Singapore Leading in Urban Innovation

Singapore Leading in Urban Innovation - Anthony S. Casey

Singapore, located on the southern tip of peninsular Malaysia, was recently named one of the principal cities leading the way in urban innovation, this is due to area’s ability to blossom and endure despite limited resources. Some of the metropolitan included on this list are Medellín, Colombia; Houston;  and Vancouver, British Columbia.

Singapore managed to find it’s way to the top of this list due to their ability to manage extremely limited resources. Despite setbacks, Singapore has been able to effectively promote education, maintain a government that’s reasonably free of corruption, and supports business. With very few resources to their name, Singapore has managed to be a financial, transport, and global commerce hub. The technology-ready island city-state frequently depends on the neighboring country Malaysia for its water, and imports nearly all of their food.  Also, approximately 30 percent of their population consist of non-permanent residents to stimulate the economy.

Singapore looks to the sea and sky to meet its water needs. Rainwater is treated to produce drinking water and water for flushing the toilet. Also, the two desalination plants can churn out 100 million gallons of water each day, using rainwater. There’s an ambitious wastewater reuse system in Singapore, which uses ultraviolet light as a disinfectant and advanced membrane filters. Though public water is sanitized to the point of it being safe for public consumption, it’s reserved for industry and air conditioning.

The bustling city is roughly the same size of New York City, and it’s considered to be “a city innovating under constraint.” More than other cities, Singapore was able to make significant use of limited space, and they’ve initiated “congestion pricing,” where drivers are charged when commuting into the business district during the bustling rush hour. Local government cap the number of vehicles that can be registered, and satellite devices track driving distances and adjusts tolls based on traffic. Motorists tend to pay quite a bit for commuting, but many have learned how to alleviate the financial burden of owning a car by doing their maintenance, utilizing carpooling services, and enrolling in gas station memberships.

Singapore’s ability to innovate has made the state attractive to tourists and real estate experts.

Anthony S Casey: Football Finance Note in 2017

football finance note anthony s casey singapore

 

Football Finance Note ETI (FFN) provides its investors the opportunity to overcome barriers to entry and participate in short-term receivables sales and other football finance transactions with professional football clubs. There is ultimate recourse to the relevant football league or supervisory bodies secured by pre-
paid claims. FFN does this within the long established, non-cyclical sports industry, with a focus on football TV-broadcasting rights. Receivables sales deals, secured by pre-paid broadcasting rights are an attractive investment, with a compelling risk/return profile, adding yield and diversification to any portfolio within a broad asset allocation strategy. The investment manager targets an annual yield of 6% plus in USD, with tightly managed duration risk and minimal correlation to other asset classes. Always within professional sport, such as English Premier League football, the individual deal sizes are in the range of USD 0.5m to USD 20m, with a typical deal duration of 6 to 24 months. The investment team has a deal track record in excess of 10 years and a deep network within the relevant industry.

January 2017 began with a flurry of activity, given the 4 week ‘Transfer Window’ in the EPL. A new record spend was achieved at GBP1.4b on EPL player transfers, with the other European Leagues closing the gap quickly. This should feed profitable deal flow through FFN with a number of clubs requesting funding.

We were presented with a rare short term, high margin deal, with EPL giving us pre-approval for the transaction, but as we were almost fully invested (~84%), we activated our first ‘capital call’ request to our investors. At the time of writing the deal is now 90% subscribed and we expect to complete the transaction in February.

 

FFN documentation has now been translated into Mandarin, at the request of a Chinese bank and ongoing negotiations should prove fruitful for our expansion into China in 2017.

FFN continues to attract positive media attention given the uncorrelated returns generated, with strong support from the internal staff at Swiss-Asia, we are happy to receive investors from both the Wealth Management & Fund Management teams, creating good capital raising momentum, that our deal pipeline can now match.

We wish you a happy and prosperous year of the Rooster!

 

Anthony S Casey: Football Financing in 2016

anthony s casey football video

The two Maestro’s of Manchester are Jose Mourinho and Pep Guardiola. But it’s likely we won’t see their battle royale until September when MU play MC.

Here’s what we expect for first day of the new season. It’s only 7 weeks away!

Let’s consider the money that’s involved in football.

Promotion and relegation in the English Premier League in 2016 is growing. The best English football had a four-year TV contract worth £44 million in 1988. The English Premier League will make £5.136 billion in national TV rights over the next three years nearly thirty years later. This doesn’t even include International rights!

The amount of money has made promotion to the English Premier League vital for teams in the second-tier English Championship. At the same time, it is more important than ever before those teams retain that top-flight status.

With the financial backing from TV, it’s extremely possible the English Premier League could see another Leicester City.

Three teams qualified for the English Premier League 2016-17 season via promotion: Burnley, Middlesbrough and Hull City. With the injection of money in the league, all three will have spending power like never before. Although the “big” clubs are moving to prevent that through player and managerial signings. The “fairer” split of TV money amongst Premier League teams – compared to those in other leagues in Europe – means the competition within the top-flight could be more even than ever, next term.

When Middlesbrough clinched promotion to the English Premier League in May, they pocketed £170m. A few weeks later, Hull City bagged £110m with their promotion playoff win over Sheffield Wednesday. Financial analyst firm Deloitte estimates that those numbers could rise to £290m if both sides retain their Premier League status next season. Pushing both clubs’ spending power far beyond what it was when they last appeared in the English Premier League. Those numbers for both sides can be a bit misleading, however. Both should see around £95m in 2016 from central distributions, increased commercial activities and gate receipts. The remainder of the money will be guaranteed Parachute Payments if they are relegated.

Burnley, who have yo-yoed between the Premier League and Championship in recent years, will see similar financial numbers. Burnley only last summer spent a transfer fee record £6m on striker Andre Gray. The money that bought Gray came from Parachute Payments used by Burnley after their 2015 relegation. This summer’s transfer window should see the claret and blue break that record.

While three clubs came up from the Championship, three now replace them from the Premier League. Newcastle United, Norwich City and Aston Villa will join the second division, but will do so with Parachute Payments in their back pockets. Despite the payments the clubs will receive, the biggest effect of relegation is missing out on the TV rights money. Championship teams collect a mere £3m compared to their Premier League rivals. Teams in the top-flight will make around £10m per game in 2016-17.

In addition to TV money, Aston Villa simply finished last in the wrong Premier League season. The Villains are guaranteed £66m for being bottom of the table. However, next season’s bottom dweller will see £100m go into their back accounts. It has truly never been a better time to be an English Premier League team thanks to next year’s TV deal going into effect.

Despite the relegated clubs being paid £65m in Parachute Payments, that figure is stretched out over four years. Norwich will get £25m next season, but that amount will be reduced in each subsequent year.

It is not just the players that are affected by relegation from the English Premier League. All three clubs are expected to cut jobs, and the wages for players and staff, if staff jobs are carried over. The price of being shut out of the Premier League is bigger than ever before, and it is set to continue growing.

 

Anthony S Casey on football investing. Read this original post on Linkedin and follow on Twitter.

 

 

Manulife Prices Singapore IPO at the Top

singapore marina bay

Singapore is expecting the country’s biggest equity fundraising in nearly two years in retail investment.

Manulife US Real Estate Management Pte. Ltd. has started taking orders from retail investors for its US$470 million initial public offering.

Manulife US REIT said it will sell 566 million units, of which 169.54 million are being taken up by select investors.

 Read more at the Wall Street Journal.

Bigger is Better

singapore marina bay

In Singapore, bigger is better. Its buildings are getting higher and higher. People are moving to the city from all over the region and all over the world. Australians and Chinese are ready to support the city’s growth. And it’s growing, up and out, as the investment in real estate proves.

Singapore real estate investment trusts (REITs have grown into a $48 billion market since they first hit the ground running in 2002. In fact, they are the sixth-largest determining market capitalisation, according Bloomberg data. More than half of the 35 REITs listed in Singapore have a market capitalization of less than $1 billion, the data show. The city-state’s largest REIT, with assets of $5.6 billion, is the CapitaLand Mall Trust.

The trust has a market capitalization of S$730.5 million ($536 million). It focuses on industrial real estate assets. Read more about the gritty numbers on Bloomberg.

Last year, Singapore Exchange Limited (SGX: S68) launched a number of new stock market indices.

SGX S-REIT 20 Index, a market capitalisation-weighted index measures the performance of the twenty biggest, most influential, and most tradable REITs in Singapore’s stock market.

The index registered 5.2% in total returns from the start of 2016 to April 6th of 2016.

The REIT-focused index is diversified according to sector. The largest group are the Retail REITs.  These account for nearly 30% of the index. Thie big retailREITs to know are CapitaLand Mall Trust (SGX: C38U) and Mapletree Commercial Trust (SGX: N21U). Also, the index last year had a dividend yield of 7.2% with the highest yielding being CDL Hospitality Trust (SGX: J85) and Frasers Commercial Trust (SGX: ND8U).

Why is this important to acknowledge?

REITs matter. They need to be part of the overall system, as REITs that excluded from the broader index are significantly disadvantaged. Now that markets are bifurcating, many investors will only consider REITs included in indexes. For good reason. In Singapore, look out for these leaders!

 

Family-Friendly in a Modernized Joo Chiat

Joo Chiat Singapore

Singapore is a historic center bristling with a legacy of trade and commerce, marked with modern architectural feats at its central skyline. However, in the quaint town of Joo Chiat on the east coast, tradition reigns supreme.

Here, the picturesque neighborhood is known for its diverse cuisine that follows strict traditional recipes (including hand-rolled spring rolls and the city’s oldest Peranakan restaurant), storing offering collectible wares, and shophouses awash in playful pastels; Joo Chiat is Singapore’s very first heritage town.

The New York Times recently reports one story of a family putting their own mark on one of these classic 1920’s Singapore shophouses.

With a child on the way, Michael and Katherin Puhaindran decided to settle into one of Joo Chiat’s highly-coveted 1920s shophouses. The architectural style is characterized by terra cotta roof tiles, French double-shuttered windows, and ornate garlands of sculpted plasterwork. The largely Chinese style was codified by Sir Stamford Raffles in the nation’s first town plan in the early 1840’s. Chinese settlers first brought the style to Singapore even earlier than that, making it the predominant architectural style throughout the rest of the region.

There once were streets similar the those of the community of Joo Chiat. However, they were destroyed in the second half of the twentieth century to make way for Singapore’s luxury high-rises and office buildings. According to Jane A. Peterson of the New York Times, over half of the seven thousand traditional Singapore homes are under some degree of conservation protection.

However, much like San Francisco’s Victorian rowhouses and NYC’s brownstones, these classic Singaporean homes are in high demand, but short supply. The Puhaindrans thought, why not? They embraced  the chance to buy one of these cherished homes when the opportunity arose

However, despite its architectural grandeur, the interior of the home did not suit the needs of an active, contemporary family.

The Puhaindrans found architectural remodeling professionals RT+Q. They designed a space that could retain the traditional style of the shophouse while overhauling the general flow of the space. By extending the back half of the property, they added space and made the the rooms more useful. The result was a new three-story structure that connected the house with an breezy, open courtyard. It’s a rectangular space that spans 72 feet deep with two additional floors and modern appliances.

To accommodate their lifestyle, the new space allows the family to host parties and most importantly, it provides their daughter with enough space to frolic.

The new design also provides an abundance of natural light, while keeping the bottom floors cool during the warm summer nights. Within the new back-half structure, elements such as closets and bathrooms are conveniently enclosed in filigree screens or glass enclosures.

The renovation costed the Puhaindrans $1.5 million Singapore dollars, but it has increased the home’s total cost to $4 million. This is certainly a well-spent investment for a modern rendition of a traditional treasure.

You can find this original post on AnthonySCasey.org. If you would like to read more on Singapore real estate, follow me on twitter @AnthonySCasey1.

Mumbai’s Luxurious Heights

south mumbai

South Mumbai

Mumbai is seeing a construction boom, as more and more high-rise skyscrapers begin to take shape in the city’s skyline. In fact, three of the world’s ten tallest residential towers currently being built are located in Mumbai. One project that is sure to capture the world’s attention is Omkar 1973, a supertall high rise residential complex that will house India’s elite. Managing director of Omkar Realtors & Developers Mr. Babulal Varma describes the complex as a “dream project” in one of the world’s most densely populated cities.

The complex will consist of three towers towering more than 900 feet high on the site of a former Mumbai slum. Demand seems to be quite high in a city that houses over 53,000 individuals per every square mile.

Mr. Varma spoke with the New York Times, “Everyone wants to get away from the crowd,” People want to get “away from the noise… away from the pollution.”

Omkar 1973 is designed for India’s wealthy elite, offering “sky villas,” a running track, a pet spa, and of course, an infinity pool. Homes in the complex are priced up to 3 billion rupees, ($44 million) for a 57,000-square-foot triplex. The higher you get in the complex, the higher the price.

Mumbai is the financial center of the world’s 9th largest economy by nominal GDP. Because India’s upper class elites are already accustomed to modern cities like New York and Singapore, the advantage of having comparable luxury buildings within the nation’s financial hub is quite appealing. The demand to pull away from the city’s dense crowds and noisy streets is high, making these apartments sure sells for real estate executives. As a testament of to their anticipated success, the world’s largest residential tower – World One – is actually being built in Mumbai. World One, which is scheduled to be completed in 2017, will stand at a towering 1,400 feet. According to the developer, three bedroom apartments in the building will start at a whopping 150 million Rupees ($2.23 million).

The new towers, including Omkar 1973 and World One, are symbols of so much more than India’s economic progression in the twenty-first century. A mumbai-based banker, Pavan Kaushal – who recently bought a four-bedroom apartment on the 22nd floor of World One –  commented on the meaning of buying one of these apartments. “You have people [here] who come from very well-to-do backgrounds and a high place professionally or business-wise, industry leaders, top doctors and lawyers, the crème de la crème of Bombay society. Anyone who lives in this building has, in a sense, arrived.”

Although it is markedly more expensive, time-consuming, and technically involved to build higher, the city’s shortage of available land has pushed developers to look to the skies. Despite height limits put into place decades ago, the country is becoming increasingly lenient to developers aiming higher. A sure sign of positive growth for the Indian economy.

Follow @AnthonySCasey1 on Twitter to stay up to date on the latest international real estate news and information.

The Impact of Singapore Real Estate

singapore real estate

There are 18 total real estate management and development firms in Singapore. The total market capitalisation of the group comes out to be $90 billion. Just how big is this overall? The combined $152 billion capitalisation of the Real Estate Sector compares to $97 billion for the three Singapore banks.

Over the past fifteen years the Real Estate Index generated nearly double the price gains of the Residential Urban

Redevelopment Authority Property Price Index.

Who are the leaders of the pack?

Hongkong Land Holdings Limited (SGX: H78), CapitaLand Limited (SGX: C31), Global Logistic Properties Ltd (SGX: MC0), and City Developments Limited (SGX: C09), are all heavily involved with the development of real estate in the city.

How strong is their influence? What should investors know?

The stocks that of the Real Estate subsectors comprise a mix of Singapore real estate and international real estate and combination of holders of local and international properties.

Income investors should know that the largest dividend among Singapore’s real estate management and development companies comes from Frasers Centrepoint Ltd (SGX: TQ5). Oxley Holdings are the top performing stock of the group. With a 66% total return over the past three years, this is a good stock to watch. On the other hand, blue chip companies such as City Developments and Global Logistic Properties recorded negative total returns of 36.2% and 33.4%, respectively, over the same timeframe.

With a market cap of $21 billion, Hong Kong Land Holdings leads the list. Founded in 1889, the Group owns and operates nearly 800,000 sq. m. of luxury retail property and office space in key Asian cities, primarily Hong Kong and Singapore. The group is incorporated in Bermuda with a standard listing on the London Stock Exchange as its primary listing.

CapitaLand is headquartered and listed in Singapore. It focuses Singapore and China, while identifying Malaysia, Indonesia, and Vietnam as new growth markets.

To learn more, read the Singapore Exchange Limited February 2016 report.

The Strength of Singapore’s Real Estate Market

civic district singapore

Singapore is a global city.  In a world tense with harrowing geopolitical tension and economic insecurity, it’s a great place to live. It’s not just a great place to live for one or two years while doing business, but it’s an ideal country to make a permanent home. This is something the country has learned as more people come looking at high-end real estate.

Despite the levying of duties intended to cool Singapore’s market, demand for luxury homes remains high. 

CNBC recently reported on this predicted growth. They spoke with Ong Chih Ching, executive chairman of KOP, in a recent article. She stated, “We are talking about 8 to 10 million [Singapore] dollar ($5.59 to 6.99 million) properties, so that’s a lot of money.”

This revenue leaves more than enough profit more than enough for renovation, according to Ong Chih Ching.

She estimates it will take Singapore another two or three years for the city to fully get on track with world markets. 

One company invested in luxury projects is the ten year old Singapore-based real estate and hospitality company KOP. Their portfolio of high-profile projects such as the Ritz Carlton Residences, Singapore’s Prudential Tower, Franklyn Hotels & Resorts, and Hamilton Scotts, to name a few.

Dubai Holdings was the major shareholder in KOP. When Ong made a management buyout of the 51 percent stake that the group held in KOP, she launched her visibility as one of the most powerful entrepreneurs in Asia.  She was even named one of 50 Power Business Women in Asia by Forbes in 2014.

With big dreams and the spirit to realize visions in real estate, Ong is a powerful leader in Singaporean real estate. Her next project is a colossal indoor winter resort in anticipated to open 2019 in Shanghai. With an estimated building cost of 3 billion yuan ($455.89 million), KOP is working with Chinese developers and city developers toward its completion. 

With KOP and Ong at the helm, luxury real estate in Asia is alive and well.

Big Hotel to Sell for $203m

Big-Hotel

A Hong Kong-based private equity group, Gaw Capital Partners (GCH), is slated to purchase the Singapore Big Hotel for $203 million. In the past, GCH has restored iconic hotels like the Hollywood Roosevelt in Los Angeles and The Strand in Yangon.

CGH directors Kenneth Gaw, Alan Lee Kam Hung, and Lee Wei Hsiung have been in the midst of acquiring Big Hotel since mid September. The 16-story, 308-room hotel offers accommodations for a range of visitors categorized into “hipster,” “rainmaker,” “explorer,” and “lover.”

According to the Straight Times, hotel investment in the region remains steady with an emphasis on larger, more mature markets. Singapore’s market has slowly started to strengthen as the Singdollar appreciates in value. Moreover, the CGH group has a positive reputation when it comes to high growth results. Since 2005, Gaw Capital has raised equity of US $5.22 billion and currently controls US $10.61 billion in asset management.

Although quite a large project, GCH has also been reported to have purchased Seattle’s tallest tower, the Columbia Centre for approximately $700 million as well as Hong Kong’s flagship InterContinental Hotel for US $938 million. They are expected to close later this year.