Real News‎ > ‎2014‎ > ‎March 2014‎ > ‎

22nd March 2014

Singapore Real Estate

Mortgage interest rates 'will rise, but slowly'

Source: Straits Times

Home owners should be concerned about higher interest rates on their mortgages but there is no need to panic, say economists. All those who spoke to The Straits Times agreed that the end of easy money policies in the United States will translate to rate hikes globally, including in Singapore.

Lakeside to get boost from future amenities

Source: Straits Times

Lakeside is probably best known to Singaporeans as the home of the quaint, tranquil Japanese and Chinese gardens. The area remains one of the quieter and less developed regions but it is set to get swept up in plans to develop the Jurong Lake District into a waterfront precinct for business, living and leisure.

Mapletree Ind to develop build-to-suit facility for HP

Source: Business Times

Mapletree Industrial Trust (MIT) will be developing a new build-to-suit (BTS) facility for lease to Hewlett-Packard Singapore at the trust's existing Telok Blangah Cluster property. The estimated total development cost of $250 million, its largest BTS development to date, includes construction and other costs but excludes the book value of the property.

Blackstone may sell industrial building in Ubi: report

Source: Business Times

Blackstone Group, the world's largest alternative asset manager, is considering the sale of an industrial building in Singapore it bought two years ago, Bloomberg reported yesterday quoting a person with knowledge of the matter. StarHub Green, whose anchor tenant is StarHub Ltd, Singapore's biggest broadband Internet and cable TV operator, may be put up for sale, according to the source

Do wider corridors make sense for private projects?

Source: Straits Times

A move to widen corridors in new residential developments to improve access for people in wheelchairs has sparked questions over whether it makes sense for private projects. Critics of the new rules say that not many people in wheelchairs are likely to use corridors in private condos, apart from those few projects marketed as retirement homes.

Oxley's London project a draw here

Source: Business Times

Buyers flocked to the Hilton Hotel yesterday to check out the first London residential project being built by Singapore-listed Oxley Holdings. More than half of the 811 units at Royal Wharf launched in London and Singapore have been snapped up, with almost all studio apartments - which start at £235,000 (S$495,500) - sold.

Hotel Royal to acquire Phuket's Burasari Resort

Source: Business Times 

Hotel Royal Limited is looking to acquire Burasari Resort in Phuket, Thailand for about 1.3 billion baht (S$51 million) via the acquisition of the entire issued and paid-up share capital of Panali Company Limited.

The resort is situated at Ruamjai Road, and is less than three minutes' walk from Patong beach. The four-star property has 186 rooms and sits on freehold land area of about 6,722 square metres (sq m) with an approximate gross floor area of about 11,441 sq m.

Construction companies prepared to deal with haze

Source: Channel News Asia / Singapore

SINGAPORE: Construction companies have said they are prepared to deal with the haze, if it returns.

One company told Channel NewsAsia it has refined its "haze contingency plans" based on last year's experience.

Authorities said on Thursday that the haze may return by late March, when Singapore is expected to enter the inter-monsoon period.

Even when the Pollutant Standards Index (PSI) is under 100, managers at one construction company have been tasked to check on workers every morning to see if they feel fit for work.

Dr Ho Nyok Yong, chief operating officer of Samwoh Corporation, said: "When this (PSI) trickles into 101 to 200, it will be classified as an 'unhealthy' condition. So for those (employees) who are healthy, they will continue working. But in between, we will ask them to rest more.

"Those who are exposed to the outdoors, we will give them some opportunity to work indoors. So... maybe half of the time, (they will) work indoors and half of the time, (they will) work outdoors. 

“We are also restructuring our working sequences in a construction site. We will make sure that they are not over-exposed to this unhealthy environment with the haze."

Dr Ho said workers will be given masks, if the air quality worsens.

And when the PSI hits the hazardous range, all outdoor work will be stopped.

These guidelines are based on the company's haze contingency plan, which is distributed to all its project directors and managers onsite.

Authorities have stressed it is employers' responsibility to ensure workers are deployed in a safe way. Even though the Manpower Ministry does not have a hard and fast rule on when work should cease, if the air quality worsens, the ministry does have the power to enforce a stop-work order, if it finds that an employer is not doing its part.

Dr Ho, who also heads the Singapore Contractors Association, said the association had begun sending reminders to its 3,000 members since last month.

He said: "Especially from last year's experience, we make sure that we have enough masks, we have a risk assessment form, and the workers are all better monitored. Those working at a height have to be especially careful - visibility is a keyword.

"(We will) make sure that when the (PSI) is very high... they can come in to rest for a while. This is to ensure that during the haze period, everybody is healthy."

Doctors also advise the public to prepare early for the possible haze.

Dr Tan Tze Lee, senior partner at The Edinburgh Clinic, said: "If you think you need a mask, you should maybe get it now. If you have young children or elderly folks at home who may need to breathe cleaner air in the house, you may want to get an air purifier now, before the haze comes.

“If you have chronic lung disease like asthma or COPD (chronic obstructive pulmonary disease), please see your doctor to get yourself ready. So be prepared."

Dr Tan is also advising his patients to exercise and keep fit now, while the air quality is good.

He said this would help them build better resistance when the haze returns.

- CNA/ms

Real Estate Companies' Brief

Suntec Real Estate Investment Trust

Source: Straits Times

Suntec Real Estate Investment Trust (Suntec Reit) announced that it will issue 218.1 million new units at $1.605 apiece following the close of the private placement to institutional and other investors. About $341.4 million in net proceeds will be raised, after deducting expenses relating to the cash call, while the unit base is expected to increase by 9.6 per cent with the issue of new units.

Ascott Reit buys Japan property for 6.3b yen

Source: Business Times

Ascott Residence Trust (Ascott Reit) has signed a deal to purchase rental housing property Infini Garden in Fukuoka, Japan, for 6.3 billion yen (S$78.4 million). The 389-unit property was acquired from The Ascott Limited and ArcResidential Japan Investments.

Views, Reviews & Forum

Old Katong lost in redevelopment

Source: Straits Times

It is sad to see shophouses go en bloc for redevelopment (Is Katong Too Cool?, SundayLife!, March 16). Though conserved, these projects form a different ambience and lose their individual, original appeal. One example is the Santa Grand Hotel, which brought down the dividing walls of shophouses to form one large entity. If every block of conserved shophouses is developed in this manner, there is little value in the conservation effort.

Comprehensive HDB town planning

Source: Straits Times

We thank Ms Catherine Soh for her letter ("Plan for malls, food centres in estates"; Sunday). For the residents' daily convenience, commercial and other facilities in HDB towns are planned comprehensively from the onset and developed progressively as towns grow.

Global Economy & Global Real Estate

S'pore investing in more property outside Asia

Singapore, Hong Kong and mainland China ranked among the biggest Asian investors in real estate outside Asia last year, keeping up a momentum that started in 2009 when the first round of US quantitative easing began channelling liquidity into the property sector. In 2013, Singapore accounted for 27 per cent of the US$30 billion in outbound investments made by Asian investors.

Weak French housing sector threatened with mortgage hike

Source: Business Times

BlackBerry Reaches Deal to Sell Most of Canadian Property

Source: Bloomberg / Tech

BlackBerry Ltd. (BBRY) reached an agreement to sell most of its real-estate holdings in Canada, to help the struggling smartphone maker shore up cash for its turnaround plan.

BlackBerry will sell more than 3 million square feet of space, plus vacant property, and lease back some of it in a transaction expected to close by the end of May, according to a statement today. The Waterloo, Ontario-based company didn’t disclose terms of the agreement, nor name the buyer. CBRE Ltd. advised BlackBerry on the deal.

The sale may raise as much as C$550 million ($491 million), based on sales prices for previous BlackBerry buildings and leaseback agreements, Ted Davis, a property broker with Avison Young Inc. who specializes in southwestern Ontario, has said.

Chief Executive Officer John Chen is returning the company to its roots as a maker of devices for business users, offering phones with physical keyboards after a shift to touch-screen devices failed to catch on with consumers. He struck a deal in December with Foxconn Technology Group to outsource phone production to save money, and expects BlackBerry to stop losing cash by the end of the fiscal year that concludes in March 2015.

The property deal “will help us move toward our goal of continued operational efficiency,” Chen said in the statement.

BlackBerry, which announced its intention to sell the property two months ago, remains committed to having “a strong presence” in Canada, said Chen, who is based in California. “We continue to consider Waterloo home to our global headquarters.”

BlackBerry fell 2.5 percent to $9.18 at the close in New York. The shares have risen 23 percent this year.

-By Hugo Miller

Lloyds Banker Sees Big Losses Ahead for London Luxury Homes

Source: Bloomberg / Luxury

Lloyds Banking Group Plc (LLOY) plans to avoid funding the development of projects in London’s luxury-home market, where it sees losses ahead for investors, according to the lender’s head of corporate real estate.

“I’m worried about high-end residential, which is where I think people will next lose significant amounts of money,” John Feeney said in an interview. “A lot of people are buying into the ‘London can only go one way’ story and that fills me with grave concern. So, I feel like the market needs a correction.”

London luxury residences have been the best-performing U.K. properties since 2009 as investors, particularly from overseas, snapped up houses and apartments in the capital to shield wealth from political and economic instability. Annual home-price gains in the U.K. beat increases in the best parts of London for the first time since 2009 last month, signaling a shift may be afoot, according to broker Knight Frank LLP.

A recovery in the wider housing market, boosted by government-backed lending, has stoked building. Registrations of new homes in London last year rose to the highest in 26 years. Developers plan to build more than 20,000 luxury homes, valued at 1,250 pounds a square foot or more, in London over the next decade, ramping up construction despite slowing price gains, consulting firm EC Harris LLP said in November.

‘Unreal’ Atmosphere

There is an air of unreality that sits over that sector and a belief that delivering 4,000 pounds a square foot to 5,000 pounds a square foot product is straightforward,” Feeney said in the March 12 interview at the MIPIM real estate conference in Cannes, France. “It’s predicated on an unknown population of super-high-net-worth individuals continuing to see London as a safe haven.

‘‘The higher the sales price envisaged per square foot, the more uncomfortable I ultimately get,’’ he said. ‘‘When you get past 2,500 pounds’’ a square foot, ‘‘it’s very challenging.’’

Wetherell, a broker that sells luxury homes in the affluent Mayfair district, is offering a refurbished home on Grosvenor Square for 5,130 pounds a square foot. If the property sells for that price, it would would be a record for an apartment in the neighborhood, according to the broker.

Still, some investors say the slowing price gains for luxury homes are ‘‘a buying opportunity’’ because there’s typically a ‘‘significant ‘bounce back’’’ in values after U.K. general elections, according to London Central Portfolio Ltd., which is seeking equity for a new fund to invest in high-end apartments. Britain’s next general election will be in 2015.

‘Development Risk’

Lloyds, Britain’s biggest mortgage lender, is seeking ‘‘development risk” and plans more lending to homebuilders and other developers, Feeney said. It’s looking to fund U.K. projects where homes have been pre-sold or office buildings where a tenant has agreed to lease the building prior to completion.

Risk is acceptable “as long as it’s a tested developer and the product has been proven through pre-sales or pre-lets,” Feeney, 37, said. Loans of as much as 60 percent of construction cost are available in London and he prefers to see “domestic demand underpinning foreign demand.”

-By Neil Callanan

FCA’s Canary Wharf Building Said to Be Offered for $297 Million

Source: Bloomberg / News

Evans Randall Ltd. is seeking to sell the headquarters of the U.K. Financial Conduct Authority, the markets regulator, in London’s Canary Wharf district. The asking price is about 180 million pounds ($297 million), according to a person with knowledge of the matter.

Capital Real Estate Partners LLP is handling the sale of the building at 25 North Colonnade, which has 362,000 square feet (33,600 square meters) of space, Evans Randall said today in a statement, without disclosing the price. The person familiar with the matter asked not to be identified because the information is private.

The amount of office space leased by companies in Canary Wharf is increasing as confidence returns to London’s financial markets. Companies agreed to lease 637,000 square feet of space in the district last year, 54 percent more than in 2012, according to broker Savills Plc. (SVS)

“Given London’s enduring appeal as a real estate investment location and the significant upturn in the Canary Wharf occupational market since the start of 2014, we believe this is an appropriate time to seek a buyer for this well-located asset,” Paul Kendrick, chief financial officer of Evans Randall, said in the statement.

The Canary Wharf building was constructed in 1991, according to Real Capital Analytics, a data provider. Evans Randall, based in the U.K. capital, also owns a 50 percent stake in the City of London tower known as the Gherkin.

-By Patrick Gower