singapore property weekly issue 148
TRANSCRIPT
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Issue 148Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS
p2 4 Upside Down Strategies to Build
Property Wealth
p9 Singapore Property News This Week
p14 Resale Property Transactions
(March 5 March 11)
Welcome to the 148th edition of the
Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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By Gerald Tay (guest contributor)
Being "upside down" is usually a negative
term when applied to financial matters. But in
my book there are two positions when it
comes to wealth: right side up and broke, or
upside down and rich. Personally, I prefer
upside down. The best way to build and
maintain wealth, -- once considered the "least
likely to succeed"-- is by adopting
unconventionalstrategies you never think and
hear fromexpertswhen building wealth.
Here are four upside-down (unconventional)
strategies employed by rich
4 Upside Down Strategies to Build Property Wealth
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successful investors in upside-down order of
course.
Strategy #4: Focus on ONE New Emerging
Location and Segment
Strategy #3: Become aLow-CostKing
Strategy #2: Build Your Property Portfolio on
a Mountain of Cash
Strategy #1: Remodel Your Thoughts to
Grow Positive Wealth
Note: The upside-down strategies should be
geared towards preparing yourself financially for
a property downturn or an economic chaos. Stay
wealthy and accumulate more wealth when that
happens!
Strategy #4: Focus on ONE New EmergingLocation and Segment
Understand Your Market and FOCUSstart with
a single area of knowledge and avoid going all
over the place like ants on a hot plate. You will
find this knowledge builds upon itself quickly.
Once you have acquired knowledge, you will
have a tremendous advantage andyoullbe able
to determine where you should focus your
investment efforts and what types of property
you should be looking to invest in. Naturally you
will have insight into how much you can pay for a
property as well.
Students who become successful real estate
investors take the time to learn their specific
market and are handsomely rewarded for their
efforts. One would be wise to follow the path of
those who have previously succeeded, and
learning about your specific market is a path that
can quickly start paying dividends.
Your chances of survival are MUCH better if you
focus on ONE new emerging location and ONE
property segment at the right point on the S-
Curve.
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Strategy #3: Become aLow-CostKing
Save like a pauper in good times, spend like
a king in bad times!
Youll need to become lean and mean forthe great economic shakeout. Whatever cash
you do spend today should go to strategic
assets such as continuing education, training
and personal development.
Most investors and buyers are often over-leveraged when borrowing costs are low and
times are good. They plan their expenses as
if their income will always stay the same. And
they have too many liabilities that produce
nothing.
These will be the type of people slaughtered
during an economic shakeout.
Living on a shoe-string budget during
good times will help you accumulate more
wealth in bad times:
Identify the unnecessary expenses thatdrain your income dry. Cut those fixed costs
and variable overheads that produces nothing
for you (branded cars, bags and expensive
vacations?)
Dump all non-strategic assets such as an
over-priced car. This will give you a huge leg
ahead many others and create more cash to
fight your strategic war ahead.
Strategy #2: Build Your Property Portfolio
on a Mountain of Cash
Now, you may have heard some financial
expertsbabbling about the importance of
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why you must remain invested during a
period of high inflation to protect your
retirement nest egg. And how some property
expertsin times of euphoria, urge you to buy
now or regret later. They have no interest in
making you rich, only themselves! During a
downturn, deflation makes cash the most
valuable asset in your possession.
The deflationary spiral will push down asset
prices, drive up the cost of repaying debt andslaughter thousands of over-leveraged
investors.
Most investors will unwittingly commit suicide.
Theyll tighten theirbelts in a race to the
bottom. But this is good news for you
because youllbe able to scoop up strategicassets at fire-sale prices!
Thatswhy you need as much cash on hand
as possible to gobargain-huntingin a major
property correction, instead of irresistible-
greedin a hot market.
Things you should do NOW before any
downturn:-
Itsthe best time to borrow money during
a downturn! Never make major capital
expenditures today that affects your
borrowing capacity tomorrow, i.e. a upgrading
of home and car, unpaid credit card dues, etc.
Understand your propertys real profit
margin and how to correctly identify the profit
potential. You can use this knowledge to
identify the truevalueof your property.
Identify if your property is funnelling
money out of your pocket today and whyitsextremely important you dump it now.
Take advantage of economic woes to
acquire properties at steep discountsstart
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studying world history and economic trends.
Education starts today, and not during a
downturn!Only invest money during chaos,
and only invest in education during good
times.
And ifyouredoing one or more of the above,
youremuch more likely to generatepositive
wealth,become rich. and stay rich!
Strategy #1: RemodelYour Thoughts to
Grow Positive Wealth
Always Buy to Rent, Never Buy to Sell
InorOut isnt an investment strategy its
gambling with time.
Popping in and out of markets trying to catchthe wave at just the right moment rarely
works for the vast majority of investors.
Neither get in nor get out are investment
strategies; theyregambling on a moment in
time.
Invest in Yourself
This might be the single biggest obstacle on
your path to riches. Ifyourenot investing incontinuing education, training and personal
development, youre limiting your ability to
make more money in the future. Your own
earning powerrooted in your education and
job skills is the most valuable asset you'll
ever own, and it can't be wiped out in amarket crash.
Follow Rules, Not Herds
Following the herd works when you shop for a
product. A car or washing machine thats
performed well in the past is likely to excel inthe future. The opposite is often true in
finance.Whatshot today is likely to be cold
tomorrow, and vice versa.
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In fact, the herd tends to gather the most
strength right before the investment it is
chasing goes off a cliff.
These rules can be as simple as refusing tobuy or sell in response to news reports, or
making sure you follow your own rules no
matter what the market is doing. Resisting the
urge to follow the crowd can prevent you from
committing the sin of buying high and selling
low.
Positive Cash flow as Strategic Victory,
Not Capital Gains
Real estate, like business, is always about
cash flow. If you want the property as a rental
property, then you need to analyse theincome minus the expenses then minus the
debt service. I recommend that you have at
least a $1,000 per unit per month positive
cash flow after all expenses and debt service.
Now if the numbers are in the profit range
that you are looking for and/or have the ROE
(return on equity) that you want.make theoffer!
Eliminate Negativity
Many people self-limit. They get in their own
way sabotaging potential success BEFORE
theyve even tried. Its important to realizethat in everything we do, theres always a
chance thatwellfail. Facing that chance, and
embracing it, is not only courageousit also
gives us a fuller, more rewarding life.
A Final Note about Wealth
Personally, I believe even on the road to
wealth, it's important to have the right mind-
set and realize you're rich alreadywith
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family, friends, health, freedom and
appreciation for what you have already and
the gifts that are yet to come.
By guest contributor Gerald Tay, CEO ofCREI Academy Group, and a professional
real estate investor whose real estate
portfolio is now worth over $8 million and
generates a 6-figure sum in rental income
annually. He exposes widely-held property
investment myths that are highly ineffective increating wealth and prevent a comfortable
retirement for the ordinary investor.
http://www.crei-academy.com/http://propertymarketinsights.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/ -
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Asia Square Tower 2 also saw its 200,000 sq
ft of space being committed in the past six
months. Mizuho and Westpac signed up for
105,000 sq ft and 38,000 sq ft, while Mercuria
Energy Trading, Scor RE, Nikko AssetManagement and Platinum Equity Partners
signed up for 21,000 sq ft, 20,000 sq ft,
17,000 sq ft, and 4,000 sq ft respectively.
Tower 2 had an occupancy rate of 60 percent,
while it was 90 percent for Tower 1. Six whole
floors of 30,000 sq ft each are available inTower 2, and three floors of 35,000 sq ft each
are left in Tower 1, with monthly asking rent
standing at $18 psf.
(Source: Business Times)
7 00 Be a ch u p f o r sa le a s a h o t e l
After acquiring the boutique office block 700
Beach earlier this year, Master Contract
Services has decided to sell it on a
completion basis including 300 hotel rooms
and an assignment of a management contract
with the United Kingdom's Whitbread group
that would operate the hotel under the
Premier Inn brand. Master Contract wasreported to expect $1 million per room for the
hotel, or a $300 million in total. The total
development cost of the hotel could be $180-
$190 million. 700 Beach is between Golden
Mile Complex and Golden Mile Tower, and is
near Nicoll Highway MRT Station.
(Source: Business Times)
R B C a p it a l t o r e n o va t e t w o o f i t s a sse t s
RB Capital is reported to be renovating its
Gallery Hotel along Robertson Quay and the
retail podium of The Quayside, which costs
about $50-70 million to bring more energy
and excitement along the Singapore River.
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This would result in 100,000 sq ft of prime
lettable retail space, 80 food and beverage
outlets with the twopropertiesriver frontage
of more than 200 metres. The renovation is
expected to finish in early 2016. RBCapitals442-room Holiday Inn Express Clarke Quay
will also start trading soon. All three assets
total $1 billion for the property group.
(Source: Business Times)
Vi s i o n E x c h a n g e o n s a l e
Sim Lian Groups integrated development
Vision Exchange has been put on sale on
March 22. Vision Exchange has a 99-year
leasehold, 25-storey office tower with two
levels of food & beverage (F&B) space and
medical suites, and is understood to be one
of the few strata offices in Jurong Regional
Centre. It will have 740 units sized 183-1,690
sq ft upon its completion in 2018 with a total
gross floor area of about 690,000 sq ft. 640
out of the 740 units are office units, 47 are
F&B units and 53 are medical suites. In this
first phase, 250 units will be released with
average prices of $2,150 psf for office units,$4,498 psf for medical suites and F&B units.
(Source: Business Times)
Tw o w a r eh o u s e i n T am p i n e s o n s a l e
Architecture and interior design firm HC
Design has put two adjacent multi-storey
warehouses at 21 and 23 Tampines along
Street 92 on sale by expression of interest
(EOI). The two slots are on a Government
Land Sales (GLS) site, with a 30-year
leasehold tenure from the Urban
Redevelopment Authority since July 9, 2007
and will be zoned forBusiness2or heavier
industrial use. The total indicative price for
these two properties is about $70 million.
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They stand on a site of about 214,880 sq ft,
with an allowable gross plot ratio of 1.4, or
$235 psf ppr.
(Source: Business Times)
M ed i c a l s u i t e s t o a t tr a c t m o r e i n v e s t o r s
Medical suites are reported to attract more
and more interest from property investors,
and are now seen as alternative asset
classes. These suites are meant for medical
usage and traditionally sold mainly to doctors.
Some developers said that about 30 percent
of new suites which are being developed will
go to investors, as they are not affected by
cooling measures and are good investment
assets in the long run. Knight Frank and
Jones Lang LaSalle (JLL) estimated that
there are about 1,400 medical suites in
Singapore. Their prices have been increasing
recently. For instance, the average price of
medical suites at Mount Elizabeth Hospital
was about $7,100 psf in 2013, compared with
only $5,000 psf in 2010.
(Source: Business Times)
Bla ckst o n e ma y se l l St a r H u b G r e e n
Theworldslargest alternative asset manager
Blackstone is reported to consider the sale of
StarhubGreen in Ubi Avenue 1 which it
bought two years ago for SGD$215 million.
StarhubGreen is now mainly occupied by
StarHub Ltd, Singaporesbiggest broadband
Internet and cable TV operator for 220,000 sq
ft out of its total 405,000 sq ft, alongside
engineering services company Boustead
Singapore and independent non-hospital
based Quest Laboratories. Rents at industrial
properties were reported to increase 5
percent in Q4 2013, and rentals of multiple-
user factory and warehouse space also went
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up 3.5 percent and 5.4 percent from last year.
(Source: Business Times)
Ma p le t r e e I n d u st r ia l T r u st d e ve lo p s f a ci l i t y
f o r H P
Mapletree Industrial Trust (MIT) is reported to
be developing a built-to-suit (BTS) facility for
Hewlett-Packard Singapore. The facility will
be at MITs Telok Blangah Cluster property
and will cost $250 million including
construction and other costs but excluding the
book value. This will be MITs biggest BTS
development, which will reposition the
property to higher-value industrial use and
maximise current plot ratio as well as
strengthen MITshigh-tech building segment
and BTS track record.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Mar 5 Mar 11
NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
3 RIVER PLACE 1,582 2,500,000 1,580 99
3 ASCENTIA SKY 958 1,500,000 1,566 993 TANGLIN VIEW 1,152 1,600,000 1,389 99
4 CARIBBEAN AT KEPPEL BAY 1,270 1,860,000 1,464 99
5 REGENT PARK 1,141 1,275,000 1,117 99
5 REGENT PARK 807 850,000 1,053 99
8 KERRISDALE 1,281 1,438,888 1,123 99
10 TANGLIN PARK 1,604 2,750,000 1,715 FH
10 SIXTH AVENUE VILLE 2,486 3,231,800 1,300 FH
11 THE ARMADALE 1,033 1,580,000 1,529 FH
11 THOMSON 800 1,432 1,658,000 1,158 FH
12 OPAL SUITES 409 581,000 1,420 FH
12 THE VERVE 1,485 1,320,000 889 FH
14 SIMSVILLE 1,249 1,205,000 965 99
14 ATRIUM RESIDENCES 1,001 900,000 899 FH
14 ASTON MANSIONS 1,227 950,000 774 99
15 THE BELVEDERE 2,766 4,680,000 1,692 FH
15 MEYER RESIDENCE 904 1,425,000 1,576 FH
15 THE MAKENA 1,152 1,430,000 1,242 FH
15 EMERY POINT 1,324 1,525,000 1,152 FH
16 COSTA DEL SOL 1,755 2,225,000 1,268 99
18 NV RESIDENCES 743 870,000 1,171 99
19 SUMMER SCENT 1,711 1,650,000 964 999
19 PALM GROVE CONDOMINIUM 1,701 1,600,000 941 999
19 RIO VISTA 1,636 1,350,000 825 99
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
19 HOUGANG GREEN 1,141 858,000 752 99
19 REGENTVILLE 1,335 1,000,000 749 99
19 HOUGANG GREEN 1,141 850,000 745 99
19 RIO VISTA 1,679 1,220,000 727 99
20 BOONVIEW 646 880,000 1,363 FH
20 GRANDEUR 8 1,130 1,260,000 1,115 99
21 MAPLEWOODS 1,324 2,000,000 1,511 FH
21 SIGNATURE PARK 1,701 1,850,000 1,088 FH
21 CLEMENTI PARK 2,131 2,300,000 1,079 FH
21 PARC PALAIS 1,238 1,271,330 1,027 FH
21 PINE GROVE 1,679 1,420,000 846 99
22 PARC OASIS 1,076 998,000 927 99
22 IVORY HEIGHTS 1,701 1,320,000 776 100
23 GLENDALE PARK 1,313 1,425,000 1,085 FH
23 REGENT GROVE 926 780,000 843 99
23 PALM GARDENS 1,216 980,000 806 99
23 NORTHVALE 1,270 1,000,000 787 99
23 MAYSPRINGS 1,528 1,175,000 769 99
25 WOODGROVE CONDOMINIUM 2,486 1,460,000 587 99
27 THE ESTUARY 1,528 1,610,000 1,053 99
27 YISHUN SAPPHIRE 1,389 968,800 698 9 9
28 SUNRISE GARDENS 1,496 1,065,000 712 99