Singapore property won’t crash on US monetary stimulus concerns

The reported tapering in the US monetary stimulus is unlikely to significantly impact property prices in Singapore, analysts have said.

“It usually comes down because of distressed selling. But economic growth is stronger than expected. People are keeping their jobs…Even if it comes down, there won’t be a crash,” noted Tata Goeyardi, Property Analyst at Religare Capital Markets.

The US Federal Reserve’s monetary stimulus has created cheap liquidity and helped boost Asian real estate, but as it comes to an end, many markets in Asia will likely feel the pains as well, media reports said.

In Singapore, the effects of such a move in the market is now underway and could last three to six months, said Tim Gibson, Head of Asian Property Equities at Henderson Global.

“Anything that is yield-like has been sold off” as a knee-jerk reaction to the unwinding of the asset purchase programme, but “we are in a cyclical macro recovery…It should be positive for real estate in terms of top line rental growth”, he added.

Meanwhile, David Neubronner, National Director for Residential Property at Jones Lang LaSalle Property in Singapore, said: “There’s still strong demand for homes, especially in the suburbs and there’s still liquidity in the market.”

But several concerns may arise going forward. “In the short term, it (housing market) should hold up, but medium to long term, there will be pressure because of the new supply coming up,” said Neubronner.



Singapore unveils master plan for port, airport, waterfront

The Singapore government unveiled a master plan yesterday to double capacity at Southeast Asia’s busiest airport, build a new waterfront city, move its massive port and relocate a military airbase to free up land for development.

The plan announced by Prime Minister Lee Hsien Loong (pic) follows mounting discontent in one of the world’s wealthiest nations over an influx of foreign workers and expatriates blamed for a range of problems – from strained infrastructure to among the highest living costs in Asia.

In an annual National Day address, Lee sought to allay those fears, elaborating on a trove of long-term plans that appear intended to counter a growing voter backlash against the People’s Action Party (PAP) that has ruled Singapore for more than half a century.

These include changes to Singapore’s health-care and education systems, and the move of its port – the world’s second-busiest hub for container shipping – to a new location in Tuas in western Singapore from 2027. That would free up land in Tanjong Pagar, next to the central business district, for a sprawling new waterfront city, Lee said.

He also unveiled plans for a fourth runway at Changi Airport, Southeast Asia’s busiest. This will alllow the government to move a military airbase in central Singapore to Changi after 2030 and free up 800 hectares (1,980 acres) of land for homes, factories and businesses.

“This is how we can stay the hub in Southeast Asia and create many more opportunities for Singaporeans,” he said, citing competition from Kuala Lumpur and Bangkok.

Pacifying a new generation Lee’s speech seemed intended to show voters that Singapore under the PAP will evolve well beyond the era of his father, the 89-year-old Lee Kuan Yew, the country’s founder prime minister. The elder Lee’s stern and technocratic policies are credited with turning Singapore from a colonial outpost in the 1960s into a flourishing financial centre with clean streets and the world’s highest concentration of millionaires.

A new generation has begun to openly question the ruling party’s wisdom, clamouring for more say in the country’s direction.
Online forums bristle with criticism of government plans announced in January to lift the population of 5.3 million by as much as 30% by 2030, mostly through foreign workers to offset a low birth rate. This has sparked debate over how many people can fit onto an island half the size of London and how much the national identity will be diluted.
The younger Lee’s speech might help appease worries that the island is running out of space.

Changi Airport, a base for Singapore Airlines Ltd, operates two runways but can take over a third now being used by the military. A fourth runway will be used by the air force, allowing the military to shut its airbase in the central region of Paya Lebar………..


China group buys Grand Park Orchard hotel at record price

Grand Park Orchard hotel including its retail podium Knightsbridge are said to have been sold at slightly over $1.15 billion. The freehold property is being sold by Park Hotel Group to Bright Ruby Resources, a Singapore-incorporated vehicle controlled by the Du family of China.

The buyer’s diversified businesses include shipping, resources and property. Bright Ruby has acquired several commercial properties in Australia, though this is believed to be its first major investment in the Singapore real estate sector.

The cash-flush group has been doing due diligence for the acquisition of Grand Park Orchard for several weeks.

Seller Park Hotel Group is expected to continue managing the 308-room hotel.

Jones Lang LaSalle group is understood to have brokered the transaction.

Market watchers say the sale is the biggest ever private-sector property transaction in Singapore – excluding asset sales undertaken as part of real estate investment trust floats, and Government Land Sales and other public sector-originated deals.

The deal also sets a benchmark price for Singapore hotel rooms.

Besides the 308-room hotel, the transaction includes about 74,000 sq ft net lettable area of retail space.

Assuming the retail space is valued at $9,500 per square foot, the hotel would be valued at almost $1.5 million per room. A higher price of $10,000 psf for the retail space would translate to a hotel pricing of close to $1.4 million per room.

Either way, this busts the previous highest Singapore hotel pricing of around $1.1 million per room.

The price being paid by Bright Ruby is understood to translate to a net yield of just over 4 per cent.

Current average room rates at Grand Park Orchard are said to be around $300 per night, with occupancy rates of more than 90 per cent.

Knightsbridge has been leased to retailers such as Abercrombie & Fitch, Topshop/Topman, Brooks Brothers, Tommy Hilfiger, Dickson Watch & Jewellery, and The Hour Glass at monthly rents said to be in the $25-35 psf band.

Grand Park Orchard is the second property that Park Hotel Group has sold in Singapore.

The first was the Park Hotel Clarke Quay, which it sold in late March for $300 million or $893,000 per room to Ascendas Hospitality Trust.

That deal entailed a contract to lease back the hotel to a unit of Park Hotel Group for 10 years with an option for a further five-year term.

The rental income will comprise an initial fixed rent component of $11.5 million for the first year subject to an escalation of 3 per cent per annum and variable rent components tied to the hotel’s performance.

The 336-room Clarke Quay property is on a site with a balance lease term of about 93 years.

The group is now left with one other hotel in Singapore, Grand Park City Hall in Coleman Street. A few potential buyers are understood to have studied the asset but a deal has yet to materialise.

Set up in Hong Kong in 1961 by three sibilings of the Law family – Raymond, Lobo and Elizabeth – Park Hotel Group moved its headquarters to Singapore in 2005.

Last year, the group clinched contracts to manage two hotels in Singapore being developed by third parties – one being developed by Chip Eng Seng next to Ikea in Alexandra Road, and the other by RB Capital above Farrer Park MRT Station in Little India.


Two Retail Properties Up For Sale

Recent retail properties put up for sale includes the 5-storey retail and entertainment centre Broadway Plaza located in Ang Mo Kio Town Centre, which will be sold through an expression of interest. The estimated price is around $65 to $70 million that would translate into a net yield of 5- 5.5%. This exercise is designated to end by Sept 6.

This plaza has a total net lettable area of 41,829 square feet, and stands on a site that has a balance lease term of around 63 years. The building is fully leased and was refurbished earlier this year. Its land area is 18,450 sq ft, and has a gross floor area of 55,351 sq ft. Its tenants include day surgery and endoscopy centre, NHG 1-Health, Ang Mo Kio Family Medicine Clinic, K Box, a childcare center, and F&B food outlets.

Property experts spoke highly of the building, citing its ‘exceptional entry yield with potential to grow current income levels’.

Another building up for sale is Upper Thomson Road’s 11,011 sq ft retail unit Thomson Imperial Court which sale will be conducted via a private treaty.  Its estimated cost ranges between $22 to $23 million, working out to a net yield of 2.3%, or $1,998 to $2, 089 psf on net lettable area.

It is currently leased to supermarket chain Sheng Shiong until December 2016, with an option to renew for 3 years, by then followed by another renewal option of the same period. Recent sale transactions of retail units in the building was concluded at an average of $2,238 psf. Property researchers say that this sale provides an opportunity for investors to own a freehold property that gives strong and stable returns for the midterm.

There is potential of acquiring a larger yield through the rental of the building, done by sub-dividing the retail unit or converting into other uses – which may include F&B outlets, a childcare centre or fitness centre upon the expiry of its current lease.


Industrial properties see price, rental declines

While Singapore’s property market as a whole remains firm, industrial properties have recorded price declines, according to data from the Urban Redevelopment Authority (URA).

The all-industrial price index for last quarter dipped 0.6 percent from a 4.5 percent increase in Q1. The index for multiple-user factory space rose 0.5 percent from 185.3 to 186.3, but prices for multiple-user warehouse spaces fell 5.9 percent to 200.6 from the previous 213.2.

As for rentals, multiple-user factory space posted 0.1 percent growth, down from 0.4 percent in Q1. Meanwhile, multiple-user warehouse rentals were down 2.4 percent. As such, the all-industrial rental index fell 0.1 percent compared to a 0.4 percent gain in Q1.

Moving forward, the industrial sector will have a pipeline of 4.436 million sq m in gross floor area (GFA) of factory space.

Last quarter, occupied factory space grew by 139,000 sq m (nett) compared to the 83,000 sq m (nett) hike in Q1.

“On the other hand, the stock of factory space increased by 385,000 sq m (nett) in 2nd Quarter 2013, higher than the increase of 100,000 sq m (nett) in 1st Quarter 2013. The vacancy rate of factory space increased from 7.0 percent at the end of 1st Quarter 2013 to 7.6 percent at the end of 2nd Quarter 2013,” the URA said.


Henley Industrial Building in Upper Paya Lebar sold for $37m

Henley Industrial Building

Henley Industrial Building, a four-storey freehold property off Upper Paya Lebar Road, has been sold to a subsidiary of Novelty Group for $37 million.

The price works out to about $545 per sq ft of gross floor area, said property services firm CBRE on Monday.

CBRE brokered the sale through a tender exercise, which closed on July 5.

The 17-unit industrial property has an area of about 27,161 sq ft, the firm said said.

“We received good response at the public tender from a handful of business occupiers wanting a standalone building with naming rights and developers, which is a testament to the excellent attributes of Henley Industrial Building,” said Mr Galven Tan, associate director of investment properties at CBRE.

He added that the price is in line with recent transactions of similar freehold industrial properties, such as the sale of 14 Little Road in November last year, 3 Playfair Road in December last year and 100H Pasir Panjang in April this year.

The sale of Henley Industrial Building is subject to approval from the Strata Titles Board.

Property investment sales in Singapore grew by 22 per cent to reach $2.78 billion in the second quarter of this year, reversing a decline recorded in the first three months of the year, CBRE said.

“The investment sales market recorded a reasonably active first-half this year and we are confident that the momentum will keep pace in the second half,” added Mr Tan.

Source: ST

S’pore 2nd-most expensive Asia city for expatriates

[SINGAPORE] The Republic has moved up two spots to become the fifth-most expensive city in the world for expatriates, and the second-most pricey location in Asia.

The city-state’s high cost of living is due to its strong currency and expensive rental market, according to findings from Mercer’s 2013 Cost of Living Survey.

Using New York as the base city, the research ranks 214 cities around the world based on the comparative cost of over 200 items – including housing, transportation, food, clothing, and entertainment.

Mercer has only shared the rankings for the 10 costliest cities.

Because the cost of expatriate housing is typically the biggest expense for employers, Mercer said it “plays an important part” in determining the rankings, accounting for almost a quarter of the overall cost of living basket.

“To maintain the cost- competitiveness, the government of Singapore has been proactively making efforts to increase the supply to ease price inflation in the housing market,” Phil Stanley, Mercer Asia Pacific global mobility leader, told BT.

While Mercer said these measures “have been effective as evidenced by stable rental rates”, Singapore’s pricey rental market nonetheless contributed to the city-state’s high ranking.

Renting a three-bedroom unfurnished house in Singapore – one that meets the standards of expatriates – costs US$7,266.91 per month, while a two-bedroom unfurnished apartment costs US$3,794.94 per month.

Despite Singapore’s high cost of living for expatriates, Mr Stanley told BT that the country “continues to attract expatriate talent for the quality of life the city-state offers”.

Tokyo slipped two places and is now the third- most expensive city in the world for expatriates, but remains the costliest city in Asia. Hong Kong ranks as the sixth-most expensive city internationally, one place below Singapore.

Luanda in Angola now stands as the priciest city worldwide, due to the high cost of imported goods, and the challenge in finding secure housing there.

“Given the increasing numbers of business travellers, global commuters, and longer-term expatriates, companies are keeping a close eye on the cost of living for international assignees in different cities around the world,” said Barb Marder, senior partner and Mercer’s global mobility practice Leader.

“Organisations need to evaluate the impact of currency fluctuations, inflation, and political instability when sending employees on overseas assignments, while ensuring they can facilitate the moves they need to drive the business results by offering fair and competitive compensation packages.”


CapitaLand posts strong first-half income

Property giant CapitaLand reported a 10.1 percent year-on-year gain in its Profit After Tax and Minority Interests (PATMI) to S$571.3 million in 1H2013, supported by higher operating profits.

The first-half PATMI could have increased 15.4 percent to S$599 million, if the one-time losses of S$27.7 million incurred during its repurchase of convertible bonds in June were excluded.

Meanwhile, the company’s Q2 PATMI dipped 0.7 percent to S$383.1 million due to lower portfolio gains. Excluding this, Q2 PATMI would have moved up 8.6 percent to S$322.1 million.

CapitaLand’s overall group revenue was up 22.7 percent to S$1,844.6 million, whereby 63.5 percent came from the core markets of Singapore and China. Operating PATMI in 1H2013 was also up 43.1 percent year-on-year to S$241.3 million.

Home sales in Singapore reached 683 units valued at S$1.6 billion, while in China a total of 1,691 homes were sold at a sales value of around S$640 million.

“We delivered a healthy set of results for the first half of 2013 amidst a challenging global economic environment. With a healthy balance sheet and a strong cash position, the Group is well-positioned to seek out growth opportunities,” said Ng Kee Choe, Chairman of CapitaLand.

Going forward, CapitaLand is looking to expand its business further, focusing on the core markets of Singapore and China, said Lim Ming Yan, President and Group CEO of CapitaLand.


Review: Many restrictions for foreign property buyers across Asia Pacific

singapore flag
While Japan, South Korea and New Zealand have zero restrictions against foreign ownership of residential property, other countries across Asia Pacific have a full spectrum of restrictions for both resident and non-resident foreigners.

Here is a regional snapshot.


  • Foreign buyers can buy freehold for up to 49% of a single development, if exceeded, the tenure will be leasehold.
  • Foreigners can buy land as a leasehold, whereas the improvements (residence) can be freehold.


  • Foreigners are allowed to own apartments and condominium units above the ground floor.
  • Land can be held by foreigners on long (renewable) leases.


  • A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was a resident in India.


  • Non-resident purchasers who do not meet other criteria set out in Decree 51 are unable to purchase apartments or condominiums.
  • Foreigners are not allowed to own land (red book).
Hong Kong
  • Foreigners can buy property without restriction but must pay a 15% additional buyer’s stamp duty.


  • No restrictions but subject to a general pricing threshold of RM500,000 and above per unit.


  • Foreigners can buy private condominiums freely although they are subject to 15% additional buyer’s stamp duty.
  • Sentosa Cove is the only place in Singapore where non-PR foreigners may buy a landed home.


  • A foreign national who is not resident or considered to benefit national development is unable to buy residential property in Indonesia.


  • Non-resident foreigners are not permitted to buy property in mainland China.


  • Foreigners can purchase dwellings that add to the housing stock. This includes ‘new dwellings’: off-the-plan properties under construction or yet to be built, or vacant land for development. Foreigners cannot buy established dwellings as investment properties or as homes.

Japan, South Korea and New Zealand

  • No restrictions.



S’pore banks raise fixed-rate loans

In an effort to hedge against rising mortgage rates in the US, Singaporeans are expected to switch to fixed-rate loans. However, some local banks have already raised the interest rates on their products.

For instance, Maybank increased the interest rate of its three-year fixed loan by 0.1 percentage point on Monday, while ANZ raised its two-year fixed mortgage by 0.17 percentage point.

On the other hand, some lenders have put an end to fixed-rate packages. Standard Chartered stopped offering fixed-rates, while Citi discontinued this product last month.

Moreover, ANZ’s two-year fixed loan rose from 1.48 percent to 1.65 percent, while Maybank’s interest rates now start at 1.25 percent for the first year and average out to about 1.4 percent in the next three years.

Despite the increase, the rates are still relatively easy on the pocket, as a rise from 1.15 to 1.25 percent works out to an additional monthly payment of around S$50 for a S$1 million 30-year mortgage.

However, some fixed rates are 0.1 to 0.2 percentage points higher than the floating rates, so “do not assume refinancing in the future will have lower spreads”, noted Founder Sean Lim.



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