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Lian Beng to ride wave of housing market recovery

Rio Casa, a 286-unit development has been sold collectively for $ 575 million to Oxley-Lian Beng Venture Pte Ltd.

Singapore-listed construction company Lian Beng Group has positioned itself to take advantage of the recovering private housing market.

According to a report published by CIMB Research on Thursday (18 January), the firm has amassed 1.9 million sq ft of residential landbank here. These include a 20 percent stake each in the redevelopment of two en bloc sites, namely Rio Casa and Serangoon Ville.

Moreover, Lian Beng is expected see greater contributions from its property development arm if prices of private residential properties in the city-state rise significantly.

In FY2017, its construction division accounted for 37 percent of its $ 281.7 million revenue. Property development made up 31 percent, while its concrete and asphalt business comprised 20 percent.

The construction firm is also anticipated to benefit from its 10 percent stake in the Gaobeidian Township project in China, where prices have more than doubled from 4,600 yuan psm in 2014 to 9,800 yuan psm last year, based on data from online property listing portal Anjuke.

In addition, the overall value of Lian Beng’s investment properties has surged from $ 66 million in FY2012 to $ 704 million in FY2017, generating cumulative fair value gains of $ 156 million during the period.

To further take advantage of the improving sentiment in Singapore’s private housing market, the company is considering to spin off its property development arm and list it on the SGX-Catalist board.

This move will not only allow the market to accurately gauge the value of its property development division, but will also enable this business to raise funds independently without using Lian Beng’s finances.

 

This article was edited by Keshia Faculin.

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Developer stocks may increase by up to 15 percent

After witnessing a good run in 2017 on expected property market recovery, developers who can turn anticipation to reality with higher selling prices and strong property sales will enjoy further re-rating, reported Business Times.

As such, analysts favour property counters that are supported by a robust line-up of new launches.

Derek Tan, senior vice-president for group equity research at DBS, expects developer stocks to increase by at least 10 to 15 percent.

“2018 is all about execution,” said Tan. “Developers will have to deliver on market expectations that the strong rebound in transaction volumes will continue in 2018, translating into strong take-up rates for upcoming new launches.”

JPMorgan property analyst Brandon Lee, who also expect a re-rating of some property stocks in 2018, believes that the risk of an immediate profit-taking is low considering that the property market is still in the nascent stage of a potential three-year upswing.

With this, most analysts see UOL Group and City Developments (CDL) as among the best large-cap proxies to ride the looming market ascent given their sizeable residential landbank in Singapore and decent exposure to the city-state’s office sector, which is also experiencing an upcycle.

DBS Group Research’s top picks include Frasers Centrepoint as well as small-cap developer Roxy-Pacific. Having land-banked ahead of its peers, the latter has seven freehold residential projects that are ready for launch in 2018.

RHB Research analyst Vijay Natarajan, on the other hand, favours the small-mid cap space in which stocks are trading at relatively higher discounts of between 30 and 50 percent.

“We believe the best way to play the recovery is a volume-driven play,” he said. “We expect the property transaction numbers (in primary and secondary markets) to remain strong irrespective of price movements as developers are bound by ABSD timelines to launch and sell their units. Thus, our top pick is APAC Realty.”

 

This article was edited by Keshia Faculin.

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S’pore start-up launches tiny homes

The units will be initially installed in Australia and listed on Airbnb, with rents ranging from $ 150 to $ 250. (Image source: Big Tiny) 

Local start-up Big Tiny has come up with an innovative idea of building small homes on wheels, which it plans to install in rural areas with breathtaking scenery.

At nearly the size of a shipping container, these homes can accommodate up to four persons and a has length of 4.8, 6.0 or 7.2 metres.

However, these houses are not yet available in Singapore. These will be initially installed in Australia, close to the Blue Mountains or Mornington Peninsula. Currently, the firm has two units down under, but plans to increase the number to 50 units by end-2018. It also intends to expand into New Zealand.

“Tiny house is part of an international movement where people are downsizing their houses to simplify their lives” and reduce resource consumption, said Adrian Chia, who founded the firm with his friends Jeff Yeo and Dave Ng.

These units will be listed on Airbnb by February, with rents ranging from $ 150 to $ 250, under a profit sharing scheme with land owners, particularly farmers.

Made from metal and recycled materials, each home is equipped with a bed, kitchenette and common space. It also comes with a heater and air-conditioning. Aside from having secure digital locks, each unit features a rainwater collection system and solar panels, while the waste that goes into the toilet is turned into compost energy.

Each unit, which costs around $ 80,000 to build, can generally withstand bad weather and can last up to 20 years.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Hollandia up for collective sale

The collective sale of Hollandia has an indicative price of $ 163.15 million ($ 1,515 psf ppr). (Photo: Savills)

The 48-unit Hollandia residential development located at the junction of Holland Road and Queensway in District 10 has been launched for collective sale, marketing agent Savills Singapore said on Wednesday (17 January).  

The owners are expecting offers in the range of $ 163.15 million, which translates to a land rate of $ 1,515 psf per plot ratio.

Built in the mid-1980s, the freehold property sits on a 53,505 sq ft site. The plot is zoned for residential use with a gross plot ratio of 1.6.

Subject to approvals from the relevant authorities, the site may be redeveloped into a 12-storey project with an allowable gross floor area of 107,688 sq ft. No development charge is payable.

Hollandia is located close to Holland Village MRT station as well as eateries at Dempsey Hill and Holland Village.

“It has been a while since a freehold redevelopment plot has been put up for sale in the Holland area,” said Suzie Mok, senior director of investment sales at Savills Singapore.

“Hollandia will draw interest as it is attractively positioned near Holland V. The widely anticipated sale of the mixed-use Government Land Sale Parcel right smack in the heart of Holland V and its forthcoming rejuvenation and transformation will be a key catalyst and potential booster of real estate values in the vicinity,” she added.

The tender for Hollandia will close on 28 February.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Private home sales hit 4-year high in 2017

Home sales in Singapore surged to 10,682 units for the whole of 2017.

Private home sales in Singapore surged 34 percent to 10,682 units for the whole of 2017 compared to 7,972 units during the previous year, according to initial estimates from the Urban Redevelopment Authority (URA).

As a result, take-up of private homes for the entire year reached its highest level since the 14,948 units sold in 2013, indicating that the city-state’s private property market is on the road to recovery.

“New private home sales in 2017 are the strongest in four years. This reflects the upbeat demand that is supporting recovery in the residential market that has also led to prices turning around since mid-2017,” said Ong Teck Hui, JLL’s national director of research and consultancy.

Meanwhile, sales of executive condominiums last year remained stable with 4,025 new units finding buyers versus the 3,999 ECs moved in 2016.

In particular, Qingjian Realty set the record for selling the most number of units last year, moving a total of 1,216 ECs and private homes. This is followed by Frasers Centrepoint (1,145 units), City Developments Limited (1,057 units), Hoi Hup Realty (845 units) and MCC Land (835 units).

The top-selling projects in 2017 include CEL Development’s Grandeur Park Residences with 607 units sold. This is followed by EL Development’s Parc Riviera (605 units), Frasers Centrepoint’s Seaside Residences (564 units), Hoi Hup Realty’s Hundred Palms Residences (531 units) and Qingjian Realty’s iNz Residence (480 units).

“The encouraging sales volume and the pickup in home prices in the second half of 2017 signalled that the private residential market has turned a corner and should continue to recover this year,” noted Tricia Song, Colliers International’s research head for Singapore.

“We estimate that about 25 major private non-landed projects with the potential to yield 15,000 to 16,000 units (excluding ECs) could be put on the market in 2018. We expect home prices to climb by five percent this year, barring any unforeseen events,” she added.

On the other hand, JLL’s Ong reckons that between 9,000 and 10,000 private units could be launched this year, in addition to around 2,000 remaining units in previously launched projects.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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