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23 November 2018 / Issue 42

By in Weekly News Review with 0 Comments

Top News for the Week

 

Government

Singapore, US renew collaboration in infrastructure, cyber security

Singapore and the US strengthened their collaboration on infrastructure, the digital economy and cyber security this week, renewing the US-Singapore Collaboration Platform Memorandum of Understanding (MOU) and signing a Declaration of Intent (DOI) to collaborate on a Singapore- US Cybersecurity Technical Assistance Programme for Asean member states.

The two countries are exploring new turf in their relationship as they reach beyond the traditional domains of defence and trade to grasp opportunities in areas such as driverless cars, energy and cyber security.

Both Prime Minister Lee Hsien Loong and US Vice-President Mike Pence agreed that there were more ways for the two countries to work together, and there was much room to grow.

With help from their 15-year-old free trade agreement, two-way trade has touched US$75 billion (S$103 billion), with the US enjoying a surplus of US$20 billion.

Links to the story:

https://www.businesstimes.com.sg/government-economy/singapore-us-renew-collaboration-in-infrastructure-cyber- security

https://www.straitstimes.com/singapore/singapore-us-pledge-to-enhance-ties-in-energy-cyber-security

 

Productivity growth, industry indicators will show Future Economy Council’s progress

Productivity growth and a number of other industry indicators will help reflect how the Future Economy Council’s (FEC) progress measures up, said Finance Minister Heng Swee Keat, who also chairs the council.

The FEC was established in 2017 to drive the growth and transformation of Singapore’s economy for the future. It also oversees the implementation of the recommendations put forth by the Committee on the Future Economy, such as the implementation of Industry Transformation Maps (ITMs). Members include representatives from the government, unions, trade associations and chambers, industry as well as educational and training institutions.

Links to the story:

https://www.businesstimes.com.sg/government-economy/productivity-growth-industry-indicators-will-show-future- economy-councils

https://www.straitstimes.com/singapore/13-new-members-for-future-economy-council

 

Singapore, Kazakhstan to boost economic partnership

Singapore and Kazakhstan aim to strengthen their economic partnership, Emeritus Senior Minister Goh Chok Tong said as the two countries signed a bilateral investment treaty (BIT).

The treaty will support greater investment flows between both countries through protecting the interests of investors and providing them with more confidence to seize opportunities.

Among other things, investors from both countries will now enjoy non-discriminatory treatment, fair and equitable treatment and full protection and security based on customary international law, protection from illegal expropriation, as well as freedom to transfer capital and returns in and out of either country.

Links to the story:

https://www.straitstimes.com/business/singapore-kazakhstan-to-boost-economic-partnership https://www.businesstimes.com.sg/government-economy/singapore-and-kazakhstan-ink-bilateral-investment-treaty

 

Economy

Singapore economy to grow by 1.5% to 3.5% next year: MTI

The escalating trade war and other headwinds will rein in Singapore’s economy next year, the Trade and Industry Ministry said.

It forecasts economic growth of 1.5 per cent to 3.5 per cent next year, a drop from the estimated 3 per cent to 3.5 per cent expansion this year.

The biggest risk would be the loss of global business and consumer confidence if the trade war between China and the United States intensifies.

This means the outlook for demand is slightly weaker next year compared with this year, with more risks for the global economy.

Signs of a weakening economy are already evident here, with the third quarter expanding at the slowest pace this year.

Growth came in at 2.2 per cent in the three months to Sept 30 compared with the same period last year, and was well down on the 4.1 per cent expansion in the second quarter.

The 2.2 per cent figure fell short of the 2.4 per cent consensus forecast of analysts polled by Bloom- berg and the MTI’s 2.6 per cent advance estimate.

The ministry said growth was supported mainly by the finance and insurance, manufacturing and business services sectors. Most industries saw slower expansion or contraction.

Links to the story:

https://www.straitstimes.com/business/economy/singapore-economy-to-grow-by-15-to-35-next-year-mti https://www.businesstimes.com.sg/government-economy/mti-growth-to-let-up-in-2019-q3-gdp-underwhelms

 

Singapore exports not very exposed to trade war: MTI analysts

The world’s biggest economies are at loggerheads but Singapore’s exposure to the US-China trade war is small, an official analysis has found.

Value added from US-China bilateral exports made up 1.29 per cent of Singapore’s gross domestic product (GDP) last year, two government economists wrote in a report.

Economists from the Ministry of Trade and Industry (MTI), added in their report that “the actual impact of the ongoing US-China trade conflict on the Singapore economy would likely be smaller for two reasons”.

Only some of the goods exported between the US and China have been slapped with tariffs, they noted. Also, while tit-for-tat duties could hurt bilateral export volume, “it is not likely that the exports would fall to zero”.

The Republic’s top export partners, by value added, are the combined Asean-5 markets of Malaysia, Indonesia, the Philippines, Thailand and Vietnam; China; the European Union-28 bloc; the US; and India.

The share of the economy embodied in Asean-5 exports in fact grew between 2011 and 2017, from

4.66 per cent to 5.25 per cent, even as value added built into exports to China, the US, and EU members dipped.

Other watchers also believe that growth from exports to five key South-east Asian markets could shelter the Republic from the conflict.

Link to the story:

https://www.businesstimes.com.sg/government-economy/singapore-exports-not-very-exposed-to-trade-war-mti- analysts

 

Business climate worsens, but Singapore’s prospects still beat China’s, survey finds

Global trade woes may send some business Singapore’s way, but uncertainty is still weighing down companies’ near-term outlook.

This is the take-away from the latest Business Times-Singapore University of Social Sciences (BT-SUSS) Business Climate Survey, which polled 157 firms from Sept 18 to Oct 17.

Companies reported weaker business performance in the third quarter, and their outlook for the six months to end-March was largely pessimistic. The last time that the quarterly survey turned up negative readings for all four key indicators was a year ago.

But a fifth of the firms still named Singapore as the market with the rosiest prospects for the year ahead, beating out China and Vietnam – which shared second place – by a broad seven-point margin.

Link to the story:

https://www.businesstimes.com.sg/government-economy/business-climate-worsens-but-singapores-prospects-still- beat-chinas-survey-finds

 

S’pore non-oil exports jump 8% in third quarter

Non-oil domestic exports (Nodx) posted a better-than-expected 8 per cent jump year on year in the third quarter, driven by non-electronic shipments, which grew for the fifth straight quarter while electronics declined.

Total trade rose for the eighth consecutive quarter, expanding 14.7 per cent in the three months to Sept 30, up from a 10.2 per cent increase in the second three months of the year, trade promotion agency Enterprise Singapore noted yesterday.

The improvement in both oil trade and non-oil trade led Enterprise Singapore to raise sharply its official 2018 growth forecasts for trade to 9 to 9.5 per cent and 5.5 to 6 per cent for Nodx.

Link to the story:

https://www.straitstimes.com/business/economy/spore-non-oil-exports-jump-8-in-third-quarter https://www.businesstimes.com.sg/government-economy/nodx-tipped-to-expand-55-6-in-2018

 

NODX outperforms in October after disappointing in September

Non-oil domestic exports (NODX) proved to be unpredictable once again, surging 8.3 per cent in October when the market was looking at an expansion of only 1.0 per cent

The month before, NODX had underperformed with a growth of 8.1 per cent from a year ago. October saw the seventh straight month of increase – thanks to a strong advance in non-electronic shipments, which outweighed a continued decline in domestic electronics exports, said trade promotion agency Enterprise Singapore in a statement.

The electronic NODX fell 3.5 per cent in October – the 11th straight month of decline – and the fall was sharper than the 1.3 per cent dip in September. Non-electronic NODX, on the other hand, grew at 12.8 per cent clip to extend the 11.8 per cent increase in the previous month.

Links to the story:

https://www.businesstimes.com.sg/companies-markets/nodx-outperforms-in-october-after-disappointing-in- september

https://www.straitstimes.com/business/economy/spore-non-oil-exports-jump-83-in-october

 

Singapore at forefront in Asia for talent competitiveness

Singapore has come up tops in Asia for talent competitiveness this year, according to a global ranking by Swiss business school IMD.

Among the Asian economies in the IMD World Talent Ranking 2018, Singapore retained its position as 13th in the world, ahead of traditional rival Hong Kong which fell six spots to 18th. This was followed by Malaysia, which jumped six places to come in 22nd.

The ranking evaluated 63 economies from around the world in developing, attracting and retaining talent based on three factors: investment and development, appeal, and readiness. Singapore fared well in attracting highly skilled professionals from abroad, management remuneration and education outcomes, but it was dragged down by its investment in public education, where it ranked 60th.

Link to the story:

https://www.businesstimes.com.sg/government-economy/singapore-at-forefront-in-asia-for-talent-competitiveness

 

Singapore among choice locations for finance companies

Hong Kong, Tokyo and Singapore are choice destinations in the region for finance companies to be based, a study said, with the financial services sector expected to continue to play a key role in growth for the region.

The report is based on a comprehensive study of 16 cities in developed and emerging markets across Asia, looking at nearly 60 criteria covering areas such as socio-economic factors and property.

Singapore was in No 3 position, behind Tokyo. The Republic remains an attractive regional base for many financial institutions owing to its stable political and economic environment, pro- business policies, active capital market and robust regulatory framework.

Link to the story:

https://www.businesstimes.com.sg/banking-finance/singapore-among-choice-locations-for-finance-companies

 

Residential

Minbu Villa takes second stab at en bloc sale at S$145.8m, but price may go lower

Faced with the cooling en bloc market, Minbu Villa, a freehold residential development in Novena, is going up for tender at S$145.8 million again, but this reserve price could be lowered if 80 per cent of the owners agree.

Its earlier collective sale bid was launched in March and closed on April 17 without a winning bid. This time, more than 60 per cent of the owners by share value and strata area have signed a supplemental agreement to lower the reserve price to S$129.1 million, translating to a land rate of S$1,200 psf ppr.

The site has a land area of 38,426 sq ft, and a gross plot ratio of 2.8. Completed in 1981, the 10- storey development comprises 33 apartments and a penthouse.

In-principle approval has also been granted by the Singapore Land Authority for the alienation of a piece of adjoining state land approximately 195.9 sq m in size; this could lower the land rate by another S$34 psf ppr.

The tender for Minbu Villa closes on Dec 18.

Link to the story:

https://www.businesstimes.com.sg/real-estate/minbu-villa-takes-second-stab-at-en-bloc-sale-at-s1458m-but-price- may-go-lower

 

Opposing collective sale doesn’t exempt owners from stamp duty

In a collective sale of private homes, residents who oppose it will still have to pay any seller’s stamp duty that applies to them, said Second Finance Minister Lawrence Wong in Parliament on Nov 20.

The reason is that the collective sales committee is given the powers to enter into a sale-and- purchase agreement on behalf of all owners when it gets the consent of the required majority of residents in the property, he added. This agreement is binding on all owners.

Mr Wong, who is also the National Development Minister, was replying to Mountbatten member of parliament Lim Biow Chuan, who asked whether the seller’s stamp duty is waived for those who do not sign the agreement to launch a collective sale.

Links to the story:

https://www.businesstimes.com.sg/real-estate/opposing-collective-sale-doesnt-exempt-owners-from-stamp-duty

https://www.straitstimes.com/politics/en-bloc-dissenters-still-have-to-pay-sellers-stamp-duty-minister

 

Two-bedroom units expected to remain popular among buyers

Owning a private home – the alluring Singaporean Dream for many locals. However, the dream appeared to be fading into the distance, when prices ascended at a rapid pace from 2008 to 2013. This, according to the Urban Redevelopment Authority’s (URA) price index for private residential properties (including Executive Condominiums), which saw prices growing 21.5 per cent from Q2 2008 to Q2 2013.

For investors who sought private residential homes at the entry level, one-bedroom apartments (typically with a floor area of less than 500 sq ft) are a natural choice, as the quantum of such shoebox units fits well into the budgets of HDB owners looking for an investment property.

However, by the beginning of 2018, signs that buyers were moving towards two-bedroom residential units emerged. In Q3 2017, approximately 16 per cent of units sold were sized between 600 to 800 sq ft, or the approximate size of a two-bedroom unit. By Q3 2018, the proportion increased to 27 per cent.

Several factors have compelled the popularity of two-bedroom units.

For one, prospective upgraders that previously saw their financial ability clipped by the TDSR accumulated sufficient capital over the years, and could now handle the downpayment of a bigger property.

Second, the large supply of homes completed in 2016 added pressure to the rental market for one- bedroom units, unlike two-bedroom units, especially those in choice districts, which have been able to hold up better despite downward pressure.

Third, the ramp-up in collective sales from 2017 to early 2018 provided a boost to many private home owners, who channelled their funds into the purchase of two-bedroom units. Two-bedroom units are expected to remain popular, as they cater to the needs of majority buyers.

Link to the story:

https://www.businesstimes.com.sg/real-estate/two-bedroom-units-expected-to-remain-popular-among-buyers

 

HDB terrace near Whampoa sold for record price of nearly S$1.2 million

A Housing and Development Board (HDB) terrace house was sold for nearly S$1.2 million in the third quarter of this year, smashing a previous record for the priciest HDB unit ever sold, according to a real estate trends report.

The 237 sq m HDB terrace located along Jalan Bahagia near Whampoa was sold in September for S$1.185 million. The three-room property has 52 years remaining on the 99-year lease, which began in 1972.

There are only 285 of such terrace properties in Singapore. Over the past five years, 63 HDB terrace homes have been sold across the island.

In Jalan Bahagia alone, 23 HDB terrace transactions were made over the past five years, four of which were in the past nine months.

The price of the Jalan Bahagia unit sold in September is slightly higher than the S$1.18 million record set by a five-room Design, Build and Sell Scheme (DBSS) flat in Bishan that changed hands in February last year.

The third most expensive HDB unit sold is a five-room DBSS flat at Lorong 1A Toa Payoh, which transacted at S$1.16 million.

Link to the story:

https://www.channelnewsasia.com/news/singapore/hdb-terrace-bahagia-whampoa-sold-for-record-price-million- 10953454

 

New rules for housing developers to prevent money laundering

Housing developers will bear more responsibilities and duties to prevent money laundering and terrorism financing from happening in the real estate sector under a Bill passed in Parliament.

This, along with other proposed changes in the Developers (Anti-Money Laundering and Terrorism Financing) Bill, will bring Singapore’s anti-money laundering and terrorism financing regime in line with international standards, said Minister for National Development Lawrence Wong.

Under the amendments, developers will need to carry out due diligence checks on purchasers, keep proper records relating to these checks, and report any suspicious transactions to Suspicious Transaction Reporting Officers. They will also need to train employees and establish processes to mitigate money laundering and terrorism financing risks.

The Bill will make amendments to the Housing Developers (Control and Licensing) Act and the Sale of Commercial Properties Act.

The changes include barring people convicted for money laundering and terrorism financing from being licensed housing developers, and disqualifying them from holding responsible positions at development firms. The Controller of Housing, who administers regulations related to developers, will also be given enforcement powers to ensure compliance with the new provisions.

Link to the story:

https://www.straitstimes.com/singapore/new-rules-for-housing-developers-to-prevent-money-laundering

 

Lease Buyback Scheme extension: Details likely ready by early 2019

The details of the Lease Buyback Scheme’s (LBS) extension to all flats should be ready by early next year. Under the LBS, flat owners aged 65 and above who meet several other criteria can sell part of their flat’s lease to the Housing Board while retaining the length of lease based on the age of the youngest owner.

The proceeds from such a sale will be used to top up their Central Provident Fund (CPF) Retirement Account, which can subsequently be used to purchase a CPF Life plan that provides individuals with a monthly income for life.

Links to the story:

https://www.straitstimes.com/singapore/housing/lease-buyback-scheme-extension-details-likely-ready-by-early-  2019

https://www.businesstimes.com.sg/real-estate/lease-buyback-scheme-extension-details-ready-in-early-2019- lawrence-wong

 

Mogul.sg portal speeds up search for property

Proptech start-up Mogul.sg has devised a new service that speeds up the search process for home seekers.

Its search portal – also called Mogul.sg – has a database of around 5,000 custom keywords that describe the characteristics of the property so a user can zero in on a relevant home much faster. This is a departure from the standard approach, which lets users filter a search by selecting from a small number of parameters like location, price and type of property.

Mogul.sg is one of the pioneer start-ups housed at the SLA’s GeoWorks industry centre, which connects and supports geospatial businesses, entrepreneurs and users.

Link to the story:

https://www.straitstimes.com/business/mogulsg-portal-speeds-up-search-for-property

 

Commercial

Repurposing Golden Mile for younger generation

A hotel or co-working space could be some of the possible new uses of Golden Mile Complex, which is being studied for conservation, even as it waits for a buyer.

DP Architects, which designed the complex in the 1960s, was appointed by the collective-sale committee as consultant architect in August to understand the development potential of the project. According to DP Architects, Golden Mile Complex may appeal to the younger generation because of its “iconic form”. Consumers today demand more unique experiences out of the places they inhabit. Leveraging a place with a strong authentic story is a powerful way to stand out among the noise of invented narratives.

Link to the story:

https://www.straitstimes.com/singapore/repurposing-golden-mile-for-younger-generation

Retail

SGReit looking to leverage on Thomson Line

Weekend shoppers shuffling to and fro two Orchard Road mega malls – Ion Orchard (and its basement Orchard MRT) and Ngee Ann City – tend to pass through the basement of a smaller one, Wisma Atria.

Starhill Global Reit (SGReit), the owner of 74.23 per cent of the share value of strata lots of Wisma Atria, has in the past leveraged on that location by placing unique offerings in the basement, like Ben’s Cookies, to entice the crowds.

With the Orchard station on the Thomson-East Coast Line opening in 2021, the Reit is currently considering asset enhancement opportunities for both Wisma Atria and Ngee Ann City. They are looking at how to bring more shoppers upstairs.

Ngee Ann City retail is 100 per cent occupied; Wisma Atria is 99.2 per cent committed – and it has filled the Orchard Road-fronting space which Cortina Holdings vacated this year.

The supply of retail space in Singapore is also expected to taper in the next few years. Orchard Road vacancy fell to 5.6 per cent in Q2 this year, the lowest vacancy rate in 14 quarters and well below the 9.3 per cent seen in the second quarter of 2016.

Link to the story:

https://www.businesstimes.com.sg/companies-markets/sgreit-looking-to-leverage-on-thomson-line

 

Noteholders and Fung Retailing extend lifeline to Toys ‘R’ Us Asia

Noteholders of Toys “R” Us Inc have joined hands with Fung Retailing to extend a lifeline to the toy retailer’s operations in Asia.

The holders of the TRU Taj LLC’s senior secured notes issued by Toys “R” Us Inc , or the Taj noteholders, unveiled a proposed acquisition of an 85 per cent equity in Toys (Labuan) Holding, in a move to separate the Asian business of the toy retailer from its ultimate parent in the US. The Taj noteholders and Fung Retailing, the owner of the remaining 15 per cent interest in Toys (Labuan) Holding, have agreed to new partnership terms in a transaction that values the company at about US$900 million.

Fung Retailing has also agreed to raise its stake to 21 per cent, making it the largest shareholder of Toys (Labuan).

Toys ‘R’ Us stores in Asia have carried on business as usual despite the winding-down of retail operations in the US after Toys ‘R’ Us filed for bankruptcy protection last September.

There were 11 Toys ‘R’ Us stores in Singapore, employing 350 staff, as at September last year.

Links to the story:

https://www.businesstimes.com.sg/companies-markets/noteholders-and-fung-retailing-extend-lifeline-to-toys-r-us-    asia

https://www.straitstimes.com/business/companies-markets/note-holders-fung-retailing-offer-toys-r-us-asia-lifeline

 

Cartier reopens its ION flagship boutique

The 688 square metre boutique will re-open its doors this Saturday, which will be marked by a two-week-long public exhibition that showcases selected iconic Cartier Collection pieces. The “Cartier, Icon of Style” exhibition highlights, among other things, the origins of Cartier’s emblem

– the panther – and its storied connections with some of the world’s most famous figures, including the Duchess of Windsor and heiress Barbara Hutton.

Links to the story:

https://www.businesstimes.com.sg/consumer/cartier-reopens-its-ion-flagship-boutique https://www.straitstimes.com/lifestyle/fashion/cartier-at-ion-reopens-in-style

 

New independent cinema to open in King Albert Park mall

A new cinema is opening in the Bukit Timah Road area early next month.

EagleWings Cinematics, located in the King Albert Park Residences Mall, will feature two halls with premium seats and two halls with standard seats.

The cinema is an independent operation run by retail and lifestyle company EagleWings Group and is not a branch of one of Singapore’s major multiplex chains, such as Golden Village, Shaw Organisation or Cathay Cineplexes.

Today, there are no cinemas in the King Albert Park area.

The closest outlets are the WE Cinemas at 321 Clementi, and the outlets in the west, such as Cathay Cineplex Jem and Shaw Theatres JCube.

The refurbished KAP Residences Mall will include other entertainment, shopping, healthcare and food operations run by the EagleWings Group, making it the mall’s largest tenant.

Link to the story:

https://www.straitstimes.com/lifestyle/new-independent-cinema-to-open-in-king-albert-park-mall

 

Shoppers queue up early for Black Friday

Foldable chairs, stools, picnic mats and lots of electronic gadgets were some of the items the nearly 1,000 shoppers had armed themselves with as they queued up outside Robinsons at The Heeren for its annual Black Friday sale.

Black Friday, an American shopping holiday that traditionally takes place on the Friday after Thanksgiving, is a golden opportunity to attract shoppers for bricks-and-mortar retailers such as Robinsons.

Other retailers are also having their own sales. Metro is opening early at 7.30am today, offering discounts of up to 90 per cent. Courts is giving discounts of up to 23 per cent on its website and at its 14 stores from today until Monday, while Tangs will offer 12 per cent rebates.

Online retailers are also going big on Black Friday. For instance, online shopping platform Lazada is offering up to 80 per cent off on selected items. Online marketplace Qoo10 is offering coupons of up to $120 for minimum purchases of various amounts.

Robinsons started its in-store sale at midnight across all three stores, and will stay open throughout the day. Its giveaway items are the big attraction: Free iPhones and iPads will be given to shoppers who hit varying amounts of minimum spending, while stocks last.

Link to the story:

https://www.straitstimes.com/singapore/shoppers-queue-up-early-for-black-friday

 

Hospitality

New $80m Seletar terminal opens

Travellers flying to Seletar Airport now have a spanking new $80 million terminal has opened. Built to handle up to 700,000 passengers a year, the facility will provide more space for private and business jet traffic, and free up capacity at Changi Airport for larger planes.

The terminal has two sections – for scheduled commercial flights and business aviation. The business aviation wing is now opened.

Links to the story:

https://www.straitstimes.com/singapore/new-80m-seletar-terminal-opens

https://www.straitstimes.com/singapore/transport/all-seletar-operations-shift-to-80m-new-terminal

 

Firefly to suspend all flights to Singapore

Malaysian airline Firefly will suspend all flights to Singapore with effect from Dec 1, the day it was scheduled to transfer its operations from Changi to Seletar Airport.

In a notice on its website, the airline said it would resume services once the relevant authorities can sort out regulatory issues with regard to its move to Seletar.

Firefly, a full subsidiary of Malaysia Airlines, did not elaborate further on its decision to suspend flights, but The Straits Times understands that it is in discussion with its country’s regulator, the Civil Aviation Authority of Malaysia.

The plan was for Firefly to move to a new passenger terminal that opened on Monday for scheduled commercial flights, chartered business flights and private jets.

Currently, only Firefly operates such turboprop flights to Changi. It offers 20 daily flights, to and from Subang, Ipoh and Kuantan.

Seletar Airport’s 10,000 sq m new terminal is designed to handle up to 700,000 passengers a year. It was built to provide more space for Singapore’s private and business jet traffic to grow, and free up capacity at Changi for larger planes.

Link to the story:

https://www.businesstimes.com.sg/transport/firefly-suspends-all-flights-to-singapore-from-dec-1 https://www.straitstimes.com/singapore/transport/firefly-to-suspend-all-flights-to-singapore

 

Darby Park Executive Suites sold for nearly S$93m

Bursa Malaysia-listed Sime Darby Property has sold its six-storey serviced residence property along Orange Grove Road, Darby Park Executive Suites, for S$92.71 million.

The buyer is Royal Group, controlled by Asok Kumar Hiranandani and his son Bobby. They could not be reached for comment by press time.

Market watchers believe that Royal Group could be looking to redevelop the prime district property into a hotel, subject to approval from the authorities.

Darby Park Executive Suites stands on a 36,311 sq ft site with a balance lease of about 73 years. Under the Urban Redevelopment Authority’s Master Plan 2014, the site is zoned for residential use with 1.6 plot ratio (ratio of maximum gross floor area to land area).

Link to the story:

https://www.businesstimes.com.sg/real-estate/darby-park-executive-suites-sold-for-nearly-s93m

 

Industrial

Wearnes building showroom for rare and vintage cars

Car dealer Wearnes is investing $35 million in an eight-storey multi-purpose complex at its Leng Kee Road premises that will offer a panoramic showroom of rare and vintage cars – the first of its kind in Singapore.

Well-heeled owners will be able to rent space to store their classic vehicles at the facility while enjoying the adjoining club lounges.

The building is Wearnes’ first major infrastructural spending since being acquired by China-based motor distributor StarChase in 2014.

The complex will have a total floor space of more than 200,000 sq ft, and is situated behind the multi-franchise agent’s row of showrooms at 45 Leng Kee Road.

It will house workshops, boutique car displays, conference facilities, exclusive lounges, corporate offices and a used car division.

Link to the story:

https://www.straitstimes.com/singapore/transport/wearnes-pumps-35m-into-grand-complex

 

Shophouses

Clifton Partners picks up Tras St shophouse trio for S$21.2m

Veteran property investor Stanley Quek is selling another conservation shophouse property. This time, an entity connected to him has offloaded three adjoining two-storey shophouses on Tras Street, for S$21.2 million.

The property, which is part of the Tanjong Pagar Conservation Area, is being bought by an entity affiliated to Clifton Partners, a real estate investment firm owned by Singaporean Zain Fancy. The price paid is understood to reflect a gross yield of nearly 3.5 per cent based on the current tenancies. Standing next to Maxwell House, the three shophouse are at 33, 35 and 37 Tras Street. They are on a single land lot of about 4,450 sq ft and with 99-year leasehold tenure starting April 1994 – with about 74 years’ balance lease.

The property translates to nearly S$2,600 psf based on built-up area of about 8,160 sq ft.

Link to the story:

https://www.businesstimes.com.sg/real-estate/clifton-partners-picks-up-tras-st-shophouse-trio-for-s212m

 

Overseas

Some claim fingers burnt in Iskandar buy-and-leaseback scheme

A group of 116 people – mostly Singaporeans – who bought serviced apartments in a waterfront development at Johor’s Puteri Harbour are claiming that they have had their fingers burnt in a buy- and-leaseback scheme.

They are accusing a company linked to the developer of giving “unreasonably and inconceivably negligible” rental returns after the first two years of guaranteed returns in a 10-year contract.

This began in March 2015 and they got at least five per cent a year. But when the guarantee period expired in February 2017, the returns plunged.

The 204-unit development, sited in the massive Iskandar township and just 10 minutes from the first Legoland theme park in Asia, is called Somerset Puteri Harbour as it is managed and operated by The Ascott, which uses the brand name Somerset.

Link to the story:

https://www.straitstimes.com/business/property/some-claim-fingers-burnt-in-iskandar-buy-and-leaseback-scheme

 

Singaporeans seek to get the best out of their JB homes

An oversupply of high-end condos in Iskandar Malaysia has been pushing rent lower, said industry experts.

More owners are turning to short-term leasing because of the lower rental yield and challenges in finding long-term tenants.

Airbnb is an alternative solution according to an analyst. It broadens the demand base because it’s on an international website. Rental demand at Iskandar has not been as strong as projected. And now, with the Malaysian government pushing for more affordable homes for locals, chances are slim for those who want to make a profit from selling their units.

Link to the story:

https://www.straitstimes.com/business/property/sporeans-seek-to-get-the-best-out-of-their-jb-homes

 

Lack of new homes may save UK market from Brexit-driven crash

Anyone fearing a Brexit-induced house-market crash in the UK would do well to remember that the country isn’t even close to keeping up with demand for new homes.

Figures show that construction continues to lag behind the government’s targets, suggesting that a failure to meet demand will buoy the market for some time to come.

Limited access to land, increasing construction costs and a slow planning process mean that homebuilders have failed to deliver enough properties for at least a decade.

The problem is especially acute in London, where net additions fell about 20 per cent from a year ago to 31,723 units, less than half the 65,000 units pledged by Mayor Sadiq Khan in his effort to convince voters he could solve the city’s chronic housing shortage.

Link to the story:

https://www.businesstimes.com.sg/real-estate/lack-of-new-homes-may-save-uk-market-from-brexit-driven-crash

 

UK housing woes deepen as asking prices fall

Property asking prices in the UK fell from a year earlier for the first time since 2011, led by declines in London and among the most expensive properties.

Asking prices slipped 0.2 per cent to £302,023 (S$532,000). Prices were 1.7 per cent lower compared with October, the biggest drop for the month since 2012.

The property market in Britain is weakening after a three-decade boom in which price growth vastly outstripped wage gains.

The uncertainty around the outlook for the UK’s divorce from the European Union is also making buyers more cautious and prompting sellers to be less ambitious with asking prices.

Link to the story:

https://www.businesstimes.com.sg/real-estate/uk-housing-woes-deepen-as-asking-prices-fall

 

London’s stockpile of unsold homes jumps to record high

London’s stock of completed but unsold homes has surged by almost half this year as Brexit uncertainty and affordability issues dog the housing market.

The number in the capital jumped to 2,374 units as of Sept 30, the most on record and up from 1,595 at the end of 2017, according to data compiled.

The borough with the biggest stockpile is Wandsworth, an area that borders the River Thames, followed by Croydon, an outer borough in the south of the city.

Britain’s housing market is slowing after a multi-year boom as the UK’s impending divorce from the European Union weighs on sentiment and prices remain out of reach for many potential buyers.

Link to the story:

https://www.businesstimes.com.sg/real-estate/londons-stockpile-of-unsold-homes-jumps-to-record-high

 

Foreign investors find trophy properties in unlikely US cities

US properties in places like Denver, Phoenix, Philadelphia and the suburbs of Atlanta have all drawn foreign investment this year as buyers look for growth outside the biggest US metro areas. The most popular second-tier markets for foreign capital this year include Dallas, California’s Inland Empire and Philadelphia.

Link to the story:

https://www.businesstimes.com.sg/real-estate/foreign-investors-find-trophy-properties-in-unlikely-us-cities

 

US existing-home sales rise for first time in seven months

Sales of previously owned US homes rose in October for the first time in seven months, suggesting that demand is stabilising at a lower level as available properties become less scarce.

Contract closings increased from the prior month to an annual rate of 5.22 million, the National Association of Realtors (NAR) said.

That compared with economists’ projections for sales of 5.2 million. The median sales price rose

3.8 per cent from a year earlier, while the inventory of available homes expanded 2.8 per cent, the third straight increase.

Even with the monthly increase, the market remains relatively soft, as sales were down 5.1 per cent from a year earlier, the biggest drop since 2014.

Link to the story:

https://www.businesstimes.com.sg/real-estate/us-existing-home-sales-rise-for-first-time-in-seven-months

 

US housing starts rise, but underlying trend weak

US homebuilding rose in October amid a rebound in multi-family housing projects, but construction of single-family homes fell for a second straight month, suggesting the housing market remained mired in weakness as mortgage rates march higher.

Other details of the report published by the Commerce Department on Tuesday were also soft.

Building permits declined last month and homebuilding completions were the fewest in a year. Housing starts increased 1.5 per cent to a seasonally adjusted annual rate of 1.228 million units last month.

In addition to rising borrowing costs, the housing market is also being squeezed by land and labour shortages, which have led to tight inventories and more expensive homes. Many workers are being priced out of the market as wage growth has lagged.

Link to the story:

https://www.businesstimes.com.sg/real-estate/us-housing-starts-rise-but-underlying-trend-weak

 

Canada’s housing boom shifting to rugged north

Forget Vancouver. British Columbia’s housing boom is set to shift to the province’s rugged north as Royal Dutch Shell’s US$31 billion liquefied natural gas project sparks an economic boom in the remote region.

British Columbia’s North Coast – a sparsely populated region usually synonymous with untamed wilderness, black bears and glacial fjords – is set for a turnaround as Shell and its four partners ramp up activity on Canada’s largest infrastructure project ever.

Residential home prices in the North Coast are set to surge faster than any other region in the province through 2020 as the project in Kitimat prepares to employ as many as 7,500 people at its peak.

In contrast, prices in Vancouver’s Lower Mainland area – once one of the hottest housing markets in North America – will fall, keeping the overall provincial median price flat.

Link to the story:

https://www.businesstimes.com.sg/real-estate/canadas-housing-boom-shifting-to-rugged-north

 

Australia housing will muddle through downturn

Australia’s property downturn will weigh on economic growth, with prices set to keep falling through 2019.

Nationwide housing prices will fall between 10 per cent to 15 per cent from recent peaks, with “slightly larger” declines in Sydney and Melbourne.

While that would be the largest decline in recent times, it would just reverse the overvaluation of recent years.

The decline is already well under way, with Sydney prices down 7.4 per cent in October from a year earlier, and Melbourne off 4.7 per cent.

Nationally, house prices dropped 3.5 per cent last month from a year earlier, according to latest data.

Link to the story:

https://www.businesstimes.com.sg/real-estate/australia-housing-will-muddle-through-downturn-citi

 

2019 home prices could fall in some smaller Chinese cities: Fitch

Home prices in some smaller Chinese cities could fall next year as the world’s second-largest economy slows, Fitch Ratings said, while adding that the government is expected to step in to stem any precipitous decline.

Nationwide growth in China’s property prices has moderated this year in response to measures to curb speculation.

Sales volumes may fall up to 10 per cent, following low-single-digit gains in 2018, with declines likely to be the strongest in lower-tier cities, it said.

Smaller cities will be most affected by the scaling back of monetised resettlement of shanty-town residents, Fitch said.

But the rating agency said the downturn is likely to be muted, and the government has considerable scope to ease policies to support the market if required.

Link to the story:

https://www.businesstimes.com.sg/real-estate/2019-home-prices-could-fall-in-some-smaller-chinese-cities-fitch

 

Indonesia plans tax revisions to prop up sluggish property sector

Indonesia plans to cut taxes on luxury properties and revise other tax rules in a bid to support the real estate industry and attract investment in South-east Asia’s biggest economy, Finance Minister Sri Mulyani Indrawati said.

The threshold for a luxury tax of 20 per cent applied to houses and apartments would be raised to at least 30 billion rupiah (S$2.8 million) from 20 billion rupiah, she said in comments published on the cabinet secretary’s website late on Wednesday.

Sales of luxury property will also be subject to a lower tax of 1 per cent of the selling price, against 5 per cent now.

Link to the story:

https://www.businesstimes.com.sg/real-estate/indonesia-plans-tax-revisions-to-prop-up-sluggish-property-sector

 

 

 

 

By:

Lee Sze Teck Head, Research

 

 

 

 

This document has been prepared by Huttons Asia for general information only. Huttons Asia does not guarantee warrant or represent that the information contained in this document is correct. Any interested party should undertake their own enquiries as to the accuracy of the information. Huttons Asia excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damage arising directly or indirectly there-from. All rights reserved.

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