Author: PropInvestSG

Singapore home sales October 2019

Home sales volumes rose 91% from the previous year in October to 928 units. This was a fall of 27% compared to Sept 2018 despite three new major project launches. Year to date volumes are up 13% compared to the same period last year. Year to date volumes are 8,397 units. The month’s new launches had low initial sale rates. GuocoLand’ 219-unit Midtown Bay sold 50 units at S$2,900 psf (take-up rate: 22%), Hong Leong’s 564-unit Midwood, condo which launched 50 units, sold 24 units at S$1,650 psf (take-up rate: 4%) and Allgreen’s 285-unit Royalgreen sold 42 units at...

Read More

What analysts are saying about Ascendas REIT’s acquisition of properties from Capitaland

  AREIT’s proposed $1.66bn acquisition and fund raise AREIT has announced the acquisition of a portfolio of 28 business parks in the US and two BPs in Singapore from its sponsor CapLand, for a combined S$1.66bn (S$1.71m incl transaction cost). The US portfolio makes up the largest portion at S$1.285bn. The purchase will be partially funded by an S$1.3bn 16-for-100 unit Rights Issue at S$2.63 per unit, a 15% discount to the Theoretical Ex-Rights Price. The remainder will be largely funded by debt. An Extraordinary General Meeting is set on 27 Nov 2019. The transaction, if approved, is expected to complete by end-2019. Low NPI yield, low DPU accretion The US portfolio is located...

Read More

Key points from URA’s 3Q2019 property market statistics release

Property prices (landed and non landed) rose 1.3% on a quarterly basis in 3Q2019. This is slightly lower than 2Q2019’s 1.5% increase, but still a good showing. Landed property prices rose 1.0%, compared to -0.1% in the previous quarter. Non landed property prices rose 1.3%, compared to 2.0% in the previous quarter. Among non-landed properties, prices rose the most in the core central region by 2.0%, followed by the rest of central region at 1.3% and then outside central region at 0.8%. Residential Property consultant JLL commented that there was strong transaction momentum in 3Q 2019, where developers launched...

Read More

Property news update: Co-working continue to grow, lendlease REIT to IPO in Singapore

Shell Cove’s Waterfront Tavern site sold following tender Shell Cove’s Waterfront Tavern is a step closer to welcoming its first customers after exclusive agency HTL Property announced the sale of the site to the locally based Balmoral Hospitality Group. “On behalf of our clients Shellharbour City Council and Frasers Property Australia, we’re delighted the tender process extracted such a high level of offers, culminating in the Balmoral Hospitality Group’s successful bid” commented HTL Property’s National Director of Pubs. Coworking spaces in Singapore tripled since 2015 to 3.7m sq ft: Colliers Co-working workspaces now take up 3.7 million sqft in...

Read More

Singapore property intelligence 8 Apr

OUE Commercial REIT (OUECT) and OUE Hospitality Trust (OUEHT) in proposed merger to create one of the largest diversified S-REITs with total assets of S$6.8b, according to company announcements. OUECT will offer to buy OUEHT in a cash and stock deal , offering S$0.04075 in cash and 1.3583 new OUECT units or at a consideration of S$0.747066 (1.6% above OUEHT’s last traded price, or 0.4% discount to OUEHT’s NAV of S$0.75/unit), based on last closing price of S$0.52/0.735 for OUECT/OUEHT, to create a single entity that will remain listed on SGX. The proposed merger is expected to be DPU accretive...

Read More

E-commerce: threat to physical retail?

In this series Ecommerce is a double-edged sword in Vietnam. Brands are engaging directlywith consumers in a way not possible 10-15 years ago and the transition from physical to online shopping is inevitable. But poor infrastructure, slow deliveries and limited avenues to access goods are impeding online growth. Instead, better information is driving consumers to shopping malls for their retail fix. The e-tailing market is poised to double to US$2bn by 2022. Against a US$143bn retail industry that is growing 10-12% YoY, UBS thinks the market can support the growth ambitions of both ecommerce and physical retail formats. The...

Read More

Trade war: Where will China production move to?

82% of companies already have or plan to relocate away from China UBS Evidence Lab surveyed 450 C-suite executives in Taiwan, Korea and Japan. 82% of firms in the survey said they had already or intend to move some of their production from China. “Going home” more likely for Taiwan and Japan, than Korea More than 55% of respondents in Taiwan and Japan said they intend to relocate back home, but only 36% of Korean companies plan to do so. UBS thinks this reflects the relatively smaller run-up in wage costs in Taiwan and Japan in recent years. While...

Read More

Home prices up 7.9% in 2018

Quoting the Urban Redevelopment Authority’s (URA) fourth quarter 2018 housing statistics, Morgan Stanley reports that unsold inventory rose, but they think it is temporary. While vacancies fell faster than they expected, it did not translate into higher rents. Home prices fell 0.1% QoQ in 4Q18. The fall in home prices on a quarterly basis is unchanged following an earlier release on 2 Jan 2019. Non-landed suburb and city fringe prices grew 1% and 2% respectively, in the quarter. Full year 2018 home prices growth was 7.9% and Morgan Stanley thinks it can grow another 5% in 2019 Unsold inventory rose. Unsold...

Read More

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...

Read More

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...

Read More

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...

Read More

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...

Read More

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....

Read More

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...

Read More

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...

Read More