Bigger is Better

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.

Relief for Singapore Real Estate Market?

Singapore Housing

Relief is possibly on the way for the Singapore private property market. This year, the industry struggled due to falling prices and a general lack of enthusiasm. Ever since the government stepped in and enforced limits on financing, the Singapore market has rapidly begun to fall behind. And although buyer disinterest continues, developers are hopeful that 2016 will be more prosperous.

In the first six months of the year, real estate services JLL estimates only 3,496 private residential unit sold, a 21 percent decrease compared to last year. The lack of sales has nose-dived prices. Property prices are projected to reach a total decline of 6 percent by year’s end. Developers typically shy away from giving discounts any more than 15 percent of the initial asking price even in such a difficult situation. Fortunately, the upcoming general election has generated buzz around the potential end of government cooling measures in the near future.

Since 2009, the Singapore Government has placed restrictions on the housing market aimed at foreign demand in an attempt to stabilize market prices. Singaporeans currently have to pay an Additional Buyers Stamp Duty of 7 percent on their second home, and 10 percent on the third. Management companies are in hopes that the September or October general election will work in the favor of Singaporeans, rolling back additional fees.

In the current state of affairs, sellers aren’t the only ones feeling pressure. Renters currently face a dilemma due to a strong demand-supply imbalance. While 26,000 housing units are expected to be completed by year’s end, last year’s peak demand only hit just above 15,000. This year isn’t projected to be much different. This makes it difficult for renters to raise their tenants rent, hoping to keep up with the competition. A slow decline in the expatriate population further skews the issue.

With the continuos decline in rent, sellers and renters can only hope for a turn-around in this fall’s general election.

Ranking the World’s Best Real Estate Markets

A study recently published by the Association of Foreign Investors in Real Estate has ranked the most attractive real estate markets in the world for foreign investment. The yearly survey conducted by AFIRE is a polling of principles and senior executives at global real estate investment firms. Members of AFIRE have an estimated $2 trillion in real estate assets.

Anthony S Casey

The United States is an attractive destination for international real estate investment (photo: Getty Images)

The results for 2014 indicate the broad appeal of properties in the United States. Three of the top six cities ranked were in the United States. New York City is once again number one, having been beaten by London in 2013. San Francisco and Houston are the other US cities on the list.

The United States was ranked the number one country with opportunity for capital appreciation, beating out Spain and the UK in the second and third position, respectively.

Granted, this organization focuses primarily on United States investment. In fact, inbound investment in the US is the common bond between all of it’s members, so take these results with a grain of salt. However, the results of this latest survey do indicate that the economy of the United States is continuing to rebound and offers stable investment opportunities. With the strength of the USD at an 11 year high, many foreign investors are taking notice.