Author: PropInvestSG

Capitaland investor day takeaways

Morgan Stanley hosted CEO Mr Lee Chee Koon and senior managers for an investor meeting. Key takeaways CapitaLand is working towards double-digit ROE from current 8% Leveraging on technology to improve productivity and tenant connectivity across mall, office and serviced residence properties Optimistic on Vietnam with contributions rising to S$100m by 2020 Pearl Bank Apartment and Sengkang Central launching in 2019 Steady growth in Ascott ROE targets CapitaLand exceeded their 8% ROE target in 2017 and aims to do so again this year. ROE therefore remains the primary focus of the group, with a double-digit target over the long...

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Singapore’s GIC partners Australia REIT Dexus to set up $1.45b trust and other property news

GuocoLand’s Beach Road integrated project adds to area’s revamp Business Times, 26 November 2018 GuocoLand announced on Sun the groundbreaking of its integrated project on Beach Road – a project which, when completed in mid-2022, will add to the rejuvenation of the nearly 2 km stretch of road. Guoco Midtown will comprise 770,000 sqft of premium Grade A office space designed for new economy companies; 30,000 sqft of retail and entertainment to draw “novel concepts”; more than 200 residential units; and the former Beach Road Police Station, a conserved building. Last year, GuocoLand and its parent Guoco Group won...

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Property market company and economic news update

Singapore’s 3Q18 GDP grew at a slower 2.2% pace, below economists’ expectations of 2.4%, as the manufacturing and services sectors disappointed. The growth figure was also revised downwards from advance estimates of 2.6% and was lower than the 4.1% growth in 2Q18. Manufacturing grew 3.5% in 3Q18, moderating from 10.7% in 2Q18, while services expanded by 2.4% (2Q18: 2.8%). Construction continued its contraction, falling by 2.3% (2Q18:-4.2%). The Ministry of Trade and Industry (MTI) is projecting that the economy will grow by 1.5 – 3.5% in 2019 (2018: 3.0 – 3.5%), with the main growth driver to shift from...

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Co-working no longer a new, niche sub-sector

Co-working is not just a new, niche sub-sector. Its rise is a reflection of a changing world of employment, writes Christopher O’Dea “The nature of work is changing. Recruitment, retention, innovation, and productivity now require not just coffee, but also yoga, not just printers, but also art installations.” The above is taken from the homepage of WeWork’s website. The core appeal of co-working is simple: let us handle that for you – front-office reception, utilities, and all the chores related to maintaining office space – so you can focus on your business. The popularity of flexible office concepts in...

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JPMorgan to open world’s largest RE fund

According to PERE, JPMorgan Asset Management will be welcoming foreign investors for the first time in its flagship real estate fund, the JP Morgan Strategic Property Fund (SPF). SPF currently has a net asset value of approximately $33b and gross asset value of approximately $43b. The fund is the largest commingled real estate fund, beating rivals in the NCREIF Fund Index – Open-end Diversified Core Equity Index. For example, PGIM Real estate’s PRISA I had a NAV of $19.7b and GAV of $24.5b as of Dec 31, according to an April presentation to the Bay County Employee’s Retirement System....

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Asia Pacific hotel transactions declining as activity becomes constrained

In a report by CBRE on third quarter 2018 hotel activity, investment transaction volume was observed to decline as activity was constrained by lack of stock for sale. In summary Korea investment activity recovered as several mid-range hotels change hands amid heightened interest from local and foreign investors Both local and foreign investors see Thailand as an interesting investment destination Shortage of assets for sale in Japan resulted in few small and medium related party deals Quality assets remain tightly held in Hong Kong, resulting in few transactions Sentiment is strengthening in Singapore as hotel performance came in solidly...

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Real interest rates and property yields [CBRE report]

Long term interest rates are a key driver of property prices, and a recent report by CBRE in Sept 2018 show a close relationship between real interest rates and property yields. In the report, the authors claim that concerns about rising real and nominal long-term interest rates are overblown. Increase in rates will likely be below the consensus of economic forecasters and they will level off well below pre-GFC levels. Noting a downward trend in property yields for the US since the mid-1990’s, the fall has been closely liked to the fall in real interest rates. CBRE makes a...

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Increasing allocations to real estate by institutional investors

In the 2018 institutional real estate allocations monitor by Hodes Weill Associates, target allocations to real estate in institutional portfolios continue climbing in 2018. Rising from 8.9% of a weighted allocation in investors’ portfolio, the 2018 figure is now 10.4%, suggesting an increasing attractiveness of the real estate asset class to investors. In the survey, 208 institutions from 209 countries representing US$11 trillion of assets are asked about their target and projected allocations. The survey provides an estimation of the quantum and directional trend of investable capital. Also read: Twenty Anson purchase by Capitaland In the same vein as...

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Blog: How to upgrade from your HDB to a executive condominium (EC)?

Rivercove Residences balloting day In this blog series, we invite real estate industry professionals to share their personal experiences. Names and identifying details have been changed to protect the privacy of individuals. In December 2017, I received an enquiry from a client by the name of Claire. She and her husband had just met their 5 year minimum occupancy (HDB) at their HDB in Fernvale and wanted to upgrade from their HDB to a condo. Eventually after much deliberation, they decided to try for Rivercove Residences. In the context of Singapore public housing, an executive condominium caters to a...

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5 reasons why the upcoming 2019 Punggol EC on Sumang Link will be another sell-out

Sumang Link EC is near the Punggol Waterway Sumang Link EC Land Parcel details The top bid of S$509.37 million for the Sumang Link EC site was won by City Development (CDL) and TID Residential. This works out to a record S$583 per square foot per plot ratio, which translates to a selling price of above S$1,000 per square foot. Launching in 2019, it is likely to be the only executive condominium (EC) to be launching in 2019. We explain the 5 reasons why it will be another sell-out like Rivercove Residences, which was fully sold out in a...

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Blog: Can divorcees purchase BTO/executive condominium (EC)?

Can divorcess get an EC/BTO? In this blog series, we invite real estate industry professionals to share their personal experiences. Names and identifying details have been changed to protect the privacy of individuals. As a real estate agent, I face different client scenarios daily. I had a client by the name of Ms C, who approached me in January 2017. She was initially rather secretive at first but after much follow up, she revealed that she is going through a divorce and has intention to sell her share of her current HDB flat to her ex-spouse. At that point...

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Frasers property €285m logistics acquisition and Sydney mansion’s record breaking A$100m price

Frasers Property Ltd. completed the acquisition of a 94% stake in AI Gewerbepark Tamm GmbH, marking the closing of a €285.2 million deal signed in February for a portfolio of properties in Germany and Austria. The first phase of the acquisition closed in July, involving the 100% stake in Alpha Industrial GmbH & Co. KG and half of the 22 assets included in the agreement. Also read: Frasers recurring income supporting the stock AI Gewerbepark Tamm GmbH’s investment property is located in the German municipality of Tamm and covers 39,220 square meters of gross leaseable area, according to a...

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Capitaland and Ascott make major acquisitions in Tauzia and US multifamily properties

CapitaLand (CAPL) acquires US$835m (S$1.14b) US multi-family portfolio of 3,787 multifamily apartments (average price: US$220,000/unit) across suburban communities in Seattle, Portland, Greater Los Angeles and Denver. The acquisition is in-line with CAPL’s strategy to diversify outside Singapore and China to developed markets and to grow new businesses. CAPL also anticipates value enhancement to the properties. The consideration would be funded by CAPL’s internal resources. Pro-forma impact to EPS and NAV/sh is not expected to be material. Potential upside from the portfolio growth include the option to spin off the assets into investments vehicles and partnerships, and also to build...

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Slow new condominium sales in August 2018 (CIMB)

Aug private home sales showed selective buying post cooling measures, in our view. We think that fast asset turn and good sell-through rates are key to margin preservation. Stay sector Neutral. Our sector top picks are City Dev, UOL and HoBee Land. Aug monthly private home sales came in at 639 units (616 units excluding executive condominiums), down 60% yoy and 64% mom, reflecting a much quieter residential market post cooling measures. New launches such as The Tre Ver garnered 22% sales (out of a total of 729 units) within the first month of launch at an average of...

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Myanmar’s failed property boom: what really happened

“If I could put all my money into Myanmar, I would,” veteran U.S. investor Jim Rogers declared in 2012. Rogers, who co-founded the Quantum Fund with hedge fund billionaire George Soros, has lived in Asia for many years and knows a bargain when he sees one. When Myanmar opened up to the world after decades of military rule, hopes were high that democracy would be restored and the economy invigorated. From tourism to telecoms, business opportunities abound as industries that had long languished in the absence of private competition were roused out of their slumber. Local consumption soared amid...

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