Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3>New private home sales fell 31% MoM in Sep21; Take-up rate remained robust at ~400%</h3><ul><li>Sales of new private homes fell again in Sep21 as developers delayed launches amid a sharp rise in Covid-19 cases and tighter safe-management measures. Developers sold 834 units in Sep21, down 31% MoM from 1,216 units in Aug21. On a YoY basis, sales were down 37% from 1,329 units in Sep20. Including ECs sold, developers moved 1,322 new homes last month, 2.0% lower MoM than in Aug21 and 6.4% lower YoY from Sep20</li></ul>

SingaporeNew private home sales fell 31% MoM in Sep21; Take-up rate remained robust at ~400%Sales of new private homes fell again in Sep21 as developers delayed launches amid a sharp rise in Covid-19 cases and tighter safe-management measures. Developers sold 834 units in Sep21, down 31% MoM from 1,216 units in Aug21. On a YoY basis, sales were down 37% from 1,329 units in Sep20. Including ECs sold, developers moved 1,322 new homes last month, 2.0% lower MoM than in Aug21 and 6.4% lower YoY from Sep20

<h2>Singapore</h2><h3>Private home prices climb 0.9% QoQ in 3Q21; Rising for 6th straight quarter</h3><p>Private home prices rose 0.9% QoQ and 7.3% YoY in 3Q21, marking an increase for the sixth consecutive quarter, according to URA. The price increase in 3Q21 was largely driven by non-landed homes in the Rest of Central Region (RCR), which rose by 2.2% QoQ. In the Core Central Region (CCR), prices fell 0.6%, while prices in the Outside Central Region (OCR) fell by 0.2%. Meanwhile, prices for landed properties rose 2.5% QoQ, compared to a 0.3% decline in the preceding quarter. It is expected that resale homes will continue seeing strong demand. For the full year, CBRE Research expects private home prices to rise by 6–8%, given the current market trajectory.</p>

SingaporePrivate home prices climb 0.9% QoQ in 3Q21; Rising for 6th straight quarterPrivate home prices rose 0.9% QoQ and 7.3% YoY in 3Q21, marking an increase for the sixth consecutive quarter, according to URA. The price increase in 3Q21 was largely driven by non-landed homes in the Rest of Central Region (RCR), which rose by 2.2% QoQ. In the Core Central Region (CCR), prices fell 0.6%, while prices in the Outside Central Region (OCR) fell by 0.2%. Meanwhile, prices for landed properties rose 2.5% QoQ, compared to a 0.3% decline in the preceding quarter. It is expected that resale homes will continue seeing strong demand. For the full year, CBRE Research expects private home prices to rise by 6–8%, given the current market trajectory.

<h2>Singapore</h2><h3>Office rents bottoming out in 3Q21, likely to head higher: Knight Frank, JLL</h3><ul><li>Office rents have turned a corner, bottoming out in 3Q21, according to Knight Frank. Prime-grade office rents in the Raffles Place/Marina Bay precinct grew for the first time since 4Q19, with rents rising by 0.2% QoQ to S$9.98psf per month. This came as the area's occupancy rates remained relatively stable, falling 0.7% QoQ to 93.6%, after 0.1%  growth in the previous quarter. Available pre-termination space also fell to about 76,000sqft in 3Q21, down 78.9% from 2Q21’s 360,000sqft</li><li>Growth in rents was also driven by Co-working operators, which expect demand for flexible work spaces to rise in the post-pandemic work environment. In Aug, co-working space providers The Executive Centre and The Great Room opened locations in the CBD spanning 38,736sqft and 37,000sqft, respectively</li><li>According to JLL, there is likely to be little or no office land releases in the CBD in the short to medium term. Guoco Midtown and Central Boulevard Towers are likely the last of fresh office injections on greenfield land within the CBD. Beyond that, we may see a reduction in office spaces as more older buildings are converted to mixed-use developments to take advantage of the CBD Incentive Scheme</li><li>Over the next few years, Grade-A office rents are expected to continue their climb, potentially gaining 23-30% by 2025. Demand for the upcoming supply of space from new office developments appears strong. For example, more than 90% of CapitaLand's upcoming integrated development CapitaSpring's space is already pre-committed or in advanced negotiations.</li></ul>

SingaporeOffice rents bottoming out in 3Q21, likely to head higher: Knight Frank, JLLOffice rents have turned a corner, bottoming out in 3Q21, according to Knight Frank. Prime-grade office rents in the Raffles Place/Marina Bay precinct grew for the first time since 4Q19, with rents rising by 0.2% QoQ to S$9.98psf per month. This came as the area's occupancy rates remained relatively stable, falling 0.7% QoQ to 93.6%, after 0.1%  growth in the previous quarter. Available pre-termination space also fell to about 76,000sqft in 3Q21, down 78.9% from 2Q21’s 360,000sqftGrowth in rents was also driven by Co-working operators, which expect demand for flexible work spaces to rise in the post-pandemic work environment. In Aug, co-working space providers The Executive Centre and The Great Room opened locations in the CBD spanning 38,736sqft and 37,000sqft, respectivelyAccording to JLL, there is likely to be little or no office land releases in the CBD in the short to medium term. Guoco Midtown and Central Boulevard Towers are likely the last of fresh office injections on greenfield land within the CBD. Beyond that, we may see a reduction in office spaces as more older buildings are converted to mixed-use developments to take advantage of the CBD Incentive SchemeOver the next few years, Grade-A office rents are expected to continue their climb, potentially gaining 23-30% by 2025. Demand for the upcoming supply of space from new office developments appears strong. For example, more than 90% of CapitaLand's upcoming integrated development CapitaSpring's space is already pre-committed or in advanced negotiations.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57" rel="noopener">City Developments (CIT SP)</a> sells Sincere stake for US$1; Raises stake in Shenzhen tech park</h3><ul><li>CIT has exited its investment in China-based Sincere Property Group for a consideration of US$1, while raising its stake in a technology park in Shenzhen. CIT has agreed to sell its 63.75% interest in HCP Chongqing Property Development (HCP Cayman) to an unrelated third party incorporated in the Republic of Seychelles. HCP Cayman holds an 80.01% equity interest in Sincere</li><li>The consideration was agreed upon after taking into account Sincere's current liquidity issues and its potential bankruptcy. For FY20, CIT had booked a S$1.78bn impairment for losses attributable to Sincere – effectively writing down 93% of its total investment in Sincere. Concurrently, CIT is increasing its stake in a company that owns 65% of Shenzhen Longgang Tusincere Tech Park. A Shenzhen Longgang District state-owned enterprise holds the remaining 35%</li></ul>

SingaporeCity Developments (CIT SP) sells Sincere stake for US$1; Raises stake in Shenzhen tech parkCIT has exited its investment in China-based Sincere Property Group for a consideration of US$1, while raising its stake in a technology park in Shenzhen. CIT has agreed to sell its 63.75% interest in HCP Chongqing Property Development (HCP Cayman) to an unrelated third party incorporated in the Republic of Seychelles. HCP Cayman holds an 80.01% equity interest in SincereThe consideration was agreed upon after taking into account Sincere's current liquidity issues and its potential bankruptcy. For FY20, CIT had booked a S$1.78bn impairment for losses attributable to Sincere – effectively writing down 93% of its total investment in Sincere. Concurrently, CIT is increasing its stake in a company that owns 65% of Shenzhen Longgang Tusincere Tech Park. A Shenzhen Longgang District state-owned enterprise holds the remaining 35%

Philippines

MREIT is a Philippines-based real estate investment trust (REIT) that owns and invests in income-producing commercial portfolios, primarily consisting of office, retail, and hotel properties. It focuses on leasing spaces to corporate tenants and managing its property portfolio, passing much of the rental income to shareholders. MREIT was incorporated in 2020 and is headquartered in Taguig City, Philippines.

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MREIT (MREIT PM)

ASEAN Builder's Scoop (18Oct21)

Sep21 new home sales take-up rate at ~400%; KDCREIT/M1 concluded network asset deal; Jervois Mansion sold out @ S$2,548psf; EAGLEHT US units...

SCCM Asia Research

ASEAN Builder's Scoop (4Oct21)

Private home prices rose for 6th straight quarters; HDB resale prices hit new record; MEG to infuse uptown assets to MREIT; DDMPR large POGO...

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ASEAN Builder's Scoop (30Sep21)

Office rents bottoming in 3Q21; IOIPG awarded Marina View site; CLI breaks ground Mandaue project; MREIT listing moved back; IHB begins RM380m...

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ASEAN Builder's Scoop (13Sep21)

CIT sells Sincere stake, raises stake in Shenzhen tech park; Hoi Hup/Sunway JV acquires Flynn Park enbloc; TSH focuses in SG, Indo, AUS; MREIT...

SCCM Asia Research

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