Singapore Real Estate
Homeowners hit as Sibor rises to highest in seven years TODAY reports: The three-month Singapore interbank offered rate (SIBOR) broke past 0.9 per cent on Wednesday - a level not seen since 2008. Source: Channel News Asia / Singapore SINGAPORE: Homeowners servicing mortgages will need to tighten their purse strings further: The three-month Singapore interbank offered rate (SIBOR) on Wednesday (Mar 11) charged past 0.9 per cent — a level not seen since 2008 — amid widespread expectations that the United States Federal Reserve will raise benchmark borrowing costs by mid-year. The local interest rate, widely used to price home loans here, closed at 0.87943 per cent Wednesday, figures published on the Association of Banks in Singapore website showed. SIBOR continued to rise on Thursday to above 0.9 per cent, banking sources said, doubling the level seen at the beginning of this year. Analysts whom TODAY spoke to said SIBOR’s climb followed the weakening of the Singapore dollar against the greenback in January, but took on added momentum after a very strong February job market in the US raised the likelihood that the Fed will normalise interest rates come June. Following the US job report on Friday — showing the world’s biggest economy created 295,000 net new jobs last month to drive the unemployment rate to a seven-year low of 5.5 per cent — the US dollar rose to its highest versus the Singapore dollar since 2010. “The rise in SIBOR has a lot to do with what we saw last Friday in the US, which caused the US dollar to move to a level we have not seen in a while. For a short time it touched S$1.39, which is very close to many people’s year-end forecast of S$1.40,” said UOB economist Francis Tan. The other mortgage-pricing benchmark, the Singapore Swap Offer Rate (SOR), which is even more dependent on the US dollar-Singapore dollar exchange rate, soared above the 1 per cent level on Thursday, the highest since 2009. The Monetary Authority of Singapore’s (MAS) surprise move in January to ease policy ahead of its scheduled April meeting had given rise to greater expectations of a weakening local currency, analysts said. “I think there is rising expectations for the exchange rate to depreciate, not necessarily against the US dollar but also against the basket of currencies that the Singapore dollar is weighed against. That will put some upward pressure on interest rates,” said Credit Suisse economist Michael Wan. “What this means is mortgage rates will rise, so households that have over-leveraged over the past years will be hit quite a bit and there may be some downward pressure on consumption spending. If domestic demand disappoints, it leaves more of the burden on external demand, or global growth, to drive the economy,” he added. The recent rise in domestic interest rates have led to some economists re-looking their exchange rate projections for the year, but they said MAS’ policy decision come April will very much determine how things will pan out. UOB’s Mr Tan said another easing by the central bank could push the US dollar to S$1.44, which will see the three-month SIBOR ending the year at around 1.3 per cent, up from his previous forecast of 1 per cent. -TODAY/kk http://www.channelnewsasia.com/news/singapore/homeowners-hit-as-sibor/1712688.html
Homeowners hit as Sibor rises to highest in seven yearsSource: Today Online / Singapore SINGAPORE — Homeowners servicing mortgages will need to tighten their purse strings further: The three-month Singapore interbank offered rate (Sibor) yesterday charged past 0.9 per cent — a level not seen since 2008 — amid widespread expectations that the United States Federal Reserve will raise benchmark borrowing costs by mid-year. The local interest rate, widely used to price home loans here, closed at 0.87943 per cent yesterday (March 11), figures published on the Association of Banks in Singapore website showed. Sibor continued to rise today to above 0.9 per cent, banking sources said, doubling the level seen at the beginning of this year. Analysts whom TODAY spoke to said Sibor’s climb followed the weakening of the Singapore dollar against the greenback in January, but took on added momentum after a very strong February job market in the US raised the likelihood that the Fed will normalise interest rates come June. Following the US job report on Friday — showing the world’s biggest economy created 295,000 net new jobs last month to drive the unemployment rate to a seven-year low of 5.5 per cent — the US dollar rose to its highest versus the Singapore dollar since 2010. “The rise in Sibor has a lot to do with what we saw last Friday in the US, which caused the US dollar to move to a level we have not seen in a while. For a short time it touched S$1.39, which is very close to many people’s year-end forecast of S$1.40,” said UOB economist Francis Tan. The other mortgage-pricing benchmark, the Singapore Swap Offer Rate (SOR), which is even more dependent on the US dollar-Singapore dollar exchange rate, soared above the 1 per cent level today, the highest since 2009. The Monetary Authority of Singapore’s (MAS) surprise move in January to ease policy ahead of its scheduled April meeting had given rise to greater expectations of a weakening local currency, analysts said. “I think there is rising expectations for the exchange rate to depreciate, not necessarily against the US dollar but also against the basket of currencies that the Singapore dollar is weighed against… That will put some upward pressure on interest rates,” said Credit Suisse economist Michael Wan. “What this means is mortgage rates will rise, so households that have over-leveraged over the past years will be hit quite a bit and there may be some downward pressure on consumption spending. If domestic demand disappoints, it leaves more of the burden on external demand, or global growth, to drive the economy,” he added. The recent rise in domestic interest rates have led to some economists re-looking their exchange rate projections for the year, but they said MAS’ policy decision come April will very much determine how things will pan out. UOB’s Mr Tan said another easing by the central bank could push the US dollar to S$1.44, which will see the three-month Sibor ending the year at around 1.3 per cent, up from his previous forecast of 1 per cent. -By Lee Yen Nee http://www.todayonline.com/singapore/homeowners-hit-sibor-rises-highest-seven-years Bill tabled to vary HDB lease infringement penalties Source: Business Times / Real Estate A bill was tabled on Thursday that, among other things, proposes to vary the quantum of penalties that the Housing and Development Board (HDB) may impose in lease infringement cases, depending on severity. If passed, the penalty will be capped at S$50,000. Currently, HDB may compulsorily acquire the flat or impose a penalty on the flat owners. The penalty is fixed for each type of infringement. The bill for first reading was introduced by Desmond Lee, Minister of State (National Development), on behalf of National Development Minister Khaw Boon Wan. -By Lee Meixian http://www.businesstimes.com.sg/real-estate/bill-tabled-to-vary-hdb-lease-infringement-penalties http://www.straitstimes.com/premium/top-the-news/story/hdb-staff-may-get-enter-flats-force-20150313
Amendments to Housing Bill tabled in ParliamentIf amendments to the Housing and Development Act are passed, HDB will be allowed to enter a flat to carry out investigations and urgent repairs.Source: Channel News Asia / Singapore SINGAPORE: Amendments to the Housing and Development Act were introduced in Parliament on Thursday (Mar 12) and if passed, will empower the Housing and Development Board (HDB) to enter a flat to carry out investigations and urgent repairs. The changes to the Act will allow HDB to enter a flat without a court warrant, to carry out urgent repairs, if the owners ignore a 24-hour notice period and do not permit HDB to enter the flat. HDB will also be given the right of entry into a flat, without a court warrant, for more serious incidents. These include the hacking of structural beams or cases which affect the structural integrity of the building and the residents' safety. HDB said it has, at times, faced challenges in securing the co-operation of flat owners in cases where ceiling leakages involve replacing parts in the upper floor unit. - CNA/rg http://www.channelnewsasia.com/news/singapore/amendments-to-housing/1711900.html $740m plan to revitalise civic district Source: Straits Times A total of $740 million is being invested in the civic district, from mapping out a commemorative Jubilee Walk to mark the nation's 50th birthday, to refurbishing the forecourt of the Esplanade - Theatres On The Bay. "It's an important investment in our heritage, to remind us of the common history that unites us as a nation," Minister for Culture, Community and Youth Lawrence Wong told Parliament yesterday at his ministry's budget debate. Construction firms exercise ‘safety time-out’ after spate of workplace accidents TODAY reports: There have been seven crane-related workplace accidents so far this year, compared to 12 for the whole of last year.Source: Channel News Asia / Singapore SINGAPORE: Thirty construction firms, led by the National Crane Safety Taskforce, have joined a one-week “safety time-out” initiated by two construction associations, as a show of concern towards the spate of workplace accidents related to crane activities since the beginning of this year. In total, 300 construction sites have paused work starting from Mar 9 to beef up safety checks and precautions, such as to inspect lifting machines and gears, review crane operation plans and conduct refresher training. Noting that there have been seven crane-related workplace accidents so far this year, compared to 12 for the whole of last year, chairman of the National Crane Safety Taskforce, Mr Mohamed Abdul Akbar, said: “It is crucial that the industry take immediate action to address the issue." The Singapore Crane Association (SCA) and Singapore Contractors Association Ltd (SCAL) initiated the timeout. SCA's chairman, Mr Alan Tan, said its members are “alarmed and concerned” with the spate of accidents, and added that it is rallying industry players to conduct a safety time-out for both mobile and tower cranes. SCAL's president, Mr Ho Nyok Yong, said his association strongly supports the move to ensure the safety of workers involved in various work-at-height operations, such as crane operations. Mr Mohamed Abdul Akbar added that as long as safety was a prime consideration, operations would run smoothly. "The Crane Safety Taskforce has recently released a checklist for safety. But what has been practised at the construction site is that each individual company uses that as a base, but they work on improving it further according to their needs. But my advice to everybody is, if you think safety, everything will go fine." -TODAY/CNA/kk/rg http://www.channelnewsasia.com/news/singapore/construction-firms/1710860.html Views, Reviews & Forum
HDB prices, cooling measures and waiting game Source: Straits Times National Development Minister Khaw Boon Wan gave little away on Tuesday when he was quizzed by two Members of Parliament about the lifting of property cooling measures during the scrutiny of his ministry's budget. In replying to Ms Foo Mee Har and Dr Lily Neo, Mr Khaw was coy. "The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful," he said. Shop rentals: HDB replies Source: Straits Times / Forum Letters WE REFER to the letter from Mr Heng Mok Koon ("Allow flexibility in HDB shop rentals"; Feb 27). Under HDB's e-bidding system for letting shops, details of properties available for bidding are posted online. Bidders can submit their own bids and view all other bids at the same time. This allows them to make timely and informed decisions on any needed adjustments to their bids, while offering transparency and preventing speculative bidding. To further help bidders who may not be familiar with the market, a minimum bid is set. This serves as a useful guide for bidders to place a more informed bid. Commercial and other facilities in HDB towns are planned comprehensively from the outset and developed progressively as the towns grow. In new estates, HDB shops are located in clusters, within a short walking distance of the residential blocks. To ensure that the daily needs of residents are adequately met, HDB designates the trades for the shops. Besides shops, there are usually also eating houses, minimarts, supermarkets and clinics. These shops complement the shopping malls in the town centre and neighbourhood centres, which offer more shopping and dining choices to residents. Ng Leong Keng Director (Policy and Planning) Housing and Development Board http://www.straitstimes.com/premium/forum-letters/story/shop-rentals-hdb-replies-20150313 Companies' Brief
KepCorp closer to taking KepLand private; bid extended Source: Business Times / Companies & Markets Conglomerate Keppel Corp looks to be within striking distance of taking its mainboard-listed property arm private. Based on a Singapore Exchange filing, it owned 85.1 per cent of Keppel Land as at Thursday night, close to the minimum it needs to delist the property developer. -By Melissa Tan Sinjia Land gets nod to move to Catalist Sinjia land has received in principle approval to transfer from the mainboard of the Singapore Exchange to the Catalist Board, subject to certain conditions, it announced on Thursday. Soilbuild Reit acquires Technics property at Loyang Source: Business Times / Companies & Markets Technics oil & Gas's wholly-owned subsidiary, Technics Offshore Engineering (TOE), has entered into a sale and purchase agreement with DBS Trustee - the trustee of Soilbuild Business Space Reit - for the sale and leaseback of a property at 72 Loyang Way for S$97 million. The term of the lease is for 15 years, with TOE to pay rent of S$7.87 million in the first year. http://www.businesstimes.com.sg/companies-markets/in-brief-36 Global Economy & Global Real Estate
Smaller Manhattan apartments lead Feb rental gains Median rent for studios up 10% to US$2,351 a month; one-bedroom rentals rise 9.4% to US$3,400Source: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/smaller-manhattan-apartments-lead-feb-rental-gains Housing on the rise at fringes of London's Square Mile Source: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/housing-on-the-rise-at-fringes-of-londons-square-mile London's 'iceberg homes' plumb the city's depths Basements built beneath luxury homes sidestep planning rulesSource: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/londons-iceberg-homes-plumb-the-citys-depths New Orleans auctioning off vacant land online City selling almost 1,800 properties to raise tax revenue; bidding to start at US$3,000 in most casesSource: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/new-orleans-auctioning-off-vacant-land-online Clock ticks for forced sale of Sydney mansion Source: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/clock-ticks-for-forced-sale-of-sydney-mansion Berlin 1936 Olympic Site Reborn as Housing on City’s Edge Source: Bloomberg (Bloomberg) -- Once home to track stars and Soviet soldiers, buildings constructed for the 1936 Olympics on the outskirts of Berlin are getting a third lease on life as housing for average citizens. A developer intends to turn the Olympic Village built under Adolf Hitler and used by the Soviet Union as barracks after the Nazi defeat in 1945 -- and where American sprinter Jesse Owens lived while winning four gold medals -- into townhouses and apartments. The plan to restore the crumbling complex, located in Wustermark about 11 kilometers (7 miles) outside Berlin city limits, is part of a building boom around the German capital as residents flee soaring prices in the center. The influx is bringing new life to eastern German villages, many of which have struggled with slumping populations in the 25 years since reunification. “Lots of Berlin families are moving here,” said Holger Schreiber, 53, a former businessman who’s now Wustermark’s mayor. “When I was growing up here as a boy it was all farms and fields.” Berlin’s housing costs have climbed the fastest of any large German city over the past five years, with prices rising 38 percent and rents increasing 30 percent. The gains stem from a tight housing market, as 45,000 new residents have flocked to the city of 3.6 million annually since 2011. The brisk pace has surprised developers, who are now racing to meet the demand. Brandenburg BoomThe soaring prices are prompting families to move further afield to towns in the state of Brandenburg, which was cut off from West Berlin during the Cold War. Brandenburg communities adjacent to the capital have added 20,000 residents in the past five years, enticed by cheaper real estate, the area’s forests and lakes and commuter lines built in the 25 years since the Wall’s collapse. In Wustermark, located on the autobahn that rings Berlin, 400 people moved to the town in 2014 alone, lifting the population to 8,400. Among arrivals this year are Helena von Hutten and her husband, who works in Berlin as an auctioneer. Last month, they signed a contract to buy a two-story 1920s house with a brick barn. The train ride to Berlin’s center takes them 32 minutes. “Normal earners like us have to look outside of Berlin where it’s cheaper,” said von Hutten, a 29-year-old stay-at-home mother with three children. Luxury VillasWustermark issued 176 building permits last year, contributing to a 20 percent surge in permits in Brandenburg, according to government data. New projects in the area range from large blocks of affordable apartments to luxury villas. Deutsche Wohnen AG, Berlin’s biggest landlord, is spending 17 million euros ($18 million) to renovate 130 apartments in historic buildings in Wustermark constructed in the 1930s for German railway workers. “Berlin is booming and the positive economic development is spreading to the surrounding regions,” said Stefan Degen, Deutsche Wohnen’s head of construction and facilities. The growth presents challenges. Retaining the rural character is key to Wustermark’s attractiveness and farming remains part of the local economy, said Mayor Schreiber. Geese, cranes and grazing roe deer are visible around the town, which is interspersed with fields and meadows with water-filled ditches. Trees have been planted along the roads. The village is also struggling to build schools fast enough to keep up with a 50 percent rise in pupils since 2005. Reaching Limits“We’re at the limits of our capacity,” Christine Scharschmidt, director of the Heinz Sielmann High School, said as she greeted students walking through the immaculate halls of a modern addition to the old school building. “We’ll need more space to take in the children who will come when the Olympic Village is restored.” The developer plans to turn the Olympic dining hall into apartments, and the athletes’ lodging into townhouses. The swimming pool and sports facilities will be renovated, and the park, with rolling hills, oaks and pines, restored. “When you walk through the grounds you’ll be able to sense what the original Olympic Village was like,” said Erik Rossnagel, head of Terraplan, the Nuremberg-based developer. Wustermark’s businesses are also growing. About 350 million euros has been invested in the town’s cargo hub, and the village has the region’s only outlet mall. Nearby is a 3,650 hectare (9,000 acre) nature preserve that’s home to European bison, red deer and wild Przewalski horses. “Keeping our nature intact and the character of our old villages is as crucial as all development for the long-term viability of this community,” Schreiber said. “We need to ensure that our young people stay, build homes and raise their families here.” -By Leon Mangasarian & Dalia Fahmy Spanish Banks Look to Expand Abroad After Recovery Back Home Source: Bloomberg (Bloomberg) -- Spanish banks, battered in the financial crisis by 197 billion euros ($209 billion) of soured loans, are resuming expansion abroad as they seek to avert future shocks by spreading their risk. Banco de Sabadell SA, the country’s fifth-largest lender, said Thursday it’s in talks to buy the U.K.’s TSB Banking Group Plc for 1.7 billion pounds ($2.5 billion). Banco Popular Espanol SA was negotiating to acquire the Central American units of Citigroup Inc., while Banco Santander SA and CaixaBank SA are looking at purchases in Portugal. A real estate crash in 2008 forced Spain to bail out some of the nation’s banks and seek 41 billion euros in funds from the European Union. Now, as lenders complete the clean-up of their balance sheets and Spain’s economy leads the region’s return to growth, they are tapping other markets. “Spanish banks have seen that peers that survived the crisis in a better position have been the ones that had geographical diversification,” said Ricardo Wehrhahn, a Madrid-based managing partner at Intral Strategy Execution, a banking and business consultant. “The crisis is over, and they can seek international opportunities now. Latin America and Portugal are seen as natural markets for Spanish banks, as is the U.K., where Santander has had a very good experience.” So far, investors remain unconvinced about the benefits of such deals. Sabadell shares dropped Thursday 7 percent, the most since 2012, after gaining 13 percent this year. Popular shares are down 2 percent this year, and CaixaBank has declined 4 percent. That compares with an 11 percent gain in the benchmark STOXX 600 Banks Index, which tracks 49 of the region’s banks. Boosting ProfitSabadell is proposing to buy Britain’s sixth-biggest lender by market value. After growing during Spain’s banking crisis by buying lenders such as Caja de Ahorros del Mediterraneo, the company needs to deliver returns and diversify internationally, Chief Executive Officer Jaime Guardiola said in an interview last month. “Geographical diversification works, and the evidence has been that Spanish players that get their earnings from different countries have been able to better confront risky situations because economic cycles often compensate each other,” said Guardiola, who has been CEO since 2007. Sabadell, based in the northeast Spanish city of the same name in the region of Catalonia, operates in Miami and Mexico and is open to future deals in Europe and Latin America, he said then. A possible move by Catalonia to secede from Spain could add to the bank’s geopolitical risks. Santander’s ExampleThe bank is seeking to almost triple its 371 million-euro net annual profit to 1 billion euros by 2016 by increasing lending, especially to small- and medium-sized companies, reducing non-performing loans and real estate assets. It had about 163 billion euros of assets in December. By entering the U.K., Sabadell would follow a move that has benefited Santander, whose U.K. unit was the most profit among its 10 global divisions last year. The company built its U.K. operation in the past 11 years through acquisitions including Abbey National and Alliance & Leicester. Santander weathered the financial crisis without needing state funds and is now looking at expanding in Portugal, where it already runs a domestic lender and may buy a competitor. Portugal is seeking offers for Novo Banco SA, the lender that was created from the reorganization and the bailout of Banco Espirito Santo SA in August. Initial bids are due March 20, and Santander has said it may make an offer. ‘Major Change’Another Portuguese lender is also attracting Spanish interest. CaixaBank, the country’s third-largest, has bid for the remainder of Banco BPI SA it doesn’t own in a 1.1 billion-euro transaction. Meanwhile, Popular, Spain’s sixth-biggest lender, had been close to buying Citigroup’s Central American operations for $1.5 billion, people with knowledge of the matter said on March 7. Popular said on Wednesday it ended those talks. “This is a major change of strategy for Sabadell,” said Antonio Hormigos, who oversees 110 million euros as head of investment management at Mirabaud Asset Management in Barcelona. “Up to now, it has been focusing on the domestic Spanish market, and this perplexing move causes uncertainty.” -By Macarena Munoz Blackstone Said in Talks to Buy UniCredit’s Former Base Source: Bloomberg (Bloomberg) -- Blackstone Group LP is in talks to buy UniCredit SpA’s former headquarters in Milan, two people with knowledge of the matter said, renewing its interest after dropping out of the bidding two months ago. Idea Fimit Sgr, the Italian company that’s managing the sale, also reached out to investors including Fosun International Ltd., controlled by Chinese billionaire Guo Guangchang, according to one of the people. Both of them asked not to be identified because the information is private. That’s after offers from Abu Dhabi Investment Authority and London & Regional Properties Ltd. were too low, one person said. The bids were between 300 million euros ($319 million) and 310 million euros, the person said. Idea Fimit had aimed to raise 400 million euros from the sale. UniCredit transferred more than 1.2 billion euros of property assets, including the headquarters building, to a real estate fund managed by Idea Fimit in 2008. UniCredit has since sold stakes in the fund, known as Fondo Omicron Plus Immobiliare, to investors and still owns a 10 percent stake. The fund’s main asset is the former headquarters building, which was put up for sale in July. Andrew Dowler, a spokesman for Blackstone, and spokesmen for Idea Fimit, Fosun, Abu Dhabi Investment Authority and London & Regional Properties declined to comment. -By Sharon R Smyth & Sonia Sirletti TPG-Backed Lenta to Boost Retail Sales Growth Amid Russia Crisis Source: Bloomberg (Bloomberg) -- Lenta Ltd., the Russian hypermarket operator backed by U.S. fund TPG Capital, said sales growth may accelerate this year on the back of surging inflation in the country and new store openings. Revenue will probably rise 34 percent to 38 percent this year after gaining 34.5 percent last year, the St. Petersburg-based retailer said. Sales growth has been accelerating from November to date with “exceptionally strong” same-store traffic and average spending boosted by inflation, which reached 16.7 percent in Russia in February. Lenta plans to open as many as 25 big-box stores and up to 15 supermarkets this year from 31 big-boxes and 14 supermarkets last year, according to the statement. The company is well-positioned with real estate to accelerate expansion once the economic conditions improve in Russia, it said. The company’s shares rose 1.9 percent as of 10:33 a.m. in Moscow, bringing the gain since last year’s IPO to 12 percent. -By Ilya Khrennikov Additional Articles of Interests - Local & Overseas Real Estate
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