Author: PropInvestSG

SPH REIT: Stable as is boring as is good

SPH REIT announced their financial results for the period ending 31 Aug 2017. This is a very stable counter that’s giving consistent distribution and yields. Has anything changed to affect its stability? Let’s take a look. All figures extracted from quarterly reports, financial statements and presentations. Gross revenue (blue line), net property income (orange) and distributable income (grey) have all been fairly stable since listing in 2014. Net property income has climbed faster than gross revenue, indicating that SPH REIT is able to control property level costs. That means unitholders have more distributable income, as evidenced by the slight...

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10 most commonly asked questions on Singapore REITs

REITs are a great investment tool given their income generating characteristics and tangible assets backing stock price valuations. In Singapore, there are now a total of 37 REITs, not counting the soon to be listed REIT that Keppel is bringing to market with US properties. For those interested in investing in REITs and getting a snapshot of how the market is performing, here are the top 10 most commonly asked questions that Phillip Capital get from retail and institutional investors. What is the impact of US rate hikes on REITs? Is it still safe to buy REITs? Apart from...

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23 charts showing 5 room resale flat prices across Singapore

Interested in seeing how 5 room resale flat prices have moved across Singapore since 2007? Here are 23 charts showing how they have trended across the last 10 years. Do check out an earlier post with 22 charts showing 4 room resale flat price trends. All information is taken from HDB’s website. If there are gaps in the chart, it means one of the following two things No resale transactions in the quarter Cases where there are less than 20 resale transactions in the quarter for the particular town and flat type. The median prices of these cases are...

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Lion-Phillip S-REIT ETF guide

This post will be a guide for those looking to invest in the Lion-Phillip S-REIT ETF. The ETF will be listed on SGX on 30th Oct 2017. The format of this post is that it will go through the key documents relating to the ETF. Lion Global Investors Limited, a member of the Oversea-Chinese Banking Corporation Limited (OCBC) Group, is one of the largest asset management companies in Southeast Asia. Established since 1986, Lion Global Investors are uniquely positioned to provide Asian equities and fixed income strategies and funds to both institutional and retail investors. Phillip Capital Management (S)...

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4 charts showing Singapore’s residential market supply peak might be over

For residential property investors, the upcoming supply pipeline is an important indicator to keep an eye on because of its impact on rents and prices in the market. Not long ago in 2013 and 2014, analysts were predicting that there would be doom and gloom in the Singapore residential market in 2016 and 2017 when the residential supply peak hit. They weren’t exactly wrong as prices has taken a tumble since 2013. It has however since picked up based on flash estimates provided by URA on 2 Oct 2017. The actual figures for 3Q 2017 will be released on...

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Would you like a shorter tenure home?

Prices in the Singapore property market has been on the decline lately, but this seems to likely only be a blip following large increases in the last few years. Rising home prices are not an issue faced in Singapore alone, with Hong Kong, Canada and Australia facing the same issue. How do policymakers respond to rising home prices that may put houses out of reach of most of the populace? One way is to tamp down on price increases by instituting measures meant to reduce demand and speculation, and at the same time increase the amount of land. Another...

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Improving office market in 2Q 2017

In the second quarter of 2017, island-wide office leasing activity had risen for two straight quarters. This is the strongest since 2015. Net new demand for office space in the first half of 2017 was about 780,000 sqft (about the size of CapitaGreen or MBFC Tower 1), higher than the 5 year average (2012-2016) of 710,000 sqft per annum. Grab moved into Marina One, taking about 100,000 sqft. Ocean Network Express also moved in, taking 50,000 sqft. Marina One has reached about 70% pre-commitment. Co-working space activity The Work Project’s 24,000 sqft space opened in OUE Downtown Gallery. Notable...

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2 signs the luxury residential market could be picking up

On the back of increased en-bloc sales activity and a bullish bid for a Beach Road site recently in Singapore, the overall residential market seems to be picking up. Here are 5 signs in the luxury market that show buyers slowly returning to the scene. Average price of luxury apartments rose in the first half of 2017 In the Core Central Region, the average prices of transacted apartments worth more than S$5m was S$2,446 in the first half of 2017. This is slightly higher than S$2,396 in the second half of 2016. CBRE believes that overall luxury prices should remain...

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Ascendas REIT’s latest annual report in 26 charts

For those lazy to look back into past annual reports to find out whether a REIT has performed well, here are a bunch of charts that show you how Ascendas REIT fared based on their latest 2016 annual report. As their portfolio consists of 100+ properties, I’ve split the charts into multiple ones so that it can be seen clearly. Decent property yields in the high single-digit range Property yields are important because they determine what yield level the REIT can trade at. Property yield here is calculated as gross income/valuation.   Healthy top line The main top line...

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Singapore REIT ETF Comparison

This post will compare the 3 REIT ETFs in Singapore Phillip SGX APAC Dividend Leaders REIT ETF NikkoAM-StraitsTrading Asia ex Japan REIT ETF Lion-Phillip S-REIT ETF I personally won’t invest in REIT ETFs because I can create my own basket of REITs and avoid paying a recurring management fee. The advantage of a REIT ETF is the ability to gain overseas exposure. However, I can do that via InteractiveBrokers which charge very little in terms of brokerage fee (Singapore should do something about the trading fee). That said, the establishment of 3 REIT ETFs listed on the SGX is...

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6 reasons why real estate helps people get rich

For most people living in Asia, real estate has been one of the ways they made their riches. Just look at the number of property developers in the top 100 lists of richest people and companies, and you can see why owning land, pouring concrete on that land and building a high rise apartment on it can yield riches. So why exactly is real estate such an attractive asset class to invest in? Owners of any type of property have the right to rent out spaces in the property to tenants in exchange for rental income. This stream of...

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En bloc market updates 2017 Sept

Ever since the en-bloc market sprang to life in late 2016, there has been a flurry of activity. Developers have been bidding and gunning for sites aggressively, and owners are fast-tracking their sales committees to get to market and take advantage of the upturn. How has the en-bloc market developed so far? A research house has so kindly compiled a list of en-bloc deals that have happened, is happening and might happen. On the left, the government didn’t release a lot of land for the 2H17 land sales programme. Result: developers can’t replenish their land bank. They become desperate...

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Does war have an impact on real estate prices?

What effect does war or large scale, prolonged military conflict have on property prices? On a first principles basis, this is what we know about real estate Inflation hedge. Rents and prices for property generally rises together with the inflation rate. Derived demand. i.e. demand for houses due to population growth results in demand for houses, apartments etc. Demand for legal services results in demand for office space. Demand for retail therapy results in demand for shopping mall space Tangible. Real estate can be felt, touched and seen Requires management. You can’t buy a house, office or retail space...

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4 condominiums with at least 4% yield

Property yield, much like a stock or REIT’s dividend yield, plays a factor in giving an investor his desired returns over the long term. In Singapore, residential property yields have been hovering around the 3-3.5% mark across the island. It’s at the higher end in the Mass Market segment while more compressed in the central districts. Let’s recap – how is yield calculated? If you remember high school math, the numerator (the number above) is the rental income generated by the property, while the denominator (the number below) is the price paid by the investor for the property. There...

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Singapore’s property cooling measures from 2011

Cooling measures form an integral and important part of the Singapore property market. Investors say it’s punitive and unnecessary while the banks and government claims it enhances stability of the market. In whatever case, the cooling measures are here to stay. They were progressively ramped up since 2011 but has since very slightly been reduced in the last year. There are websites that consolidate the cooling measures but this will be different. This post will lay out the text from the government’s ministries and stat boards such as MAS, MOF, MND, URA and HDB when they imposed their cooling...

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