Singapore private home sales jump in September, but no recovery seen
Sales of private home by developers in Singapore jumped nearly 50% in September from a year earlier, aided by low interest rates and price slips, but analysts saw few signs of a recovery in the property market. Data from the Urban Redevelopment Authority (URA) showed that developers sold 509 units in September, up from 341 units in September 2015. The number of units sold was up 8.8% from 468 units sold in August. But analysts doubts the jump indicates a turnaround, as a slowdown in the trade-reliant economy is likely to hurt property demand. People are starting to think about the current situation, such as concerns about a recessionary environment, and whether layoffs could affect affordability of new homes. Singapore’s economy unexpectedly shrank in the third quarter from the previous three months, raising expectations that the central bank may ease its policy more. In the third quarter, private home prices fell at the fastest pace in seven years, a URA flash estimate showed in October. (Reuters)
Yishun 10 Cineplex
Frasers Centrepoint Trust acquires Yishun 10 cineplex retail lots for $37.8mil
Frasers Centrepoint Trust is buying all 10 strata-titled retail units at Yishun 10 Cinema Complex for a total purchase consideration of $37.75 million. Yishun 10 is located at 51 Yishun Central 1 which is next to Northpoint Shopping Centre. The retail podium at Yishun 10 comprises 10 strata-titled retail units located on the ground floor and the total nett lettable area is 10,413 square feet with an occupancy of 99.5% as at 30 September 2016. The independent aggregate valuation of the 10 units by Jones Lang LaSalle Property Consultants is $40 million as at end Sept. The tenure of retail units is 99 years starting April 1 1990. Dr Chew Tuan Chiong, CEO of Frasers Centrepoint Asset Management, said, “Yishun 10 is strategically located next to FCT’s Northpoint Shopping Centre. This acquisition aligns well with our longterm value creation strategy for Northpoint.” (The Edge Markets)
Marina Bay land gets record bid from Malaysia group
The first land sold in Singapore’s Marina Bay in nine years fetched a record price for a government land sale, with a Malaysian-led group bidding S$2.6 billion. The price is equivalent to S$1,689 per square foot of gross floor area, topping the S$1,409 per square foot paid in 2007 for the Asia Square Tower 1 site. “All the bids are higher than the market expectations of between S$1.3 billion and S$1.8 billion, which is a reflection of the steady restoration of investors’ confidence in the office market,” said Christine Li, director of research at Cushman & Wakefield Inc. According to the URA, the winning bid came from Wealthy Link Pte, which priced the 1.1 hectare (2.7 acre) plot at S$18,180 per square meter of gross floor area. Wealthy Link is owned by IOI Properties Group Bhd., part of a Malaysian conglomerate with interests in palm oil and property development. (Bloomberg)
Grab opportunity in S-REITs while markets are cautious
According to DBS, investors now have a chance to accumulate Singapore REITs while the market overshoots. The recent share price weakness of S-REITs was due to increased macro uncertainties, coupled with the fourth quarter traditionally being unhappy times for REIT investors. Uncertainties arising from Trump’s win in the US presidential election, potential rate hike in Dec and profit-taking as REITs remain ahead since the start of the year have also resulted in net outflows for Singapore REITs, with month-to-date prices coming down 5% to 10%. REITs fit the bill for investors looking for yields in the uncertain economic outlook. (The Edge Markets)
Spike in extension fees paid by developers
Developers have been forking out far more in extension fees this year than last for failing to sell all the units at their residential projects within a stipulated timeframe. As at Oct 27, the Government had collected about $58.2 million in fees this year, up from just $24.9 million collected in the whole of last year, said the Singapore Land Authority (SLA). The extension fees relate to Qualifying Certificate (QC) rules applying to foreign developers – including Singapore developers listed here but with foreign shareholders. Under the Residential Property Act, developers issued with a QC upon buying private residential land must finish building the project within five years of acquiring the site and sell all units within two years of obtaining a temporary occupation permit. Failing that, the developer pays extension charges pro-rated to the proportion of unsold units. Besides QC fees, developers also face the prospect of being hit by the additional buyer’s stamp duty (ABSD) requiring developers to build and sell all new units within five years of buying the site or pay a levy. Market watchers suggested tweaking QC rules by either extending the two-year sales period or allowing developers to lease unsold units while they try to sell them. (The Straits Times)
Home rents continue to decline
Rents for non-landed private homes and HDB flats have continued their slide last month, slipping by 0.4% and 0.5% respectively from September. Rents for condominiums and private apartments fell by 0.8% in the prime districts and 1.2% in the city fringes. In contrast, rents edged up 0.5% in the outlying districts. According to SRX Property, an estimated 3,686 units were rented last month from 3,637 units in September. Year on year, rental volume last month was 8.2 % higher in October last year. The HDB rental market also saw more leasings, with a 17.9% rise in the number of flats rented out last month. Year-on-year, rents in October were down by 4% from a year ago, and 11.3% off their peak in August 2013. (The Straits Times)
