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26 October 2018 / Issue 38

By in Weekly News Review with 0 Comments

Top News for the Week

  • CDL to launch Whistler Grand in the west at average S$1,380 psf
  • More headwinds for collective sales with several sites relaunched at lower reserve price
  • Singapore core inflation dips to 1.8% in September
  • Multinational corporations pumping more money into factories and offices in Singapore in the first six months of the year with some US$35 billion FDI
  • Outlook for the industrial property sector is expected to remain stable going into the fourth quarter and beyond


Food manufacturers, service sector stand to gain from trade pact

From manufacturers of spring roll pastry and frozen prata to service firms and serviced residence operators, Singapore companies big and small stand to gain from the European Union-Singapore Free Trade Agreement (FTA) that was signed.

The FTA will be up for a vote in the European Parliament early next year, and enters into force once it is ratified. When that happens, the Ministry of Trade and Industry (MTI) estimates that over 80 per cent of Singapore exports will be able to enter the EU tariff-free.

Among those who stand to gain are Singapore food manufacturers. Their goods made in Singapore can enter the EU tariff-free, up to a combined quota of 1,250 tonnes a year.

Another feature of the deal allows manufacturers that include raw material and input sourced from Asean countries to qualify for tariff concessions.

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Live, work, play: Life by the water calls

A lush island with housing complexes, served by driverless electric vehicles only. Linked to it, an island for play and a high-tech waterfront city that is both an extension to the central business district and a link for Singapore’s green pathways.

These are among the ideas urban planners have for a future area that the Government hopes to brand as the Southern Gateway of Asia.

The upcoming Greater Southern Waterfront district is back in the spotlight, after it was announced that plans are being drawn up to integrate Sentosa with the precinct and develop the adjacent island of Pulau Brani.

About 1,000 ha of land (about the size of 30 Singapore Sports Hubs) will be freed up for the development of a new waterfront city after 2030, when port terminals including those in Tanjong Pagar and Pasir Panjang will be consolidated in Tuas.

Extending the city to the Greater Southern Waterfront, creating differentiated districts and an uninterrupted 30km-long waterfront promenade are among the possibilities that have been raised by the Urban Redevelopment Authority, after it identified the area for development in its 2013 Draft Master Plan.

The waterfront precinct will likely include mixed-use developments with residential, office and retail components, and a master developer may be appointed for the entire district.

The strait between the 120-ha island and the mainland can also be sealed and converted into a reservoir, while the waterfront stretch can be integrated with the central business district to form a “seamless extension of the commercial hubs and business activities that spill over into the new Southern Gateway of Asia”.

With the tight CBD supply over the next three years, demand for city fringe offices in the HarbourFront and Alexandra submarket is expected to increase.

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Singapore to be investment broker for Asia’s infrastructure

Singapore plans to spur investment in much-needed infrastructure in South-east Asia by helping to structure projects to make them more “bankable”, a senior official has said.

A government agency called Infrastructure Asia has been set up to connect the “supply and demand” for these projects, Indranee Rajah, Singapore’s Second Minister for Finance, said in an interview.

Links to the story: broker


Raise CPF withdrawal age amid growing lifespans: study

Singapore can improve its pension system by raising the Central Provident Fund withdrawal age amid growing lifespans, and also open the fund to non-permanent resident workers, said the Melbourne Mercer Global Pension Index (MMGPI).

Currently, Singapore’s pension system remains the best in Asia – for the 10th consecutive year – and ranks 7th globally.

Measuring 34 pension systems, the Index shows that the Netherlands and Denmark (with scores of 80.3 and 80.2 respectively) both offer A-Grade world class retirement income systems with good benefits, clearly demonstrating their preparedness for tomorrow’s ageing world.

Singapore scored a B grade, climbing to 70.4 in 2018 from 69.4 in 2017 – which itself was an improvement from the 67.0 in 2016 – due to improvements in the sustainability sub-index. In the sub-indices, the Republic scored a C+ for adequacy, B for sustainability and A for integrity.

Singapore’s overall B grade – shared with nations including Finland, Australia and Norway – is defined as “a system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system”.

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Expanded expressway link to ease congestion

The expansion of the interchange between the Tampines Expressway (TPE) and the Kallang-Paya Lebar Expressway (KPE) would help improve traffic conditions in the growing Punggol area, say experts.

The Straits Times reported last week that the intersection between the two expressways, including a direct connection to Punggol Central, would open by the end of next month. This is almost a year ahead of its original projected opening in the third quarter of next year.

First announced in 2014, the $185 million expansion of the intersection between the KPE and TPE included the building of roads, three vehicular bridges crossing Sungei Serangoon and Sungei Blukar, and a new flyover across the TPE.

The intersection is the latest of several measures taken to alleviate traffic congestion in the area. The measures included building two flyovers linking Sengkang and Punggol in 2004, as well as the opening of Buangkok East Drive in 2009, which connected the KPE directly to Sengkang.

In 2016, as an interim measure, a temporary slip road was built connecting Punggol East directly to the KPE, as well as Lorong Halus leading to Pasir Ris.

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Driverless hover-taxis to take off in Singapore

Test flights of a driverless hover-taxi will take place in Singapore next year, a German aviation firm said, the latest innovation to offer an escape from Asia’s monster traffic jams.

Millions of commuters in the region’s cities have to contend with chronic gridlock every day, sparking a race to develop new ways to avoid the snarl-ups.

While Singapore does not suffer major congestion, it is seen as a perfect test-bed for new technologies due to its compact size and openness to innovation.

Resembling a helicopter, Volocopter’s electric air taxis take off and land vertically. They are based on drone technology and can fly two people for around 30 kilometres, the firm said in a statement. The Singapore tests follow a public demonstration in Dubai last year.

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More to be done to make R&D pay off

Businesses must work together with public research institutes to develop products that can compete based on innovation, and not price.

The Government’s public research arm, the Agency for Science, Technology and Research (A*Star), have been challenged to seek out 10 large firms, 10 progressive trade associations and chambers, and 10 government agencies to “develop plans that address sector-level needs and opportunities”.

Singapore must make use of its domestic and regional advantages to find opportunities for growth. This means leveraging Singapore’s connectivity with a fast-growing Asia and its prospects as a regional hub.

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Singapore bucks global trend; draws more investments in H1

Multinational corporations were still pumping more money into factories and offices in Singapore in the first six months of the year, even as they slashed global investments at the same time.

Some US$35 billion in foreign direct investments (FDI) flowed into Singapore, driving FDIs in South-east Asia up 18 per cent over the first half of 2017 to US$73 billion in January-June this year, according to the latest Investment Trends Monitor published by the United Nations Conference on Trade and Development (UNCTAD).

The latest FDIs elevated Singapore from eighth to sixth in UNCTAD’s top 10 FDI host economies. China moved up one notch to top the list, while the US slipped from first to third position. The UK made the most dramatic comeback, leaping from 16th to 2nd.

Link to the story:      h1


Singapore businesses welcome EUSFTA

Singapore’s business community has welcomed signing of the European Union-Singapore Free Trade Agreement (EUSFTA), with exporters of electronics, pharmaceuticals, chemicals and processed food products particularly well-placed to benefit.

Calling it “a timely development given the growing international trade tensions”, Singapore Business Federation (SBF) chief executive officer Ho Meng Kit said: “SBF is committed to support the successful implementation of the EUSFTA by promoting the new economic opportunities it offers to our companies, especially SMEs (small and medium enterprises).”

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Expect a ‘3 plus and minus 5%’ model of future growth

Instead of the “5 plus and minus 1” per cent growth of yesteryear, Singapore’s economy will likely enter a phase of “3 plus and minus 5” per cent growth, arising from technological disruption and global trade tensions, said Minister for Trade and Industry Chan Chun Sing.

Speaking at the Future Economy Conference and Exhibition at the National Trades Union Congress Centre, Mr Chan outlined what should be the economic strategy for Singapore firms in a likely future of slower growth.

The government will transit from only having broad-based measures in the past to having industry- specific strategies as the wider range of growth impacts each industry differently.

Noting similarities in the best performing industries in the 23 transformative road maps – such as banking and finance, and logistics and transport, Mr Chan said strong trade associations and chambers (TACs), strong labour management relationships and clear definitions of problems are needed for the strategies to work.

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Singapore core inflation dips to 1.8% in September

Singapore’s core inflation came in at 1.8 per cent last month, dipping slightly from August’s 1.9 per cent.

Headline inflation remained unchanged from August, at 0.7 per cent, even though the market expected the year-on-year rise in consumer prices to quicken.

The decline in core inflation came from slower growth in retail prices of items like clothing and shoes, which offset the higher price increases in services, said the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) in a joint statement.

Prices of retail items rose by 1.5 per cent year on year – slowing from the 2 per cent increase previously. There was also a steeper fall in the prices of recreation and entertainment goods, and telecommunications equipment.

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Interest rate trajectory: different endings

There is no doubt to pundits about the direction of interest rates, but each has a different view on where the trajectory would end.

DBS expects SOR and Sibor, which is usually used to price home loans, to continue trending upwards to reach 2.85 per cent by Q419.

UOB forecast that the three-month benchmarks for borrowing costs will climb to just under 2 per cent by year end and further to about 2.5 per cent by end-2019.

OCBC sees a more modest hike to 1.7 per cent and 1.75 per cent respectively, by end-2018 and rise to 2.3-2.4 per cent by end-2019.

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For pharma, volatility and value are two sides of the same coin

For the four months to July, Singapore’s export-oriented drug industry notched up double-digit yearly growth, while July exports surged a stunning 109 per cent – yet industry players are hard put to forecast a consistent trajectory. Rather, the prognosis for the notoriously volatile sector is for it to hold “steady”.

Given the growing regional demand, and the resources pumped in amid strong regulatory support, why is the sector so volatile? The answer lies in the dynamics of the business.

Pharmaceuticals are highly vulnerable to base-effect blips, no thanks to issues such as inventory stockpiling or changes in drugmaker portfolios.

Production depends on how much volume pharmaceutical factories can handle, as investments on that front can lead to “a supply-driven bump” in factory and export growth.

Forecasting too is hampered by the difficulty in capturing the full picture. The Economic Development Board’s (EDB) projects a “robust base of activities” in the next three to five years. But this may not translate to an increase in factory output as such activities could involve, for instance, testing and validation of products in development – which would not register as output. Adding to the fluctuating output are the current headwinds of pricing pressures, with governments worldwide working to keep healthcare costs down, as well as competition in the off-patent generics space.

Meanwhile, there is no let-up in expansion for those invested here. Singapore already has 60-odd factories for pharmaceuticals and medical devices, according to EDB, and four of the world’s top 10 drugs are made here.

Link to the story: same-coin



CDL to launch Whistler Grand in the west at average S$1,380 psf

City Developments Limited (CDL)’s Whistler Grand condo will go at an average selling price of S$1,380 psf, which the giant developer touts as the most affordable launch for the fourth quarter. CDL will begin previews for the 716-unit development comprising two 36-storey towers at West Coast Vale.

Special prices at the official launch for Whistler Grand will start from S$608,000 for one-bedders, S$792,000 for two-bedroom, S$1.198 million for three-bedroom, S$1.568 million for four- bedroom and S$1.788 million for five-bedroom, with typical unit sizes ranging from 441 square feet (sq ft) for a one-bedroom to 1,442 sq ft for the five-bedroom. There are also two five-bedroom flexi penthouses, and dual-key options for the three-and four-bedroom units are available.

Oxley Holding’s 548-unit Kent Ridge Hill Residences will also preview and will launch at an average S$1,700 psf according to a media report.

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Pace of new home launches to remain steady despite cooling measures

Home buyers are more discerning and selective in their purchases as the market adjusts to the new cooling measures. Demand is beginning to gravitate towards projects with perceived strong value propositions.

The August and September 2018 sales figures seem to bear this trend out. Two months after the new cooling measures were introduced, top selling projects appear to be enjoying higher market share gains.

In August and September 2018, the top five projects took up 73 per cent and 68 per cent of total private new home sales respectively, while in June 2018, the top five took up only 61 per cent of total new home sales in June 2018.

This implies that older launches which are less flexible in terms of pricing could face more challenges in finding buyers, as compared to newer launches where developers still have leeway to revise pricing strategy in light of the ninth round of cooling measures.

Link to the story: measures


Property sentiment hit by cooling measures: Report

Property cooling measures announced in July have dampened sentiment in the real estate market, according to a new report.

The quarterly Real Estate Sentiment Index (Resi) fell sharply to 4 in the third quarter from 6.6 in the second, a stark change following the July measures.

Resi is jointly developed by the Real Estate Developers’ Association of Singapore (Redas) and the National University of Singapore’s (NUS) Department of Real Estate, and surveys senior executives of Redas member firms.

It uses a “net balance percentage” to score key determinants of sentiment in the real estate market.

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Collective-sale fever cools for large residential sites

Even before new rules to raise the minimum average unit size for condominium and private apartment projects outside the central area were announced, the collective-sale fever was abating for larger sites.

The 99-year leasehold Chuan Park in Lorong Chuan has failed in its second attempt to secure an 80 per cent mandate for a $900 million collective sale.

It was a close thing, however, with 585 owners of 357 units, or 79.78 per cent of total share value and 77.39 per cent of total area, signing the sale agreement by an Oct 13 deadline, according to a notice seen by The Straits Times.

The shortfall came despite the reserve price being raised from an initial $790 million.

Freehold Windy Heights in Kembangan is now in a 10-week private treaty period after its tender closed on Oct 10 without a sale. While the reserve price is unchanged at $806.2 million, owners are going through a re-signing process to lower it to $750 million.

Even smaller sites are trying to lower their reserve price to boost their appeal. La Ville, a 40-unit freehold condo near Katong Park MRT station, has relaunched for sale by tender. More than 70 per cent have signed to lower the reserve price from $152 million to $140.6 million.

54 collective-sale tenders – seven with commercial components – have closed without a sale so far this year.

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Spanish Village goes en bloc again at same price

Home owners haven’t abandoned their en bloc dreams just yet, with Spanish Village being the latest to take another crack at the market at the same price of S$882 million.

Its earlier attempt this year was launched in June and closed on 18 July without a winning bidder. Spanish Village’s guide price of S$882 million translates to a land rate of S$1,721 psf ppr, including a development charge of around S$30 million.

Built in the 1980s and located in District 10 along Farrer Road, Spanish Village sits on a 331,457 square foot site, and is zoned for residential use under Master Plan 2014 with a gross plot ratio of 1.6.

The 226-apartment development is close to the Singapore Botanic Gardens, Dempsey Hill and Holland Village, and is served by major roads and expressways such as Farrer Road, Holland Road, Pan Island Expressway and Ayer Rajah Expressway. Farrer Road MRT station is 275 metres away.

Other condominums which have been recently put up for another go at collective sale include Laguna Park in the East with a reserve price of S$1.48 billion and Faber Garden off Upper Thomson Road at the same reserve price of S$1.18 billion. Grange Heights in St Thomas Walk has also been put up for public tender for S$820 million.

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Recent collective sales face challenges galore

Gilstead Mansion has been relaunched for collective sale at $65 million, or $3 million less than its guide price in June, as owners hope to beat the chill of July’s cooling measures and the clock.

The revised price translates to $1,524.70 per sq ft per plot ratio, with no development charge payable. The 24-unit freehold development has a land area of 35,751 sq ft and an existing gross floor area of 42,632 sq ft.

Gilstead Mansion is in the Stevens-Chancery area, one of nine areas that will face an increased average unit size of 100 sq m if a development application is submitted to the authorities on or after Jan 17 next year.

Under the current 70 sq m guideline, about 56 units could be redeveloped on the site.

The Gilstead Mansion tender will close on Nov 22 at 2pm.

Owners at the freehold Balestier Regency have started to collect signatures to lower the reserve price from S$218 million to S$190 million in a bid to make the site “more viable and appealing to potential developers,”. Balestier Regency also falls under the areas that will now face the 100 sq m rule.

Owners at La Ville are signing a supplemental agreement to lower their reserve price from S$140.6 million, from the original S$152 million; they have secured an at least 70 per cent mandate.

Owners at Windy Heights now are going through a re-signing process to revise the reserve price by 6.97 per cent to S$750 million.

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HDB’s annual deficit grows by 44 per cent to $1.7b

More new flats were sold and more existing flats underwent upgrading, contributing partly to a

44.4 per cent spike in the Housing Board’s (HDB) net deficit in the last financial year.

In its annual report released, the HDB incurred an overall deficit of $1.717 billion in the financial year of 2017/2018, up from $1.189 billion.

The report also showed an increase in the deficit for HDB’s home ownership programme, from

$861 million previously to $1.383 billion in the last financial year.

In total, the number of completed sales was 26,857 units – 5,407 more than in the previous financial year.

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Website lets sellers decide property agents’ worth

A new website that connects home sellers to property agents will allow users to pay what they think the agent deserves.

Sellers can opt to pay agents as low as 1 per cent commission for bad service, and up to 2.5 per cent for “world class service”. The market norm is around 2 per cent, though commissions can be negotiated beforehand.

Besides the ratings-based fees, the website offers freebies such as sprucing up the client’s house, taking professional photographs and cab rides for home viewers.

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Non-residential sector looking up

The property cooling measures announced in July jolted the residential property market. Activity has begun to slow as developers held back launches and collective sales trickled to a halt.

Flushed with capital, investors who believe in bricks and mortar are still on the hunt for quality real-estate assets. But with opportunities narrowing on the residential front, they are looking at alternative asset classes.

Commercial rents have rebounded strongly since last year. Grade A office rents are 18 per cent up from the trough in the first three months of 2017 and just 4 per cent below the recent peak in the first quarter of 2015.

The total secondary transaction volume between January and August this year stood at $600 million, just a tad lower than the $707 million for the whole of last year.

Industrial rents are also showing signs of stabilisation after a prolonged correction. Singapore’s Purchasing Managers’ Index and manufacturing indices have recorded steady growth in the last few quarters. Large manufacturing companies with a long-term view on Singapore are beginning to think about locking down the purchase of a freehold industrial property. This has shored up investment activity in the industrial sector, and may impel others to follow suit.

Over the medium term, some liquidity will still find its way back to these segments if Singapore’s economy continues to hum along.

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Private health group and Siemens unit open diagnostic-imaging centre

Healthcare staff from around the region have a new space to get their hands on the latest tools from German engineering giant Siemens.

Private healthcare group MWH Medical and a Siemens division opened a diagnostic imaging facility in Singapore, under a training and equipment tie-up.

The Siemens Healthineers Asia Reference Centre, which takes up about half of MWH Medical’s 20,000 sq ft space at Royal Square at Novena, will focus on medical fields such as stroke, cancer and heart disease.

The facility will introduce healthcare professionals to devices such as the 3T Magnetom Vida magnetic resonance imaging and Somatom Drive computed tomography scanners, with training resources and machines provided by Siemens Healthineers.

Link to the story: centre


JustCo to open latest co-working space in Q4 2019

Co-working outfit JustCo will move into the entire second floor of Fraser Property’s China Square Central complex, once the building’s current asset enhancement initiative is completed.

JustCo aims to open its latest space in the fourth quarter of 2019, adding to its current portfolio of 13 centres in Singapore.

Its Marina Square and MacDonald House offices were opened earlier this year.

Users of the China Square Central space at 18 Cross Street will be able to enjoy “state-of-the-art facilities, flexible leasing terms and a variety of meeting and entertainment areas”, JustCo said. The premises will also contain a large event space with a platform stage, pop-up display corners for members to showcase their products, spacious hot and dedicated desk areas, bespoke suites, a JustBrew cafe, and a collaboration and games corner.

Also launching in Q4 2019 will be JustCo’s third Bangkok office in Samyan Mitrtown, with new openings planned in Jakarta, Seoul, Sydney, Melbourne, Taipei, Shanghai and other Asian cities.

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Duo offices, hotel, retail space said to be going on the market

M+S Pte Ltd, the joint-venture between Malaysia’s Khazanah Nasional and Singapore’s Temasek Holdlings, will be putting its office, hotel and retail components of the Duo project along Beach Road up for sale.

The combined asking price for the above components is about S$2 billion.

The joint-venture company has sold almost all the 660 apartments in the mixed-development project.

The office and retail components alone have a combined indicative pricing of S$1.6 billion. If one wants to bid for the office component only, the asking price is S$1.3 billion, or close to S$2,300 psf on net lettable area (NLA) of 568,412 sq ft.

The 56,000 sq ft retail component, Duo Galleria, is on Level 1 and Basement 3.

The asking price for the 342-room Andaz hotel is S$500 million, or S$1.46 million per key.

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WeChat Pay option at 600 outlets in S’pore from Nov 1

Shoppers at Cold Storage, Giant, Guardian and 7-Eleven outlets will be able to pay for their purchases with their mobile phones via WeChat Pay from Nov 1.

Dairy Farm Singapore and Nets announced their tie-up with the Chinese e-payment giant to offer consumers the option of paying with its digital wallet service at more than 600 retail outlets of the four brands.

Visitors from China and Chinese nationals living in Singapore will also be able to utilise this payment option, Dairy Farm and Nets said in their joint statement.

The payment option is being piloted at the 7-Eleven and Guardian stores in Changi Airport, as well as in Orchard Road and Chinatown.

To use WeChat Pay, users should scan the Nets QR code on the Nets unified point-of-sale terminal. Dairy Farm Singapore and Nets also said WeChat Pay will better cater to the growing number of Chinese visitors and offer them a convenient way to pay while shopping in Singapore.

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DBS whets appetites with chatbot F&B service

Online chat has become more than just for chit-chat.

An initiative by DBS Bank – a first in Singapore – allows consumers to skip the regular queue, pre- order and pay for food and drinks with Facebook Messenger.

Payment is cashless via the DBS PayLah! e-wallet or DBS and POSB credit or debit cards. Consumers can even customise their orders, such as requesting less sugar or more milk in their coffee or tea – simply by chatting with a chatbot that represents participating restaurants.

Dubbed DBS Foodster, the initiative takes aim at the global US$112 billion ($154.5 billion) e- commerce market, which Juniper Research estimated would be serviced by chatbots in 2023.

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Industrial property sector outlook stable in Q4 and beyond

The outlook for the industrial property sector is expected to remain stable going into the fourth quarter and beyond, although the impact from the US-China trade war remains a potential risk.

In the third quarter, industrial prices edged up 0.1 per cent from the previous quarter, while industrial rents slipped 0.1 per cent – marking a decline for the 14th consecutive quarter – owing to softer rents in multiple-user factories, single-user factories and business parks, JTC’s quarterly report showed.

Compared to a year ago, prices of industrial space softened 1.1 per cent, while rents dipped 0.4 per cent.

Meanwhile, the occupancy rate climbed 0.4 percentage point quarter-on-quarter to a six-quarter- high of 89.1 per cent, led by single-user factories, business parks and warehouses. From a year ago, the occupancy rate was up 0.5 percentage point.

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Solar panel maker in S$585m sale, leaseback deal

The Singapore unit of Norway-headquartered solar firm REC is understood to have entered into a proposed S$585 million sale-and-leaseback transaction on its Tuas South property.

The deal with Australia-based Logos Property, is one of the biggest of its kind here, and involves only the real estate; the fully-integrated solar-panel manufacturing facility it houses will continue to operate as normal.

Located along Tuas South Avenue 14, the low-rise development has a gross floor area of about

1.6 million sq ft. It stands on a 2.72 million sq ft site directly allocated to REC by JTC Corp in 2008, when the company was known as Renewable Energy Corporation.

The site has a 30-year leasehold tenure, with an option to renew the lease for another 30-year term. The real-estate deal, which is subject to JTC’s approval, is expected to be completed by year end.

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NTU partners HP to launch S$84m research laboratory

A corporate research laboratory set up in partnership with tech giant HP was officially opened at the National Technological University.

The S$84 million laboratory and its 100 researchers and staff will focus on digital manufacturing technologies, specifically in areas of advancing 3D printing, artificial intelligence, machine learning, new materials and applications, cybersecurity and customisation.

The collaboration, which is in line with the national push towards industry transformation, will also include developing educational curriculum on designing for additive manufacturing. It will cover areas such as data management, security, user experience and business models.

This is HP’s first university laboratory collaboration in Asia.

NTU president Subra Suresh said the partnership with HP is a significant milestone for NTU, as 3D printing and adjacent technologies such as artificial intelligence, machine learning and cybersecurity are integral parts of the Fourth Industrial Revolution.

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Why Singapore fits in with Dyson’s electric dream

When billionaire James Dyson, the British inventor of the bagless vacuum cleaner, unveiled a plan to build an electric car plant in Singapore, it raised a few eyebrows.

Apart from the shortage of land, Singapore has some of the highest average salaries in the world and it has been nearly 40 years since Ford closed its factory here, effectively ending car production on the island.

Dyson management said the decision was based on supply chains, access to markets and the availability of expertise, which offset the cost factor.

Firstly, when compared with other global cities, Singapore has some of the highest average salaries in the world after tax, according to studies by Deutsche Bank.

Land available for industrial use is scarce and expensive, and the nation ranks highly in general cost-of-living indexes.

But aside from its skilled engineers and scientists, Singapore offers generous incentive schemes for a high-tech firm like Dyson.

Some schemes include tax breaks for five years, which can be extended, and grants that can cover up to 30 per cent of the cost of projects to improve efficiency. Officials declined to comment on whether Dyson benefited from any such schemes.

Secondly, in the broader South-east Asia, only 142 electric vehicles are forecast to be sold this year. By contrast, sales in China are forecast to almost reach 700,000 vehicles this year, more than double the combined sales from the United States and Europe.

But with one of the world’s busiest ports, Dyson can roll a car off the production line here and within the hour, it can be on its way to China or other electric vehicle markets like South Korea or Japan.

Lastly, Dyson’s history with Singapore probably also played a role.

It already employs 1,100 people here, making 21 million digital electric motors a year. It also has manufacturing hubs in Malaysia and the Philippines.

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New lab at NUS, scholarships to boost electronics sector

A new research laboratory that aims to help develop advanced semiconductors that are more efficient and cheaper was launched on Thursday, along with S$1.5 million in scholarships to grow the pool of talent in the electronics sector.

The lab, a collaboration between US equipment supplier Applied Materials and the National University of Singapore (NUS), will work on accelerating the discovery and commercialisation of new materials for manufacturing advanced semiconductors.

More than 50 researchers, engineers and doctoral students are expected to be trained at the lab in NUS.

Applied Materials will also be sponsoring scholarships worth S$1.5 million for the doctoral students.

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Shopping for a piece of heritage

Shophouses are an iconic part of Singapore’s built environment, reflecting our multi-cultural influences in their architecture – from Malay roof eaves to decorative Peranakan tiles to the Art Deco façade popular in 1950s’ architecture. Although many were lost during Singapore’s urban

development, those that remain today are governed by strict conservation rules and guidelines for restoration and adaptive reuse in a bid to preserve them.

The market for shophouses, though small due to their scarcity, is a lucrative one. They traditionally hold their value even during market downturns, and many investors are interested in owning a piece of heritage.

Based on URA Realis data, total transaction value of shophouses hit a historical high in the first quarter this year, topping the previous market peak in the first half of 2013. This was supported by one or two large transactions.

Buyers are drawn to invest in shophouses for a number of reasons, including their heritage value, location or unique charm of a specific property or distinctive architecture. Upgraded shophouses, or those with potential for further enhancement, also stand out to investors.

The typical entry yield of shophouses is in the range of 2 per cent to 3 per cent, depending on the balance lease or whether it is freehold.

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Three new hotels on Sentosa aimed at drawing more locals

Sentosa, one of the country’s most popular tourist destinations, is looking to court more Singapore residents, who make up just a third of its 19 million annual visitors.

Three new hotels will open on the resort island next year, offering more affordable staycation options and niche events.

Seeing an opportunity to seize the mid-tier market, the operator behind brands such as Oasia and Village decided to invest heavily in Sentosa and build three hotels on a 45,000 sq m compound off Palawan Beach, each catering to different segments of travellers.

A Village Hotel with about 600 rooms will cater to families and business travellers when it opens in the first quarter of next year, along with The Outpost Hotel, targeting adult guests.

The Barracks Hotel, which forms the compound’s upmarket offering, with 40 rooms housed in a conserved colonial building, will open in the third quarter of next year.

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Qantas to open second lounge at Changi Airport next year

Australian carrier Qantas will open a second lounge at Changi Airport next year for its top premium customers, in a multi-million-dollar investment to reaffirm its commitment to the Singapore market.

Located at Terminal 1 where the airline operates from, the new 1,000 sq m lounge for first class customers and top-tier frequent flyers will be ready by the end of next year. It will be able to accommodate 240 people, and will also be open to top-tier frequent flyers from partner airlines from the oneworld alliance group.

When it is ready, Qantas will be the only foreign airline to have a first-class lounge at Changi Airport.

Its existing business class lounge at Changi, which opened in 2013, will also be upgraded and expanded as part of ongoing improvements.

Singapore is Qantas’ largest hub outside Australia. The airline operates more than 50 return services to and from Changi Airport each week, making it one of the largest foreign airlines to operate out of the Singapore airport.

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Banning foreign buyers seen not solving NZ’s home shortage

Many foreigners are now banned from buying homes in New Zealand unless they are newly built apartments, as the Labour-led government fulfils an election promise that critics say could be popular but won’t solve the lack of affordable housing.

Critics say the Labour-led coalition’s answer to the problem – banning foreigners – won’t make a big enough difference in a market where economists reckon there is a shortage of around 100,000 homes.

Official figures suggest foreigners, mostly from China and neighbouring Australia, account for only 3 per cent of the homes bought nationwide, though the data does not capture property purchases made through trusts and corporate entities.

Australians and Singaporeans are exempt from the new ban. Resident visa holders in New Zealand are also exempted.

The government slightly relaxed terms of the ban in June, when it decided non-residents could still own up to 60 per cent of units in large, newly built apartment buildings, but not existing homes. Ultra-rich investors have been drawn to New Zealand, by the islands’ unspoilt, scenic landscape and clean environment.

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US existing home sales fall to slowest pace in September since 2015

Sales of previously owned US homes eased in September to the weakest pace in almost three years, a sign rising prices and mortgage costs are keeping potential buyers on the sidelines, recent data showed.

The sixth-straight monthly drop in sales, the longest streak since 2015, underscores what’s now a challenging time in the real estate market for buyers. The average mortgage rate for a 30-year fixed term has advanced nearly one percentage point this year, compared to a decline in 2017.

Rising prices are also keeping homes unaffordable, particularly for first-time buyers. Those price gains are fuelled by demand – homes stayed on the market for only 32 days on average, compared with 34 days a year earlier. There’s also a lack of supply, with inventories ticking up yet remaining tight.

Existing home sales account for about 90 per cent of the market and are calculated when a contract closes. The remainder of the market is made up by new home sales, which are considered a timelier indicator and are tabulated when contracts get signed.

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New home sales in US reach 2-year low while mortgage rates go up

Sales of new US single-family homes fell to a near two-year low in September and data for the prior three months was revised lower, the latest indications that rising mortgage rates and higher prices were sapping demand for housing.

Though housing accounts for a small share of gross domestic product, it has a bigger economic footprint.

That is raising concerns that a protracted housing market weakness could eventually spill over to the broader economy.

Sales tumbled 12 per cent in the West to a two-year low and plunged 40.6 per cent in the North- east to their lowest level since April 2015. They rose 6.9 per cent in the Midwest.

There were 327,000 new homes on the market in September, the most since January 2009 and up

2.8 per cent from August. Supply is, however, just over half of what it was at the peak of the housing market boom in 2006.

At September’s sales pace it would take 7.1 months to clear the supply of houses on the market, the most since March 2011, compared with 6.5 months in August.

Nearly two-thirds of the houses sold last month were either under construction or yet to be built.

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London’s housing market in prolonged slowdown

The London housing market is in bad shape – possibly even worse than it looks on paper. Official numbers show that prices in the capital only started to fall this year. But it feels much more brutal to real estate agents on the ground.

The market is already down about 15 per cent in central London compared with four years ago and it may fall another 7 per cent in the next two years.

The slowdown, triggered by a slew of new taxes and stretched affordability, has been compounded by Britain’s impending exit from the European Union, and now there’s the threat of a new levy on foreign buyers.

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By: Lee Sze Teck Head, Research





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