Real estate investment activity down 50% on-quarter in Q1

Despite the fact that first quarter real estate investment activities damaged heavily by Singapore government control measure, the REIT stocks still outshine others sectors as per my previous sharing. For those haven't view the previous post you can click on this links http://sharesdiscussion.blogspot.com/2012/04/1st-quarter-2012-property-offshore.html

Below article from channelnewsasia describe current property situation well enough. For those interested on REIT Stocks should take a look and digest. I will share my points on next post, stay tune.

Article transferred from channelnewsasia

SINGAPORE: Real estate investment activity in Singapore declined by 50 per cent in the first quarter of this year to S$3.7 billion.
This compared to the previous quarter where investment sales hit S$7.4 billion.
Among the reasons are investors remain mindful of rising business costs, global economic uncertainties and a weaker property market.
This is according to the latest DTZ Research report which highlights real estate investment activity in the first three months of this year.
The report added that the decline was due to a fall in both public and private sector investment sales.
In the public sector, DTZ said the lack of industrial sites launched for sale contributed to a fall in government sales from S$3.0 billion in fourth quarter 2011 to S$2.2 billion in first quarter 2012.
Meanwhile, sales of government land sites for residential development in first quarter 2012 was similar to that in fourth quarter 2011.
Within the private sector, investment deals in all major real estate segments fell, reflecting an anticipated softening of the market, said the report.
DTZ said despite the Additional Buyer's Stamp Duty (ABSD) cooling measures, collective sale sites continue to hit the market.
Six collective sales were concluded in the quarter at below S$200 million each.
The largest en bloc deal was the S$161.1 million sale of Tai Keng Court, transacted at 24 per cent higher than its asking price of S$130 million.
Meanwhile, local investors continue to dominate the investment market, accounting for about 80 per cent of investment deals in first quarter 2012.
The research added that foreign investors, mostly those within Asia, were drawn mainly to the residential sector.
While foreign investors are expected to wait for the right timing and opportunity to enter the market, the low interest-rate environment in Singapore will continue to encourage investment from local investors.
Real estate investment trusts (REITs) continued to be active in the quarter, especially the industrial REITs.
Ascendas REIT acquired four industrial buildings (CINTECH I, II, III, IV) at Science Park which are expected to generate a net property income yield of about 7.3 per cent.
Meanwhile, Cambridge Industrial Trust and Cache Logistics Trust made an acquisition each in first quarter 2012.

1st quarter 2012, Property & Offshore Marine Stocks Outperforming the Broader Market!

I was reading an article from reuters, it mentions that past week (30th March 2012) Singapore shares ended higher on Friday, with the main index clocking gains of around 14 percent for the first quarter, with property and offshore marine stocks outperforming the broader market.

This article delighted me as 90% of my portfolio come from these two sectors. I agree to the statement from the article "Kenneth Ng, CIMB's Singapore head of research, highlighted offshore marine as his top sector pick, due to persistently high oil prices, and also real estate investment trusts because of attractive dividend yields." Offshore marine is recovering, we can detect this from recent annoucement like offshore marine stocks rewarded with contract and so on. All these good sign encourages me to keep my eye on offshore marine stocks because they are relatively low price now. If nothing wrong, they can be a rising stars in near future! If base on risk reward ratio, they are at the condition of lower risk but higher potential for good return!

Singapore Property stocks always my fauvorite especially S-REITs. The stable price and attractive dividend yields make me unable to resist. REITs is a good balance for your investment porfolio because it can reduce the risks you are undertaking due to its defensive nature to stocks market.

If you look for the full article, please go to this links http://www.reuters.com/article/2012/03/30/stocksnews-singapore-close-idUSL3E8EU5D920120330

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Cambridge Industrial trust 1Q2011 results summary

Information sharing: CIT quoted from hardwarezone forum:

.Cambridge Industrial Trust (“CIT”) announces its unaudited first quarter financial results ended 31 March 2011.
Key highlights include:
• Fully underwritten and renounceable Rights Issue of approximately 132.1 million units raising gross proceeds of approximately S$56.7 million. Issue price of S$0.429 per Unit. Rights Issue was 2.51 times subscribed.
• Debt refinancing with S$320.0 million new term loan agreed (subject to loan documentation) with a syndicate of financial institutions. All-in debt cost is approx. 4.4% p.a.
• CIT increased its Acquisition Term Loan Facility from S$50.0 million to S$120.0 million. All-in debt cost is approx. 3.0% p.a.
• Distributable income for 1Q2011 was S$11.9 million, representing a 1.0% decrease from 4Q2010 distributable income of S$12.0 million.
Singapore, 28 April 2011 - Cambridge Industrial Trust Management Limited (“CITM”), the Manager (“Manager”) of CIT, announced that CIT registered gross revenue of S$19.3 million and a net property income (“NPI”) of S$16.6 million for its first quarter financial results ended 31 March 2011 (“1Q2011”).
The Trust has delivered a distribution per unit (“DPU”) of 1.001 cents to its Unitholders for 1Q2011, which will be payable to Unitholders on 14 June 2011.
1Q2011 DPU of 1.001 cents is 16.1% less than the DPU for 4Q2010. This is largely attributable to the distribution being diluted as a result of the recent Rights Issue. Unitholders who exercised their Rights, and as a result have been issued additional Units, will receive a distribution payment not affected by this dilution.
If the Rights Units had been excluded from the distribution calculation (as the capital raised did not contribute to the 1Q2011 earnings), the 1Q2011 DPU would have been 1.126 cents, which is 5.6% less than the previous quarter. This decrease is attributable to dilution from the equity raising in November 2010 and the time being taken to deploy the proceeds of this raise into income earning assets.

1Q result was bringing negative impact to Cambridge. CIT was 0.52cent before this announcement, but dropped to 0.5cent when investor learned about this news. I bought this counter at 0.5cent after the announcement. Many persons doubt that why I bought at this timing? Actually I did research and keep a close eye at this counter few months ago. According to my personal calculation, the fair value is 0.45 - 0.5 cent. Although this quarter is not doing well, but the overall performance is acceptable cum they just done their Right issues which collected S$56.7 million fund.

To me, Singapore property’s phenomenon is who has the cash, who win the profit! REIT needs to expand and acquire more properties to increase their revenue, income and distribution. Hence, now they collected funds, it is time to expand and grow! Work hard Cambridge!