Singapore Economy Singapore is China's second favourite investment destination By 2017, China's outbound direct investment could reach US$264b, outstripping its FDI Source: Business Times / Government & Economy The Republic's diverse industrial structure ranging from high-tech biomedical manufacturing to multi-million infrastructure development has helped the city state remain China's second most popular investment destination after the US this year. -By Angela Tan A sustainable future for Singapore As part of a review of the Sustainable Singapore Blueprint, the Government will spend S$1.5 billion on rolling out programmes to create a cleaner and greener Singapore. Source: Channel News Asia / Singapore SINGAPORE: Bold plans have been unveiled to create a cleaner and greener future for Singaporeans. They are part of a review of the Sustainable Singapore Blueprint - which aims at responding to the challenges that the nation face. The Government will commit S$1.5 billion to support the roll out of the programmes under the blueprint. This was announced by Prime Minister Lee Hsien Loong at the launch of the Sustainable Singapore Blueprint 2015 on Saturday (Nov 8). The blueprint, first released in 2009, maps out strategies for Singapore's sustainable development. As part of the review, close to 6,000 people were involved in consultations and discussions. A long-term vision for Singapore is a model city for green living, even as the country grapples with environmental challenges such as a dry spell earlier this year. Other challenges include housing a growing nation within limited land; mitigating carbon footprint while planning early for climate change; and securing access to water, energy, food and raw materials. Prime Minister Lee said: "We can do more, we need to do more, as our environmental challenges grow. For example, climate change ... in February, we had our longest dry spell ever. The reservoir water levels dropped below normal - everywhere our grass, the grass in our parks, turned brown. We had 'lalang' fires all over Singapore, even one or two forest fires in the nature reserves. But fortunately our lives were not disrupted because we ran our desalination plants at 100 per cent and we increased our NEWater output to meet our needs. "And we didn't have to ration water, as we planned for a margin of safety. So we endured the drought, and eventually the rains came, and Singapore became green again. But we cannot become complacent because climate is changing. I think we must expect more such extreme episodes, more droughts, more heavy rains at different times and we must be able to cope with that." Plans announced on Saturday which would enable Singapore to be
cleaner and greener would focus on three areas: 1) A Liveable &
Endearing Home; 2) A Vibrant & Sustainable City; and 3) An Active &
Gracious Community. The aim is to increase the share of journeys during peak hours made via public transport to 75 per cent. In 2013, the figure was 64 per cent. To do so, the length of rail network will be extended to 360km in 2030 from 178km in 2013. The proportion of households within a 10-minute walk from train stations will be increased to 80 per cent in 2030, from 58.5 per cent in 2013. Electric car-sharing and driverless car trials will also be conducted. To conserve precious resources, the government encourages the
reuse and recycling of materials. It aims to raise the national recycling rate
from 61 per cent in 2013 to 70 per cent in 2030. There will be centralised
chutes for recyclables in all new HDB flats, and better recycling
infrastructure for private housing. The Government is also aiming for 80 per cent of buildings to achieve the Building and Construction Authority's Green Mark Certified rating, up from the 21.9 per cent last year. To reduce carbon footprint as well as improve energy and water efficiency, the Government has initiatives to encourage green buildings. These include a S$52 million fund for research on promising solutions. Innovation districts incorporating educational institutions and industrial estates will be test-beds for new technologies. However, for the vision to come to life, a collective effort is
required. "The responsibility - some of it lies with the government, a
large part of it has to do with what each of us individually choose and decide
to do with our own lives. HDB can build more convenient chutes for recycling,
but households have to use them and have to practise the 3Rs - reduce, reuse
and recycle," said PM Lee. Under another initiative, the public can pledge to reduce food waste and the use of disposables on certain days. They can then post photographs on social media to show how they did so. The challenge aims to collect pledges of 50,000 "No Waste Days". In a Facebook post, Environment and Water Resources Minister Vivian Balakrishnan said: "We have made much progress since the first version of the SSB (Sustainable Singapore Blueprint) was rolled out in 2009. We need to evolve in order to face the major challenges that the future will bring due to climate change, urbanisation, resource depletion and pollution. But these same challenges also present us with opportunities to build the model city of the future. Singapore will only be our best home if each and every one of us does our part. We need a sense of personal ownership and collective responsibility." - CNA/rw/al http://www.channelnewsasia.com/news/singapore/a-sustainable-future-for/1460910.html Singapore Real Estate TRE Residences to be launched next weekend Average pricing is S$1,560 psf with early-bird discounts of up to 5%Source: Business Times / Real Estate SALES at TRE Residences in Geylang, a 250-unit condominium project jointly developed by Sustained Land, MCC Land and Greatview Development, will begin next weekend at an average indicative pricing of S$1,560 per square foot (psf). The developers are also dangling early-bird discounts of up to 5 per cent during the Nov 15-16 launch. The project's launch is coming ahead of GuocoLand's condo project at Sims Drive, Sims Urban Oasis, that is expected to be launched only early next year. After factoring in the early-bird discounts, prices at TRE Residences start from S$690,000 for a 420-sq-ft one-bedder to S$899,900 for a 570-sq-ft two-bedder, S$1.179 million for a 764-sq-ft compact three-bedroom unit and S$1.38 million for a 947-sq-ft four-bedroom dual-key unit, according to marketing materials. Huttons and PropNex are the official marketing agents for TRE Residences, a project that is 51 per cent owned by Sustained Land, 29 per cent by Greatview Development and 20 per cent by MCC Land (Singapore), a unit of the Metallurgical Corporation of China. According to MCC Land managing director Tan Zhiyong, the breakeven price for the project is around S$1,300 psf, in line with the earlier projections of property consultants. The project was widely expected to start selling at above S$1,400 psf, given the land bid of S$776 psf per plot ratio or S$146 million tabled by Sustained Land in January this year, consultants said. SLP International executive director Nicholas Mak noted that the average indicative pricing for TRE Residences is steep compared to the median prices of between S$1,151 psf and S$1,497 psf for new sale transactions in the vicinity, including The Centren and Grandview Suites, in the past one year. The 99-year-leasehold TRE Residences is priced similarly to freehold resale units at two other Geylang projects, Centra Heights and Centra Studios, which have a median price of S$1,507 psf and S$1,687 psf respectively for units transacted over the past one year. R'ST Research director Ong Kah Seng noted that while the ideal price for a project in this locality would be around S$1,450 psf, the developers are likely assuming marginal profits due to the high land price paid for the smallish plot near Aljunied MRT Station. The small number of units in the project and its location may work to its favour, said Mr Ong. "This location is very suitable for tenants who are single expatriates or those who prefer renting a small apartment, at most co-sharing of an apartment. Rental prospects for this project is fairly positive due to its convenient location." Mr Mak noted that the rental yields for selected 99-year condos near TRE Residences hover at 3.8-3.9 per cent per annum. To match this rental yield, the expected monthly rents for units in TRE Residences have to range from S$4.79 to S$5.19 psf. The median monthly rents in the Geylang planning area, however, have been S$3.30-S$3.80 psf in the past 15 months, he said. Elsewhere, developers are also dangling discounts for selected units in existing launches to revive buyers' interest. Roxy-Pacific is offering an additional 8 per cent discount for limited units at Trilive in Kovan; Singapore Land is tagging a 10 per cent discount and another 7 per cent discount for the absorption of the additional buyers' stamp duty for limited units in Alex Residences in Redhill. -By Lynette Khoo http://www.businesstimes.com.sg/real-estate/tre-residences-to-be-launched-next-weekend Companies' Brief Project completion boosts Wee Hur's earnings Source: Business Times / Companies & Markets Wee Hur Holdings on Friday reported a net profit of S$102.5 million for its nine months ended Sept 30, 2014, almost eight times the net profit of S$13.1 million a year ago. -By Lee Meixian http://www.businesstimes.com.sg/companies-markets/project-completion-boosts-wee-hurs-earnings Hock Lian Seng posts 41% fall in profit for first nine months of 2014 Revenue up 9% to S$93.7m on the back of additional income from new propertiesSource: Business Times / Companies & Markets Ascott Reit on Thursday reported a distribution per unit (DPU) of 2.11 Singapore cents for the third quarter ended Sept 30, 2014 - an 11 per cent drop from the 2.37 Singapore cents paid a year ago, which included one-off items of about S$1.5 million. If the one-off items (which had to do with fair value gains from the unwinding of interest rates swaps) and Ascott Reit's rights issue in Dec 2013 were excluded, the DPU would have been 15 per cent higher, it said. -By Lee Meixian Far East Hospitality Trust Q3 DPU drops 6.4% Source: Business Times / Companies & Markets Far East Hospitality Trust reported a 3.1 per cent drop in distributable income to S$23.45 million for the third quarter ended September 2014 from a year ago. Distribution per unit (DPU) fell 6.4 per cent to 1.32 Singapore cents from 1.41 Singapore cents a year ago. -By Anita Gabriel http://www.businesstimes.com.sg/companies-markets/far-east-hospitality-trust-q3-dpu-drops-64 CapitaLand Q3 net profit inches up 1.3% to S$130m Source: Business Times / Companies & Markets Property giant CapitaLand has reported net profit of S$129.98 million for the third quarter ended Sept 30, 2014, up 1.3 per cent from the same period last year. The Q3 FY2013 net profit of S$128.3 million included S$12.45 million from discontinued operations. http://www.businesstimes.com.sg/companies-markets/capitaland-q3-net-profit-inches-up-13-to-s130m CapitaLand Q3 net profit inches up 1.3% to S$129.98m Source: Business Times / Companies & Markets PROPERTY giant CapitaLand has reported net profit of S$129.98 million for the third quarter ended Sept 30, 2014, up 1.3 per cent from the year-ago period. The Q3 FY2013 net profit of S$128.30 million had included S$12.45 million from discontinued operations. Revenue was down 4.3 per cent to S$918.93 million. The revenue drop was due mainly to lower revenue from the group's development projects in China held by subsidiaries, partly mitigated by higher revenue from its Singapore development projects as well as higher rental revenue from its shopping mall and serviced-residence businesses. Earnings per share edged up to 3.1 Singapore cents in Q3 FY2014 from 3 cents in Q3 FY2013. Net asset value per share dipped to S$3.72 as at Sept 30, 2014, from S$3.79 as at Dec 31, 2013.
The counter closed 3 cents higher on the stock market on Friday. CapitaLand announced its results after the close of trading. -By Kalpana Rashiwala http://www.businesstimes.com.sg/companies-markets/capitaland-q3-net-profit-inches-up-13-to-s12998m CapitaLand posts 1.3% rise in Q3 net profit The company attributed the rise to higher contribution from the shopping mall business, development projects in China and Vietnam as well as lower finance costs.Source: Channel News Asia / Business SINGAPORE: CapitaLand has reported a 1.3 per cent rise in third-quarter net profit to S$130 million, compared to the same quarter last year. The property group attributed the rise to higher contribution from the shopping mall business, development projects in China and Vietnam as well as lower finance costs. However, group revenue for the same quarter ended Sep 30 declined 4.3 per cent to S$918.9 million from a year ago. In a statement, President and Group CEO of CapitaLand Lim Ming Yan said: "CapitaLand's business remains resilient as it continues to focus on building a well-diversified portfolio across integrated developments, shopping malls, serviced residences, offices and homes." Looking ahead, CapitaLand said it will continue to invest in well-located sites mainly in Singapore and China to grow its pipeline of projects. The company also plans to focus its efforts on improving the performance of its existing projects as well as the forthcoming opening of new shopping malls and Raffles City projects in China. - CNA/ms http://www.channelnewsasia.com/news/business/singapore/capitaland-posts-1-3-rise/1459772.html Global Economy & Global Real Estate Blackstone gets US$1.5b in commitments for property fund Source: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/blackstone-gets-us15b-in-commitments-for-property-fund Sears Investors Get Long-Sought Real-Estate Plan After 10 Years Source: Bloomberg / News Sears Holdings Corp. (SHLD) Chief Executive Officer Eddie Lampert is almost 10 years into his turnaround effort and he’s finally doing what many investors wanted him to do from the start: sell the company’s real estate. Sears said yesterday that it was considering selling 200 to 300 stores to a newly formed real-estate investment trust, the first step in a plan that could offload most of the chain’s 1,800 locations. Spinning off the property into a REIT could generate $1.8 billion to $1.9 billion, according to Evercore ISI. Sears would then lease the properties back. The move was cheered by investors, who have been clamoring for a real-estate deal since Lampert first merged Sears Roebuck & Co. and Kmart Holding Corp. in 2005. Sears has suffered nine straight quarterly losses and exhausted many other avenues for raising cash, including the spinoff of its Lands’ End chain and the sale of part of its Canadian operations. That’s turned real estate into a final frontier. Still, the latest fundraising venture would leave Sears with a hefty annual rent bill and spotlight the uneven quality of its properties. “There is no doubt that there is underlying value in Sears real estate,” said DJ Busch, an analyst at research firm Green Street Advisors in Newport Beach, California. “Most of the value, however, is located at the higher-productivity malls. There is little to no value at the lower end of the quality spectrum.” Household IncomesA Sears property in Thousand Oaks, California, for example, boasts a surrounding median household income of $101,000. Another that’s available for rent in northeastern Philadelphia, meanwhile, has a median of $38,390. Companies typically create REITs to lower taxes and boost returns to their shareholders. The trusts don’t pay federal income taxes so long as they distribute at least 90 percent of their taxable earnings as dividends. Earlier this week, casino operator Pinnacle Entertainment Inc. became the latest company to announce it was creating a REIT, following pressure from an activist investor. Speculation that Sears was forming a REIT grew last year after it established its Seritage Realty Trust as a separate legal entity. That business, based in Greenwich, Connecticut, spotlights properties that Sears is offering for rent or redevelopment. Chris Brathwaite, a spokesman for Hoffman Estates, Illinois-based Sears, declined to comment on whether Seritage would be the vehicle for spinning off the company’s real estate. Stock SoarsSears shares jumped 31 percent to $42.81 yesterday after the REIT plan was disclosed, marking the biggest gain since April 2003. Before the surge, the shares had declined 13 percent during the past six months. Sears would be different than most REITs in that its stores would be the only tenant in most cases. That makes it “a tricky proposition,” Busch said. The trusts tend to be prized “because most own good quality real estate with a diversified tenant base.” The company’s Sears and Kmart chains have suffered years of declining sales, making them less-than-ideal tenants. Still, Sears has already been working to entice other retailers to its properties -- either to share the space or take it over entirely. Last month, Sears announced plans to rent out space in seven Northeastern stores to Primark Stores Ltd., a British budget-clothing retailer. In Pennsylvania’s King of Prussia Mall, Sears will vacate its space and Primark will move in. If Sears could eventually install other retailers at most of its locations, “you could be left with a REIT that has value,” said Matt McGinley, an analyst at Evercore ISI in New York. ‘Substantial Proceeds’If the company completes the REIT deal, it may ultimately own 400 to 500 stores and lease the remainder, said Chief Financial Officer Rob Schriesheim. “We would realize substantial proceeds from such a sale, which would further enhance our liquidity,” he said. Still, spinning off the real estate wouldn’t solve Sears’s cash shortages, McGinley said. He estimates that the amount raised by the REIT deal is “only sufficient to offset their current operating losses.” Sears’s operations used $1.1 billion in cash in the last fiscal year, a rate McGinley estimates will accelerate. It posted a $1.4 billion loss. Sears is taking other steps to raise money. In the past two months, it has announced rights offerings for $625 million in notes and warrants, along with as many as 40 million shares of Sears Canada. (SCC) Funding NeedsThe company aims to raise as much as $2.07 billion this year if the offerings are fully subscribed.Fitch Ratings calculated in September that the company would need $4 billion of capital to avoid running out of cash in 2016. Ideally, the company would rent out some of its space to specialty tenants, which would pay higher rent than Sears pays as an anchor, McGinley said. Anchor retailers -- traditionally large department stores -- typically get better deals on rent because they’re meant to draw traffic to malls. Getting tenants into less affluent locations may be a challenge, though. About 27 percent of the company’s square footage lies in what CoStar Portfolio Strategy calls “weak local trade area demographics.” That means households in the surrounding neighborhood aren’t big spenders. An additional 23 percent of Sears’s space is in “questionable” locations, with somewhat better buying power, according to Suzanne Mulvee, CoStar’s director of research in Boston. Target PressureThough REITs have become increasingly popular, ones with a single retail tenant have been rare. Hedge-fund manager Bill Ackman urged Target Corp. (TGT)’s shareholders to spin off the company’s real estate in 2008, valuing such a move at $5.1 billion. Investors voted down the proposal. While the department-store chain Mervyn’s separated its real-estate portfolio into a REIT, the company ended up liquidating in 2008. For Sears, the approach also would bring additional expenses. McGinley estimates that the company would pay about $150 million in mall rents if it goes through with the plan. “It’s one additional burden on a company that’s burning over $1.5 billion in free cash flow,” he said. “This places Sears as a retailer in a more precarious predicament.” -By Lauren Coleman-Lochner Sears Soars on Plan to Sell Stores to REIT, Lease Them Back Source: Bloomberg / News Sears Holdings Corp. (SHLD) jumped the most in more than a decade after saying it may sell 200 to 300 stores and lease them back, aiming to wring money from its real-estate holdings after nine straight quarterly losses. The selected outlets would be sold to a newly formed real-estate investment trust, the Hoffman Estates, Illinois-based company said today in a statement. Sears would continue to operate stores in those sites, and the plan could ultimately be extended to include most of its locations. The company also would let shareholders purchase stock in the trust. A spinoff would capitalize on the most valuable asset remaining in Sears’s portfolio -- real estate -- and reward investors who have been pushing for such a move for years. While Chief Executive Officer Edward Lampert has previously tapped property holdings to raise cash, this transaction would be by far the largest. “It’s among the last things that they would be able to do in terms of monetizing the assets,” said Matt McGinley, an analyst at Evercore ISI in New York. “There’s not a whole lot left.” Sears jumped 31 percent to $42.81 at the close in New York, the biggest gain since April 2003. Before the surge, the shares had declined 13 percent in the past six months. Pinnacle’s MoveCompanies have created REITs to lower taxes and boost returns to their shareholders. The trusts don’t pay federal income taxes so long as they distribute at least 90 percent of their taxable earnings as dividends. Yesterday, casino operator Pinnacle Entertainment Inc. (PNK) became the latest to announce it was creating a REIT, following pressure from an activist investor. Lampert, who is also Sears’s biggest shareholder, has separated a number of the company’s assets in the past three years, including the Lands’ End clothing business in April. The company also sold five leases in Canada for C$400 million ($353 million) last year. At the same time, he’s looking to sublease some locations to other tenants, letting Sears keep operating in a smaller footprint. Last month, Sears announced plans to rent out space in some of its Northeast stores to Primark Stores Ltd., a British budget-clothing retailer that’s expanding in the U.S. ‘Substantial Proceeds’Sears currently operates about 1,800 stores. If the company completes a REIT deal, it may ultimately own 400 to 500 stores and lease the remainder, Chief Financial Officer Rob Schriesheim said on the company’s blog. “We would realize substantial proceeds from such sale, which would further enhance our liquidity,” he said. Still, spinning off the real estate wouldn’t solve Sears’s cash shortages, McGinley said. He estimates the move could bring in $1.8 billion to $1.9 billion, an amount “only sufficient to offset their current operating losses.” Sears’s operations used $1.1 billion in cash in the last fiscal year, a rate McGinley estimates will accelerate. It posted a $1.4 billion loss. Sears is taking other steps to raise money. In the past two months, it has announced rights offerings for $625 million in notes and warrants, along with as many as 40 million shares of Sears Canada. The company, which operates the Kmart discount chain as well as Sears department stores, aims to raise as much as $2.07 billion this year if the offerings are fully subscribed, according to a blog post last month. Fitch Ratings calculated in September that the company would need $4 billion of capital to avoid running out of cash in 2016. Quarterly LossSears today said it expects a third-quarter loss of $275 million to $325 million in adjusted earnings before interest, taxes, depreciation and amortization. The company had $330 million in cash and equivalents as of Nov. 1. Sears expects year-end debt to be “materially lower” than the approximately $5.9 billion in the previous year, assuming both rights offerings are fully subscribed. While the REIT move would raise money, it also would bring additional expenses. McGinley estimates that the company would pay about $150 million in mall rents if it goes through with the plan. “It’s one additional burden on a company that’s burning over $1.5 billion in free cash flow,” he said. “This places Sears as a retailer in a more precarious predicament.” Specialty TenantsIdeally, the company would rent out some of its space to specialty tenants, which would pay higher rent than Sears pays as an anchor, McGinley said. Anchor retailers -- traditionally large department stores -- typically get better deals on rent because they’re meant to draw traffic to malls. Not all of Sears’s space is in prime locations, though. About 27 percent of the company’s square footage lies in what CoStar Portfolio Strategy calls “weak local trade area demographics.” That means households in the surrounding neighborhood aren’t big spenders. An additional 23 percent of Sears’s space is in “questionable” locations, with somewhat better buying power, according to Suzanne Mulvee, CoStar’s director of research in Boston. Sears established its Seritage Realty Trust unit as a separate legal entity headquartered in Greenwich, Connecticut, in March 2013, prompting speculation that the company was preparing to create a REIT. Chris Brathwaite, a spokesman for Sears, declined to comment on whether Seritage would be the vehicle for spinning off the company’s real estate. Target PressureThough REITs have become increasingly popular, ones with a single retail tenant have been rare. Outside investors have little appetite for that approach, McGinley said. Hedge-fund manager Bill Ackman urged Target Corp. (TGT)’s shareholders to spin off the company’s real estate in 2008, valuing such a move at $5.1 billion. Investors voted down the proposal. While the department-store chain Mervyn’s separated its real-estate portfolio into a REIT, the company ended up liquidating in 2008. Today, Sears also reported a same-store sales drop of 0.1 percent for the fiscal third quarter, which ended Nov. 1. That compared with a 0.6 percent drop for the first nine months of the year. Sears has been closing some stores as Lampert seeks to create a leaner merchant focused on its digital operations and loyalty program. While the retailer has been a leader in adding features such as expedited in-store pickup for online orders, that hasn’t translated into higher traffic or sales. Sears has posted only one quarter of positive same-store sales, considered a key gauge of performance, since Lampert merged Sears Roebuck & Co. and Kmart Holding Corp. in March 2005. When Lampert orchestrated that deal, many investors saw the real-estate holdings as the prize, McGinley said. Today, the company finally revealed what it may do with those assets. “They showed you the cards,” McGinley said. “They showed you what people had wanted them to do, expected them to do, for a decade.” -By Lauren Coleman-Lochner Pinnacle Falls for Second Day After Casino REIT Plan Source: Bloomberg / News Pinnacle Entertainment Inc. (PNK), the casino operator that yesterday said it would separate its operating assets and real estate into two publicly traded companies, fell for a second day. The shares dropped 1.6 percent to $22.85 at the close in New York. That’s after they declined 9.4 percent yesterday, when the Las Vegas-based company said it would create a real estate investment trust to be distributed to shareholders in a tax-free spinoff. Standard & Poor’s and Fitch Ratings lowered their outlooks on Pinnacle’s debt to negative from stable today, citing the potential for higher leverage with the transaction and continued weakness in the company’s gambling markets. Investor reaction to Pinnacle’s move stands in contrast to that of rival casino operator Penn National Gaming Inc. (PENN), which announced it was creating a REIT two years ago. Penn’s stock jumped 28 percent the day after its announcement. Penn had approval for its transaction from the Internal Revenue Service and a lease agreement between the REIT and management company before it made its announcement, Felicia Hendrix, an analyst at Barclays Plc in New York, said today in a note. She downgraded Pinnacle’s stock to equalweight, the equivalent of a hold rating, from overweight. “It is difficult to take a positive stance given so many unknowns,” she said. Pinnacle, which owns 15 gambling properties across the country, will split into a casino management firm and a REIT. The latter is an ownership structure that allows businesses to bypass federal income tax by distributing profits directly to investors. Pinnacle has been under pressure to pursue the strategy from activist investor Orange Capital LLC, a New York-based hedge fund co-founded by Daniel Lewis. The separation is contingent on the company getting approval to do so from the IRS, a request Pinnacle said it would make by the end of the year. The company also announced plans to raise $1 billion for debt reduction and general corporate purposes. -By Christopher Palmeri http://www.bloomberg.com/news/2014-11-07/pinnacle-falls-for-second-day-after-casino-reit-plan.html |