measures should be relaxed ("Too early to relax property cooling measures, says MND"; Tuesday). Why is it necessary to ease them in the first place?

Global Economy & Global Real Estate

S'pore developers working on 2 Melbourne projects

Source: Straits Times 

Local developers are jumping on the property development bandwagon in Melbourne. Listed firm Hiap Hoe will launch a project in the Australian city's Docklands area today - its first overseas development, the firm said.

Hiap Hoe and Aspial to launch luxury apartments in Melbourne

Source: Business Times / Companies

TWO Singapore property developers have announced the launch of their Melbourne projects, both touting luxury apartments with dramatic views as selling points.

Mainboard-listed Hiap Hoe is selling residential units at its Marina Tower Melbourne, located at the NewQuay precinct of the Docklands region, just outside the Melbourne city centre.

In addition to the waterfront location, the project's two 43-storey and 36-storey towers stand at nearly double the height of the other projects in the NewQuay precinct. The towers have a total of 461 freehold units.

-By Cai Yong

Sime Darby to list auto unit to raise funds

Source: Straits Times

Jokowi to lift ban on foreign ownership of apartments if elected

Source: Business Times / Wealth

INDONESIAN presidential hopeful Joko Widodo plans to allow foreign investment in apartments to boost tax revenue, a move that could spur demand for property in the country's luxury market.

Foreign investors would be able to buy apartments worth at least 2.5 billion rupiah (S$263,000) in the capital, other main cities and Bali island, Setyo Maharso, a member of his campaign team, said in an interview on Thursday. Foreigners are barred from directly buying Indonesian property, leading to illegal transactions via proxies, so allowing them will enable a luxury tax to be imposed on sales, he said in Jakarta.

Mr Widodo, known as Jokowi, is seeking to revitalise his chances with new pledges days before the July 9 vote, having seen a commanding lead against Prabowo Subianto evaporate in a race that survey company Roy Morgan said is "too close to call". The property idea, not in Mr Widodo's published policy manifestos, may be a political gamble in a campaign filled with anti-foreign rhetoric, yet would prove popular with investors.

-From Jakarta, Indonesia

Biggest Wealth Fund Forms New Real Estate Group

Source: Bloomberg / News

Norway’s $890 billion sovereign wealth fund, the world’s biggest, is seeking top executives for a new real estate group that will invest almost $10 billion annually in properties over the next three years.

The fund, based in Oslo, is looking to hire new chief risk, operating and administrative officers for real estate, according to job postings on its website and in newspapers.

The new executives will have “key roles in implementing a new organizational structure, and further develop our ability to invest and manage real estate assets,” the fund said.

The group is currently overseen by real estate Chief Investment Officer Karsten Kallevig, and part of the broader risk structure of the fund, headed by Chief Executive Officer Yngve Slyngstad. The fund first got approval to invest in properties in 2010 and said last month it will invest 1 percent of its assets in real estate over the next three years as it seeks to reach its 5 percent target.

Thomas Sevang, a spokesman, said the real estate group will remain part of the fund and not operated as a separate entity. As part of an expansion of the group it’s natural to “staff up on management,” he said by phone today.

In a strategy document released June 24 the fund revealed it was boosting its staff by about 60 percent over the next three years to tackle increased investments in real estate and said it’s preparing for more investments in assets “with income streams that grow in line with the global economy.”

Hiring Spree

The number of employees will grow to about 600 from 370, mostly outside Norway, including 200 for real estate, the fund said last month.

The investor owns 1.3 percent of the world’s stocks and is struggling to meet a real return target of 4 percent. Central bank Governor Oeystein Olsen, who oversees the fund, has argued it needs to expand into new assets and raise the amount of stocks it holds to 70 percent of its portfolio to raise returns.

The government of western Europe’s biggest oil producer has set limits for the fund to hold 60 percent in stocks, 35 percent in bonds and 5 percent in real estate. Since the establishment of Norges Bank Investment Management in 1998, the fund has a real annual return of 3.6 percent and a nominal return of 5.7 percent. Measured in dollars, it has generated a 6.7 percent return.

It has so far bought real estate in places such as Times Square, the Champs Elysees and London’s Regent Street. The fund has a strategy to focus on 10 to 15 cities globally and its efforts to enter Asia are about to intensify, Kallevig said in an interview in May.

“There should be a significant increase in pace just based on that,” he said.

-By Niklas Magnusson