News Roundup

Our top Singapore and international property stories.

HDB resale volume up 27.8% amid price falls

Funeral services provider moves into property business

The brokerage was recently formed from the merger of two local players, MORE Property and Global Property Strategic Alliance (GPSA), with a combined base of around 800 property agents.

The company shared that the $2.75 million purchase price will be payable in two tranches, comprising $1.25 million in cash and $1.5 million in shares, within two months after the completion of the GAP acquisition.

Previously, APSIL had made two forays into the real estate agency business. The first involved a proposal to acquire 100 percent of Century 21 Hong Kong Limited, the sub-franchisor that grants the Century 21 franchise to licensed real estate brokers in Hong Kong and Macau. Once completed, the acquisition will provide APSIL with access to Century 21’s retail networks, as well as its operating and marketing systems.

Looking ahead, Choo stated that the new core business “will allow APSIL to benefit from a diversified global platform, moving it away from its single-country focus on Malaysia, and enabling it to explore exciting new opportunities for growth”.

MAS: Still too early to ease cooling measures

Property developers and homeowners hoping that the cooling measures will be relaxed soon will have to wait longer after the Monetary Authority of Singapore (MAS) said easing the policies would be premature.

In a recent report by Today Online, MAS managing director Ravi Menon said: “Property prices have softened somewhat, but like I said last year, in the context of the price increase that had occurred — 60 percent over three years — the softening we have seen is really not all that much. So, it’s still premature to consider removing any of the cooling measures that are in place.”

Century 21 chief executive Ku Swee Yong wasn’t surprised by Menon’s comments.“Based on the still-strong reaction from developers to Government Land Sale tenders and the decent response to some of the new launches, this is probably not the correct time to be easing curbs,” he noted.

Menon’s views mirror that of Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam and National Development Minister Khaw Boon Wan.Last October, Tharman stated that “prices have some distance to go in achieving a meaningful correction,” while Mr Khaw mentioned it was not the right time to ease the cooling measures, since there was still room for property prices to moderate.

Australian dollar falls below Singapore dollar

The Australian dollar weakened to below the S$1.00 level on Monday, 27 July, falling below parity against the Singapore dollar for the first time since 2009.According to Bloomberg data, the Australian dollar was trading at 99 Singapore cents at noon that day, not far from just above S$1.00 across Asia the previous week.The decline was attributed to slowing global demand for the country’s commodities exports in recent months. The Australian dollar has weakened against its Singapore counterpart by about eight percent since the start of the year, falling below parity for the first time in six years.Media reports quoted industry experts who said the Australian dollar could weaken further against the local currency over the coming months.

Shunfu Ville set to go en bloc

The owners of Shunfu Ville (pictured) in Marymount Road have reportedly secured the minimum consent required for the residential development to be launched for collective sale.A former HUDC estate that was privatised, Shunfu Ville sits on a 409,000 sq ft site with a balance lease term of around 70 years, reported The Business Times.The site houses three 16-storey towers and three low-rise blocks, with unit sizes ranging between 1,668 sq ft and 1,776 sq ft.The en bloc sale of the 358-unit development is being marketed by JLL. The owners controlling 80 percent of Shunfu Ville’s strata area and share value have agreed to the collective sale. They are expected to receive over $700 million from the sale, which works out to a unit land price within the low $800 psf ppr range, inclusive of two payments to be made by the buyer to the state.

One is a lease upgrading premium to top up the lease of the site to 99 years, while the other is a differential premium for developing a larger project on the site.

Zoned residential under the Urban Redevelopment Authority’s (URA) Master Plan 2014, the Shunfu Ville site has a plot ratio of 2.8. This means a new project could comprise 1,280 units with an average size of 850 sq ft.

Based on its reserve price, the owners stand to gain over 50 percent more compared to what they would have received from selling the units individually.

Industrial rents, prices on a downtrend: JTC

Prices and rents of industrial properties in Singapore have continued to moderate amidst the higher supply of industrial land and space released by the government in the past few years, according to JTC’s quarterly market report for Q2 2015.

During the said period, island-wide prices of industrial premises fell by 0.7 percent on a quarterly basis, and 0.9 percent year-on-year.

At the same time, overall rents of industrial properties in Singapore dipped 0.7 percent on a quarterly basis, and 2.7 percent from Q2 2014.

Rents for multi-user factories declined 1.2 percent from Q1 2015 and 3.1 percent year-on-year. Rents for single-user factories feel 0.5 percent quarter-on-quarter, but posted a rise of 1.2 percent over the previous period last year.

Looking ahead, around 1.6 million sqm of industrial space is projected to enter the market in 2H 2015, including 290,000 sqm of multi-user factory space.

By 2016, an additional 2.8 million sqm of industrial space is expected to come on-stream, including 348,000 sqm of business park space and 710,000 sqm of multi-user factory space.

With the large supply pipeline, industrialists will have adequate space to expand their operations in the coming years, said JTC. However, the upcoming stock would surpass the annual average demand of 1.1 million sqm in the last three years.

Maldives relaxes rules on foreign land ownership

Despite concerns of military expansion by China, lawmakers in the Maldives (pictured) have ratified the island nation’s legislation to allow foreigners to own land in perpetuity.According to AsiaOne, with 70 members for and 14 against, the new law paves the way for foreigners investing over US$1 billion to own land, provided 70 percent of the area is reclaimed from the Indian Ocean.The constitution prohibits foreigners from owning any part of Maldivian territory, allowing 99-year leases instead.Under the revisions, 10 percent of the Maldives’ existing 298 sq km territory will be given to investors in order to develop more reclaimed land.

Members of the opposition Maldivian Democratic Party (MDP) said the legislation would give foreign parties unprecedented access to operate within the Maldives. The party was divided on the bill, with 10 in favour and 10 against.

More calls to abolish DBSS

Some Members of Parliament (MPs) have renewed their calls for the Design, Build and Sell Scheme (DBSS) to be abolished or tweaked, due to the gray area of accountability, as well as low public confidence in project quality.

In a recent report by Today Online, Bishan-Toa Payoh GRC MP Hri Kumar Nair was quoted in a Facebook post as hoping the scheme would be permanently shelved. In 2011, the building of new DBSS flats was suspended, following public outcry over the high prices at Centrale 8 in Tampines.

While he acknowledged the intent behind the scheme – which is to bridge the gap between public and private housing – he said confusion could have arisen over the obligations of the HDB. “Because this is public housing, the expectation is that not only will HDB oversee the development, it’s supposed to work with the developer to resolve all defects. And because there is such an expectation, there is also disappointment when that does not happen.”

This comes after several MPs aired their concerns in Parliament over the role of HDB in resolving disputes relating to defects in DBSS projects. Some even questioned the scheme’s future, prompting Minister of State for National Development Desmond Lee to state that there is no need to rush into making a decision when market conditions may change.

			This article was first published in the print version The PropertyGuru News & Views. Download PDF of full print issues or read more stories now!