post

Blockchain powered action in property transaction may be headed here

Click on Blockchain powered action in property transaction may be headed here
for the source.
Author: Ravi Philemon

The Payment Services Act may propel more Blockchain powered action here

By: Phoenix Lee/

Blockchain technology, which first found burst into mainstream as a secure platform for cryptocurrency, is today being extended to transform industry sectors on a holistic ecosystem basis. Healthcare, banking and insurance are just three industries where blockchain technology has found wide acceptance because the technology provides transparency and accountability, which makes them particularly suitable for recording and managing ledgers.

blockchain powered

The Payment Services Act may spawn blockchain powered PropTech action in Singapore

Because it is secure by design, blockchain technology is expected to impact several sectors including healthcare, real estate, legal industry, security, government, education and, charities and aid organisations.

For example, many donors who contribute to the various causes in the charities sector worry if their donation reach their intended beneficiaries. Blockchain technology allow charities to create trust through smart contracts and online reputation management systems which can help donors trust that their money is going to the specified cause.
But besides disrupting industries, can blockchain technology create social impact? How can blockchain create change – what are the factors contributing to its adoption, what are the risks involved and what is the potential in this area for changemakers and the underserved population?

Benefiting the world with blockchain
Blockchain technology, with its transparent, immutable qualities aligns with a nonprofit business model. Using the technology can enable the reduction of global economic inequality, grant people first-time access to the financial system which has largely ignored or exploited them.

Blockchain Against Hunger: Harnessing Technology in Support of Syrian Refugees
U.N.’s World Food Programme is implementing a blockchain based system that allows refugees to get food with an iris scan, instead of relying on cash, credit, or vouchers, all of which can be stolen.

Samsung And South Korean Enterprises Enter The Blockchain powered ID Race
South Korean mobile giant, Samsung teams up with three financial services companies to launch a blockchain-based mobile identification system next year. Through its application, it removes individual consumers’ dependence on a central intermediary to verify their identity and manage their personal data when making online transactions.

Blockchain powered educational revolution
Blockchain technology can disrupt the education sector by providing an avenue to verify certificates, creating a one-stop education profile, getting students ready for exams, and by creating a hyperledger. Japanese electric company, Sony utilized IBM blockchain technology to consolidate an online depository of education records.

The Monetary Authority of Singapore (MAS) on Jan 28, announced the commencement of the Payment Services Act (PS Act). The new PS Act will enhance the regulatory framework for payment services in Singapore, strengthen consumer protection and promote confidence in the use of e-payments.

The Payment Services Act may spawn blockchain powered PropTech action in Singapore.

The Payment Services Act may pave the way for blockchain powered PropTech companies like Zweispace to make inroads into Singapore. Zweispace located in Tokyo, Silicon Valley, and Singapore, holds multiple patents around blockchain, started to tokenize the industry specific app utility, starting from real estate and legal professions for inheritance contract. The tokens are on BitcoinSV blockchain.

Zweispace started selling Zweicoin a real estate industry utility token in Japan, the coin can be consumed to run award winning PropTech apps. It can also be held as almost like stable token but most likely appreciating with more stuff coming in. PropTech apps includes, Robot Architect, “AutoCalc” a maximum profitable property planning with AI support, and Earthquake impact assessment app, “Namazu”, developed with experts from a largest construction company. Zweispace is awarded the best PropTech company in 2019, expanding its domain to construction and finance.

Surplus of the money generated by selling Zweicoin is stored in a bank account in Japan, and part of the money will be converted to real estate. The ownership record and rental revenue history will be stored in its patented real estate blockchain system.

Zweispace also announced Zweinote, the real estate backed security type token with a licensed entity, starting from real estate in Tokyo.

Legal profession tokens will be consumable at inheritance advisory system, a legal tech system with expert knowledge for traditional contract generation with cutting edge smart smartcontract capability. Simultaneously, Shintakukeiei.com, a Japanese media about trust legal contract, opened, targeting 7 million elders in aging Japan with 13 trillion-dollar financial assets stored in banks with less than 0.1% interest rate.  Members can receive consultation from member lawyers before legal tech generates trust contract on backend system, along with alternative, next generation Inheritance Smart Contract. Practical smart contracts will be introduced to financial industry starting from Japan.

This system with media site, will accelerate the contracting process, as Japanese government is encouraging regional banks to do so. This inheritance advisory system “Pitashin” was created with the collaboration of Zweispace and Yasuhiro Ogino, a Shiho-shoshi (solicitor), the expert of inheritance contract and legal tech director at Trust System Security Association. The system is powered by Smart Contract System on ZWEICHAIN, a blockchain Zweispace provides. ZWEICHAIN means two chain in German, a pair of private chain and public chain.

For the public chain, Zweispace picked BitcoinSV chain since 2019, the aggressively scaling original bitcoin protocol created and managed by nChain or Satoshi Nakamoto team. The “Legal Token” for this ecosystem, will be tokenized on BitcoinSV chain, same as Zweicoin on BitcoinSV.ispace uses for its system. The conversion rate can be checked at a new utility token site. Zweicoin can be purchased on site and is in talks with multiple exchanges for trading including one already integrated.

The post Blockchain powered action in property transaction may be headed here appeared first on iCompareLoan Resources.

post

Office rents in Southeast Asia remain reasonable

Click on Office rents in Southeast Asia remain reasonable
for the source.
Author: Ravi Philemon

SEA office rents remain reasonable compared to world’s most expensive office markets – Premium office occupancy costs in Singapore rank 14th worldwide, driven by technology firms and traditional banking and finance sectors

SEA Office Rents Rank among World’s Top

SEA office rents

SEA office rents remain reasonable compared to world’s most expensive office markets (Image credit: Pixabay)

Five Southeast Asian cities rank in the world’s top 86 most expensive premium office rental markets, according to the fifth edition of JLL’s Premium Office Rent Tracker (PORT).

In this fifth edition of JLL’s Premium Office Rent Tracker (PORT), JLL compares like-for-like occupation costs across 86 major office markets in 73 cities. PORT comprises the key elements of occupancy costs – net effective rent, service charges and government tax on rent – all standardised to enable true international comparisons. While only a fraction of a city’s corporate base will pay premium rents, PORT provides a useful barometer of relative costs.

The report, which compares occupancy costs for premium office buildings across the world’s leading real estate markets, reveals that Singapore holds the 14th spot worldwide, with net effective rents and occupancy costs running US$117 per year per square foot. That is slightly more than half the premium rents in Hong Kong’s Central district, the most expensive submarket.

KEY HIGHLIGHTS OF SEA OFFICE RENTS

  • Occupancy costs continue to increase for premium offices
    Occupancy costs for premium buildings have continued to rise in major office markets over the past year, despite many markets being in a late-cycle phase. Costs have grown by an average of around 4% in U.S. dollar terms during 2018.
  • Supply is on the rise – but vacancy remains low
    Globally, the supply of premium space is gradually expanding and, while there is now greater occupier choice, premium space is still not in abundance. Among the top office markets, the overall vacancy rate remains in the low single digits – and as tight as 1.5% in Tokyo CBD, 2.7% in Berlin and 3.2% in Beijing.
  • Rental growth set to decelerate in 2019
    Growth in occupation costs is likely to slow down in 2019 as new supply comes through; however, while rental growth is expected to decelerate, there are very few major markets where a downward correction is projected for 2019. In fact, the delivery of new premium buildings will set fresh rental benchmarks in several markets.
  • Affordability is still a concern as corporates look for alternatives
    Affordability continues to be a concern, particularly in the top tier of markets such as Hong Kong, New York and London, although considerable discounts can still be found in other well-located business districts within these cities. More affordable cities are also attracting significant corporate interest, including in Europe (e.g. Amsterdam, Berlin and Warsaw), Southeast Asia (e.g. Ho Chi Minh City and Manila) and select secondary markets in the U.S. (e.g. Dallas and Atlanta).

Financial services drives premium rents
The banking and financial services industry continues to be the main driving force of premium office rents, particularly in the ‘high-end’ and ‘mid-level’ markets. In more affordable ‘value’ markets, legal, technology, professional and business services and retail are playing a more important role.

“Corporate occupiers are seeking to consolidate and streamline their portfolios in strategic locations. There is a growing recognition of the role that real estate plays in talent attraction and retention and innovation and collaboration, as well as the importance of transport connectivity, local amenities and the quality of digital infrastructure.

User experience now has a central role in the design of new office environments. There is a shift towards increased flexibility and choice over how and where employees work, while cutting-edge technologies, such as virtual
and augmented reality, are being integrated. High-quality services, ranging from food and beverage offers to recreation spaces and gyms, are becoming standard features in premium locations, as employee well-being moves to the core of occupier concerns.”

SEA office rents

The office rents in the other five ranked Southeast Asian cities were considerably less expensive as well, including Ho Chi Minh City (38th, $78/sq ft), Jakarta (55th, $60 sq ft), Manila (66th, $54/sq ft), Bangkok (77th, $46/sq ft) and Kuala Lumpur (85th, $30/sq ft).

While the banking, financial industry sectors continue to be the major occupiers of premium office space globally, technology firms – in particular, online platforms – are playing a greater role in propelling demand for premium office space. Based on Singapore Economic Development Board’s statistics, 80 of the top 100 global tech companies, and 4,000 over home-grown and international start-ups from around the world have established their operations in Singapore. These include internet companies Google, Facebook and LinkedIn, new economy firms engaged in e-commerce or online businesses such as Shopee, Razer and Grab, as well as technology hardware manufacturers like Acer, Apple, Dell and Siemens.

SEA Office Rents in Tracked Markets

The average total occupancy costs of the five tracked markets in Southeast Asia are as follows:

Market Total occupancy cost (USD, sq ft/yr)
14 Singapore $117
38 Ho Chi Minh City $78
55 Jakarta $60
66 Manila $54
77 Bangkok $46
85 Kuala Lumpur $30

Chris Archibold, Head of Leasing, JLL Singapore says: “Tech firms have been prioritising Singapore as a key hub due to the government’s supportive policies and the conducive business environment here. The smart nation digitalization plans have also helped to fuel the growth of this sector. Though some of the occupational demand created is going to business park locations, the sector has also been a significant driver of grade A office space due to the need to attract and retain top talent.”

Other SEA Office Rents may Pose Challenge to Singapore

Other gateway cities in Southeast Asia, including Jakarta and Ho Chi Minh City, are now competing with Singapore to become the next Silicon Valley. Specifically, their fast-growing tech start-up ecosystems are diverting some of the attention of venture capital and private equity investors from Singapore. They may eventually challenge Singapore for its position as Asia’s investment and innovation hub.

The post Office rents in Southeast Asia remain reasonable appeared first on iCompareLoan Resources.

post

Fragile retail market braces for near-term risks amid Covid-19 outbreak

Click on Fragile retail market braces for near-term risks amid Covid-19 outbreak
for the source.
Author: Ravi Philemon

Coronavirus outbreak poses near-term risk to still fragile retail market; industrial property sector braves economic headwinds

  • Rents are bottoming and supply pipeline is easing but fragile retail market remains vulnerable
  • Despite fragile retail market, retail property investment sales hit 10-year high in 2019 at SGD4.1 billion
  • Warehouse and factory rents remained under pressure while that of business parks rose in the second half of 2019
  • Industrial property outlook set to be two-tiered, with business parks and higher specification buildings outperforming older industrial facilities

Colliers International on Feb 13 published two research reports which examine the market performance of the fragile retail market and industrial property sector in the second half of 2019 (H2 2019) and its projections for both sectors in 2020.

Colliers Research notes that both the retail and industrial property markets showed signs of bottoming and will likely continue to stabilise into 2020. However, downside risks persist, and any recovery will likely be marginal, particularly for the retail property market which remains vulnerable.

fragile retail market

No breather for fragile retail market despite expectations for rents to stabilise and recover gradually (Image: Wikimedia Commons)

Fragile Retail Market

Based on Colliers’ research, ground-floor rents on Orchard Road inched up by 0.1% half-on-half (HOH) in H2 2019 to SGD40.65 per square foot per month (psf pm), while that of Regional Centres remained flat at SGD33.60 psf pm. For the full-year 2019, rents fell 1.3% year-on-year (YOY) for Orchard and stayed flat for Regional Centres.

Ms Tricia Song, Head of Research for Singapore at Colliers International, said, “We expect rents to stabilise and recover gradually as new supply pipeline eases over 2020-2024. Nonetheless, retail sales remain fragile. Excluding motor vehicles, the retail sales declined 1.2% in 2019. In the near-term, the outbreak of coronavirus (COVID-19) could dampen consumer sentiment and delay a recovery. The situation is evolving, and no one really knows how this will turn out at this point; the outbreak could be the proverbial black swan that will hurt the retail sector.”

That said, retail tenants typically sign two-year leases where rents are locked in during the period, hence rents do not necessarily mirror retail sales volatility. In the longer term, barring a protracted downturn, Colliers Research believes Orchard Road prime rents are likely to lead a gradual recovery with potential boost from Orchard Road rejuvenation plans, as well as a recovery in visitor arrivals and tourism receipts.

Despite large completions in 2019, island-wide retail vacancy improved to 7.5% as of end-2019, (-1 ppt YOY, -0.2 ppt HOH), driven by higher net absorption which is likely boosted by the good take-up at Jewel at Changi Airport and Funan in H1 2019, and Paya Lebar Quarter Mall in H2 2019. As the market continues to digest the major supply completions in 2019, we expect new supply to ease significantly and stay tight in 2020 (0.3% of total stock versus 10-year historical average of 1.4%) and throughout 2020-2024 (0.5% of total stock).

In H2 2019, investment volumes contracted 6.7% HOH on a high base. Nonetheless, overall retail property transaction volumes hit a decade high in 2019, surging 204% YOY to reach SGD4.1 billion. This was driven by keen investor interest and mergers and acquisitions. Major transactions in 2019 included The Star Vista, Duo Galleria and Liang Court in H2 2019, and Chinatown Point and Rivervale Mall in H1 2019. Meanwhile, 313 Somerset was injected into newly-listed Lendlease Global Commercial REIT, while the merger of OUE Hospitality Trust and OUE Commercial Trust priced Mandarin Gallery at SGD3,908 psf.

Ms. Song added, “Over the next few years, the market remains conducive for deals given a favorable interest rate outlook, limited new supply and bottoming rents. After years of consolidation, test-bedding new concepts, recalibrating tenant-mixes, and rental adjustments, we observed that landlords and tenants appear to be more confident about tackling challenges arising from e-commerce by embracing omni-channel retail strategy and driving innovation. In addition, new brand openings, F&B expansions and the entry of flexible workspace players into retail malls helped to support occupancies.”

INDUSTRIAL

Singapore’s industrial property market continued to navigate the economic headwinds, remaining soft in H2 2019, particularly in the warehouse and factory space segments. Based on Colliers’ data, average monthly gross rents of factories fell by about 1.8% YOY to SGD1.67 psf pm as at the end of 2019. Meanwhile, warehouse and logistics rents eased by 1.6% YOY from SGD1.25 psf pm to SGD1.23 psf pm at end-2019.

In contrast, rents at business parks climbed by nearly 1.4% YOY from SGD4.31 psf pm at the end of 2018 to SGD4.37 psf pm at the end of last year. Rents of independent high-spec space, meanwhile, increased by about 1.4% YOY to 2.94 psf pm over the same period.

Dominic Peters, Senior Director of Industrial Services at Colliers International, said, “The COVID-19 outbreak could hit manufacturers with disruption to the global supply chain in the near-term. Coupled with ample new stock, factory rents would likely remain under pressure. In general, we forecast continued two-tier performance between older lower-specifications and newer higher-specifications facilities. Centrally-located business parks and high-spec buildings with good amenities should continue to attract healthy demand while those older and further away from MRT stations or in suburban areas could face more pressure.”

Overall, Colliers Research expects business park and high-spec rents to see slight upticks in the coming quarters. Even within business parks, the performance is likely to be two-tiered with the newer ones in the city fringe likely to see healthier demand than the older ones.

Industrial rents for multi-user factories and single-user factories would likely moderate amid the greater supply in 2020. Warehouse rent should remain soft in 2020-2021 amidst global trade uncertainties before recovering from 2022 as supply diminishes. Location and supporting infrastructure could also be differentiating factors for specialised industries such as food factories and data centres.

In terms of vacancies, Colliers Research noted that the overall industrial vacancy rate could edge up in 2020 as net demand lags net supply. Vacancies should decrease from 2021 onwards as demand improves. According to JTC’s data, total net new supply of industrial space is expected to more than double YOY in 2020 to 20.2 million sq ft, or about 4% of total stock, before coming off in 2021. Meanwhile, business park supply is set to intensify from 2023.

Colliers Research expects capital values of prime industrial properties with freehold or long land tenures of 60 years and above to see marginal uptick in the next few years due to their scarcity. While the interest in government’s industrial land sales in 2019 has been subdued, Colliers Research anticipates stronger investment demand for high-spec industrial spaces in 2020. Net yields for industrial properties with short leaseholds of 30 years and below remained flat throughout 2019 at 5.75–6.25% and Colliers Research estimates that this stable trend should hold over the next five years.

The post Fragile retail market braces for near-term risks amid Covid-19 outbreak appeared first on iCompareLoan Resources.

post

UOB announces relief assistance to cushion impact of Covid-19

Click on UOB announces relief assistance to cushion impact of Covid-19
for the source.
Author: Ravi Philemon

UOB announces $3billion relief assistance especially for SMEs affected by Covid-19

By: Phoenix Lee/

UOB announcesUnited Overseas Bank (UOB) on Feb 12 announced that it has allocated S$3 billion to provide companies, especially small- and medium-sized enterprises (SMEs), in Singapore with relief assistance to tide over the negative impact of the COVID-19 outbreak on their business.

United Overseas Bank Limited (UOB) is a leading bank in Asia with a global network of more than 500 offices in 19 countries and territories in Asia Pacific, Europe and North America. Since its incorporation in 1935, UOB has grown organically and through a series of strategic acquisitions. UOB is rated among the world’s top banks: Aa1 by Moody’s and AA- by both Standard & Poor’s and Fitch Ratings. In Asia, UOB operates through its head office in Singapore and banking subsidiaries in China, Indonesia, Malaysia, Thailand and Vietnam, as well as branches and representative offices across the region.

UOB announces package to help corporate clients

In the face of the likely economic fallout and its impact on industries and businesses, UOB sees the need to help its corporate clients, in particular the SMEs, in addressing their near-term liquidity needs. The Bank’s relief measures aim to enable those affected companies, who have good track records and who have been servicing their repayments promptly, to have more flexibility in their cash flow management.

UOB announces relief assistance to cushion impact of Covid-19. Assistance especially targeted at small and medium sized enterprises.

These measures include:

  • allowing affected businesses to rework their principal repayments and to service only their loan
    interest for up to one year;
  • extending up to one year working capital financing of up to S$5 million; and
  • offering financing liquidity against mortgage security.

Mr Wee Ee Cheong, Deputy Chairman and Chief Executive Officer, UOB, said, “In these particularly trying times, the government, businesses and communities are doing their very best to overcome this immediate challenge. We at UOB want to play our part in our commitment to caring for our clients’ businesses. For most companies, especially the SMEs, cash flow and financing are key to them sustaining their business. As their long-term banking partner, we believe our added support can help alleviate the business disruption and pressure from the ripple effect of the epidemic.”

UOB announces plan also for retail customers

For its retail customers who are affected by the current circumstances, UOB will assess on a case-by-case basis how it can help them. The Bank is monitoring the situation and will take appropriate steps accordingly in support of its customers.

UOB announces assistance as reports suggests impact from Covid-19 is expected to be short-lived

The economic impact of the Coronavirus issue is expected to be short-lived based on the current situation, said a recent note from Cushman & Wakefield (C&W). The report said that the Singapore government has tried to put in place multiple lines of defence to minimize the chances of the virus spreading further.

Any disruption to market activity is expected to be short-lived and so the real estate impact will be minimal said Ms Christine Li, C&W’s Head of Research for South East Asia.

“Singapore, Singapore; held up by the country’s sound economic fundamentals. The impact will be mostly felt by the hospitality, retail and F&B sectors, with limited impact on both the office and industrial sectors as these are non-tourism related sectors. Corporates may delay decision making in the first quarter of 2020 as they focus on tactical issues around operations in China for the moment. This is expected to impact activity in the first quarter of 2020 against an office leasing market that has already been grappling with a slowdown arising from the US-China trade war.”

Although the real estate impact will be minimal, the impact on the hospitality sector is more immediate said the report.

“With millions in China under an effective lockdown and a ban on Chinese tour groups and travellers who have recently travelled to China, tourist arrivals especially from China are expected to slow in 1H 2020. Given that Chinese tourists make up about 20 per cent of Singapore’s international visitors with about 3.6 million visitors to Singapore in 2019, overall hotel RevPar is expected to see some downward pressure in the first half.

“The slow down in tourist arrivals will result in a decline in shopping spend by Chinese tourists, particularly retail trades and tourist destinations which cater to Chinese tourists. Chinese tourists were the top spenders in the first half of 2019, spending close to S$2 billion on shopping, accommodation, F&B, etc, with 51 per cent on shopping alone. As such, some of the more touristy shopping destinations mainly in Marina Bay Sands and Orchard locations could be affected if the travel ban and outbreak persists.”

As the real estate impact is expected to be minimal, landlords of major shopping centres are not under pressure to lower rents, especially if the overall situation improves in the next couple of weeks, said C&W.

“Typically, the well-managed shopping centres also have enough tenants in waiting to take up any vacancy that becomes available. So long as the virus remains at bay with no community spread, the temporary decline in footfalls at malls should recover over a short period of time.”

In the residential sector, there could be a slight impact on project launches as developers are likely to hold back new launches in view of the weaker sentiment, said C&W.

Ms Li said, “high-end luxury properties with more Chinese buyers could face slower take-up rates as viewings are expected to slow down in the midst of the outbreak. Again, the impact should still be contained as Singapore continues to be seen as a safe haven location amid heightened global uncertainties.”

She added, “liquidity is still aplenty and investors continue to search for yield in the real estate sector. Well-managed and well-located office and industrial assets will remain sought after by investors and occupiers who typically take a medium to long term view when they purchase or lease these properties.”

The post UOB announces relief assistance to cushion impact of Covid-19 appeared first on iCompareLoan Resources.

post

Neil Road Conservation Shophouses for sale via EOI exercises

Click on Neil Road Conservation Shophouses for sale via EOI exercises
for the source.
Author: Ravi Philemon

Neil Road Conservation Shophouses for sale via separate EOI exercises

Colliers International announced on Feb 12 that it is inviting offers for the purchase of a pair of conservation shophouses in Neil Road and three other shophouses with adjoining vacant land in Jasmine Road via two separate Expression of Interest (EOI) exercises.

Neil Road Conservation Shophouses

Neil Road Conservation Shophouses for sale via separate EOI exercises (Image: Colliers International)

Healthy interest expected for EOI exercises for Neil Road Conservation Shophouses

Mr Steven Tan, Senior Director of Capital Markets at Colliers International, said, “We expect healthy interest for these shophouses from both local and foreign investors, including high net worth individuals, family offices, developers, and private equity funds. Singapore real estate remains appealing and continues to get investors’ vote of confidence amid uncertain times. This is due in part to Singapore’s strong fundamentals and the long-term growth potential of its property market.”

Conservation shophouses at 65/67 Neil Road
The pair of adjoining 2-storey conservation shophouses with attic at 65/67 Neil Road has an indicative price of SGD15.57 million, which translates to about SGD2,800 per square foot (psf) based on the total gross floor area (GFA) of 5,563.7 sq ft (512.2 sq m). The rare shophouses – located in the prime Tanjong Pagar planning area – sits on a site that spans 2,703.6 sq ft (251.2 sq m) and has a 99-year land tenure, with effect from 4 July 1989.

Situated near the Tanjong Pagar and Outram Park MRT stations on the East-West Line, the property is easily accessible via public transport. It also has prominent frontage onto Neil Road, enjoying heavy pedestrian traffic and high visibility. Being in the vibrant city centre and within the Chinatown Historic District, the area around the shophouses teems with activity, offering a wide range of entertainment and F&B options.

Mr. Tan added, “Apart from their rarity and prime location, these shophouses at Neil Road are attractive as they enjoy strong tenant covenant and has the potential to increase GFA via addition and alteration works, subject to relevant approvals. Additionally, there is ample space at the rear of the property for the loading and unloading of supplies as well as the setting up of an alfresco F&B area, subject to approval. We believe there is an upside for rental revision, particularly in a robust leasing market with limited supply.”

The ground floor of both shophouses and the second floor of 67 Neil Road are currently tenanted to an entertainment establishment which has been leasing the space for many years. Meanwhile, the second floor of 65 Neil Road – which is vacant – will allow the successful buyer to inject new concepts to the revitalise the space. Subject to approval by the Urban Redevelopment Authority, the second floor of the shophouse can be used for restaurant, clinic, commercial school, gym/fitness centre, night club, karaoke, student hostel, and residential use, potentially co-living concepts.

Under the Master Plan 2019, the site is zoned commercial. Owing to the commercial-use zoning, the additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD) are not applicable for the site.

The EOI exercise for 65/67 Neil Road will close at 3pm on 12 March 2020.

Freehold shophouses at 7/9/11 Jasmine Road and adjoining land
The three shophouses – comprising a mix of 2- and 3-storey properties – and an adjoining vacant land (belonging to the owner of 11 Jasmine Road) have a guide price of SGD22.88 million. This works out to about SGD1,185 psf – inclusive of the estimated development charge – based on the proposed GFA of 21,363 sq ft (1,984.8 sq m) upon redevelopment.

Altogether, the three shophouses and the adjacent land, which is located behind the three shophouses, are sited on freehold land with a combined site area of 7,121 sq ft (661.6 sq m). Under the Master Plan 2019, the site is zoned residential with 1st storey commercial and has a Gross Plot Ratio of 3.0.

The site presents exciting redevelopment potential. Subject to approvals, it could potentially be redeveloped into a modern building of up to 4-storey, with commercial space on the first floor and about 16 residential units, based on an average apartment size of 861 sq ft (80 sq m).

Mr. Tan noted, “What makes this site appealing is its freehold tenure, convenient location in an established residential enclave with a large population catchment, and the relatively sizable land area, which offers good redevelopment opportunities. We have been approached by several co-living operators who are looking for suitable properties to operate from, and we believe this site would be ideal for that purpose. The buyer can seek permission from the authorities for change of use to Serviced Apartments to tap the growing co-living sector.”

The site – surrounded by an exclusive landed housing estate – is a stone’s throw from the upcoming Upper Thomson MRT station on the Thomson-East Coast Line and minutes away from the Marymount MRT station on the Circle Line. It is also conveniently situated near numerous amenities, including popular eateries along Upper Thomson Road, Thomson Plaza, Sin Ming Plaza, Junction 8 shopping mall, Whitley Secondary School, Catholic High School, and MacRitchie Reservoir Park.

The EOI exercise for 7, 9 and 11 Jasmine Road and the adjoining land will close at 3pm on 19 March 2020. The shophouses can be purchased separately or collectively.

Properties such as the Neil Road 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 (such as the Neil Road Conservation Shophouses) 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.

 

The post Neil Road Conservation Shophouses for sale via EOI exercises appeared first on iCompareLoan Resources.

post

Fu Lu Shou Complex office portfolio for sale via EOI exercise

Click on Fu Lu Shou Complex office portfolio for sale via EOI exercise
for the source.
Author: Ravi Philemon

The Fu Lu Shou Complex office portfolio has a sizable floor area rarely made available for sale at attractive guide price of S$1,400 psf

Fu Lu Shou Complex office portfolio

Image: CBRE

CBRE announced on Feb 11 that it is launching the sale of a portfolio of three strata office units in Fu Lu Shou Complex at a guide price of S$1,400 per square foot.

The sale of the Fu Lu Shou Complex office portfolio will be by way of an Expression of Interest (EOI) exercise.

Conveniently located next to the lift lobby on Level 5 of Fu Lu Shou Complex, the subject portfolio consists of three strata-titled offices with unit areas of approximately 936 square feet, 2,034 square feet and 2,174 square feet. The combined strata floor area is approximately 5,145 square feet. All three units have water points, floor traps and toilets.

Mr Michael Tay, Head of Capital Markets, Singapore at CBRE says, “One of the many key selling points of the subject property is the sizeable floor area that is rarely made available for sale in Fu Lu Shou Complex, and at an attractive per square foot price. Two offices of unit area 1,464 square feet and 2,207 square feet were respectively sold in 2019 at S$1,435 per square foot and S$1,450 per square foot. Ownership of the office units in this development can be said to be tightly held, given that no office units were traded between 2006 and 2018.”

Mr Tay continues, “To be sold on vacant possession basis, these units are expected to garner keen interest from end-users who are seeking to invest in premises for own operations to lock in long-term operational costs and to hedge against volatility in the office rental cycles. The office portfolio will also appeal to investors – including family offices and high net-worth individuals – who have a mid- to long-term view of potential capital appreciation, against the backdrop of tighter office supply and stronger strata market scene. Not forgetting, investors also have the option to divest the units on an individual basis in the future.”

As the Fu Lu Shou Complex office portfolio are commercial units, both local and foreigners are eligible to purchase them without the imposition of additional buyer’s stamp duty or sellers’ stamp duty.

Completed in 1983, Fu Lu Shou Complex is a six-storey mixed development comprising a retail podium from basement 1 to level 3 and offices on levels 4 and 5. The Complex is strategically located on a corner plot with dual road frontages along Rochor Road and Waterloo street. It also enjoys seamless connectivity to other parts of the island with ready access to public transport facilities – a bus stop right in front of the Complex and Bugis MRT Interchange within a 200-meter walking distance.

Fu Lu Shou Complex is located within the bustling Bugis/Bras Basah precinct which is a well-known enclave for arts and cultural activities. With the recently announced plans to revitalize the Bugis Village and Bugis Street, more vibrancy will be injected into the area featuring novel lifestyles and F&B offerings, as well as integrated heritage and community events. Other nearby landmark developments include the upcoming Guoco Midtown, South Beach and DUO. These developments feature a good mix of residential, commercial, office and/or hotel components, which will contribute to the already voluminous pedestrian in the vicinity.

CBRE is the sole marketing agent for the EOI exercise of the Fu Lu Shou Complex office portfolio, which closes on 17 March 2020 at 3 pm.

Fu Lu Shou Complex is a shopping centre in the Bugis section of downtown Singapore that specialises in Daoist and Buddhist religious paraphernalia.

Like other Singapore malls which cater to a specific commercial market, the Fu Lu Shou Complex gathered together many tenants selling similar items; here tenants purvey items such as lucky stones and gems, ceramic religious icons, incense and so on. The mall is named after the Daoist concept of Fu Lu Shou, meaning, respectively, good fortune (fu, 福), prosperity (lu, 祿) and longevity (shou, 壽), clearly signalling its specialisation to consumers.

While it houses many solely commercial ventures, the Fu Lu Shou Complex is particularly notable in that it also contains functioning religious shrines integrated into certain stores. In their usage of the complex as a source of religious wares and as a site of religious practice, the tenants and consumers here blur the line between mall and temple. Thus, in visiting the Fu Lu Shou Complex, Chinese religion practitioners can obtain both religious paraphernalia and blessings from propitiated deities.

“The Fu Lu Shou Complex office portfolio is a good buy especially since office property vacancies are continuing their recovery as sales and rent prices continue their upwards trend,” said Mr Paul Ho, chief mortgage officer at iCompareLoan.

“There is a large investment appetite for properties in the CBD area and there is also demand for space as our fintech industries grows,” he added.

“Office property vacancies will continue to recover as the market is acutely aware of the tight vacancy rate and muted future supply. The office market, especially the Grade A and prime office segment should see keen competition in the coming months,” Mr Ho predicted.

The office sector has taken a temporary breather after a strong 26% rental growth over three years. In the capital market, while valuations are high, office would still offer the best risk-reward proposition on the mid- to long-term horizon. Office demand will continue to be led by the technology and flexible workspace sectors, albeit at a slower rate than 2019.

“The Singapore real estate market to retain its lustre in 2020 amid uncertainty,” said Mr Ho.

The post Fu Lu Shou Complex office portfolio for sale via EOI exercise appeared first on iCompareLoan Resources.

post

Grab acquires retail wealth tech start-up Bento

Click on Grab acquires retail wealth tech start-up Bento
for the source.
Author: Ravi Philemon

Grab acquires wealth tech start-up Bento to bring retail wealth solutions to millions across Southeast Asia

By: Phoenix Lee/

Grab acquires Bento to bring retail wealth management and investment solutions to its ecosystem of users, driver-partners and merchant-partners. Bento will be rebranded as GrabInvest; products to be rolled out in South-East Asia, with Singapore as the first market.

  • Grab acquires Bento to bring retail wealth management and investment solutions to its ecosystem of users, driver-partners and merchant-partners
  • As Grab acquires Bento it will be rebranded as GrabInvest; products to be rolled out in South-East Asia, with Singapore as the first market
  • As Grab acquires Bento, it signals the start of journey where the underserved in SEA can save and invest in financial products traditionally limited to affluent individuals and institutional investors

Grab Holdings Inc. (“Grab”), Southeast Asia’s leading super app, on Feb 4 announced the acquisition of Bento Invest Pte Ltd (“Bento”), a Singapore-based robo-advisory start-up for an undisclosed sum, that will allow Grab to offer retail wealth management solutions to users, driver-partners and merchant-partners, via the Grab app.

As Grab acquires Bento, it will be rebranded as GrabInvest with products launched on the Grab app in the first half of the year in Singapore.

GrabInvest will be a new core business vertical under Grab’s financial services arm, Grab Financial Group, led by Chandrima Das, founder and CEO of Bento. Grab Financial Group currently offers financial services across Southeast Asia in payments (GrabPay), rewards (GrabRewards), lending (GrabFinance), and insurance (GrabInsure) to micro-entrepreneurs, small business owners, driver-partners and users across Southeast Asia.

GrabInvest aims to democratise access to retail wealth management products, in order to provide millions across Southeast Asia with the opportunity to save and invest in financial products traditionally limited to affluent individuals and institutional investors.

Grab acquires Bento

(Image: Grab)

GrabInvest aims to make wealth management services accessible by adopting a low-cost model, easy to understand by allowing users to transact on a platform they are familiar with, transparent by having full disclosures on fees with zero hidden elements, and trusted by adhering to consumer protection standards outlined by our Monetary Authority of Singapore (MAS) Capital Markets Services  (CMS) license.

Reuben Lai, Senior Managing Director of Grab Financial Group, said: “In Southeast Asia, there is a lack of access to affordable wealth management products and retirement planning solutions for most people. As we face an increasingly volatile and uncertain economic environment, it is imperative for Southeast Asians to acquire the tools and knowledge to protect their future by sustainably building wealth for themselves and their families. The launch of GrabInvest brings us a step closer to democratising access to affordable financial solutions that will help them achieve the financial stability they need well into their retirement years.”

Philip Chew, Head of Investments and New Businesses, Grab Financial Group, said: “We are excited to welcome Chandrima and her team to the Grab family. Bento has been recognised as a leading wealth-tech platform and proven to be an industry leader in democratising retail wealth solutions in the region. Now, from within Grab’s everyday app, we will build on our fintech capabilities to transform what is currently an underserved retail wealth sector in Southeast Asia to one that is powered by a 24/7 user engagement platform and best-in-class financial models, portfolio management and risk management technologies. All of this, while remaining affordable, accessible and trusted by our partners and users.”

Chandrima Das, Founder and CEO, Bento, and Grab Financial Group’s new Head of Wealth Management also spoke to the acquisition: “The Bento and Grab Financial teams share a common vision to democratise investments for our customers irrespective of their wallet size. I am grateful for the opportunity to be part of the Grab ecosystem as we work together to make wealth management solutions serve the financial needs of millions of Southeast Asians.”

Bento’s proprietary digital wealth platform includes client onboarding, and portfolio construction and rebalancing supported by robust risk management capabilities. The platform is built and backed by a team of seasoned asset management and banking professionals who will join the GrabInvest team. Bento’s founder, Chandrima Das, has over two decades of leadership experience in banks and asset managers across Asia and the UK. Chandrima was formerly Managing Director at Bank of Singapore and prior to that, CEO of ING Investment Management.

GrabInvest will operate under a retail wealth management capital markets services license in Singapore, namely the MAS Retail Licensed Fund Management Company (LFMC) license.

GrabInvest aims to offer cash management and portfolio-based financial solutions to its users, driver-partners and merchant-partners, with Singapore as the first market to roll-out.

In December 2019, Grab announced that it was partnering Singtel for Singapore digital banking licence. The consortium will apply for a digital full bank licence in Singapore. Grab will have a 60 percent stake in the consortium entity while Singtel will hold a 40 percent stake.

Grab and Singtel said that they are committed to contributing to the financial services sector with a differentiated offering that addresses the unmet and underserved needs of consumer and enterprise segments in Singapore. The digital bank will aim to cater to the needs of digital-first consumers, who have come to expect greater convenience and personalisation, and SMEs which cite lack of access to credit as a key pain point.

The consortium will be well-positioned to offer relevant products and services and become a trusted partner for consumers and enterprises; embedding banking and financial services seamlessly into the everyday lives of Grab and Singtel’s large, highly-engaged base of customers.

The post Grab acquires retail wealth tech start-up Bento appeared first on iCompareLoan Resources.

post

HDB launches 3,095 flats in February 2020 BTO exercise

Click on HDB launches 3,095 flats in February 2020 BTO exercise
for the source.
Author: Ravi Philemon

HDB launches 3,095 flats with wide range of flats for different budgets and needs

HDB launches 3,095 flats for sale on Feb 11 under the February 2020 Build-To-Order (BTO) exercise. The flats on offer are located in the non-mature town of Sembawang and mature town of Toa Payoh.

A wide selection of flats, ranging from 2-room Flexi to Three-Generation (3Gen) flats, is offered as HDB launches 3,095 flats to meet the diverse housing needs of first-timers, second-timer families, multi-generation families, elderly and singles.

In view of the eldercare services and facilities in the vicinity, the 2-room Flexi flats at Kim Keat Ripples and Toa Payoh Ridge are offered only to seniors aged 55 and above, on short leases of between 15 and 45 years, in 5-year increments.

More options as HDB launches 3,095 flats

As part of HDB’s continual efforts to offer flexible interior layouts to meet changing lifestyle needs, and to provide buyers with more choices, HDB said that it will offer 3-room flats with integrated kitchen/utility space in Canberra Vista and Toa Payoh Ridge.

The integrated kitchen/utility space is a contiguous space that offers home owners flexibility in configuring the area according to their preferred interior design concept. HDB added that home owners who prefer to separate the kitchen from the utility space may add a partition during their renovation.

HDB said that it will also introduce 2-room Flexi flats with flexible space in Canberra Vista and Toa Payoh Ridge. Elderly flat buyers who purchase a short-lease 2-room Flexi flat with flexible space in these projects may opt for the Optional Component Scheme (Package 3). The package includes a folding door, amongst other senior-friendly fittings, allowing them to use the space to accommodate a caregiver, or for entertainment when family members or friends visit.

Generous subsidy offered as HDB launches 3,095 flats

New HDB flats are priced with a generous subsidy, taking into account factors such as location, flat attributes and prevailing market conditions. HDB’s prices are considerably lower than transacted prices of comparable resale flats in the vicinity. In addition, 2-room Flexi flats are priced taking into account the lease chosen.

HDB launches 3,095 flats

(Screengrab HDB)

Eligible first-timer families can enjoy the Enhanced CPF Housing Grant (EHG) of up to $80,000. With EHG, flat buyers could pay as little as $9,000 for a 2-room Flexi flat, $102,000 for a 3-room flat, $212,000 for a 4-room flat, and $305,000 for a 5-room flat.

BTO Prices as HDB launches 3,095 flats

Town Project Flat Type Transacted Prices
of Resale Flats
in the Vicinity #
Selling Price
(Excluding Grants)
Selling Price
(Including Grants ^)
Non-Mature Towns
Sembawang Canberra Vista 2-room
Flexi*@
From $89,000 From $9,000
3-room From $177,000 From $102,000
4-room $396,000  –  $425,000 From $272,000 From $212,000
5-room $390,000  –  $480,888 From $350,000 From $305,000
3Gen From $355,000 From $310,000
Mature Town
Toa Payoh Kim Keat Ripples

Toa Payoh Ridge

2-room
Flexi*^^
(40-year Lease)
From  $90,000 From  $10,000
3-room  – From  $351,000 From  $291,000
4-room $555,000  –  $778,000 From  $395,000 From  $350,000

Note:

1) * 2-room Flexi flats come in two sizes – 36 sm (Type1) and 45/46 sm (Type 2).

^ The starting prices of flats in Table 1 are based on 99-year leases. For illustration purposes, the assumed EHG amounts are:
i)   2-room Flexi flat: $80,000
ii)  3-room flat: $75,000 in non-mature towns and $60,000 in mature towns
iii) 4-room flat: $60,000 in non-mature towns and $45,000 in mature towns
iv) 5-room flat / 3Gen flat: $45,000 in non-mature towns

The starting prices after grant amounts are illustrative, assuming that the household incomes of eligible first-time buyers of flats in the mature towns are higher. The actual grant amount received will depend on the buyers’ income and eligibility. Read more on EHG in HDB infoWEB.

# Details on the comparable resale flats can be found on the HDB e-Sales website. In making comparison, please take into account the differences in attributes between the comparable resale flats and the BTO flats.

^^ 2-room Flexi flats at Kim Keat Ripples and Toa Payoh Ridge are offered only to seniors (aged 55 and above) on short leases of between 15 and 45 years, in five-year increments.

Singles who apply for a 2-room Flexi flat under the Single Singapore Citizen (SSC) Scheme will pay $15,000 more than couples. Eligible singles can also apply for the EHG of up to $40,000. The actual grant amounts will vary according to income.

2)        Selling prices are rounded up to the nearest thousand dollars. 

HDB said that first-timer families will continue to enjoy priority in flat allocation and that married/courting couples who wish to live together with their parent(s) can apply for a 3Gen flat in Canberra Vista. Applicants who wish to live close to their parents or married children in the same BTO project can submit a joint application under the Multi-Generation Priority Scheme (MGPS).

Application for the new flats launched in the February 2020 BTO exercise can be made online on the HDB InfoWEB from 11 February 2020 (Tuesday) to 17 February 2020 (Monday). Applicants can apply for only one flat type/category in one town under the BTO exercise. There is no Re-Offer of Balance Flats (ROF) exercise in February 2020 as HDB is reviewing the sale processes for balance flats to better serve the needs of home buyers.

Applicants who wish to take up an HDB housing loan for their flat purchase need to produce a valid HDB Loan Eligibility (HLE) letter when they book a flat, except for young couples who are eligible for deferment of income assessment. All applicants are encouraged to apply for an HLE letter early so that they will know their budget and book a flat within their budget. The HLE letter will indicate the loan amount based on applicants’ individual financial situation.

HDB encouraged applicants to apply for a BTO flat in the non-mature town to enjoy a higher chance of success in securing a flat. Members of the public have 7 days to make an online application at HDB InfoWEB. HDB will shortlist applicants using a computer ballot, and not on a first-come-first-served basis. HDB advised applicants to apply for flats with lower application rates for better chances of success.

The post HDB launches 3,095 flats in February 2020 BTO exercise appeared first on iCompareLoan Resources.

post

Real estate impact due to Covid-19 expected to be short-lived

Click on Real estate impact due to Covid-19 expected to be short-lived
for the source.
Author: Ravi Philemon

Multiple lines of defence to minimize the chances of the Covid-19 spreading further expected to minimise real estate impact

real estate impact

Multiple lines of defence to minimize the chances of the Covid-19 spreading further expected to minimise real estate impact

The economic impact of the Coronavirus issue is expected to be short-lived based on the current situation, says a note from Cushman & Wakefield (C&W). The report said that the Singapore government has tried to put in place multiple lines of defence to minimize the chances of the virus spreading further.

Any disruption to market activity is expected to be short-lived and so the real estate impact will be minimal said Ms Christine Li, C&W’s Head of Research for South East Asia.

“Singapore, Singapore; held up by the country’s sound economic fundamentals. The impact will be mostly felt by the hospitality, retail and F&B sectors, with limited impact on both the office and industrial sectors as these are non-tourism related sectors. Corporates may delay decision making in the first quarter of 2020 as they focus on tactical issues around operations in China for the moment. This is expected to impact activity in the first quarter of 2020 against an office leasing market that has already been grappling with a slowdown arising from the US-China trade war.”

Although the real estate impact will be minimal, the impact on the hospitality sector is more immediate said the report.

“With millions in China under an effective lockdown and a ban on Chinese tour groups and travellers who have recently travelled to China, tourist arrivals especially from China are expected to slow in 1H 2020. Given that Chinese tourists make up about 20 per cent of Singapore’s international visitors with about 3.6 million visitors to Singapore in 2019, overall hotel RevPar is expected to see some downward pressure in the first half.

“The slow down in tourist arrivals will result in a decline in shopping spend by Chinese tourists, particularly retail trades and tourist destinations which cater to Chinese tourists. Chinese tourists were the top spenders in the first half of 2019, spending close to S$2 billion on shopping, accommodation, F&B, etc, with 51 per cent on shopping alone. As such, some of the more touristy shopping destinations mainly in Marina Bay Sands and Orchard locations could be affected if the travel ban and outbreak persists.”

As the real estate impact is expected to be minimal, landlords of major shopping centres are not under pressure to lower rents, especially if the overall situation improves in the next couple of weeks, said C&W.

“Typically, the well-managed shopping centres also have enough tenants in waiting to take up any vacancy that becomes available. So long as the virus remains at bay with no community spread, the temporary decline in footfalls at malls should recover over a short period of time.”

In the residential sector, there could be a slight impact on project launches as developers are likely to hold back new launches in view of the weaker sentiment, said C&W.

Ms Li said, “high-end luxury properties with more Chinese buyers could face slower take-up rates as viewings are expected to slow down in the midst of the outbreak. Again, the impact should still be contained as Singapore continues to be seen as a safe haven location amid heightened global uncertainties.”

She added, “liquidity is still aplenty and investors continue to search for yield in the real estate sector. Well-managed and well-located office and industrial assets will remain sought after by investors and occupiers who typically take a medium to long term view when they purchase or lease these properties.”

The report said that post-Wuhan virus, the mid-term outlook for the hospitality market is favourable, given the low hotel supply pipeline over the next few years and healthy visitor arrival estimates.

Ms Li said, “a slew of new tourist initiatives and developments are expected to raise the attractiveness of Singapore as a regional tourist destination in Southeast Asia over the long term.”

She added, “this includes continued investment in Singapore’s aviation infrastructure (Changi Airport Terminal 5), and tourism attractions/developments such as the Mandai eco-tourism hub, Jurong Lake District, Sentosa redevelopment and AEI works at the two integrated resorts.”

MOH’s COVID-19 ADVISORY

The Ministry of Health (MOH) advised Singaporeans to defer all travel to Hubei Province and all non-essential travel to Mainland China. MOH said all travellers should monitor their health closely for two weeks upon return to Singapore and seek medical attention promptly if they feel unwell.

Travellers should inform their doctor of their travel history. If they have a fever or respiratory symptoms (e.g. cough, shortness of breath), they should wear a mask and call the clinic ahead of the visit.

MOH advises travellers and members of the public to adopt the following precautions at all times:

  • Avoid close contact with people who are unwell or showing symptoms of illness;
  • Observe good personal hygiene;
  • Practise frequent hand washing with soap (e.g. before handling food or eating, after going to toilet, or when hands are dirtied by respiratory secretions after coughing or sneezing);
  • Wear a mask if you have respiratory symptoms such as a cough or shortness of breath;
  • Cover your mouth with a tissue paper when coughing or sneezing, and dispose the soiled tissue paper in the rubbish bin immediately; and
  • Seek medical attention promptly if you are feeling unwell.

MOH said that it will continue to monitor the situation closely. It added that as medical practitioners are on the lookout for suspect cases, Singapore is likely to see more cases that will need to be investigated.

The post Real estate impact due to Covid-19 expected to be short-lived appeared first on iCompareLoan Resources.

post

Business Term Loan could help cash-strapped business owners

Click on Business Term Loan could help cash-strapped business owners
for the source.
Author: Ravi Philemon

A business term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.

By: Hitesh Khan/

For example, if you’re looking to borrow a large sum of money and have a property on hand, you may be able to “cash out” the property’s value by taking a term loan or an home equity loan.

Many banks have business term loan programs that can offer small businesses the cash they need to operate from month to month.

Business term loans are very useful for small businesses to purchase fixed assets such as equipment for its production process. Business term Loan is not the most accessible option for everyone in the market, and approval is highly conditional upon the bank, but it is possible.

Whether you call it a business term loan, a home equity loan or an equity term loan, they all mean the same thing. A term loan lets you borrow money, while using your house as collateral. Business term loan is another option available to homeowners who may have a tight cash situation but have have a valuable house at their disposal, which they may sell and downgrade. But a home equity loan lets you get money out of your house, without having to lose it.

If your property has increased in value over time, you may take a term loan by using the equity of your property as collateral  and at a relatively low interest rate.

The businbusiness term loaness term loan extended against your property means that its equity becomes collateral.

There are plenty of advantages of taking a term loan by using your house is the collateral. For example, the bank feels a lot more secure knowing you can’t exactly pack up your house and run away with it. Because there’s something they can foreclose on, banks consider term loans to be low-risk, secured loans.

SME loans – with low success rate, it is important to work with trusted hands

That means banks charge a super-low interest rate, seldom above 1.3 per cent per annum. For reference, that’s less than a third of your CPF Ordinary Account rate (up to 3.5 per cent per annum), and about 1/6th of a personal loan rate (about six per cent per annum). That super-low interest rate means home equity loans are quite cheap, and can provide a much bigger loan than you’d get through, say, a personal installment loan. Most other, unsecured loans can only lend you up to four times your monthly salary.

On top of this, the government in 2017, made regulatory changes to term loan restrictions. If your house is already paid up, you can borrow up to half its value, without having to meet Total Debt Servicing Ratio (TDSR) restrictions.

This is how a term loan works:

Suppose you have purchased a property in 2010 for $650,000.
Loan was 80% = $520,000 amortized over 30 years.
In 2018, a new valuation was done and the property is worth $1 million.
The current loan amount is $440,000.
If this property loan is the only one you have in Singapore, then you may qualify for 80% lending on valuation, which is $800,000.
Equity home loan amount = (80% * valuation) less current loan amount less CPF usage including accrued interest.
Assuming you have used $160,000 CPF with accrued interest, this is the home equity loan amount you would get:
$800,000 – $440,000 – $150,000 = $200,000
Together with the outstanding loan, the total debt on the property now would be $640,000.

As a high number of applications for SME loans are unsuccessful, it is important for passionate business-owners to consider term loans to grow and sustain their business operations. It is also important for them to work with trusted hands, and with people who know the industry.

Mortgage Broker Singapore – Should I use one?

One recent research report said that up to 81 per cent of SMEs in Singapore do not qualify for business financing. Many applications for bank loans are delayed or rejected because business owners are not familiar with the qualifications for the loans or of how to apply for such loans.

Access to crucial credit facility is often hindered by the lack the relevant financial knowledge and / or the resources to engage professional business consultancy services to manage and address their obligations and financial liabilities as business owners. The terrain to apply and qualify for loans is also uneven because creditors are not just banks but finance companies and other licensed lending entities whose security arrangements may be different or more complicated.

Mr Paul Ho, chief mortgage consultant at iCompareLoan said, “before you try to negotiate commercial loans, know one cardinal rule, ‘businesses need to borrow when they do not need money’.”

He added: “When your business is struggling and you need additional funding to tide over a tough patch, then you will find that your access to funding is completely cut off and end up with very expensive funding.”

To negotiate commercial loans be wise to plan 6 to 12 months ahead for any potential funding needs. Even if you do not need funding now, you may want to quickly refinance your home loans for any potential equity and stand-by cash even if you do not need it now.

Remember, banks assess your credit and affordability at the point of application, so you should apply when your status is good, not when you have further deteriorated. At that time, no banks will lend you.

You should also read more about the different types of funding. If your business is profitable and you only need short term funding, but your access to bank’s working capital is temporarily cut off, then you should consider personal loans as a source.

There are many factors to consider when you try to secure local business loans, and good negotiators can always tweak terms to have an advantage.

If you have to bargain business loans be mindful that loan specialists can be your best ally. They can set you up on a path that can get you the best personal loans in a quick and seamless manner. They can also arrange for the Best Home Equity Loans in Singapore as they have close links with the best lenders in town and can help you compare Singapore loans and settle for a package that best suits your needs.

The post Business Term Loan could help cash-strapped business owners appeared first on iCompareLoan Resources.