Category: Uncategorized

CLAR proposes to acquire DHL Indianapolis Logistics Centre for $150.3 mil; announces divestment of Jalan Buroh property

CapitaLand Ascendas REIT (CLAR) has recently announced its intention to acquire DHL Indianapolis Logistics Center, a top-quality logistics property in the USA, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million. This proposed acquisition is a strategic move that will not only strengthen CLAR’s portfolio but also boost its income stability and resilience. The property, which was independently valued at $156.7 million as at Jan 1, 2025, will be acquired at a 4.1% discount. The total acquisition cost, including fees and expenses, will be $153.4 million.

To fund this acquisition, the manager of CLAR intends to use a combination of internal resources, divestment proceeds, and/or existing debt facilities. The transaction is expected to be completed in 2022, and upon completion, DHL USA will enter into a long-term leaseback agreement for the entire property until December 2035, with options to renew for two additional five-year terms. This long lease term, combined with a built-in annual rent escalation of 3.5%, will provide a stable income stream for CLAR and improve the resilience of its portfolio.

The DHL Indianapolis Logistics Center is a fully occupied, single-storey logistics building with a gross floor area of 979,649 sq ft. It is located in Whiteland, a submarket in southeast Indianapolis, Indiana. This prime property is expected to increase the value of CLAR’s logistics assets under management (AUM) in the USA by 35.3% to approximately $587.5 million. With this acquisition, CLAR’s logistics footprint in the USA will expand to 20 properties, covering four cities and a total GFA of approximately 5.1 million sq ft.

William Tay, executive director and CEO of the manager, believes that this acquisition is a strategic fit for CLAR’s existing portfolio. He also states that this is CLAR’s first sale and leaseback acquisition in the USA, and it will increase the proportion of modern logistics assets in its portfolio to 42.3%. This property will further enhance CLAR’s resilient income stream and is expected to contribute positively to its long-term returns.

In addition to this latest acquisition in Indianapolis, CLAR’s logistics assets in the USA are situated in Kansas City, Chicago, and Charleston. The manager is confident that this acquisition, along with the divestment of the Jalan Buroh property, will further strengthen CLAR’s position as a leading logistics real estate investment trust in the region. The proposed acquisition is estimated to have a pro forma impact of approximately 0.019 Singapore cents on the distribution per unit (DPU) for the financial year ended Dec 31, 2023, representing a DPU accretion of 0.1%, assuming the acquisition was completed on Jan 1, 2023.

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The cityscape of Singapore is distinguishable by its towering skyscrapers and state-of-the-art facilities. These modern condos, strategically situated in desirable locations, offer a combination of opulence and convenience that appeals to both locals and foreigners. With a plethora of facilities like swimming pools, fitness centers, and top-notch security services, these condos provide a comfortable and enticing lifestyle for potential tenants and buyers. Additionally, investors can reap the benefits of higher rental returns and an increase in property value over time. Keep up-to-date with the latest developments by checking out New Condo Launches.…

Australia’s Wee Hur Holdings sells 7 PBSA assets to Greystar for $1.4 bil

Wee Hur Holdings has recently announced the sale of its portfolio of seven purpose-built student accommodation (PBSA) assets to Greystar. The transaction, which was made public on December 16, involves the sale of over 5,500 beds across several Australian cities for a purchase consideration of A$1.6 billion ($1.4 billion). Wee Hur will retain a 13% stake in the portfolio through its subsidiary, Wee Hur (Australia).

Investing in a condo in Singapore offers numerous advantages, with one of the most significant being the potential for impressive capital appreciation. As a major global business hub with a robust economy, Singapore has a consistent demand for real estate. This, along with its strategic location, has led to a consistent increase in property prices, particularly in prime areas. Savvy investors who enter the market at the right time and hold onto their condo for the long term can reap the benefits of considerable capital gains.

The group plans to use the net proceeds of approximately $320 million to support its strategic growth and reinvestment in the core business, as well as expansion into new areas such as alternative investments. The transaction is expected to be completed within the next six months, subject to Foreign Investment Review Board (FIRB) approvals for Greystar and consent from Wee Hur’s shareholders.

According to Wee Hur, the sale of its PBSA assets demonstrates the group’s resilience in navigating through challenging market conditions, including the impact of Covid-19 and greenfield developments. It also supports the group’s long-term strategy of diversifying its portfolio and positioning itself for sustainable growth across multiple sectors.

Goh Wee Ping, CEO of Wee Hur Capital, says that the group’s successful recapitalization with RECO in 2021/2022, amidst global uncertainty, has provided them with liquidity and certainty. The sale of the PBSA portfolio is yet another opportunity for the group to unlock maximum value for its stakeholders, he adds.

Wee Hur’s decision to sell its PBSA assets to Greystar comes after its successful foray into the sector in recent years. The group’s move towards alternative investments is in line with its efforts to diversify its portfolio and capitalize on emerging opportunities in the market. With this transaction, Wee Hur is well-positioned for sustainable growth and long-term success.…

On December 16, the joint venture developers Hoi Hup Realty and Sunway Developments successfully sold 137 units at the Novo Place executive condominium (EC) during the second round of balloting. This phase was exclusively open to second-timer buyers, individuals who have previously purchased a subsidized flat from the Housing and Development Board (HDB), either as a new flat or a resale flat.These 137 units represent 88.1% of the development, according to Mark Yip, CEO of Huttons Asia, bringing the total number of units sold at Novo Place to 444. Yip adds that this milestone was achieved within a month of its launch on November 16, making it the best-selling EC project of 2024.”This strong interest from second-timers reflects a desire to upgrade their lifestyle, with many buyers already residing in the West,” says Yip.Explore comprehensive data about all ECs, including the average profit at 5 and 10 years.AdvertisementYip also notes that all four-bedroom units at Novo Place have been sold out, highlighting the high demand for spacious homes. The showflat of a four-bedroom-plus-study unit at Novo Place, where all four-bedders have been sold, also supports this observation.Novo Place is located at Plantation Close in the new Tengah town, just a five-minute walk from Tengah Park MRT station on the Jurong Region Line (JRL). This provides convenient access to major employment hubs in the West such as the Jurong Lake District and Jurong Innovation District. Yip emphasizes that very few ECs offer such close proximity to an MRT station.Many buyers at Novo Place have also opted for the deferred payment scheme, allowing them to secure their desired unit and defer their home loan payments. According to Yip, this eases the financial burden for HDB upgraders who still have an outstanding loan on their current flat.Furthermore, due to their comparable quality and finishes to private condominiums but at a more affordable price, ECs are experiencing strong demand from HDB upgraders. Additionally, buyers at ECs enjoy upfront remission on the Additional Buyer’s Stamp Duty (ABSD).As of December 16, the average price of units sold at Novo Place is $1,656 per square foot. Data on the latest listings for Novo Place properties and the available units can also be found online.

The scarcity of land in Singapore is a major driving factor behind the widespread demand for condos in the country. As a small island nation experiencing rapid population growth, Singapore is facing limited land availability for development. This situation has resulted in strict land use policies and a competitive real estate market, where property prices continue to rise. As a result, investing in real estate, specifically in condos, has become a highly profitable venture, with the potential for significant capital appreciation. This trend is further amplified by the numerous Singapore projects that offer attractive opportunities for investors.…

According to data published by the Urban Redevelopment Authority (URA) on December 16th, developers sold a total of 2,557 new private homes in November. This figure represents a significant 246.5% increase from the 738 units sold in October and a 226% jump compared to the units sold in November 2023.

This surge marks the highest monthly developer sales since March 2013, when a total of 2,793 units (excluding ECs) were sold. Christine Sun, the chief researcher and strategist at OrangeTee Group, states that this is a result of the unprecedented number of project launches during the month. She adds that buyers were likely spurred to invest due to improved affordability of mortgages, which was a result of lower interest rates.

The five private residential projects launched in November were Chuan Park, Emerald of Katong, Nava Grove, The Collective at One Sophia, and Union Square Residences. These projects together accounted for a total of 2,871 new units being launched, marking a 438% increase from the previous month and a 196% increase compared to the same period last year.

In addition to these projects, the 504-unit Novo Place EC also commenced sales in November. Overall, the total number of new home sales surged by 277% month on month and 226% year on year to reach 2,891 units in November.

As of November, developers have sold an estimated 6,344 new units, which is marginally higher than the 6,317 units sold in the first 11 months of 2023. These sales were driven by the 6,627 units launched for sale by developers during that period, which was slightly lower than the 7,515 units launched in the same period last year.

In Singapore, the demand for condos remains high and one of the main contributing factors is the scarcity of land. As a small and densely populated nation, Singapore faces limited land availability for development. This has resulted in strict land use policies and a fiercely competitive real estate market, where property prices continue to rise. As a result, investing in real estate, specifically condos, has become a lucrative opportunity, with the potential for significant capital appreciation. With the addition of Singapore Projects, the demand for condos is expected to remain strong in the coming years.

Top-Selling Projects

Emerald of Katong, a 846-unit development by Sim Lian Group, was the best-selling project in November. The 99-year leasehold development is located in the Rest of Central Region (RCR) and saw 840 units being sold during the month at a median price of $2,627 psf. This makes it the best-selling project by units and percentage in 2024, according to Lee Sze Teck, senior director of data analytics at Huttons Asia.

Buyers were likely drawn to the project’s design and offerings, particularly those looking to live near the East Coast. Improved affordability of mortgages may also have incentivized buyers to invest in this city-fringe project, as lower interest rates have made mortgages more accessible, observes Sun.

Kingsford Group’s 916-unit Chuan Park, located on Lorong Chuan in the Outside Central Region (OCR), sold 721 units or 79% of its total units in November at a median price of $2,586 psf. This makes it the second best-selling project by number of units in that month.

Nava Grove, situated at Pine Grove in District 21, was the third best-selling project in November. Developed by MCL Land and Sinarmas Land, the 99-year leasehold development sold 382 units or 69% in November at a median price of $2,445 psf.

Sun believes the strong sales performance among new launches was fueled by pent-up demand and improved buyer sentiment following interest rate cuts in September. Lee adds that buying momentum has been gathering pace since the last quarter with robust response to project launches such as 8@BT and Norwood Grand. Demand was also redirected to the wider market as buyers who missed out on their choice unit in a particular project were prompted to quickly commit to a unit in other new or existing projects.

Emerald of Katong’s launch has also created a ripple effect on neighboring projects, such as Tembusu Grand and The Continuum, with an uptick in take-up. Looking ahead, a more muted December is anticipated due to the festive season, with only a couple of new launches planned.

However, SRI’s Mohan Sandrasegeran expects new home sales to regain momentum in January 2025 with the launch of The Orie by City Developments on Lorong 1 Toa Payoh. He adds that other launches expected in the first quarter of 2025 include Bagnall Haus, Aurea, and Aurelle of Tampines EC.

Sun believes the recent surge in sales is a temporary phenomenon, and she is cautiously optimistic of a better performance in the new sale market in 2025. Lee is projecting new private home sales to rebound to between 7,000 and 8,000 units in 2025, while prices are estimated to grow between 4% and 7%. Ultimately, the market will be driven by unsatisfied demand from 2024, which will flow over to the launches in 1Q2025.…

Rewritten: Condo investment has become a favored option for both local and foreign investors in Singapore, thanks to the country’s strong economy, stable political climate, and exceptional quality of life. The Singapore real estate market presents a wealth of opportunities, with condos being a popular choice for their convenience, amenities, and potential for lucrative returns. In this article, we will delve into the advantages, factors to keep in mind, and necessary steps for investing in a condo in Singapore. With its promising condo market, Singapore is truly a prime destination for property investment.

Hilton, a global hospitality giant, has recently opened its latest property in Beihai, China – the Hilton Garden Inn Beihai Jiafu. This marks a significant milestone for the company as it is their 100th Hilton Garden Inn in Greater China. The hotel, which boasts 199 rooms, is strategically located just 2 km away from Beihai High-Speed Railway Station and 6 km from Beihai Fucheng Airport. It also offers easy access to Beihai International Passenger Port, which is a mere 20-minute drive away.

Qian Jin, President of Hilton Greater China and Mongolia, expressed his excitement about this launch in a recent press release. He stated that the opening of Beihai Jiafu Hilton Garden Inn not only showcases the brand’s rapid growth, but also reaffirms their long-term commitment to the Chinese market. This sentiment is echoed by the fact that Hilton’s first Hilton Garden Inn in China was launched in Shenzhen in 2014, and since then, the brand has expanded to include Shanghai, Beijing, Chengdu, Guilin, and Aksu. In the coming years, Hilton Garden Inn plans to open more properties in popular tourist destinations like Zhangjiajie, Ordos, Huangshan, Shanwei, and Jinan.

Moreover, Hilton is also planning to introduce its new Hilton Garden Inn Gen A properties in China. This regional prototype is specifically designed to cater to the needs of Generation Alpha travelers in Greater China. In June, Hilton announced the launch of Hilton Garden Inn Gen A, with initial locations planned in Nanjing, Chengdu, Chengde, and Jinan. With this new offering, Hilton aims to further strengthen its position in the Asia Pacific region and enhance its appeal to a wider audience.

The company’s Senior Vice President of Development for Asia Pacific, Clarence Tan, has revealed that Hilton has over 200 Hilton Garden Inn properties in the pipeline in the region. These upcoming launches will contribute significantly to the brand’s expansion across the wider Asia Pacific region. Hilton is determined to double its mid-market presence in the region and aims to have over 1,000 hotels by 2025.…

CapitaLand Investment Limited (CLI) is expanding its presence in Australia with the recent acquisition of Wingate Group Holdings’ property and corporate credit investment management business for A$200 million ($173 million). This acquisition will also bring in an additional A$2.5 billion in funds under management (FUM) for CLI, increasing its total FUM in Australia by 30% to $8.3 billion, which accounts for around 7% of its total of $115 billion.

The demand for condominiums in Singapore has been on the rise, fueled by the country’s limited land availability. Due to its rapid population growth, Singapore has implemented strict land use policies, making it a challenge for developers to acquire land for construction. As a result, the real estate market has become highly competitive, with soaring property prices. This has sparked an interest in real estate investment, particularly in condos, as they offer the potential for significant capital appreciation. Additionally, the introduction of Singapore Projects has only intensified the demand for condos, as the supply of land for development remains scarce.

With a goal to reach $200 billion in FUM by 2028, CLI is committed to investing up to A$1 billion to grow its FUM in Australia. This marks a notable shift in focus for CLI, as the previous board and management had divested its key assets in Australia a decade ago to concentrate on the then faster-growing China and other overseas markets.

The announcement of the acquisition, made on Dec 16, confirms earlier reports by the Australian media last month. Wingate is recognized as one of the leading and largest private credit investment managers in Australia, having completed over 350 transactions worth more than A$20 billion.

CLI and Wingate have a pre-existing relationship, as they had recently closed a A$265 million Australia Credit Program (ACP) in September, which was established in partnership with Wingate. According to CLI, Wingate’s expertise can help broaden CLI’s proprietary deal origination networks, expand its access to institutional and private high-net-worth investors, and increase its geographical exposure to Australia.

Paul Tham, group CFO of CLI, states that there is potential for growth in other Asia Pacific markets such as South Korea, India, and Japan. He adds that as CLI continues to diversify geographically, Australia remains a focus market due to its significant potential for growth.

CLI also notes that the Australian private capital market has grown by 33% in the past 18 months, with assets under management reaching A$139 billion. By 2028, it is forecasted that there will be a commercial mortgage funding gap of A$146 billion. With the addition of Wingate, CLI will be able to diversify its portfolio of logistics, business parks, office, and lodging assets across nine cities in Australia.

As of Sept 30, CLI already manages 34 logistics properties and business parks, as well as four Grade A office buildings in Australia. It also has over 13,500 lodging units across more than 150 properties under its wholly-owned lodging unit, The Ascott.…

An expression of interest (EOI) is being held for a row of four freehold conservation shophouses located at 762, 764, 766 and 768 North Bridge Road, with a guide price of $37 million. These shophouses are situated on two plots of land, with an average land rate of $6,417 psf. The first plot consists of units 762 and 764, sharing a 2,891 sq ft plot with a built-up area of 4,917 sq ft, while the remaining units at 766 and 768 are on a 2,875 sq ft plot with a built-up area of 4,657 sq ft.

The marketing of these properties is exclusively handled by Isabel Sim, associate senior marketing director at Huttons Asia. According to Sim, there is potential to increase the usable area of each property by extending the rear for an outdoor terrace on the second floor, with an estimated increase of 1,000 sq ft per plot. The current tenants include a fitness retail shop, convenience store, and massage and reflexology services.

Being commercial properties, buyers are exempt from Additional Buyer’s Stamp Duty (ABSD), making these shophouses an attractive investment opportunity for both locals and foreigners. The properties offer potential for capital gains and stable rental yield due to their prime location and vibrant commercial environment in the historic Kampong Glam Conservation enclave.

The shophouses enjoy prominent frontage along North Bridge Road and are within walking distance of Bugis MRT Interchange and Nicoll Highway MRT Station. The area is also home to iconic landmarks such as Sultan Mosque and Malay Heritage Centre. The EOI exercise will close on January 10, 2025, at noon.

When contemplating an investment in a condo, it is crucial to also evaluate its potential rental yield. Rental yield refers to the annual rental income as a percentage of the property’s purchase price. In Singapore, condo rental yields can vary significantly based on factors such as location, property condition, and market demand. Generally, areas with high rental demand, such as those near business districts or educational institutions, tend to offer better rental yields. It is advisable to conduct thorough market research and seek guidance from real estate agents to gain valuable insights into the rental potential of a specific condo. To learn more about condo projects in Singapore, visit Singapore Projects.

For more information, interested parties can contact Isabel Sim at Huttons Asia. Shophouse transactions may have decreased in the third quarter of 2024, but there is still demand shown by uncaveated deals, according to Huttons Asia. Indonesian tycoon Bachtiar Karim’s family office Invictus Developments has also recently made a significant purchase in the shophouse market, buying lyf Ginza Tokyo for $93 million. Will shophouse transactions pick up in the second half of 2024? Time will tell.…

in Nov 18-25 weekThe freehold development Grange 1866 achieved a new record high for condos with a new psf-price of $3,393 psf. The two-bedroom unit of 818 sq ft fetched a staggering $2.78 million on November 27, narrowly edging out the previous record of $3,390 psf that was set in June last year. This impressive record has been achieved in the week between Nov 22 to 29.The former record was achieved in June last year when a 764 sq ft unit found a buyer for $2.59 million. A new psf-price high of $3,378 psf was also achieved by boutique condo Hill House in November. The latest peak of $1.53 million was set when a 452 sq ft, two-bedroom unit was sold on Nov 25. This sale surpassed the previous record of $3,267 psf and was achieved with a 3.4% difference.In third place, The Cosmopolitan, a 228-unit freehold condo located on Kim Seng Road, achieved a new psf-price high of $2,817 psf with the sale of a 1,324 sq ft, three-bedroom unit for $3.73 million on Nov 25. The sale was just 0.7% higher than the previous record. Interestingly, the sellers had purchased the unit for $2.58 million in November 2010, making a profit of about $1.15 million.Coming in at 4th and 5th place respectively are The Lumos and Leonie View, both freehold condos located in prime District 9. The Lumos topped out at $2,763 psf and Leonie View at $2,538 psf. Meanwhile, a new project, 26 Newton, made its first entry into the top ten with a new psf-price high of $2,365 psf.Overall, the top ten condos with the highest psf-price recorded in the week of Nov 22 to 29 showed a range of $2,365 to $3,393 psf. Freehold development Grange 1866, boutique condo Hill House and 14-floor The Cosmopolitan made up the podium, while The Lumos and Leonie View filled the fourth and fifth spot, respectively. Rounding out the top ten is new project 26 Newton, making its first appearance with a psf-price of $2,365.

The week of Nov 22-29 saw Grange 1866, a freehold development, topping the list of condos that hit a new peak psf-price. A 14th-floor unit sold for $2.78 million, setting a new record of $3,393 psf for the project. This narrowly edged out the previous record of $3,390 psf, achieved in June last year when a 764 sq ft unit changed hands for $2.59 million. Grange 1866 has seen 12 new sale transactions this year, with an average price of $3,181 psf. The most expensive unit sold in the development this year was a 1,012 sq ft, two-bedroom unit for $3.02 million, or $2,989 psf.

Expected to be completed by the end of 2025, Grange 1866 is a single 16-storey residential block located on Grange Road in prime District 10. It offers one- and two-bedroom apartments measuring between 527 and 1,012 sq ft.

In second place was Hill House, a boutique condo which also hit a new psf-price high for the second time in November. The latest record of $3,378 psf was set when a 452 sq ft, two-bedroom unit on the 8th floor was sold for $1.53 million on Nov 25. This surpassed the previous record of $3,267 psf by 3.4%. A total of 12 units have been sold by the developer this year, with an average price of $3,108 psf. The lowest-priced unit to sell this year was a 753 sq ft, three-bedroom unit for $2.21 million, or $2,934 psf.

Singapore’s cityscape boasts towering skyscrapers and cutting-edge infrastructure. Condos, situated in highly desirable locations, offer a fusion of opulence and convenience that appeals to both locals and foreigners. These residential complexes boast a plethora of facilities like pools, fitness centers, and vigilant security, elevating the standard of living and making them a desirable choice for renters and buyers alike. From an investor’s perspective, these attractive amenities equate to greater rental returns and an appreciating property value over time. With the addition of Condo, these urban living spaces become even more desirable for those seeking a luxurious and convenient lifestyle in Singapore.

The 999-year leasehold condo, expected to be completed in 2026, is located on Institution Hill, off River Valley Road, in prime District 9. It offers one- and two-bedroom units ranging in size from 431 to 452 sq ft, as well as three-bedroom units of 753 sq ft.

Rounding out the top three was The Cosmopolitan, which saw a new psf-price high of $2,817 psf with the sale of a 1,324 sq ft, three-bedroom unit for $3.73 million on Nov 25. This was just 0.7% higher than the previous record of $2,795 psf achieved in October last year.

The 26th-floor unit was purchased for $2.58 million in November 2010, resulting in a profit of approximately $1.15 million for the sellers.

Completed in 2008, The Cosmopolitan is a 228-unit freehold condo located on Kim Seng Road in prime District 9. It offers two-bedroom units of 1,141 sq ft, three-bedroom units spanning from 1,324 to 1,399 sq ft, and four-bedroom apartments of 1,679 sq ft.

With no new psf-price lows recorded during this period, The Lumos and Leonie View, both freehold condos in prime District 9, took the 4th and 5th spot with new psf-prices of $2,763 and $2,538, respectively. Meanwhile, new project 26 Newton made its first appearance in the top ten list with a new psf-price of $2,365.

Overall, the top ten condos with the highest psf-price recorded in the week of Nov 22 to 29 showed a range of $2,365 to $3,393 psf. Grange 1866, Hill House, and The Cosmopolitan took the top three spots, followed by The Lumos and Leonie View. New project 26 Newton completed the top ten with a psf-price of $2,365.…

The investment in a Singapore Condo has become a desirable option for both locals and foreign investors, thanks to the country’s robust economy, stable political climate, and exceptional quality of life. With a thriving real estate market, condos have emerged as a popular choice due to their strategic locations, convenient amenities, and potential for lucrative returns. In this piece, we will explore the benefits, important considerations, and necessary steps to take when investing in a condominium in Singapore.

Global real estate returns have seen a positive turnaround in 2Q2024 after facing cumulative losses for two years, indicating a promising recovery ahead. The rise in real estate values was fueled by low interest rates, which helped push global total returns up to 5.0% in 4Q2021 and an impressive 17.8% in 1Q2022, well above long-term averages.

However, the tightening cycle that followed led to a decline in values, bringing them back to 2018 levels on a global scale. We believe that the real estate market correction is almost complete, making it an opportune time for investors to reconsider this asset class. In the long term, real estate has shown to provide a stable income return and diversification benefits, and has the potential to generate strong returns during recovery periods. For example, after the early 90s recession, investors saw a 76% cumulative return over the next five years.

Additionally, evidence of a turnaround in valuations can be seen as global value losses slowed to 0.74% in 2Q2024, the lowest quarterly adjustment in the past two years. With offsetting income returns of 1.07%, global real estate achieved a positive 0.33% return, marking the first positive quarter since 2Q2022. Out of the 15 global markets in the MSCI Global Property Index, a majority saw write-ups in real estate values for the first time since 2Q2022. Eight markets, including Japan, South Korea, Singapore, Southern Europe, the Nordics, the Netherlands, France, and the UK experienced value increases from the prior quarter. Six markets saw value losses between 0.3% and 1.5%, all of which moderated from 1Q2024. Only Australia recorded a larger write-down in the second quarter than in the first, with a 4.2% correction bringing valuations more in line with its peers.

However, changes in capital values are only one component of real estate returns. Historically, the larger component of total returns has been income. This trend highlights the importance of income returns in driving overall performance in the real estate sector, underscoring the need for investors to consider both capital and income aspects when evaluating real estate investments.

Overall, income returns were generally stable and contributed to the positive total returns in 12 out of 15 countries in the second quarter. They were flat in the US (-0.09%), slightly negative in Ireland (–0.22%), and significantly negative in Australia (–3.07%). According to preliminary NCREIF ODCE index data (a capitalisation-weighted, gross-of-fee, time-weighted return index), US total returns are turning positive (0.25%) as values begin to rebound, and we expect this positive trajectory to continue.

Looking ahead, although fundraising for real estate investment shows signs of a potential rebound globally after two slow years, China and Japan could face challenges. In 3Q2024, China and Japan accounted for 27% and 15% of the US$7.5 billion ($10.04 billion) in cross-border inflows in Asia Pacific. Over half of Japan’s inflows came from global sources, while most of China’s came from within Asia Pacific, particularly Hong Kong and Singapore. However, both countries face high debt costs and other factors hindering a strong rebound in real estate capital inflows.

China has faced a property crisis since 2021, with risks such as price dislocation, geopolitical risk, and lack of liquidity hindering its market. The collapse of Evergrande has exacerbated this crisis, making it unlikely for interest in Chinese real estate from the West to return anytime soon. Additionally, the domestic property crisis persists, with high office vacancies, low rental yields, issues with failing developers, and government interventions. These factors have caused many European investors to avoid China and Hong Kong, regardless of potential returns.

Meanwhile, Japan remains an outlier in terms of interest rates, as major markets like the US have cut rates in an effort to boost property investment. In July, the Bank of Japan raised borrowing rates for the first time since 2007 to control inflation, reducing market attractiveness. This hike has prevented cap rate compression, meaning property prices have not risen, forcing real estate holders to rely on historically low-income yields. However, the senior housing sector remains an attractive niche due to Japan’s ageing population, with 29% of its population aged 65 or over. These assets are small, requiring an amalgamation play by investors.

On the other hand, Australia’s purpose-built student accommodation (PBSA) market has huge potential due to a significant housing shortage. Currently, only 20% of students in Melbourne and Sydney can be accommodated by universities, forcing the rest to seek private rentals. Additionally, real estate debt in Australia offers appealing risk-adjusted returns. There are funding gaps in construction, with many developers unable to secure bank financing. Sectors like logistics or PBSA offer long-term growth opportunities.

As the economy stabilises, both valuations and transaction market pricing suggest that the real estate market is likely near its bottom. However, additional risks are inevitable in an uncertain economic and geopolitical environment, but this applies to all asset classes. Over the past two years, the weight of real estate in investors’ portfolios has significantly decreased due to resetting real estate values and a record stock market. Today, investors may consider making fresh allocations to the private real estate market to achieve a strategic weighting.

In the long term, private real estate offers low correlations to other asset classes, strong income returns, and inflation-hedging potential. While there may be bumps in the road, we believe the market is beginning to look up, presenting excellent investment opportunities for savvy investors.…

An apartment at Island View, a freehold condominium in Pasir Panjang, has made headlines for being the most profitable resale deal of the week from November 26 to December 3. The unit, measuring 3,498 sq ft, was sold for $4.8 million ($1,372 per sq ft) on November 27. The seller had purchased the unit in September 2005 for $1.3 million ($372 psf), and after owning it for almost 19 years, made a remarkable profit of $3.5 million, representing a capital gain of 269% or an annualised profit of 14.2%.

This sale at Island View has now surpassed the previous record profit of $3.19 million from the sale of another 3,498 sq ft unit at the condo for $5.09 million ($1,455 psf) in February 2022. The seller of that unit had bought it in February 2007 for $1.9 million ($543 psf).

Island View, located on Jalan Mat Jambol in District 5, is a boutique development with 72 units of apartments measuring between 3,056 sq ft to 3,538 sq ft. Completed in 1984, this freehold condo consists of low-rise blocks and is within walking distance of the Pasir Panjang MRT station on the Circle Line.

In September of 2023, the owners of Island View attempted a collective sale by launching a tender with a guide price of $575 million. However, there were no bids and the condo was relisted for sale in March of this year at the same price but still failed to attract a buyer.

The second most profitable condo resale deal during the week took place at Cavenagh Court, where a unit measuring 1,862 sq ft on the sixth floor was sold for $3.65 million ($1,960 psf) on December 2. The owner of this unit had purchased it in April 2006 for $1.02 million ($548 psf) and made a gain of $2.63 million (258%) after owning it for almost 19 years.

This sale at Cavenagh Court has set a new record for the highest profit at the condo, surpassing the previous top gain of $2.15 million from the sale of another 1,862 sq ft unit on the fourth floor for $3.28 million ($1,761 psf) in April 2022. The seller of that unit had bought it in October 2007 for $1.13 million ($607 psf).

Cavenagh Court, a freehold condo on Cavenagh Road in the Newton area of District 9, was completed in 1971 and comprises 68 units ranging from 1,819 sq ft to 1,862 sq ft. It is conveniently located near the Orchard Road shopping belt.

Apart from the unit sold on December 2, there has been only one other resale transaction at Cavenagh Court this year, where a 1,840 sq ft unit on the sixth floor changed hands for $3.82 million ($2,074 psf). The seller had bought the unit for $2.88 million ($1,565 psf) in August 2019, making a gain of about $938,000.

In contrast, the sale of a duplex penthouse at The Berth By The Cove was the least profitable condo resale deal of the week. The four-bedroom apartment measuring 3,089 sq ft was sold for $3.6 million ($1,165 psf) on November 29. The previous owner had bought it for $5.53 million ($1,790 psf) in August 2007, resulting in a loss of $1.93 million (35%) after owning it for around 17 years.

This sale at The Berth By The Cove is the second most unprofitable transaction recorded at the condo. The biggest loss belongs to a 2,939 sq ft, four-bedroom unit that sold for $3.25 million ($1,106 psf) in February 2018, resulting in a loss of $2.39 million for the seller who had bought it in October 2011 for $5.64 million ($1,919 psf).

When making the decision to invest in a condominium, it is important to consider the cost of maintenance and management in addition to the initial purchase price. This is because condominiums often require a monthly maintenance fee to cover the upkeep of shared areas and amenities. While this may add to the overall cost of owning a condo, it also ensures that the property remains well-maintained and increases in value. To make condo ownership more manageable and less time-consuming, investors can enlist the help of a reliable property management company such as Singapore Projects Singapore Projects. They can assist with day-to-day tasks, making the investment a more effortless and passive one.

The Berth by the Cove, located on Ocean Drive in the Sentosa Cove residential enclave on Sentosa Island, is a freehold condo completed in 2006. It comprises 15 low-rise blocks with 200 units, and apartments range from two to four bedrooms between 1,012 sq ft to 2,325 sq ft. There are also four- and five-bedroom penthouses measuring 2,939 to 6,028 sq ft. There have been seven other resale transactions at this condo this year, with the units selling at prices ranging from $1,237 psf to $1,535 psf. Out of these, four were unprofitable with losses between $40,000 and $780,000, while the remaining three deals were profitable with gains of $200,000 to $430,000.…