Singapore’s rich growing fond of US properties

The rebounding housing market in the United States – notably in pricey markets such as Manhattan’s luxury condos – is finding fans in wealthy Singaporeans.

New projects with top-of-the-line finishes and expansive views as well as hotel-like amenities and services are a big draw now, real estate agents said.

Comprehensive statistics on purchases by Singaporeans are not publicly available in New York City records. Anecdotally, however, property agents said they had seen a tenfold increase in purchases by Singaporeans compared with two years ago.

In contrast to US buyers who are lured by the current historically low interest and mortgage rates, Singapore buyers always made their purchases in cash, said the heads of some of New York’s largest residential brokerages.

Corcoran Group president and CEO Pamela Liebman noted that among them were not only wealthy individuals, but also consortiums buying properties in bulk as investments.

Public records show that Sonsie Holdings, with a listed address of 14 Robinson Road in Singapore, bought a two-bedroom apartment in Midtown East for US$2.26mil (RM6.75mil) at end-2011.

Veteran rubber trader Oei Hong Bie purchased a Chelsea condominium from Singapore Tong Teik, the company he founded, for US$1mil (RM2.98mil) last October.

“They are attracted to the sexy properties that are going up, such as One57 in Midtown and 56 Leonard in Tribeca,” said Liebman, adding that price tags ranged anywhere from US$1mil to US$30mil (RM89.4mil).

“They love all-glass towers, with great views, preferably of Central Park, with hotel-like amenities and services.”

Dorothy Herman, president and CEO of Douglas Elliman, concurred, saying: “We have seen a steady increase of luxury buyers from Singapore over the past couple of years, snapping up anything from studios to luxury condos.” — The Straits Times / Asia News Network

买破屋拾到宝 2投资家赚近亿

（华盛顿10日综合电）两名美国投资者最近乐疯了，因为他们用30万美元（约94万令吉）买了一间荒废的小别墅，而在这间别墅里，他们发现了价值3000万美元（约9320万令吉）的画作，这些画作属于前屋主——一位不得志的画家。
据英国《每日电讯报》报道，托马斯舒尔茨和拉里约瑟夫是纽约当地的两名投资客，他俩2007年在纽约长岛用30万美元买下了一间小别墅，准备将其修缮之后以40万美元（约125万令吉）的价格卖出。在清理房子时，他们发现了几千件抽象画，它们的作者属于同一个人——一位亚美尼亚裔的美籍画家——亚瑟皮那让。这位画家在这房子住了几十年，画作都是在这间房子里创作的。但画作并没有得到认可，皮那让于1999年郁郁而终，享年85岁。
两位投资客在买下房子时，皮那让的亲戚急于套现，便跟他俩说，那些画没啥用，扔掉就行了。但舒尔茨和约瑟夫留了个心眼，他们给了皮那让亲戚2500美元（约7770令吉）换来全部画作，希望能卖个好价钱。
另一个奇迹出现
于是舒尔茨和约瑟夫开始清点这些画，总共有7万幅作品，包括印象派画作，插画和一些二战士兵的素描。随着部分画作的公开，皮那让的声誉也日渐提高，许多画评家都认为皮那让是个被低估的优秀画家。舒尔茨说：“这栋房子是当地最小的，但里面发现的艺术品可能是艺术史上最重要的发现之一。”
目前，皮那让最优秀的50幅作品在纽约富勒大厦展出，据舒尔茨介绍，皮那让生前一直希望能在展示他的才华，但一直到死的那天都未能如愿。
不过，皮那让至少可以成为另一个“梵高”，死前籍籍无名，死后才名声大震。

Housing starts surge in positive sign for US economy

WASHINGTON: Groundbreaking on new homes surged in September to its fastest pace in more than four years, a sign the housing sector's budding recovery is gaining traction and supporting the wider economic recovery.

Housing starts increased 15 percent last month to a seasonally adjusted annual rate of 872,000 units, beating even the most optimistic forecasts on Wall Street, Commerce Department data showed on Wednesday.

It was the quickest pace of groundbreaking since July 2008, though data on starts is volatile and subject to substantial revisions.

America's economy has shown signs of faster growth in recent months as the jobless rate has fallen and retail sales data has pointed to stronger consumer spending.

Wednesday's data showed that housing, which was battered by the 2007-09 recession, is increasingly one of the brighter spots in the economy.

"One of the big headwinds for the economy has been the weak housing market and this indicates that headwind has dissipated," said Gary Thayer, an economic strategist at Wells Fargo Advisors in St. Louis, Missouri.

Home building could add to growth this year for the first time since 2005 and the brighter economic signal is likely to be welcomed at the White House, where a sluggish economy is weighing on President Barack Obama's chances of re-election next month.

Economists estimate that for every new house built, at least three new jobs are created.

Groundbreaking on new homes rose across much of the country, and was up 20.1 percent in western states. It fell 5.1 percent in the Northeast, however.

Yields on U.S. government debt rose as investors bet the data pointed to a stronger economy.

On the U.S. stock market, the PHLX Housing Index of leading home builders climbed 4 percent as D.R. Horton advanced 5 percent. Home improvement retailers Home Depot and Lowe's were also higher.

NOT YET NORMAL

Housing remains hampered by a glut of unsold homes, and the housing starts rate is still about 60 percent below its January 2006 peak.

Home building now makes up just over 2 percent of the economy, so it is unlikely to fuel a big acceleration in the recovery anytime soon. The European debt crisis looms heavily over the economic outlook, as does the possibility Washington could hike taxes and cut spending next year.

But every little bit helps, and more home building could partially compensate for recent weakness in factory output, which has been hit by sluggish export demand and cooling investment in capital goods.

"Things are lining up for housing," said John Canally, an economist at LPL Financial in Boston. "It's another step in the right direction, but you still have a long, long way to get back to 'normal' in housing."

September groundbreaking for single-family homes, the largest segment of the market, rose 11 percent to a 603,000-unit pace - the highest level since August 2008. Starts for multi-family homes climbed 25.1 percent.

Building permits grew 11.6 percent to a 894,000-unit pace in September, beating economists' forecasts.

U.S. home sales have been creeping up and the steep decline in prices since 2006 appears to have bottomed. That has helped home-builder sentiment, which this month rose to a fresh six-year high.

In a bid to help the economy by encouraging people to buy homes, the Fed said last month it would buy $40 billion in mortgage-backed securities every month until the jobs outlook improves substantially.

The Fed's efforts to lower borrowing costs have pushed interest rates on 30-year mortgages to all-time lows. Last week, fixed 30-year mortgage rates rose 1 basis point to average 3.57 percent, the Mortgage Bankers Association said.

Applications for U.S. home mortgages fell last week, but demand for purchase loans, a leading indicator of home sales, reached the highest level since June, the association said.

"It seems as though low interest rates and stable prices are starting to stir the interest of potential buyers," said Michael Moran, an economist at Daiwa Securities America in New York. - Reuters

Real estate back in favour

It’s in demand again with signs of US housing market bottoming out

LONDON: Treated by many as a pariah after the US subprime collapse triggered the 2007 global financial crisis, real estate is increasingly bouncing back with insurance, pension and sovereign wealth funds.

The evaporation of interest rates on high-quality government bonds is encouraging asset managers to look again at prime real estate properties and stocks, where they find returns far outshooting socalled “safe” sovereigns.

Sovereign wealth funds are a US$4 trillion business and pension funds cover more than US$30 trillion, so even a small shift could move billions away from lower-yielding and more volatile assets.

Top-of-the-crop commercial and residential properties from London to Bangkok are in demand and there are signs of a bottoming out in the US housing market, prompting major investors to buy foreclosed homes to rent.

Comeback: Interest in real estate has returned, as can be seen from the housing front in New York to Paris. Prime property in major cities has seen its strongest growth since 2010 in the second quarter. – Reuters

A sign of increasing interest in the sector can be seen in real estate funds, which have attracted more fresh money than other sectors this year, according to fundtracker EPFR Global.

Andrew Economos, head of sovereign and institutional strategy for JP Morgan Asset Management in Asia, says sovereign wealth funds are particularly active.

“Sovereign wealth funds are looking for positive yields and they are finding anywhere between 5% and 7% in real estate. They are getting yield on purchase as well as capital appreciation,” he said.

“They are diversifying across real estate into commercial, trophy properties as well as REITs (real estate investment trusts),” he said. REITs are securities sold like a stock and which invest in real estate properties or mortgages.

In one of the most recent high-end deals, Norway's sovereign wealth fund teamed up last month with Italian insurance giant Assicurazioni Generali to manage prime office and retail properties worth 550 million euros in central Paris.

Norway's sovereign wealth fund NBIM, which holds assets worth about 3.6 trillion Norwegian crowns (US$598.93bil), plans to raise real estate assets to as much as 5% of its overall portfolio from 0.3% at the end of March.

China's US$482bil sovereign wealth fund Investment Corp said on Wednesday this was one of the sectors it was now focusing on.

One way that investors are tapping the real estate market is through stocks and real estate investment trusts, which offer substantially higher dividend yields than sovereigns in areas spanning from Europe and the United States to Japan.

Dividend yields for stocks listed on the MSCI real estate index for the eurozone reach nearly 7%, according to Thomson Reuters Data-Stream, which beats by far negative or near zero yields for government bonds in core countries Germany or France. This is also higher than other sought-after assets including corporate bonds, which offer an overall yield of 3.24% on the iBoxx index.

The MSCI real estate eurozone index is up 13.1% since the beginning of the year compared with 2% for the overall MSCI index for the region, Data-Stream shows.

Yields on prime commercial or real estate housing the actual property rather than stocks vary widely but analysts give estimates of an average 35% for the best property in Europe.

“Certainly the work that we have done on an advisory basis to clients in the past three to four months has highlighted the importance of property in their portfolios,” said Ken Adams, global strategist at Scottish Widows Investment Partnership.

That market is highly polarised, however, with anything less than outstanding properties offering long leases with financially sound tenants in sought-after areas being spurned by investors put off by recession and the euro debt crisis and prices for these more secondary assets falling.

Commercial real estate, which had widely collapsed in the wake of the subprime crisis, was competing with other high-yield assets such as emerging market bonds and must offer the safety of a high-quality bond with better yields to attract investors such as pension funds, said John Danes, property research director at UK fund manager Aberdeen Asset Management.

“The return has to be very financially secure, with long leases and if there is some kind of inflation link as well, all the better,” said Danes, adding that he had seen increased interest across sectors, from long-let retail and offices to British supermarkets, which he said offer financially solid tenants and yields of 4.55%.

In the birthplace of the subprime crisis, in the United States, a number of investors are focusing on the opportunities that have been created in housing.

Blackstone Group LP has spent more than US$300mil to purchase over 2,000 foreclosed homes to rent and bet on a recovery of the US housing market, the firm said in mid-July.

Although analysts forecast any growth in the US housing market would be sluggish and it could take 10 years or more to go back to 2006 peak levels, commercial housing had seen nine consecutive quarters of uninterrupted improvement with vacancies down and rents up, said Citi analyst Jeff Berenbaum.

“Yields are in the high 3% to low 4% range for the strongest properties,” he said.

“For a risky market like commercial housing that's pretty historically low but if you compare with treasury yields, it's still a pretty wide spread.”

On the housing front globally, prime property in major cities has seen its strongest growth since 2010 in the second quarter, with a 1.3% growth in the year to June, according to Knight Frank's prime global cities index, which tracks the top 5% of mainstream markets. Reuters