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Replies to Unanswered Questions for REITs Symposium Panel

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Author: Marubozu

This article appears on Inside Invest.

https://www.insideinvest.com.sg/investing-trading/2019/05/27/replies-to-unanswered-questions-for-reits-symposium-panel/

Both of the panel discussions at REITs Symposium 2019 were so well-received that many of the good questions sent in by the audience had to be sacrificed due to time constraints.

In appreciation of your overwhelming support, however, we picked up some of your unanswered questions and reached out to Kenny Loh, one of our invited panellists of the day to share his views with us. Enjoy!

 

What drives a REIT’s long-term price appreciation? Increased capital inflows (investor interests) or appreciation of its underlying assets?

The share price of a REIT is driven by both the increase in DPU and also the appreciation of the NAV. The value of the property and rental income will go up in the long term because REIT investment is inflation hedged, as long as the REIT is well managed.

 

Properties for older REITs are ageing. Moving forward, will more money be required to upkeep properties, thus reducing distributions to unit holders?

It is true that REITs need to spend more maintenance costs to upkeep the aging properties. However, a good REIT manager has the options to do AEI to revitalise the building or sell the older building away and replace it with a newer one. All these actions may help the REIT to enhance its DPU.

 

Should we avoid REIT ETF because of the tax issues it attracts, in contrast to holding pure REITs?

Tax concessions have been extended to REIT ETFs, ensuring parity in tax treatments between investing in individual S-REITs and REIT ETFs. https://www.businesstimes.com.sg/stocks/singapore-budget-2018/singapore-budget-2018-reit-etfs-to-enjoy-tax-transparency

 

What are the key risks of investing in a REIT?

REIT is sensitive to economic cycles and interest cycle as the underlying asset is real estate. Real estate has its own investment cycle. Investors should not put 100% investment in real estate sectors or REITs. It is advisable for investors to diversify their investments into different asset classes with minimal correlation.

 

How to avoid value traps in REITs?

Investors should not make investment decisions purely by looking at the numbers. Qualitative analysis, Macro Economy Analysis and Risk Assessment are important analytical steps to avoid value traps.

 

What are some of the red flags that we, as retail investors should look out for when we do our homework/analysis on the suitable REITs to buy/hold?

Retail investors are always dependent on the free information available on the internet for research. Those data or news are lagging or old news. Investors need to do more qualitative analysis instead of focusing too much on the financial numbers which can be subjected to financial engineering. Most retail investors cannot differentiate between fact, opinion, noise or rumours in their analysis. The more they read, the more they are confused.

 

Given that REITs do have many restrictions, e.g.: 90% pay-out, 45% gearing and are relatively secured, do you advise using leverage through margin financing to enhance yield?

Leverage if used correctly can enhance the return. Vice versa, investors will face huge financial burden due to margin call when used wrongly. It is very important for investors to seek qualified and unbiased professional advice which is free from conflict of interest before doing any margin financing.

 

Kenny Loh is a Senior Consultant and REITs Specialist of a Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER. He has won multiple awards in financial planning and investment planning.

G-20 leaders face toxic brew of political instability, trade tensions and slowing global growth

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Author:

What makes this moment even more perilous is that world leaders come to the table with far less cohesiveness, nursing wounds from a series of trade skirmishes.

Gains in home prices shrink slightly, but S&P Case-Shiller shows some cities’ prices are heating up again

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Gains in home prices shrink slightly, but S&P Case-Shiller shows some cities’ prices are heating up again


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Author:

Home prices in April were 3.5% higher than a year earlier, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index.
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Three Little India conservation shophouses for sale at S$11m reserve price

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Author: Ravi Philemon

Three Little India conservation shophouses within heritage district is located close to an MRT Station

Cushman & Wakefield has been appointed as the marketing agent for the sale of three contiguous part two-storey, part two-storey with mezzanine conservation corner shophouses at 27, 29, 31 Dalhousie Lane.

three Little India conservation shophouses

Image credit: C&W

The indicative price for the three Little India conservation shophouses is S$11 million, which works out to be about $1,415 psf (per square foot) on total floor area.

The three Little India conservation are situated at the intersection of Dalhousie Lane and Madras Street, within the heritage district of “Little India Conservation Area” and zoned “Commercial” under the Master Plan 2014.

The three Little India conservation shophouses, with individual land titles, sit on a combined land area of about 3,870 sq ft and has an estimated total floor area of about 7,771 sq ft. They enjoy a prominent 50-metre dual frontages onto Dalhousie Lane and Madras Street. All three units are approved permanently for ‘restaurant’ use on the 1st floor and office use on the upper floors.

Little India is evolving into one of Singapore’s most vibrant districts with many new hotels, cafes, restaurants and bars setting foot into the area. In addition, upcoming developments such as the neighbouring Tekka Place and the future hotel development at Golden Wall Centre are expected to bring about exciting changes in terms of increased footfalls and new business concepts within the precinct.

The three Little India conservation shophouses will enjoy direct connectivity to Rochor MRT (DT13) after Tekka Place has been completed.

According to Mr Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, “These prized corner assets are strategically positioned and enjoy superb frontage and close proximity to the Rochor area while situated within the Little India Heritage area. It enjoys the best of both worlds. In addition, it is extremely rare for shophouses to be located so close to an MRT Station.

The shophouses will likely appeal to discerning investors seeking to reap the potential gains from rental upside and capital appreciation upon the completion of Tekka Place and future projects such as the Golden Wall Centre site and possibly the Sim Lim Square redevelopment upon its successful en-bloc sale.”

Subject to authorities’ approval, other possible uses for the three Little India conservation shophouses include backpacker’s hostel, fitness centre, retail shops, enrichment schools or co-working space.

Foreigners are eligible to purchase the three Little India conservation shophouses and Additional Buyer’s Stamp Duty (ABSD) is not applicable. The three Little India conservation shophouses will be sold with existing tenancies and the sale is conducted via an Expression of Interest exercise which closes on 23 July 2019 at 3 p.m.

With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.

The government’s swift response to curb home price growth in July last year, has tampered the prospects of residential properties as attractive investments. Investors looking for alternatives to park their money could divert their attention to shophouses as they are not subjected to this round of purchase or sales restrictions.

The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.

One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.

Mortgage Broker Singapore – Should I use one?

Properties such as the three Little India conservation shophouses may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.

How to Secure a Commercial Loan Quickly

Are you planning to capitalise on the uptrend of Singapore’s commercial sector but unsure of funding for investment? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.

Alternatively you can read more about the Best Commercial Loans in Singapore before deciding on your next purchase.  Our brokers have close links with the best lenders in town and can help you compare Singapore’s best commercial loans and settle for a loan package that best suits your commercial purchase needs.

Whether you are looking for a new commercial loan or for a refinancing package for your commercial properties, our brokers can help you get everything right from calculating mortgage repayment, comparing interest rates, all through to securing the best commercial loans which fits your profile. And the good thing is that all our services are free of charge. So it is all worth it to secure the best commercial loans through us.

You may contact us today for advice on a new commercial loan  or refinancing advice, or for Personal Finance advice.

You may also speak to our Panel of Property agents.

The post Three Little India conservation shophouses for sale at S$11m reserve price appeared first on iCompareLoan Resources.

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Final loan decision – Things to consider before putting pen to paper

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Author: Ravi Philemon

If you are thinking about getting personal loans, there are some things that you will want to consider before making a final loan decision.

By: Hitesh Khan/

While it’s true that a personal loan can be of great help for lots of people who are in a tight financial situation, you will need to learn the facts so you can make the best possible choice when making the final loan decision. Getting personal loans is not something that you will want to rush into.

final loan decisionA Personal Loan is basically like all other loans
You will find that a personal loan is just like all other types of loans in the sense that the borrower pays back the money in fixed instalments over a predetermined period of time. This period of time ranges from one to five years. These loans usually carry fixed interest rates but not always.

There are numerous types of personal loans
It’s also important to keep in mind that there are numerous types of personal loans that you will have to choose from. The two main types of personal loans are secured and unsecured. A secured personal loan requires some sort of collateral/property to be put down in the event that the person is unable to pay back the loan. Typically this collateral is a property, though it can be anything of enough value to cover the total cost of the loan.

An unsecured personal loan requires no collateral, so you won’t have to risk losing your home if you are unable to pay back the loan. You will want to remember that it can be difficult to get an unsecured loan if you have a low credit score. These loans typically have higher credit requirements due to the fact that there is no collateral required.

Either way, before making the final loan decision, you will want to make sure that you are able to pay back the money you borrow, regardless of which type of loan you choose.

Personal loans useful to get out of tough financial crunch

A Personal Loan may not be your best option
There are tons of different loan options, and a personal loan may not be the right one for you. It is important that you take the time to weigh your options so you can find the best one based on your specific borrowing needs. While it is true that personal loans typically come with lower interest rates than credit cards, you should still keep in mind that it’s not the only option you have. The more time you take to look into your borrowing options, the better off you are going to be.

Choose the right Lender
It is also imperative that you choose the right lender, because there are many different options that you are going to have. Before making the final loan decision, remember that banks are not the only ones giving out personal loans. By spending some time looking for the right lender, you will be able to get the best possible deal on the loan you need. Because there are so many lender options, you will definitely want to make a point of knowing what you have to choose from. Choosing the right lender can mean saving quite a bit of money in interest, so you will have to keep that in mind before getting personal loans.

Using payday loan is useful as a last resort after exploring all options

Don’t apply for too many loans
It’s never a good idea to apply for too many loans, because doing so can actually hurt your credit score. When you apply for a personal loan, the lender will check your credit. This is referred to as a “hard inquiry”, which can actually lower your credit score by a few points. The more places you apply, the more your credit score could be negatively affected. You will want to ask lenders about possible rates on your loan before you apply.

Check for any hidden or additional fees
Interest may not be the only cost that comes with your loan, so you will need to make sure that there aren’t any hidden or additional fees before you sign the contract and make everything official. The last thing you want to do is to take out a loan without knowing about all of the different fees that you are going to potentially incur.

The fact is that a personal loan can be of great help to those who are in financial straits, but you will have to be cautious before making the final loan decision. The more time you take to do the necessary research, the better off you will be in the end. There are many different things that need to be taken into consideration before applying for this type of loan. Those who consider all of these things will be better off for it. In the end you will be glad you did the research.

How to Secure Personal Loans Quickly

If you are in a financial crunch and are searching if personal loans useful to expand your business, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

Contact us for home loan or refinancing advice.

The post Final loan decision – Things to consider before putting pen to paper appeared first on iCompareLoan Resources.

Is Rich Dad Poor Dad Still Relevant to You for Financial Freedom? You Decide.

Click on Is Rich Dad Poor Dad Still Relevant to You for Financial Freedom? You Decide.
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https://www.drwealth.com/wp-content/uploads/cropped-drwealth-favicon-32×32.jpg Author: Irving Soh

First published around 2000s, Robert Kiyosaki’s Rich Dad Poor Dad quickly became an international best-seller. … Read more >>

65 Club Street, luxurious 999-year corner shophouse, for sale at $23m

Click on 65 Club Street, luxurious 999-year corner shophouse, for sale at $23m
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Author: Ravi Philemon

JLL, announced on June 24 that it is pleased to present an exclusive opportunity to acquire 65 Club Street – a charming corner three-storey conservation shophouse with an attic, nestled on the elevated cul-de-sac of Club Street. JLL, being the exclusive marketing agent of building, said 65 Club Street is located directly opposite the Chinese Weekly Entertainment Club, a private millionaire’s club with a history going back to 1891.

The 999-year heritage building occupies a land area of 2,083 sf and has a total floor area of approximately 5,640 sf. Under the 2014 Master Plan, 65 Club Street is zoned “Commercial” and is located within the Telok Ayer Conservation Area. The asset is currently owner-occupied and will be sold with vacant possession.

65 Club Street is a beautifully-restored shophouse which previously underwent an approximately $1.2 million refurbishment.

The interiors of 65 Club Street are tastefully designed with luxurious and impeccable finishes. Level 1 features a private entertainment area with a wine bar, dining area and a showroom while the upper floors are being used as office and art gallery space. Each floor has a column-free, regular and highly efficient layout with generous ceiling height. In the day, the shophouse is brightly-lit as light comes in through the full height French windows at the front and an airwell in the middle.

The offering is easily accessible and is within a short walk from Chinatown and Telok Ayer MRT station, and the upcoming Maxwell MRT station. Located within the Central Business District (CBD), the property is also easily accessible to other parts of Singapore via major expressways including the Marina Coastal Expressway (MCE), Ayer Rajah Expressway (AYE) and Central Expressway (CTE).

Having been an exclusive enclave for the affluent Straits Chinese community in the past, Club Street has today evolved to become one of Singapore’s trendiest F&B and lifestyle destinations that is popular amongst locals, expats and tourists. Notable establishments in the area include fancy boutique hotels and serviced apartments such as Ann Siang House and Scarlett Hotel; restaurants such as PS.Cafe, Merci Marcel, Little Creatures, Cugini, Les Buchons, Oxwell and Co and cocktail bars such as Operation Dagger, The Screening Room and Pandora’s Garden.

Mr Clemence Lee, Senior Director, Capital Markets, JLL said: “When the property was put up for sale previously, the vendor received a handful of offers but they fell short of the vendor’s expectation. The property was subsequently withdrawn from the market. With the limited number of quality shophouse offerings available in the market now, we feel that this is a good time to relaunch the property via a Public Tender Exercise to give buyers a chance to re-look at this outstanding opportunity.”

“With its prestigious Club Street address, superior 999-year tenure, exclusive elevated cul-de-sac location and luxurious interior finishes, 65 Club Street exudes both status and prestige. It is a perfect trophy asset which will appeal to a wide range of owner occupiers including family offices, wealth management companies or boutique financial firms amongst others. Given the reduction in price, we are confident that the asset will receive strong interest during the marketing exercise.”

The latest comparable transaction in the area is 64 Club Street which was brokered by JLL at $21.8 million ($3,880 psf on GFA) in September 2018.

The indicative guide price for 65 Club Street is in the region of $23 million.

As the property sits on land zoned for commercial use, foreigners are eligible to purchase the property. There is also no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the property.

The shophouse, 65 Club Street, will be marketed through a public tender exercise, which closes on Wednesday, 31st July 2019 at 3pm.

Mr Paul Ho, Chief Mortgage Consultant at iCompareLoan, said that all these action in the commercial property market shows that despite the property curbs introduced by the Government last year, Singapore is still attractive for investors.

“Although the property market exuberance has been curbed to some extent with the property cooling measures introduced last year, Singapore as a property market investment destination still remains among the top – shoulder to shoulder – with other cities in the world like London, New York, Shanghai and Sydney,” Mr Ho said.

“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region,” he added.

How to Secure a Commercial Loan Quickly

Are you planning to capitalise on the uptrend of Singapore’s commercial sector but unsure of funding for investment? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.

Alternatively you can read more about the Best Commercial Loans in Singapore before deciding on your next purchase.  Our brokers have close links with the best lenders in town and can help you compare Singapore’s best commercial loans and settle for a loan package that best suits your commercial purchase needs.

Whether you are looking for a new commercial loan or for a refinancing package for your commercial properties, our brokers can help you get everything right from calculating mortgage repayment, comparing interest rates, all through to securing the best commercial loans which fits your profile. And the good thing is that all our services are free of charge. So it is all worth it to secure the best commercial loans through us.

You may contact us today for advice on a new commercial loan  or refinancing advice, or for Personal Finance advice.

You may also speak to our Panel of Property agents.

The post 65 Club Street, luxurious 999-year corner shophouse, for sale at $23m appeared first on iCompareLoan Resources.