Commercial, Residential & Industrial Properties

Have been going round feeling the ground these couple of weeks for a few types of property I have a few findings.

1. Commercial(retail shops) is strong. Don't see many signs of weakness.
City-fringe/ Suburbs still highly sought after even though selling/rental prices are crazy. HDB shops are hotter than ever(probably due to the very limited supply).

2. Residential. Slowing. Maybe the inevitable rate hike will bring prices closer to earth.

3. Industrial. Dead. Numerous newly launched projects are struggling to find buyers. Those newly completed ones are struggling to find tenants. Investors now are offering carrots to tenants and willing to let out at insanely low prices. Did a quick calculation and realized that many investor owned units are no longer about making money, it is about managing losses.

4. Office- anyone can comment?

To a certain extent, residential seems more palatable as an investment as one can stay or eventually it be rented out if price is right. Industrial units are damn tricky. Got a friend who runs a business, he wants to rent a unit and is getting all the landlords to outbid each other for lowest rent. Shockingly low rent. Investors are stuck as tenants are harder to come by.

Pt 3. Businessman friend said a Woodlands indu unit he was looking. Landlord/investor drop 10% to get him to sign. Looking to sell too.

10% only?
From what I know rent for new Woodlands Industrial developments are dropping anything from 15-20% in terms of rental from a few months ago.
Rent is insanely low now. Compared to retail space in HDB suburbs(not shopping centres, shopping centres cost a whole lot more), rentals are around 8-10 times cheaper.
That means, for the same amount of money, you can either get the tiniest of retail space or a nice big modern industrial unit.

I am getting increasing number of sms and phone calls from agents who are my "friends".
There were the usual weekly numbers of calls/sms vs the increased calls/sms for past few weeks.

The name Iskandar kept popping up increasingly as well.

From URA site,

Release of 1st Quarter 2013 real estate statistics

STOCK & VACANCY AND SUPPLY IN THE PIPELINE AS AT END OF 1ST QUARTER 2013

Let's take a look at the grandfather S-reits (hi cap and very liquid) of the various property types: mall, office, industrial - chart below:

[Image: z?s=%5eSTI&t=3m&q=l&l=off&z=l&c=C38U.SI,...&region=US]

Areit (red line), an industrial reit, is clearly well underperforming the other property type reits in the past few weeks. Seems to bear out Big Toe's anecdotal evidence.

(14-06-2013, 01:45 PM)swakoo Wrote: Let's take a look at the grandfather S-reits (hi cap and very liquid) of the various property types: mall, office, industrial - chart below:

[Image: z?s=%5eSTI&t=3m&q=l&l=off&z=l&c=C38U.SI,...&region=US]

Areit (red line), an industrial reit, is clearly well underperforming the other property type reits in the past few weeks. Seems to bear out Big Toe's anecdotal evidence.

I'd have thought your chart confirms the characteristics for that 3 asset classes of REITs in terms of risk. From Low to High (added in Healthcare),

1. Healthcare
2. Retail
3. Office
4. Industrial

PS. Not sure where to place Hospitality, but likely between Office & Industrial.

(14-06-2013, 02:02 PM)KopiKat Wrote: I'd have thought your chart confirms the characteristics for that 3 asset classes of REITs in terms of risk. From Low to High (added in Healthcare),

1. Healthcare
2. Retail
3. Office
4. Industrial

PS. Not sure where to place Hospitality, but likely between Office & Industrial.

True too - added healthcare to the charts.

[Image: z?s=%5eSTI&t=3m&q=l&l=off&z=l&c=C38U.SI,...&region=US]

1. Healthcare - yellow
2. Retail - green, orange (partial)
3. Office - purple, orange (partial)
4. Industrial - red

(14-06-2013, 02:13 PM)swakoo Wrote:

(14-06-2013, 02:02 PM)KopiKat Wrote: I'd have thought your chart confirms the characteristics for that 3 asset classes of REITs in terms of risk. From Low to High (added in Healthcare),

1. Healthcare
2. Retail
3. Office
4. Industrial

PS. Not sure where to place Hospitality, but likely between Office & Industrial.

True too - added healthcare to the charts.

[Image: z?s=%5eSTI&t=3m&q=l&l=off&z=l&c=C38U.SI,...&region=US]

1. Healthcare - yellow
2. Retail - green, orange (partial)
3. Office - purple, orange (partial)
4. Industrial - red

From those listed, the order of biggest fall from peak to least fall should be in this order. (Using Lim&Tan online chart)

1. Ascendas (-19.5%)
2. Suntec (-19%)
3. CapitaMall (-14.5%)
4. PLife (-14%)
5. CapitaComm (-13.5%)

Why Suntec fall so much? And isn't Plife suppose to be the lowest risk?

(14-06-2013, 02:46 PM)NTL Wrote: From those listed, the order of biggest fall from peak to least fall should be in this order. (Using Lim&Tan online chart)

1. Ascendas (-19.5%)
2. Suntec (-19%)
3. CapitaMall (-14.5%)
4. PLife (-14%)
5. CapitaComm (-13.5%)

Why Suntec fall so much? And isn't Plife suppose to be the lowest risk?

These grandfather S-reits (apart from PLife) are very hi cap and liquid. When big funds are hot on any one particular of these reits, the peak can go very high. Hence if you make comparisons from their respective peaks, there could be some "distortion".