Singapore Real Estate BOA: Real estate market bogged down by 3 factors Source: Business Times / Top Stories [SINGAPORE] Mixed results from Singapore's transition to a productivity-driven growth model, coupled with tighter population policies and housing measures, are weighing on the real estate market, said Bank of America Merrill Lynch (BOAML) in a report on Tuesday. On the restructuring front, results have been mixed. GDP (gross domestic product) growth has averaged 3.8 per cent in the last three years versus average growth of over 7 per cent during the 2004-2008 population boom; labour productivity has struggled to compensate for weaker foreign labour growth; and labour constraints are weighing on growth and pushing core inflation higher, said BOAML economist Hak Bin Chua. "We estimate that about 83,000 jobs have been forgone during 2011-2013 due to stricter labor policies. . . Job creation has declined to 22,000 in Q2 2014, the slowest in almost four years. We believe total job creation is likely to slow to about 100,000 this year, vs. 136,000 in 2013," he said. The bank estimates productivity growth of one per cent, versus the government's target of 2 to 3 per cent. "We do not see the government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo by 2015 unless the government chooses to further tighten in the Budget . . . we think a pause in the restructuring is likely and in order, as companies, particularly SMEs, are having trouble adjusting to the speed of the tightening," said Dr Chua. A second notable trend is the accelerated shift to a services-based economy, which will slow demand for industrial space and support demand for commercial space. Such restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market. Compounded by strict property measures, transaction volumes have fallen sharply and property prices have slid for several quarters. According to property analyst Donald Chua, home prices could fall by 20 per cent over 2014 to 2016. Separately, while property measures have curbed household leverage, they have been less effective in curbing the overall banking system leverage. Also notable is the fact that households have increased foreign property investments and offshore financing as a result of the measures. "Overall, Singapore household balance sheets look healthy despite easing property prices. The household asset-liability ratio remains above six times, with 53 per cent in (non-property) financial assets. Household debt has stabilized at about 76 per cent of GDP and is far below past peaks (of over 90 per cent)," noted Dr Chua. CPF balances have also increased as more members choose to leave their funds in CPF due to the attractive interest rates rather than drawing the funds down for housing. This will help provide a buffer in the event of a sharper property market correction or rising interest rates. Looking ahead, cyclical property measures - stamp duties and loan-to-value limits - may be relaxed when US interest rates and Singapore mortgage rates begin rising. This would put the timing of any potential relaxation in the second half of 2015.
Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared more sufficiently. An earlier relaxation would probably require property prices to fall more sharply or the economy to slip into a recession, concluded the report. -By Mindy Tan Property curbs may be eased only in H2 2015: ReportMerrill
Lynch report says prices would have dropped by over 10% by then Source: Straits Times / Top of The News ANY relaxation of Singapore's property curbs, such as stamp duties and borrowing limits, is likely only in the second half of next year, Bank of America Merrill Lynch said in a report yesterday. By then, some pain may have been felt. Home prices would probably have declined by more than 10 per cent by the middle of next year while households would have cut their debt levels sufficiently, said Bank of America Merrill Lynch economist Chua Hak Bin. That is also when interest rates in the United States and mortgage rates here might begin rising. "An earlier relaxation would probably require property prices to fall more sharply or the economy to slip into a recession," Mr Chua added. Property prices are set to fall 20 per cent by 2016 because of oversupply of new units, Bank of America Merrill Lynch had said in a separate report last Friday. Other market observers were more circumspect about when the property curbs might be relaxed. OCBC economist Selena Ling said: "What we are seeing today is a very modest slide (in prices). If mortgage rates adjust, then it's possible that prices would slide further and faster but there is not much clarity on when the US will raise its interest rates." Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, agreed. "It is possible that property prices could fall 10 per cent by the middle of next year, but any prediction of a significant drop in property prices is premature until the interest rate situation in the US is very clear," he said. Dr Chua said there are already some indications that the property market is stabilising and that the Government's cooling measures of recent years are working. A stress test of banks by regulators shows that the banking system remains resilient against various stress scenarios. Household balance sheets are also in better shape with the growth in household debt moderating. However, he noted, the Monetary Authority of Singapore argued in July that it was too early to unwind cyclical property cooling measures as risk factors have not changed. Cyclical measures, such as loan-to-value borrowing limits and stamp duties, are designed to prevent households from over-extending themselves when buying property during periods of rapid price increases or elevated prices. Property prices remain elevated. After having risen 30 per cent over the last five years, they are down by just 3 per cent over the last three quarters. Global interest rates are still at historic lows. "Relaxing property measures in the current easy liquidity environment may set off another spiral of price increases," Dr Chua noted. He also outlined how other government policies could dampen the property market. The restructuring process and stricter foreign worker and immigration policies are lowering the economy's potential growth, while curbs on the inflow of working-age foreigners will exacerbate Singapore's ageing demographics. While he does not expect the Government to reverse course on these policies, a pause "may be in order", as companies, particularly small and medium-sized enterprises, are having trouble adjusting to the speed of the tightening. -By Yasmine Yahya, Assistant Money Editor Home prices ‘to fall 20% by 2016 on restructuring, curbs’: reportA
Bank of America Merrill Lynch research report said that “restructuring and
stricter foreign worker and immigration policies are lowering potential growth
and impacting the property market". Source: Channel News Asia / Business SINGAPORE: Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016, as economic restructuring as well as property and loan curbs continue to weigh on the housing market, Bank of America Merrill Lynch (BAML) said in its research report released Tuesday (Sep 9). “Overly tight population policies will imply the dominance of ageing-resident demographics over the influx of younger non-resident workforce. Delays in relaxing property measures would imply a greater negative impact from rising mortgage rates,” said BAML economist Chua Hak Bin. Under the ongoing economic restructuring that the Government has said is a long-term undertaking, it will slow the flow of foreign workers into Singapore while rolling out incentives for companies to raise productivity. “Restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market,” Dr Chua said. “Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,” he added. Private home prices fell for a third straight quarter in the three months ended June as cooling measures such as the Additional Buyer’s Stamp Duty and loan restrictions such as the Total Debt Servicing Ratio (TDSR) framework curbed demand. From the beginning of the year, prices had fallen by 2.3 per cent by the end of the second quarter, the Urban Redevelopment Authority’s index showed in July. On the public housing front, Housing and Development Board (HDB) resale prices shed 3 per cent by the end of the second quarter from the beginning of the year, hit by a reduction in the Mortgage Servicing Ratio cap and the maximum loan term, as well as a three-year wait for new permanent residents before they can enter the market. Mr Ku Swee Yong, chief executive of property agency Century 21, said more downward pressure will be exerted on private residential prices from current vacancies and new supply. He noted that more than 21,000 private homes remained unoccupied in the second quarter, translating to a vacancy rate of 7.1 per cent, while another 29,000 new units will come on the market in the next two years. Meanwhile, the decline in HDB resale prices will directly affect the mass market private housing segment, as the pool of upgraders becomes smaller. Dr Chua said the fate of the property market largely depends on how the Government tweaks its policies, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of property measures. “Singapore’s transition to a productivity-driven growth model is still ongoing and has produced mixed results so far … Labour productivity has not improved and not compensated for weaker foreign labour growth,” he added. “We do not see the Government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo in 2015, unless the Government chooses to further tighten in the Budget, to be announced in February. “We think a pause in the restructuring is likely and in order, as companies, particularly small and medium enterprises, are having trouble adjusting to the speed of the tightening,” he said. Dr Chua expects the Government to begin unwinding property measures only from the second half of next year, when the benchmark United States federal funds rate is forecast to begin to rise, with Singapore mortgage rates moving in tandem. He said the structural measures, such as the TDSR and loan tenure curbs, are not likely to be changed. However, cyclical measures such as loan-to-value limits and stamp duties can be calibrated based on market conditions. “Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared sufficiently,” he said. -TODAY/av Home prices ‘to fall 20% by 2016 on restructuring, curbs’Stricter immigration, foreign worker policies hitting growth and property market: Report Source: Today Online / Business SINGAPORE — Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016, as economic restructuring as well as property and loan curbs continue to weigh on the housing market, Bank of America Merrill Lynch (BAML) said in its research report released yesterday. “Overly tight population policies will imply the dominance of ageing-resident demographics over the influx of younger non-resident workforce. Delays in relaxing property measures would imply a greater negative impact from rising mortgage rates,” said BAML economist Chua Hak Bin. Under the ongoing economic restructuring that the Government has said is a long-term undertaking, it will slow the flow of foreign workers into Singapore while rolling out incentives for companies to raise productivity. “Restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market,” Dr Chua said. “Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,” he added. Private home prices fell for a third straight quarter in the three months ended June as cooling measures such as the Additional Buyer’s Stamp Duty and loan restrictions such as the Total Debt Servicing Ratio (TDSR) framework curbed demand. From the beginning of the year, prices had fallen by 2.3 per cent by the end of the second quarter, the Urban Redevelopment Authority’s index showed in July. On the public housing front, Housing and Development Board (HDB) resale prices shed 3 per cent by the end of the second quarter from the beginning of the year, hit by a reduction in the Mortgage Servicing Ratio cap and the maximum loan term, as well as a three-year wait for new permanent residents before they can enter the market. Mr Ku Swee Yong, chief executive of property agency Century 21, said more downward pressure will be exerted on private residential prices from current vacancies and new supply. He noted that more than 21,000 private homes remained unoccupied in the second quarter, translating to a vacancy rate of 7.1 per cent, while another 29,000 new units will come on the market in the next two years. Meanwhile, the decline in HDB resale prices will directly affect the mass market private housing segment, as the pool of upgraders becomes smaller. Dr Chua said the fate of the property market largely depends on how the Government tweaks its policies, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of property measures. “Singapore’s transition to a productivity-driven growth model is still ongoing and has produced mixed results so far … Labour productivity has not improved and not compensated for weaker foreign labour growth,” he added. “We do not see the Government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo in 2015, unless the Government chooses to further tighten in the Budget, to be announced in February. “We think a pause in the restructuring is likely and in order, as companies, particularly small and medium enterprises, are having trouble adjusting to the speed of the tightening,” he said. Dr Chua expects the Government to begin unwinding property measures only from the second half of next year, when the benchmark United States federal funds rate is forecast to begin to rise, with Singapore mortgage rates moving in tandem. He said the structural measures, such as the TDSR and loan tenure curbs, are not likely to be changed. However, cyclical measures such as loan-to-value limits and stamp duties can be calibrated based on market conditions.
“Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared sufficiently,” he said. http://www.channelnewsasia.com/news/business/singapore/home-prices-to-fall-20-by/1354620.html
http://www.todayonline.com/business/home-prices-fall-20-2016-restructuring-curbs HDB details plans for three new housing districts They are Punggol Northshore, and first precincts in Bidadari and Tampines North Source: Business Times / Singapore THE Housing and Development Board (HDB) on Tuesday unveiled detailed plans for the first housing projects in Bidadari and Tampines North, as well as for Punggol Northshore - one of seven new waterfront housing districts in Punggol. Punggol's Northshore District will be the next one to be developed after the Matilda District. It will offer about 6,000 new flats, with the first project slated to be launched in 2015. New technologies will be employed to make the district "smart and sustainable". In fact, Northshore will be the first district to test-bed smart technologies in public housing.
It will feature intelligent car parks (which automatically increase the number of available lots during non-peak hours for visitors, as residents with season parking tickets are out in the day), smart lighting (lighting with sensors which will be reduced in common areas with little or no human traffic detected), and smart waste management (whose sensors will monitor waste disposal patterns before the data is analysed to optimise the deployment of resources needed for waste collection). -By Lee Meixian 3 new housing locations to be green havens Source: Straits Times / Top of The News THE first public housing projects in the upcoming Tampines North, Bidadari and Punggol Northshore areas are set to feature a range of green initiatives. Aside from heavily landscaped facilities such as roof gardens, the Build-To-Order projects will boast technologically advanced and eco-friendly features such as air-pressure waste systems. "Intelligent" carpark monitoring systems will also be installed at the four pioneer precincts in Punggol Northshore. These automatic systems reserve space for residents by adjusting the number of parking spaces available to visitors, depending on the time of day. The roofs of these seafront blocks of flats, which face the Johor Strait, will be designed to allow installations of solar panels. Common areas will have sensors that can reduce energy usage by dimming the lights when human traffic is low. More than 3,000 units in blocks as high as 26 storeys will be launched by the Housing Board next year in Punggol Northshore. Among other amenities will be a shopping centre, a two-storey walkway connecting the nearby Samudera LRT station to the waterfront, and a dragonfly pond in the middle of the area. At the first housing precinct in Bidadari, which will also be launched next year, residents in more than 1,000 units can look forward to walkways flanked by greenery, shops and eating houses. They will also get views of a man-made lake and a new park from blocks as tall as 18 storeys. Those living in the first Tampines North precinct will have a park as an entrance, with resting pavilions shaped like sand piles, drawing inspiration from the area's history of sand quarries. More than 1,500 units, in blocks spanning 14 to 16 storeys, will be launched in November this year. Every block will come with a "living room" where residents can mingle amid landscaped greenery on the ground floor. Bridges in Bidadari and Tampines North will connect garden decks and different blocks across roads. All the new precincts will also come with air-pressure or pneumatic waste systems to reduce the manpower and trucks needed for refuse collection. Property analysts believe each of these locations will be popular for different reasons. "Bidadari has been touted to be the next Bishan. It's near to town and is considered city-fringe housing," said ERA Realty key executive officer Eugene Lim. "Tampines North is close to the Tampines regional centre, so it will enjoy the amenities of a mature estate." Ms Nicole Tan, 23, who is unemployed and plans to apply for a Tampines North flat with her boyfriend, said: "It's a five- minute drive from Tampines Avenue 1, where my parents live. It will be so convenient to visit them." PropNex Realty chief executive Mohamed Ismail Gafoor said that Punggol Northshore will be a hit with those looking for a waterfront lifestyle and activities.
"It will probably be the cheapest waterfront housing you can get," said Mr Lim, adding that the distance from the city centre will be less of a concern. "Those who buy flats in Punggol see it as a self-contained town. It will be bustling like Tampines in years to come." -By Yeo Sam Jo HDB unveils green living plans for Bidadari and Tampines NorthThe first public housing projects in these two areas will have lots of greenery and will yield more than 2,500 units. Applications for Tampines North will open in November, while those interested in applying for Bidadari will have to wait till next year.Source: Channel News Asia / Singapore SINGAPORE: The first housing projects at Bidadari and Tampines North will yield more than 2,500 units, and residents can look forward to more greenery, open spaces and seamless connectivity to transportation networks, the Housing and Development Board (HDB) announced on Tuesday (Sep 9). Development plans for the two areas were first announced last year. The first public housing project for Bidadari, a former cemetery, will be launched next year. It will be located in the Alkaff neighbourhood, which is adjacent to Upper Serangoon Road. Residents can expect roof gardens, community terraces, and garden courtyards. There will also be an underpass to connect residents to the Alkaff Lake and Bidadari Park.
At Tampines North, the first project to be launched will be located in Park West District, located along Tampines Avenue 9. This will yield about 1,500 HDB flats. There will be a park and landscaped decks at Tampines North. The
carparks both here and in Bidadari will be hidden under walkways and gardens.
It is not just a green feature - it also enhances connectivity and safety for
pedestrians when commuting from one end of the precinct to another. The two districts will also boast smart features such as a pneumatic waste conveyance system that has sensors to monitor disposal patterns. Mr Steven Tan, Managing Director of real estate agency OrangeTee, expects Bidadari to be the most popular among home-buyers due to its location: "For HDB estates in centralised locations, the demand is usually much higher." Those interested in applying for Bidadari will have to wait till next year, while applications for Tampines North will open in November.
On Tuesday, HDB also detailed plans for a seafront district at Punggol Northshore, which will be a testbed for smart technologies. - CNA/xy Source: Today Online / Singapore SINGAPORE — From car parks to waste management, one of the seven new waterfront housing districts in Punggol will be the first public housing district here to test smart technologies. Punggol Northshore will be the next district to be developed in the town, after plans for Matilda district were announced last year. It will have about 6,000 flats, with the first project to be launched next year, the Housing and Development Board (HDB) said yesterday when it unveiled plans for three housing projects around the island. Solar panels will sit atop Punggol Northshore blocks. They will also be directly connected to a Light Rail Transit station, with sheltered access to the waterfront. Smart technologies will enhance the planning and maintenance of HDB estates for a more liveable and efficient environment, the agency said. Besides lights equipped with sensors in common areas, the car parks in Punggol Northshore will have an intelligent parking demand monitoring system that automatically increases available lots for visitors during non-peak hours and decreases them in the evening when residents with season parking return home. A pneumatic waste conveyance system — automated waste collection that uses a vacuum-type underground pipe network to collect household waste — will come with sensors to monitor waste disposal patterns. The data to be collected have yet to be decided on, but the aim is to optimise the deployment of waste-collection resources. The smart waste management system will also be deployed in the first housing precincts of Bidadari and Tampines North, said the HDB. The Bidadari project, to be launched next year, will be in Alkaff neighbourhood. It will feature two malls, one with an underpass linking residents to Alkaff Lake and Bidadari Park. Roof gardens and community terraces will be built on top of multi-storey car parks and selected residential blocks, with views of the lake and park. Over in Tampines North, envisioned as a “green shoot” of Tampines town, its first public housing project comprising 1,500 flats will be launched in November. The project’s blocks will have undulating facades resembling a canyon’s rock walls and its low-rise two-storey car parks will have landscaped rooftops to provide “doorstep greenery” to residents. “Community living rooms” with lush greenery and landscaping will be located at the ground level of each block, with seats for residents to get together and mingle, said the HDB. The projects — which follow broad master plans for Bidadari and Tampines North announced last year and that for the next phase of Punggol’s development announced in 2012 — aimed for distinctive districts and neighbourhoods, as well as seamless connectivity to transportation networks, the HDB said. -By Neo Chai Chin http://www.channelnewsasia.com/news/singapore/hdb-unveils-green-living/1353758.html
http://www.todayonline.com/singapore/punggol-district-first-trial-smart-technologies Industrial site draws top bid of $5.2m in eight-way tussle Source: Straits Times / Money A TUSSLE between eight bidders for an industrial site in Tuas South Street 7 resulted in a top offer of $5.2 million yesterday. The bidders, mostly construction and engineering firms, were likely drawn to the site by its affordability, analysts said. IG Tuas lodged the top bid - $96 per sq ft (psf) per plot ratio (ppr) for the 554,235 sq ft parcel. It is the last site on the industrial Government Land Sales (GLS) list for the first half of the year. This was 9 per cent more than New Hope Singapore's bid of $4.79 million - or $88 psf ppr - which came in second. L&P Blasting was third with its bid of $4.1 million - or $76 psf ppr - 26 per cent lower than the top offer. Analysts had expected a winning offer of $68 to $100 psf ppr when the site was put up for sale in July. However, SLP International research head Nicholas Mak noted that similar parcels nearby were being sold for lower prices of $65 to $70 psf ppr. The site is zoned B2, typically for heavy industrial use, and was triggered for sale from the reserve list when a minimum bid price of $3.52 million was submitted. It has a lease of 20 years and 10 months and a plot ratio of 1. A site on the reserve list is launched for tender only upon successful application by a developer, while confirmed list sites are launched according to schedule, regardless of demand. "The relatively healthy participation in (the) tender is partly due to the limited supply of such small sites in the current industrial Government Land Sales programme," said Mr Mak. Only one B2 industrial site available for the second half of the industrial GLS programme is smaller than 0.6ha, and is likely to fetch a price lower than $5 million - a sum that is deemed more palatable to many small and medium-sized industrial firms.
Mr Mak expects the new development to be a single factory as strata-subdivision is not allowed for the plot, until five years after the building is completed. -By Cheryl Ong Ghosts don’t scare buyers as August home prices rise But analysts warn it is too early to call a turnaround in resale private housing market Source: Today Online / Business SINGAPORE — The private housing market showed signs of life in August with resale prices rising for the first time in five months, shrugging off the traditionally inauspicious Hungry Ghost month, but analysts have warned it is too early to say a sustained turnaround is on the cards. Resale prices of non-landed private homes registered a month-on-month increase of 0.4 per cent last month, reversing the previous four months of downtrend, a flash report by Singapore Real Estate Exchange (SRX) showed yesterday. However, prices were still 5 per cent lower than the same period last year and 5.3 per cent below the recent peak achieved in January. Last month’s rise was driven by gains in the Core Central Region and Rest of Central Region, where prices jumped 4.8 per cent and 1.5 per cent, respectively, SRX said. However, the Outside Central Region, which has been the most resilient to repeated rounds of property curbs thus far, suffered a 1.1 per cent decline in resale prices. “Looking at the SRX numbers, the market has been see-sawing with some months of price declines and then another few months of increases. What this means is that it is not conclusive that the market is actually improving,” said Mr Alan Cheong, senior director of research and consultancy at real estate firm Savills Singapore. “The market is showing downside bias, but it is moving at a slow pace and with some resistance — the general economy is not moving at a distressed pace, so there’s no urgency for many people to force sell,” he added. Mr Eugene Lim, key executive officer at property agency ERA, agreed that it is still early days to call a turnaround in the resale private housing market. He noted that the latest rise in prices was not accompanied by a surge in transactions, which showed that buying momentum remained subdued. The SRX figures showed 418 non-landed private homes were re-sold last month, little changed from the 417 units transacted in the previous month. “The slight increase in prices did not come with an increase in demand, which shows that buyer sentiment remains low. With all the measures in place, the low sentiment is expected to remain for now — buyers are now more cautious, so they take time to source out value buys,” Mr Lim said. Besides curbs such as the Total Debt Servicing Ratio and Additional Buyer’s Stamp Duty that continue to weigh on the market, a weakening rental landscape is also undermining the resale market, analysts said. The SRX report showed that overall rents fell 0.6 per cent last month, the seventh straight month of decline, while rental volume rose by 3.6 per cent to 3,539 units.
“Notwithstanding the slowdown in arrivals of foreign nationals in Singapore, there is still demand for rental. But the increase in supply of completed units is faster than the increase in demand, so rents will continue to fall for that reason,” said Mr Cheong. -By Lee Yen Nee http://www.todayonline.com/business/property/ghosts-dont-scare-buyers-august-home-prices-rise US properties increasingly popular with S’pore investors Local developers taking stakes in American projects, while those from the US have set up shop here to attract investors Source: Today Online / Business SINGAPORE — The real estate market in the United States has become one of the latest contenders for a slice of Singaporean investors’ growing interest in overseas properties, joining the ranks of traditionally popular markets such as Malaysia, Australia and Britain. In recent months, Singapore developers, including Keppel Land and Pontiac Land, have flocked to the US, taking stakes in American projects as they seek alternative sources of revenue amid a lacklustre market back home. On their part, US developers, including Millennium Partners, have also set up shop here, in an attempt to attract more individual investors for their properties in the States. “We first came to Singapore and a few other Asian cities in 2009 to market our project Millennium Tower in San Francisco … We’ve seen interest grow and our hope is that it will continue to grow; that’s why we’re here,” said Mr Richard Baumert, a partner at Millennium Partners. Mr Baumert was in town to kick-start marketing for the company’s latest project — Millennium Tower in Boston. Overseas properties are becoming increasingly popular with Singapore investors, who face tough property curbs and high entry prices at home. The Monetary Authority of Singapore said Singaporeans poured S$2 billion into foreign properties last year based on deals done by real estate agencies here, a 43 per cent increase from the S$1.4 billion invested in 2012. And analysts said this figure could increase further. Mr John Stinson, Cushman and Wakefield’s executive managing director of capital markets in the Asia-Pacific, said: “There has been an overall surge in interest from the Asia-Pacific in investing in the United Kingdom, Europe and the US for almost two years. This trend has really gathered momentum from Singapore and other parts of South-east Asia this year. Many investors with portfolios highly concentrated in Singapore … are executing strategies to diversify offshore. “The US has reached the top of many investors’ target lists of offshore country targets. The markets showing the most appeal have been New York, San Francisco and Los Angeles ... The US markets are generally coming off a low base in almost every sector; interest rates are historically low and the US dollar has again become a safe-haven currency.” Mr Sean Tan, general manager of real estate portal iProperty, agreed that the US is emerging as a viable investment destination, especially among investors who are seeking a diversified portfolio, but noted that its popularity still pales in comparison with that of Malaysia, Australia and the UK. “As with any investment, there are risks. The US is so far away; investors may not be familiar with the market so they may buy into areas that are not so good … but cities such as San Francisco and Boston are not bad as their economies are quite promising.” Mr Tan also said overseas developers are drawn to Singapore for its status as a regional hub and gateway to affluent individuals in Asia, a sentiment that Mr Baumert shares.
“We have two more projects coming up after this one, so we thought we should just set up an office here. We started in summer, so that’s around June. From a branding perspective, it also helps to tell people that we have a presence in Singapore,” said Mr Baumert. -By Lee Yen Nee http://www.todayonline.com/business/property/us-properties-increasingly-popular-spore-investors Real Estate Companies' Brief OUE Hospitality Trust Source: Business Times / Singapore Markets Sept 9 close: S$0.90 OCBC INVESTMENT RESEARCH, Sept 9
WE expect OUE Hospitality Trust (OUEHT) to benefit from a seasonally higher hospitality demand in the second half of this year. Croesus Retail Trust Source: Business Times Croesus Retail Trust (CRT) announced the acquisition of One's Mall for 11 billion yen (S$131 million) which represents a 5.2 per cent discount to the 11.6 billion yen independent valuation, and an initial NPI yield of 5.8 per cent. One's Mall is a freehold, large-scale retail complex with a net lettable area of 52,844 square metres located in Inage Ward within Chiba City, which is 40 km south-east of Tokyo.
http://www.businesstimes.com.sg/premium/singapore-markets/others/brokers-take-20140910 Reverse mortgage worth considering Source: Straits Times / Forum Letters THE tweaks to the Lease Buyback Scheme ("More cash upfront under enhanced lease buyback plan", last Thursday) do not remove its inherent flaws. For instance, the value and transferability of the unit are affected once the lease is sold to the Government. Also, future property price appreciation does not benefit the flat owner, and the decision is irreversible. In contrast, a reverse mortgage scheme does not affect the title and value of the flat. It is a loan secured by a mortgage of the flat that is disbursed monthly, like an annuity.
There are reverse mortgage schemes that allow for lump sum disbursements for medical expenses, or renovations and repairs to the flat. The flat owner, or his children if they should inherit the flat, can sell it at any time by paying off the mortgage. If property prices increase, the owner can sell the flat at a better price, so he has more funds to pay off his outstanding loan. There has been no word on reverse mortgage plans despite reports earlier this year that the Government was studying the issue ("Focus on meeting housing needs of seniors, needy folk"; March 11). Many reverse mortgage schemes have some government sponsorship and underwriting of the longevity and market value risks in particular. There are cases of seniors living in fully paid-up HDB flats who need social assistance because they have no cash.
The Government has the obligation to offer them more options like reverse mortgage, because it has encouraged home ownership since the nation's independence. -By Kuo How Nam Global Economy & Global Real Estate Foreign developers in town to woo Asian buyers Source: Business Times / Top Stories [SINGAPORE] Global property launches are gathering pace in this part of the world as more overseas developers start wooing the Asian rich. At least two foreign developers are in town this week to kick off their global launches next month. US developer Millennium Partners, which just opened its Singapore office in June, said it is targetting "discerning Asian buyers" who want to own a home right next to the landmark 1912 Burnham Building in Boston. Similarly, the Malaysian consortium behind the iconic Battersea Power Station mixed-use project that overlooks London's famous River Thames is on a world-wide marketing blitz ahead of its phase three residential launch. It is also wooing firms from the US to Asia to set up shop in the redevelopment project.
Speaking to reporters on Tuesday, Richard Baumert, partner at US-based Millennium Partners, noted that low inventory levels of completed homes and new builds in the US set the stage for property price increases. -By Lynette Khoo GLP inks China lease agreements Source: Business Times Global Logistic Properties has signed new lease agreements totalling 87,000 sqm (936,000 sq ft) with three leading third-party logistics companies in Eastern and Midwestern China. It is extending strategic partnerships with Sinotrans and Best Logistics.
http://www.businesstimes.com.sg/premium/companies/others/company-briefs-20140910 Singapore to calibrate involvement in India's Smart Cities project Minister in the Prime Minister's Office S Iswaran said Singapore wants to understand the needs of the Indian government before making any commitments.Source: Channel News Asia / Singapore NEW DELHI: Singapore needs to calibrate its involvement in
India's Smart Cities project, which is a key focus of the new Indian
government. Minister in the Prime Minister's Office S Iswaran, who is in India
as part of the delegation accompanying Emeritus Senior Minister Goh Chok Tong,
said Singapore should also make a material contribution so that the help given
can produce tangible results and create value for both countries. In 2014, India's capital New Delhi became the world's second most populous city and by 2050, India is projected to add 404 million people to its cities. Thus, there is a need to introduce a more sustainable urban development policy in the country. India's Prime Minister Narendra Modi has set out his vision to build 100 Smart Cities across India - a key focus of his new government. Singapore has offered help to build these cities and share its experiences in other countries, but has not made any concrete plans at this stage as it wants to understand the needs of the Indian government before making any commitments. Singapore understands the scale of the project and intends to size its involvement appropriately. Mr Iswaran, who is also the Second Minister for Trade and Industry, said: "(We are) looking at one or two locations, and even within those locations, looking at some aspects. I do not know if we can actually perform the whole range of capabilities that might be expected but we can play to our strengths ... and see what we can do there." Also accompanying ESM Goh to India is Minister of State for National Development Desmond Lee, who is keen to better understand how Singapore can help in the future development of the country. Mr Lee said: "We can play a role of a catalyst - we have a vibrant private sector and in that sense, we can help to catalyse investments in various areas in India." Singapore is also optimistic that with the new government in India, there is scope for trade to grow. Both countries are reviewing the Comprehensive Economic Cooperation Agreement, and it is hoped that it can be concluded next year. Mr Iswaran said: "Next year, there will be particularly symbolic value because it will be the 50th year of diplomatic ties between India and Singapore. So if the review can be concluded in a manner that is mutually beneficial and to be announced by next year, that will be welcomed by all parties." On Tuesday evening (Sep 9), ESM Goh and the Singapore delegation met Senior Bharatiya Janata Party leader L K Advani. On Wednesday, ESM Goh will meet PM Modi at his office. - CNA/ac http://www.channelnewsasia.com/news/singapore/singapore-to-calibrate/1354122.html Simon Property CEO Says ‘There’s No Deal’ in Australia Source: Bloomberg / News Simon Property Group Inc. (SPG) Chief Executive Officer David Simon said the mall owner doesn’t have a deal in Australia, following a report by the Australian that the company was likely to pursue CFS Retail Property Trust Group. (CFX) “There’s no deal,” Simon said at a Barclays Plc financial-services conference that was broadcast over the Internet today. The Australian reported today that Indianapolis-based Simon may bid for CFS Retail, potentially keeping CFS’s premium shopping centers and selling second-tier properties. Simon, the largest U.S. mall owner, has “been known to do some deals here and there, however not in Australia,” the CEO said. Simon’s holdings overseas include a stake in European mall owner Klepierre, based in Paris. The real estate investment trust is redeveloping and expanding its existing malls and building outlet centers to boost growth. CFS Retail, with a market value of about A$6.6 billion ($6.1 billion), rose 3.8 percent today to A$2.17. Simon was little changed at $172.44 in New York. The stock rose 21 percent this year, compared with a 19 percent gain in the Bloomberg REIT Regional Mall index of 10 landlords. -By Brian Louis http://www.bloomberg.com/news/2014-09-09/simon-property-ceo-says-there-s-no-deal-in-australia.html Amazon Said to Agree With Brookfield for London Tech City Office Source: Bloomberg / Luxury Amazon.com Inc. (AMZN) reached an agreement with Brookfield Property Partners LP (BAM) to rent about 400,000 square feet (37,000 square meters) of office space near the London technology hub known as Silicon Roundabout, two people with knowledge of the deal said. Amazon, the world’s largest online retailer, will occupy more than two-thirds of Brookfield’s Principal Place development, said the people, who asked not to be identified because the talks are private. Details of the lease deal are set to be announced on Thursday, they said. A spokeswoman at Seattle-based Amazon declined to comment. Technology, media and telecommunications companies are providing London’s landlords with tenants as financial-services firms put off expansion plans. Principal Place, also known as “Tech City,” is located on the northern edge of London’s City financial district. Amazon leased a 210,000 square foot building close to the Farringdon rail station and London’s Smithfield Market last year. Google Inc. agreed to lease an additional 160,000 square feet at its King’s Cross development in the first quarter. Brookfield, a unit of Toronto-based Brookfield Asset Management Inc. (BAM/A), is being advised on the deal by property consulting firm Allsop LLP and broker Cushman & Wakefield Inc. -By Patrick Gower Blackstone, TPG Buy U.K. Mortgage Lender for $290 Million Source: Bloomberg / News Blackstone Group LP (BX) and TPG Capital agreed to buy mortgage lender Kensington Group Plc and other mortgage assets from Investec Plc for 180 million pounds ($290 million) to expand in the U.K. real-estate market. Blackstone Tactical Opportunities Advisors and TPG Special Situations Partners are buying the business seven years after Investec delisted Kensington Group from the London Stock Exchange, all parties said in separate statements today. “Kensington is a best-in-class specialist lender with an established track record in the U.K. and strong customer relationships,” David Blitzer, head of Blackstone Tactical Opportunities, said in an e-mailed statement. “We will invest in growing the business in the mortgage space as well as extending the range of its activities in specialty finance.” Kensington, which had gross assets of 3.7 billion pounds at the end of March, employs about 140 people and has some 30,000 customers, according to the statement. Investec said its common equity Tier 1 ratio, a key measure of financial strength, is seen increasing to about 11.3 percent from 8.8 percent at the end of March, taking into account the transaction and the sale of Investec Bank (Australia) Ltd. -By Kiel Porter http://www.bloomberg.com/news/2014-09-09/blackstone-tpg-buy-u-k-mortgage-lender-for-290-million.html Blackstone Plans IPOs as Next Real Estate Fund Prepared Source: Bloomberg / Luxury Blackstone Group LP (BX) has already taken public its biggest U.S. real estate investment from the property market’s boom. Now it’s planning to sell shares in two companies created in the wake of the crash. The world’s biggest private-equity real estate firm yesterday filed a confidential notice for an initial public offering of IndCor Properties Inc., an industrial landlord it began building in 2010 by accumulating warehouses. Blackstone also is planning an IPO as soon as next year for Invitation Homes LP, the owner of more than 45,000 rental homes that began in 2012, according to a person familiar with the matter. Blackstone, which bought assets at discounts after the financial crisis depressed prices, is now selling shares in more of its largest property units as stocks hover close to highs. The firm’s past offerings include last year’s IPOs of Hilton Worldwide Holdings Inc. (HLT) and shopping-center owner Brixmor Property Group Inc. (BRX) “Valuations in general have never been higher, so depending on the sector, it makes an abundance of sense to take an operating company public,” said Eric Frankel, an analyst at Green Street Advisors Inc., a Newport Beach, California-based property-research firm. Next FundBlackstone, based in New York, is stepping up its real estate stock sales as it prepares to raise its next global property fund. Private-equity firms typically sell investments from older funds as they prepare to raise new ones. The sales enable the companies to realize gains from profitable investments and return money to investors. “Someone like Blackstone is almost always trying to raise a new fund,” Erik Gordon, a business and law professor at the University of Michigan, said in a telephone interview. “You have to show success and the way you show success so you can keep raising money is by selling an investment at a high price in a high market or you go public.” Top money managers including Blackstone President Tony James are warning of excesses from central bank stimulus and preparing their firms for what may follow recent market highs. “We clearly have an overvalued debt market,” James said today at a breakfast hosted by Politico, the Washington-based media company. “We have an equity market that’s well above median value. Equity markets are overvalued by historical standards.” Foreclosed HomesBlackstone created Invitation Homes, based in Dallas, by buying foreclosed homes at auction after the housing market collapsed. It has spent more than $8 billion buying and renovating properties. Peter Rose, a Blackstone spokesman, declined to comment on the company’s plans for Invitation Homes. As with Invitation Homes, Blackstone formed IndCor when times were tough. The firm acquired 20 million square feet (1.9 million square meters) of prime industrial properties in California by buying debt on the assets at discounts. IndCor, based in Chicago, now owns more than 110 million square feet of warehouses throughout the country. It will be the largest U.S. real estate investment trust with purely industrial properties. The number of shares to be sold and price range haven’t been determined, IndCor said yesterday. The company plans to raise about $1 billion, which would value IndCor at about $8 billion, a person with knowledge of the plans said last month. Hilton IPOIndCor and Invitation Homes would be Blackstone’s fifth and sixth U.S. real estate IPOs since October 2013. In December, the firm took public its biggest-ever investment by equity, McLean, Virginia-based Hilton. The $2.71 billion IPO, a record for a lodging company, came six years after Blackstone’s $26 billion takeover of the hotel operator in October 2007. Stephen Schwarzman, Blackstone’s chairman and chief executive officer, said in July that the company is preparing a property fund that will be the successor to the record $13.3 billion raised in 2012 for Blackstone Real Estate Partners VII. “At our current investment pace, we’d likely be back in the market with our next global fund early next year,” Schwarzman said on an earnings conference call on July 17. Blackstone used a different strategy to exit its other big boom-era real estate deal, the $39 billion buyout of billionaire Sam Zell’s Equity Office Properties Trust, then the largest U.S. office landlord. The firm flipped many of Equity Office’s assets upon completion of the acquisition in February 2007, and has since sold additional assets one by one and in groups as occupancies and property values rose. Better Valuation“Blackstone is agnostic in terms of how they execute their exit strategy,” said Frankel of Green Street. “Some platforms get a better valuation going public and some are better off selling to third parties.” IndCor and Invitation Homes are following a template set with Brixmor. Blackstone built Brixmor into the second-largest U.S. shopping center landlord starting with the 2011 purchase of real estate from Australia’s Centro Properties Group. Centro acquired hundreds of U.S. strip centers as the market was peaking and couldn’t refinance them when credit markets froze. Brixmor went public on Oct. 29. Two weeks later, Blackstone sold shares in Extended Stay America Inc. (STAY), an operator of long-stay hotels co-owned with Centerbridge Partners LP and Paulson & Co. The three firms bought Extended Stay in 2010. In April, Blackstone took public La Quinta Holdings Inc. (LQ), an operator of limited-service hotels acquired in 2006. Hilton is trading 28 percent above its IPO price, while La Quinta is 19 percent higher. Brixmor also has gained 19 percent since going public, and Extended Stay is up 18 percent. -By Hui-yong Yu |
